BMW GROUP
REPORT 2020
OUR RESPONSIBILITY.
OUR FUTURE.
Report on the BMW Group’s economic
performance and its ecological and social
contributions.
LINK TO THE ONLINE REPORT
Contents
2
CONTENTS
35 COMBINED
MANAGEMENT
REPORT
General Information and Group Profile
Products and Services
Production, Purchasing and
Supplier Network
Employees and Society
Report on Economic Position
Report on Outlook, Risks and
Opportunities
Internal Control System Relevant for
Accounting and Financial Reporting
Processes
Disclosures Relevant for Takeovers
and Explanatory Comments
36
69
87
105
122
159
179
180
4
7
8
13
23
29
33
About This Report
(Part of the Combined
Management Report)
TO OUR
STAKEHOLDERS
BMW Group in Figures
Report of the Supervisory Board
Statement of the Chairman
of the Board of Management
Dialogue with Stakeholders
BMW Stock and Capital Markets
in 2020
BMW GroupReport 2020 Contents
185 GROUP
FINANCIAL
STATEMENTS
Income Statement for Group
and Segments
Statement of Comprehensive
Income for Group
Balance Sheet for Group
and Segments
Cash Flow Statement for Group
and Segments
Statement of Changes in Equity
for Group
Notes to the Group Financial
Statements
186
187
188
190
192
194
343 OTHER
INFORMATION
3
281 CORPORATE
GOVERNANCE
282
291
326
330
331
340
344
357
359
363
364
365
367
368
Fundamental Aspects of Corporate
Governance (Part of the Combined
Management Report)
Remuneration Report (Part of the
Combined Management Report)
Glossary and Explanation
of Key Figures
Responsibility Statement by the
Company’s Legal Representatives
Independent Auditor’s Report
Independent Practitioner’s Report
Further GRI Information
Reporting Concept
TCFD-Index
NFE-Index
BMW Group Fuel Consumption
and CO₂ Emissions Information
BMW Group
Ten-year Comparison
Financial Calendar
Contacts
BMW GroupReport 2020 About This Report
4
ABOUT THIS REPORT
(PART OF THE COM-
BINED MANAGEMENT
REPORT)
This report represents a new approach to reporting
for the BMW Group. For the reporting year 2020, the
BMW Group has combined its Annual Report and its
Sustainability Report (formerly the Sustainable Value
Report) in a single document. It is therefore important
for us to begin by briefly explaining the structure and
rationale behind the new approach so that you, as a
stakeholder in the company, can make the best possible
use of the report. Above all, this means being able to
find and categorise the information you are looking
for both quickly and reliably. Integrated reporting is a
dynamic process for the BMW Group that works in both
directions. For this reason, we are not only seeking a
dialogue based on assertions underpinned by content,
we are equally convinced that it enables us to report in
the most effective way.
This version of the Annual Report is a translation
from the German version. Only the original German
version is binding.
OBJECTIVE
SYMBOLS AND OTHER INFORMATION
...
The contents of these sections were subjected to
a separate limited assurance engagement by the
independent auditor. All other audited sections
of the report underwent a reasonable assurance
audit engagement by the independent auditor.
The following symbols help the reader to navigate
through the report:
Return to previous page
Go to table of contents
Continued on next page
Cross reference
As a premium manufacturer, the BMW Group aspires
to lead the way in terms of sustainability. It is therefore
taking responsibility and placing this topic at the core
of its corporate strategy moving forward. This change
has involved taking a major step, as the BMW Group is
including sustainability as a prime factor in its corporate
decision-making processes. This integrated approach
obviates the need to pursue a separate sustainability
strategy. Sustainability principles – such as the prudent
use of resources – are increasingly playing a key role in
shaping the BMW Group’s corporate strategy and serving
as key parameters for an integrated and multidimension-
al approach.
As it embraces this process, the BMW Group is build-
ing on a solid foundation, given that it has repeatedly
set itself ambitious sustainability targets and assumed a
pioneering role in this area over decades. For example,
the BMW Group was the first company in the automotive
sector to appoint an environmental protection officer
back in 1973. Under the umbrella of Efficient Dynamics,
the BMW Group proceeded to innovate in the field of
electrified drivetrains, while at the same time developing
highly efficient combustion engines, and has systematical-
ly continued to take this dual approach ever since. With
a trial fleet of around 600 fully electric MINI E vehicles
made available to customers, the BMW Group demon-
strated as long ago as 2009 that electric mobility can be a
source of great driving pleasure as well as being suitable
for everyday use. The all-electric BMW i3 followed in 2013,
effectively setting the benchmark for sustainable mobility
going forward. In 2020, the Group also achieved its car-
bon emissions targets for the new vehicle fleet, thanks
to the growing size of its fleet of electrified vehicles.
BMW GroupReport 2020
About This Report
5
The BMW Group has long considered it both its obliga-
tion and its mission to take a pioneering role within the
automotive industry.
CONTENT AND STRUCTURE
The logical consequence, starting with this report, is
to inform stakeholders about the BMW Group’s business
performance in a single integrated report. The objective
is to provide a clear insight into the BMW Group as a
whole with the aim of making its activities transparent,
accountable and measurable. At the same time, the in-
tention is to make it as easy as possible for readers to
familiarise themselves with the contents of the report.
For this reason, key information is deliberately repeated
at various points in the document, providing a general
overview for readers focusing on specific chapters and
sections who do not intend to read the entire report.
This approach not only underlines the BMW Group’s
determination to spearhead the transformation towards
sustainability, but also its desire to shape the process and
report on it in a transparent manner. This report com-
bines the Sustainability Report and the Annual Report
in a single Integrated Report, based on the framework
of the International Integrated Reporting Council (IIRC).
It replaces the two previously separate publications and
will be published each year on the date of the Annual
Conference. The BMW Group is keen to demonstrate
to shareholders, customers, employees and, last but not
least, the general public how economic, ecological and
social issues can complement one another. In fact, they
are often mutually dependent and the pursuit of sus-
tainability is the driving force of the Group. The report
also includes descriptions of corporate strategy, future
development and internal management processes and
how the BMW Group, as part of society, creates value in
economic, ecological and social terms. Join the conver-
sation with the BMW Group
Dialogue.
On 9 March 2021, the Financial Statements of
BMW AG were authorised for issue by the Board of Man-
agement and the Group Financial Statements approved
for publication.
Similar to annual reports in previous years, the
new BMW Group Report combines the management
reports of Bayerische Motoren Werke Aktiengesellschaft
(BMW AG) and the BMW Group in a Combined Manage-
ment Report.
In accordance with § 289 b and § 315 b of the Ger-
man Commercial Code (HGB), BMW AG is required to
issue a non-financial statement (NFS) at both Company
and Group level. This statement is published jointly for
BMW AG and the BMW Group as a non-financial report
within the Combined Management Report. In order to
identify this content more easily, an NFS index is includ-
ed as an appendix that summarises the references for the
reader. As in previous years, the NFS has been reviewed.
Contents that have been subjected to a limited assurance
standard are marked with graphic symbols
. All
other parts of the Management Report and the Group
Financial Statements have been audited to a reasonable
assurance standard, unchanged from the previous year.
Further information is provided in the
Independent Auditor’s
Report and the
Independent Practitioner’s Report.
...
This report also contains information on the attain-
ment of targets relating to the now completed sustaina-
bility strategy for the period from 2012 to 2020.
The BMW Group has published sustainable value
reports since 2001, initially every two years and annually
since 2012. Prior to this period, the Group had a long
tradition of publishing environmental reports, in which
it reported transparently on the impact of its operations
on the environment, including mitigating measures.
Since 2005, the BMW Group has applied Global
Reporting Initiative (GRI) standards to report on sustain-
ability matters. Since 2008, it has voluntarily complied
with the highest GRI application level (“comprehensive
option”). Additional GRI-relevant information is provid-
ed in the chapter
GRI
Content Index. This information was also subjected to a
limited assurance review.
Further GRI Information and in the
In 2015, the General Assembly of the United Nations
(UN) announced 17 Sustainable Development Goals
(SDGs). The SDGs are at the core of the 2030 Agenda, a
global action plan aiming to ensure that economic pro-
gress is environmentally friendly and socially equitable.
The BMW Group has identified the SDGs to which it
can make a direct and thus the greatest possible con-
tribution with its own sustainability goals. Reference is
made to these SDGs at the beginning of the Combined
Management Report.
BMW GroupReport 2020
About This Report
6
The report is structured to ensure that essential con-
tent is easily accessible, even at a glance. With this point
in mind, the key information is presented in summarised
form at the beginning of each section of the Management
Report and subsequently discussed in detail. In addition,
information provided in graphical form has been high-
lighted to enable key facts to be identified more easily.
Connection to Figures in the Group Financial
Statements
For each topic, an assessment was carried out to identify figures
reported in the financial statements that enable a better under-
standing of the NFS, and which therefore require to be explained.
Where necessary, these figures have been disclosed and ex-
plained in the relevant chapters.
CURRENT AND FUTURE REPORTING
In light of the announcement that the major stand-
ards institutions (GRI, SASB, CDSB, CDP / TCFD and
IIRC) intend to collaborate, alongside regulatory devel-
opments relating to non-financial reporting (including
the revision of the Non-Financial Reporting Directive),
the reporting environment is likely to continue gaining
momentum. At the same time, the BMW Group sees the
development of business strategy as an ongoing task, in
order to remain flexible within an increasingly dynamic
environment. Both aspects will play a key role in future
reporting. For this reason, the BMW Group plans to
review its non-financial performance indicators in 2021.
The figures for fuel consumption, CO2 emissions and power con-
sumption 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
tyre size selected as well as optional equipment and can change
based on configuration.
Fuel Consumption and CO2 Emissions
Information are available in chapter Other Information.
The figures have been calculated based on the new WLTP test cy-
cle and adapted to NEDC for comparison purposes. In these vehi-
cles, different figures than those published here may apply for the
assessment of taxes and other vehicle-related duties which are
(also) based on CO2 emissions.
For further details of the official fuel consumption figures and
official specific CO2 emissions of new cars, please refer to the
“Manual on fuel consumption, CO2 emissions and power con-
sumption of new cars”, available at
www.dat.de/co2/.
BMW GroupReport 2020
To Our Stakeholders
7
TO OUR
STAKEHOLDERS
8
13
23
29
33
BMW Group in Figures
Report of the Supervisory Board
Statement of the Chairman of the
Board of Management
Dialogue with Stakeholders
BMW Stock and Capital Markets in 2020
BMW GroupReport 2020
To Our Stakeholders
BMW Group in Figures
BMW GROUP
IN FIGURES
KEY NON-FINANCIAL PERFORMANCE INDICATORS
GROUP
Workforce at year-end 1
Share of women in management positions in the BMW Group 2
AUTOMOTIVE SEGMENT
Deliveries 3, 4
Share of electrified vehicles in deliveries
CO2 emissions EU New Vehicle Fleet (in g CO2 / km) 5
CO2 emissions per vehicle produced (in tons) 6
MOTORCYCLES SEGMENT
Deliveries
8
2016
2017
2018
2019
2020
Change in %
124,729
15.3
129,932
16.0
134,682
17.2
126,016
17.2
120,726
17.8
2,349,962
2,465,021
2,486,149
2,537,504
2,325,179
2.6
124
0.54
4.2
128
0.41
5.7
128
0.40
5.8
127
0.30
8.3
997
0.23
– 4.2
3.5
– 8.4
43.1
– 22.0
– 23.3
145,032
164,153
165,566
175,162
169,272
– 3.4
1 Since the reporting year 2020, a new definition for workforce size has been applied (see
Glossary). To enable better comparability, the value for 2019 was adjusted accordingly (2019 before adjustment: 133,778 employees).
For the timeframe including and prior to 2018, the share of the employees that are no longer reflected in reporting is about 7.5-8 %.
2 The new definition of the term “employee” (see footnote 1) also has an impact on the proportion of women in management positions. For comparative purposes, the 2019 figure has been adjusted accordingly (2019 before adjustment: 17.5 %).
3 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 311,473 units, 2017: 385,705 units, 2018: 455,581 units, 2019: 538,612 units, 2020: 602,247 units).
4 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous years. For further information on retail vehicle delivery data, please see
5 EU including Norway and Iceland; since 2018 value according to WLTP (Worldwide Harmonised Light Vehicles Test Procedure), retroactively calulated as NEDC (New European Driving Cycle).
6 Efficiency indicator calculated on the basis of Scope 1 and Scope 2 emissions (i. e. a market-based method according to GHG Protocol Scope 2 Guidance that excludes climate-impacting gases other than carbon dioxide) from vehicle production
Comparison of Forecast with Actual Outcomes.
(excluding motorcycles), adjusted for CHP losses, divided by the total number of vehicles produced, including the joint venture BMW Brilliance Automotive Ltd., Shenyang, but excluding contract manufacturing by Magna Steyr and Nedcar.
7 Figure (internal calculation) takes into account flexibilities as defined in regulatory requirements: phase-in with 5 g / km, supercredits BEV / PHEV with 7.5 g / km and eco-innovations with 2.4 g / km.
BMW GroupReport 2020
To Our Stakeholders
BMW Group in Figures
FURTHER NON-FINANCIAL PERFORMANCE FIGURES
9
GROUP
Spending on employee training and development (in million €) 1
352
349
373
370
279
– 24.6
2016
2017
2018
2019
2020
Change in %
AUTOMOTIVE SEGMENT
Deliveries by brand 2
BMW 3
MINI
Rolls-Royce
Total 3
Production by brand
BMW 4
MINI
Rolls-Royce
Total 4
1,986,167
2,089,854
2,117,854
2,184,939
2,028,841
359,758
4,037
371,729
3,438
364,101
4,194
347,465
5,100
292,582
3,756
2,349,962
2,465,021
2,486,149
2,537,504
2,325,179
2,002,997
2,123,947
2,168,496
2,205,841
1,980,740
352,580
4,179
378,486
3,308
368,685
4,353
352,729
5,455
271,121
3,776
2,359,756
2,505,741
2,541,534
2,564,025
2,255,637
Energy consumption per vehicle produced (in MWh) 5
2.21
2.17
2.12
2.04
2.12
– 7.1
– 15.8
– 26.4
– 8.4
– 10.2
– 23.1
– 30.8
– 12.0
3.9
MOTORCYCLES SEGMENT
Production volume
BMW
FINANCIAL SERVICES SEGMENT
New contracts with retail customer
145,555
185,682
162,687
187,116
168,104
– 10.2
1,811,157
1,828,604
1,908,640
2,003,782
1,845,271
– 7.9
1 Training for BMW Group employees and temporary staff at consolidated companies worldwide. Data collated on basis on direct inputs of participants and, to a smaller extent, by extrapolation. Data also includes e-learning formats.
2 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous years. For further information on retail vehicle delivery data, please see
3 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 311,473 units, 2017: 385,705 units, 2018: 455,581 units, 2019: 538,612 units, 2020: 602,247 units).
4 Production figures including the Joint Venture BMW Brilliance Automotive Ltd., Shenyang (2016: 305,726 units, 2017: 396,749 units, 2018: 491,872 units, 2019: 536,509 units, 2020: 602,935 units).
5 Efficiency ratio calculated on basis of electricity, heat, natural gas and heating oil consumption of vehicle production (excluding motorcycles), adjusted for CHP losses, divided by total number of vehicles produced, excluding contract manufacturing by Magna Steyr and Nedcar,
Comparison of Forecast with Actual Outcomes.
plus energy consumption of engine plants and electric motors as well as battery production divided by engine production in Hams Hall, Steyr, Munich and BMW Brilliance Automotive Ltd. in Shenyang.
BMW GroupReport 2020
To Our Stakeholders
BMW Group in Figures
KEY FINANCIAL PERFORMANCE INDICATORS
GROUP
Profit / loss before tax in € million
AUTOMOTIVE SEGMENT
EBIT margin in %
RoCE in %
MOTORCYCLES SEGMENT
EBIT margin in %
RoCE in %
FINANCIAL SERVICES SEGMENT
RoE in %
* The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, Note 6 to the Group Financial Statements).
10
2016
2017
2018 *
2019
2020
Change in %
9,665
10,675
9,627
7,118
5,222
– 26.6
8.9
74.3
9.0
33.0
21.2
9.2
77.7
9.1
34.0
18.1
7.2
49.8
8.1
28.4
14.8
4.9
29.0
8.2
29.4
15.0
2.7
12.7
4.5
15.0
– 44.9
– 56.2
– 45.1
– 49.0
11.2
– 25.3
BMW GroupReport 2020
To Our Stakeholders
BMW Group in Figures
FURTHER FINANCIAL PERFORMANCE FIGURES
11
in € million
2016
2017
2018
2019
2020
Change in %
Total capital expenditure 1
Depreciation and amortisation
Free cash flow Automotive segment
Group revenues 2
Automotive
Motorcycles
Financial Services 2
Other Entities
Eliminations 2
Group profit / loss before financial result (EBIT) 2
Automotive
Motorcycles
Financial Services 2
Other Entities
Eliminations 2
Group profit / loss before tax (EBT) 2
Automotive
Motorcycles
Financial Services 2
Other Entities
Eliminations 2
Group income taxes 2
Profit / loss from continuing operations 2
Profit / loss from discontinued operations
Group net profit / loss 2
Earnings per share 2 in €
Pre-tax return on sales 2, 3 in %
5,823
4,806
5,792
94,163
86,424
2,069
25,681
6
7,112
4,822
4,459
98,282
85,742
2,272
27,567
7
8,013
5,113
2,713
96,855
85,846
2,173
27,705
6
7,784
6,017
2,567
104,210
91,682
2,368
29,598
5
6,222
6,143
3,395
98,990
80,853
2,284
30,044
3
– 20,017
– 17,306
– 18,875
– 19,443
– 14,194
9,386
7,695
187
2,184
– 17
– 663
9,665
7,916
185
2,166
170
– 772
– 2,755
6,910
–
6,910
9,899
7,888
207
2,194
14
– 404
10,675
8,717
205
2,207
80
– 534
– 2,000
8,675
–
8,675
8,933
6,182
175
2,172
– 27
431
9,627
6,977
169
2,143
– 45
383
– 2,530
7,097
– 33
7,064
7,411
4,499
194
2,312
29
377
7,118
4,467
187
2,272
– 96
288
– 2,140
4,978
44
5,022
4,830
2,162
103
1,721
36
808
5,222
2,722
100
1,725
– 235
910
– 1,365
3,857
–
3,857
– 20.1
2.1
32.3
– 5.0
– 11.8
– 3.5
1.5
– 40.0
27.0
– 34.8
– 51.9
– 46.9
– 25.6
24.1
–
– 26.6
– 39.1
– 46.5
– 24.1
–
–
36.2
– 22.5
–
– 23.2
10.45 / 10.47
13.07 / 13.09
10.60 / 10.62
7.47 / 7.49
5.73 / 5.75
– 23.3 / – 23.2
10.3
10.9
9.9
6.8
5.3
– 22.1
1 Expenditure for capitalised development costs, other intangible assets and property, plant and equipment.
2 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, Note 6 to the Group Financial Statements).
3 Group profit before tax as a percentage of Group revenues.
BMW GroupReport 2020
To Our Stakeholders
BMW Group in Figures
12
BMW GROUP DELIVERIES OF AUTOMOBILES ¹, ²
BMW GROUP REVENUES
in 1,000 units
in € billion
2,350.0 2,465.0 2,486.1 2,537.5
2,325.2
110
94.2
98.3
96.9
104.2
99.0
55
0
2,600
1,300
0
2016
2017
2018
2019
2020
2016
2017
2018 3
2019
2020
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2016: 311,473 units,
2017: 385,705 units, 2018: 455,581 units, 2019: 538,612 units, 2020: 602,247 units).
2 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
Comparison of Forecast with
BMW GROUP PROFIT / LOSS
BEFORE FINANCIAL RESULT (EBIT)
BMW GROUP PROFIT / LOSS
BEFORE TAX
in € million
in € million
11,000
9,386
9,899
8,933
11,000
9,665
10,675
9,627
5,500
0
7,411
4,830
5,500
0
7,118
5,222
2016
2017
2018 3
2019
2020
2016
2017
2018 3
2019
2020
3 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of
IFRS 16 (see Annual Report 2019, Note 6 to the Group Financial Statements).
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
13
REPORT OF THE
SUPERVISORY BOARD
The excellent collective
performance of the BMW Group
gives the SUPERVISORY
BOARD confidence as we go
into 2021.
Norbert Reithofer
Chairman of the Supervisory Board
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
DEAR SHAREHOLDERS,
We look back on 2020 as an exceptionally challenging year, dominated as it was by
the impact of the coronavirus pandemic. The year unfolded very differently from the way
we had anticipated at the end of 2019. Nevertheless, despite the challenging conditions,
the BMW Group remained focused on its targets and pressed ahead with its future-ori-
ented projects. Thanks to resolute crisis management and rigorous digital teamwork at
all levels, the BMW Group achieved a respectable result for the year, with deliveries to
customers in the fourth quarter at their highest level to date. This excellent collective
performance gives us confidence as we go into 2021. Sustainable, digitalised mobility,
combined with an outstanding overall customer experience, are the key supporting
pillars of the BMW Group’s corporate strategy. As a pioneer of new technologies and
champion of sustainability in economic, social and ecological terms, the BMW Group
will continue on its transformational journey to becoming a tech company, thereby
strengthening its position in the premium segment in the process.
Focus of Supervisory Board activities during the past financial year
The Supervisory Board performed the duties incumbent upon it with the utmost
diligence in 2020, rigorously monitoring the management of the BMW Group in a
conscientious manner. It also advised the Board of Management on matters relating
to the leadership and strategic evolution of the company. In five meetings of the full
Supervisory Board – all lasting significantly longer than usual due to the circumstances
and including one two-day meeting – together with the Board of Management we
deliberated in great detail on the operating performance of the BMW Group. The
Board of Management also kept the Supervisory Board informed of any matters of
significance outside the framework of formal meetings as the need arose. In addition,
the Chairmen of the Supervisory Board and the Board of Management engaged in
direct dialogue on current issues, as did the Chairman of the Audit Committee and the
Board of Management member responsible for Finance. Conference calls were also held
between the Members of the Board of Management, the Board of Management member
responsible for Finance, the Chairman of the Supervisory Board and the Chairman of
the Audit Committee as a supplementary measure.
The Board of Management’s regular reports on the Group’s current performance
were dominated by pandemic-related matters during the year under report. In view
of the rapid spread of coronavirus in the spring, additional meetings of the Audit
14
The SUPERVISORY BOARD
is convinced that the
BMW Group will continue to
expand its position in the
premium segment through its
enduring commitment to
sustainability in economic,
social and ecological terms.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
15
Committee and the Presiding Board were scheduled to facilitate the monitoring of
production, sales and liquidity developments in a prompt manner. The Board of Man-
agement kept us constantly informed regarding the impact of the pandemic on the
BMW Group’s business performance, providing up-to-date status reports on sales, pro-
duction, liquidity and the Financial Services segment. Information on vehicle deliveries
to customers was separately analysed by market and model, focusing particularly on the
electrified variants. The reports also dealt with the competitive situation in general and
the development of new business and transaction volume as well as the risk situation in
the Financial Services segment. The Board of Management pointed out deviations from
the original forecast and presented measures to mitigate the impact of the pandemic. It
also outlined potential developments based on a range of possible scenarios. The size
of the workforce and the attainment of the decarbonisation targets set out by the EU
Commission were also a subject of discussion.
Furthermore, the Board of Management provided us with information on a number
of important current topics, including the opening of the Competence Centre for electric
drivetrain production in Dingolfing and BMW Brilliance Automotive’s second battery
centre in China as well as the new communication concept for the futuristic technology
showcase #NEXT Gen 2020, which was held virtually for the first time. The reports also
addressed the topics of product quality and the progress of the HERE joint venture.
The Supervisory Board deliberated in depth on the BMW Group’s evolving corporate
strategy, which is now clearly focused on the progressive transformation of its drivetrain
technology towards electric mobility. The Board of Management outlined to us the
renewed production network strategy, which is based on converting the Munich plant
to assemble the new vehicle architecture and the planned cluster architecture at the
BMW Group plant in Hungary. As a core component of the BMW Group’s overarching
corporate strategy, we also took an in-depth look at the sustainability aspect, which is
embedded at every stage along the supply chain, the production process and the entire
life cycle of our products.
The Supervisory Board also deliberated at length on important issues arising within
the Board of Management’s various key areas of responsibility. Purchasing, for instance,
reported on the status of the supply chain and the purchasing strategy regarding raw
materials for electric mobility. The Board of Management member responsible for Fi-
nance gave a talk on the Group’s financing system, focusing in particular on liquidity
management and financial market risk management. When reporting on the Financial
Services segment, the main focus was on strategy as well as business performance and
the risk situation. We also analysed the BMW Group’s strategic cooperations in great
detail, particularly the further course of the “Your Now” joint venture strategy and the
market situation in China.
In light of the coronavirus pandemic and the accompanying restrictions on events
involving large numbers of people, in early April we agreed that the 2020 Annual
General Meeting should be held as a virtual event without the physical presence of
shareholders.
An important topic for the Supervisory Board in 2020 was the revision of the Board
of Management’s remuneration system for the financial years 2021 and beyond, in line
with the new version of the German Corporate Governance Code. After the Personnel
Committee had completed the initial groundwork, in the third quarter we intensively
discussed proposals for a new remuneration concept with the help of an independent
remuneration consultant. On this basis, in December we worked through the details
of the revised remuneration system, focusing in particular on setting targets for the
variable remuneration components. The Supervisory Board finally passed a resolution
approving the new remuneration system, including a standardised service agreement,
new target remuneration levels and total remuneration caps.
The Supervisory Board reviewed the structure and level of Board of Management re-
muneration for the financial year 2020, whilst also taking into account the BMW Group’s
business performance in 2020. The salaries of senior executives and employees within
Germany as a whole were also taken into account. After analysing comparative studies
provided by an external remuneration consultant, we concluded that the remuneration
of Board of Management members is appropriate. Detailed information on the remu-
neration of the Board of Management is provided in the Remuneration Report.
The change to the system of Board of Management remuneration was also the focus
of one-on-one discussions between myself and investor representatives concerning
Supervisory-Board-related issues, including the question of the independence of Su-
pervisory Board members.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
16
The main focus of
SUPERVISORY BOARD
WORK was on the continued
development of corporate
strategy, particularly the
expansion of electric mobility.
In the third quarter, the Supervisory Board devoted a great deal of time to exam-
ining the BMW Group’s revised forecast for the period from 2021 to 2026. The Board
of Management outlined the fundamental changes made to mitigate the impact of
the coronavirus pandemic compared with the forecast presented one year earlier as
well as the ambitious long-term targets in the forecast. It also pointed out the higher
degree of volatility and uncertainty in terms of external framework conditions, whilst
reiterating the aim of achieving continuous overall growth, particularly in the field of
electric mobility. After thorough examination, the Supervisory Board approved the
BMW Group’s long-term corporate plan.
At the final meeting held in 2020, the Board of Management presented the annual
budget for corporate development in the financial year 2021 and discussed it in exhaus-
tive detail with the Supervisory Board.
With the advance of digitalisation, data protection and cybersecurity are becoming
increasingly important issues. For this reason, we requested a report on the current
status from the Board of Management.
We also discussed the topic of diversity at considerable length. The Board of Man-
agement reported on the current status of the diversity concepts developed by the
Group and the target achievement at various levels as well as future targets. As its
target for the proportion of women on the Board of Management from 1 January 2021 to
31 December 2025, the Supervisory Board has stipulated that the Board of Management
should continue to include at least one female member.
The Supervisory Board’s agenda also included a number of internal issues during
the year under report. For example, the Supervisory Board updated its rules of pro-
cedure and published them online in accordance with the recommendation of the
revised German Corporate Governance Code. At the Supervisory Board meeting held
in March, we also discussed the results of our annual efficiency self-assessment in
detail. The Supervisory Board has also benefited from advances in digitalisation, a key
element of our corporate strategy, by setting up a digital boardroom to improve the flow
of information. Due to coronavirus-related restrictions, beginning in the spring, the
meetings themselves were held as face-to-face events with digital participation offered
to enable all members to attend.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
17
We also discussed corporate governance standards at the BMW Group. Based
on a self-assessment, we concluded that the composition of the Supervisory Board
at 31 December 2020 was in line with the targets stipulated in the diversity concept,
the competency profile and other composition targets. We updated the competency
profile and broadened the definition of the various areas of expertise. An overview
showing each individual Supervisory Board member’s areas of expertise is provided in
the Statement of Corporate Governance on our website.
In December, the Board of Management and the Supervisory Board issued their
Declaration of Compliance with the German Corporate Governance Code. We will
comply with the recommendations of the Code as amended on 16 December 2019
without exception. The wording of the Declaration of Compliance can be found in the
Statement of Corporate Governance on our website.
The Supervisory Board took part in a variety of further training measures in 2020.
In July, for instance, we visited the BMW Autonomous Driving Campus in Unter-
schleißheim near Munich and discussed the topic of automated driving at great length
through several presentations. The presentation held by an external expert on artificial
intelligence gave us additional food for thought on the importance of software for
the future of the automotive industry, which we then explored in greater depth in a
subsequent discussion. In September, the Supervisory Board attended a workshop on
drivetrain technology at the BMW and MINI Driving Academy in Maisach near Munich,
including a driving session.
No conflicts of interest arose on the part of members of the Supervisory Board
during the year under report. Significant transactions involving Supervisory Board
members and / or other related parties as defined by IAS 24, including close relatives
and intermediary entities, were subject to review on a quarterly basis.
We reviewed the efficiency of our work in the Supervisory Board by completing
a revised and expanded questionnaire as well as holding supplementary discussions
with the Chairman. Overall, there is a high degree of satisfaction with the work of
the Supervisory Board. Cooperation, both within the Supervisory Board itself and
with the Board of Management, was unanimously assessed as being constructive and
trusting. However, we intend to discuss suggestions for improving individual aspects
of cooperation in the new financial year.
Sustainability is at the heart
of the BMW Group’s broader
strategy, encompassing
all relevant aspects, from the
supply chain to production
and the product life cycle.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
18
Description of Presiding Board activities and committee work
The Supervisory Board has established a Presiding Board and four committees. The
chairpersons of these two bodies reported in detail on the work of their committees
at each subsequent Supervisory Board meeting. You can read more about the duties,
the composition and the working methods of the Presiding Board and various other
Supervisory Board committees in the Statement of Corporate Governance on our website.
Due to the exceptional challenges of the past financial year caused by the corona-
virus pandemic, the Presiding Board and the Audit Committee intensified their work
in order to fulfil their duties in a suitable manner. Additional meetings were held to
provide the Presiding Board with prompt information on the current status of sales and
production and the Audit Committee with information on liquidity and the Financial
Services business.
The Presiding Board held six meetings and one conference call during the financial
year 2020. Together with the Board of Management and senior heads of department, we
prepared the detailed agenda of full Supervisory Board meetings (unless a committee
was responsible for doing so) and made suggestions for topics to be reported on at
Supervisory Board meetings.
The Audit Committee held seven meetings and three conference calls during the
year under report.
The meetings held in February and March 2020 focused primarily on preparing
the Supervisory Board meeting at which the financial statements for the financial year
2019 were to be discussed and examined. After obtaining the auditor’s Declaration of
Independence, the Audit Committee recommended to the full Supervisory Board that
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (“PwC”) be proposed
for election as auditor at the 2020 Annual General Meeting. 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 audits of the year-end Com-
pany and Group Financial Statements 2020 and the review of the Half-Year Financial
Report and deemed it appropriate. Following approval by the Annual General Meeting
held in May 2020, 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 quality of the audit was a subject of discussion at the Supervisory Board meetings
held in February and June. The Board concluded that the audit was of good quality.
The Board of Management presented us with the Sustainable Value Report as well
as the separate combined non-financial report of BMW AG and the BMW Group for
the financial year 2019. Moreover, the representatives of PwC presented the findings
of their review, which had been performed as a “limited assurance” engagement.
At our meetings we also discussed preparations for the new Integrated Group Report
and the procedural changes required with regard to reporting and the external audit.
We decided that the non-financial (Group) statement should again be reviewed by PwC
in the form of a “limited assurance” engagement.
We also discussed the quarterly statement 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 beginning of August 2020.
The Audit Committee again dealt intensively with the topic of compliance within the
BMW Group during the year under report. In his regular report, the Chairman of the
Compliance Committee provided a summary of ongoing compliance-related proceedings
and presented a raft of measures aimed at promoting the continuous improvement of
the compliance system. The Head of Corporate Quality also reported on the subject of
technical compliance. The relevant head of department also presented the Supervisory
Board a description of tax and customs compliance management.
Furthermore, the Audit Committee regularly discussed the status of the EU Com-
mission’s investigation into the antitrust allegations connected with the former working
groups of several German automobile manufacturers and was provided with updates
from the Board of Management regarding the potential further course of proceedings.
In relation to proceedings initiated by the German Federal Cartel Office and ter-
minated in 2019 with a fine of € 28 million regarding the purchase of long steel by the
BMW Group, the Supervisory Board addressed the question of whether it had a duty
to act on this matter. The Supervisory Board sought counsel from external lawyers in
order to obtain legal certainty. On the recommendation of the Audit Committee and
after carefully considering the advantages and disadvantages for the BMW Group, based
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
19
on an expert legal opinion and oral explanations, the Supervisory Board decided not
to assert any claims for damages against current or former members of the Board of
Management of BMW AG in connection with the fine imposed by the German Federal
Cartel Office on 21 November 2019.
In addition, the main findings of internal audits conducted by Corporate Audit as
well as details of advance audit planning were reported to the Audit Committee. We
discussed the effectiveness of the BMW Group’s current risk profile and risk manage-
ment system on several occasions, including ongoing measures to improve the internal
control system on a continuous basis.
The Audit Committee was regularly provided with detailed information regarding
major legal disputes and proceedings. These included, in particular, an investigation
initiated in December 2019 by the US Securities and Exchange Commission (SEC) into
possible violations of US securities laws in relation to the reporting of vehicle delivery
figures in the USA. The case was concluded in September 2020 with a settlement of
18 million US dollars.
Our agenda also included considering an audit report relating to the European
Market Infrastructure Regulation (EMIR). In this context, the independent auditor
confirmed the effectiveness of the system currently applied by BMW AG to ensure
compliance with the regulatory requirements.
The Audit Committee concurred with the decision of the Board of Management
to raise the Company’s share capital in accordance with Article 4 (5) of the Articles of
Incorporation (Authorised Capital 2019) by € 822,000 and issue a corresponding number
of new non-voting bearer shares of preferred stock in conjunction with the Employee
Share Programme.
The SUPERVISORY BOARD
and the BOARD OF
MANAGEMENT will comply
with the recommendations
of the German Corporate
Governance Code without
exception.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
20
The Personnel Committee focused primarily on the topic of Board of Management
remuneration. In its five meetings during the year under report, the Personnel Commit-
tee reviewed the appropriateness of the Board of Management’s remuneration for the
financial year 2019, duly taking the impact of the coronavirus pandemic into account.
During the second half of the year, the Committee focused on revising the remuneration
system for Board of Management members. The Personnel Committee also performed
the groundwork for the full Supervisory Board to appoint a Board of Management
member responsible for Development and granted approval for members of the Board
of Management to assume mandates outside the Group in exceptional cases.
The Nomination Committee convened twice during the financial year 2020. Taking
into account the German Corporate Governance Code (DGCC) and the composition
requirements adopted by the Supervisory Board, the Nomination Committee addressed
the issue of potential replacements for shareholder representatives on the Supervisory
Board in the coming years.
The Mediation Committee, which is prescribed by law, did not need to convene
during the financial year 2020.
Composition of the Board of Management
With effect from 1 July 2020, Klaus Fröhlich retired from his position as Board of
Management member responsible for Development. We would like to thank Mr Fröhlich
for his many years of successful and effective work for BMW AG and particularly wish
to express our appreciation for the momentum he generated over a 30-year period in
advancing the BMW Group’s role as a pioneer of new technologies.
The Supervisory Board appointed Frank Weber to the Board of Management as his
successor with effect from 1 July 2020. Mr Weber joined the BMW Group in 2011 as
Head of Total Vehicle Development and was most recently responsible for the Rolls-
Royce product line as well as the BMW luxury class. In light of the various management
positions he has previously held in development, Mr Weber is excellently qualified to
assume responsibility for Development at the BMW Group and we certainly wish him
all the best in his new role.
The Supervisory Board extended the mandate of one Board of Management member
during the year under report.
Composition of the Supervisory Board, the Presiding Board and the Supervisory Board’s
committees
Prof. Renate Köcher left the Supervisory Board with effect from the end of the
Annual General Meeting 2020. We would like to thank Prof. Köcher for her many
years of constructive work and faithful cooperation while serving on the Supervisory
Board. The Annual General Meeting elected Anke Schäferkordt as a new member of
the Supervisory Board. Ms Schäferkordt has a wealth of knowledge and experience in
the field of communication and media, and, in her capacity as an independent financial
expert, ideally complements the Supervisory Board’s overall composition. The Annual
General Meeting re-elected me as a member of the Supervisory Board and I was again
elected Chairman at the subsequent meeting of the Supervisory Board.
In view of the considerable length of time he has been a member of the Supervi-
sory Board and mindful of the Supervisory Board’s efforts to appoint an independent
chairperson to the Audit Committee as defined in the German Corporate Governance
Code, Dr Karl-Ludwig Kley resigned his membership and chairmanship of the Audit
Committee with effect from the end of the 2020 Annual General Meeting. We wish to
thank Dr Kley for his many years of knowledgeable and committed leadership of the
Audit Committee and are delighted that he will continue to contribute his expertise as
a member of the Supervisory Board. Dr Kurt Bock was subsequently elected as member
and Chairman of the Audit Committee. Dr Bock has been a member of the Supervisory
Board since 2018 and, as a former long-serving Chief Financial Officer and Chairman of
the Board of Executive Directors of BASF SE, has a great deal of expertise in the fields
of accounting, financial reporting and auditing. An overview of the composition of the
in this report and in the separate
Supervisory Board and its committees is provided both
Statement on Corporate Governance, which is available on our website together with
the curricula vitae of Supervisory Board members.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
21
Disclosure of attendance at meetings by individual members
Examination of financial statements and the profit distribution proposal
The attendance rate at the meetings of the Supervisory Board, its committees and the
Presiding Board was over 99 %. The table below shows attendance by individual member:
Supervisory Board Member
Meetings
Attendance
Attendance in %
Dr.-Ing. Norbert Reithofer
Manfred Schoch
Stefan Quandt
Stefan Schmid
Dr. Karl-Ludwig Kley
Dr. Kurt Bock
Christiane Benner
Verena zu Dohna-Jaeger
Dr.-Ing. Heinrich Hiesinger
Prof. Dr. Reinhard Hüttl
Susanne Klatten
Prof. Dr. Renate Köcher 1
Horst Lischka
Willibald Löw
Simone Menne
Dr. Dominique Mohabeer
Brigitte Rödig
Anke Schäferkordt 2
Dr. Vishal Sikka
Dr. Thomas Wittig
Werner Zierer
1 Supervisory Board Member until 14 May 2020.
2 Supervisory Board Member since 14 May 2020.
29
27
29
27
24
10
5
5
5
5
7
1
5
5
5
5
5
4
5
5
5
29
27
29
27
24
10
5
5
5
5
7
1
5
5
5
5
5
4
4
5
5
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (“PwC”) was ap-
pointed as external auditor for the financial year 2020. PwC conducted a review of the
condensed Interim Group Financial Statements and the Interim Group Management
Report for the six-month period ended 30 June 2020 and presented its findings 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, for the second time, audited the Company and Group Financial Statements
for the financial year 2020 as well as the Combined Management Report, including
the Statement on Corporate Governance for the financial year 2020 – in each case
authorised for issue by the Board of Management on 9 March 2021 – and issued an
unqualified audit opinion, signed for the second year in succession 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 26 February 2021, the Audit Committee initially considered
in detail the preliminary version of the Company and Group Financial Statements,
the Combined Management Report (including the Combined Non-financial (Group)
Statement), the Statement of Corporate Governance, the draft versions of the auditor’s
reports and the Board of Management’s proposal for the appropriation of profit.
Immediately after authorising their issue, the Board of Management submitted the
Company and Group Financial Statements for the financial year 2020 and the Combined
Management Report (including the Combined Non-financial (Group) Statement), the
Statement of Corporate Governance and the proposal for the appropriation of profit to
the Supervisory Board. The auditor’s long-form audit reports were also made available
to the Supervisory Board in a prompt manner.
At its meeting on 10 March 2021, the Audit Committee diligently examined and
deliberated on these documents before they were considered in detail at the plenary
session of the Supervisory Board on 11 March 2021.
BMW GroupReport 2020
To Our Stakeholders
Report of the Supervisory Board
22
At the two respective meetings, the Board of Management provided the Audit Com-
mittee and the Supervisory Board with detailed explanations of the financial reports
presented. The representatives of the external auditor present at the meetings reported
on the main findings of their audit and answered additional questions put by members
of the Audit Committee and the Supervisory Board. The focus of these meetings was
on key audit matters as well as the related audit procedures, which were discussed at
length by the Audit Committee and the Supervisory Board.
The representatives of the external auditor confirmed that the risk management
system established 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
also confirmed that no material weaknesses in the internal control system and risk
management system were identified with regard to the financial reporting process. Sim-
ilarly, in the course of their audit work they did not identify any facts 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.
by the members of the Supervisory Board. The “limited assurance” audit performed
by PwC received an unqualified opinion, which was duly signed by Andreas Fell as
inde pendent auditor (Wirtschaftsprüfer) and by Nicolette Behncke as independent
auditor (Wirtschaftsprüferin). The Supervisory Board acknowledged and approved the
combined Non-financial (Group) Statement drawn up by the Board of Management.
Expression of appreciation by the Supervisory Board
We would like to express our special thanks to the members of the Board of Man-
agement and the entire workforce of the BMW Group worldwide for their remarkable
achievements in the financial year 2020. Their outstanding degree of motivation, adapt-
ability and strong team spirit made this result possible, despite the extremely difficult
conditions.
We are confident that the Board of Management and the employees of the
BMW Group, with their courage and willingness to adapt, will ensure your company
a leading position in the field of sustainable and digitalised mobility going forward.
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 by the Audit Committee and the Supervisory Board after
the examination, no objections were raised. The Group and Company Financial State-
ments of Bayerische Motoren Werke Aktiengesellschaft for the financial year 2020
drawn by the Board of Management were subsequently approved at our meeting held
on 11 March 2021. The Company Financial Statements for the year ended 31 Decem-
ber 2020 have therefore been adopted.
Munich, March 2021
On behalf of the Supervisory Board
We also examined the proposal of the Board of Management to use the unappropri-
ated profit to pay a dividend of € 1.90 per share of common stock and € 1.92 per share
of non-voting preferred stock, in each case on shares entitled to receive a dividend. We
considered the proposal appropriate and therefore gave it our approval.
NORBERT REITHOFER
Chairman of the Supervisory Board
The Audit Committee and the Supervisory Board also considered at length the
combined Non-financial (Group) Statement for the year ended 31 December 2020,
which was drawn up by the Board of Management for the first time as part of the
Integrated Group Report. The Board of Management provided an in-depth explana-
tion of the statement during the relevant meetings. Representatives of the external
auditor presented key findings of their audit and answered additional questions posed
BMW GroupReport 2020
To Our Stakeholders
Statement of the Chairman of the Board of Management
23
STATEMENT OF THE
CHAIRMAN OF THE
BOARD OF MANAGEMENT
This year we are launching
our TECHNOLOGY
OFFENSIVE with the NEW
ALL-ELECTRIC
BMW models iX and i4.
Oliver Zipse
Chairman of the Board of Management
BMW GroupReport 2020
To Our Stakeholders
Statement of the Chairman of the Board of Management
DEAR SHAREHOLDERS,
Climate change demands responses. Rethinking our mobility as a task for society
as a whole is one way of responding – with considerable impact and an important sig-
nalling effect. The BMW Group is a global, digitalised high-tech company for premium
mobility. With this idea of ourselves, we are driving and shaping the transformation of
our industry. To do so, we are relying on technological innovation in all relevant fields –
sustainable drivetrains, autonomous driving and intelligent integration of hardware and
software, as well as for the digitalised automotive production of the future, up to and
including blockchain technology and artificial intelligence.
Such profound upheavals like the sustainable mobility that we are combining step
by step with the principles of a circular economy require cooperation on a much larger
scale. The BMW Group is involved as a partner and visionary through cross-industry
technology alliances and platforms. We firmly believe that technological innovation,
in combination with responsible action, contributes to progress for companies and
the economy, as well as benefiting the environment. We all share the same goal of a
climate-neutral society.
First integrated BMW Group Report.
We are documenting our impact on the road to climate neutrality. With the transition
to integrated reporting, we are documenting how we are managing the BMW Group
systematically and in an integrated manner according to financial and sustainability
targets. For you, dear shareholders, as well as for other stakeholders in this company,
we want to verifiably show our progress. With this move, we are not just leading the
way among our key competitors. The BMW Group has followed a broad stakeholder
approach for years. We aim to set an example and are therefore comprehensively and
systematically reducing our environmental footprint. Our aim is to achieve full trans-
parency. We will naturally only be releasing the new Report online.
24
ENVIRONMENTAL
PROGRESS through
TECHNOLOGY – that is what
the BMW Group stands for.
BMW GroupReport 2020
To Our Stakeholders
Statement of the Chairman of the Board of Management
25
Listen to what CEO
OLIVER ZIPSE has
to report about
the financial year 2020.
Robust and flexible, adaptable and innovative – your company during
the Covid-19 pandemic.
The rapid spread of SARS-CoV-2 around the globe struck while the BMW Group
was in the midst of its multidimensional transformation. In hindsight, one thing is clear:
in a difficult environment with unforeseeable developments, your company proved just
how robust, flexible, adaptable and innovative it is. Our greatest strength was taking a
realistic view of things, relying more than ever before on the flexibility of our people.
Thanks to this, we were able to meet our adjusted targets, which we announced early in
the pandemic. At the same time, the Board of Management made far-reaching decisions
and significantly stepped up the pace of transformation at the BMW Group.
Global market share increased during the pandemic.
Our vehicles have given many people a sense of security during the pandemic. In
fact, cars were more popular than ever. Our customers bought over 2.3 million BMW,
MINI and Rolls-Royce vehicles – a decrease of only 8.4 percent from our record-breaking
2019. Nonetheless, the BMW Group was able to increase its global market share in
2020. Additionally, BMW Motorrad posted the second-best sales figures in its history
and BMW M GmbH had its most successful year ever.
EU CO₂ limits for 2020 significantly overfulfilled.
Despite the coronavirus pandemic, we delivered about a third more electrified BMW
and MINI vehicles to customers than the previous year. Our plug-in hybrids were highly
sought-after, as were our new fully electric models, the BMW iX3 * and MINI Cooper SE *.
Because we started our preparations early, we were able to significantly overfulfil our
assigned CO₂ limit by about 5 g / km. This was never in any doubt for us. Our EU fleet
emissions are currently at 99 g / km and we will also meet the 2021 requirements.
Accepting things as they are and making the best of them.
During lockdown, we had to shut down production across our global network for
the first time in BMW history. Shortly afterwards, we ramped up again – in a phased, yet
extremely timely manner. This enabled us to respond to different rates of development
in the markets quite precisely.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
To Our Stakeholders
Statement of the Chairman of the Board of Management
26
Our associates implemented the new requirements with commitment and discipline –
and continue to do so. Every single vehicle launch went ahead as planned. Our supply
chain stayed up and running at all times and mastered the stress test of the coronavirus
year. We kept in touch with our customers – personally and digitally. Thanks to our
new Mobile Sales Office, we are also offering contactless consultation and sales in more
than 60 markets.
Thank you to all our customers; praise for our 120,726 associates.
Personally, and on behalf of the Board of Management team, I would like to thank
all our customers for placing their trust in us. I would also explicitly like to thank our
retail organisation and suppliers and extend an especially warm thank you to all our
associates. 2020 was an extremely challenging year, full of emotion, hope and setbacks,
but the BMW team spirit prevailed. The Company and employee representatives found
solutions together – just as Herbert Quandt would have wanted.
Phase I of our transformation – the e-mobility pioneer.
At major tipping points, BMW has often ushered in change with bold decisions.
During the global economic and financial crisis of 2008 / 2009, your company paved the
way for electric mobility. The ultra-sustainable BMW i3 * was ahead of its time – and is
still performing well in the marketplace to this day.
Phase II of our transformation – strategic focus on electrification, digitalisation and
developing expertise.
We are currently leveraging the full potential of global differences in demand with
our wide range of products and drivetrains. The popular BMW X3 will be joined by
the high-volume BMW 5 Series, X1 and 7 Series models, each with a choice of four
drivetrain technologies. Our plants are capable of building different drivetrains on the
same production line. By the end of 2022, each of our German vehicle plants will be
producing at least one fully electric vehicle. This is what flexibility looks like at BMW!
We are enabling our team by developing expertise and reallocating competences. We
plan to take everyone along with us. This year alone, we will be training 75,000 partici-
pants in future areas of activity and new fields of expertise like robotics, data analytics,
agile software development, AI, autonomous driving and, of course, e-mobility.
* See
Fuel Consumption and CO2 Emissions Information.
Electrifying the BMW Group.
We are also stepping up electric mobility to keep pace with growing demand. Our
roadmap is ambitious: Your company aims to have delivered more than a million ve-
hicles with battery-electric or plug-in hybrid drive trains to customers by the end of
this year. We will have 25 electrified models on the roads by 2023 – targeting our large
high-volume models, in particular. By 2025, electrified vehicles will comprise at least a
quarter of our sales volume. We also see potential in fuel cells and are supporting the
creation of hydrogen infrastructure in Germany. A small series of the BMW i Hydrogen
NEXT is planned from 2022.
BMW iX and i4 will revolutionise the market in 2021.
Many customers are eagerly awaiting the new fully electric BMW iX * and i4 models.
Both vehicles have a strong emotional appeal straight from the heart of the BMW brand. In
the iX we have perfectly integrated hardware and software in the form of shy tech. Just as
our customers would expect from us: in a simple, intuitive and precise manner. We want
to excite people with innovations and at the same time inspire them. The new BMW iDrive
transforms the iX *, just like every future BMW model, into a digital powerhouse.
Phase III of our transformation – what will define a BMW in the year 2030?
We aim to deliver at least seven million electrified vehicles to customers by 2030. To
coincide with the next surge in e-mobility, we will be launching our new cluster archi-
tecture, which is uncompromisingly centred on fully electric drivetrains, in the middle
of the decade, starting at our new plant in Hungary. We believe the next dimension of
digital connectivity is closely tied to this: in the vehicle, in production and throughout
our company processes.
Sustainability is the common thread.
Achieving consistent, sustainable development will also give us a competitive edge.
In 2012, we set ourselves ten sustainability goals up to 2020. Today, we are able to say:
mission accomplished. Let me give you three examples:
1. We halved the CO₂ emissions of our European new vehicle fleet between 1995 and
2020.
2. Our plants worldwide exclusively source green electricity. As of 2021, they will even
produce completely CO₂-neutral on balance.
3. The percentage of women in management functions at the BMW Group is above
our target range.
BMW GroupReport 2020
To Our Stakeholders
Statement of the Chairman of the Board of Management
27
We don’t just do sustainability at BMW: We are making BMW sustainable.
We now find ourselves on the next stage of the journey – pursuing a verifiable
and consistent path towards climate neutrality by 2050. In July 2020, we adopted our
integrated sustainability strategy, with concrete science-based targets for the first stage
up to 2030. How are we different from other companies? The answer to that is simple:
we are substantially reducing our carbon footprint along the entire value chain. The
aim is for life cycle CO₂ emissions per vehicle to be lowered by at least a third. This will
be achieved through innovation, not offsets. In this way, we can drastically reduce the
carbon footprint compared to 2019 per vehicle by 2030:
— In production by 80 percent.
— During the use phase by more than 40 percent.
— In the supply chain by at least 20 percent.
Without countermeasures, growth in e-mobility would, in fact, increase supply chain
CO₂ emissions by a third. Instead, we are reversing this trend and lowering emissions.
Our aim is to create the most sustainable supply chain in our industry. We have already
agreed with our suppliers that they will only use green power to produce battery cells.
This measure alone adds up to about ten million tonnes less CO₂ over the next ten years.
Climate-neutral business model spanning the entire value chain by 2050.
We are already looking ahead into the future and intend to close the material cycle
further – for instance, by increasing the percentage of secondary material in our vehicles.
This lowers CO₂ emissions significantly compared to using primary material. We will be
sharing how we plan to drive towards a circular economy at the IAA MOBILITY 2021.
Our clear claim
is that the GREENEST
ELECTRIC VEHICLE comes
FROM BMW. We are
reducing CO₂ emissions per
vehicle over the entire
value chain. This is what sets
the BMW Group apart.
BMW GroupReport 2020
To Our Stakeholders
Statement of the Chairman of the Board of Management
28
Dear Shareholders,
The coronavirus pandemic has shown very clearly how important cars are to people.
Demand should continue to increase overall. We aim to get sales back towards their
pre-pandemic levels by the end of the year. We always take a long-term perspective.
All our decisions are geared towards adding value, profitability and growth in close
combination with sustainability, climate protection and secure jobs. On this basis, your
company will remain a safe and attractive investment, focused on added value creation.
Our entrepreneurial independence is a valuable commodity for us. From this posi-
tion, we can create a new mobility for our customers. We will be investing more than
€ 30 billion in research and development – and the future of your company – by 2025.
That alone shows how fully confident we are.
Join us in embarking on this promising decade!
OLIVER ZIPSE
Chairman of the Board of Management
BMW GroupReport 2020
To Our Stakeholders
Dialogue with Stakeholders
DIALOGUE WITH
STAKEHOLDERS
STAKEHOLDER ENGAGEMENT
The BMW Group is an enterprise that operates on
a global scale within a complex environment subject to
crucial interdependencies. Business activities have an
external impact and can affect the interests of many
individual stakeholders as well as various categories of
stakeholders. Conversely, developments occurring across
society as a whole can influence the Group’s business
activities, both directly and indirectly. Against this back-
drop, the BMW Group maintains a regular dialogue with
its stakeholders in all key markets on a variety of topics.
The aim at all times is to achieve a better understand-
ing of the positions of stakeholders and in turn provide
them with greater insight into the BMW Group’s activi-
ties. In pursuing this aim, the BMW Group does not shy
away from critical topics and debates, but endeavours to
find solutions via a constructive dialogue with stakehold-
ers in the best interests of all concerned.
In its interaction with stakeholders, the BMW Group
uses its own dialogue formats as well as participating
constructively in public debates. For example, the Group
has been represented at UN climate conferences for many
years.
The basis for the BMW Group’s engagement with
stakeholders is set out in its
Stakeholder Engagement Policy.
The document defines dialogue objectives, sets out the
criteria for identifying and prioritising stakeholders, and
specifies suitable dialogue formats as well as forms of
communication.
BMW GROUP DIALOGUES
BMW Group Dialogues are among the main formats for
interacting with stakeholders and have been held regu-
larly since 2011. Above all, they provide an opportunity
to sound out current and impending corporate strategic
decisions compared with stakeholder expectations. Major
topics covered in recent years have included electric mo-
bility, the Group’s energy strategy, corporate citizenship,
urban mobility, and environmental and social standards
in the supply chain.
Generally, BMW Group Dialogues are held annually
in the BMW Group’s key sales regions of North America,
Europe and Asia. Stakeholder feedback is documented
and incorporated in the Group’s strategic considerations
alongside other key factors.
29
PARTICIPATION IN PUBLIC POLICY DEVELOPMENT AND
WORK IN ASSOCIATIONS
The BMW Group maintains an active, open and
transparent dialogue with policy makers, union repre-
sentatives, associations and non-governmental organi-
sations (NGOs). The aim is to play a constructive and
transparent role in helping shape the general political
framework regarding the company’s business activities.
In this context, the BMW Group offers its expertise to
promote fair competition for all those involved and find
viable solutions.
The BMW Group has political offices in a number of
major cities, including Berlin, Brussels, Washington DC
and Beijing, giving it a worldwide presence for express-
ing its opinions on environmental, financial and social
policy issues. The BMW Group always adopts a clear
position, which it communicates in a transparent manner
to external parties, regardless of the target audience it
is addressing.
Apart from its own activities in terms of public pol-
icy development, the BMW Group is also a member of
numerous associations in various countries. Membership
is voluntary in the majority of cases, although there are
some situations in which it is necessary to join associa-
tions in order to comply with legal requirements.
The BMW Group puts forward its own standpoints
with a view to helping shape association policies. How-
ever, this does not mean that the Group’s opinions
always fully coincide with those of the associations. If
there are any major differences, the Group considers the
best options available for best dealing with the situation.
BMW Group Cooperation Policy for Trade, Industry & Car Manufacturer
Associations
BMW GroupReport 2020
To Our Stakeholders
Dialogue with Stakeholders
30
At the beginning of 2021, the BMW Group assumed
the presidency of the European Automobile Manufactur-
ers’ Association (ACEA). The Association collaborates
with a wide range of institutional, non-governmental
research and civil society organisations as well as with a
number of industry associations. The year 2021 is seen
as a crucial point for the automotive industry within the
European Union in terms of transitioning to sustainable
mobility. The current focus of the ACEA agenda is there-
fore on topics such as climate protection, emissions, con-
nected and automated driving, sustainability, research
and innovation, economy and safety.
In the interest of transparency, the BMW Group al-
ways discloses the most important association member-
ships on its website
BMW Group Memberships. Furthermore,
all topics that are discussed at EU level are publicly
available in the
EU Transparency Register.
FINANCIAL MARKET PRESENCE WITH SUSTAINABILITY
CREDENTIALS
Regular in-depth dialogue with capital market partici-
pants has always been a high priority for the BMW Group.
Within a short space of time, sustainability has become a
key driver for the financial market. Investors and analysts
are increasingly considering environmental, social and
governance (ESG) aspects in their investment recommen-
dations and decision-making processes.
For many years now, its top rankings in prestigious
capital market sustainability indexes have borne out the
BMW Group’s leading role among automobile manu-
facturers. In 2020, for instance, the BMW Group was
ranked first in the automotive category of the Dow Jones
Sustainability Indices World and Europe. The Group also
attaches particular importance to remaining in direct
contact with investors and analysts. These dialogues are
currently focused on the BMW Group’s sustainability
strategy, the related progress updates and the ambi-
tious targets the Group has set itself to reduce carbon
emissions across the entire value chain. These topics are
discussed in face-to-face meetings and conversations as
well as at (sometimes virtual) roadshows and conferences
held at key international financial centres.
Against the backdrop of the Paris Climate Agreement,
policymakers in Europe are also increasingly adopting a
holistic approach to dealing with climate protection and
sustainability issues. For example, the EU Action Plan
for Sustainable Finance aims to redirect capital flows
towards sustainable economic activities. Financial risks
arising from factors such as climate change, resource
scarcity and environmental degradation are set to be
given greater prominence, and new approaches are
being developed to manage these risks. There are also
calls to promote greater transparency and long-termism
regarding financial and economic activity.
In June 2020, as a key aspect of the EU Action Plan,
the EU Parliament adopted a regulation to introduce a
uniform classification system (taxonomy) for environ-
mentally sustainable economic activities within the EU,
with a view to achieving a sustainable allocation of cap-
ital. The Taxonomy Regulation also extends the relevant
reporting requirements to companies covered by the EU
CSR Directive. From the 2021 reporting year onwards,
companies affected are required to disclose information
on revenues, capital expenditure and operating expenses
relating to economic activities that qualify as environ-
mentally sustainable, based on the stipulated taxonomy.
The BMW Group attaches great importance to the EU
Taxonomy Directive and is currently preparing for the
new requirements in a Group-wide project.
Sustainability is also an important factor for the
BMW Group when it comes to investing pension fund
assets. At the end of 2019, the Group took a pivotal
decision to apply sustainability criteria to investments
held by its German pension fund. The current focus is
on measuring the carbon footprint of significant parts of
these assets on the one hand and the risks attached to
their future performance on the other.
Concurrently, numerous benchmarks for investing
in liquid assets have been replaced by ESG-optimised
indices. Regarding the non-liquid portion of pension
assets, a fixed amount has been reserved for upcoming
investments that are intended to have a measurable,
positive impact on the environment or society in gen-
eral that are not based on yield considerations alone
(impact investments). In addition to climate protection,
the investments made to date are largely based on the
Sustainable Development Goals (SDGs) set out by the
UN such as health, well-being, affordable clean energy,
and sustainable consumption and production.
BMW GroupReport 2020
To Our Stakeholders
Dialogue with Stakeholders
31
KEY TOPICS IN 2020
Key topics raised by the BMW Group with stakeholders
included:
The BMW Group’s interaction with stakeholders in-
cludes topics brought to its attention by stakeholders as
well as those in which it proactively engages in dialogue.
— The Group’s new corporate strategy objectives
— Environmental and social standards in the supply
chain
Key issues raised by BMW Group stakeholders in
2020 included:
— Carbon emissions in the supply chain
— Climate protection, particularly carbon emissions
— Support for electric mobility and the comprehensive
— Human rights in the supply chain, particularly re-
garding the procurement of raw materials for electric
mobility applications
— Illegal deforestation
— Lobbying in associations
expansion of charging infrastructure
— Political control over emissions limits without dis-
criminating against individual drivetrain technolo-
gies and vehicle concepts
— Continued development of the regulatory framework
for automated driving and digital networks
— Sustainable finance
— Support for new efficiency-enhancing technologies
— Realistic relationship between emissions targets and
emission measurement methods
— Consistency between supply-side and demand-side
decarbonisation policies
— Ensuring a sufficient supply of critical raw materials
— Trade policy and free trade agreements
BMW GroupReport 2020
To Our Stakeholders
Dialogue with Stakeholders
32
THE NEXT STEPS:
STAKEHOLDER GROUPS AND FORMS OF DIALOGUE
Dialogue, conferences and technology workshops with investors and analysts
Capital market
Dialogue in the context of industry initiatives, joint events, training courses,
presentations, supplier risk assessments
Participation of company experts in committees and working groups, memberships
of initiatives and associations
Available to answer questions from policymakers and provide information to political
decision makers on relevant topics from the company’s perspective
Visiting universities and colleges, talks, discussions, dialogue events
with students
Dialogue within the context of press trips, press releases, information events
on new products, test drives, trade fairs
Dialogue with sales organisations and coordinating units of importers
Discussions with local residents, plant tours, press engagements
Face-to-face meetings / dialogue, responding to enquiries
Dialogue with employees and managers, employee surveys, idea management,
internal media
Surveys (including a corporate reputation study), social media, trade fairs, mass media
Suppliers
Networks
and associations
Political
decision makers
Research
Mass media
Business partners
Local stakeholders
Civil society and NGOs
Employees
Customers
The BMW Group intends to continue interacting with
its stakeholders throughout 2021. Apart from consider-
ing ways to develop and expand its own existing formats,
it will also continue to participate constructively in public
formats during the coming year.
Further plans include broadening the scope of in-
ternal dialogues with employees from 2021 onwards,
building on the success of this format at the BMW Group
Dialogues in 2020. The aim is to make employees aware
of the expectations of external stakeholders on the one
hand, while at the same time enabling employees to
participate in ongoing discussions and developments
on the other.
The BMW Group will also continue to engage in con-
structive dialogue with investors and analysts focused on
Socially Responsible Investments (SRI). In addition to the
daily discussions held on this subject, the BMW Group’s
participation in SRI roadshows and conferences in global
financial centres is again scheduled for 2021.
The extent to which the coronavirus situation will
continue to impact direct interaction with stakeholders
in 2021 remains to be seen. However, the BMW Group
has fared well with its digital formats so far and has
developed a range of options for maintaining dialogue
with stakeholders via alternative concepts and formats.
BMW Group
in dialogue
GRI 102-40, 102-43
BMW GroupReport 2020
To Our Stakeholders
BMW Stock and Capital Markets in 2020
BMW STOCK AND
CAPITAL MARKETS
IN 2020
RATINGS REMAIN AT HIGH LEVEL
The BMW Group continues to be the best-rated
automobile manufacturer in Europe.
The severe impact of the coronavirus pandemic in
2020 and the accompanying repercussions for the global
economy resulted in a reassessment of ratings in some in-
dustries, including the automotive sector. For some time
now, the rating agencies have highlighted the major chal-
lenges currently facing the entire automotive industry in
general. In light of developments in 2020, the agencies
took the opportunity to reassess the credit ratings of their
entire portfolio of automobile manufacturers. The more
rigorous assessment resulted in a significant number of
negative outlooks and downgrades being announced in
the course of recent months.
In this context, Moody’s lowered its long-term rating
for BMW AG from A1 to A2 in March 2020 and at the
same time set the outlook to “under review for further
downgrade”, before changing it to negative two months
later in May. Also in March, the rating agency Standard
& Poor’s (S&P) lowered its credit rating from A+ to A,
while leaving the outlook at negative.
Both agencies cite the negative trend in profitability
and free cash flow as the reason for the downgrade by
one rating level. Furthermore, the transformation of the
automotive industry and a deterioration of the market
environment in general are seen as major challenges.
The negative outlook for the long-term ratings reflects
the general uncertainty regarding future developments
and the potentially adverse impact of the coronavirus
pandemic. In light of the prevailing circumstances, the
agencies see a potentially negative impact on automobile
sales, profitability and free cash flow across the automo-
tive sector.
At the same time, however, the short-term ratings for
BMW AG were confirmed by both Moody’s (P-1) and S&P
(A-1) and therefore remain at a high level.
The BMW Group is already benefiting from its
rigorous working capital and capital expenditure man-
agement. The Automotive segment’s free cash flow, for
instance, exceeded market expectations not only in the
fourth quarter 2020, but also for the financial year as a
whole, with the EBIT margin again nearing the strategic
target range of between 8 and 10 %.
33
With its above-average ratings overall, the
BMW Group continues to enjoy good access to interna-
tional capital markets and is also benefiting from highly
attractive refinancing conditions.
Company rating
Moody’s Standard & Poor’s
Non-current financial liabilities
Current financial liabilities
Outlook
A2
P-1
A
A-1
negative
negative
TOP RANKINGS IN SUSTAINABILITY RATINGS
The BMW Group again achieved top rankings in
prestigious sustainability ratings in 2020, underlining
its strong position in this area. In 2020, for instance, the
BMW Group was named sector leader in the Automobiles
category of the Dow Jones Sustainability Indices World
and Europe. It is also in the top grouping (Climate A
List) of the CDP ratings list (formerly Carbon Disclosure
Project) for the transparency of its carbon emissions
reporting. Furthermore, the Group was again listed in
the British FTSE4Good Index in 2020, is also listed by
MSCI, Sustainalytics and ISS-Oekom and holds a leading
position in its sector in each case.
BMW GroupReport 2020
To Our Stakeholders
BMW Stock and Capital Markets in 2020
34
DIVIDEND BELOW PREVIOUS YEAR’S LEVEL – PAYOUT
RATIO REMAINS STABLE
BMW AG STOCK
The Board of Management and the Supervisory
Board will propose to the Annual General Meeting that
the unappropriated profit of BMW AG amounting to
€ 1,253 million (2019: € 1,646 million) be used to pay a
dividend of € 1.90 per share of common stock (2019:
€ 2.50) and a dividend of € 1.92 for each share of preferred
stock (2019: € 2.52). The payout ratio for 2020 therefore
stands at 32.5 % (2019: 32.8 %).
COMMON STOCK
Number of shares in 1,000
Stock exchange price in € 1
Year-end closing price
High
Low
PREFERRED STOCK
Number of shares in 1,000
Stock exchange price in € 1
Year-end closing price
High
Low
KEY DATA PER SHARE IN €
Dividend
Common stock
Preferred stock
Earnings per share of common stock 3
Earnings per share of preferred stock 4
Free cash flow Automotive segment
Equity
2020
2019
2018
2017
2016
601,995
601,995
601,995
601,995
601,995
72.23
76.68
37.66
73.14
77.75
58.70
70.70
96.26
69.86
86.83
90.83
77.71
88.75
92.25
65.10
57,689
56,867
56,127
55,605
55,114
55.20
57.60
32.50
1.902
1.922
5.73
5.75
5.15
55.05
67.85
47.54
2.50
2.50
7.47
7.49
3.90
93.26
90.92
62.10
85.50
60.70
3.50
3.52
10.605
10.625
4.12
88.265
74.64
78.89
67.29
4.00
4.02
13.07
13.09
6.78
82.95
72.70
74.15
56.53
3.50
3.52
10.45
10.47
17.45
72.08
1 Xetra closing prices.
2 Proposed by management.
3 Weighted average number of shares for the year.
4 Stock weighted according to dividend entitlements.
5 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, Note 6 to the Group Financial Statements).
BMW GroupReport 2020
Combined Management Report
35
COMBINED
MANAGEMENT REPORT
36
36
37
41
56
58
62
69
73
76
80
84
87
91
95
99
100
105
109
113
116
119
General Information and Group Profile
Core Values and Guiding Principles
Organisation and Business Model
Strategy, Goals and Management System
How the BMW Group creates value
Compliance and Human Rights
Innovation and Customer Orientation
Products and Services
Design and Product Safety
Carbon Emissions and Pollutants
Electric Mobility
Mobility Patterns
Production, Purchasing and
Supplier Network
Production Network
Resource Consumption and Resource Efficiency
Renewable Energy
Purchasing and Supplier Network
Employees and Society
Long-term Employee Development and
Employer Attractiveness
Health and Performance
Employee Diversity
Corporate Citizenship
122
122
126
127
142
142
148
150
153
154
159
159
164
179
180
Report on Economic Position
General and Sector -specific Environment
Overall Assessment by Management
of the Financial Year
Comparison of Forecasts with Actual Outcomes
Review of Operations
Automotive Segment
Motorcycles Segment
Financial Services Segment
Other Entities Segment / Eliminations
Comments on Financial Statements of BMW AG
Report on Outlook,
Risks and Opportunities
Outlook
Risks and Opportunities
Internal Control System Relevant for
Accounting and Financial Reporting
Processes
Disclosures Relevant for Takeovers
and Explanatory Comments
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
GENERAL
INFORMATION AND
GROUP PROFILE
CORE VALUES AND
GUIDING PRINCIPLES
LONG-TERM THINKING FORMS THE BASIS FOR OUR
ECONOMIC SUCCESS.
Long-term thinking and responsible action are an
integral part of the BMW Group’s corporate identity
and continue to form the basis for our economic success.
We strive constantly to meet the high expectations our
customers have in our products. Our business model is
intrinsically linked with the principle of sustainability
and we see the two factors as an integral unit. We aspire
to be not only the most successful, but also the most
sustainable premium provider of individual mobility and
always focus on the needs of our customers.
The BMW Group’s stance is unwavering: ecological
and social sustainability, responsibility for our products
and a clear commitment to conserving resources are at
the heart of our corporate strategy. We think and manage
our corporate affairs in a holistic manner. For instance,
we do not limit our understanding of environmental sus-
tainability to the emissions generated by our vehicles, but
rather take the entire value chain into account – whether
along the supply chain, in our production processes, dur-
ing the use phase or at the end-of-life recycling stage.
We have firmly embedded the principle of sustainability
in every aspect of our business. Our primary aim is to
balance the interests of economy, ecology and society and
thereby contribute to ecological and societal improve-
ment.
Global challenges such as growing urbanisation and
the finite nature of natural resources have inspired and
motivated us to develop a range of innovative products
and services. Climate change is one of the greatest chal-
lenges of our time and we are fully committed to the
Paris Climate Agreement in order to mitigate its effects.
As the BMW Group, we are making our contribution
by focusing on developing and improving technologies
and services that can effectively help bring about a via-
ble reduction in the global carbon emissions caused by
individual mobility. With this strategy we can create a
clear competitive advantage by offering our customers
emotional, trendsetting mobility solutions that are also
made with sustainable principles in mind.
36
OUR ACTIONS AS A COMPANY HAVE A POSITIVE IMPACT
ON THE ECONOMY AND SOCIETY.
We are a company operating on a global scale. As
such, we acknowledge our responsibility to contribute
to economic prosperity in the countries where we are
located. For this reason, we not only aspire to achieve
sustained profitable growth for the Group, but also to
make a specific contribution towards economic devel-
opment and improvement in the quality of life at the
locations where we operate.
The growth of the BMW Group not only provides a
reasonable return for investors, but also attractive salaries
for its employees. We also make a positive contribution
to society in general at the locations where we operate,
firstly by paying the amounts due to public authorities
(such as customs duties and taxes) and secondly in the
form of social, cultural and corporate citizenship activi-
ties.
Corporate Citizenship.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
37
Operating on a global scale, the BMW Group employed
a workforce of 120,726 people at the end of the year
under report. In 2020, the BMW Group consolidated its
position as one of the world’s most attractive employers.
Its leading role in terms of sustainability also contributes
to employee loyalty within the BMW Group.
The BMW Group comprises BMW AG itself and all
subsidiaries over which BMW AG has either direct or in-
direct 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 TRANSFORMATION OF MOBILITY AND THE
ADVANCE OF DIGITALISATION ARE OPPORTUNITIES.
ORGANISATION AND
BUSINESS MODEL
Mobility patterns worldwide, and hence the entire
automotive industry, are currently undergoing profound
change. We see this transformation as an opportunity to
set new industry standards and innovate in the fields of
electrification, connectivity and automated driving.
Digitalisation provides us with an excellent oppor-
tunity to take a fundamentally new approach to devel-
oping products for the benefit of our customers. We
not only react to customer wishes, but also anticipate
them through a good understanding of their preferences.
Moreover, digitalisation enables us to redesign processes
throughout the entire organisation.
WE ARE MOVING FORWARD IN OUR OWN
INDEPENDENT WAY.
As societal values as well as demographic and tech-
nological conditions change, new demands on mobility
solutions are constantly emerging. The ambition to fulfil
those wishes and needs is the force that drives us for-
ward. We are taking steps to ensure a viable future for
our business by developing innovatively, sustainably and
independently.
General information on the BMW Group is provid-
ed below. There have been no significant changes in
the Group’s structure compared to the previous year.
Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
based in Munich, Germany, is the parent company of the
BMW Group.
The starting point for the BMW Group’s corporate
strategy is to act in a consistent manner on a custom-
er-oriented and sustainable basis. Products, brands
and services are currently being developed with a clear
focus on innovative technologies such as low-emissions
drivetrains, digitalisation, connectivity and autonomous
driving.
The BMW Group is one of the most successful manu-
facturers of automobiles and motorcycles in the premium
segment worldwide. With BMW, MINI and Rolls-Royce,
the BMW Group owns three of the best-known premium
brands in the automotive industry. It also holds a strong
market position in the premium segment of the motorcy-
cle business. The Group sets itself clear goals in terms of
sustainable, individual mobility, resource-efficient value
creation, the continued development of its workforce
potential and its contribution to society. Sustainability
is an integral part of the Group’s business model and
plays a vital role in ensuring its viability going forward.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
BMW GROUP LOCATIONS WORLDWIDE
Headquarters
Canada
USA
Mexico
United
Arab Emirates
Brazil
Argentina *
South Africa
New Zealand
38
42
Sales subsidiaries and
Financial Services
locations worldwide
31
Production and
assembly plants
13
Countries with research
and development locations
Sales subsidiaries and
Financial Services
* Sales locations only.
Russia
India
China
South Korea
Japan
Hong Kong
Thailand
Malaysia
Singapore
Indonesia *
Australia
Production outside Europe
BMW Group plant Araquari, Brazil
BMW Group plant Chennai, India
BMW Group plant Manaus, Brazil
BMW Group plant Rayong, Thailand
BMW Group plant Rosslyn, South Africa
BMW Group plant San Luis Potosí, Mexico
BMW Group plant Spartanburg, USA
BMW Brilliance Automotive, China
(joint venture – 3 plants)
Partner plants outside Europe
Partner plant, Chongqing, China
Partner plant, Hosur, India
Partner plant, Jakarta, Indonesia
Partner plant, Cairo, Egypt
Partner plant, Kulim, Malaysia
Research and development
network outside Europe
BMW Group Designworks, Newbury Park, USA
BMW Group Technology Office USA, Mountain View,
USA
BMW Group Engineering and Emission Test Center,
Oxnard, USA
BMW Group ConnectedDrive Lab China, Shanghai,
China, and BMW Group Designworks Studio
Shanghai, China
BMW Group Technology Office, Shanghai, China
BMW Group Engineering China, Beijing, China
BMW Group Engineering Japan, Tokyo, Japan
BMW Group Engineering USA, Woodcliff Lake, USA
BMW Group IT Technology Office, Greenville, USA
BMW Group IT Technology Office, Singapore
BMW Group IT DevOps Hub, Rosslyn, South Africa
BMW do Brasil, Araquari, Brazil
BMW Group Technology Office Tel Aviv, Tel Aviv, Israel
BMW Group R&D Center Seoul, Seoul, South Korea
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
BMW GROUP LOCATIONS IN EUROPE
Norway
Germany
The Netherlands
UK
Ireland
Belgium / Luxembourg
France
Switzerland
Italy
Slovenia *
Spain
Portugal *
* Sales locations only.
Production in Europe
BMW Group plant Berlin
BMW Group plant Dingolfing
BMW Group plant Eisenach
BMW Group plant Landshut
BMW Group plant Leipzig
BMW Group plant Munich
39
Sweden
Finland *
Denmark
Czech
Republic
Poland
Austria
Slovakia
Hungary *
Romania *
Bulgaria *
Greece
Research and development network in Europe
BMW Group Research and Innovation Centre (FIZ),
Munich, Germany
BMW Car IT, Munich, Germany
BMW Group Autonomous Driving Campus,
Unterschleißheim, Germany
BMW Group Designworks, Munich, Germany
BMW Group Lightweight Construction and
Technology Center, Landshut, Germany
BMW Group Diesel Competence Centre, Steyr, Austria
Critical TechWorks S.A., Porto, Portugal
BMW France, S. A. S., Montigny, France
Rolls-Royce Motor Cars Ltd., Goodwood, UK
BMW Group plant Regensburg
BMW Group plant Wackersdorf
BMW Group plant Steyr, Austria
BMW Group plant Hams Hall, UK
BMW Group plant Oxford, UK
BMW Group plant Swindon, UK
Rolls-Royce Manufacturing Plant, Goodwood, UK
Partner plants in Europe
Partner plant, Born, the Netherlands
Partner plant, Graz, Austria
Partner plant, Kaliningrad, Russia
BMW GroupReport 2020
40
FINANCIAL SERVICES SEGMENT
The BMW Group is a leading provider of financial
services in the automotive sector. It offers these services
in around 60 countries worldwide via companies and
cooperation arrangements with local financial services
providers and importers. The Financial Services seg-
ment’s main business is credit financing and the leasing
of BMW Group brand automobiles and motorcycles to
retail customers. Customers can also choose from an
attractive array of insurance and banking products.
Operating under the brand name Alphabet, the
BMW Group’s international multi-brand fleet business
provides financing and comprehensive management ser-
vices for corporate car fleets in more than 20 countries.
These services also include helping customers to manage
their fleets on a sustainable and climate-friendly basis.
Financing dealership vehicle fleets serves to support
the dealership organisation and rounds off the segment’s
range of services.
Products and Services
The MINI brand promises driving pleasure in the
premium small car segment and, apart from models pow-
ered by efficient combustion engines, also offers plug-
in hybrid and fully electric variants. 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 specialises in bespoke customer
specifications and offers the very highest level of quality
and service.
The global sales network of the BMW Group’s automo-
bile business currently comprises more than 3,500 BMW,
over 1,600 MINI and some 140 Rolls-Royce dealerships.
MOTORCYCLES SEGMENT
The Motorcycles business is also clearly focused
on the premium segment. The model range currently
comprises motorcycles in the Sport, Tour, Roadster,
Heritage, Adventure and Urban Mobility categories.
BMW Motor rad also offers a broad range of equipment
options to enhance rider safety and comfort. The Mo-
torcycles business sales network is organised similarly
to that of the automobiles business. Currently, BMW
motorcycles are sold by more than 1,200 dealerships and
importers in over 90 countries.
Combined Management Report
General Information and Group Profile
PRESENTATION OF SEGMENTS
In order to provide a better insight into the Group as
a whole, this report also contains separate presentations
of the Automotive, Motorcycles and Financial Services
operating segments.
AUTOMOTIVE SEGMENT
The BMW brand caters to a wide variety of customer
requirements. Its model portfolio comprises an extensive
range of automobiles, including the premium compact
class, the premium mid-size luxury class and the ul-
tra-luxury class. Apart from fully electric models such
as the BMW iX3*, which was launched in 2020, it also
includes state-of-the-art plug-in hybrids and conventional
models powered by highly efficient combustion engines.
Together with the highly successful models of the BMW
X family and the high-performance BMW M brand, the
BMW Group meets the diverse expectations and needs
of its customers worldwide.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
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STRATEGY, GOALS AND
MANAGEMENT SYSTEM
STRATEGIC ORIENTATION OF THE BMW GROUP
Individual mobility, as the BMW Group understands
it, is inextricably linked with conserving the world’s nat-
ural resources. The BMW Group bases its contribution
to the sustainable development of our planet on scien-
tifically derived criteria. With this principle in mind, it
combines ecological and social aspects with securing its
long-term future in all its activities. The BMW Group
views the combination of driving pleasure and respon-
sibility for acting sustainably as a clear factor for dif-
ferentiation. The outcome is that customers experience
outstanding innovative products made by a company
focused on sustainability.
However, that is merely the starting point for the
BMW Group, which intends to integrate sustainability
more strongly than ever in its corporate strategy. The
strategy establishes the necessary conditions to fulfill
both customer expectations and regulatory requirements
regarding emissions in the Group’s various markets by
offering a wide range of products. Its clear ambition is to
ensure that all areas of the company think, manage and
demonstrably act in a true spirit of sustainability.
This way of thinking has resulted in the BMW Group
reaching the logical strategic decision to move away from
pursuing a separate sustainability strategy and present-
ing a separate sustainable value report. Sustainability is
41
the basic pattern that shapes the BMW Group’s strategy.
From beginning to end, activities and plans should com-
prehensively be examined with regard to their economic,
ecological and social impacts and the corresponding
decisions taken based on an integrated approach. With
effect from the financial year 2020, the Group is there-
fore integrating its reporting. A Group Report of this
nature covers a variety of key aspects and endeavours
to highlight correlations in a transparent manner. The
BMW Group is therefore consciously subjecting all of its
activities to a comprehensive external audit, including
its activities in the area of sustainability.
THE STRATEGY ARROW – POINTING THE WAY
TO THE FUTURE
The BMW Group’s strategy comprises four key ele-
ments, which are summarised in a strategy arrow that
points towards the future.
POSITION – WHAT DOES THE BMW GROUP
STAND FOR?
The BMW Group stands for first-class individual
mobility and sustained responsibility. These factors pro-
vide transparency and reliability for shareholders and
investors as well as for partners in the supply chain and
the production and sales system, but also for all other
stakeholders, political decision makers, the media and
the general public.
The BMW Group considers itself as a pioneer and
sets standards for the individual mobility of tomorrow. It
combines joy and responsibility without compromise and,
together with its partners, leads the industry in terms
of environmental, social and integrity standards. The
BMW Group is committed to complying with the Paris
Climate Agreement – with a verifiable track record of
continuous improvement. It is promoting the principles
of circular economy, both in its corporate philosophy and
in close collaboration with its partners – from the supply
chain to production, the use phase and the recycling of
its products.
Position
Direction
Strategic
approach
Collaboration
BMW GroupReport 2020
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DIRECTION – WHAT IS THE BMW GROUP’S
DRIVING FORCE?
Its aspiration to manufacture products that will in-
spire its customers – both today and in the future. That is
the force that drives the BMW Group. At the same time,
the Group strives to achieve a high level of profitability
in order to safeguard its corporate independence and
distinctively shape the mobility trends of the future. The
integration of ecological and social aspects throughout
its entire value chain ensures the continued viability of
the BMW Group going forward.
The Group is built on a firm foundation of strong
brands and emotional products. In the face of increasing-
ly fierce competition, the BMW Group continues to hone
its brand profiles and express them, among other ways,
in a unique, characteristic automotive design language.
Design arouses emotions and emotion drives desire. At
the BMW Group, outstanding design always follows
function. The kidney-shaped grille of the new BMW iX,
for example, takes on a new role as a smart surface that
not only conceals new technologies, but has the ability
to self-heal due to the use of innovative materials, so that
slight scratches disappear by themselves.
Innovation and
Customer Orientation
The products must deliver what their design prom-
ises, i. e. sportiness, quality and emotionality, a fact
that applies equally to all drivetrain technologies. The
BMW Group is a leading supplier of electrified vehicles,
the foundation for which was laid at an early stage by
project i with the all-electric BMW i3 in 2013. Mean-
while, the Group is in the middle of its second phase:
In order to keep pace with growing market demand, it
is expanding its offering of electric drivetrains across all
segments. With its flexible platforms and the fifth gen-
eration of in-house developed fully electric drive trains,
the BMW Group can offer its customers worldwide a
broad and mature range of products. For example, the
all-electric MINI Cooper SE * and the BMW iX3 * were
both launched in the course of 2020 and will be followed
by the BMW i4 and the BMW iX * in 2021.
In future, models such as the high-volume BMW 5 Se-
ries and the X1 as well as the BMW 7 Series will be available
with four different types of drivetrain – all-electric, plug-in
hybrid, petrol and diesel. Moreover, the BMW Group is
preparing for the third phase of its transformation with a
new vehicle architecture starting in the mid-2020s. Over
the next ten years, the Group intends to have more than
seven million of its electrified vehicles on roads world-
wide – at least two-thirds of them all-electric models.
42
With this aim in mind, the BMW Group is system-
atically expanding its product range and progressively
enhancing both its technologies and its vehicle archi-
tectures, the latest of which are entirely centred on fully
electric drivetrain systems. At the same time, the Group
is taking another major step in terms of digitalised con-
nectivity, not only within the vehicle itself, but also in
its corporate processes.
As part of its Performance Programme, the BMW
Group is also working to continuously raise its level of
efficiency in order to compensate for the high upfront
expenditures required for the technologies that will shape
the world of tomorrow. Profitability and free cash flow
have a high priority within the BMW Group’s corporate
management system. All the measures and initiatives it
takes are therefore aimed at continually developing its
strong economic base.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
Moreover, to express the importance of its ability to
perform in economic terms, the BMW Group has set it-
self ambitious financial targets in the course of realigning
its strategy. In future, the key performance indicators
(KPIs) already used in the annual outlook, namely
1. Profit before financial result as a percentage of Auto-
motive segment revenues (EBIT margin Automotive
segment) and
2. Return on capital employed for the Automotive seg-
ment (RoCE Automotive segment)
will also be integrated as KPIs at the strategic level. The
aim is for the Automotive segment’s EBIT margin to rise
steadily again to between 8 % and 10 % and for the RoCE
to reach a level of at least 40 % in the future.
The two segment-related profitability indicators will
be supplemented by the KPI
3. Group profit before tax as a percentage of Group
revenues (BMW Group EBT margin).
With this strategy, the BMW Group intends to gen-
erate a Group EBT margin in excess of 10 %. In terms of
KPIs, the equivalent to Group EBT margin for corporate
management purposes is Group profit before tax (EBT).
Outlook
Management System and
43
With regard to free cash flow, the BMW Group focus-
es particularly on capital expenditure and the systematic
management of working capital.
STRATEGIC APPROACH – WHERE IS THE
BMW GROUP HEADING?
Even faster digitalised processes and lean struc-
tures are key prerequisites for consistently leveraging
efficiencies. During the coronavirus pandemic year
2020, for example, advances in digitalisation enabled
the BMW Group to maintain direct contact with its cus-
tomers, despite lockdowns worldwide. Digitalisation is
helping to shorten the process of developing new vehicle
models by up to one-third. When the BMW Group transi-
tions to the more advanced smart vehicle architectures in
2021, the conventional drivetrain variants will be largely
phased out to make way for electrified drivetrains such
as mild hybrid, plug-in hybrid and fully electric systems.
These results will already begin to take effect from 2022.
Moreover, as one of its efficiency initiatives, the
Group regularly assesses how complexity can be rea-
sonably reduced. Complexity arises due to increasingly
strict and globally heterogeneous regulatory require-
ments. The Group-wide Performance Programme also
includes making the most of synergies and efficiencies
in indirect purchasing as well as in terms of materials
and production costs. And it goes without saying that
the BMW Group is selectively bolstering its performance
with attractive new models – especially in segments gen-
erating the highest returns.
The BMW Group places the strategic emphasis on its
customers and their varying requirements worldwide. In
the BMW Group, trendsetting technologies, emotional
products and individualised customer service merge to
create a unique overall experience for customers.
Its strategy is therefore of a dynamic nature. On the
one hand, the Group’s market environment is charac-
terised by stable trends. This includes people’s need for
individual mobility, which the BMW Group is convinced
will remain strong and grow further in the years to come.
On the other hand, however, it needs to be able to re-
spond to uncertain developments both flexibly and with
a sense of proportion. These developments can be of a
(geo)political nature, but also come in the form of fully
unexpected events such as the coronavirus pandemic.
In 2020, the Board of Management realigned the core
elements of the BMW Group’s strategy and focused them
on the key technology areas that are expected to shape
the future.
Innovative technologies are the key to the future
of mobility going forward. By 2025, the BMW Group
intends to invest more than € 30 billion in research
and development to reinforce its role as a leader of
innovation. The Group’s plans are also an expression
of confidence in terms of the way it sees business de-
veloping going forward. Its ability to integrate a broad
variety of technologies in an overall system is of crucial
importance. Companies that succeed in mastering and
combining both hardware and software in equal measure
are those which will shape the future of the automobile
in the long term.
BMW GroupReport 2020
Combined Management Report
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44
HOW DOES THE BMW GROUP
ENSURE COOPERATION?
SUSTAINABILITY PLACED AT CORE
OF CORPORATE STRATEGY
To achieve its strategic goals, the entire team of some
121,000 employees worldwide needs to work in a spirit
of cooperation to implement the strategy, based on the
principles of responsibility, appreciation, transparency,
trust and openness. The BMW Group therefore works
hand in glove with both internal and external partners
with the twin aims of achieving maximum effectiveness
and joint success.
The Group needs to tackle the entrepreneurial,
eco logical and social challenges in equal measure to
accomplish these aims. Decisions need to be analysed
with regard to their interactions and consequences in the
overall context. Success is not something to be simply
taken for granted, but has to be worked for every day
anew. Everyone needs to work hard for “their” company
and deliver maximum performance in order to reach the
common goal. Success in corporate terms is always the
joint success of all BMW Group employees together with
their partners. For this reason, it is also a key aspiration
of the BMW Group to be an attractive employer.
Sustainability is intrinsic to the BMW Group’s stra-
tegic orientation. At the end of July 2020, the Board of
Management of BMW AG announced the first details of
this strategy and presented targets to which the enter-
prise will remain committed for the period up to 2030.
In this endeavour, the BMW Group is building on a solid
foundation. In recent years and decades, it has also re-
peatedly set standards in sustainability that are acknowl-
edged by external, independent bodies. In 2020, for
example, the BMW Group took back industry leadership
in the automotive sector in the Dow Jones Sustainability
Indices World and Europe. The BMW Group therefore
occupies the top spot among automotive manufacturers
Dialogue with Stakeholders. It is also in the top CDP grouping
for its transparent disclosure of carbon emissions. The
principle of continuous improvement has always been a
key aspect of the BMW Group's strategy.
The Group has therefore given a commitment to
achieve climate neutrality across the entire value chain
by no later than 2050. In view of the long-term nature
of its targets and the fact that, from today’s perspective,
the technological and economic route remains uncertain,
the BMW Group sets its targets one decade at a time.
In 2020, for example, the Group set itself specific goals
for the year 2030 based on scientific information. New
science-based targets have emerged from the initiative of
the same name (SBTI). These targets are fully in line with
the requirements of the Paris Climate Agreement and put
the BMW Group on the path towards climate neutrality.
Carbon emissions are to be reduced by at least
one-third per vehicle over the entire life cycle, from the
supply chain to production to the end-of-life phase. The
BMW Group expects environmental and social stand-
ards to be upheld by all participants in the supply chain,
including those delivering critical raw materials. The
BMW Group aims to ensure the most sustainable supply
chain in the industry.
BMW GroupReport 2020
NEW AND AMBITIOUS TARGET FRAMEWORK BY 2030
The corresponding key non-financial performance
45
The BMW Group is firmly convinced that the fight
against climate change and the responsible use of re-
sources will determine the future of our society – and
thus also that of the BMW Group. Particularly as a
premium manufacturer, the BMW Group aspires to lead
the way in promoting sustainability and is therefore also
taking responsibility with regard to this key topic.
This also means facing up to the challenges of the
future, but also making effective use of opportunities as
they arise. With this in mind, the BMW Group focuses on
the performance and diversity of its workforce, whereby
the proportion of women in management positions at
BMW Group is seen as a key performance indicator for
the future.
Moreover, the BMW Group is rigorously going one
step further by setting itself new and ambitious sustain-
ability targets for 2030. They are an inherent aspect of
strategic management and include the upstream supply
chain, the Group’s own manufacturing operations as well
as the customers’ use phase.
indicators are:
1. CO₂ emissions per vehicle produced
2. CO₂ emissions of the new vehicle fleet *
3. Proportion of electrified vehicles in total deliveries
In future, the key non-financial performance indica-
tors will be supplemented to include CO₂ emissions gen-
erated in the supply chain. The corresponding strategic
focus is firmly established in every area of the company.
* EU including Norway and Iceland.
Combined Management Report
General Information and Group Profile
The new target framework represents a systematic
continuation of the ten strategic sustainability goals
already announced in 2012, which have been rigorously
pursued in the period from 2012 to 2020. These sustain-
ability goals were divided into three main fields of action:
1. Products and services
The increasing electrification of the BMW Group’s
fleet and the systematic further development of
combustion engines made it possible to remain
within the fleet CO₂ limit set by the EU in the 2020
reporting period, taking all regulatory requirements
and regulations into account.
As a result, the
Group also achieved the target it set itself in 2012
of halving the carbon emissions generated by its
European new vehicle fleet in the period from 1995
to 2020.
Carbon Emissions and Pollutants
2. Production and value creation
Since 2020, the BMW Group has obtained all of its
production-related, externally generated electricity
from renewable sources, in line with the target set
by the Group.
Renewable Energy
3. Employees and society
Women accounted for 19.5 % of the BMW Group’s to-
tal workforce during the year under report (BMW AG:
15.9 %) and therefore above the target range of 15 %
to 17 % set for 2020. At 17.8 %, the proportion of
women in management positions at BMW Group
(BMW AG: 16.2 %) was also within the target range
at the end of 2020. The high proportion of women
in junior management programmes also forms the
basis for a further increase in the number of women
in management positions over time.
Employee Diversity
BMW GroupReport 2020
Combined Management Report
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46
Strategic targets 2020
2020
TARGETS ACHIEVED
– 53 %
CO² EMISSIONS IN THE
EUROPEAN NEW VEHICLE
FLEET IN THE PERIOD FROM
1995 TO 2020
100 %
ELECTRICITY PURCHASED FOR
THE BMW GROUP’S PLANTS
WORLDWIDE SINCE 2020 FROM
RENEWABLE ENERGY SOURCES
17.8 %
PROPORTION OF WOMEN
IN MANAGEMENT POSITIONS
IN THE BMW GROUP
PRODUCTS AND
SERVICES
PRODUCTION, PURCHASING
AND SUPPLIER NETWORK
EMPLOYEES AND
SOCIETY
This is a simplified depiction. Detailed explanations of KPIs and its corresponding
assurance level are provided in the relevant chapters of the report.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
47
CARBON TARGETS FOR THE VEHICLE’S USE PHASE
By 2030, the carbon emissions generated by
BMW Group vehicles are to be reduced by more than
40 % per kilometre driven. The BMW Group has been
working successfully for many years to reduce the level
of carbon emissions of its new vehicle fleet worldwide.
As well as complying with its legal obligations, the Group
has always remained true to its voluntary commitments.
The early deployment of Efficient Dynamics technologies
since 2007 and the ongoing electrification of its vehicle
fleet form the dual basis for continued compliance with
statutory carbon emissions and fuel consumption limits
going forward.
As a pioneer of electric mobility, the BMW Group is
in the process of significantly expanding its range. By
the end of 2021, it aims to have over one million ve-
hicles powered by either all-electric or plug-in hybrid
drivetrains on the road. BMW Group customers will
then be able to choose from a range of five fully electric
series-produced models.
The BMW Group intends to have 25 electrified mod-
els on the road by 2023. The plan is based on flexible
vehicle architectures and production systems that enable
a model to be manufactured as an all-electric version, as
a plug-in hybrid or powered by a conventional internal
combustion engine. This approach gives the BMW Group
the flexibility to take account of changes in market de-
mand as well as differences in regulatory requirements
and infrastructure in the various markets in which it
operates. The BMW Group forecasts that demand for
its electrified vehicles is set to double by 2021 compared
to 2019. According to the BMW Group’s forecasts, by
2021 the sale of electrified vehicles is expected to double
compared to 2019 figures. By 2025, the proportion of
electrified cars in total Group deliveries is expected to
rise to at least 25 %. However, Group decarbonisation
targets are far more ambitious. By 2030, it aims to reduce
carbon emissions per kilometre driven during a given
vehicle’s use phase by more than 40 % compared to 2019
(Scope 3 downstream).
Carbon Emissions and Pollutants The
target is within the range defined by the SBTI’s calcu-
lations to limit global warming to between 1.5 and 1.75
degrees Celsius.
CARBON EMISSIONS IN PRODUCTION AND AT BUSINESS
LOCATIONS BY 80 %
The BMW Group has a direct influence on the carbon
emissions generated at its own plants and locations and
has therefore been a leader in terms of resource efficiency
in this field for many years. Its underlying aspiration
is even more ambitious than the international pursuing
efforts of limiting global warming to 1.5 degrees Celsius.
Despite having already reduced the level of carbon
emissions per vehicle produced by more than 70 %
since 2006,
the BMW Group intends to additionally
reduce carbon emissions per vehicle produced, which
are generated directly by its own combustion process-
es (Scope 1) and indirectly by external energy sources
(Scope 2), by a further 80 % by 2030 (base year 2019).
Accordingly, by 2030 carbon emissions are expected to
have dropped by over 90 % compared with 2006 levels.
Resource Consumption and Resource Efficiency
Alongside the purchase of electricity, 100 % of which
has been obtained from green, renewable sources * since
2020,
Renewable Energy the BMW Group will continue to
systematically invest in optimising its energy efficiency
and also intends to exploit the opportunities offered by
digitalisation in the process. Even today, the Group’s
production processes are already highly efficient – for
example, by reducing the volume of rejects in car body
construction to a minimum and by planning the ongo-
ing maintenance of its machinery on a predictive basis.
The BMW Group will also examine the potential for the
broader deployment of renewable energy at its various
locations worldwide. The use of green hydrogen to gen-
erate power can also play a key role.
* Electricity generated from in-house renewable power plants, direct supply contracts for green electricity
and certified guarantees of origin.
BMW GroupReport 2020
48
As a concrete example of the measures taken, the
Group has already entered into contractual agreements
with its cell manufacturers that only green electricity will
be used to produce the fifth generation of battery cells, a
move that should lead to a total saving of around ten mil-
lion tonnes of carbon dioxide over the next ten years.
Moreover, the BMW Group is currently in the process
of creating the organisational conditions that enable it
to reliably record and document the size of the carbon
footprint generated via its supply chain. This, in turn, is
the key prerequisite for taking subsequent measures to
reduce and effectively manage it, fully in line with the
BMW Group’s declared strategy of continuous improve-
ment.
Purchasing and Supplier Network
Task Force on Climate-related Financial
Disclosures (TCFD)
In its reporting procedures, the BMW Group also takes the rec-
ommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) into account in order to report transparent-
ly on climate risks and opportunities for operational and finan-
cial reporting purposes. Firstly, it reports on this topic in detail in
its BMW Group Report and secondly in the CDP questionnaire,
which has incorporated the TCFD recommendations since 2018.
The BMW Group’s 2020 CDP questionnaire is available on the
TCFD-Index in the ap-
pendix provides a compact overview of the key statements con-
tained in the four TCFD core elements as well as their location in
the BMW Group Report and the CDP questionnaire.
BMW Group Website. The TCFD Index
Combined Management Report
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CO2 IN THE SUPPLY CHAIN: TREND REVERSAL AND
SIGNIFICANT REDUCTION
In view of the increasing number of electric vehicles
on roads worldwide, far greater attention will also have
to be paid to upstream value creation when it comes to
reducing carbon emissions going forward – particularly
in light of the energy-intensive production of high-volt-
age batteries. Due to the greater proportion of electrified
vehicles, carbon emissions generated per vehicle in the
BMW Group’s supply chain are set to rise by more than
one-third by 2030 if no countermeasures are taken. At
the same time, as the volume of carbon emissions gener-
ated during the use phase decreases, the total percentage
of emissions caused by the supply chain and attributable
to the Group will increase. This situation requires the
BMW Group to set its own strategic targets.
The Group not only aims to halt the rise in the level
of carbon generated by the supply chain that would be
expected without taking countermeasures (Scope 3 up-
stream), it also intends to reduce emissions per vehicle
by at least 20 % * by 2030 (base year 2019). In its efforts to
achieve this aim, among other measures the BMW Group
is establishing the carbon footprint of the supply chain
as a decision-making criterion when awarding contracts.
With this end in mind, the Group took the step of initiat-
ing a dialogue with its most important suppliers in terms
of their carbon footprint during the period under report.
The BMW Group is playing an exemplary role in working
with well-documented and measurable carbon emission
targets for its supply chain.
* Value rounded for simplification purposes. The target percentage validated in conjunction with SBTI is 22 %.
BMW GroupReport 2020
Combined Management Report
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49
RESPONSIBLE USE OF RESOURCES – ENTERING THE
CIRCULAR ECONOMY
Not only decarbonisation but also the responsible
use of resources plays a key part in the BMW Group’s
strategy. In practical terms, this means primarily avoiding
waste or reducing it to an absolute minimum. However,
as resources are scarce and many raw materials are only
available in limited quantities, the reuse of materials
and raw materials in the form of secondary materials is
becoming increasingly key for manufacturing processes
going forward.
For example, the growing popularity of electric mo-
bility worldwide cannot be covered by primary materials
alone in the long term. Furthermore, there is a strong
synergy between the conservation of primary natural
resources and carbon dioxide emissions. Therefore,
from a sustainability perspective, the underlying flows
of resources require some rethinking. The BMW Group
aims to obtain high-quality secondary materials through
promoting a greater degree of transparency in the re-
cycling chain and simultaneously tracing the reuse of
(secondary) raw materials within the cycle.
The Group has the clear objective of promoting the cir-
cular economy principle by using raw materials even more
efficiently in order to protect nature’s finite resources.
Even today, vehicles are already required to be 95 %
recyclable. However, the proportion of secondary raw
materials used to manufacture new vehicles is still com-
paratively low. In view of this key point, the BMW Group
plans to considerably increase this proportion in its
vehicles by 2030 – and is already exploring some very
far-reaching scenarios.
The use of secondary materials
again significantly reduces carbon emissions in compari-
son to primary materials – by as much as 80 % in the case
of aluminium, for example. Keeping the extraction of raw
materials to a minimum is an ideal way of protecting ex-
isting resources. In the case of critical raw materials, for
example, any political conflicts in the producing coun-
tries could also give rise to risks for the BMW Group’s
procurement activities, which can be mitigated through
the use of secondary products.
Particularly in view of the high-voltage batteries
needed to power electrified vehicles, which can entail
the use of critical raw materials, the circular economy
has a decisive role to play. In close collaboration with the
German recycling specialist Duesenfeld, the BMW Group
has developed a process that can achieve a recycling rate
of up to 96 % – including the graphite and electrolytes
these devices contain. The BMW Group already offers all
customers who own a vehicle equipped with a high-volt-
age battery to take the devices back free of charge. The
offer also applies to regions where it is not legally obliged
to do so.
In order to monitor and verify flows of goods on a
global basis, the BMW Group is also using digital tools
in pilot processes, including blockchain technology. The
PartChain project, for example, enables the Group to
collect supply chain data using a method that is both
verifiable and tamper-proof at all times. In the long term,
this technology could enable critical raw materials in par-
ticular to be fully traceable from the mine to the smelter.
Resource Consumption and Resource Efficiency
SECURING LONG-TERM SUCCESS
In order to create value for the BMW Group, the
environment and society in general, sustainability is
integrated throughout the entire value chain and all
its underlying processes. And the evidence of how this
Group strategy is being implemented underlines its tan-
gible impact. It sets out clear guidelines and points the
way forward in terms of how the BMW Group intends to
shape the individual premium mobility of tomorrow. The
BMW Group will move forward in its own independent
way and continue the long-term process of developing
on a sustainable and profitable basis.
The BMW Group’s strategic goals up to the years 2025
and 2030 respectively are summarised in the presenta-
tion below:
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
50
> 10 %
EBT MARGIN
GROUP
8 -10 %
EBIT MARGIN
AUTOMOTIVE SEGMENT
≥ 40 %
RETURN ON CAPITAL EMPLOYED
AUTOMOTIVE SEGMENT
Strategic targets
2025
≥ 25 %
MINIMUM PROPORTION OF ELEC-
TRIFIED AUTOMOBILES TO TOTAL
DELIVERIES
22 %
PROPORTION OF WOMEN
IN MANAGEMENT POSITIONS
IN THE BMW GROUP
2030
80 %
REDUCTION OF CO² EMISSIONS
PER VEHICLE IN PRODUCTION
(BASE YEAR 2019)
> 40 %
REDUCTION OF CO² EMISSIONS
IN VEHICLE USE PHASE
PER KILOMETRE DRIVEN
(BASE YEAR 2019)
≥ 20 %
REDUCTION OF CO² EMISSIONS
IN THE SUPPLY CHAIN
(BASE YEAR 2019)
This is a simplified depiction. Detailed explanations of KPIs and its corresponding
assurance level are provided in the relevant chapters of the report.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
Managing sustainability
The BMW Group’s long-term strategic course is determined by
the full Board of Management, which is therefore also responsi-
ble for implementing the Group’s sustainability goals. In 2019,
the separate format of the Board of Management’s Sustaina-
bility Board was fully incorporated into the regular meetings of
the Board of Management, enabling sustainability issues to be
even more systematically integrated within the BMW Group’s
decision-making processes. Since then, sustainability has been
treated like every other topic and discussed at Board of Manage-
ment meetings as the need arises. Moreover, all requests for de-
cisions referred to the Board of Management are required to be
assessed beforehand in terms of their sustainability. A Strategy
and Structure Circle, comprising the top management of the vari-
ous company divisions, prepares the drafts of decisions to be tak-
en for the Board of Management after also taking sustainability
issues into account.
The BMW Group’s corporate governance principles are set out in
Corporate Governance Statement.
detail in its
GRI 102-18,
102-19, 102-20, 102-26, 102-27, 102-31, 102-33
The Group’s targets for sustainability are applied at business unit
level and overall area of responsibility level. As a consequence,
the individual targets set for managers include sustainability as-
pects and criteria that have an impact on performance-based
compensation.
GRI 102-19, 102-28
The Supervisory Board decides on the amounts awarded to mem-
bers of the Board of Management
Remuneration Report, basing
its decisions on the sustainable development of the BMW Group
as a whole. Bonuses are partially based on personal performance
and assessed primarily according to qualitative criteria. These in-
clude ecological innovations (e. g. carbon emission reductions),
leadership accomplishments and the ability to manage change
processes. Additional criteria include enhancing the company’s
attractiveness as an employer, progress in implementing the di-
versity concept and activities that encourage corporate citizen-
ship within the BMW Group.
GRI 102-27, 102-28, 102-35
51
MANAGEMENT SYSTEM
The BMW Group’s business management system fol-
lows a value-based approach that focuses on profitability,
consistent growth, value enhancement for capital pro-
viders, sustainability, climate protection 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. This strategy also secures the
desired degree of corporate autonomy in the long term.
The BMW Group’s internal management system is
based on a multilayered structure. Operating perfor-
mance is managed primarily at segment level. In order
to manage long-term corporate performance and assess
strategic issues, additional key performance figures 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-financial performance
indicators (value drivers). The link between value added
and the relevant value drivers is presented in a simplified
form below.
BMW GROUP – VALUE DRIVERS
Value added
–
Return on capital
(RoCE or RoE)
×
Return on sales
Capital turnover
Cost of capital
÷
÷
×
Profit
–
Expenses
Revenues
Capital employed
Average weighted
cost of capital rate
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
Due to the very high level of aggregation, it is im-
practical to manage the business on the basis of value
added. This key indicator is, however, used for reporting
purposes. In addition, relevant value drivers having a sig-
nificant 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-related decisions, the
target system follows a project-oriented management
logic that is based on net present values and profitability
performance indicators, thereby providing a fundamental
basis for decision-making.
MANAGEMENT OF OPERATING PERFORMANCE
AT SEGMENT LEVEL
Operating performance at segment level is managed
at an aggregated level on the basis of returns on cap-
ital. 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
(RoCE) is used for the Automotive and Motorcycles
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 measure segment performance and the development
of enterprise value.
52
AUTOMOTIVE SEGMENT
The most comprehensive key performance indicator
used for the Automotive segment is RoCE. This indica-
tor provides information on the profitability of capital
employed and the operational business. Value driver
analyses can be used to interpret the causes of a change
in RoCE and derive suitable measures to influence its
development. RoCE is measured on the basis of segment
RETURN ON CAPITAL EMPLOYED
profit before financial result and the average capital
employed in the segment. The strategic target for the
Automotive segment’s RoCE is 40 %.
RoCE Automotive
=
Profit before
financial result
Average
capital employed
Profit before financial result in € million
Average capital employed in € million
Return on capital employed in %
Automotive
2,162
4,499
17,026
15,513
2020
2019
2020
2019
2020
12.7
2019
29.0
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).
Due to its key importance for the Group as a whole,
the Automotive segment is managed on the basis of
additional key performance indicators that 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
(EBIT margin: segment profit before financial result as a
percentage of segment revenues) as the key performance
indicator for segment profitability.
Furthermore, the segment manages its compliance
with fleet CO₂ targets in regulated markets. This also
includes the proportion of total deliveries accounted for
by electrified vehicles. Since compliance with regulatory
requirements has a significant impact on the company’s
success, business decisions relating to vehicle projects
also take fleet CO₂ requirements into consideration.
In order to take account of the increasing relevance of
carbon emissions over the life cycle of a vehicle, in 2020
a control logic was agreed upon to measure this factor
during the manufacturing phase (supplier network, logis-
tics, production).
BMW GroupReport 2020
53
Combined Management Report
General Information and Group Profile
MOTORCYCLES SEGMENT
As with the Automotive segment, the Motorcycles
segment is managed on the basis of RoCE. Capital em-
ployed is determined on the same basis as in the Auto-
motive segment. The strategic RoCE target for the Motor-
cycles segment is 40 % as in the Automotive segment.
RoCE Motorcycles
=
Profit before
financial result
Average
capital employed
RETURN ON CAPITAL EMPLOYED
Motorcycles
Profit before financial result in € million
Average capital employed in € million
Return on capital employed in %
2020
103
2019
194
2020
687
2019
660
2020
15.0
2019
29.4
The main value drivers include the number of de-
liveries and the operating return on sales (EBIT margin:
segment profit before financial result as a percentage of
segment revenues) as the key performance indicator for
segment profitability.
BMW GroupReport 2020
54
Combined Management Report
General Information and Group Profile
FINANCIAL SERVICES SEGMENT
As commonly practised in the banking sector, the
Financial Services segment is managed on the basis of
return on equity (RoE). 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
return on equity of at least 14 %.
RoE
Financial Services
=
Profit before tax
Average equity capital
RETURN ON EQUITY
Financial Services
1,725
2,272
15,343
15,146
2020
2019
2020
2019
2020
11.2
2019
15.0
Profit before tax in € million
Average equity capital in € million
Return on equity in %
STRATEGIC MANAGEMENT AT GROUP LEVEL
Strategic management and the quantification of
financial implications based on long-term corporate
planning are performed primarily at Group level. Key
performance indicators in this context include Group
profit before tax and the size of the workforce at the year
end. Group profit before taxes provides a comprehensive
measure of the Group’s overall corporate performance
after consolidation effects and a transparent basis for
comparing performance over time.
The information provided by these non-financial
performance indicators is complemented by the two
financial key performance indicators of pre-tax return
on sales and value added. Value added, as a highly ag-
gregated performance indicator, also provides an insight
into capital efficiency and the (opportunity) cost of cap-
ital required to generate Group profit. A positive added
value means that a return on investment above the cost
of capital has been achieved.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
55
VALUE ADDED GROUP
in € million
BMW Group
Value added Group
Earnings amount
Cost of capital (equity + debt capital)
Value added Group
2020
2019
2020
2019
2020
2019
5,464
7,369
8,061
7,812
– 2,597
– 443
=
=
earnings amount –
cost of capital
earnings amount –
(cost of capital rate × capital
employed)
In order to determine the internal rate of return,
risk-adjusted cost of capital rates are based on the average
of actual rates in recent years. In light of the long-term
nature of product and investment decisions, the follow-
ing internal rates of return are used in conjunction with
segment management:
Capital employed comprises the average amount
of Group equity and pension pro visions as well as the
financial liabilities of the Automotive and Motorcycles
segments employed at the end of the last five quarters in
each case. The earnings amount corresponds to Group
profit before tax, adjusted for interest expense incurred
in conjunction with the pension provision and the fi-
nancial liabilities of the Automotive and Motorcycles
segments (profit before interest expense and taxes). The
cost 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 capital for the BMW Group in
2020 was 12 %, unchanged from the previous year.
in %
Automobile
Motorcycles
Financial Services
2020
2019
12.0
12.0
13.4
12.0
12.0
13.4
VALUE-BASED MANAGEMENT FOR PROJECT DECISIONS
Operational business in the Automotive and Motor-
cycles segments is largely shaped by the life-cycle-de-
pendent character of investment projects, which have
a substantial influence on future business performance.
Project-related decisions are therefore a crucial element
of financial management in the BMW Group.
Project decisions are based on calculations derived
from the expected cash flows of each individual project.
Calculations are made for the full term of a project, in-
corporating 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.
The net present value indicates the extent to which
the project will be able to generate future net cash in-
flows over and above the cost of capital. A project with
a positive net present value enhances future value added
and therefore results in an increase in enterprise value.
The internal rate of return of the project shows the aver-
age return on the capital employed in the project. In this
respect, there are conceptual links between the internal
rate of return and the multi-year average RoCE.
For all project decisions, the project criteria and long-
term periodic results impact are measured and incorpo-
rated in the long-term Group planning. 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.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
HOW THE BMW GROUP
CREATES VALUE
Within the BMW Group, value creation is a com-
prehensive process involving a broad range of positive
factors, some of which interact in complex ways. These
factors may be of a financial or a non-financial nature
and relate to both tangible and intangible values that are
geared towards creating additional value using a mini-
mum of resources. These input factors form the basis that
drives the BMW Group’s overall performance.
According to the input-output model of the IIRC
framework, the factors on both the input and the output
side are divided into six different types of capital, which
can be distinguished as follows:
1. Financial capital
2. Human capital
3. Intellectual capital
4. Relationship capital
5. Produced capital
6. Natural capital
56
The BMW Group’s financial capital is defined in
terms of equity capital and total assets, the latter cor-
responding to the balance sheet total. An appropriately
high equity ratio (i. e. equity as a percentage of total
assets) makes a significant contribution to safeguarding
the corporate independence of the BMW Group and
forms a solid basis for high earnings and therefore stable
dividends for the shareholders.
The BMW Group’s solid economic base is inextricably
linked with its human and intellectual capital. These
two precious assets constitute the greatest factor in the
enduring success of the Group as a whole and play a
key role in tackling the challenges of the future. They
combine the knowledge, skills, abilities, strengths and
talents of the BMW Group’s workforce and are among
the most important value factors for the Group.
In its international R&D network, the BMW Group
offers its innovation-minded employees excellent condi-
tions that enable them to create the solutions that will
shape tomorrow’s world. The high degree of motivation
to innovate and the willingness to perform, both of
which are firmly anchored throughout the entire work-
force, are equally expressed in the lively participation
in Group-wide ideas management as well as in the
outstanding level of employee satisfaction. A key pillar
of the BMW Group’s personnel development strategy is
to develop this success factor in a targeted manner. In
addition to its many other levers, the Group attaches
great importance to the personal advancement of each
individual, which also includes providing opportunities
for further training.
For the BMW Group, innovation means rigorously
taking the next step. In this context, it also collaborates
closely with its partners in the supplier network. The
stable relationships, which have developed over a long
period of time in many cases, have created a capital of
inestimable value, a fact amply demonstrated not least
in the 2020 pandemic year. Even under the challeng-
ing conditions of the global lockdown in 2020, the
BMW Group’s supply chains remained firm; a feat only
possible when the partners share common standards and
values and can truly depend on one another.
Purchasing
and Supplier Network
The backbone of the BMW Group’s produced capital
is formed by the 31 plants in its global production net-
work, across which it manufactured a total of 2.26 million
premium vehicles during the 2020 reporting period. Thir-
teen of these plants (over 40 %) are already producing
electrified vehicles alongside conventional models.
Natural capital describes all the renewable and
non-renewable resources deployed in the manufactur-
ing process. The BMW Group is an efficiency-oriented
company, and for that reason both the enterprise as
a whole and its individual employees have always de-
ployed natural resources sparingly as a matter of course.
The consistently positive development of these capital
indicators in recent years underscores this common
corporate identity, a fact additionally confirmed by the
assessments of independent rating agencies
BMW Stock
and Capital Markets in 2020.
All in all, these various aspects form the basis of the
BMW Group’s enduring success. Even minor changes in
individual factors can directly influence the overall result.
This holistic BMW Group approach is intended to ensure
that all available resources are used in a responsible man-
ner.
Value Added Statement
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
Financial capital
61,520
216,658
Total assets
(€ million)
Equity capital
(€ million)
120,726
Human capital
279
Workforce at
end of year
Training and education
expenditure (€ million)
Intellectual capital
6,279
1,561
R&D expenditure
(€ million)
Employee ideas
implemented in
conjunction with
CRE8 Ideas
Management
Relationship capital
55.5
79
Proportion of
production-relevant
purchasing volume within
the CDP supply chain
programme (in %)
Purchase volume
(€ million)
Produced capital
thereof 13
31
Number of
plants
plants
producing
electrified
vehicles
Natural capital
100
2.12
Energy consumption
per produced vehicle
(in MWh)
Proportion of
electricity from
renewable energy
sources (in %)
How the BMW Group creates value
Output
Input
This diagram shows an illustrative overview of key performance indicators (KPIs) disclosed
in the report. Detailed explanations of KPIs and its corresponding assurance level are provided
in the relevant chapters of the report.
Further information is available at:
report.bmwgroup.com
57
Financial capital
1,253
4,830
Dividend total
( proposal to the
Annual General
Meeting) (€million)
Profit before
financial result (EBIT)
(€ million)
Human capital
12,244
82
Wages/salaries/
social insurance
contributions
(€ million)
Employee
satisfaction
(in %)
Intellectual capital
6.3
18.2
First-year benefits
from implemented
employee ideas
(CRE8) (€ million)
R&D ratio
(in %)
Relationship capital
35
60
Proportion of
value creation
from suppliers
(in %)
Proportion of
suppliers in the
CDP Supply Chain
programme with
an assessment of
at least B (in %)
Produced capital
2.33
192,662
Deliveries to
customers
(in million units)
Deliveries of
electrified vehicles
Natural capital
− 56.7
− 53
Improvement
in resource
consumption and
emissions from
vehicle production
(in %, average)
Development
CO2 emissions EU new
car fleet since 1995
(in %)
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
COMPLIANCE AND
HUMAN RIGHTS
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 share-
holders, customers, 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
throughout the entire value chain. As an active corpo-
rate member of the German Institute for Compliance
(DICO), the BMW Group provides practical support for
compliance management in Germany and contributes to
its further development.
COMPLIANCE AS A CORPORATE FUNCTION
The BMW Group Compliance Management System is
designed to ensure that the BMW Group, its representa-
tive bodies, its managers and staff act in a lawful manner
at all company locations. Particular emphasis is placed on
measures to ensure compliance with antitrust legislation
and avoid the risk of corruption or money laundering, as
well as promoting respect for human rights. Activities
to avoid non-compliance with the law are managed and
monitored by the BMW Group Compliance Committee.
58
These activities include legal monitoring, internal compli-
ance 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.
REGULAR COMPLIANCE REPORTING TO BOARD OF
MANAGEMENT AND SUPERVISORY BOARD
The BMW Group Compliance Committee reviews the
effectiveness and efficiency of the Compliance Manage-
ment System on an ongoing basis. It reports regularly
and on a case-by-case basis to the Board of Management
and the Audit Committee of the Supervisory Board on all
compliance-related issues, including the progress made
in refining the BMW Group Compliance Management
System, details of investigations performed, known
infringements of the law, sanctions imposed and correc-
tive / preventative measures implemented. This also en-
sures the Board of Management and Supervisory Board
are immediately notified of any cases of particular sig-
nificance. On the basis of this information, the Board of
Management keeps track of and analyses developments
and trends in the field of compliance and initiates the
measures needed to improve the Compliance Manage-
ment System. The following were among the measures
implemented in 2020:
— Board of Management decision of 15 December 2020
establishing a BMW Group Chief Compliance Officer,
effective 1 January 2021, to further strengthen com-
pliance management at the BMW Group.
— Creation of six new compliance functions within
the Board divisions of BMW AG, with a multi-day
onboarding programme for the new Compliance
Officers.
— Stepping up antitrust compliance measures.
— A company-wide tone-from-the-top communications
initiative highlighting the compliance management
culture at the BMW Group.
GRI 102-33
BMW GROUP COMPLIANCE MANAGEMENT SYSTEM
Supervisory Board BMW AG
Board of Management BMW AG
BMW Group Compliance Committee
BMW Group Compliance Committee
Office
BMW Group Compliance
Network
Annual Report
Annual Report
Annual
Compliance
Reporting Run
Compliance Instruments
of the BMW Group
Compliance Controls
Compliance
Reporting
Compliance Case
Management
Compliance Processes
and IT Systems
Compliance Academy
and Culture
Compliance Strategy
Legal Compliance
Monitoring and Trends
Compliance Risks and
Preventive Excellence
Compliance Codes and
Internal Regulations
Compliance Communications
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
COMPANY-WIDE COMPLIANCE NETWORK
The decisions taken by the BMW Group Compliance
Committee are drafted in concept and implemented
operationally by the BMW Group Compliance Commit-
tee Office. The BMW Group Compliance Committee
Office has more than 20 employees and forms part of
the organisation that reports 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 Com-
pliance Responsibles (heads of local units) and over 80
local Compliance Officers (heads of local compliance
Compliance management in the Financial
Services segment
The financial services business entails specific risks arising from
the nature of its products and processes. The focus here is on an-
ti-money-laundering measures, compliance with financial sanc-
tions, information privacy and data protection, fraud prevention,
and legislative and regulatory monitoring, as well as consum-
er protection. To address the risks in these areas, a “compliance
coordination” function was created within the Financial Services
segment as a delegated function of the BMW Group Compliance
Committee Office. Based on an annual trend analysis, it identifies
new or modified regulatory requirements in the financial services
sector and defines the necessary measures. Implementation by
BMW Group financial services companies worldwide is tracked on
a quarterly basis. Compliance is incorporated into the target man-
agement process for the Financial Services segment. Integration
of specific targets into strategic management underlines the im-
portance of this topic and helps monitor implementation. A man-
agement system is also used to identify risks of non-compliance
with internal and external regulations in the early stages.
functions). The specific compliance activities required for
financial services business are coordinated by a separate
compliance department within the Financial Services
segment. The BMW Group compliance organisation
remained fully operational in 2020, despite the unique
demands of the coronavirus situation.
COMPLIANCE MANAGEMENT SYSTEM AIMED AT ENSUR-
ING LAWFUL CONDUCT THROUGHOUT THE GROUP
The various elements of the BMW Group Compli-
ance Management System are shown in the diagram on
the previous page
BMW Group Compliance Management System
and are applicable to all BMW Group organisational
units worldwide. The BMW Group Legal Compliance
Code and BMW Group Code on Human Rights, which
form the core of the Group’s Compliance Management
System, are supplemented by an internal set of rules.
The BMW Group Policy “Compliance” sets out binding
strategic requirements for BMW Group compliance
management, its premises and basic principles, as well
as for implementation in the business departments.
The BMW Group Policy “Antitrust Compliance”, which
establishes binding rules of conduct for all employees
across the BMW Group to prevent unlawful restriction
of competition, was supplemented by several additional
manuals in 2020 and deserves particular mention. The
rules set out in the BMW Group Policy “Corruption Pre-
vention” and the BMW Group Instruction “Corporate
Hospitality and Gifts” deal with lawful handling of gifts
and benefits and define appropriate assessment criteria
and approval procedures. The BMW Group Instruc-
tion “Anti-money-Laundering” defines company-wide
59
standards for anti-money-laundering for trade in goods
and the financial services sector.
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 ma-
terials are used to raise awareness among staff 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 materials.
A compliance tone-from-the-top initiative called “Walk-
the-Talk” was organised for the first time in 2020 to boost
employee awareness of the importance of creating a cul-
ture of transparency and trust. Senior managers gave
keynote speeches on a wide range of compliance issues
at forums and employee meetings.
The training opportunities offered by the BMW Group
Compliance Academy are refined on an ongoing basis for
specific target groups. As well as imparting knowledge,
online and classroom training options with company-spe-
cific 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 com-
pletion of the test is confirmed by a certificate. These
courses are also offered on an optional basis to all other
employees.
BMW GroupReport 2020
Combined Management Report
General Information and Group Profile
60
More than 42,800 managers and staff worldwide have
so far received training in the basic principles of com-
pliance, including the content of the Legal Compliance
Code and the topic of corruption prevention, 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 receive compliance train-
ing. Online training in antitrust compliance is mandatory
for managers and staff exposed to the associated risks as
a result of their functions or on specific occasions. A total
of more than 38,300 managers and employees worldwide
have so far completed antitrust compliance training and
currently hold a valid certificate. Classroom and virtual
training, as well as multi-day coaching sessions, are also
held in local markets for all key compliance topics. One
main emphasis here is on department-specific antitrust
training – an area that was significantly expanded in
2020.
GRI 205-2
Any member of staff with questions or concerns
relating to compliance is expected to discuss these
matters with their managers and with the relevant de-
partments within the BMW Group: in particular, with
the BMW Group Compliance Committee Office, Legal
Affairs and Corporate Audit. The BMW Group Compli-
ance Contact also serves as a further point of contact
and provides non-employees with a system for reporting
concerns relating to compliance. Communication with
the BMW Group Compliance Contact may remain anon-
ymous, if preferred. BMW Group employees worldwide
also have the opportunity to submit information about
possible breaches of the law within the company anon-
ymously and confidentially in several languages via the
BMW Group SpeakUP Line. The BMW Group assures
those providing information that no attempt will be made
to determine their identity should they choose to remain
anonymous. Unauthorised use is naturally excluded
from this. 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 and
address any issues.
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 documented and
approved in a special compliance IT system. The same
applies to verifying legal admissibility and documenting
benefits, especially in connection with corporate hospi-
tality. The BMW Group also uses an IT-based Business
Relations Compliance programme to ensure the reliabil-
ity of its business relations. Relevant 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. IT
solutions for automated reporting of compliance training
activities and documentation of all compliance activities
conducted by the business units were also under devel-
opment during the reporting year.
Through the Group-wide reporting system, compli-
ance responsibles across all organisational units of the
BMW Group report, on both an ongoing and adhoc 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 corrective / preventative meas-
ures implemented.
Compliance with and implementation of compliance
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 Cor-
porate Audit to perform compliance-specific checks and,
if necessary, brings in Corporate Security to investigate
suspected cases. Two BMW Group Compliance Spot
Checks, sample tests specifically designed to identify
potential corruption risks, and an antitrust compliance
validation (to identify and audit possible antitrust risks)
were carried out in addition in 2020. The organisational
units for audit are selected on the basis of a Group-wide
compliance risk assessment.
GRI 205-1
In an antitrust investigation, the EU Commission
alleges that five German car manufacturers colluded with
the aim of restricting competition for innovation with
regard to certain exhaust treatment systems installed in
diesel and petrol-driven passenger vehicles. The current
investigation is solely concerned with possible infringe-
ments of competition law. For further details, please see
Legal Risks within the Report on risks
the section on
note 10 to the Group Financial
and opportunities and
Statements.
BMW GroupReport 2020
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61
MANAGERS HAVE UNIQUE RESPONSIBILITY AS
COMPLIANCE ROLE MODELS
COOPERATION BETWEEN COMPLIANCE AND EMPLOYEE
REPRESENTATIVES
Managers, in particular, bear a high degree of re-
sponsibility 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. Manag-
ers 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 relevant information is extremely valuable.
Managers should remain open to discussion and consider
differing opinions. Any indication of non-compliance
with the law must be rigorously investigated.
SANCTIONS MANAGEMENT
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. Culpable violations of the law result in em-
ployment-contract sanctions and may involve personal
liability consequences for the employee involved.
Compliance is also an important factor in safeguard-
ing 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 prin-
ciples for lawful conduct. Employee representatives are
regularly involved in the process of refining compliance
management within the BMW Group.
WORLDWIDE IMPLEMENTATION OF LABOUR
STANDARDS AND RESPECT FOR HUMAN RIGHTS
BMW Group models for ensuring compliance with
environmental and social standards throughout its value
chain are based on various internationally recognised
guidelines. This especially applies to the
Guidelines for Multi-
national Companies issued by the Organisation for Economic Cooperation
and Development (OECD), the
Human Rights, the content of the
able Development and the
United Nations Environment Programme’s
(UNEP) Declaration on Cleaner Production. The BMW Group con-
centrates on topics and action areas where it can exert its
influence as a commercial enterprise.
GRI 102-12, 102-16
UN Guiding Principles on Business and
ICC Business Charter for Sustain-
With the signing of the UN Global Compact by the
Board of Management of BMW AG in 2001 and the “Joint
Declaration on Human Rights and Working Conditions
in the BMW Group”, which was adopted in 2005 and up-
dated in 2010, the BMW Group has committed to abide
by internationally recognised human rights and, specif-
ically, the ILO core labour standards. The BMW Group
Code on Human Rights and Working Conditions, which
was published in 2018 to provide further clarification,
was ratified by the Board of Management and employee
representatives. This affirms the BMW Group’s com-
mitment to human rights and outlines how it promotes
respect for human rights and, specifically, how it imple-
ments the ILO Core Labour Standards in its business
operations worldwide. The Code was also part of the
compliance communications initiative “Walk-the-Talk”.
The BMW Group conducts specific training on the sub-
ject of human rights: for instance, training Purchasing
staff to be aware of human rights issues.
GRI 412-2
In its annual compliance reporting, all organisational
units of the BMW Group are also asked for a local risk
assessment of potential for human rights abuses. Their
responses form the basis for developing further measures
for the department to minimise the risks.
GRI 412-1
BMW GroupReport 2020
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Specific human rights risks arise in the supply
chain due to the collaborative, cross-border and conti-
nent-spanning nature of value creation processes in the
automotive industry. For this reason, the BMW Group
has integrated respect for human rights into its
Supplier
Sustainability Policy and follows an appropriate risk manage-
ment process. In addition to the company’s international
purchasing terms and conditions, BMW Group dealer
and importer contracts also contain a clause on com-
pliance and human rights. Human rights obligations
are also considered in choosing sites and in important
investment decisions.
GRI 412-3
In order to meet increasing requirements in the area
of human rights, the BMW Group discusses various
legislative proposals at German and European level
through associations and initiatives and participates in
the Automotive Industry Dialogue as part of the Ger-
man government’s National Action Plan on Business
and Human Rights. The German Federal Ministry of
Labour and Social Affairs featured a practical example
from the BMW Group on its
CSR website. As part of its
leadership of the
CSR / Human Rights Working Group of the
German Institute for Compliance (DICO), various as-
pects of human rights management in companies were
discussed among members and presented at the
DICO
Forum in October 2020.
INNOVATION AND CUSTOMER
ORIENTATION
FOCUS ON DRIVETRAIN TECHNOLOGIES
62
A constant striving for innovation, for something new
and better, is a concept deeply anchored in the corpo-
rate culture of the BMW Group – in the thinking of its
employees, in its processes and also in the identity of its
brands. The benchmark and the goal of the BMW Group’s
activities is to identify the wishes of customers worldwide
in advance, in order to actively help shape trends and
thereby drive transformation – a strategy discerniable in
production vehicles such as the BMW iX *. In its develop-
ment work, the BMW Group focuses on two key areas.
Firstly, innovative digital solutions that make people’s
everyday lives easier and at the same time protect the
environment, and secondly, as a premium provider in its
industry, the Group sees it as an obligation to offer cus-
tomers a diverse range of customised, efficient drivetrain
technologies ranging from all-electric drive systems, to
plug-in hybrids and highly efficient internal combustion
engines. This also includes hydrogen fuel cell technology,
which the Group believes could become an additional
option in the long term.
The BMW Group’s culture of innovation is most
deeply rooted in its global research and development
network. However, innovation is a lot more than that
for the BMW Group: throughout the entire company it
is both the basis and the driving force behind the quest
to replace the good with the better. Innovative solutions
benefit society in a number of ways: economically, eco-
logically and socially.
The dynamics of the markets in which the
BMW Group operates are largely determined by customer
expectations and therefore by demand. The BMW Group
therefore focuses on the wishes and needs of its cus-
tomers. Market expectations have a direct impact on the
range of vehicles on offer. How big does the vehicle need
to be? Which drivetrain variant fits your own lifestyle?
For this reason, the BMW Group offers a broad range
of drivetrain systems and aims to offer corresponding
electrified models for all of its brands and for every
series. Ultimately, a business model is successful and
sustainable in the long term by offering tailor-made
solutions and assuring customers who are confident in
their purchasing decisions. Since 2020, the BMW X3 has
been the benchmark in this regard. It is now available in
all four drivetrain variants: as an iX3 * with an all-electric
drivetrain, as a plug-in hybrid or as a model powered by
a highly efficient diesel or petrol engine.
* See
Fuel Consumption and CO2 Emissions Information.
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THE FIFTH GENERATION OF ELECTRIC DRIVETRAINS:
A MAJOR LEAP IN TERMS OF PRODUCTION AND
SUSTAINABILITY
THE BMW GROUP COVERS THE ENTIRE PROCESS CHAIN
FOR ELECTRIC DRIVETRAINS
CAN THE HYDROGEN FUEL CELL SERVE AS A BUILDING
BLOCK GOING FORWARD?
Customer-oriented innovations frequently begin
with basic research. Built up over many years, the
BMW Group’s expertise makes sustainable solutions
possible. The new, in-house-developed electric motor
does not contain any rare earth elements. The latest
generation of batteries requires two-thirds less cobalt
than its predecessors. The BMW Group also considers
the factor of sustainability when sourcing the cobalt it
uses. The metal is acquired transparently via a certified
process and supplied to the battery cell producers for
further processing. Details are available in the chapter
Purchasing and Supplier Network
Purchasing and Supplier
Network. The BMW Group has contractually agreed with
the battery cell suppliers for the fifth generation of its
eDrive electric drivetrain that only green electricity from
renewable sources will be used in their production pro-
cesses, which should reduce carbon emissions by some
ten million tonnes over the next ten years. In this fifth
generation of the BMW Group’s electric drivetrain, the
electric motor, transmission and power electronics are
also installed within a compact space. The outstanding
efficiency of the drivetrain components and the high
energy density of the high-voltage battery enable ranges
that conventional electric vehicles can only achieve with
significantly larger and correspondingly heavier batteries
and therefore lower efficiency. This electric drivetrain
was deployed for the first time in the BMW iX3 *, which
was launched in 2020. From 2021 onwards, further
all-electric models such as the BMW iX * or the BMW i4
will be powered by this state-of-the-art technology.
* See
Fuel Consumption and CO2 Emissions Information.
Whether electric motors, high-voltage batteries,
charging equipment or power electronics – since 2011
the BMW Group has gained extensive experience with
all the components used in eDrive technology and
places its emphasis on in-house developments. By the
end of 2022, all German vehicle plants will produce at
least one fully electric vehicle. The production system is
capable of manufacturing vehicles either with internal
combustion engines or electric drivetrains on a single
line and can therefore also respond flexibly in terms of
the type of drivetrain required by the customer. This
level of flexibility in production allows the BMW Group
to meet customer expectations in an ideal way. At the
BMW Group’s Battery Research Centre, work on battery
cells is currently focusing on features that provide a high
degree of customer value, including energy density, peak
power, longevity, charging properties, costs, behaviour
at various temperatures and, last but not least, safety.
At the same time, the BMW Group is building a pilot
plant for lithium-ion battery cells near Munich, making
the BMW Group the first automotive manufacturer to
singlehandedly cover the entire process chain of electric
driving and master it in technological terms.
The BMW Group is also investing in the enhanced
development of hydrogen fuel cell technology. The
BMW i Hydrogen NEXT, which is based on the X5, al-
ready awakened a great deal of interest among visitors
at the IAA 2019. In the long term, hydrogen technology
could become a further component in the BMW Group’s
drivetrain range. If the supply of renewably produced
hydrogen can be ensured, this technology will provide an
attractive option for combining emissions-free mobility
with long-distance capability and short refuelling times.
The BMW Group is convinced that different forms of
drivetrain will continue to exist side by side in the future,
as customer expectations cannot be met with a single
solution on an international basis. Beginning in 2022,
the BMW Group will present a low-volume series of the
BMW i Hydrogen NEXT featuring the second generation
of its hydrogen fuel cell drive system. To make this aim a
reality, the BMW Group has been collaborating success-
fully with Toyota Motor Corporation since 2013. The new
drivetrain technology will be combined with the fifth
generation of the eDrive, which will then generate its en-
ergy from a fuel cell instead of a high-voltage battery. The
BMW Group has also developed this technology in-house
as an overall system. However, the appropriate political
and infrastructural framework conditions first need to be
created if green hydrogen is to become widely available
in sufficient quantities and at competitive prices. Hy-
drogen can also play a key role in powering heavy-duty
and commercial vehicles with the aim of making logistics
carbon-neutral going forward. The BMW Group’s Leipzig
and Spartanburg plants have already been using trans-
port vehicles powered by renewably produced hydrogen
for a number of years.
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THE BMW iX *: ELECTRIC FROM THE GROUND UP
In November 2020, the BMW Group gave the public
its first preview of the BMW iX, the first of which are
scheduled for delivery to customers in the course of
2021. Right from the start, the BMW iX was designed
exclusively to provide electric mobility that is suitable for
everyday use. The vehicle is powered by the fifth genera-
tion of BMW eDrive technology, which the BMW Group
has developed in-house and consists of twin electric
motors, power electronics, charging technology and a
high-voltage battery produced without the use of rare
earths. Fully electric and featuring four-wheel drive
technology, it will enable ranges of over 600 km in the
WLTP cycle. Equipped with innovative charging technol-
ogy and a highly efficient drivetrain, the BMW iX can be
charged to enable a range of over 120 km in a mere ten
minutes. Thanks to the development of new technologies,
the kidney-shaped grille of the BMW iX has now been
given a new function as a smart surface where camera
technology, radar and other sensor-based features are
located behind a transparent exterior. Through the use
of innovative materials, the surface of the grille also has
a self-healing effect that makes light scratches disappear
by themselves. Moreover, as the first 5G-capable model
to be made by a premium manufacturer, the BMW iX will
also be the BMW Group’s technology flagship in terms
of digitalisation going forward. In addition, gigabit Eth-
ernet technology is being used for the first time in this
innovative vehicle, enabling extremely large volumes of
data from sensors and antennas, for example, to be trans-
mitted through the vehicle within fractions of a second
and then processed in the centralised high-performance
computers of the vehicle’s on-board system. Moreover,
some of this data is also transmitted to the cloud, an-
alysed and returned to the vehicle fleet, depending on
the situation, creating new services for customers. For
instance, information on danger spots detected by these
vehicles, such as black ice, will be made available to the
entire fleet, as well as tips on where a free parking space
is most likely to be found upon arrival. When using all
these digital technology innovations, the BMW Group
places great emphasis on ensuring that drivers and pas-
sengers can perceive and operate new features intuitively,
effortlessly and without distraction – regardless of how
technically complex they may be. These functions are
known as shy tech, i. e. technology that only becomes
visible when needed.
* See
Fuel Consumption and CO2 Emissions Information.
64
ARTIFICIAL INTELLIGENCE – THE BASIS FOR AUTOMATED
DRIVING AND INTERACTION WITH THE VEHICLE
Since the end of 2020, over 400 data-driven and
AI applications have been helping the BMW Group pro-
cess and interpret big data throughout all relevant areas
of the company. Artificial intelligence is also deployed
when it comes to developing an algorithm that enables
safe and predictive automated driving features, helping
to analyse the approximately 250 million kilometres of
“experience” gained to date (as of October 2020). Even
now, BMW Group customers are already experiencing
the capabilities of AI technologies as they drive. Since the
end of 2018, an Intelligent Personal Assistant has been
offering them support upon request. Since the second
half of 2020, more than 70 % of BMW vehicles have been
equipped with the BMW Intelligent Personal Assistant
as standard. For example, commands given in natural
speech enable drivers to comfortably operate numerous
vehicle functions without having to take their hands off
the steering wheel.
CUSTOMER-CENTRIC DEVELOPMENT
Via the BMW Group’s international development net-
work, the varying regional needs and requirements of its
customers worldwide are being incorporated into design,
research and development. Group locations worldwide
are in direct dialogue with their various regions. The
BMW Group conducts an average of 70 customer studies
per year in the area of display and operating concepts
alone. The Group also researches dialogue formats and
upcoming trends.
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In a state-of-the-art innovation process, the
BMW Group also uses its ability to change perspectives
when required. In this respect, it is the first automotive
manufacturer to collaborate with Epic Games, a com-
puter games developer. The BMW Group has modified
gaming technologies and adapted them for use in vehi-
cle development as well as in production planning and
customer presentation at the retail level. In the field of
vehicle development, new components and systems can
therefore be tested intensively at a very early stage so
that they can later be used by the customer simply and
intuitively to the greatest extent possible. Technologies
originating from the computer games industry such as
mixed reality and game engines are key elements that
are making an important contribution in this respect.
Internationally staffed teams of developers work simul-
taneously and interactively with one another before
hardware prototypes are additionally made available. In
a mixed reality environment, technical solutions can be
analysed at an early stage on a virtual ride before the
first samples are made physically available, effectively
cutting testing costs and, last but not least, minimising
development times.
The BMW Group operates an international network
of research and development locations to ensure that
ideas can swiftly and directly become innovations for
customers in the form of ideas to offer. The network
provides the ideal environment for experts to work cre-
atively in internationally connected teams to promote
knowledge transfer and even faster, integrated, flexible
collaboration for effectively developing the major trends
of the future. This combined network of research and
development expertise is continuously being expanded
and strengthened in a competence-oriented manner.
65
INNOVATION CULTURE IN THE MAKING: A NEW
CENTRALISED HUB OF THE BMW GROUP’S GLOBAL
RESEARCH AND DEVELOPMENT NETWORK COMES
INTO BEING.
The Munich Research and Innovation Centre (FIZ)
is the main hub of the Group’s international network of
14 research and development locations. The first phase
of construction completed in the course of enlarging the
Munich FIZ went into operation in autumn 2020. On
the FIZ campus, the focus is on transformation and the
future-related topics of electrification, digitalisation and
connectivity. With over 90 petabytes of storage capacity,
100 test benches, 200 laboratories and the directly adja-
cent prototype construction facility, the FIZ has grown
to become one of the largest research and development
centres in Europe.
BMW Operating System 7: new features in version 07 / 20
smartphones wirelessly within the vehicle and access their apps via
touch control without having to directly operate their smartphone. Navi-
gation instructions provided by Google Maps are shown on both the info
display and the head-up display.
BMW eDrive zones: plug-in hybrids can use geofencing to detect when
they are entering an environmentally restricted zone or a city centre.
They then automatically switch to electric mode after previously ensur-
ing that the vehicle’s battery is fully charged, enabling them to drive lo-
cally emissions-free and almost silently where it has the greatest impact.
Charging management: electrified models are provided with addition-
al information and services via the Connected Charging feature. Pub-
lic charging stations and their availability are displayed and addition-
al information is also shown, for example on providers, opening hours
or suggestions for places of interest and cafes or restaurants nearby.
Finding a parking space: customers can be assisted via various services
when searching for a parking space. The on-street parking information,
for example, calculates where a parking space is most likely to be free.
Digital key: in collaboration with Apple, the BMW Group is the first car
manufacturer to offer its customers the option of using their iPhone as
a fully fledged digital car key. It unlocks the vehicle at the door handle
and the engine can be started when it is placed in the smartphone com-
partment. Access rights can be shared with other people and config-
ured in the process and there is a specially designed mode for inexpe-
rienced drivers.
Navigation / BMW Maps: the cloud-based system has a great many ad-
vantages. The route calculation feature combines real-time informa-
tion with forecast models and therefore acts more dynamically and
swiftly than ever. Additional context-based information such as rat-
ings, business opening hours and pictures of interesting places pro-
vide BMW Group customers with excellent support. Entering a des-
tination has now been made far more convenient due to the free text
function, which uses a single search line and adds suggestions for rel-
evant search terms.
Intelligent Personal Assistant: the BMW Group has revamped the look
of the BMW Intelligent Personal Assistant and made it more emotion-
al. The Assistant is able to distinguish between the driver’s and the pas-
senger’s speech, learns and even leans towards the respective conver-
sation partner.
Apple Car Play allows navigation information from Apple Maps to be
displayed on both the head-up display and the info display. Google
Android Auto is also integrated: customers can use functions on their
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66
ALWAYS UP TO DATE VIA RADIO INTERFACE
INNOVATION IN PRODUCTION
INSPIRATION AND COOPERATION
In production scenarios, innovations can act in two
different ways: they serve the purpose of conserving re-
sources and thus further boosting efficiency
Production,
Purchasing and Supplier Network, but they can also help to
implement new product ideas and design options. Dig-
italisation is thus also paving the way for completely
new applications that enable owners to customise their
vehicles, such as by adding individual equipment features
for the MINI. Furthermore, the BMW Group opened
the Additive Manufacturing Campus in summer 2020.
Production, research and even further training on the
subject of additive manufacturing (i. e. 3D printing) are
combined under one roof at the location. The Campus
is also capable of manufacturing components for series
production vehicles.
The best ideas often come into being when different
partners work together. Regional BMW Group Technolo-
gy Offices are searching for promising young companies
worldwide in fields of innovation such as sensor tech-
nology, artificial intelligence, battery technology, smart
materials, natural user interfaces and smart logistics.
Cooperations in which the strengths of the BMW Group
complement those of established partners also help to
enhance the innovative strength of the BMW Group.
Cooperations and partnerships For the BMW Group, main-
taining its innovation network also includes intensive
dialogue with selected colleges and universities. Every
year, thousands of students come to the BMW Group to
complete an internship or write a scientific thesis. Many
Group employees also work as lecturers at universities
and higher education institutions. The BMW Group
maintains close partnerships with six universities and
research institutions to conduct joint research projects
that combine knowledge transfer with the training of
highly qualified junior staff.
The remote software upgrade function keeps BMW
vehicles continuously up to date. The software updates
can be conveniently downloaded to the vehicle whether
at home or on the road and contain improvements or
even fully new vehicle features. In autumn 2020, the
BMW Group rolled out the most extensive remote soft-
ware upgrade in its history. The free-of-charge improve-
ments and new attractive features were made available
over-the-air to more than 750,000 BMW Operating
System 7 (version 07 / 20) vehicles worldwide.
Moreover, Remote Software Upgrade allows drivers
to purchase and activate additional optional features. For
example, the Highbeam Assist or Active Cruise Control
with the Stop&Go function can also be subsequently in-
stalled quickly and easily over the air, even on vehicles
that have already been delivered to customers. Customers
can therefore benefit from the latest technological devel-
opments and have the opportunity to test functions that
were not yet needed at the time of purchase for a certain
period of time with the option to purchase them.
Apps have been offering customers an effortless
connection between their smartphones and the vehicle
since 2013. A new generation of the My BMW app has
been available on 30 European markets as well as in
China and Korea since December 2020. My BMW is the
new universal interface to the vehicle and, depending on
how it is equipped, also enables selected features to be
activated remotely, such as vehicle localisation.
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Cooperations and partnerships
HERE
YOUR NOW
Under the name YOUR NOW, the BMW Group and Daimler AG are offering
innovative, customer-friendly solutions for business partners, cities and
municipalities looking to make their mobility more efficient and sustain-
able. The cooperation includes the joint ventures FREE NOW (ride-shar-
ing services) with REACH NOW (on-demand mobility and multimodality),
PARK NOW (parking) with CHARGE NOW (charging) and SHARE NOW
(car sharing). Further information is available in the chapter
Mobility
Patterns.
To maintain its successful course in the long term, the BMW Group en-
ters into targeted cooperations and partnerships not only with companies
from the automotive industry, but also with technology leaders from other
sectors. The aim of interacting with external partners is to combine exper-
tise against the backdrop of rapid technological change and make innova-
tions available to customers within the shortest time possible.
BMW Brilliance Automotive (BBA)
BMW Brilliance Automotive Ltd. is a 50:50 joint venture between the
BMW Group and Brilliance China Automotive Holdings Ltd., which was
founded in 2003. BMW Brilliance Automotive Ltd. produces BMW brand
models in one engine plant and two automobile plants in Shenyang, Chi-
na. Production of the BMW iX3 * began there in 2020.
The BMW Group intends to increase its shareholding in BBA from 50 %
to 75 %. The BMW Group already signed an agreement to that effect with
its partner Brilliance China Automotive Holdings Ltd. (CBA) in 2018. Fol-
lowing approval by the Annual General Meeting of CBA, completion of the
agreement remains subject to regulatory approvals.
Spotlight
The aim of Spotlight Automotive Limited (Spotlight), a joint venture be-
tween the BMW Group and the Chinese manufacturer Great Wall Motors,
is to produce all-electric MINIs for the BMW Group as well as electric vehi-
cles for Great Wall Motors. The joint venture also includes the joint devel-
opment of battery-powered electric vehicles. Spotlight was established
on 27 December 2019, following approval from the Chinese authorities
and the first stage of construction has already begun.
Together with the intention to increase its shareholding in BBA, the
BMW Group is significantly expanding its presence in China and under-
lining its commitment on that market.
Since BMW AG, Daimler AG and AUDI AG acquired the HERE mapping
service in 2015, the partners have been working on high-precision dig-
italised maps that can be linked to real-time vehicle data. Digitalised
maps create the basis for the next generation of location-related servic-
es, thereby marking the next key step in the evolution of individual mobili-
ty. They also form the basis for developing new assistance systems. As an
independent platform, HERE has always remained accessible for the au-
tomotive industry as well as other partners. In 2020, Mitsubishi Corpo-
ration (MC) and Nippon Telegraph and Telephone Corporation of Japan
(NTT) jointly acquired 30 % of the business. As a result, the location data
and technology platform now has nine direct and indirect shareholders:
Audi, Bosch, the BMW Group, Continental, Intel, MC, Mercedes-Benz,
NTT and Pioneer.
Toyota Motor Corporation (TMC)
As strong, independent companies, the BMW Group and TMC have been
collaborating successfully in various fields since 2011, including fuel cell
technology. The BMW Group was primarily responsible for developing a
joint sports car platform, and series production of these brand-specific
vehicles has been ongoing since the end of 2018.
IONITY
The BMW Group is a founding partner of the IONITY joint venture, the aim
of which is to establish a comprehensive, high-performance, high-power
charging (HPC) network for electric vehicles. The joint venture represents
a vital step towards ensuring that electric mobility also becomes a viable
means of transport over long distances, thus establishing it on the mar-
ket. All IONITY charging points are publicly accessible, brand-independ-
ent and designed in accordance with the European Combined Charging
System (CCS) standard. The founding partners (the BMW Group, Daim-
ler AG, the Ford Motor Company as well as the Volkswagen Group with
Audi and Porsche) all participated in equal measure. In 2019, the Hyundai
Motor Group with its Hyundai and Kia brands was accepted as an addition-
al shareholder. The joint venture is, however, also open to further partners.
* See
Fuel Consumption and CO2 Emissions Information.
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BMW GROUP PERFORMANCE INDICATORS RELATING
TO RESEARCH AND DEVELOPMENT EXPENSES
in %
Research and development expenses as a percentage of revenues
Research and development expenditure ratio 1
Capitalisation rate 2
2020
5.7
6.3
36.6
2019
Change in %-pts.
5.7
6.2
33.2
0.0
0.1
3.4
in € million
2020
2019
Change in %
Research and development expenses
New expenditure for capitalised development costs
Amortisation
Research and development expenditure 3
1 Research and development expenditure as a percentage of Group revenues.
2 Capitalised development costs as a percentage of research and development expenditure.
3 Research and development expenditure comprises the sum of research and non-capitalised development cost
and capitalised development cost (not including the associated scheduled amortisation).
5,689
2,300
– 1,710
6,279
5,952
2,134
– 1,667
6,419
– 4.4
7.8
2.6
– 2.2
BMW GroupReport 2020
Products and Services
69
PRODUCTS
AND SERVICES
PROMISED
We aim to reduce the
CO2 EMISSIONS of
our European new vehicle
fleet BY HALF between
1995 and 2020.
BMW GroupReport 2020
Products and Services
70
DELIVERED
Mission
accomplished.
MINUS 53 %.
BMW GroupReport 2020
Products and Services
71
“At the BMW Group, we are creating
the digital, emission-free and dynamic
driving of the future.
As a tech company, we master ʻsheer
driving pleasureʼ, today and tomorrow.
We are the only ones to combine
dynamic performance and quality with
safety and security for customers and
data.”
Frank Weber
Member of the Board of Management
of BMW AG, Development
Pieter Nota
Member of the
Board of Management
of BMW AG, Customer,
Brands, Sales
“Our ambition: to provide the best
premium customer experience in the
industry.
Premium is also defined in terms of
sustainability.
That’s why we support our customers
in making not only the best, but also the
most responsible vehicle choice – includ-
ing a seamlessly integrated, convenient
charging concept for our electric vehicles.”
BMW GroupReport 2020
Products and Services
72
We made the
RIGHT DECISIONS
early on.
WHY ARE THE CO2 EMISSIONS
OF THE NEW VEHICLE FLEET
IN EUROPE THE BENCHMARK?
The EU requirements are among the
strictest and most ambitious worldwide.
Think of it this way: Once you’ve met Eu-
ropean requirements, it’s a lot easier to
fulfil those in other markets and regions.
Aside from that, Europe is also our biggest
sales region.
HOW DID THE BMW GROUP
MEET THE TARGETS FOR
2020?
We made the right decisions – impor-
tant decisions – early on: We offer elec-
trified vehicles in every segment – while
continuing to make our conventional drive
trains more efficient. We ultimately over-
fulfilled the targets for 2020. And that’s a
good thing, because we’re not interested
in the goals themselves – it’s about con-
tributing to environmental responsibility.
CAN YOU GIVE US A GLIMPSE
OF THE FUTURE?
We are right on track for the targets
for 2021, but the goals for 2030 are a
whole other dimension. I know that our
product portfolio puts us in a very good
position. But the conditions also have to
be right – and that means significantly
expanding charging infrastructure.
Further information is available at:
report.bmwgroup.com
Christian Miedaner
is responsible for CO2
strategy during the
product use phase.
BMW GroupReport 2020
Combined Management Report
Products and Services
73
DESIGN AND PRODUCT SAFETY
FUTURE-ORIENTED DESIGN
BMW Group vehicles combine emotional and func-
tional design with the highest of safety standards. Active
and passive safety systems ensure greater safety on the
road – not only for BMW Group customers, but for all
other road users, too. When manufacturing its products,
the BMW Group avoids the use of any substances that are
hazardous to health. It also informs its customers about
all the various safety aspects of its products and enables
them to recognise and handle dangerous situations by
providing driver safety training. The BMW Group en-
sures transparency, informational self-determination and
data security when using its customers’ data.
The BMW Group is synonymous with future-oriented,
emotional vehicle design that unites aesthetics with state-
of-the-art technology. It strives to create experiences
for its customers through the design of its vehicles. A
successful design makes vehicles coveted products that
cater to the individual needs of customers the world over.
The BMW, MINI, Rolls-Royce and BMW Motorrad brands
each have their own independent design language. De-
signs created by the BMW Group should not only meet
the high design standards of a globally leading premium
automotive manufacturer, but make technical innova-
tions functional and intuitive to use at the same time.
In order to make future mobility trends perceptible
at the earliest stage of design, the BMW Group devel-
ops various types of prototypes. Concept vehicles, such
as the BMW Concept i4, which was first presented in
March 2020, are specifically used to communicate in
advance how future series-produced vehicles will look.
Vision vehicles such as the MINI Vision Urbanaut, which
was unveiled at the BMW Group #NEXTGen event in No-
vember 2020, provide the public with a glimpse of how
the Group’s future mobility concepts could be designed.
The globally operating company Designworks is also
a subsidiary of the BMW Group and an inspiring studio
that works to create thought-provoking design ideas for
both the BMW Group and external customers. In its
three studios in Los Angeles, Munich and Shanghai, it
creates ambitious visions of the future that are meant to
shape and improve our world.
USING SAFETY TECHNOLOGY TO MINIMISE RISKS
The BMW Group not only strives to create an emo-
tional connection between products and its customers via
its design, it also designs and builds its vehicles to meet
the highest safety standards, as it considers the safety of
its vehicles an essential part of its product responsibility.
By including a raft of active and passive safety
measures, the BMW Group is able to reduce the risk of
accidents and injuries not only for vehicle occupants, but
for other road users, too. Above all, these safety measures
include optimised chassis tuning, highly effective braking
systems, stable passenger compartments and airbags, but
also digital driver assistance systems such as active cruise
control, collision warning, lane guidance and emergency
braking assistants.
BMW GroupReport 2020
Combined Management Report
Products and Services
74
REDUCING POLLUTANTS
COMPREHENSIVE INFORMATION ON SAFETY ASPECTS
DATA PROTECTION IS A KEY TASK
Right from the design stage of its vehicles, the
BMW Group consciously avoids the use of problematic
materials and substances and takes active steps to keep
emissions within the passenger compartment to a mini-
mum. With this design strategy, the BMW Group seeks to
ensure that legal requirements regarding product safety,
human health protection and the environment are com-
plied with worldwide for each phase of the product life
cycle, including development, use, recycling and disposal.
In addition, all BMW, MINI and Rolls-Royce brand vehi-
cles are equipped with passenger compartment air filters
as standard, which filter out pollutants and particles such
as dust or pollen from the outside air.
In 2020, the BMW Group installed passenger com-
partment filters featuring nanofibre filter technology
for the first time, which keep certain microbial particles
and allergens as well as ultra-fine particulate matter from
entering the vehicle’s passenger compartment. Also in
2020, nanofibre filters were installed for the first time
in a Rolls-Royce as standard. From 2021, however, the
innovative technology will gradually become available for
numerous other BMW Group vehicle models.
The BMW Group provides customers with compre-
hensive information on the correct use of its products
and services. Information on health and safety as well
as the proper use of its vehicles is provided in printed
form in the integrated owner’s manual and is also avail-
able electronically via a smartphone app or online. The
information is supplemented by notes and additional
background information on services, accessories and
vehicle components.
DRIVER TRAINING TO PROMOTE GREATER ROAD
SAFETY
The BMW Group offers training for BMW and MINI
brand automobiles as well as BMW motorcycles in over
30 countries. In the BMW and MINI Driving Experience,
it raises awareness of potentially dangerous situations
and thus also contributes to road safety in general. De-
spite global restrictions due to the coronavirus pandemic,
the Driving Experience trained over 70,000 participants
worldwide at various international locations in 2020.
The BMW Group views data protection as one of the
most important tasks of digitalisation. It takes data pro-
tection into account at an early stage in the development
of its functions and services in order to ensure transpar-
ency, informational self-determination and data security
for its customers. In order to maintain this high level
of data protection in the long term, the BMW Group’s
products and services are always developed according to
security-by-design principles and continuously tested for
security aspects (cybersecurity) throughout their entire
life cycle.
The BMW Group’s product responsibility also
includes the secure transfer of vehicle data to third
parties. For this reason, BMW Group vehicles are not
directly connected to the Internet, but communicate
directly and exclusively with the BMW ConnectedDrive
back-end service via a secure connection in a virtual
private network. This precaution minimises the risk of
unauthorised third parties gaining access to the vehicle
or the driver’s personal data. The point of access to the
Internet is controlled via a gateway. The BMW Group
considers the provision of vehicle data via a secured back
end (extended vehicle approach in accordance with ISO
20078) the best solution for ensuring data security and
thus a high level of data protection.
BMW GroupReport 2020
Combined Management Report
Products and Services
In May 2017, the BMW Group introduced BMW
and MINI CarData for the secure transmission of data to
third parties. CarData is already available to BMW and
MINI customers across all European markets. Custom-
ers can adjust their privacy settings to suit their own
personal needs, either within their vehicles or on the
ConnectedDrive portal, thereby retaining their right to
informational self-determination. They can decide at any
time which data to share with service providers (such
as workshops, insurance companies and fleet manag-
ers) in order to receive customised service offers. The
BMW Group has also been offering this service in the
USA since April 2020.
Furthermore, the Group works closely with the
relevant data protection supervisory authorities to
clarify fundamental data protection issues that relate
to the increasing connectedness of its vehicles with the
environment. For example, as a member of the German
Association of the Automotive Industry (VDA) and
the European Association of the Automotive Industry
(ACEA), the BMW Group supports the principles on data
protection they have drawn up. These principles focus
on transparency, the informational self-determination of
customers and the technical protection of data in their
vehicles.
75
ENSURING SAFETY WITH QUALITY MANAGEMENT
CONTINUOUS FURTHER DEVELOPMENT OF SAFETY
SYSTEMS
All BMW Group vehicles are subject to stringent
safety tests during development and production, some of
which are even stricter than those prescribed by law. The
BMW Group’s quality management does not end at the
factory gate, but also extends to vehicles that customers
are already using. If any deviations from the Group’s
strict quality standards are observed in their markets, it
systematically follows up on these indications. If neces-
sary, the Group informs the relevant authorities without
delay and initiates any measures that may be required.
The BMW Group take voluntary technical action even
if there is no immediate danger. Any vehicles potentially
affected are checked, and if a fault is detected the cor-
responding components are replaced. If there is a safety
risk of any kind, the BMW Group implements technical
measures in collaboration with the relevant authorities.
For this reason, the Group has established appropriate
committees, processes and organisations that are man-
aged by the Product Support, Technical Actions and
Warranty Costs department.
GRI 416-1
By systematically developing and improving its safety
systems, the BMW Group is helping to reduce the risk of
accidents and injuries for all road users. An important in-
dicator of this risk is the European New Car Assessment
Programme (Euro NCAP), a scheme for assessing the
safety of vehicles in the event of a crash. The results of
the most recently assessed vehicles (four top Euro NCAP
ratings for the BMW 1 Series, BMW 2 Series Gran Coupé,
BMW 3 Series and BMW Z4) once again demonstrate the
BMW Group’s premium standards in terms of vehicle
safety.
In the years to come, the BMW Group will continue
working to additionally enhance the safety of its vehicles.
Apart from constantly optimising the passive safety of
each individual vehicle, the Group is also focusing on
improving road safety standards by means of connected
and automated driving. This applies, for example, to the
BMW iX *, which was unveiled during the year under
report and will go into series production in 2021. With
its even more efficient sensor technology, the vehicle will
be equipped with new and improved automated driving
and parking functions and set new standards for the
BMW Group.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
Combined Management Report
Products and Services
CARBON EMISSIONS
AND POLLUTANTS
The fight against climate change is crucial for the
future of our society – and thus also for that of the
BMW Group. For this reason, it is placing sustaina-
bility in the centre of its corporate strategy. In future,
the BMW Group intends to be even more systematic in
examining not only the economic, but also the ecological
and social impact of its corporate decisions. The Group
has therefore also committed to the requirements of the
Paris Climate Agreement that are relevant to it and set
itself the target of establishing a climate-neutral business
model across its entire value chain by the year 2050.
In 2020, the BMW Group undercut the EU’s manu-
facturer-specific fleet carbon emissions limit of 104 g / km
by achieving a figure of 99 g / km according to internal
calculations.
At the same time, it also accomplished
the goal it set itself in 2012 of halving the carbon emis-
sions generated by its European new vehicle fleet by 2020
compared with 1995.
Furthermore, the BMW Group
will continue to work successfully on constantly reducing
its carbon emissions going forward. The BMW Group
aims to provide its customers with the best offers world-
wide, also in terms of sustainability. For this reason, the
BMW Group’s drivetrain technology is based on two
factors – highly efficient combustion engines and electric
mobility.
76
NEW TARGETS FOR DECARBONISATION BY 2030
The BMW Group is committed to achieving long-
term carbon neutrality by 2050. Guided by this principle,
it is taking extensive measures to substantially reduce
the carbon and other pollutant emissions generated by
its vehicles, as it has done in the past. In the year under
report, the BMW Group therefore set itself specific new
targets derived from the Science Based Targets Initia-
tive (SBTI) in order to further cut its carbon emissions
below the level already achieved and is taking a holistic
approach to accomplishing this aim. In this context, the
Group intends to achieve a mitigation corridor across all
the activities for which it is responsible that corresponds
to the defined target set out in the 2015 Paris Climate
Agreement, i. e. to limit global warming to between 1.5
and 1.75 degrees Celsius. Within the value chain, this
includes all three scopes defined under the umbrella of
the Science Based Targets Initiative (SBTI). By 2030, the
BMW Group therefore intends to reduce the average car-
bon emissions generated by its new car fleet in the use
phase by 40 % compared to 2019 (Scope 3 downstream).
Furthermore, the BMW Group is scrutinising its entire
value chain and striving to significantly reduce carbon
emissions from the supply chain (Scope 3 upstream),
its production processes (Scope 1 and 2) and the entire
use phase. These targets have been notified to the SBTI
and validated.
Recording carbon emissions
from Scope 1 to Scope 3
The carbon emissions generated by a given company are record-
ed in various categories. The Greenhouse Gas Protocol, a part-
nership between the World Resources Institute (WRI) and the
World Business Council for Sustainable Development (WBCSD),
distinguishes between Scope 1, Scope 2 and Scope 3 emissions,
based on their various sources.
Whereas Scope 1 emissions are generated within a company
through the combustion of fossil fuels, Scope 2 refers to the indi-
rect emissions caused by the consumption of electricity and heat
from externally generated sources of energy. Scope 3 emissions
are generated in the upstream and downstream stages of the val-
ue chain, both in the supply chain (upstream) and in the subse-
quent use of products and services (downstream).
FLEET CARBON EMISSIONS FURTHER REDUCED
The development of sustainable products and servic-
es has long been an integral part of the BMW Group’s
business model. The early fleet-wide use of Efficient Dy-
namics technologies (since 2007) and the electrification
of vehicles (since 2013) are continuously reducing carbon
emissions in the long term. These twin factors form the
basis for complying with and even undercutting legally
prescribed carbon emissions and fuel consumption limits.
more than
– 40 %
drop in carbon emissions
generated by the new car fleet
in the use phase by 2030
BMW GroupReport 2020
Combined Management Report
Products and Services
Taking all regulatory requirements ¹ into account, the
average carbon emissions generated by the BMW Group’s
new car fleet within the EU (including Norway and
Iceland) according to the NEDC ² in the year under report
amounted to 99 g CO₂ / km ³. The BMW Group therefore
reduced its fleet carbon emissions by 28 g CO₂ / km com-
pared to the previous year (2019: 127 g CO₂ / km), approx-
imately 5 g CO₂ / km below the limit of 104 g CO₂ / km
applicable to the BMW Group.
Between 1995 and 2020,
the Group’s carbon emissions were reduced by around
53 %
. This success was achieved through the consistent
electrification of the vehicle fleet and the continuous
improvement in the efficiency of combustion engines.
GRI 302-5, 305-5
Worldwide, the BMW Group reduced its fleet
average carbon emissions by 5 % compared to the
previous year to 133 g CO₂ / km ² in 2020 (simplified in-
ternal BMW Group calculation for its core markets EU,
USA, China, Japan and Korea) (2019: 140 g CO₂ / km ).
DEVELOPMENT OF CO2 EMISSIONS OF BMW GROUP NEW VEHICLE FLEET IN THE EUROPEAN UNION
Base year 1995 = 210 g CO₂/km
230
m
k
/
²
O
C
g
90
77
(compared
to base year
1995)
– 53 %
GRI 305-3, 305-5
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Year
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Development of CO2 emissions of BMW Group new vehicle fleet in
the EU from 1995 to 2017 (on the basis of the NEDC test cycle).
Development of CO2 emissions of BMW Group new vehicle fleet in
the EU (on the basis of the NEDC test cycle; provisional value for
2018). Source: the International Council on Clean Transportation
(ICCT), 1995–2009; European Environment Agency (EEA),
2010–2019.
Development of CO2 emissions of BMW Group new vehicle fleet
in the EU from 2017 to 2020 (on the basis of the WLTP test cycle,
retroactively calculated as an NEDC value for the purposes of
comparability). 2
1 Flexibilities as defined in regulatory requirements: phase-in with 5 g / km, supercredits BEV / PHEV with
7.5 g / km and eco-innovations with 2.4 g / km.
2 Since 2018, all vehicles in the EU must be licensed according to the new WLTP test cycle. However,
the EU Commission will not start using WLTP to calculate fleet CO2 emissions until 2021. As a result,
WLTP fleet emissions must be retroactively calculated as NEDC values for the purposes of reporting
until and in 2020.
3 This is a preliminary internal calculation with a potential tolerance of + / – 0.5 g CO2 / km, as official registra-
tion figures have not been provided by all EU states. The EU Commission is not expected to publish official
figures until November 2021.
BMW GroupReport 2020
Combined Management Report
Products and Services
In the USA, the average fleet emissions ¹ for the
model year (MY) 2020 amounted to 156 g CO₂ / km
for passenger cars (MY 2019: 157 g CO₂ / km) and
186 g CO₂ / km for light trucks (MY 2019: 188 g CO₂ / km).
Fleet-weighted CO₂ emissions in the USA averaged
167 g CO₂ / km (MY 2019: 167 g CO₂ / km – BMW internal
calculation).
In China, average carbon emissions ² rose slightly to
151 g CO₂ / km (2019: 144 g CO₂ / km). This is due to lower
sales of electrified models in China, while overall sales
are increasing.
GRI 302-5, 305-5
RANGE OF ELECTRIFIED VEHICLES FURTHER EXPANDED
The BMW Group sees wide-ranging opportunities
to further reduce fuel consumption and pollutant emis-
sions in the electrification of power trains. This point
is particularly relevant against the backdrop of global
decarbonisation targets, for example in the EU, China or
the USA (particularly California), and the sustainability
targets the BMW Group has set itself for 2030. For this
reason, the BMW Group again expanded its range of
electrified vehicles during the 2020 reporting year. By
2030, the Group plans to have delivered at least seven mil-
lion electrified vehicles to its customers.
Electric Mobility
7 million
electrified vehicles delivered
by 2030
78
CONVENTIONAL DRIVETRAINS MORE EFFICIENT AND
WITH LOWER EMISSIONS
The BMW Group continues to work intensively
on reducing fuel consumption and carbon emissions
in its conventionally powered vehicles. Since 2007,
the BMW Group has been implementing its Efficient
Dynamics package of technological measures through-
out the fleet, comprising various coordinated measures
to reduce fuel consumption. In this context, the Group
continued to optimise the efficiency of its combustion
engines throughout the year under report by deploying
recuperation systems and continuous emissions reduc-
tion measures. Recuperation systems utilise the energy
recovered from the braking process to supply the vehi-
cle’s electrical system and generate additional power for
the drivetrain. For this reason they are often referred to
as mild hybrid vehicles.
Electrified Vehicles
Since the early 1990s, the BMW Group has managed
to significantly reduce the pollutant emissions generated
by its vehicles by deploying new technologies and mak-
ing improvements to existing ones. In Europe alone, it
has reduced the relevant exhaust emissions of the new
vehicle fleets for diesel passenger cars in accordance with
the threshold values of the standards Euro 1 to Euro 6
from 1992 to 2019 by well over 90 % compared to the level
recorded prior to the introduction of the Euro emissions
standards.
GRI 305-7 The introduction of new models
with even lower-emissions drivetrain technologies has
made a significant contribution to this result. In the
year under report, the BMW Group also converted all
its remaining models to the Euro 6d emissions standard.
The BMW Group expects modern, highly efficient
diesel engines to continue playing an important role. As
part of its Efficient Dynamics approach, the BMW Group
will therefore continue to work on reducing the consump-
tion of conventional drivetrain systems and boosting
their efficiency in the foreseeable future. It intends to
continue along this route, taking innovative approaches
to the combustion engine, aerodynamics and lightweight
design. The use of 48-volt technology is another key
component in the BMW Group’s efforts to reduce its
carbon emissions.
Artificial intelligence (AI) can also contribute to cut-
ting carbon emissions and vehicle fuel consumption. The
BMW Group is conducting research into how AI could
make energy management in vehicles adaptive, enabling
energy consumption to be modified to suit the needs of
the driver and further improve energy efficiency.
Nitrogen oxide levels are a crucial factor for the air
quality in towns and cities. With this point in mind, since
mid-2018 the BMW Group has installed a highly effective
combination of an NOx storage catalytic converter (NSC)
and an SCR system (SCR: selective catalytic reduction)
with urea injection technology (AdBlue) in all BMW
diesel models as well as in the larger MINI diesels. As
part of its continuous further development strategy, the
BMW Group has additionally improved the efficiency of
its exhaust gas after-treatment technology by utilising
an oxidation catalytic converter in conjunction with two
SCR catalytic converters. In 2020, this new technique
was launched and rolled out across the Group’s product
portfolio together with the revised generation of its diesel
engines.
1 Basis: USC (United States Combined).
2 Basis: NEDC (New European Driving Cycle).
BMW GroupReport 2020
79
With this approach of taking the entire vehicle life
cycle into account, the BMW Group intends to realise its
ambition of achieving substantial improvement from one
vehicle generation to the next. The Group implements its
targets and assesses its progress during the development
process based on a carbon footprint in accordance with
the ISO 14040 / 44 standard.
Electric Mobility
Combined Management Report
Products and Services
With the aim of spreading these innovations
for improving air quality as swiftly as possible, the
BMW Group offered a scrappage bonus in Germany in
2020. The move was intended to rejuvenate the passenger
car fleet and thus contribute quickly and effectively to
reducing nitrogen oxide emissions. In 2019 and 2020,
there were already first signs of a noticeable reduction
in NOx pollution in German cities, partially due to the
progressive renewal of the fleets of all automotive man-
ufacturers.
GRI 416-2
matters agreed therein are valid for every state in the
USA – one of the BMW Group’s largest sales markets.
The commitments made enhance the Group’s long-term
planning security in the face of political change and are
in line with increasingly stringent legislation worldwide
designed to reduce vehicle emissions. In view of the
growing popularity of electric mobility, for example,
the BMW Group sees the rapid expansion and technical
harmonisation of charging infrastructure as an urgent
requirement. In the USA and Europe in particular, the
slow pace of infrastructural expansion is still holding
back the spread of electric mobility.
SUCCESSFUL REDUCTION SURPASSES LEGAL
REQUIREMENTS
The BMW Group has the clear ambition to meet statu-
tory carbon emissions requirements. Within the EU, the
Group succeeded in improving on fleet carbon targets
during the year under report. With respect to fleet car-
bon limits in other regulated markets, the BMW Group is
also explicitly aiming to comply with the limits and keep
its emissions as far below them as possible, which it again
succeeded in doing in the year under report.
The BMW Group supports the development of har-
monised national regulations, also on an international
basis to the extent possible. Comparable regulations in
major markets create reliable, predictable framework
conditions that make a key contribution to combating
climate change and improving air quality. In view of
its commitment to complying with the climate goals
enshrined in the Paris Agreement, during the year
under report the BMW Group entered into a voluntary
agreement with the US State of California to reduce fleet
emissions over and above national requirements. The
MANAGEMENT OVER THE ENTIRE LIFE CYCLE
In order to meet market-specific fleet requirements
and its own even more ambitious decarbonisation tar-
gets, the BMW Group is taking an holistic approach to
reducing emissions throughout the entire life cycle of its
vehicles. This approach is particularly relevant, as – de-
spite the expansion of electric mobility having an overall
positive impact on carbon emissions in the use phase –
emissions levels in the supply chain are increasing due to
the use of more carbon-intensive components, especially
those installed in high-voltage battery systems. For this
reason, right from the product development stage of new
vehicle projects, the BMW Group has defined specific
targets for reducing carbon emissions across the entire
life cycle. The strategy applies equally to the vehicle de-
velopment, the supply chain, production, the use phase,
and finally recycling at the end-of-life phase.
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80
ELECTRIC MOBILITY
AMBITIOUS TARGETS FOR EXPANDING ELECTRIC
MOBILITY
PRODUCT OFFERING EXPANDED AND SALES VOLUME
INCREASED
Electric mobility is one of the key topics of the
future when it comes to making road travel sustainable
and a more pleasant experience. In recent years, the
BMW Group has significantly expanded its range of
electrified vehicles and related services. It therefore sees
itself as one of the leading providers of premium electric
mobility, measured on the basis of its cumulative sales
volume figures between 2013 and 2020 and in light of
the holistic approach it is taking.
The BMW Group’s electrified vehicles combine the
advantages of sustainable mobility with dynamic drive-
train behaviour. Fully electric battery-powered models
(BEVs) generate zero local emissions and can significantly
reduce traffic noise levels in towns and cities.
The BMW Group is pursuing the goal of substantially
further decarbonising its vehicles and thereby achieving
a worldwide reduction in carbon emissions in the use
phase (Scope 3 downstream in accordance with SBTI
Carbon Emissions and Pollutants and Paris Climate Agreement
targets. A key part of its product strategy is therefore to
systematically continue electrifying its model range. The
BMW Group has set itself ambitious targets: by 2025, the
proportion of electrified vehicles in its total deliveries is
to rise to at least 25 %. By 2030, the BMW Group plans to
have delivered at least seven million electrified vehicles ¹.
To ensure that it achieves its sales volume targets
for electric and plug-in hybrid vehicles, the BMW Group
plans to more than double its sales of electrified vehi-
cles by the end of 2021 compared with 2019 figures
(2019: 146,158 ² units). Based on its existing plans, the
BMW Group will have 25 electrified models on the road
by 2023.
The BMW Group is consciously focusing on battery
electric vehicles (BEV) and plug-in hybrid technology
(PHEV), enabling customers to select the form of drive-
train that best suits their respective mobility needs. In
order to serve regionally varying customer requirements,
the BMW Group assembles a variety of drivetrain tech-
nologies on the same production line.
During the year under report, the BMW Group
launched further models with hybrid drivetrains: the
BMW X1 xDrive25e ³, X2 xDrive25e ³, X3 xDrive 30e ³,
330e Touring ³, 330e xDrive Sedan ³, 330e xDrive Tour-
ing ³, 530e Sedan ³, 530e Touring ³, 530e xDrive Sedan ³,
530e xDrive Touring ³ and 545e xDrive Sedan ³. These
were joined by two additional all-electric models, the
MINI Cooper SE ³ and the BMW iX3 ³, which has been
available in Europe since the end of January 2021. The
BMW iX3 ³ is already equipped with the technology of the
fifth, and thus latest, generation of BMW Group battery
cells.
Glossary.
1 See
2 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
3 See
Fuel Consumption and CO2 Emissions Information.
Comparison of Forecast with
≥ 25 %
proportion of electrified vehicles in
total deliveries by 2025
BMW GroupReport 2020
Combined Management Report
Products and Services
In November 2020, the Group presented the
BMW iX ¹, featuring new electric drivetrain technology,
substantially enhanced connectivity and innovative in-
terior design. The BMW iX ¹ also features a range of over
600 km (WLTP) and shorter charging times. The vehicle
can be charged for a range of over 120 km in roughly
ten minutes.
In 2020, the BMW Group delivered 192,662 electri-
fied vehicles (2019: 146,158 units ²). Further information
is available in the “Automotive segment” section of the
Business Report.
Fuel Consumption and CO2 Emissions Information.
1 See
2 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
Comparison of Forecast with
3 The range has already been determined in accordance with the new WLTP test cycle (Worldwide harmo-
nized Light vehicles Test Procedure) and recalculated to NEDC (New European Driving Cycle) for compara-
bility. The actual range depends on various factors, including personal driving style, route characteristics,
the outside temperature, heating, air conditioning, preheating and precooling. Provisional figure.
81
RANGE INCREASED TO MEET CUSTOMER NEEDS
FURTHER INVESTMENTS IN ELECTRIFICATION
The BMW Group invests on an ongoing basis in the
planning and development of new vehicle models. The
figure of 25 electrified models previous targeted to be on
the roads by 2025 has now been brought forward to 2023.
Around half of the 25 models will be offered as
all-electric versions. The BMW Group also intends to
offer its high-volume models as purely battery-powered
versions. From today’s perspective, the European Union’s
target of attaining climate neutrality by 2050, the interim
targets discussed in the context of the Green Deal and
the similarly ambitious climate policy targets of other
countries can only be achieved with a variety of parallel
technologies if customers are to continue being offered
a range of mobility options that meet their specific and
differing needs going forward. Even today, from a global
viewpoint there are driving profiles that cannot yet
be covered by an all-electric vehicle due to physical or
technical restrictions or insufficient access to a viable
charging infrastructure.
To enable customers to cover as much of their daily
driving as possible emissions-free, the BMW Group is sys-
tematically increasing the electric range of its plug-in hy-
brids (PHEV) and battery-powered electric vehicles (BEV)
by introducing new technologies. Hence, for PHEVs, the
Group has increased the range of the BMW X5 PHEV ¹
from 31 km (2015: NEDC data) to 80 km ³, the BMW
530e PHEV ¹ from 45 km (2017: NEDC data) to 60 km ³
and the BMW 330e PHEV ¹ from 40 km (2016: NEDC
data) to 60 km ³. In the BEV segment, the range of the
BMW i3 BEV ¹ increased from 300 km (2016: NEDC data)
to 359 km ³.
To further increase the range of its electrified vehicles,
the BMW Group is improving both the energy density
and the efficiency of its battery cells. For example, the
high-voltage battery in the BMW iX3 ¹ has a 20 % higher
energy density and the power density of the electric
motor has also been increased by 30 %.
As a matter of principle, the BMW Group takes a
differentiated view to increasing the electric range and
does not necessarily consider it expedient to aim for
a maximum range for all electrified vehicles, and is
rather of the opinion that it makes more sense to offer
customers tailor-made solutions by producing a fleet of
vehicles with varying ranges. Resource use and resource
efficiency – advantages that also benefit the customer.
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82
PHEVs and highly efficient internal combustion
engines are therefore a more likely choice in this envi-
ronment. For these reasons, the BMW X3 * is the first
model series to be available in two variants, firstly with
a combustion engine and secondly as a plug-in hybrid
version, thanks to the BMW Group’s scalable, modular
construction system. The BMW iX3 * is also available with
its all-electric drivetrain.
Quite apart from battery-powered electric drivetrain
systems, the BMW Group also continues to see the poten-
tial of fuel cells, a technology embedded in the hydrogen
strategy of various countries. The Group is planning to
produce a small series of the BMW i Hydrogen NEXT
from 2022. Moreover, as an associated partner of H2
Mobility Deutschland GmbH, the BMW Group is in-
terested in establishing the infrastructure required for
hydrogen-powered vehicles.
ACHIEVING SUSTAINABILITY OVER THE ENTIRE
LIFE CYCLE
The BMW Group considers both decarbonisation
targets and market-specific fleet requirements right from
the product development stage. In doing so, it defines
specific targets that ensure well-balanced optimisation
over the entire life cycle.
and other pollutant emissions as well as the use of critical
materials over the entire life cycle of its vehicles right
from the very beginning. With the fifth generation of
BMW eDrive, the Group reached an important milestone
during the year under report. A special feature of the
electric motor, which is being installed in the BMW iX3 *
for the first time (eDrive Gen5), has been designed so
that it no longer requires the use of rare earth elements.
For the fifth generation of its high-voltage storage system,
the BMW Group obtains any critical raw materials it re-
quires from sources outside the known conflict regions.
Cobalt that is bought in directly by BMW Group and
made available to suppliers is sourced from Morocco and
Australia. The lithium used is also from Australia, where
it is extracted by means of the so-called hard rock mining
process. In addition, the BMW Group has successfully
reduced the amount of cobalt required per kWh by two-
thirds through the further chemical development of its
battery cells.
Purchasing and Supplier Network
The use of renewable energy in production process-
es – for example in the manufacture of energy-intensive
materials such as carbon fibre reinforced plastic – or the
choice of green electricity in the use phase – also help
reduce the carbon footprint of the BMW Group’s vehicles.
Further information on how efficiently and therefore eco-
nomically and sparingly the BMW Group uses resources
in its production processes is provided in the section
Resource Consumption and Resource Efficiency.
With its project i, the BMW Group was among the
first manufacturers to pursue the aim of reducing carbon
The BMW Group has entered into a contractual agree-
ment with its battery cell manufacturers to ensure that
they only use green electricity when producing the fifth
generation of battery cells. In a joint technology consor-
tium with battery manufacturer Northvolt, the Group
also plans to configure the value chain for battery cells
in Europe with sustainability as its top priority.
Other approaches to handling resources in a respon-
sible, sustainable manner include the reuse of batteries,
such as in stationary storage systems with the aim of
improving the use of renewable energy and promoting
recycling. In collaboration with the recycling specialist
Duesenfeld, for example, the BMW Group has developed
the prototype of a process that enables 96 % of the mate-
rial from battery cells to be recovered for recycling. Fur-
thermore, the option exists for all customers whose ve-
hicle contains a high-voltage battery for the BMW Group
to take the battery back free of charge. This also applies
to regions where there is no legal obligation to do so.
The BMW Group manages the implementation of its
targets and assesses progress in vehicle development via
its Life Cycle Assessment in accordance with the ISO
14040 / 44 standard. The Group utilises these assessments
to record the environmental impacts occurring over the
life cycle of a vehicle right from the development stage
and make comparisons with predecessor models. Howev-
er, the BMW Group’s approach goes one step further: it
breaks down the targets by product and then implements
the appropriate measures. These include, for example,
the use of green electricity for energy-intensive processes
in the supply chain or in production as well as the use of
recycled materials such as aluminium or plastics instead
of deploying primary resources.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
Combined Management Report
Products and Services
The BMW Group aims to ensure that electric and
electrified vehicles make an effective contribution to
climate protection not only in the use phase, but also in
their overall footprint, including the supply chain. As
an example, the environmental report of the BMW iX3 *
indicates that the greenhouse gas potential values of an
all-electric vehicle are around 30 % lower than those of
a conventional reference vehicle with a diesel drivetrain
when the calculation is based on standard consumption
and the European electricity mix. Furthermore, when
the electricity used for charging is generated from re-
newable energy sources, the emissions values are around
60 % lower.
Competence centre for battery cells
In 2019, the BMW Group began pooling its wealth of experi-
ence and comprehensive knowledge of battery cell technology
in a new competence centre based in Munich. With this strategy,
the Group is pursuing the twin aims of further improving its bat-
tery cell technology and fully penetrating production processes.
Based on the battery technology currently in use, the BMW Group
intends to substantially increase the potential range of its electri-
fied vehicles by 2030 by continuing to develop its battery cells,
modules and systems. Looking to the future, the focus will be
even more on cutting battery system costs in order to make elec-
tric mobility more profitable.
The competence centre replicates the entire value chain of bat-
tery cell technology, from research and development to the struc-
ture and the design of the battery cell to the production of the first
prototypes. It takes the complete life cycle of a battery cell into ac-
count, from purchasing the raw materials to recycling. Particularly
in view of the high-voltage batteries needed to power electrified ve-
hicles, which can entail the use of critical raw materials, the circu-
lar economy has a decisive role to play.
Production, Purchasing
and Supplier Network
83
EXPANDING THE CHARGING INFRASTRUCTURE AND
ENABLING FASTER CHARGING
A comprehensive charging infrastructure is a prereq-
uisite for the rapid, widespread deployment of electric
mobility. In order to promote this project, between 2015
and 2020 the BMW Group committed itself to improving
the charging infrastructure in a total of over 50 projects
and has initiated the installation of some 15,000 opera-
tional charging points. The BMW Group plans to install a
total of 4,100 charging points at BMW Group properties
in Germany by the end of 2021. Half of these charging
points will be made accessible for public use. Together
with other car manufacturers, charging station providers,
charging service providers and energy suppliers, the
BMW Group is working on simplifying not only access
to charging stations, but also the charging process itself.
At European level, in close collaboration with the
IONITY joint venture, the BMW Group is in the process
of building a high-performance fast-charging network com-
prising some 400 charging stations along major transport
routes by 2021. Fast-charging stations make charging up to
seven times faster than standard 50 kW stations. Originally
planned for completion by 2020, due to the coronavirus
pandemic and the lack of approvals, the BMW Group and
its partners were compelled to postpone the construction of
certain stations until 2021. To date, 325 of the 400 planned
IONITY fast-charging stations have been installed and a
further 44 are currently under construction. At powerful
and increasingly widespread DC fast-charging points
with outputs of at least 150 kW, the BMW iX3 * can be
charged to achieve a range of over 100 km (WLTP) in
around ten minutes.
The BMW Group intends to offer electric mobility to
both private customers and companies operating entire
fleets and is additionally expanding the BMW Charging
product and service portfolio for trendsetting charging
solutions at home, on the road and at the workplace.
Charging infrastructure for both private and commercial
purposes is a key prerequisite for the further expansion
of electric mobility. The BMW Group welcomes the sup-
port provided by government premiums, as charging
options both at home and at the workplace make a key
contribution to the overall infrastructure from the point
of view of customers.
GREEN ELECTRICITY FOR E-MOBILITY
During the year under report, the BMW Group
continued to pursue and expand its approaches to the
holistic ecological optimisation of electric mobility both
at home and on the road. In addition to BMW Charging
and MINI Charging, the Group already offers electricity
from renewable sources as well as attractive solar power
packages for homes in both Germany and Austria. As
part of its strategic investment in the IONITY joint ven-
ture, the BMW Group is preparing to broaden its range
of services to enter other markets as well as the field of
public charging.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
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84
IMPROVING POLITICAL CONDITIONS
MOBILITY PATTERNS
MAKING URBAN MOBILITY SUSTAINABLE WITH
SERVICES
In the BMW Group’s view, there is still a need for
political support for electric mobility in many countries
and cities. In the EU, for example, market research points
to the close correlation between the density of charging
infrastructure and the sale of electrified vehicles. This
correlation applies not only at member state level, but
also in a regional comparison. The BMW Group is
therefore seeking dialogue with policymakers to call for
measures to be taken to improve consistency on both
the supply and the demand sides. In concrete terms,
the aim is to improve framework conditions with the
aim of stimulating demand for electrified vehicles not
only nationally, but also at local level. The focus here is
on increasing the number of public charging points and
offering usage incentives in everyday life, such as park-
ing spaces reserved for electric vehicles or discounts on
parking fees. In Germany, for example, only a few cities
have so far taken advantage of the funding opportunities
offered by the Electric Mobility Act.
To advocate for improved conditions, the BMW Group
is involved, for example, in the National Platform for the
Future of Mobility (NPM), in the European initiative EIT
Urban Mobility and within the framework of the World
Economic Forum. Furthermore, the BMW Group is in
dialogue with think tanks such as Agora Verkehrswende
and is a member of the International Consultative Com-
mittee of China EV 100 as well as at VELOZ, a non-profit
organisation dedicated to promoting electric mobility in
the US state of California.
The BMW Group wants to make mobility more sus-
tainable and more convenient to use. In recent years,
numerous urban mobility offers have been developed
and introduced in cooperation with selected towns and
cities. The BMW Group therefore sees its 2020 target
of providing sustainable support for changing mobility
behaviour by offering integrated mobility services in
selected metropolitan regions as having been met.
Moreover, the Group continues to work together with
its subsidiaries and in dialogue with the respective cities
to find solutions to the increasing density of road traffic
and the corresponding rise in noise levels, air pollution
and land use. The BMW Group is also meeting these
challenges by developing connected vehicles. In view of
the growing trend towards vehicle electrification, the
Group is therefore making a significant contribution in
particular to providing eco-friendlier modes of transport
as well as promoting the better use of space in urban
areas.
The BMW Group is currently working together with
three German cities to improve the traffic situation
and explore new mobility solutions. The New Mobility
Berlin project aims to improve the quality of life within
the city. For this reason, the BMW Group is develop-
ing tailor-made multimodal solutions, i. e. approaches
that incorporate the entire range of transport modes.
In selected districts of the city, via its subsidiaries, the
BMW Group offers shared fleets of rental cars and
e-scooters as an alternative to privately used vehicles.
The strategy is intended to encourage better use of the
road space occupied by rarely used private vehicles for
other purposes going forward.
At the same time, the BMW Group has reached
agreements with the cities of Munich and Hamburg,
where it has carried out the first pilot projects for making
city centres more pleasant to live in. Specific examples of
the development of new, sustainable mobility options in-
clude the City2Share research project, which focuses on
measures to reduce traffic in project districts in Munich
and Hamburg, and the “umparken Schwabing-West” pro-
ject, in which the BMW Group is working to transform
public space and enable it to be used more appropriately
by offering mobility packages for local residents.
The BMW Group is also involved in various urban
platforms via which municipalities exchange information
and collaborate on projects, including the
Urban Mobility
Platform in Germany and the international
EIT Urban
Mobility Platform of the European Institute of Innovation and
Technology.
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Via its subsidiaries, the BMW Group promotes
innovative service offerings in the fields of car sharing,
driving services, parking and vehicle charging as well as
multimodal transport. In 2019, the BMW Group there-
fore merged its own mobility services in a joint venture
with those of Daimler Mobility Services GmbH to create
the YOUR NOW service. The common goal of the two
companies is to expand the use of on-demand mobility
and offer new solutions for cities and municipalities
looking to make road use more efficient and sustaina-
ble. In this context, the market development and the
political-regulatory framework conditions in the cities are
continuously being examined and the range of services
further developed in collaboration with strategic partners.
The BMW Group has expanded its car-sharing
service offering (SHARE NOW) to include a long-term
rental of up to 30 days. It also continued to develop
FREE NOW into a multimodal mobility platform by
adding e-bikes and e-scooters. In 2020, FREE NOW had
46 million registered customers and offers ride services
in 17 countries and 153 cities. In the year under report,
around 2.9 million customers used the SHARE NOW
car-sharing services, which are available in 16 cities and
eight countries. The car-sharing fleet currently compris-
es around 9,500 vehicles, almost one-quarter of which
are electrically powered. In 2020, the number of trips
decreased due to the coronavirus pandemic.
The CHARGE NOW vehicle charging service cur-
rently provides access to around 246,000 public charging
points operated by various providers in 32 countries. In
addition to its CHARGE NOW services, the BMW Group
is working with partners in other markets to provide cus-
tomers with broad access to charging points. The PARK
NOW digital parking service enabled around 45 million
customers in around 1,200 cities to pay more quickly and
easily for parking spaces on a contactless basis. However,
PARK NOW’s business performance was also impacted
by the coronavirus pandemic in 2020.
The BMW Group and its subsidiaries are working
continuously on intelligently interconnecting vehicles,
infrastructure and mobility services. The aim here is to
make better use of the limited parking space available
and reduce traffic congestion. The BMW Group is fully
committed to complying with statutory limits for air
quality, noise levels and carbon emissions as well as to
restoring the quality of life for the residents of urban are-
as. For these reasons, the BMW Group intends to further
intensify its dialogue with towns and cities and make an
active contribution to the discussion on more sustainable
mobility options as well as tailored traffic management
measures. The Group also intends to transfer the results
achieved in individual cities to other areas and adapt
them on an international basis.
FURTHER DEVELOPING AUTOMATED DRIVING
Automated functions and digitally connected vehicles
can help reduce traffic congestion, minimise the risk of
accidents and cut emissions levels. These technologies are
therefore making a direct contribution to improving the
quality of life in cities, and electric mobility in particular
is becoming more and more popular at the same time.
The latest BMW models are equipped with
state-of-the-art driver assistance systems. In 2021, the
BMW Group is taking automated driving a decisive step
further with the development of the BMW iX*. It will be
the first BMW Group vehicle to offer both automated
driving and parking functions via a new modular tech-
nology system. The BMW Group sees considerable po-
tential in automated driving and will continue to develop
this field intensively over the next few years.
Employee mobility
As the largest single employer in the Munich metropolitan region,
the BMW Group has a special role to play in its hometown location
and the surrounding urban areas by actively helping to reduce en-
vironmental pollution. The Group is planning to have one of the
largest company charging networks in place by mid-2021, there-
by helping to increase the popularity of electric mobility and re-
duce carbon dioxide as well as other pollutant emissions.
The BMW Group provides incentives for its employees to use
public transport, including benefits such as a discounted month-
ly ticket within the Munich city area. Around 14,000 employees
have chosen this option. The Group also operates a long-estab-
lished shuttle bus service between its locations. It also provides
its staff with rental bicycles and scooters for commuting. Last but
not least, as a good example, with its BMW LeaseRad offer, the
Group is actively supporting the growing number of employees
who choose to ride to work by bicycle and also encourages travel-
ling by bicycle and scooter in general.
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
Combined Management Report
Products and Services
The BMW Group is also leveraging vehicle con-
nectivity with its new eDrive Zones technology, which
automatically switches plug-in hybrids to fully electric
driving mode when entering an environmental zone.
The innovation makes it easier for customers to drive
emissions-free to the greatest extent possible. The Group
has already introduced this function in over 80 European
cities.
The safety of its automated systems is a top priority
for the BMW Group. For that reason, in 2019 it partnered
with 11 leading companies in the field of automated
driving to produce a Safety First for Automated Driving
(SaFAD) white paper that highlights the importance
of safety by design in the development of an industry
standard for automated driving. The BMW Group sees
this white paper as an important step towards defining
industry-wide standards from the testing stage to the
approval of highly and fully automated driving functions.
Since 2018, BMW assistance systems have been
utilising artificial intelligence to anticipate typically dan-
gerous situations such as the swerving of other vehicles
in order to react in good time. The BMW Group can
further improve the performance of artificial intelligence
in this field by analysing anonymised data taken from
real-life activities. Therefore, as a founding member of
the European Gaia-X project, it is committed to devel-
oping standards for organising data and cloud-based
measures with the aim of making traffic management
more efficient.
In order to incorporate highly mature new technolo-
gies in series production and further raise its level of ex-
pertise in the field of automated driving, the BMW Group
is building a new development and testing ground in the
86
Czech Republic, which is scheduled for completion in
2022. Complex everyday automated driving conditions
can then be tested at the new facility in a realistic but
controlled environment.
independently which of their vehicle data are transmitted
to other market participants for a specific purpose. The
BMW Group has also been offering this service in the
USA since June 2020.
Design and Product Safety
PREVENTIVELY PROTECTING CUSTOMER DATA
IDENTIFYING POTENTIAL FOR SUSTAINABLE MOBILITY
AT AN EARLY STAGE
The protection of data and information within the
BMW Group is based on the relevant laws and standards,
particularly in accordance with the EU General Data Pro-
tection Regulation and the ISO / IEC 27001 international
security standard. The personal data of customers is
only collected, processed or utilised to the extent legally
permitted and with the consent of the person in ques-
tion. Any complaints can be reported to the Customer
Interaction Centre, the Data Protection Officer or via the
SpeakUP Line and will be dealt with promptly.
In order to protect its digital systems from tampering,
the BMW Group systematically searches for possible
weak points with a view to closing any potential gaps in
good time before approving the respective component.
The Group continuously translates any new insights into
binding standards. Clear standards regarding data and
information protection also apply to any collaborations
and partner relationships.
With BMW CarData, the BMW Group introduced
a secure, data-protection-compliant and transparent
service for the non-discriminatory sharing of vehicle
data, initially in Germany in 2017 and since 2018 across
Europe. BMW CarData provides BMW Group customers
with complete data sovereignty. Customers can decide
The BMW Group has combined the topics of sustain-
ability and mobility in its corporate strategy. It analyses
the opportunities and challenges arising from changes
in mobility demand that result from new types of mo-
bility on offer or regulatory framework conditions. The
BMW Group then develops premises for its contribution
to sustainable mobility on this basis. In corporate depart-
ments for both strategy and communication, the Group
has established dedicated teams in a global network and
provided them with funding to jointly define sustainabil-
ity goals and monitor the extent to which they are being
achieved. The BMW Group views developments in its
main markets in a differentiated manner and engages in
collaborative research projects in order to understand the
changes, impacts and needs of urban mobility behaviour
worldwide at an early stage. The Group is also in regular
dialogue with its international stakeholders. One of the
aims of these established events is to gain a better un-
derstanding of people’s mobility needs worldwide and
develop new products and services accordingly.
Dialogue
with Stakeholders
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PRODUCTION,
PURCHASING AND
SUPPLIER NETWORK
PROMISED
We aim to reduce
CO2 EMISSIONS
per vehicle produced.
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DELIVERED
Since 2020, the electricity
for all BMW Group plants
has been sourced from
100 % RENEWABLE
ENERGIES.
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“Our expertise in integrating new
technologies and products into our
production system is unique worldwide.
Through innovation and digitalisation, we
are setting new benchmarks in terms of
efficiency and sustainability. This leads
into a new era of automotive production:
The next level of our BMW Group pro-
duction system will be lean, green and
digital.”
Dr.-Ing. Andreas Wendt
Member of the Board of Management
of BMW AG,
Purchasing and Supplier Network
“A company is much more than just
the sum of its individual employees. It is
about sharing the same goals, working
together as partners and taking responsi-
bility beyond one’s own area. This applies
to us at the BMW Group, as well as in
cooperation with our suppliers.”
Dr. Milan Nedeljković
Member of the
Board of Management
of BMW AG, Production
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We know where
TECHNOLOGY can still
leverage POTENTIAL.
That’s why I’m OPTIMISTIC
we can reach the high goals
we set ourselves.
MR WITSCHNIG, ENVIRON-
MENTAL PROTECTION IN
PRODUCTION. WHAT DOES
THAT MEAN EXACTLY?
Our goal is clean production. That
means minimising our environmental
impact in a targeted manner – with regard
to water, waste, energy, solvents, etc. We
have achieved a great deal in recent years –
for instance, reducing the amount of
waste by 80 %. And all BMW Group plants
worldwide have obtained their electricity
from renewable energies since 2020.
THE GOAL IS TO REDUCE
CO2 EMISSIONS IN PRO-
DUCTION BY ANOTHER 80 %
BY 2030. HOW WILL YOU
DO THAT?
We have already achieved a great deal
when it comes to energy efficiency and
sourcing green power. And we know where
technology can still leverage potential. Our
next big topic will be gas consumption.
SUPPLY CHAIN CO2 EMIS-
SIONS ARE ALSO MEANT TO
BE REDUCED BY 2030.
MS PEREZ SZMAK, WHY BY
ONLY 20 %?
Without corrective measures, ex-
panding electromobility would increase
CO₂ emissions in the supplier network
by at least a third. We don’t just want to
stop this increase; we want to reverse it.
So, actually, a reduction of at least 20 % is
a very ambitious goal.
Renewable energies will play a big
part in this. A second topic is the reuse
of materials – in other words, a circular
economy. The best part is: Our suppliers
are fully on board with this.
Further information is available at:
report.bmwgroup.com
Jury Witschnig is responsible
for environmental protection in
production. Patricia Perez Szmak
heads the project dedicated to
sustainability in the supply chain.
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The Group’s Dingolfing plant has assumed a lead-
ing role as a competence centre for e-drive systems in
the production of electric drivetrain components. It
produces battery modules, high-voltage batteries and
fifth-generation electric motors for the BMW Group’s
electrified vehicles. E-motors are also manufactured
at the Landshut plant. Production facilities for battery
components and high-voltage batteries are also being
established at the Group’s Leipzig and Regensburg sites.
Currently, high-voltage batteries are manufactured at
three BMW Group plants, i. e. Dingolfing (Germany),
Spartanburg (USA) and Shenyang (China). In Thailand,
the BMW Group collaborates closely with a partner
that manufactures high-voltage batteries for electrified
vehicles that are produced locally. By 2024, the produc-
tion of internal combustion engines in Europe will be
concentrated at BMW Group locations in Steyr (Austria)
and Hams Hall (UK).
PRODUCTION NETWORK
SYSTEMATIC TRANSFORMATION TOWARDS ELECTRIC
MOBILITY
The BMW Group’s production system is efficient and
flexible. It provides customers with a large number of
customisation options when choosing their own vehicle.
Moreover, during the reporting period the BMW Group’s
global production system once again demonstrated its
ability to respond to highly volatile market developments,
even under the demanding conditions of the 2020 pan-
demic year.
The production network leverages innovative technol-
ogies from the fields of digitalisation and Industry 4.0,
including applications from the worlds of virtual reality,
artificial intelligence, smart logistics and 3D printing.
2022
every production plant in Germany
will be manufacturing at least one
fully electric model
The BMW Group continues to accelerate towards
electric mobility and is bolstering its international
production network for the increased manufacturing of
electrified vehicles. By the end of 2022, every production
plant in Germany should have the capacity to produce at
least one fully electric vehicle model. The BMW Group’s
production system is capable of manufacturing both con-
ventional internal combustion and electrically powered
vehicles on a single line, enabling it to respond flexibly
to changing customer requirements for various drivetrain
systems. In 2020, the Group simultaneously manufac-
tured electrified models at 13 locations in its global pro-
duction network. By the middle of the current decade
it will be deploying a new cluster architecture geared to
fully electric drivetrains. Initially, the technology will be
launched at the future Debrecen plant in Hungary and
then transferred to the global production network in a
step-by-step process.
Electrification is also becoming increasingly impor-
tant in terms of drivetrain production. In the year under
report, the BMW Group announced the construction of
a pilot plant for the near-series production of battery cell
prototypes. The aim is to further optimise the produc-
tion of battery cells in terms of quality, performance and
costs. The Battery Cell Competence Centre in Munich
already covers the entire value chain in terms of battery
cell technology – from research and development to the
structure and design of the battery cell as well as its
manufacturability.
BMW GroupReport 2020
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PRODUCTION SITES IN KEY MARKETS
Locations
BMW GROUP PLANTS
The BMW Group’s production network comprises
31 locations in 15 countries. The Group aims to strike a
balance between production and deliveries in the various
regions of the world. 20 of the 31 sites are BMW Group
plants. Three sites belong to the BMW Brilliance Au-
tomotive joint venture in Shenyang (China), which is
currently being further enlarged. Eight production sites
are operated by partners or contract manufacturers. The
same standards of quality, safety and sustainability ap-
ply at all locations within the BMW Group’s production
network worldwide.
Araquari
Berlin
Chennai
Dingolfing
Eisenach
Hams Hall
Landshut
Leipzig
Manaus
Munich
Oxford
Rayong
Regensburg
Rosslyn
San Luis Potosí
Spartanburg
Steyr
Swindon
Wackersdorf
92
Products
BMW 3 Series, BMW X1, BMW X3, BMW X4, BMW X5
BMW motorcycles, car brake discs
BMW 2 Series, BMW 3 Series, BMW 5 Series, BMW 6 Series, BMW 7 Series
BMW X1, BMW X3, BMW X4, BMW X5, BMW X7, MINI Countryman
BMW 3 Series, BMW 4 Series, BMW 5 Series, BMW 6 Series,
BMW 7 Series, BMW 8 Series, BMW M
Chassis and drivetrain components,
e-motors, high-voltage batteries, battery components
Rolls-Royce bodywork, pressed parts
Country
Brazil
Germany
India
Germany
Germany
Toolmaking, vehicle components, aluminium tanks for BMW Motorrad
United Kingdom
Petrol engines, core engine parts
Germany
Germany
Brazil
Germany
United Kingdom
Thailand
Germany
South Africa
Mexico
USA
Austria
United Kingdom
Germany
Vehicle and engine components, e-motors and special-purpose motors
BMW 1 Series, BMW 2 Series, BMW i, BMW M
Motorcycles
BMW 3 Series, BMW 4 Series, BMW M
Petrol and diesel engines, high-performance engines for M models
Core engine parts
MINI, MINI Clubman, MINI Cooper SE *
BMW 2 Series, BMW 3 Series, BMW 5 Series, BMW 7 Series
BMW X1, BMW X3, BMW X5, BMW X7
Motorcycles
BMW 1 Series, BMW 2 Series, BMW 4 Series
BMW X1, BMW X2, BMW M
BMW X3
BMW 3 Series
BMW X3, BMW X4, BMW X5, BMW X6, BMW X7, BMW M,
High-voltage batteries
Petrol and diesel engines
Core engine parts
High-performance engines for M models
Pressed parts and bodywork components
Distribution centre for parts and components
Cockpit assembly
Processing of carbon fibre components
Rolls-Royce Manufacturing Plant Goodwood
United Kingdom
Rolls-Royce Phantom , Ghost, Wraith, Dawn, Cullinan*
* See
Fuel Consumption and CO2 Emissions Information.
BMW GroupReport 2020
93
Products
BMW 5 Series
BMW X3
BMW iX3 *
BMW 1 Series, BMW 2 Series, BMW 3 Series
BMW X1, BMW X2
Petrol engines, high-voltage batteries, battery components,
production of core engine parts
Combined Management Report
Production, Purchasing and Supplier Network
Locations
JOINT VENTURE
BMW BRILLIANCE AUTOMOTIVE HOLDINGS LTD.
Dadong (Shenyang)
Tiexi (Shenyang)
Tiexi (Shenyang)
* See
Fuel Consumption and CO2 Emissions Information.
Country
China
China
China
The BMW Group’s four automotive partner plants in
Jakarta (Indonesia), Cairo (Egypt), Kaliningrad (Russia)
and Kulim (Malaysia) primarily serve their respective
regional markets and produce BMW and MINI brand
models.
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 produced the BMW 5 Se-
ries Sedan and the BMW Z4 in Graz (Austria). VDL
Nedcar manufactured the MINI Convertible and MINI
Countryman models as well as the BMW X1 at its produc-
tion plant in Born (the Netherlands). In addition, BMW
motorcycles are produced at the TVS Motor Company in
Hosur (India) as well as at the Loncin Motor Company
in Chongqing (China).
BMW GroupReport 2020
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94
HIGH PRODUCTION VOLUME DESPITE PANDEMIC
VEHICLE PRODUCTION OF THE BMW GROUP BY PLANT
The coronavirus pandemic caused demand on in-
ternational automotive markets to fall, in some cases
substantially, especially in the first six months of the
year. Production volumes were adjusted accordingly and,
at 2,255,637 ¹ BMW, MINI and Rolls-Royce brand auto-
mobiles, were below the level recorded one year earlier
(2019: 2,564,025 ¹ units; – 12.0 %). The figure comprised
1,980,740 ¹ BMW (2019: 2,205,841 ¹ units; – 10.2 %), 271,121
MINI (2019: 352,729 units; – 23.1 %) and 3,776 Rolls-Royce
brand vehicles (2019: 5,455 units; – 30.8 %).
1 Includes vehicles produced by the BMW Brilliance Automotive Ltd.,
Shenyang joint venture (2020: 602,935 units; 2019: 536,509 units).
2 Joint Venture BMW Brilliance Automotive Ltd., Shenyang.
3 Contract production.
in units
Spartanburg
Dingolfing
Regensburg
Leipzig
Oxford
Munich
Rosslyn
Rayong
Chennai
Araquari
Goodwood
San Luis Potosí
Tiexi (BBA) 2
Dadong (BBA) 2
Born (VDL Nedcar) 3
Graz (Magna Steyr) 3
Partner plants
Total
2020
2019
Change in %
361,365
231,970
199,991
200,968
175,984
143,758
50,760
25,752
6,228
8,400
3,776
56,081
311,137
291,798
125,666
35,747
26,256
411,620
284,907
255,804
230,284
222,340
221,077
69,463
23,700
8,976
8,208
5,455
25,538
250,241
286,268
174,097
52,231
33,816
2,255,637
2,564,025
– 12.2 %
– 18.6 %
– 21.8 %
– 12.7 %
– 20.8 %
– 35.0 %
– 26.9 %
8.7 %
– 30.6 %
2.3 %
– 30.8 %
119.6 %
24.3 %
1.9 %
– 27.8 %
– 31.6 %
– 22.4 %
– 12.0 %
BMW GroupReport 2020
Combined Management Report
Production, Purchasing and Supplier Network
RESOURCE CONSUMPTION
AND RESOURCE EFFICIENCY
– 78 %
CO2 emissions per vehicle
since 2006
The reduction of carbon emissions and the respon-
sible use of resources are important cornerstones of the
BMW Group’s strategy. Its own plants and locations
have a direct influence on both carbon emissions levels
and resource consumption. The BMW Group has been
committed to resource-efficient production at its plants
for many years. This includes checking and monitoring
the consumption of resources across the BMW Group’s
production network. The principle of continuous im-
provement applies throughout the BMW Group. It in-
vests in efficient technologies and also continually seeks
to optimise its existing processes and procedures. This
principle has been highly successful, as the Group clearly
surpassed its target of reducing resource consumption
per vehicle produced by an average of 45 % by 2020 com-
pared to 2006 , achieving an overall reduction of 56.7 %.
Apart from continuously reducing energy consumption
in general, the BMW Group is now focusing on convert-
ing its electricity supply to renewable energy sources.
Any remaining production-related emissions that cannot
yet be avoided will be offset from 2021 onwards.
NEW PRODUCTION TARGETS UP TO 2030
The biggest lever for reducing the BMW Group’s
Scope 1 and Scope 2 emissions is at its production
locations, which account for around 90 % of these emis-
sions. The BMW Group has had considerable success
in this area and repeatedly set new standards in terms
of sustainable production methods. Between 2006 and
2020, carbon emissions per vehicle produced fell by
around 78 % by continually improving energy efficiency,
generating renewable electricity in-house and entering
into direct supply contracts for green power (including
guarantees of origin).
Nevertheless, the BMW Group
has already set itself the next target: compared to 2019,
these emissions levels are to be reduced by a further
80 % per vehicle by 2030. As from 2021, the Group will
make the remaining carbon emissions from Scope 1 and
Scope 2 completely carbon- neutral by using voluntary
offset certificates.
95
CARBON FOOTPRINT IN PRODUCTION REDUCED AGAIN
Carbon emissions per vehicle produced fell by
around 23 % to 0.23 t compared with the previous year.
The reduction is a result of completely switching the
BMW Group’s production network to green electricity
generated from renewable sources. The BMW Group also
managed to reduce the absolute level of carbon emissions
generated by the production network to 486,630 t (2019:
697,025 t).
GRI 305-4
CO2 EMISSIONS PER VEHICLE PRODUCED ¹, ²
in t
1.0
0.5
0
0.54
0.41
0.40
0.30
0.23
2016
2017
2018
2019
2020
GRI 305-4, 305-5
1 Efficiency indicator calculated from Scope 1 and Scope 2 CO2 emissions (market-based method according
to GHG Protocol Scope 2 Guidance. Other climate-impacting gases than CO2 not included) from vehicle
production, without motorcycles, minus CHP losses divided by the total number of vehicles produced, incl.
BMW Brilliance Automotive Ltd. joint venture, Shenyang / CN, not including the vehicles from the Magna
Steyr and Nedcar contract production plants.
2 The figures for 2016 to 2018 were examined by the external auditor on the basis of a limited assurance
engagement.
BMW GroupReport 2020
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96
The absolute volume of carbon emissions fell by
13 % to around 66 million tonnes during the year under
report. The main drivers were the reduction in fleet carbon
emissions worldwide and the lower production volume due
to the coronavirus pandemic.
GRI 302-2, 305-1, 305-2, 305-3,
305-4, 305-5
BMW GROUP CO2 FOOTPRINT
(CONDENSED VERSION) ¹
in t CO₂ / CO₂e
2020
2019
TOTAL EMISSIONS 2
65,828,005
75,987,119
MINIMISING RESOURCE CONSUMPTION AND OTHER
EMISSONS
The BMW Group wants to lead the way by keeping
resource consumption in its production processes to an
absolute minimum. Apart from carbon emissions, further
decisive factors are energy and water consumption, the
amount of waste sent for disposal and the use of solvents.
In recent years, the BMW Group has made a great deal
of progress in terms of resource consumption. Between
2006 and 2020, the BMW Group reduced its average re-
source consumption and emissions generated per vehicle
by 56.7 %, an improvement of 6.5 % year on year.
The pandemic-related interruption of production at
most BMW Group plants had a significant impact on
energy consumption per vehicle. When the produc-
tion facilities were restarted, the same base load ³ and
simultaneously lower production volumes resulted in
an overall increase in energy consumption per unit.
Although the BMW Group’s energy consumption fell
to 5,714,610 MWh (2019: 5,974,625 MWh) in absolute
Energy Consumption in Detail,
terms during the pandemic
energy efficiency was negatively impacted by lower unit
volumes and not least also by hygiene measures such
as the requirement to increase the frequency of venti-
lation. The BMW Group’s specific energy consumption
for vehicle production in 2020 therefore rose by 3.9 %
to 2.12 MWh per vehicle produced compared to 2019.
GRI 302-1, 302-3, 302-4
Scope 1
Scope 2
Scope 3
642,885
642,259
84,257
302,574
65,100,863
75,042,286
IMPROVEMENT IN RESOURCE CONSUMPTION AND
EMISSIONS FROM VEHICLE PRODUCTION SINCE 2006
per vehicle produced
Average of the values
Energy consumption
CO2 emissions
Water consumption
Process wastewater
Waste for disposal
Solvent emissions
GRI 302-3, 305-4
– 56.7 %
– 38.0 %
– 78.1 %
– 31.0 %
– 42.7 %
– 82.4 %
– 67.7 %
1 The detailed version of the BMW Group carbon footprint can be found in the section on
BMW Group CO2
Footprint.
2 The emissions listed account for approximately 90 % of the BMW Group’s total Scope 1 to Scope 3 emissions.
Scope 1 and Scope 2 emissions exclude climate-impacting gases other than carbon dioxide.
3 The base load is the amount of power permanently required (e. g. standby consumption), regardless of how
many vehicles are produced. The base load includes energy required for emergency and basic lighting, min-
imum ventilation or heating and air conditioning in standby mode.
– 56.7 %
Resource consumption and emissions
from vehicle production since 2006
BMW GroupReport 2020
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ENERGY CONSUMPTION PER VEHICLE PRODUCED ¹, ²
in MWh
3.0
1.5
0
GRI 302-3, 302-4
2.21
2.17
2.12
2.04
2.12
2016
2017
2018
2019
2020
At 2.25 m³ per vehicle produced, specific water
consumption dropped by 3 % compared to the previous
year.
Water Consumption per Vehicle Produced
The BMW Group continuously tries to further reduce
energy and water consumption. It sees opportunities to
save energy in particular by improving base load man-
agement, for example by reducing standby consumption
during shift breaks. In order to reduce water consump-
tion, the BMW Group’s plants are further improving their
circulation systems by means of wastewater treatment.
– 38 %
Energy consumption per vehicle
produced since 2006
Optimisation measures are, however, offset by the high-
er consumption required to cool the newly installed
combined heat and power plants. The BMW Group has
investigated the use of water sources other than drinking
water in a number of its plants in future. It focused on
locations in dry climatic regions, such as the plant in San
Luis Potosí (Mexico).
During the year under report, the volume of waste
for disposal per vehicle produced decreased by 18.6 % to
3.33 kg compared to 2019. The main reason for differ-
ences in the volume of waste for disposal is changes in
the structure of the existing waste disposal companies
at the BMW Group’s various locations. For example, in
2020 the Shenyang plant in China began using house-
hold-type commercial waste to generate energy, a strategy
also introduced at the Rosslyn plant in South Africa.
Waste for Disposal per Vehicle Produced
The BMW Group reduced its emissions of volatile
organic compounds (VOC ³) per vehicle produced by
4.7 % to 0.81 kg in the 2020 reporting period. This year-
on-year improvement is attributable to process optimi-
sations such as restricting the quantity of material used
for cleaning work, the use of solvent-free cleaning agents,
and the equipping of several new paint shops with ex-
tended thermal oxidisation facilities for base and clear
coats, such as at the Munich, Dingolfing and Shenyang
plants.
Solvent Emissions per Vehicle Produced
GRI 305-7
97
MONITORING RESOURCE CONSUMPTION
The monitoring of resource consumption is an in-
tegral part of the Group’s environmental management
strategy in the global production network and is man-
aged by the Steering Committee of the BMW Group’s
international environmental protection network. Each
facility, building and space at each location is allocated to
an internal operator. Within this area, the operator is not
only responsible for the facilities and technical systems as
well as the smooth running of processes and procedures,
but also for their environmental impact. ⁴
An environmental management system in accord-
ance with ISO 14001 has been implemented at all 31
BMW Group production plants. With the exception
of the Manaus plant in Brazil (planned for 2021), all
Group sites are certified according to this standard.
The five competence centres – emissions, water, waste,
qualification and environmental management system –
coordinate the BMW Group’s environmental protec-
tion measures worldwide. Accordingly, any ecological
improvements that have proven to be effective at one
location are implemented at other locations to the extent
possible. Ongoing further training and the exchange of
information between employees are aimed at ensuring
the transfer of knowledge.
1 Efficiency indicator calculated from electricity, heat, natural gas and heating oil consumption from vehicle
production ( without motorcycles) minus CHP losses, divided by the total number of vehicles produced, ex-
cluding vehicles from the Magna Steyr and Nedcar contract production plants, plus energy consumption of the
engine plants and electric engines as well as battery production, divided by engine production in Hams Hall,
Steyr, Munich and BMW Brilliance Automotive Ltd. in Shenyang.
2 The figures for 2016 to 2018 were examined by the external auditor on the basis of a limited assurance
engagement.
3 VOC emissions (volatile organic compounds) are generated in particular during the painting process and
can be reduced by deploying innovative painting technologies.
4 Each operator is required to describe the environmental impacts in the aspect register in accordance with
the environmental management system and identify measures for improvement (e. g. long-term targets).
BMW GroupReport 2020
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CIRCULAR ECONOMY MAXIMISES RESOURCE EFFICIENCY
AND CONTRIBUTES TO CLIMATE PROTECTION
The responsible use of resources plays a key role
in the BMW Group’s business model. For example, if
electric mobility is not only to be produced using pri-
mary materials in the long term, the underlying flows
of resources need to undergo a sustainable transforma-
tion. The BMW Group intends to create high-quality
secondary raw materials by promoting a greater degree
of transparency in the recycling chain and tracking the
actual further use of raw materials within the cycle. The
Group wants to provide effective impetus for a circular
economy that is viable in the long term by emphasising
the importance of recycling valuable resources. At the
same time, this strategy can significantly contribute to
cutting carbon emissions (Scope 3 upstream), as the use
of secondary raw materials can significantly reduce the
size of the Group’s carbon footprint in its procurement
and production processes – even down to as little as
one-sixth, depending on the material. For this reason,
the BMW Group has defined the circular economy as
a strategic focus for the coming years. This includes its
own internal initiatives as well as increasing its external
commitment in dialogue with major stakeholders.
The economical use of resources is already a key re-
quirement in the design process and at the product devel-
opment stage and guarantees that BMW Group products
are designed to ensure that as much raw material as
possible remains within the circular economy. In 2020,
a total of 99.1 % of the waste generated in production
processes was either recycled or recovered. To the extent
viable, i. e. depending on the waste disposal market and
distances to the supplier, the cycles of materials are phys-
ically closed so that the resulting recyclates can be reused.
End-of-life vehicles are therefore not considered as waste
to be disposed of, but as a source of secondary raw ma-
terials. For this reason, the BMW Group promotes the
return of end-of-life vehicles, components and materials
to the raw materials cycle. Together with its sales organi-
sations in each country, the Group has already organised
the taking back of end-of-life vehicles in 30 countries and
offers environmentally friendly recycling services at more
than 2,800 take-back centres. All vehicles brought onto
the market since 2008 comply with global requirements
for the recycling of end-of-life vehicles, components and
materials. Already today, vehicles are required to be 95 %
recyclable.
GRI 301-3
By 2030, the BMW Group intends to further increase
the percentage of recycled secondary raw materials in
its vehicles while systematically developing the recy-
cling process at the same time. During the year under
report, around 25 % of the steel and up to 20 % of the
thermoplastics the Group used for vehicle manufacturing
were derived from secondary sources. Up to 50 % of the
aluminium the BMW Group uses to make its aluminium
castings comes from secondary sources.
Average Distribu-
GRI 301-2
tion of Materials in BMW Group Vehicles
In its efforts to minimise waste, the BMW Group has
developed recycling and reprocessing concepts that are
adapted to the waste flows in its various plants, to region-
al legal requirements and to existing local waste disposal
structures. Moreover, the Group intends to increase its
level of expertise in the development and production of
Electric Mobility and create greater transpar-
battery cells
ency regarding the whereabouts and recycling of end-of-
life vehicles and their resources.
Input / Output Assessment
98
Through its own venture capital fund BMW i Ven-
tures, the BMW Group has invested in key technologies
that can make a decisive contribution towards achieving
its long-term vision of carbon neutrality. In 2020, for ex-
ample, BMW i Ventures invested in PureCycle, the first
company in the world that can recycle polypropylene
(an essential vehicle component) into a colourless and
odourless native state. The BMW Group also invested
in Prometheus Fuels, which has developed a technology
that enables carbon-neutral synthetic fuels to be pro-
duced using green energy.
Logistics: freight carriers and carbon emissions
In close cooperation with freight carriers, infrastructure oper-
ators and commercial vehicle manufacturers, the BMW Group
is developing ecologically sustainable logistics concepts. The
Green Logistics strategy pursues the logistical aim of achiev-
ing climate-neutral transportation, thereby contributing to the
Group’s target of reducing carbon emissions in the supply chain
by 20 % per vehicle by 2030 (base year 2019).
The carbon footprint and the use of carbon-efficient energy and
modes of transport is a decisive criterion for the BMW Group
when selecting freight carriers. Currently, more than half of the
vehicles the Group produces are transported from manufactur-
ing plants by rail. When supplying vehicles to the Chinese mar-
ket, the BMW Group is further reducing its carbon footprint by
using the railway lines along the Silk Road more intensively. In or-
der to reduce carbon emissions, some of the spare parts sent to
China by airfreight are being increasingly dispatched by rail. For
other overseas markets, the option to switch to intermodal air-sea
transport has been tested.
The BMW Group is increasingly working on the further devel-
opment and piloting as well as the use of innovative technolo-
gies and already deploys battery- and gas-driven trucks to sup-
ply production facilities. In 2020, the BMW Group used the sea
route from Belgium to Spain for vehicle production purposes. The
use of biofuel from waste cooking oil led to a reduction in carbon
emissions of 1,100 t.
BMW GroupReport 2020
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RENEWABLE ENERGY
All BMW Group locations worldwide as well as
the BMW Brilliance Automotive (BBA) joint venture
purchase 100 % green electricity, i. e. energy generated
from renewable sources ¹.
With the aim of cutting the
carbon emissions it generates in production processes
by an additional 80 % per vehicle by 2030 (base year
2019) in a further step, the BMW Group systematically
continues to invest in optimising the energy efficiency
of its global production network. The strategy includes
the use of process heat in paint shops and data analysis
to reduce the power consumption of its machinery to
a minimum. Moreover, the BMW Group is further ex-
panding its own renewable power generation capacities
at its various locations and increasing its energy storage
capability. Leveraging these and other measures, the
Group is making steady progress towards its long-term
goal of becoming a leader in the use of renewable energy
in production and value creation.
RENEWABLE ENERGY GENERATED IN-HOUSE
The BMW Group is reducing the size of its carbon
footprint by generating its own electricity from renewable
sources. It is utilising suitable technologies and develop-
ing solutions, depending on the location and the on-site
conditions. The various options range from solar energy,
for example in Mexico, to biogas in South Africa and
wind power in Leipzig. As the BMW Group’s in-house
production cannot fully cover its energy requirements, it
99
buys in electricity from renewable sources – preferably
locally. At the same time, in future the BMW Group
intends to cover an increasing percentage of its elec-
tricity requirements through so-called power purchase
agreements (PPAs), i. e. direct purchases from defined
renewable energy generation facilities.
The Group is also working on solutions for storing
renewable energy. For example, the storage farm at the
BMW Group plant in Leipzig is equipped with high-volt-
age batteries from the BMW i3 ². The storage farm is in-
tegrated in the public power grid and provides control
energy, which means the BMW Group is additionally
helping to keep the public electricity grids stable.
CLEAR PROCESSES, ROLES AND RESPONSIBILITIES
Independent processes have been established
throughout the company for planning and implementing
energy-related measures, which assign clear roles and
responsibilities to the central strategy departments, the
regional controlling offices and the plants at local level.
The BMW Group also maintains a close dialogue with its
energy suppliers in local markets, monitors regulatory
developments and calls in external support as needed
in order to respond to any changes in the percentage of
renewable electricity supplied and the size of its carbon
footprint.
SHARE OF GREEN ELECTRICITY PURCHASED FROM
THIRD PARTIES 3, 4
in %
100
50
0
100
87
81
79
63
2016
2017
2018
2019
2020
100 %
Green electricity from
renewable sources
1 Electricity from in-house renewable generation plants, direct supply contracts for green electricity and
certified proofs of origin.
Fuel Consumption and CO2 Emissions Information.
2 See
3 Calculated based on volumes of green electricity purchased (including via certificates of origin). Relates to
all BMW Group production locations including the BMW Brilliance Automotive Ltd., Shenyang, joint venture
as well as motorcycle production and non-production areas.
4 The figures for 2016 to 2018 were examined by the external auditor on the basis of a limited assurance
engagement.
BMW GroupReport 2020
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Production, Purchasing and Supplier Network
PURCHASING AND
SUPPLIER NETWORK
The BMW Group has laid the foundations for a stable
and sustainable supply chain by organising its purchasing
processes, managing international supply relationships
with its partners and producing its own components.
The Purchasing and Supplier Network therefore
makes a significant contribution to the Group’s focus
on the strategic markets of tomorrow, such as e-mobility
and connectivity, and takes steps to ensure correspond-
ing production volumes in the supply chain. With the
growing demand for electrified vehicles, the need for the
respective components and parts in production is also in-
creasing. For battery cells in particular, the BMW Group
is taking a variety of measures to accommodate this
growth. For example, it will purchase the battery cells
for its entire fifth generation from four different sup-
pliers, thus making itself less dependent on individual
manufacturers. Flexibility in terms of volume is both a
premise and a decisive criterion for selecting battery cell
suppliers.
The Purchasing and Supplier Network has been op-
erating on a global basis for many years and adheres to
the principle of procuring parts and components locally.
The BMW Group has efficient teams on the ground in all
of its key purchasing markets. Direct contact with these
local markets has proved particularly effective during the
coronavirus pandemic. Despite the high level of pressure
on the supply chain, the BMW Group again managed to
ensure a seamless supply of parts to its globally located
production plants throughout the 2020 reporting year.
The supply chain has thus demonstrated its stability and
flexibility, despite the exceptional conditions witnessed
in the 2020 pandemic year. Its many years of sustainable
activity in the purchasing and supplier network have also
helped to build this resilience.
Overall, the Purchasing and Supplier Network is
responsible for the global procurement and quality as-
surance of production materials, raw materials, capital
goods and services as well as the in-house manufacturing
of vehicle components. External suppliers are rigorously
selected on the basis of competitiveness in terms of op-
erational excellence, quality, innovation, flexibility, cost
and sustainability.
100
REGIONAL DISTRIBUTION OF BMW GROUP
PURCHASE VOLUMES *
in € billion
Asia / Australia 7.2 %
3.5 % Other
Rest of Western
Europe 14.3 %
North America 18.1 %
Total
€ 55.5 billion
40.0 % Germany
16.9 % Eastern Europe
* Direct and indirect purchasing; excluding Joint Venture BMW Brilliance Automotive Ltd., Shenyang.
GRI 102-9
60 %
of value added
attributable to suppliers
BMW GroupReport 2020
Combined Management Report
Production, Purchasing and Supplier Network
101
SUSTAINABILITY INTEGRAL TO PURCHASING AND
SUPPLIER NETWORK
NEW TARGETS FOR DECARBONISATION IN THE
SUPPLIER NETWORK
MOTIVATING PARTNERS TO OPERATE SUSTAINABLY
The BMW Group places great emphasis on cor-
porate due diligence. The Group already addressed this
issue in 2008, defining and setting out comprehensive
environmental and social standards for the awarding of
contracts for the BMW i3. Since 2010, the BMW Group
has required its partners and suppliers for BMW i models
to comply with human rights and extended environ-
mental and social standards, including environmental
protection management systems. Since 2014, these speci-
fications have been mandatory for suppliers of all vehicle
models. In 2019, this requirement was supplemented to
include occupational health and safety management
systems wherever necessary.
For many raw materials, the requirement to ensure
that environmental standards and human rights have not
been violated poses a particular challenge, for instance
in the case of lithium and cobalt, both of which are key
raw materials for manufacturing battery cells.
By the year 2030, the BMW Group intends to have
over seven million electrified vehicles on the road. This
means that the average carbon emissions generated by
the BMW Group’s supplier network (scope 3 upstream
according to SBTI) will increase by more than one-third
per vehicle by 2030 if no countermeasures are taken.
Apart from the growing percentage of electrified models
in the BMW Group’s product range, the reasons are, for
example, the energy-intensive production of battery cells,
the greater use of aluminium and increased localisation
in China, where the proportion of green electricity in
the energy mix is still relatively low. Nevertheless, the
BMW Group has set itself the goal of not only halting this
trend, but even reversing it and reducing carbon emis-
sions per vehicle in the supply chain ¹ by at least 20 % ²
(base year 2019) by 2030. With this aim in mind, among
other measures, since 2020 it has established the carbon
footprint as a criterion for awarding contracts within the
supply chain.
The BMW Group is continuously expanding its sus-
tainability activities across the supplier network. The fo-
cus is essentially on three key issues: 1. Decarbonisation,
2. Compliance with environmental and social standards,
particularly human rights, and 3. The protection of nat-
ural resources.
One of the biggest levers for promoting decarboni-
sation in the supply chain is the use of green electricity.
For this reason, the BMW Group has agreed with the
suppliers of the current fifth generation of battery cells
to use only green electricity from renewable sources for
production purposes.
Just as the BMW Group continuously implements
optimisation and efficiency measures in its own pro-
duction environment, it is also actively committed to
promoting decarbonisation measures within its supplier
network. By participating in the CDP supply chain pro-
gramme, the Group motivates its suppliers to operate
sustainably and, for example, utilise renewable energy
in their production activities. The core of the programme
consists of annual reporting that takes a multitude of
climate-related aspects into account, including specific
measures to reduce carbon emissions or increase the per-
centage of renewable energy deployed. The BMW Group
strongly encourages its suppliers to set targets in line
with the Paris Climate Agreement and thereby contrib-
ute to limiting global warming. The Group’s success is
reflected in the steadily growing number of suppliers
participating: 63 suppliers (2019: 40) reported at least
one 2-degree-compliant target system, and 59 (2019: 54)
plan to publish one within the next two years.
at least
– 20 %
CO2 emissions per vehicles
in the supply chain by 2030
1 Including transport logistics.
2 Value rounded for simplification purposes. The target percentage validated in conjunction with SBTI is 22 %.
BMW GroupReport 2020
Combined Management Report
Production, Purchasing and Supplier Network
In 2020, a total of 218 suppliers to the BMW Group
(2019: 199) reported via the CDP Supply Chain pro-
gramme, accounting for approximately 79 % of the
BMW Group’s production-related purchasing volume
(2019: 78 %). The participating suppliers reported carbon
reduction totalling some 22 million tonnes of emissions
(2019: 32 million tonnes), which are proportionately
attributable to the materials and goods supplied to the
BMW Group. Due to the coronavirus pandemic and the re-
sulting decrease in production volumes, carbon emissions
were generally lower in 2020. Accordingly, the reduction
in reported carbon emissions was also lower.
GRI 308-1,
308-2, 414-1, 414-2
The BMW Group has integrated the assessments of
the CDP Supply Chain Programme in its key purchasing
processes. The results are used in discussions with sup-
pliers, in strategic management meetings and in overall
supplier strategies to point out potential for improvement.
On average, suppliers that have been reporting within the
CDP Supply Chain Programme for at least three years
have improved. The BMW Group sees this fact as proof
that the programme has become well established at the
companies participating for longer periods and that it
yields the intended results. In 2020, the Group also asked
more than 1,000 additional suppliers who, as small and
medium-sized companies, did not meet the criteria to be
invited to the CDP Supply Chain Programme to complete
a carbon-related questionnaire. The activity further cov-
ered approximately another 11 % (and therefore a total of
90 %) of the Group’s production-related purchasing vol-
ume. The results of the survey provided the BMW Group
with additional insights that enabled it to further establish
the carbon footprint assessment in the supply chain as an
award criterion in decision-making processes. This was
already the case in 18 out of 31 tenders with the largest
carbon footprint.
GRI 308-1, 308-2, 414-1, 414-2
102
RESPECT FOR ENVIRONMENTAL AND SOCIAL
STANDARDS AND HUMAN RIGHTS
KEY ELEMENTS FOR SUSTAINABLE MATERIALS
PURCHASING
It is a major challenge to ensure compliance with
human rights as well as environmental, health and safe-
ty standards in the extraction of raw materials. For this
reason, BMW Group Purchasing goes beyond the mere
contractual agreement of sustainability standards to a
deeper point in the supply chain in order to conclude
respective direct agreements at particularly critical points
in the supplier network and ensures compliance with
them by conducting audits.
The BMW Group is also involved in various initia-
tives to standardise management approaches towards
implementing human rights due diligence and applying
them throughout the entire supplier network. In Ger-
many, for example, these include the industry dialogue
on respect for human rights along the global supply
and value chains of the German automotive industry,
in which the BMW Group is actively involved. It is also
active internationally and involved in initiatives to stand-
ardise the mining of raw materials. By certifying mines
in accordance with the standards of the
Initiative for
Responsible Mining Assurance (IRMA) or the
Aluminium Stewardship
Initiative (ASI), the BMW Group is promoting compliance
with environmental and social standards right from the
raw material extraction stage with the aim of making a
significant contribution to improving compliance with
human rights throughout international supply chains.
During the year under report, the BMW Group
included key sustainability issues such as biodiversity,
deforestation and animal welfare in its
Supplier Sustain-
ability Policy, which forms the basis for the Group’s terms
and conditions of purchase. Accordingly, BMW Group
suppliers and all purchases are subject to the Group’s
comprehensive sustainability requirements.
In 2012, in its materials strategy the BMW Group
identified particularly critical raw materials and other
materials from a sustainability perspective and initiat-
ed the cross-industry study
Material Change Report (2018)
on this basis. The Group continuously analyses the
raw materials prioritised in the report as well as other
materials essential for production with regard to their
impact on the environment and society along the entire
supply chain. By sourcing raw materials such as cobalt
and lithium directly, the BMW Group can establish trace-
ability and transparency with regard to environmental
and social standards, which is critical for conducting due
diligence in raw materials supply chains.
BMW GroupReport 2020
Combined Management Report
Production, Purchasing and Supplier Network
103
RESPONSIBLE USE OF NATURAL RESOURCES
COMPREHENSIVE MEASURES AND COOPERATION IN A
SPIRIT OF PARTNERSHIP ENSURE COMPLIANCE WITH
SUSTAINABILITY STANDARDS.
In addition to compliance with environmental
and social standards and respect for human rights, the
responsible use of nature’s finite resources also plays a
major role.
With the aim of protecting stocks of critical raw ma-
terials, by 2030 the BMW Group plans to significantly
increase the percentage of recycled raw materials, i. e.
secondary raw materials, that it uses and to reuse these
materials in line with circular economy principles. The
growth of e-mobility is causing the topic of circular
economy to become increasingly important, as a variety
of critical raw materials are required to produce battery
cells. The use of secondary raw materials significantly
reduces the carbon footprint compared to primary ma-
terials: by a factor of 4 to 6 for aluminium and by a factor
of 2 to 5 for steel and thermoplastics.
At its own plants, the BMW Group is gradually es-
tablishing closed recycling loops between the plants and
the raw materials manufacturers, such as at the Landshut
components plant. In late 2019, the
foundry in Landshut
was certified by the Aluminium Stewardship Initiative
(ASI) for its sustainable use of aluminium. Around half
of the aluminium used at the BMW Group’s Landshut
plant comes from a closed recycling loop. The Group is
consciously reducing the use of carbon-intensive primary
aluminium via this method.
We can only succeed in achieving our sustainabil-
ity goals by interacting with suppliers on the basis of
mutual cooperation. Ultimately, climate protection and
compliance with environmental and social standards
are a challenge for the whole of society. As with quality,
sustainability is all about accomplishing ambitious goals
in close collaboration with the supplier network.
With the aim of stepping up its efforts to ensure
due diligence in the field of sustainability, since 2018
the BMW Group has been involved in developing the
Automotive Sustainability Assessment (ASA) in the
German Association of the Automotive Industry (VDA).
Based on these guidelines, the performance of essential
due diligence procedures can now be audited in a stand-
ardised manner, even at the premises of medium-sized
suppliers to the automotive industry. The BMW Group
already applies the Responsible Business Alliance
(RBA) audit programme for major suppliers from the
electronics industry. It also carries out qualification,
standardisation and empowerment measures and holds
informational events, particularly in the case of supply
chains exposed to a higher degree of risk. The aim is to
further develop and actively bring about transformation
at suppliers with regard to sustainability issues. In its
efforts to achieve this aim, the BMW Group leverages
both individual and standardised elements of the Drive
Sustainability Initiative and the Responsible Business
Alliance to integrate sustainability in business processes
such as procurement.
Electric mobility can only be sustainable if the
raw materials it requires are also obtained as
sustainably as possible. Take lithium for
example:
The BMW Group currently sources lithium for its fifth genera-
tion of high-voltage batteries exclusively from Australia, where
the material is extracted by means of a so-called hard rock min-
ing process.
Furthermore, the Group has commissioned a study on sustaina-
ble lithium mining under the auspices of two renowned American
universities in order to scientifically investigate water consump-
tion in the extraction of lithium. The purpose of the study, which
will be jointly conducted by the University of Alaska-Anchorage
and the University of Massachusetts-Amherst, is to investigate
the impact of lithium mining on local water supplies in Latin
America.
Lithium is the lightest metal on earth and is mainly used to pro-
duce batteries, ceramics, glass and aluminium. It is therefore
also an essential material for producing lithium-ion batteries and
plays a key role in vehicle electrification.
Two-thirds of the world’s lithium reserves are located in Latin
America. To date, however, the impact of lithium mining in the re-
gion has not been sufficiently scientifically studied. The gap will
now be closed by the study commissioned by the BMW Group.
BASF SE is also partially financing the study.
BMW GroupReport 2020
In 2020, responsibility for sustainability in the supply
chain and also energy was combined in a separate depart-
ment within Purchasing. It comprehensively manages the
integration of sustainability factors in the BMW Group’s
procurement activities. At the same time, it works togeth-
er closely with the Strategy department and continually
adapts operational purchasing requirements.
A detailed presentation of sustainability-related
activities undertaken in the supplier network and a
description of the OECD Due Diligence Guidance is
available on the
BMW Group website.
Combined Management Report
Production, Purchasing and Supplier Network
Via the due diligence process, the BMW Group
checks whether and how sustainability standards are be-
ing implemented by its suppliers. Suppliers contractually
undertake to comply with a range of requirements in line
with their environmental (ISO 14001, EMAS) and occu-
pational health and safety management systems (OHSAS
18001, ISO 45001) and to demand and maintain compli-
ance with these agreements from their subcontractors.
In 2020, the sustainability questionnaire for sup-
pliers, which was initiated by the BMW Group in 2012
and jointly compiled by the automotive manufacturers,
was comprehensively revised. The BMW Group’s Supply
Chain Response Team processes any information regard-
ing potential breaches of its sustainability standards in
the supplier network. Furthermore, the BMW Group’s
Human Rights Contact Supply Chain serves as the cen-
tral point of contact and can be reached anonymously by
telephone or email to report any potential violations of
social or environmental standards by suppliers.
The BMW Group has agreed corrective measures with
64 % (2019: 62 %) of the suppliers at which sustainability
shortfalls were identified in the course of the reporting
year. The suppliers are required to remedy these defi-
cits prior to the start of production. The main areas to
be acted upon in particular were hazardous materials
management, waste management, working conditions
and occupational health and safety.
GRI 308-1, 308-2, 414-1,
414-2
104
The BMW Group follows the principle of
empowerment before disengagement.
The mining of cobalt entails risks, particularly when it comes to
upholding human rights. The BMW Group is committed to en-
suring that the mining and processing of cobalt are carried out
in accordance with sustainability standards and international-
ly applicable labour laws. For this reason, the Group purchases
the cobalt needed to produce its fifth generation of battery cells
directly from the mines themselves and makes it available to the
battery cell suppliers. Around one-fifth of the BMW Group’s co-
balt requirement is purchased from mines in Morocco and the re-
maining four-fifths in Australia.
At the same time, the Group is engaged in a pilot project in
the Democratic Republic of Congo in keeping with the princi-
ple of “empowerment before disengagement”. In 2018, the
BMW Group joined forces with other partners to initiate the
cross-sector initiative “Cobalt for Development” with the aim of
improving the working and living conditions of workers engaged
in small-scale cobalt mining operations in the Congo. As part of
the project, around 40 members of 12 mining cooperatives were
trained as trainers on occupational and environmental risks who
pass on the content to more than 1,500 miners in the form of
training courses. These programmes are underpinned by activi-
ties in local communities by which the residents benefit from im-
proved access to education and alternative income opportunities.
The project is being implemented by the Gesellschaft für interna-
tionale Zusammenarbeit (GIZ) GmbH.
The aim of the project is to further develop and professionalise
artisanal mining in the Congo to meet the BMW Group’s strict
sustainability requirements and could be an option for sourcing
cobalt in the long term.
More information on this project is available
here.
BMW GroupReport 2020
Employees and Society
105
EMPLOYEES
AND SOCIETY
PROMISED
THE BMW GROUP
SEES DIVERSITY as a
STRENGTH. That is why it has
set targets for the long-term
advancement of women at all
levels of the company.
BMW GroupReport 2020
Employees and Society
DELIVERED
The number
of female managers
at BMW AG has
more than DOUBLED
since 2011.
106
BMW GroupReport 2020
Employees and Society
107
“Commitment to a sustainable future
is no longer just an option. It is an obli-
gation. This is valid for the BMW Group
and every other company. BMW has been
a leader in sustainability for years – and
we are now setting ourselves even more
ambitious goals for the coming decade.
We are putting sustainability at the very
centre of the company, measuring our
success and making this even more trans-
parent through the BMW Group Report.”
Ilka Horstmeier
Member of the Board
of Management of BMW AG,
Human Resources,
Labour Relations Director
“Working at the BMW Group means
taking responsibility far beyond our own
premises – for our society, the environ-
ment and all our stakeholders. It is our
associates who are creating more sustain-
able, connected and safer mobility. This is
our contribution to a better future. This is
what drives us forward every day.”
Dr. Nicolas Peter
Member of the Board of Management
of BMW AG, Finance
BMW GroupReport 2020
Employees and Society
108
Sabine Distler and Gabriele von Stetten are
jointly responsible for diversity strategy at the
BMW Group.
We need DIVERSITY:
It makes us MORE
INNOVATIVE and MORE
COMPETITIVE.
WHAT DOES DIVERSITY
MEAN TO THE BMW GROUP?
The BMW Group firmly believes
that diversity enhances our performance
capabilities. Diverse teams are more
innovative – because everyone brings a
different perspective. Our customers are
diverse, too. If we want to understand
them, win them over and engage them,
we also need this kind of diversity among
our employees.
THE BMW GROUP ALSO
SETS ITSELF TARGETS –
FOR EXAMPLE, FOR THE
PERCENTAGE OF WOMEN
IN MANAGEMENT.
HOW CAN THESE GOALS
BE ACHIEVED?
We identify female talents at the com-
pany and develop them selectively. At the
same time, we continue to bring qualified
women into the company. We already
make sure we have a high percentage of
women in our talent development pro-
grammes.
WHAT ABOUT OTHER
DIVERSITY FACTORS?
We have expanded our diversity
strategy to include physical and mental
ability, sexual orientation and identity, in
addition to the previous dimensions of
gender, cultural background, age and ex-
perience. For certain factors, quantitative
targets make sense; for others, we need
qualitative goals. It's about creating the
best-possible working environment in an
open and respectful corporate culture.
Further information is available at:
report.bmwgroup.com
BMW GroupReport 2020
109
QUALIFICATION, DEVELOPING AND RESTRUCTURING
COMPETENCIES
AVERAGE DAYS OF FURTHER TRAINING *
Social, economic and technological developments
require companies to continually adapt to new situations
and qualify their employees to meet the challenges of the
future. The BMW Group therefore invests continuously
in measures aimed at establishing, broadening or adapt-
ing the necessary competencies, and offers its workforce
numerous options for training and further education.
BROAD RANGE OF TRAINING AND FURTHER EDUCATION
OPPORTUNITIES
Lifelong learning is an integral part of everyday work-
ing life at the BMW Group. It aims to ensure the efficien-
cy and employability of its workforce and thus its own
long-term competitiveness by offering a needs-oriented
and innovative range of training courses, particularly in
forward-looking fields of expertise such as digitalisation
and electrification.
GRI 404-2
In 2020, BMW Group employees spent an average of
2.0 days on further training (2019: 3.3).
Number of days
5.0
2.5
0
3.8
3.4
3.4
3.3
2.0
2016
2017
2018
2019
2020
* Further training of employees and temp workers of the BMW Group in the consolidated companies world
wide. Data retrieved by direct representation of the number of participants as well as a small share by quali
fied extrapolation. The data also include elearning courses.
GRI 4041
Due to the coronavirus pandemic, face-to-face training
was only conducted to a limited extent during the period
under report. However, the increased use of e-learning
formats ensured that qualification courses were held, for
the most part, despite the situation.
GRI 404-1
Combined Management Report
Employees and Society
LONG-TERM EMPLOYEE
DEVELOPMENT AND EMPLOYER
ATTRACTIVENESS
The success of the BMW Group is based on the
personal commitment and technical expertise of its
employees. As an attractive employer offering highly
interesting future-oriented jobs, the BMW Group is look-
ing to recruit new employees, deploy them in the best
way possible and specifically promote their potential
with the aim of ensuring their long-term employability.
The success of this approach is reflected not only in the
results of employee satisfaction surveys, but also in the
awards the BMW Group has received as an attractive
employer.
EMPLOYEE DEVELOPMENT AND EMPLOYER
ATTRACTIVENESS – KEY ASPECTS OF SUSTAINABILITY
Promoting and developing the potential of its work-
force and being an attractive employer are important
aspects of sustainability for the BMW Group. And, as
one of the most important stakeholder groups, it is log-
ical to consistently involve employees in the dialogue
when changing the Group’s strategic course. In a series
of international stakeholder dialogues with employees
from various regions in 2020, the BMW Group discussed
its perception as a sustainable company as well as the
main focus of its strategy.
Dialogue with Stakeholders
BMW GroupReport 2020
Combined Management Report
Employees and Society
INVESTMENT IN TRAINING AND FURTHER EDUCATION ¹
in € million
400
300
200
352
349
373
370
279
2016
2017
2018
2019
2020
Expenditure on training and further education to-
talled € 279 million (2019: € 370 million). The year-on-year
decrease was due to the coronavirus pandemic, whereby
much of the training initially planned as face-to-face
events had to be transferred to virtual formats, the cost
of which was significantly lower.
Strategic human resources planning helps manage
the need for systematically developing and / or restructur-
ing competences, ensuring that vacancies are filled and
employees are qualified in good time.
1 Training and further education encompasses BMW Group vocational training in 11 countries and further
education for employees and temp workers of the BMW Group in the consolidated companies worldwide.
2 Unlike the conventional management career with its focus on disciplinary leadership, the Expert Career pro
gramme focuses on technical, project or companyrelated topics that do not entail line responsibility for
others. This Expert Career option enables the BMW Group to offer employees an additional career path.
€ 279 million
Spending on employee training
and development
INVESTMENT AND TRAINING BOLSTER JOB SECURITY
As one of the pioneers in this field, the BMW Group
is also shaping the transformation to electric mobility and
digitalisation. For example, it already commissioned its
Autonomous Driving Campus in Unterschleißheim near
Munich back in 2018 and its Battery Cell Competence
Centre in Munich in 2019. By 2026, the Group intends
to invest some €400 million in a new vehicle assembly
line on the site of the current internal combustion
engine production facility at its main plant in Munich.
The transformation of production sites and long-term job
security thus go hand in hand. Employees are trained
and qualified in order to take on new responsibilities
in other areas. For example, the BMW Group is further
expanding its e-drivetrain production competence centre
in Dingolfing. It has also established production facili-
ties for battery modules and high-voltage batteries at its
Leipzig and Regensburg plants, which are scheduled to
begin production in 2021. Since 2009, the BMW Group
has provided more than 52,000 people, not only its own
employees, but also those of suppliers, with further
training in the field of electric mobility.
GRI 404-2
110
DEVELOPMENT AND FURTHER TRAINING FOR
MANAGERS
Excellent leadership is a vital prerequisite for deliv-
ering outstanding performance in a competitive envi-
ronment. The BMW Group’s managers play a key role
in implementing its new corporate strategy. In order to
develop this expertise, the BMW Group promotes per-
sonalities who have the right attitude and individual,
context-related behaviour, joint team leadership skills
and a high degree of connectedness within the company.
Apart from careers in management, the BMW Group also
offers the Expert Career ². It empowers its managers to
develop excellent leadership qualities based on a uniform
understanding of leadership.
GRI 404-2
Future orientation and innovative capability
with FIZ Future
The technological heart of the BMW Group beats in its Research
and Innovation Centre (FIZ). With the FIZ Future programme, the
BMW Group is combining its knowledge, expertise and creativity
at its location in Munich (Germany) in order to research and devel
op the individual mobility of the future, characterised by electrifica
tion, digitalisation and connectivity.
The opening of the FIZ Nord project building was a major milestone
in the year under report. At the new FIZ Nord, the BMW Group is
pooling the innovative strength and key competences it will need
to take on the challenges of the future. For the first time, all its ve
hicle drivetrain developers are working under one roof – on both
state-of-the-art, highly efficient petrol engines and the latest gen
eration of electric drivetrains. The key aim here is to promote in
tensive collaboration and thus also the transfer of knowledge be
tween the various technologies. With this strategy, the BMW Group
has taken an important step towards developing the competences
and networking of the people who work there as well as bolstering
its innovative strength.
BMW GroupReport 2020
Combined Management Report
Employees and Society
PROMOTING YOUNG TALENT
Vocational training at the BMW Group makes an
important contribution to meeting the constant demand
for young talent within the company, thus underlining
the attractiveness of the Group as an employer. At the
same time, the Group has the ambition to develop per-
sonalities through vocational training and enable young
people to participate in society. With this point in mind,
the BMW Group invests in vocational training and thus
in the skilled workers of tomorrow. Despite the chal-
lenges posed by the pandemic, the BMW Group again
recruited 1,200 trainees in Germany alone during the
year under report. This social responsibility still includes
the promise that BMW AG will offer its trainees perma-
nent positions after completing their vocational training
at its various plants and at the company headquarters.
For several years now, the BMW Group has been
additionally investing in digitalised training, which has
been even more widely used since the outbreak of the
coronavirus pandemic. Innovative learning platforms and
formats as well as digitalised learning content ensured
that numerous training locations were able to continue
offering training with virtually no gaps, even when the
vocational schools were closed.
Trainees are preparing for their future occupations
in 30 skilled trades and 17 dual courses of study at 19
training locations around the world. The training oppor-
tunities on offer are geared towards the Group’s future
fields of activity. Graduate trainees thus play a key role in
developing expertise within the BMW Group.
GRI 404-2
The BMW Group attracts further young talents by
offering academic programmes for junior staff and
supports them in their professional and personal de-
velopment through mentoring, networking and a wide
range of qualification opportunities in practical and
international assignments. Despite the coronavirus pan-
demic, the BMW Group managed to implement all of its
programmes. Face-to-face events were partially replaced
by digital formats and the international assignments that
form part of the Global Leader Development Programme ¹
were largely conducted at BMW AG level, despite the un-
favourable conditions. The total number of apprentices
and trainees participating in development programmes
for junior staff within the BMW Group remained at the
high level of 4,672 in the year under report (2019: 4,801;
– 2.7 %).
APPRENTICES AND PARTICIPANTS IN YOUNG TALENT
PROGRAMMES ²
Number
5,000
4,500
4,000
4,964
4,750
4,613
4,801
4,672
2016
2017
2018
2019
2020
1 International trainee programme for university graduates and young professionals across all disciplines.
2 Includes SpeedUp (an undergraduate programme) and Fastlane (a master’s programme).
111
THE BMW GOUP REMAINS AN ATTRACTIVE EMPLOYER
Highly regarded industry ratings once again ranked
the BMW Group as one of the world’s most attractive em-
ployers in 2020. The BMW Group is therefore the world’s
top-ranked automotive manufacturer in the current rank-
ing of the World’s Most Attractive Employers 2020 as
rated by the well-known study provider Universum. In
the study – which counts as one of the leading studies
in the field of employer attractiveness worldwide – the
BMW Group ranked fourth among engineering and
IT students worldwide, after Google, Microsoft and
Apple. When conducting the study, Universum surveyed
235,000 students from the 12 economically largest na-
tions worldwide. This recognition is a major success for
the BMW Group. In the Trendence Young Professionals
Barometer for Germany, the BMW Group again achieved
top spot in 2020.
As an attractive employer, the BMW Group offers fu-
ture-oriented jobs and the right conditions for employees
to grow personally and contribute towards shaping the
future. Outstanding performance is a daily motivation
to develop individual potential and make the company
successful together.
Universum
study
Top-ranked automotive
manufacturer – World’s Most Attractive
Employers 2020
BMW GroupReport 2020
Combined Management Report
Employees and Society
In our efforts to ensure that the BMW Group re-
mains an attractive employer, we also offer above-average
salaries for the respective labour markets. To verify this
fact, we conduct remuneration studies each year on a
worldwide basis. The total salary package consists of
monthly remuneration and a variable component. We
also offer a wide range of additional benefits, such as a
company pension.
GRI 401-2
Depending on their stage of life or living circum-
stances, employees have different needs when it comes
to organising their work and their working hours. For
this reason and to help employees find a good work-life
balance, the BMW Group offers a great deal of individual
personal scope in the form of working time arrangements
such as flexible working hours, remote working, addi-
tional holidays in return for a corresponding reduction in
salary, sabbaticals or temporary and permanent part-time
solutions. These factors form the basis for individually
adjusting contractually agreed working hours. The BMW
Group is also investing in so-called new working environ-
ments with the aim of offering employees contemporary
and attractive spaces in which to collaborate.
Every two years, the BMW Group conducts a com-
pany-wide employee survey. The survey conducted in
autumn 2019 again showed a slight improvement in the
High Performance Index (HPO-I) compared to 2017. The
HPO-I is integrated as a parameter in the BMW Group’s
management system and measures the performance of
the organisation as a whole. The results of the 2019 em-
ployee survey were evaluated, analysed and internal
measures derived accordingly. Among other aspects, at-
tractiveness as an employer and overall satisfaction were
rated with 85 % and 82 % approval respectively. Despite
overall positive approval ratings with regard to employer
attractiveness, a declining trend is discernible, which
shows that topics such as climate change, sustainability
112
and electric mobility are becoming increasingly impor-
tant for the workforce and thus also for the survey results.
The BMW Group is responding to this development with
its new strategy, focusing on sustainability and numerous
internal initiatives, including stakeholder dialogues with
employees on the topic of sustainability. The Group is
also implementing the new strategic guidelines in its
various corporate divisions. Its assessment regarding
processes has also developed highly positively, albeit still
at a low level. In order to encourage this positive trend,
activities aimed at improving interdisciplinary coopera-
tion have been stepped up. The results of the follow-up
process were reported to the Board of Management in
July 2020. The next employee survey is currently being
prepared and will be conducted in autumn 2021.
of personnel measures that reconciled the future viability
of the organisation with the interests of the workforce.
Firstly, the number of employees was reduced through
natural fluctuation, and secondly by reaching voluntary
agreements such as early retirement part-time working
arrangements or direct early retirement.
Appropriate provisions were recognised and the ex-
pected cost included in personnel expenses. For details
see
note 15 to the Group Financial Statements.
EMPLOYEE ATTRITION RATE *
as a percentage of workforce
MANAGING EMPLOYMENT AND WORKFORCE PLANNING
As of 31 December 2020, the BMW Group employed
a total of 120,726 people worldwide. From the 2020 re-
porting period onwards, the figure denoting the size of
the workforce only includes core and temporary employ-
ees. The number of employees is slightly below that of
the previous year (2019: number of employees based on
new definition: 126,016; – 4.2 %).
GRI 102-7, 102-8
The widespread restrictions on public life and the
economy caused by the coronavirus pandemic also
had a negative impact on the automotive industry in
2020. The BMW Group responded by taking a number
of personnel measures. Initially, it made use of flexible
arrangements such as reducing excess hours on time
and holiday accounts, followed by the introduction of
short-time working hours. In dialogue with the Works
Council, the Group also agreed on a balanced package
5.51
2.70
2.64
2.78
3.39
7
3.5
0
2016
2017
2018
2019
2020
* BMW AG; number of employees on unlimited employment contracts leaving the Company.
Strategic personnel planning serves as a tool for iden-
tifying the need to readjust personnel and competence
structures at an early stage. The BMW Group uses this
information as the basis for making targeted improve-
ments in the areas of training and further education,
personnel development, marketing, recruiting and young
talent programmes.
BMW GroupReport 2020
Combined Management Report
Employees and Society
113
HEALTH AND PERFORMANCE
HEALTH MANAGEMENT WITH A HOLISTIC APPROACH
The BMW Group places great emphasis on main-
taining and promoting the health and the performance of
its employees. It therefore encourages personal respon-
sibility and designs its work environments with the idea
of maintaining the health of its people in the long term.
In line with this strategy, employees at all BMW Group
locations have a comprehensive health management sys-
tem available to them. The Group’s very high standards
of occupational safety also serve as a preventive measure.
Since 2011, the BMW Group has combined a set
of coordinated measures to promote the health and
performance of its workforce within its health initiative
programme. A range of campaigns inform the workforce
on subjects such as addiction prevention or ways of
maintaining good mental health. Regular campaign days,
dialogue events and training courses address current
health topics such as nutrition, exercise and fitness, can-
cer prevention or mental resilience and raise awareness
of these issues accordingly. Due to the unprecedented
circumstances caused by the pandemic, many of these
events took place virtually.
GRI 403-6
The BMW Group greatly emphasises the importance
of all of its employees having access to the company’s in-
house health services. In Germany, the focus is mainly on
providing acute treatment for employees and temporary
workers during working hours. In certain countries, how-
ever, the Group’s health service also takes on primary
care tasks, such as in Thailand, India or Mexico. The
BMW Group’s company doctors also advise employees
on individual preventive measures if requested to do so
and help them adapt their work environment to ensure
that their health and performance are maintained in the
long term.
GRI 403-2, 403-3
Measures to address the coronavirus pandemic
In terms of health protection for the BMW Group’s workforce, the
exceptional challenges posed by the coronavirus pandemic had to
be addressed during the year under report. The primary aim was to
ensure the Group’s ability to perform while at the same time pro
tecting the health of its staff. For these reasons, the BMW Group
set up a crisis management team without delay to draw up and
implement effective protection and hygiene concepts. Staff and
managers were promptly provided with information and recom
mendations for action, not only to protect themselves, but others
too. The crisis management team kept a watchful eye on inter
national developments, as the infection spread extremely quick
ly during the year under report. The BMW Group responded ef
fectively in a challenging situation that had to be reassessed on
a daily basis at times.
Specially trained teams were sent out to the Group’s various lo
cations and plants, advising managers and employees on how
best to implement the protection and hygiene measures. The ex
perts from the hygiene teams were also available to answer ques
tions at any time. Moreover, a Groupwide information campaign
helped inform employees on how best to contribute to curbing
the rate of infection. Regular safety and hygiene inspections en
sure that the measures are being implemented effectively and on
a sustained basis during the pandemic.
The BMW Group ensured the health and safety of its entire work
force at its various locations throughout the year under report,
despite the exceptional challenge posed by the coronavirus pan
demic. The new SARSCoV2 occupational health and safety reg
ulations were implemented at BMW AG and a works agreement
was concluded to that effect. A comprehensive manual based on
this agreement is ensuring the implementation of infection con
trol measures worldwide.
BMW GroupReport 2020
Combined Management Report
Employees and Society
In line with the general demographic change,
the increasingly high average age of the workforce
presents further challenges in terms of healthcare.
The BMW Group’s Health Initiative also closely ad-
dresses the concerns of employees looking to remain
as healthy and productive as possible at an advanced
age.
GRI 403-3, 403-6
One of the parameters the BMW Group uses to quan-
tify the success of its health management measures is
the sickness rate. At 3.4 %, the sickness rate at BMW AG
was lower than in the previous year (2019: 5.0 % or 3.7 %
according to the new definition).
GRI 403-10
The Group continuously strives to improve this figure
by means of its health management measures.
SICKNESS RATE ¹
in %
7.0
4.5
2.0
GRI 40310
4.6
4.6
4.9
5.0
3.7
3.4
2016
2017
2018
2019
OLD
2019
NEW
2020
114
OCCUPATIONAL SAFETY AT ALL GROUP LOCATIONS
ACCIDENT FREQUENCY RATE ²
Occupational safety is one of the BMW Group’s fore-
most preventive measures for protecting and maintaining
the health of its workforce. The strategy is based on a
comprehensive management system that not only meets
legal requirements applicable at the Group’s various lo-
cations, but frequently goes beyond them. Accordingly,
the BMW Group is committed to ensuring and certifying
the highest level of occupational safety at all its locations.
The right to occupational health and safety is also a key
feature enshrined in the BMW Group’s Code on Human
Rights and Working Conditions. In the Code, the com-
pany undertakes to consistently comply with currently
applicable occupational health and safety legislation
worldwide and also to set its own additional standards
for improving occupational safety.
GRI 403-1
Fortunately, in 2020 the accident frequency rate
across the workforce as a whole dropped further to
3.2 accidents per 1 million hours worked (2019: 3.5).
However, one fatal accident occurred at the Group’s
Dingolfing plant during the year under report. By 2015,
the BMW Group had already achieved the target it set
itself in 2011 of halving the accident frequency rate to 4.5
accidents per 1 million hours worked by 2020. Since then,
the BMW Group has endeavoured to continue reducing
this rate.
GRI 403-9
8.0
4.0
0
GRI 4039
4.0
3.6
3.5
3.5
3.2
2016
2017
2018
2019
2020
69,092 or 99.7 % of people employed at BMW Group
plants work at a location certified in accordance with
an international occupational health and safety manage-
ment system ³.
GRI 403-1, 403-8
3.2
Accidents
per one million hours worked
1 BMW AG; Number of hours of absence due to paid sick leave divided by the contractually agreed target
number of working hours; up to 2019, absence due to unpaid sick leave was also taken into account.
Figures up to 2018 are not comparable.
2 Number of occupational accidents with at least one day of absence from work per one million hours worked.
3 OHSAS 18001 / ISO 45001 (Occupational Health and Safety Assessment Series) or OHRIS (Occupational
Health and Risk Management System).
BMW GroupReport 2020
Combined Management Report
Employees and Society
External companies and their employees also need
to be able to work safely at BMW Group locations. For
this reason, cooperation with contractual partners is
regulated in a separate contractor declaration, enabling
potential hazards to be identified and appropriate protec-
tive measures taken on this basis. On large construction
sites, all employees of external companies are given
safety briefings by BMW Group experts. On smaller
construction sites, however, this duty is performed by
the contractors themselves. The company department
responsible for placing the order monitors compliance
with the occupational health and safety regulations, sup-
ported by the relevant occupational health and safety
unit as required.
In order to improve occupational safety at the up-
stream stages of the value chain, too, the BMW Group
requires its suppliers to comply with internationally
recognised occupational health and safety requirements ¹
via its
Purchasing Conditions.
GRI 403-7
MANAGEMENT, TRAINING AND QUALITY ASSURANCE
All topics relating to health and occupational safety
within the BMW Group are combined in the Work En-
vironment, Health, Group Safety and Group Data Pro-
tection unit and allocated to the Board of Management’s
Human Resources area of responsibility. Moreover, the
managers in the various specialist departments are
responsible for all related in-house processes. Health
management and occupational safety, i. e. occupational
health professionals, occupational medical staff, safety
specialists and safety officers support and advise the
respective internal departments.
GRI 403-1
115
The BMW Group continually assesses and improves
occupational health and safety at all its locations based
on recognised management systems such as ISO 45001,
OHSAS 18001 or OHRIS ², via occupational health and
safety committees and by way of in-house risk assessments.
Health and safety committees that include both employer
and employee representatives work actively at nearly all
BMW Group locations, making continuous improvements
to occupational health and safety standards.
GRI 403-4
The Group ensures the quality of its processes by
conducting internal audits on an annual basis. Tests at
the BMW Group’s various locations are performed by
external certification organisations and the specialists re-
sponsible for implementation are given regular training.
Due to the challenges posed by the coronavirus pandem-
ic, in order to comply with safety and hygiene regulations,
audits were conducted partly on-site and partly virtually
in the year under report.
GRI 403-2, 403-4, 403-9, 403-10
In order to identify work-related risks in both pro-
duction facilities and offices, the BMW Group conducts
wide-ranging risk and stress analyses. For example,
during the year under report, the internal analysis of
an industrial accident uncovered a risk in the produc-
tion of high-voltage batteries. A technical solution was
then found to automate this stage of production. The
employees concerned were then trained and instructed
and their protective equipment was adapted accordingly.
A specific risk assessment was also carried out pertaining
to the coronavirus pandemic. Employees are encouraged
to contact their managers at any time if hazards or risks
are identified. Employees can also approach their des-
ignated work representative at any time, or report risks
and hazards anonymously via the Compliance hotline.
GRI 403-2
On the basis of management systems, the BMW Group
regularly evaluates all the methods and instruments used
within the company. The results are then used to improve
internal standards. As part of its co-determination process,
the BMW Group involves the Works Council as well as
representatives of the severely disabled and personnel
management as required.
To ensure occupational health and safety standards
at all its locations, the BMW Group provides its staff
with regular training. The BMW Group Academy is
solely responsible for all training measures relating to
environmental protection and occupational health and
safety. It prepares its various seminars in cooperation
with the relevant departments for occupational safety,
ergonomics, environmental protection and health man-
agement. However, the occupational safety, ergonomics
and environmental protection departments or the health
services can also develop and offer their own measures
if required to do so at short notice. The BMW Group is
also adapting these programmes in line with the current
pandemic situation and increasingly switching to virtual
solutions.
GRI 403-5
1 In accordance with OHSAS 18001 / ISO 45001 and management systems derived from ILO (International
Labour Organization) or UNGC (United Nations Global Compact).
2 OHSAS 18001 / ISO 45001 (Occupational Health and Safety Assessment Series) or OHRIS (Occupational
Health and Risk Management System).
BMW GroupReport 2020
Combined Management Report
Employees and Society
116
EMPLOYEE DIVERSITY
PROMOTING DIVERSITY AT ALL LEVELS
The BMW Group sees diversity as a strength and
this factor in its workforce is one of the keys to its cor-
porate success. The BMW Group believes that diversity
fosters innovation and therefore also boosts competitive-
ness. A deeper understanding of the needs of customers
around the world is just one example. In recent years,
the BMW Group’s diversity concept has continued to
broaden the eclectic nature of its workforce in terms of
gender, cultural background, age and experience. For
this reason, the Board of Management not only approved
the Group’s existing diversity concept, but broadened it
during the year under report.
The BMW Group places great emphasis on an unprej-
udiced, appreciative and inclusive working environment
for all its employees. To underline its conviction, in 2020
the BMW Group continued expanding the diversity
concept with the existing dimensions of gender, cultural
background, age and experience to include sexual orien-
tation and identity as well as disability.
The BMW Group promotes a culture that sees strength
in diversity and difference as a valued asset. It seeks to
raise awareness of diversity issues among its employees
and managers by means of training, presentations and
dialogue formats and also promotes diversity and equal
opportunity via its recruiting and personnel development
measures. During the year under report, the BMW Group
again organised an international Diversity Week with the
aim of raising awareness of every dimension of diversity
within the company and exerting a positive influence
on its corporate culture. However, the programme was
conducted exclusively online due to the coronavirus pan-
demic. The Diversity Week and the simultaneously run
global diversity awareness campaign were transmitted in
a variety of digital formats and reached an approximate
total of 92,000 BMW Group employees online.
The equal treatment of all employees is a funda-
mental principle firmly enshrined in Group policy. The
BMW Group Code of Conduct and the BMW Group Code
of Human Rights and Working Conditions rigorously ad-
dress discrimination of all kinds. Employees are asked
to contact their managers, the relevant specialised units,
the personnel department or the Works Council if they
have any pertinent concerns. The BMW Group SpeakUP
Line is a telephone service available in over 30 languages
that gives employees worldwide the opportunity to report
possible violations both anonymously and confidentially.
Diversity-promoting concepts have also been
developed for selecting the future composition of the
Board of Management and the Supervisory Board. The
BMW Group provides information on the respective
diversity criteria and how to implement them in its
Corporate Governance Statement.
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Employees and Society
117
PERCENTAGE OF FEMALE EMPLOYEES
PERCENTAGE OF WOMEN IN MANAGEMENT POSITIONS
AND IN THE TOTAL WORKFORCE OF THE BMW GROUP ²
The BMW Group is committed to the sustained ad-
vancement of women and has therefore set targets for
the percentage of women employed at all levels of the
company. This target framework was valid up to and
including 2020.
in %
Entire
workforce
20
18.7
19.3
Management
positions
15.3
16.0
19.9
19.8
17.2
17.5
19.3
17.2
19.5
17.8
The percentage of women in management positions ¹
within the BMW Group has been rising steadily for many
years. Globally, the proportion of female managers in the
BMW Group stood at 17.8 % at the end of 2020 (2019: new
definition; 17.2 %). At BMW AG, the number of women in
management positions has more than doubled between
2011 and the present day. Expressed as a percentage, the
proportion of female managers at BMW AG was 16.2 %
(2019: new definition; 15.5 %) at the end of 2020.
10
0
2016
2017
2018
2019
OLD
2019
NEW
2020
The percentage of women employed in the
BMW Group’s total workforce reached 19.5 % during
the period under report (2019: new definition; 19.3 %),
exceeding the internally agreed target range of 15 % to
17 %. At 15.9 %, the proportion of women working for
BMW AG was within the target range of 15 % to 17 %
(2019: new definition; 15.7 %).
PERCENTAGE OF WOMEN IN MANAGEMENT POSITIONS
AT BMW AG ²
in %
Entire
workforce
20
By 2025, the BMW Group aims to increase the pro-
portion of women in the workforce in general as well
as in management positions to between 20 % and 22 %.
BMW AG is aiming for a proportion of 17 % to 19 % of
women in the total workforce and 19 % to 21 % in man-
agement positions. To achieve this target, BMW AG care-
fully analysed the effectiveness of its existing measures
and programmes during the year under report, focused
on specifically optimising them to suit requirements
and derived new measures. These include, for exam-
ple, new formats for the targeted promotion of young
female managers and the option of filling management
positions with two people at the same time in a form of
joint leadership. In addition, the BMW Group ensures a
high proportion of women in its young talent promotion
programmes and is committed to a seamless return to
working life after parental leave.
In order to ensure gender pay parity, BMW AG has
established a process that compares the monthly pay of
men and women based on the categories of full-time,
part-time and pay grade. In 2020, there were no signif-
icant differences in the total remuneration packages
offered to women and men at BMW AG.
GRI 405-2
The proportion of women in young talent training
programmes such as the Global Leader Development
Programme increased to around 42 % (2019: 39 %) dur-
ing the period under report. In the student promotion
programmes such as Fastlane and SpeedUp, the figure
was around 33 % (2019: 28 %).
GRI 405-1
10
0
19.5 %
Percentage of women
in the BMW Group
15.8
Management
positions
13.3
16.1
14.0
15.1
16.5
15.8
16.3
15.5
15.7
16.2
15.9
2016
2017
2018
2019
OLD
2019
NEW
2020
1 The proportion of women in management functions includes management levels I to IV. Management
levels are defined in terms of their functional level and follow a comprehensive job evaluation system
based on Mercer.
2 The new definition of the term “employee” is provided in the
Glossary. The difference between old and
new definitions in previous years is similar to the difference between 2019 new and old.
BMW GroupReport 2020
Combined Management Report
Employees and Society
DIVERSITY IN ALL DIMENSIONS
BMW AG EMPLOYEES BY AGE GROUP, DIVIDED INTO
FUNCTIONS AND GENDER ¹
118
It is supported in this respect by its internal network
BMW Group PRIDE. Confirmation of this commitment
can be seen, among other things, in the Group’s top 5
ranking in the DAX 30 LGBT+ Diversity Index 2020.
Cultural background
Employees from over 110 countries work together at
the BMW Group. The ability to work together in inter-
national teams in a spirit of trust and respect is key to
the Group’s success. A broad range of opportunities for
personnel development, qualification and further training
promotes intercultural understanding. For example, the
Global Leader Development Programme for newly recruit-
ed employees is deliberately geared towards international
participants. In 2020, new employees from eight countries
took part in the programme (2019: 11 countries). With its
“Courage to be more open” campaign, the BMW Group is
also actively fighting against racism, for an unprejudiced
working environment and mutual respect.
Age and experience
The BMW Group sees demographic change as both
a challenge and an opportunity, as it offers people the
chance to combine (life) experience and fresh ideas in a
productive way. Since 2019, as part of the Senior Expert
Programme, retired employees have been passing on their
knowledge and experience to their younger colleagues.
Within the Reverse Mentoring Programme organised
by the BMW Group, older employees benefit from the
new knowledge of the younger generation. Managers are
qualified to recognise and leverage the opportunities and
challenges that mixed-age teams offer.
GRI 404-2
in %
2018 total
2019 total
2019 total new 1
2020 total
direct 2
indirect 3
male
female
< 30
years old
30–50
years old
> 50
years old
Disability
11.7
11.1
11.6
10.4
14.1
8.3
9.4
16.1
59.2
59.1
59.2
59.9
53.3
63.8
59.3
63.0
29.1
29.8
29.2
29.7
32.6
27.9
31.3
20.9
Employees with disabilities need to be offered an
inclusive and accessible working environment that
enables them to fully develop their performance. That
is the BMW Group’s mission. It begins with providing
training opportunities for severely disabled young people
and continues by designing workplaces that meet their
needs. As part of an internal communication campaign,
during the year under report the BMW Group encour-
aged greater openness and assuredness in interaction
with disabled employees.
1 Up to 2019: number of employees on unlimited employment contracts. From 2020, reporting based on new
employee definition
Glossary.
2 Clockcontrolled and production employees.
3 All employees without clock control.
GRI 4051
Sexual orientation and identity
Diversity also means living a corporate culture in
which employees of all sexual orientations and identities
are treated with equal appreciation and respect. With
this point in mind, the BMW Group is committed, for
example, to raising awareness among employees and
managers for the concerns of lesbians, gays, bisexuals
and transgender people, as well as to various cam-
paigns as part of the LGBT+ movement’s PRIDE Month.
In the coming years, the BMW Group intends to
analyse its activities in all five dimensions of the ex-
tended diversity concept and add new measures and
programmes as the need arises. The Human Resources
Policy and Strategy department and the operational
Human Resources department, together with the disci-
plinary managers, are responsible for all the measures
provided for in this concept.
BMW GroupReport 2020
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Employees and Society
119
CORPORATE CITIZENSHIP
BUILDING BRIDGES BETWEEN CULTURES
VOLUNTARY COMMITMENT OF EMPLOYEES
Corporate citizenship is an integral part of the
BMW Group’s corporate identity. The company’s com-
mitment to corporate citizenship focuses in particular on
long-term and international projects in which it can pro-
vide targeted support with its own core competences. At
all the Group’s international locations, this commitment
aims at attaining better living conditions, intercultural
understanding and good education.
Support provided during the coronavirus
pandemic
The coronavirus pandemic posed major challenges for socie
ty and companies worldwide in the year under report. In order to
help handle this exceptional situation, the BMW Group has orient
ed its measures internationally and focused on its areas of core
competence. For example, the BMW Group made vehicles avail
able to social and healthcare facilities. It also donated protective
equipment to health authorities and medical facilities.
The BMW Group aims to play a leading role in inter-
cultural understanding. As a corporation with a multi-
national workforce and locations on five continents, the
BMW Group has a keen interest in encouraging tolerance
and understanding between various nations, cultures
and religions. Together with the United Nations Alliance
of Civilisations (UNAOC), since 2011 the Group has
regularly presented the
Intercultural Innovation Award. The
Award is designed to promote innovative projects that
seek solutions to intercultural tensions and conflicts.
Originally, the BMW Group had set itself the goal of
reaching around one million people with the award-win-
ning projects by 2020, but it surpassed that figure at an
early stage. Since 2017, the Group has therefore been
pursuing the new aim of supporting six million people
with the award winners’ projects by 2025. By the end
of 2020, the award-winning projects had already helped
some five million people.* The BMW Group therefore
believes it is well on the way to exceeding the target it
has set itself.
* The number of people supported is provided by the award winners at the end of each year. It is calculated
based on combined data from media and sources. The figure reported relates only to the people who benefit
directly from the projects concerned.
The BMW Group is increasingly involving its em-
ployees in its social commitment efforts. Since 2011,
the company has presented the BMW Group Awards for
Social Commitment to its employees. The award goes
to staff members who have made a special contribution
through their voluntary work. In 2020, five employees
were honoured for their charitable social commitment,
two of them even received special awards from the Dop-
pelfeld Foundation. The BMW Group Awards for Social
Commitment are each endowed with € 5,000, which go
directly to the respective aid projects. This year’s award
winners come from India (Ooruni Foundation), Germany
(Gesellschaft für Kinderkrebsforschung e.V. and Hilfe für
Kinder in Kenya) and South Africa (Gauteng Community
Organization and Golden Youth Club). In addition to the
award winners, each of the other five finalists received
prize money of € 2,500.
The organisation Waves For Water is another project
with employee involvement that the BMW Group has
been successfully working together with for five years.
As part of this initiative, employees near the Group’s
locations in Mexico, India, Thailand and Indonesia help
provide families with water filters to facilitate their access
to clean drinking water. In the year under report, the
project was unfortunately interrupted by the coronavirus
pandemic, but will be continued as soon as circumstanc-
es permit.
BMW GroupReport 2020
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Employees and Society
120
EDUCATION CREATES BETTER PROSPECTS FOR LIFE
PEOPLE REACHED BY THE BMW GROUP’S
TOTAL EXPENDITURE ON CORPORATE CITIZENSHIP
CORPORATE CITIZENSHIP ACTIVITIES ¹
BY TYPE OF ACTIVITY ³
At its various locations, the BMW Group develops
educational projects that facilitate young people’s first
steps into the labour market and offer them better pros-
pects for life. With its programmes from primary school
level through to higher education, the BMW Group is
making a lasting contribution towards more equal op-
portunity. The BMW Group bases its funding approach
on the specific needs and requirements at its various
locations. During the year under report, the BMW Group
again supported a range of educational projects in the
USA, Thailand, India, Brazil, Mexico, China, Korea,
South Africa and Germany. However, due to the coro-
navirus pandemic, it was unable to offer its support to
the same extent as before.¹ The workshops were there-
fore conducted with a smaller number of participants
and online whenever possible. The BMW Group used
any funds that could not be deployed for educational
measures due to the coronavirus restrictions to mitigate
the immediate consequences of the pandemic.
Support
provided during the coronavirus pandemic
People reached by
Intercultural Innovation Award
winning projects since 2011
By the end of 2020:
approx. 5 million
Target 2025:
6 million
in € thousand
100,000
87,837 4
Commercial Activities
Community Investment
Donations/
payments in kind
50,000
0
33,436
37,242
33,229
33,631
1 Due to the coronavirus pandemic, the number of people who took part in educational projects was not
3 The activities of the BMW Group in the area of corporate citizenship are divided into three main areas:
recorded in 2020.
DONATIONS WORLDWIDE ²
monetary donations and payments in kind; community investment, which refers to investment in project
initiatives and partnerships conceived inhouse as well as corpor ate volunteering by BMW Group
employees; and our commercial activities, which encompass sponsorship and socalled causerelated
marketing.
4 The relatively high amount in 2016 is due to a oneoff donation to increase the capital of the
BMW Foundation in the BMW centenary year 2016 from € 50 million to € 100 million.
2016
2017
2018
2019
2020
For further information and additional projects, see
in € million
the website
BMW Group’s Corporate Citizenship.
Sports 5.2 %
0.1 % Politics
The BMW Group’s investment in corporate citizenship
totalled € 33.6 million in 2020 (2019: € 33.2 million).
Environment / Sustainability 2.4 %
Culture 8.6 %
Society /
Community 26.7 %
Total
16.2
57.0 % Science /
Education
2 In the form of donations and payments in kind.
€ 33.6 m
Expenditure on
Corporate Citizenship
BMW GroupReport 2020
Combined Management Report
Employees and Society
MANAGING CORPORATE CITIZENSHIP IN A TARGETED
AND EFFECTIVE MANNER
To ensure transparency regarding all the measures
taken in this area, the Group-wide guidelines on spon-
soring, donations and memberships have been binding
since 2011. Apart from transparency, it is also essential
to carefully document all the measures in order to ensure
that legal requirements are complied with.
The BMW Group will continue to be socially active
on a global basis and focus its commitment on the UN
Sustainable Development Goals going forward. The joint
initiatives of the BMW Group and its partners, particular-
ly the BMW Foundation Herbert Quandt, therefore focus
on the topics in which they can have the greatest impact
and benefit society to the greatest extent.
121
Inspiring, connecting, investing – the BMW Foundation Herbert Quandt
The BMW Foundation Herbert Quandt * is an independent corporate
foundation whose activities contribute towards the BMW Group’s cor
porate citizenship and mission. The Foundation’s mission is to inspire
executives worldwide to take social responsibility and work as respon
sible leaders for a peaceful, just and sustainable future. Moreover, the
Foundation invests in initiatives and organisations that develop solu
tions to social, environmental and political crises.
Through its Responsible Leadership programmes, the global Respon
sible Leaders Network and its impactoriented investments (the Eber
hard von Kuenheim Fund), the BMW Foundation Herbert Quandt has
promoted the UN Sustainable Development Goals since their adoption
in 2015.
The digital transformation expedited by the coronavirus pandemic also
impacted the Foundation’s programmes in 2020. For example, the Re
sponsible Leaders Table format events on the topic of Europe featuring
selected leaders from the worlds of politics, business and civil socie
ty were held virtually. The Foundation also conducted the Responsible
Leaders forums that had already been planned for Turkey and India on
line. The RISECity programme was carried out in Amsterdam, Madrid,
Athens and Singapore – either physically or on a hybrid basis – depend
ing on the local situation. The Responsible Leaders Network, which
currently has 1,854 members in 109 countries, also maintained its col
laboration via online meetings.
In order to actively support the ongoing transformation to a sustainable
society and a sustainable economic system, the Foundation launched
the RESPOND Accelerator programme in 2020. For the first group,
ten startups were selected that aim to successfully develop their sus
tainable business models. RESPOND aims to demonstrate that social
responsibility and successful entrepreneurship are not contradicto
ry concepts. As part of the five-month programme, which got off to a
successful start despite the adverse conditions caused by the pandem
ic, the startups received support from mentors and investors from the
Foundation’s network.
In response to the challenges posed by the coronavirus pandemic, the
BMW Foundation Herbert Quandt supported the German government’s
#WirvsVirus hackathon both financially and via its RESPOND network
during the year under report. This world’s largest hackathon aims to de
velop creative solutions to combat the impact of the pandemic.
Further information about the BMW Foundation Herbert Quandt is
available here:
www.bmw-foundation.org/en/
* The BMW Foundation Herbert Quandt is a corporate foundation of BMW AG. The Foundation implements
its programme with the income earned on endowment assets or received in the form of regular financial
contributions from the benefactor. In accordance with the Articles of Incorporation, the independent Foun
dation is advised by the Board of Trustees (Kuratorium), on which the Chairman of the Supervisory Board
and one member of the Board of Management of BMW AG are represented.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
REPORT ON
ECONOMIC POSITION
GENERAL AND SECTOR-
SPECIFIC ENVIRONMENT
In 2020, the coronavirus crisis caused the global
economy to slump on a scale not seen since the Great
Depression of the 1930s. The International Monetary
Fund (IMF) estimates the contraction in global gross
domestic product (GDP) at 3.5 %. All G7 countries saw a
significant drop in economic output. The BRIC countries
also suffered sharp declines – with the notable exception
of China.
122
Europe’s economy was hit harder than any other
major region. In the eurozone, the economy contracted
sharply by 7.6 % year-on-year. Significant losses were
recorded in Germany (– 5.0 %), France (– 8.3 %), Italy
(– 9.0 %) and Spain (– 11.0 %), the eurozone’s largest
economies. With many areas of the economy complete-
ly paralysed at times due to lockdowns lasting several
weeks, both production and consumption slumped
dramatically. Unemployment rates rose in all countries,
despite the increases being at least partially held down
by short-time work programmes. Governments across
the region implemented extensive economic stimulus
packages to support their countries’ economies. The
assistance programmes caused government spending
to rise sharply in 2020, resulting in higher debt ratios in
the respective countries.
GDP in the United Kingdom (UK) slumped by 10.7 %
in 2020. The performance was influenced not only by
the consequences of the coronavirus pandemic, but also
by the ongoing uncertainty surrounding the terms of
the Brexit trade deal, which would ultimately govern the
UK’s future relations with the European Union (EU).
In the USA, GDP fell by 3.5 % during the year under
report. Due to the lockdowns and in the absence of
short-time work programmes, the unemployment rate
rose significantly. Consumer sentiment and exports
both slumped during various parts of the year. Both
corporate investment and industrial production suffered
a significant decline. In light of the ensuing economic
situation, the US Federal Reserve (FED) further lowered
its benchmark interest rates in 2020.
Although China was the only economy to expand in
2020, its growth rate of 2.3 % was significantly down on
the previous year. Consumer demand collapsed almost
completely during the spring lockdown. However, strong
pent-up demand set in from early summer and lasted
through to the end of the year, thereby helping the econ-
omy to recover.
Export-reliant Japan also suffered a considerable de-
cline in economic output (– 5.3 %) due to the coronavirus
pandemic during the period under report. The main
factors here were lower private consumption, particularly
in the spring, and the drop in exports.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
123
CURRENCY MARKETS
EXCHANGE RATES COMPARED TO THE EURO
Index: December 2015 = 100
150
100
50
Source: Reuters.
British pound
Russian rouble
Chinese renminbi
US dollar
Japanese yen
2016
2017
2018
2019
2020
2021
The US dollar / euro exchange rate became far more
volatile in 2020 due to the coronavirus crisis. It fluctuated
between 1.07 and 1.22 to the euro, and resulted in an
average rate for the year of 1.14 US dollars to the euro.
The value of the British pound was affected by
both the coronavirus pandemic and the uncertainties
surrounding a free trade agreement with the EU. For a
while, the British currency fell to 0.93 pounds to the euro
before finishing the year at 0.83 pounds to the euro. The
average exchange rate of 0.89 pounds to the euro for the
year was slightly lower than one year earlier.
The same applies to the Chinese renminbi, which
averaged 7.87 renminbi to the euro over the year as a
whole.
The Japanese yen fluctuated between 114 and 127 yen
to the euro, resulting in an average exchange rate for the
year of 122 yen to the euro.
The currencies of major emerging markets also lost in
value in 2020 as a consequence of the coronavirus crisis.
The Indian rupee and the Russian rouble fell by around
5 % and 14 % respectively against the euro on average,
while the Brazilian real depreciated by as much as 33 %
against the euro.
BMW GroupReport 2020
124
Looking at raw materials for batteries, the price of
cobalt remained largely stable compared to the previous
year. By contrast, the price of lithium fell slightly, reflect-
ing lower demand due to the coronavirus pandemic on
the one hand and oversupply on the other.
Combined Management Report
Report on Economic Position
ENERGY AND RAW MATERIALS PRICES
The impact of the coronavirus pandemic was also felt
on practically all commodities markets in 2020. After
falling noticeably in mid-year, steel and aluminium prices
rose again sharply towards the end of the year.
Prices for precious and non-ferrous metals also
followed a similar trend. One exception, however, was
rhodium, which is mainly used in catalytic converters. In
this case, prices continued to rise significantly through-
out the 12-month period. By the end of the year the price
of this precious metal had almost tripled compared to
one year earlier.
DEVELOPMENT OF METALS PRICES
STEEL PRICE TREND
Index: December 2015 = 100
Index: January 2016 = 100
500
400
300
200
100
0
Palladium
Gold
Cobalt
Platinum
Lithium carbonate
200
150
100
50
2016
2017
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
Source: Reuters.
Source: Working Group for the Iron and Metal Processing Industry.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
125
Oil prices reacted sharply to the coronavirus pan-
demic and the related collapse in demand. The market
price of WTI crude even turned negative for a short
time. Although the price recovered somewhat by the
end of 2020, it remains slightly lower than one year
earlier. The price of Brent crude sank to a low of 19
US dollars before recovering to stand at 51 US dollars by
the end of the year. For a short time in April, WTI crude
was quoted at a negative market price of 37 US dollars,
ultimately finishing the year at a positive market price
of 48 US dollars.
OIL PRICE TREND
Price per barrel of Brent Crude
100
50
0
Source: Reuters.
Price in US dollars
Price in euros
2016
2017
2018
2019
2020
2021
AUTOMOBILE MARKETS
Automobile markets slumped worldwide in 2020 due
to the impact of the coronavirus pandemic. In total, reg-
istration figures for passenger cars and light commercial
vehicles fell sharply by 13.3 % to a total of 72.4 million
units during the year under report.
INTERNATIONAL AUTOMOBILE MARKETS
Europe
thereof Germany
thereof France
thereof Italy
thereof Spain
thereof United Kingdom (UK)
USA
China
Japan
Total
Change in %
– 24.3
– 19.1
– 25.5
– 27.7
– 32.3
– 29.4
– 14.5
– 5.0
– 11.4
– 13.3
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
126
OVERALL ASSESSMENT
BY MANAGEMENT OF THE
FINANCIAL YEAR
The BMW Group coped well with the major chal-
lenges that arose during the pandemic year 2020 and, in
view of the pronounced level of volatility on international
markets, can look back on a business performance over
the last 12 months that can be regarded as satisfactory
overall.
Despite declining key performance indicators in
2020, the BMW Group’s results of operations, financial
position and net assets are indicative of its solid finan-
cial condition. Overall, business developed in line with
management’s revised expectations. This assessment also
takes into account events after the end of the reporting
period. The outlook for 2021 factors in the expected
impact of the coronavirus pandemic.
INTERNATIONAL MOTORCYCLE MARKETS
INTERNATIONAL INTEREST RATE ENVIRONMENT IN 2020
International motorcycle markets in the 250 cc plus
class were down slightly overall (– 0.9 %) in 2020 due to
the pandemic. Markets in Europe were also negatively
impacted by the developments and contracted by 1.1 %.
In Spain, the decline was significantly higher at 13.7 %.
Registration figures were also down in Italy (– 9.1 %) and
France (– 4.6 %). By contrast, Germany saw a significant
increase, with new registrations up by 15.0 %. The US
market was at a similar level to the previous year (+ 0.1 %).
Brazil, on the other hand, recorded a significant drop
(– 17.7 %).
INTERNATIONAL MOTORCYCLE MARKETS
Europe
thereof Germany
thereof France
thereof Italy
thereof Spain
America
thereof USA
thereof Brazil
Total
Change in %
– 1.1
15.0
– 4.6
– 9.1
– 13.7
– 3.5
0.1
– 17.7
– 0.9
The coronavirus pandemic and its severe impact on
the economy in 2020 also prompted central banks around
the world to adopt drastic countermeasures. The aim of
their monetary policies was to mitigate the effects of the
downturn, for example by making it easier for smaller
companies to access cheap credit.
In the first half of the year, the European Central
Bank (ECB) decided to increase the existing bond pur-
chase programme to € 120 billion per month and launch
an additional emergency bond purchase programme
(Pandemic Emergency Purchase Programme – PEPP)
with a total volume of € 1,850 trillion.
As a direct response to the economic impact of the
coronavirus pandemic, the Bank of England (BoE) cut
its benchmark interest rate in two steps from 0.75 % to
0.1 % during the first quarter and increased its bond-buy-
ing programme to a total volume of 895 billion British
pounds.
In the USA, in two emergency meetings held during
the first quarter, the Fed lowered its target range for the
benchmark interest rate from between 1.50 and 1.75 %
to between 0.00 and 0.25 %. It also announced further
measures, including a commitment to make unlimited
bond purchases.
After suffering an economic slump at the beginning
of the year, but then avoiding a second wave of infec-
tions, China recovered earlier and faster than other major
economies. Instead of introducing massive stimulus pro-
grammes, China increasingly relied on other instruments,
such as lowering the reserve requirement ratio to 12.5 %
and the loan prime rate to 3.85 %.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
127
COMPARISON OF FORECASTS
WITH ACTUAL OUTCOMES
BMW GROUP COMPARISON OF 2020
FORECASTS WITH ACTUAL OUTCOMES 2020
The following table shows the development of key
performance indicators for the BMW Group as a whole
as well as for the Automotive, Motorcycles and Financial
Services segments in the financial year 2020 compared
to the forecasts made in the Annual Report 2019. In light
of the rapid escalation of the coronavirus crisis during
the first quarter 2020, the BMW Group partially revised
its outlook for the year. The changes are shown below.
Detailed information on the Group’s key perfor-
mance indicators is provided in conjunction with the
analysis of the Group’s results of operations, financial
position and net assets below. Changes in key perfor-
mance indicators for the Automotive, Motorcycles and
Financial Services segments are explained in the separate
sections for each segment.
Forecast for 2020
in 2019 Annual Report
Forecast revision
during the year
Actual
outcome in 2020
GROUP
Profit before tax
significant decrease
€ million
Workforce at yearend
in line with last year’s level
Q1: slight decrease
AUTOMOTIVE SEGMENT
Deliveries to customers 1
significant decrease
Emissions new vehicle fleet 2
significant decrease
EBIT margin
between 2 and 4
Q1: between 0 and 3
Return on capital employed
significant decrease
MOTORCYCLES SEGMENT
Deliveries to customers
EBIT margin
slight decrease Q1: significant decrease
Q3: moderate decrease
between 6 and 8
Q1: between 3 and 5
Return on capital employed
slight decrease Q1: significant decrease
FINANCIAL SERVICES SEGMENT
Return on equity
slight decrease
Q1: moderate decrease
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2020: 602,247 units).
2 EU including Norway and Iceland.
units
g CO2 / km
%
%
units
%
%
%
5,222 (– 26.6 %)
significant decrease
120,726 (– 4.2 %)
slight decrease
2,325,179 (– 8.4 %)
moderate decrease
99 (– 22.0 %)
significant decrease
2.7 (– 2.2 %pts.)
12.7 (– 16.3 %pts.)
significant decrease
169,272 (– 3.4 %)
slight decrease
4.5 (– 3.7 %pts.)
15.0 (– 14.4 %pts.)
significant decrease
11.2 (– 3.8 %pts.)
slight decrease
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
RETAIL VEHICLE DELIVERY DATA *
In December 2019, BMW Group was informed by
the SEC that the SEC had commenced an inquiry into
BMW Group’s vehicle sales and sales reporting practic-
es. On January 22, 2020, the SEC formally opened an
investigation into potential violations of U. S. securities
laws by BMW Group relating to disclosures regarding
BMW Group’s unit sales of new vehicles. On Septem-
ber 24, 2020, BMW AG and two of its U. S. subsidiaries
settled the matter with the SEC and, without admitting
or denying the allegations, consented to the entry of an
order (the “SEC Order”) finding violations of Sections
17(a)(2) and 17(a)(3) of the U. S. Securities Act and agreed
to pay a penalty of U. S.$18 million. The SEC Order
alleged, among other things, that the disclosures that
BMW Group had provided to investors in its U. S. bond
offerings conducted under Rule 144A in the period from
2016 to 2019 had contained material misstatements and
omissions regarding BMW Group’s U. S. retail vehicle
deliveries.
In connection with the above, BMW Group reviewed
prior period retail vehicle delivery data for automo-
biles and determined that certain vehicle deliveries of
automobiles were not reported in the correct periods.
BMW Group has corrected its reported delivery data, as
further described below, to report deliveries in the period
in which they occurred and has made, and will continue
to make in the future, certain adjustments to its poli-
cies and procedures (together, the “Revised Reporting
Process”) in order to further improve the reliability and
validity of its retail vehicle delivery data, in particular
with respect to the timing of the recognition of retail
vehicle deliveries.
BMW Group has applied the Revised Reporting
Process to all markets with effect from the year 2020.
While BMW Group revised retail vehicle delivery data for
certain of its most significant markets for the years 2016
through 2019 presented in this report, such data were
not revised for BMW Group’s other markets. As a result,
retail vehicle delivery data presented in this report for
the years 2016 through 2019 is not directly comparable
to such data presented for the year 2020. Specifically, the
retail vehicle delivery data for automobiles presented in
this report have been revised as follows:
128
When presenting total retail vehicle delivery data
for automobiles other than model-by-model data, data
relating to the years 2016 through 2019 for BMW Group’s
16 most significant markets were adjusted to reflect the
Revised Reporting Process. In the years 2016 through
2019, these 16 markets represented on average approxi-
mately 87 % of BMW Group’s total retail deliveries of au-
tomobiles. For each of the years 2016 through 2019, these
revisions amounted to less than 1 % of BMW Group’s
total retail deliveries of automobiles.
The retail vehicle delivery data for automobiles for
BMW Group’s other markets have not been adjusted
for any period prior to 2020, nor have any retail vehi-
cle delivery data for motorcycles been adjusted for any
period prior to 2020. BMW Group believes the impact
on BMW Group’s retail vehicle delivery data presented
in this report of such data not having been adjusted to
reflect the Revised Reporting Process to be immaterial.
* See
Glossary for the definition of deliveries.
BMW GroupReport 2020
129
BMW Group believes the retail vehicle delivery data
presented in this report are materially correct in accord-
ance with BMW Group’s current definition and related
policies and procedures of retail vehicle deliveries.
Retail vehicle deliveries during a given reporting
period do not correlate directly to the revenue that
BMW Group recognizes in respect of such reporting
period.
Combined Management Report
Report on Economic Position
The preparation of BMW Group’s retail vehicle deliv-
ery data involves a variety of estimates and judgments,
some of which are complex and all of which are inher-
ently subjective, and is subject to other uncertainties,
including:
— The vast majority of deliveries of vehicles are 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.
— The definition of deliveries includes vehicles deliv-
ered in the United States and Canada if the relevant
dealers designate such vehicles as service loaner
vehicles or demonstrator vehicles.
— Retail vehicle delivery data for periods prior to 2020
include an immaterial number of pre-series vehicles
that were never intended to be sold to end users
(such as vehicles for use by government agencies in
connection with safety evaluations (e. g., crash tests)
or for other tests).
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
130
RESULTS OF OPERATIONS OF THE BMW GROUP
BMW GROUP CONDENSED INCOME STATEMENT
in € million
Revenues
Cost of sales
Gross profit
Selling and administrative expenses
Other operating income and expenses
Profit before financial result
Financial result
Profit / loss before tax
Income taxes
Profit from continuing operations
Profit / loss from discontinued operations
Net profit
Earnings per share of common stock in €
Earnings per share of preferred stock in €
in %
Pretax return on sales 1
Posttax return on sales 2
Gross profit margin 3
Effective tax rate 4
1 Group profit before tax as a percentage of Group revenues.
2 Group net profit as a percentage of Group revenues.
3 Gross profit as a percentage of Group revenues.
4 Income tax expense as a percentage of Group profit before tax.
2020
2019
Change in %
98,990
– 85,408
13,582
– 8,795
43
4,830
392
5,222
– 1,365
3,857
–
3,857
5.73
5.75
2020
5.3
3.9
13.7
26.1
104,210
– 86,147
18,063
– 9,367
– 1,285
7,411
– 293
7,118
– 2,140
4,978
44
5,022
7.47
7.49
2019
6.8
4.8
17.3
30.1
– 5.0
0.9
– 24.8
6.1
–
– 34.8
–
– 26.6
36.2
– 22.5
–
– 23.2
– 23.3
– 23.2
Change in %-pts.
– 1.5
– 0.9
– 3.6
– 4.0
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
Group revenues by region were as follows:
BMW GROUP REVENUES BY REGION
in %
Europe
Asia
Americas
Other regions
Group
BMW GROUP COST OF SALES
in € million
Manufacturing costs
Cost of sales relating to financial services business
thereof interest expense relating to financial services business
Research and development expenses
thereof amortisation of capitalised development costs
Service contracts, telematics and roadside assistance
Warranty expenses
Other cost of sales
Cost of sales
131
Due to coronavirus-related dealership closures,
Group revenues for the financial year under report
were moderately down on the previous year (2020:
€ 98,990 million; 2019: € 104,210 million; – 5.0 %).
Negative currency effects caused by the unfavourable
development of the US dollar, the Russian rouble and
the Chinese renminbi also had a downward impact on
revenues.
Factors working in the opposite direction included
product mix effects due to the less pronounced drop in
the sale of high-revenue models, higher selling prices on
the back of a rejuvenated product range, and a portfo-
lio-related upturn in leasing revenues. Positive develop-
ments on pre-owned vehicle markets were reflected in
higher revenues generated from the sale of returned lease
vehicles, particularly in the third and fourth quarters.
Due to the drop in new leasing business in the first half
of the year as well as the expected decline in new leasing
business in light of lower inventory levels at dealerships,
the amount of revenues eliminated on consolidation
decreased year-on-year. *
Group cost of sales amounted to € 85,408 million,
similar to the previous year’s level (2019: € 86,147 mil-
lion; – 0.9 %). Higher risk-provisioning expenses, mainly
arising in connection with the measurement of credit
and residual value risks, were partially offset by reduced
manufacturing costs due to lower production volumes.
* Further information is provided in
note 5 to the Group Financial Statements.
2020
44.3
32.1
21.4
2.2
2019
44.4
30.6
22.7
2.3
100.0
100.0
2020
2019
Change in %
46,878
27,114
1,960
5,689
1,710
1,411
2,971
1,345
48,776
25,828
2,288
5,952
1,667
1,641
2,566
1,384
85,408
86,147
– 3.9
5.0
– 14.3
– 4.4
2.6
– 14.0
15.8
– 2.8
– 0.9
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
In addition, warranty expenses were negatively
impacted in 2020 by the recognition of provisions in
connection with the exhaust gas recirculation cooler and
vehicle recalls (such as for contaminated battery cells in
plug-in hybrid vehicles).
Cost of sales relating to Financial Services business
went up as a result of the costs associated with the sale
of returned lease vehicles, mirroring the impact on rev-
enues.
Furthermore, the eliminations described above had
an equal and opposite impact on revenues, resulting in
a year-on-year decrease in the amount of cost of sales
eliminated on consolidation.
Research and development expenses were slightly
lower than in the previous year. Higher expenses were
incurred in 2019 including those relating to the BMW iX ¹
for instance. By contrast, the amount capitalised for future
vehicle model start-ups increased in the financial year un-
der report. The higher level of capitalised development
costs mainly related to new models, the electrification of
the vehicle fleet and automated driving.
Depreciation and amortisation on property, plant
and equipment and intangible assets recorded in cost of
sales and in selling and administrative expenses totalled
€ 6,143 million (2019: € 6,017 million).
Selling and administrative expenses decreased year-
on-year, influenced in particular by lower personnel
expenses (due to a year-on-year decline in the number
of employees) and a decrease in expenses for marketing
and communication (including the impact of new model
launch events transmitted via digital formats). Stringent
fixed cost management also contributed to the reduction
in selling and administrative expenses.
BMW GROUP RESEARCH AND DEVELOPMENT EXPENDITURE
in € million
Research and development expenses
Amortisation
New expenditure for capitalised development costs
Total research and development expenditure
132
2020
2019
5,689
– 1,710
2,300
6,279
5,952
– 1,667
2,134
6,419
BMW GROUP PERFORMANCE INDICATORS RELATING TO RESEARCH AND DEVELOPMENT EXPENSES
in %
Research and development expenditure ratio 2
Capitalisation rate 3
2020
6.3
36.6
2019
Change in %-pts.
6.2
33.2
0.1
3.4
The net amount of other operating income and ex-
penses improved significantly, whereby the year-on-year
change was attributable to the expense recognised in the
first half of the previous financial year for the provision
relating to ongoing antitrust proceedings. ⁴
Profit before financial result dropped sharply to
€ 4,830 million (2019: € 7,411 million), reflecting the
various negative impacts on gross profit described above.
The financial result improved significantly year-on-
year. The figure reported for 2020 benefited in particular
from an increase to € 1,212 million (2019: € 918 million)
of at-equity earnings generated by the Chinese joint ven-
ture BMW Brilliance Automotive Ltd., Shenyang, as
well as from the gain of € 105 million recorded by
THERE Holding B. V. on the sale of shares in the card
service provider HERE International B. V. to Mitsubishi
Corporation (MC) and Nippon Telegraph and Telephone
Corporation (NTT) ⁵ during the first half of 2020. In the
previous year, the financial result also included higher
impairment losses recognised in connection with the
strategic realignment of the YOUR NOW Group.
Fuel Consumption and CO2 Emissions Information.
1 See
2 Research and development expenditure as a percentage of Group revenues.
3 Capitalised development costs as a percentage of research and development expenditure.
4 Further information is provided in
5 Further information is provided in
note 10 to the Group Financial Statements.
note 24 to the Group Financial Statements.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
As forecast most recently in the quarterly state-
ment to 30 September 2020, Group profit before tax
of € 5,222 million was significantly lower than one year
earlier (2019: € 7,118 million) and therefore in line with
the revised outlook.
Income tax expense for the year decreased to
€ 1,365 million (2019: € 2,140 million), mainly due to the
pandemic-related drop in earnings. The effective tax rate
fell to 26.1 % (2019: 30.1 %). In the previous financial year,
the effective tax rate was raised due to the non-deducti-
bility of items for tax purposes, namely the recognition
of the provision relating to the EU Commission’s anti-
trust proceedings and impairment losses relating to the
YOUR NOW Group, the latter of which was reported
within other financial result.
The size of the workforce decreased slightly to
120,726 employees year-on-year and was therefore in line
with expectations (2019: 126,016 *; – 4.2 % employees).
133
FINANCIAL POSITION OF THE BMW GROUP
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 2020 and 2019, classified according to
operating, investing and financing activities. Cash and
cash equivalents in the cash flow statements correspond
to the amounts disclosed in the balance sheet.
Cash flows from operating activities are determined
indirectly, starting with Group / segment profit before
tax. By contrast, cash flows from investing and financing
activities are based on actual payments and receipts.
BMW GROUP CASH FLOWS
in € million
2020
2019
Change
Cash inflow (+) / outflow (–) from operating activities
Cash inflow (+) / outflow (–) from investing activities
Cash inflow (+) / outflow (–) from financing activities
Effects of exchange rate and changes in composition of Group
Change in cash and cash equivalents
13,251
– 3,636
– 8,254
140
1,501
3,662
– 7,284
4,790
– 111
1,057
9,589
3,648
– 13,044
251
444
* Since the reporting year 2020, a new definition for workforce size has been applied (see
Glossary).
To enable better comparability, the value for 2019 was adjusted accordingly (2019 before adjustment:
133,778 employees).
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
134
Focused capital market management, good rat-
ings and the high level of acceptance enjoyed by the
BMW Group on those markets enabled it to refinance
itself on the world’s debt capital markets at favourable
conditions during the period under report, despite the
temporary impact of the coronavirus pandemic on those
markets. In addition to bonds, loan notes and private
placements, the Group also issued commercial paper. As
in previous years, the issues were all in high demand,
not only from institutional investors, but also from
private investors for selected transactions. In addition,
retail customer and dealership financing receivables 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 the customer deposits used 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.
Despite lower earnings, the increase in net cash in-
flows from operating activities can be explained primarily
by the pandemic-related drop in new business recorded
by the Financial Services segment. The swift measures
taken at production level to adjust to the coronavirus
situation also resulted in lower levels of inventories at
dealerships and simultaneously to a reduction in receiv-
ables from sales financing, primarily in the form of lower
credit financing for dealerships. Advance tax payments
also dropped year-on-year due to the lower earnings.
The reduction in inventories had a positive impact on
the change in working capital, whereas the decrease in
trade payables, caused mainly by earlier plant closures
and stringent cost management, had an offsetting effect.
The year-on-year change in cash flows from investing
activities was positively influenced by the level of net out-
flows disbursed in 2019 for investment assets, primarily
for the acquisition of the YOUR NOW companies. In addi-
tion, the higher level of investments in property, plant and
equipment and intangible assets in 2019 – particularly
for the market launch of new vehicle models such as the
BMW 1 Series, the BMW 3 Series and the X5 – resulted in
a year-on-year decrease in cash outflows. Proceeds from
the sale of marketable securities also had a positive impact
on the net cash outflow from investing activities.
The net cash outflow from financing activities was
mainly attributable to lower financing requirements in
the Financial Services segment and the related reduction
in bond issues, the reduced volume of asset-backed fi-
nancing and the repayment of liabilities to banks.
REFINANCING
A broad range of instruments on international money
and capital markets is used to refinance worldwide op-
erations. The funds raised are used almost exclusively to
refinance 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:
1. The ability to act through permanent access to stra-
tegically important capital markets
2. Autonomy through the diversification of refinancing
instruments and investors
3. Focus on value through the optimisation of financing
costs
Financing measures undertaken at corporate level
ensure access to liquidity for the Group’s operating sub-
sidiaries at standard market conditions and consistent
credit terms. Funds are acquired in line with a target
liability structure, comprising a balanced mix of financ-
ing instruments. The use of longer-term instruments to
refinance the Group’s Financial Services business and
the maintenance of a sufficiently high liquidity reserve
serves to rule out any imminent liquidity risk for the
portfolio. This conservative financial approach also has
a favourable effect on the Group’s rating. Further infor-
mation is provided in the section “Liquidity risks” within
the “Report on Outlook, Risks and Opportunities”.
BMW GroupReport 2020
135
Combined Management Report
Report on Economic Position
In 2020, the BMW Group issued one euro benchmark
bond on the European capital market with a total issue
volume of € 2.3 billion as well as one bond on the US
capital market with a total issue volume of 4.0 billion
US dollars. In addition, one bond was issued for a total
amount of 0.4 billion British pounds. Private placements
totalling € 3.6 billion were also issued, including so-called
“Panda Bonds” for an amount of 6.0 billion Chinese
renminbi. A total of nine public ABS transactions were
executed in 2020, including three transactions in China,
two in Germany and one each in Japan, the USA, Canada
and the UK, with a total financing volume equivalent
of € 5.8 billion. In addition, further financing equivalent
to € 10.7 billion was realised or secured in the UK, Ger-
many, the USA, Switzerland and Australia via new and
prolonged ABS conduit transactions. Other transactions
remain in place in Germany, China, the UK, the USA,
Canada, Japan and South Africa, amongst others.
The following table provides an overview of amounts
utilised at 31 December 2020 in connection with the
BMW Group’s money and capital market programmes:
Programme
in € billion
Euro Medium Term Notes
Australian Medium Term Notes
Commercial Paper
* Measured at exchange rates at the relevant transaction dates.
Programme
framework
Amount
utilised*
50.0
1.6
13.0
35.3
–
0.6
Liquidity-related measures were put in place during
the first half of the year to enable the Group to respond
flexibly to ongoing uncertainties caused by the coronavi-
rus pandemic and to manage operations at short notice
in the event of possible renewed containment measures.
Reflecting the improved situation on capital markets in
the second half of the year, the BMW Group was able to
reduce the amount of liquidity on hand to € 17.8 billion
at 31 December 2020, similar to the previous year’s level.
The BMW Group also has access to a syndicated
credit line, which was renegotiated in July 2017. The
syndicated credit line of € 8 billion has a term ending in
July 2024 and is being made available by a consortium
of 44 international banks.
The credit line was not being utilised at 31 Decem-
ber 2020. Further information with respect to financial
liabilities is provided in
notes 31, 35 and 39 to the Group
Financial Statements.
BMW GroupReport 2020
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Report on Economic Position
136
NET ASSETS OF THE BMW GROUP
BMW GROUP CONDENSED BALANCE SHEET AT 31 DECEMBER
Adjusted for currency effects, the BMW Group’s
balance sheet total was slightly lower than at 31 Decem-
ber 2019. Including currency effects from the US dollar
and pound sterling, amongst others, the balance sheet
total decreased moderately. ¹
in € million
ASSETS
Property, plant and equipment (adjusted for currency
effects) were slightly down on the previous year, mainly
due to the lower amount of capital expenditure in 2020.
In the previous year, investments at the BMW plants in
Spartanburg, USA and San Luis Potosí, Mexico had the
effect of increasing property, plant and equipment.
1 Further information is provided in
2 The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to
note 5 to the Group Financial Statements.
the prior year figures.
Intangible assets
Property, plant and equipment
Leased products
Investments accounted for using the equity method
Other investments
Receivables from sales financing
Financial assets
Deferred and current tax
Other assets
Inventories
Trade receivables
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Equity
Pension provisions
Other provisions
Deferred and current tax
Financial liabilities
Trade payables
Other liabilities
Total equity and liabilities
Group
2020
2019
Change in %
Currency-adjusted
change ² in %
Proportion of
balance sheet total
in % 2020
12,342
21,850
41,995
3,585
735
84,277
7,752
3,065
10,326
14,896
2,298
13,537
11,729
23,245
42,609
3,199
703
92,437
7,325
3,403
12,939
15,891
2,518
12,036
216,658
228,034
61,520
3,693
13,982
1,256
106,376
8,644
21,187
216,658
59,907
3,335
13,209
1,595
116,740
10,182
23,066
228,034
5.2
– 6.0
– 1.4
12.1
4.6
– 8.8
5.8
– 9.9
– 20.2
– 6.3
– 8.7
12.5
– 5.0
2.7
10.7
5.9
– 21.3
– 8.9
– 15.1
– 8.1
– 5.0
5.6
– 3.5
2.6
12.0
11.8
– 4.7
7.2
– 7.1
– 17.9
– 3.1
– 6.7
14.9
– 1.6
7.1
11.7
8.9
– 18.9
– 5.9
– 13.3
– 4.2
– 1.6
5.7
10.1
19.4
1.7
0.3
38.9
3.6
1.4
4.8
6.9
1.1
6.2
100.0
28.4
1.7
6.5
0.6
49.1
4.0
9.8
100.0
BMW GroupReport 2020
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Report on Economic Position
137
Leased products (adjusted for currency effects) were
slightly up on the previous year due to portfolio growth,
mainly in Germany, Italy and Switzerland.
Other provisions increased year-on-year due to addi-
tions to risk provisions in connection with the exhaust
gas recirculation cooler and various recalls, such as for
contaminated battery cells in plug-in hybrids.
Receivables from sales financing (adjusted for cur-
rency effects) went down slightly compared to 31 De-
cember 2019, primarily due to the decrease in dealership
financing, mainly in the USA, Germany, the UK and
France. A total of 1,238,286 new credit financing con-
tracts were concluded with retail customers during the
financial year 2020. The number of contracts in place
with dealerships and retail customers decreased by 0.6 %
to 4,040,231 contracts.
Group equity rose slightly by € 1,613 million to
€ 61,520 million, driven primarily by the profit of
€ 3,775 million attributable to shareholders of BMW AG.
The dividend payment for the financial year 2019
amounted to € 1,646 million, reducing equity accordingly.
Financial liabilities decreased moderately over the
twelve-month period, with repayments of maturing
bonds exceeding new issues.
Despite the volatility caused by the outbreak of the
coronavirus pandemic, the results of operations, finan-
cial position and net assets of the BMW Group remained
stable throughout the financial year, thanks to a raft of
measures that were immediately implemented, including
focused working capital management, strict investment
and fixed cost management and targeted liquidity man-
agement.
BMW GROUP EQUITY RATIO *
in %
Group
Automotive segment
Financial Services segment
* Equity capital as a percentage of the balance sheet total, respectively.
31. 12. 2020
31. 12. 2019
Change in %-pts.
28.4
37.0
10.5
26.3
35.5
9.9
2.1
1.5
0.6
BMW GroupReport 2020
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Report on Economic Position
138
VALUE ADDED STATEMENT
BMW GROUP 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. Depreciation 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 the employees.
The remaining proportion in the Group is retained to
finance future operations. The gross value added amount
treats depreciation and amortisation as a component of
value added which, in the allocation statement, would be
treated as internal financing.
Net valued added by the BMW Group remained at a
high level in the financial year 2020.
WORK PERFORMED
Revenues
Financial income
Other income
Total output
Cost of materials *
Other expenses
Bought-in costs
Gross value added
Depreciation and amortisation of total tangible,
intangible and investment assets
Net value added
ALLOCATION
Employees
Providers of finance
Government / public sector
Shareholders
Group
Minority interest
Net value added
2020
in € million
2020
in %
2019
in € million
2019
in %
Change
in %
98,990
650
916
98.4
0.6
0.9
104,210
– 22
1,031
100,556
100.0
105,219
52,355
16,766
69,121
31,435
11,976
19,459
12,244
2,129
1,229
1,253
2,522
82
52.1
16.7
68.8
31.3
11.9
19.3
63.0
10.9
6.3
6.4
13.0
0.4
57,358
14,923
72,281
32,938
10,749
22,189
12,451
2,466
2,250
1,646
3,269
107
99.0
–
1.0
100.0
54.5
14.2
68.7
31.3
10.2
21.1
56.1
11.1
10.1
7.4
14.7
0.5
19,459
100.0
22,189
100.0
– 5.0
–
– 11.2
– 4.4
– 8.7
12.4
– 4.4
– 4.6
11.4
– 12.3
– 1.7
– 13.7
– 45.4
– 23.9
– 22.9
– 23.4
– 12.3
* Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).
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Combined Management Report
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BMW GROUP VALUE ADDED 2020
in %
Depreciation and amortisation 11.9
16.7 Other expenses
Cost of materials 52.1
19.3 Net
value added
63.0 % Employees
10.9 % Providers of finance
6.3 % Government / public sector
6.4 % Shareholders
13.0 % Group
0.4 % Minority interest
BMW GroupReport 2020
140
Combined Management Report
Report on Economic Position
RESULTS OF OPERATIONS BY SEGMENT
BMW GROUP REVENUES BY SEGMENT
in € million
Automotive
Motorcycles
Financial Services
Other Entities
Eliminations
Group
2020
2019
Change in %
Currency adjusted
change * in %
80,853
2,284
30,044
3
– 14,194
98,990
91,682
2,368
29,598
5
– 19,443
104,210
– 11.8
– 3.5
1.5
– 40.0
27.0
– 5.0
– 10.5 %
– 1.1 %
2.9 %
0.0 %
– 26.5 %
– 3.5 %
* The adjustment for exchange rate factors is calculated by applying the relevant current exchange rates to the prior year figures.
BMW GROUP PROFIT / LOSS BEFORE TAX BY SEGMENT
in € million
Automotive
Motorcycles
Financial Services
Other Entities
Eliminations
Group
2020
2019
Change in %
2,722
100
1,725
– 235
910
5,222
4,467
187
2,272
– 96
288
7,118
– 39.1
– 46.5
– 24.1
–
–
– 26.6
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
BMW GROUP MARGINS BY SEGMENT
in %
Automotive
Gross profit margin 1
EBIT margin 2
Motorcycles
Gross profit margin 1
EBIT margin 2
1 Gross profit as a percentage of segment revenues.
2 Profit / loss before financial result as a percentage of segment revenues.
2020
2019
Change
in %-pts.
11.6
2.7
15.0
4.5
14.9
4.9
19.3
8.2
– 3.3
– 2.2
– 4.3
– 3.7
141
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
REVIEW OF OPERATIONS
AUTOMOTIVE SEGMENT
BMW GROUP ASSERTS ITS POSITION AS LEADING
PREMIUM MANUFACTURER
The worldwide restrictions placed on public and pri-
vate life due to the coronavirus pandemic also affected
the BMW Group and its dealership organisation. Against
this backdrop, deliveries ¹ were extremely volatile in
2020. After a promising start to the year, sales figures
slumped in the spring, before recovering from the third
quarter onwards. During the final months of the year, the
BMW Group returned to its successful course.
In 2020, the BMW Group delivered a total of
2,325,179 ² BMW, MINI and Rolls-Royce brand automo-
biles to customers (2019: 2,537,504 ², ³ units; – 8.4 %), once
again leading the premium segment worldwide.
Due to the impact of the coronavirus crisis in the first
half of 2020, deliveries were originally expected to drop
significantly over the year as a whole. In the end, however,
the decrease was relatively moderate at 8.4 %, largely on
the back of a distinct recovery, particularly in the final
quarter.
142
DELIVERIES OF ELECTRIFIED MODELS ³
in units
2020
2019
Change in %
BMW Group PHEV
148,121
106,639
BMW Group BEV
44,541
39,519
Total
192,662
146,158
38.9
12.7
31.8
A strong second six-month period also contribut-
ed significantly to the brands making up for a major
part of the coronavirus-related decline in the first half
of the year. Over the full year, the BMW brand deliv-
ered 2,028,841 ² units to customers worldwide, 7.1 %
below the record figure set one year earlier (2019:
2,184,939 ², ³ units). MINI was also down year-on-year at
292,582 units (2019: 347,465 ³ units; – 15.8 %). Following
the previous year’s record high, Rolls-Royce Motor Cars
delivered a total of 3,756 of its ultra-luxury brand vehi-
cles to customers in 2020 (2019: 5,100 ³ units; – 26.4 %).
PROPORTION OF ELECTRIFIED VEHICLES UP
SIGNIFICANTLY
The growing number of electrified models offered
by BMW and MINI brands was again reflected in the
sharply rising delivery figures recorded in 2020. Over
the twelve-month period, the BMW Group sold a total
of 192,662 electrified BMWs and MINIs worldwide,
around one-third (31.8 %) up on the previous year
(2019: 146,158 ³ units). Accordingly, electric mobility has
become a significant growth driver for business. In the
meantime, the BMW Group has expanded its portfolio
of electrified vehicles to 14 models, which are available
in a total of 95 countries worldwide. Based on its existing
plans, the BMW Group will have 25 electrified models
on the road by 2023.
The launch of the fully electric MINI ⁴ and the pres-
entation of the BMW iX3 ⁴ during 2020 will be followed
in 2021 by the first deliveries of the two fully electric
models, the BMW iX ⁴ and the BMW i4.
Glossary for the definition of deliveries.
1 See
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2020: 602,247 units, 2019:
538,612 units).
3 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
4 See
Fuel Consumption and CO2 Emissions Information.
Comparison of Forecast with
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
143
FLEET CO2 TARGETS MORE THAN ACHIEVED ¹ –
EMISSIONS WITHIN THE LEGAL LIMIT
Figures for the UK deteriorated significantly, with
deliveries falling to 163,174 units (2019: 233,771 ³
units; – 30.2 %), not least due to uncertainty over reaching
a trade deal with the EU and the course of the pandemic.
BMW GROUP – KEY AUTOMOBILE MARKETS 2020
as a percentage of sales volume
Measures taken by the BMW Group to reduce fleet-
wide carbon emissions are having a marked effect. The
increased share of electrified vehicles delivered and the
rigorous use of Efficient Dynamics technologies have
enabled the BMW Group to achieve the stipulated fleet
CO₂ limit for 2020, based on regulatory requirements.
Fleet carbon emissions of vehicles delivered in Europe at
the end of the reporting period were 99 g CO₂ / km (2019:
127 g CO₂ / km; – 22.0 %).
Sales of the BMW Group’s three brands on the Amer-
ican continent totalled 379,714 units (2019: 472,879 ³
units; – 19.7 %).
Other 28.6
A total of 307,876 units were delivered to customers
in the USA (2019: 375,726 ³ units; – 18.1 %). Despite a
challenging environment due to the coronavirus pan-
demic, the final quarter here finished strongly on the
back of rising demand.
Japan 2.7
Italy 2.7
UK 7.0
DELIVERIES UP IN ASIA AND DOWN IN EUROPE AND
AMERICA
BMW GROUP DELIVERIES OF VEHICLES BY REGION AND MARKET ³
33.5 China
13.2 USA
12.3 Germany
BMW Group sales in Asia grew solidly in 2020,
with deliveries to customers rising by 6.0 % to a total
of 986,464 ² BMW, MINI and Rolls-Royce brand vehicles
(2019: 930,767 ², ³ units). In China in particular, the
BMW Group surpassed the previous year’s figure by
7.4 %, with 778,412 ² units delivered to customers (2019:
724,711 ², ³ units).
By contrast, sales performance in Europe was af-
fected more severely by the coronavirus crisis. In an
unprecedented year marked by restrictions strongly
affecting retail business, the BMW Group delivered a
total of 913,642 units across the region (2019: 1,081,649 ³;
– 15.5 %). The number of vehicles delivered in Germany
fell by 13.8 % to 285,019 units (2019: 330,507 ³ units).
in 1,000 units
Europe
thereof Germany
thereof UK
Americas
thereof USA
Asia 2
thereof China 2
Other markets
Total ²
2020
2019
2018
2017
2016
913.6
285.0
163.2
379.7
307.9
986.5
778.4
45.4
1,081.6
1,097.4
1,101.9
1,089.8
330.5
233.8
472.9
375.7
930.8
724.7
52.2
310.6
236.8
457.1
355.4
871.8
635.8
59.9
296.5
242.4
456.1
358.8
847.7
595.0
59.3
298.5
252.4
453.7
359.5
738.2
508.8
68.3
2,325.2
2,537.5
2,486.1
2,465.0
2,350.0
1 EU including Norway and Iceland.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2020: 602,247 units,
2019: 538,612 units, 2018: 455,581 units, 2017: 385,705 units, 2016: 311,473 units).
3 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
Comparison of Forecast with
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
BMW BRAND ¹, ² BENEFITS FROM STRONG LUXURY
SEGMENT
MOST SUCCESSFUL YEAR TO DATE FOR BMW M ¹
The BMW brand finished the year with a total of
2,028,841 units delivered to customers worldwide (2019:
2,184,939 ², ³ units; – 7.1 %), whereby the BMW 8 Series
and the BMW X7 contributed in particular to the im-
proved model mix. In addition, the 8 Series, the X6 and
the X7 proved highly popular, each posting double-digit
percentage increases. The highly successful BMW 3 Series
model also recorded solid growth during the twelve-
month period. Deliveries of the BMW 4 Series declined
due to model life cycle factors.
NEW BMW BRAND PRODUCTS ¹
The BMW brand introduced a variety of innovative
new products over the course of 2020, starting with the
BMW X3 plug-in hybrid variant in January, followed
by the BMW X1 plug-in hybrid and the BMW 2 Series
Gran Coupé in March. The second half of the year saw
the launch of model revisions of the BMW 5 Series and
the BMW 6 Series Gran Turismo as well as the plug-in
hybrid variants of the BMW 3 Series Touring and the
BMW X2. The new BMW 4 Series Coupé was launched
in October. The fully electric BMW iX3 celebrated its
market début in China in November, with other markets
to follow in early 2021. Additional hybrid variants of the
BMW 5 Series were also added to the product range.
Fuel Consumption and CO2 Emissions Information.
1 See
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2020: 602,247 units,
2019: 538,612 units).
3 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
Comparison of Forecast with
BMW M GmbH finished the most successful year in
its history with a 5.9 % rise in deliveries to 144,231 units
(2019: 136,165 ³ units; + 5.9 %), boosted by good contribu-
tions from the new high-performance BMW X5 M and X6
DELIVERIES OF BMW VEHICLES BY MODEL VARIANT ¹, ², ³
in units
BMW 1 Series
BMW 2 Series
BMW 3 Series
BMW 4 Series
BMW 5 Series
BMW 6 Series
BMW 7 Series
BMW 8 Series
BMW Z4
BMW X1
BMW X2
BMW X3
BMW X4
BMW X5
BMW X6
BMW X7
BMW i (i3 and i8)
BMW total
144
M models. In addition to these two models, BMW M also
presented the new BMW M8 Gran Coupé and the M2 CS
during the year under report. The new BMW M3 and
the BMW M4 Coupé, which both celebrated their world
premières in 2020, will be launched as further important
models in 2021.
2020
2019
Change in %
Proportion of
BMW sales volume
2020 in %
164,056
104,859
381,416
38,879
302,564
19,893
46,025
20,703
14,982
230,041
74,229
292,328
55,237
168,674
38,100
48,693
28,162
173,870
115,095
358,643
74,236
353,249
25,170
50,552
12,219
15,819
266,124
91,765
316,883
61,569
165,498
22,116
39,882
42,249
2,028,841
2,184,939
– 5.6
– 8.9
6.3
– 47.6
– 14.3
– 21.0
– 9.0
69.4
– 5.3
– 13.6
– 19.1
– 7.7
– 10.3
1.9
72.3
22.1
– 33.3
– 7.1
8.1
5.2
18.8
1.9
14.9
1.0
2.3
1.0
0.7
11.3
3.7
14.4
2.7
8.3
1.9
2.4
1.4
100
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
145
MINI FIGURES DOWN ON PREVIOUS YEAR ¹
ROLLSROYCE: FIGURES DOWN IN CHALLENGING
ENVIRONMENT AFTER PREVIOUS YEAR’S RECORD
PERFORMANCE ¹
DELIVERIES OF ROLLSROYCE VEHICLES
BY MODEL VARIANT ¹, ²
In a highly challenging environment, MINI deliveries
worldwide fell to 292,582 units (2019: 347,465 ² units), a
drop of 15.8 %.
At the same time, the importance of electric mobil-
ity for the MINI brand is steadily growing. In addition
to the MINI Countryman plug-in hybrid variant, the
fully electric MINI Cooper SE has been available since
March 2020. The latter generated a great deal of market
interest, with 17,580 units delivered to customers by the
end of the reporting year. The revised model of the MINI
Countryman became available in September. Deliveries
of John Cooper Works high-performance models went up
by 21.2 % to 20,628 units (2019: 17,025 units ²). The MINI
John Cooper Works GP made its market début in March.
DELIVERIES OF MINI VEHICLES BY MODEL VARIANT ²
Due to the global impact of the coronavirus pan-
demic, Rolls-Royce deliveries fell to 3,756 units (2019:
5,100 ² units; – 26.4 %). Nevertheless, the leading marque
in the ultra-luxury segment continued to expand its mod-
el range, including the launch of the new Rolls-Royce
Ghost in September 2020.
Rolls-Royce Motor Cars’ Bespoke programme allows
customers to select their own personalised configura-
tions with maximum flexibility. The marque also offers
the Dawn, Ghost, Wraith and Cullinan models in Black
Badge variants. Black Badge vehicles can be customised
to include special features as well as higher engine per-
formance.
in units
Phantom
Ghost
Wraith / Dawn
Cullinan
Rolls-Royce total
2020
360
324
873
2,199
3,756
2019
Change in %
604
662
1,326
2,508
5,100
– 40.4
– 51.1
– 34.2
– 12.3
– 26.4
in units
2020
2019
Change in %
MINI Hatch (3 and 5door)
MINI Convertible
MINI Clubman
MINI Countryman
MINI total
157,040
177,553
24,875
32,958
77,709
30,383
40,683
98,846
292,582
347,465
– 11.6
– 18.1
– 19.0
– 21.4
– 15.8
Proportion of
MINI sales volume
2020 in %
53.7
8.5
11.3
26.5
Fuel Consumption and CO2 Emissions Information.
1 See
2 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous
100.0
years. For further information on retail vehicle delivery data, please see
Actual Outcomes.
Comparison of Forecast with
BMW GroupReport 2020
146
Combined Management Report
Report on Economic Position
AUTOMOTIVE SEGMENT PERFORMANCE
Automotive segment revenues amounted to
€ 80,853 million (2019: € 91,682 million; – 11.8 %, cur-
rency-adjusted: – 10.5 %) and were therefore significantly
lower than one year earlier. Lower sales volumes due to
the coronavirus pandemic and negative currency effects
were partially offset by overall favourable product mix
effects brought about by the less pronounced drop in the
sale of high-revenue models. Improved selling prices also
helped to cushion the impact of the drop in revenues.
Segment cost of sales decreased moderately to
€ 71,456 million compared to the previous year (2019:
€ 78,062 million; – 8.5 %). The volume-related decline
in cost of sales was offset by expenses for various pro-
visions, including those recognised in connection with
the exhaust gas recirculation cooler and recalls (such as
contaminated battery cells in plug-in hybrid vehicles).
In addition, lower capitalised overhead costs due to
the reduction of inventories accounted for at Group level
as well as higher expenses for depreciation and amorti-
sation had the effect of increasing segment cost of sales
year-on-year.
Expenses recognised for workforce measures were
largely offset by lower expenses for performance-related
remuneration components.
The net amount of other operating income and ex-
penses improved by € 1,361 million, largely due to the
provision recognised in relation with the EU Commis-
sion’s ongoing antitrust proceedings in the previous
financial year.*
* Further information is provided in
note 10 to the Group Financial Statements.
The segment EBIT margin (profit before financial
result as a percentage of revenues) came in at 2.7 % (2019:
4.9 %; – 2.2 percentage points). As forecast in the quar-
terly statement to 30 September 2020, the EBIT margin
was within the target range of between 0 and 3 % and
therefore in line with the revised outlook. In the 2019
Annual Report, a segment EBIT margin within a target
range of between 2 and 4 % was forecast.
At € 560 million, the Automotive segment’s financial
result was significantly up on the previous year (2019:
negative € 32 million), mainly reflecting the improved
result from at-equity accounted investments described
in the section on Group earnings above.
Profit before tax for the year amounted to € 2,722 mil-
lion and was therefore significantly lower than one year
earlier (2019: € 4,467 million; – 39.1 %).
The Automotive segment’s RoCE for 2020 was signif-
icantly lower at 12.7 % (2019: 29.0 %; – 16.3 percentage
points). The decline was mainly attributable to the lower
EBIT. The higher volume of capital expenditure in pre-
vious years – including amounts invested to expand the
product portfolio – also contributed to this development.
As forecast for the financial year 2020, RoCE declined
significantly and was well below the long-term strategic
target valid through 2020 of at least 26 % for the auto-
motive segment.
BMW GroupReport 2020
147
The main factor influencing the decrease in the
net cash inflow from operating activities was the pan-
demic-related year-on-year deterioration in operational
pre-tax earnings. The change in working capital was posi-
tively impacted by the reduction in inventories, while the
lower level of trade payables – mainly due to an earlier
closure of plants – had an offsetting effect compared
to the prior year. The decrease in the net cash outflow
from investing activities was mainly attributable to the
changes described in the Group Cash Flow Statement.
Combined Management Report
Report on Economic Position
Free cash flow for the Automotive segment was as
follows:
FREE CASH FLOW AUTOMOTIVE SEGMENT
in € million
2020
2019
Change
Cash inflow (+) / outflow (–) from operating activities
Cash inflow (+) / outflow (–) from investing activities
Adjustment for net investment in marketable securities and investment funds
Free cash flow Automotive segment
8,178
– 3,933
– 850
3,395
9,690
– 7,165
42
2,567
– 1,512
3,232
– 892
828
In the Automotive segment, net financial assets
comprised the following:
NET FINANCIAL ASSETS AUTOMOTIVE SEGMENT
in € million
31. 12. 2020
31. 12. 2019
Change
Cash and cash equivalents
Marketable securities and investment funds
Intragroup net financing
Financial assets
Less: external financial liabilities*
Net financial assets Automotive segment
* Excluding derivative financial instruments.
9,522
3,759
7,996
21,277
– 2,815
18,462
9,077
4,470
7,784
21,331
– 3,754
17,577
445
– 711
212
– 54
939
885
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
MOTORCYCLES SEGMENT
MOTORCYCLE DELIVERIES DOWN DURING
PANDEMIC YEAR
Motorcycles segment deliveries dropped slightly to
169,272 units (2019: 175,162 units; – 3.4 %) due to the
global pandemic. Favourable market developments in
the fourth quarter, however, caused the total number of
motorcycles delivered over the twelve-month period to
exceed the revised outlook announced in the quarterly
statement to 30 September 2020.
DELIVERIES BY MARKET
The spread of the coronavirus caused international
motorcycle markets to develop unevenly in 2020. Over-
all, however, the number of motorcycles delivered by
BMW Motorrad worldwide fell only slightly by 2.8 % to
102,026 units (2019: 104,994 units). Germany, however,
managed to buck the general trend with deliveries up
by 4.7 % to 27,516 units (2019: 26,292 units). Motorcy-
cle deliveries in France also edged up, rising by 1.4 %
to 17,539 units (2019: 17,300 units). By contrast, figures
for Italy (13,918 units; 2019: 15,580 units; – 10.7 %) and
Spain (11,030 units; 2019: 12,607 units; – 12.5 %) – both
of which were particularly hard hit by the pandemic –
dropped sharply year-on-year.
148
Sales in China grew strongly, with motorcycle deliver-
ies climbing by 33.7 % to 11,788 units (2019: 8,818 units).
Brazil saw a solid increase of 6.4 % to 10,707 units (2019:
10,064 units), also bucking the market trend. By contrast,
deliveries in the USA fell moderately to 12,135 units
(2019: 13,379 units; – 9.3 %).
MARKET LAUNCHES IN 2020: MODEL RANGE
REJUVENATED
BMW GROUP DELIVERIES OF MOTORCYCLES
164.2
165.6
175.2
169.3
145.0
in 1,000 units
180
90
0
Four new models and several model revisions were
2016
2017
2018
2019
2020
launched in 2020.
In February, BMW Motorrad completed its mid-range
offering with the market launches of the F 900 R (Roadster
segment) and the F 900 XR (Adventure segment). The Ad-
venture Sport model S 1000 XR followed in March. In the
Heritage segment, the R18 – a cruiser with the largest box-
er engine ever built by BMW Motorrad – has been avail-
able since September. The model revisions of the highly
successful Enduro models R 1250 GS and R1250 GSA as
well as that of the R nine T family followed in October. In
addition, various special editions were introduced to mark
the 40th anniversary of the GS series.
BMW GROUP – KEY MOTORCYCLE MARKETS 2020
as a percentage of sales volume
Other 38.1
Brazil 6.3
China 7.0
16.3 Germany
10.4 France
8.2 Italy
7.2 USA
6.5 Spain
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
149
BMW MOTORRAD OFFERS A GLIMPSE INTO THE FUTURE
MOTORCYCLES SEGMENT PERFORMANCE
In light of the pandemic-related restrictions,
BMW Motorrad increasingly turned to virtual formats
to showcase its new models over the course of 2020.
In November 2020, products such as the Definition
CE04 – an electrically powered scooter featuring innova-
tive connectivity solutions for urban mobility – were pre-
sented online using a virtual format on the BMW Group’s
innovation platform #NEXTGen.
Numerous series models scheduled for launch in 2021
were also presented online, including the M 1000 RR –
BMW Motorrad’s first-ever M model – in September. This
was followed in October by the launch of the R18 Classic
and in November by the launch of the S 1000 R. With
the R18 Classic, BMW Motorrad is expanding its product
range in the cruiser segment with the addition of a model
that is also ideally suited for touring.
Revised models of the G 310 GS, the G 310 R and the
R 1250 RT were also presented in October and November.
Motorcycles segment revenues were slightly down
year-on-year. The main reasons for this development were
the pandemic-related drop in sales and unfavourable
currency effects, which were partially offset by positive
product mix effects.
The segment EBIT margin (profit before financial
result as a percentage of revenues) came in at 4.5 % (2019:
8.2 %; – 3.7 percentage points) and thus within the most
recently forecast target range of between 3 and 5 %.
Profit before tax for the year was significantly lower
than one year earlier.
The RoCE for the Motorcycles segment in 2020 was
15.0 %, significantly down on the previous year’s level
(2019: 29.4 %; – 14.4 percentage points), mainly due to
the lower level of EBIT.
The performance was in line with the outlook com-
municated in the quarterly statement to 30 Septem-
ber 2020, but well short of the Motorcycles segment’s
RoCE target valid through 2020 of 26 %.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
150
FINANCIAL SERVICES SEGMENT
NEW BUSINESS WITH RETAIL CUSTOMERS MODERATELY
DOWN ON PREVIOUS YEAR
FINANCIAL SERVICES BUSINESS HELD DOWN BY
CORONAVIRUS PANDEMIC
In a difficult environment dominated by the global
impact of the coronavirus pandemic, business devel-
oped significantly less favourably for the Financial
Services segment in 2020 compared to one year earlier,
a fact reflected in a 24.1 % drop in profit before tax to
€ 1,725 million (2019: € 2,272 million). As reported in
previous quarters, this development was primarily
due to the recognition of risk provisioning expenses
for credit and residual value risks, thereby reducing
reported earnings over the course of the twelve-month
period. Due to the impact of the coronavirus pandemic,
the segment’s total business volume in balance sheet
terms decreased moderately by 6.8 % to € 133,093 million
(2019: € 142,834 million). The contract portfolio under
management at 31 December 2020 comprised 5,981,928
contracts and was therefore at a similar level to one year
earlier (2019: 5,973,682 contracts; + 0.1 %).
A total of 1,845,271 new credit financing and leasing
contracts was signed with retail customers during 2020,
a moderate decrease of 7.9 % on the previous year (2019:
2,003,782 contracts).
New credit financing contracts also dropped mod-
erately by 6.2 %, while new leasing contracts saw a
more pronounced decrease of 11.1 %. Overall, leasing
accounted for 32.9 % and credit financing for 67.1 % of
new business.
By contrast, customer demand for pre-owned vehicles
picked up in a number of key sales markets including
the USA. Overall, a total of 405,713 credit financing
and leasing contracts relating to pre-owned BMW and
MINI brand vehicles were signed in 2020, a year-on-year
improvement of 1.9 % (2019: 398,144 contracts).
The total volume of new credit financing and leasing
contracts concluded with retail customers during the
twelve-month period amounted to € 57,200 million, mod-
erately lower than one year earlier (2019: € 61,353 mil-
lion; – 6.8 %).
The share of new BMW Group vehicles leased or fi-
nanced by the Financial Services segment stood at 49.8 % ¹
in 2020, 2.4 percentage points down on the previous year
(2019: 52.2 %), mainly attributable to increased compe-
tition in China.
The total portfolio of credit financing and leasing con-
tracts in place with retail customers edged up year-on-
year, rising by 1.9 % to stand at 5,591,799 contracts at the
end of the reporting period (2019: 5,486,319 contracts).
China remained the region with the highest growth rate,
this time coming in with a moderate year-on-year rise of
8.7 %. Figures for the Europe / Middle East / Africa region
(+ 2.6 %) and the EU Bank ² region (+ 2.2 %) were also up
on the previous year. By contrast, the contract portfolios
in the Americas and Asia / Pacific regions fell slightly by
1.1 % and 1.9 % respectively.
CONTRACT PORTFOLIO OF
FINANCIAL SERVICES SEGMENT
in 1,000 units
6,000
5,115
5,381
5,708
5,974
5,982
3,000
0
2016
2017
2018
2019
2020
1 The calculation only includes automobile markets in which the Financial Services segment is represented by
a consolidated entity.
2 EU Bank comprises BMW Bank GmbH with its branches in Italy, Spain and Portugal.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
151
BMW GROUP NEW VEHICLES FINANCED OR
LEASED BY FINANCIAL SERVICES SEGMENT ¹
CONTRACT PORTFOLIO RETAIL CUSTOMER FINANCING
OF FINANCIAL SERVICES SEGMENT 2020
FLEET BUSINESS DOWN SLIGHTLY ON PREVIOUS YEAR
49.9
46.7
50.1
52.2
49.8
Leasing 22.4
20.7
21.2
22.3
21.4
in % per region
Asia / Pacific 7.8
China 13.0
Financing 27.5
26.0
28.9
29.9
28.4
EU Bank 2 18.6
in %
60
30
0
35.7 Europe /
Middle East / Africa
Under the brand name Alphabet, the Financial Ser-
vices segment’s fleet management business offers leasing
and financing arrangements as well as specific services
to commercial customers.
At 31 December 2020, the segment was managing
a portfolio of 704,977 fleet contracts (2019: 717,353
contracts), down slightly by 1.7 % over the twelve-month
period.
2016
2017
2018
2019
2020
24.9 Americas
1 Values adjusted retrospectively due to the restatement of delivery figures. See
Glossary for the definition
of deliveries.
2 With effect from the beginning of the fourth quarter of 2019, the EU Bank comprises BMW Bank GmbH and
its branches in Italy, Spain and Portugal. The former subsidiary in France was transferred for organisational
purposes to the Europe / Middle East / Africa region in conjunction with strategic realignments.
DEALERSHIP FINANCING SIGNIFICANTLY LOWER
The total volume of dealership financing was sig-
nificantly lower compared to one year earlier, falling
by 23.5 % to € 16,241 million at the end of the reporting
period (2019: € 21,227 million).
BMW GroupReport 2020
152
As described above, the net cash inflow from operat-
ing activities recorded by the Financial Services segment
for the financial year 2020 resulted primarily from the
fact that lower vehicle inventories at dealerships had
the effect of reducing receivables from sales financing,
mainly in the area of dealership financing. The net cash
outflow from financing activities mainly reflected the
repayment of loans and the decrease in asset-backed
securities financing.
Return on equity (RoE) finished at 11.2 %, slightly
below the level achieved one year earlier (2019: 15.0 %;
– 3.8 percentage points). The decline was primarily attrib-
utable to the pandemic-related increase in risk provisions
for residual value risks and, to an even greater extent, for
credit risks, in both cases causing earnings to deteriorate.
The improved risk profile in the fourth quarter, main-
ly due to better remarketing outcomes and lower risk
provisions for credit losses, contributed greatly to the
RoE for the full year 2020 being above the forecast value
(“moderate decline”) communicated in the quarterly
statement to 30 September 2020.
Net cash inflows and outflows for the Financial Ser-
vices segment were as follows:
Combined Management Report
Report on Economic Position
FINANCIAL SERVICES SEGMENT PERFORMANCE
Revenues generated by the Financial Services seg-
ment rose slightly to € 30,044 million (2019: € 29,598 mil-
lion; 1.5 %; currency-adjusted: + 2.9 %) due to portfolio
growth mainly in Germany, Italy and Switzerland as well
as due to higher revenues from the sale of returned lease
vehicles.
Cost of sales relating to Financial Services business
went up by € 1,020 million (2019: € 25,938 million; + 3.9 %).
Apart from depreciation on leased vehicles and costs
associated with the sale of returned lease vehicles, the
increase was driven primarily by additional risk provi-
sions related to expected residual value and credit losses.
Segment profit before tax amounted to € 1,725 mil-
lion (2019: € 2,272 million; – 24.1 %), significantly down
on the previous year.
NET CASH FLOWS FOR
THE FINANCIAL SERVICES SEGMENT
in € million
2020
2019
Change
Cash inflow (+) / outflow (–) from operating activities
Cash inflow (+) / outflow (–) from investing activities
Cash inflow (+) / outflow (–) from financing activities
Net
2,762
424
– 2,508
678
– 5,345
129
5,300
84
8,107
295
– 7,808
594
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
CHANGE IN RISK PROFILE
In 2020, the risk profile across the Financial Services
segment’s total portfolio was shaped primarily by the
volatility arising due to the coronavirus pandemic and
the resulting additional risk provisioning measures rec-
ognised in connection with expected credit and residual
value risks, mainly provisions and allowances to cover
future credit and / or residual value losses.
The initial and continuous testing of customer cred-
itworthiness is an important aspect of the BMW Group’s
credit risk management. As explained in previous quar-
ters, for accounting purposes the Financial Services
segment has raised credit loss allowances over the course
of 2020 in order to reflect the potential longer-term
economic impact of the coronavirus pandemic on retail
and dealership business. The amounts recognised were
based on reasonable and appropriate market-specific
information and estimates available at the end of the
reporting period.
The credit loss ratio on the total credit portfolio
amounted to 0.21 % at 31 December 2020, and was there-
fore slightly lower than one year earlier (2019: 0.26 %).
More specifically, the loss ratio stood at 0.16 % (2019:
0.15 %) for leasing business and 0.31 % (2019: 0.41 %) for
credit financing business with retail customers. The over-
all improvement in the loss ratio was also attributable to
government measures (such as payment moratoriums
or restrictions in the receivables management process)
implemented in many countries around the world.
153
In the premium segment for pre-owned vehicles,
remarketing selling prices for vehicles coming out of
leases developed positively overall in 2020. Whereas
restrictions on sales and the lower supply of new ve-
hicles had a negative impact on demand for new and
pre-owned vehicles during the first lockdown, the market
saw an upward trend during the second half of the year.
Despite this moderate recovery, economic development
remains exposed to an increased level of uncertainty due
to the pandemic. This point is particularly relevant for
the development of prices for pre-owned premium seg-
ment vehicles in the short and medium term. Under the
prevailing circumstances, the BMW Group sees prices as
likely to fluctuate significantly in subsequent quarters, as
in 2020, due to a number of factors, including possible
changes in demand patterns or the renewal of temporary
restrictions that could have an impact on the remarketing
process. Accordingly, in 2020 market-specific risk provi-
sioning expenses were recognised relating to the vehicle
portfolio subject to residual value risks.
In line with customary business practice, the Finan-
cial Services segment makes provision to take account
of significant business risks on an ongoing and compre-
hensive basis. Based on current assessments, however,
the segment has recognised appropriate levels of provi-
sions / allowances to cover residual value and credit risks.
Further information on the segment’s risk profile is
provided in the section on risks and opportunities and
in
note 38 to the Group Financial Statements.
DEVELOPMENT OF CREDIT LOSS RATIO
in %
0.5
0.25
0
0.32
0.34
0.25
0.26
0.21
2016
2017
2018
2019
2020
OTHER ENTITIES SEGMENT / ELIMINATIONS
The combined profit before tax in the Other Entities
segment and eliminations saw a significant improvement
of € 483 million. This was attributable to reversal effects
from the leased products portfolios, lower eliminations
due to the decline in new leasing business and the
lower expected new leasing business resulting from the
reduced levels of inventories at dealerships.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
COMMENTS ON FINANCIAL
STATEMENTS OF BMW AG
154
Bayerische Motoren Werke Aktiengesellschaft
(BMW AG), 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 BMW AG, unless presented differently
in the following section. The Financial Statements of
BMW AG 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).
The key financial performance indicator for BMW AG
is the dividend payout ratio (unappropriated profit of
BMW AG in accordance with HGB in relation to net
profit for the year of the 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.
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 capitalisation 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.
BUSINESS ENVIRONMENT AND REVIEW OF OPERATIONS
The general and sector-specific environment
of BMW AG is essentially the same as that of the
BMW Group and is described in the Report on Economic
Position section of the Combined Management Report.
BMW AG develops, manufactures and sells automo-
biles and motorcycles as well as spare parts and accesso-
ries 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. Mainly due to the impact of the coronavi-
rus pandemic, automobile deliveries fell by 305,852 units
to 2,249,943 units in the financial year 2020. This figure
includes 598,853 units relating to series sets supplied to
the joint venture BMW Brilliance Automotive Ltd., She-
nyang, an increase of 64,215 units over the previous year.
At 31 December 2020, BMW AG employed a work-
force of 84,668 people (31 December 2019: 86,700 people,
adjusted). With effect from the financial year 2020, the
key performance indicator for the size of the workforce
comprises only core and temporary employees. The
change in presentation is in line with the change in the
internal management system, which now focuses on
these employee groups.
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
RESULTS OF OPERATIONS
BMW AG INCOME STATEMENT
in € million
Revenues
Cost of sales
Gross profit
Selling expenses
Administrative expenses
Research and development expenses
Other operating income
Other operating expenses
Result on investments
Financial result
Income taxes
Profit after income tax
Other taxes
Net profit
Transfer to revenue reserves
Unappropriated profit available for distribution
155
Revenues fell by € 9,651 million year-on-year, primar-
ily reflecting the lower volume of deliveries to customers
caused by the coronavirus pandemic. In geographical
terms, the scale of decline was most pronounced in
the Rest of Europe and USA regions. Revenues totalled
€ 75,040 million (2019: € 84,691 million), of which Group
internal revenues accounted for € 49,348 million (2019:
€ 57,412 million) or 65.8 % (2019: 67.8 %).
Cost of sales went down by 9.2 % to € 63,726 million,
mostly due to the lower number of deliveries. Expenses
incurred in connection with the exhaust gas recirculation
cooler, however, along with a number of other items,
had a negative impact in the financial year under report.
Gross profit fell by € 3,199 million to € 11,314 million.
Overall, selling and general administrative expenses
were at a similar level to the previous year.
Research and development expenses related mainly
to new vehicle models (including the iX3 * as well as
the new 4 Series Coupé and Convertible), expenses for
the development of reference architectures, drivetrain
systems, digital products and automated driving as well
as increased expenses in connection with electrification.
R&D expenses decreased by 2.4 % year-on-year, in line
with activities relating to new model start-ups.
* See
Fuel Consumption and CO2 Emissions Information.
2020
2019
75,040
– 63,726
11,314
– 4,030
– 2,747
– 5,394
1,237
– 1,250
3,084
– 280
– 214
1,720
– 18
1,702
– 449
1,253
84,691
– 70,178
14,513
– 3,979
– 2,776
– 5,528
1,295
– 2,526
1,858
39
– 767
2,129
– 22
2,107
– 461
1,646
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
Other operating income decreased to € 1,237 million
(2019: € 1,295 million), whereby the main reasons for the
change were lower income from the reversal of other pro-
visions, offset by higher gains on financial transactions.
Other operating expenses decreased to € 1,250 mil-
lion (2019: € 2,526 million), mainly due to the prior-year
recognition of a provision relating to EU Commission
antitrust proceedings.
Income from profit transfer agreements with Group
companies, reported in the line item Result on invest-
ments, increased year-on-year. By contrast, financial
result deteriorated by € 319 million, mainly due to lower
income from designated plan assets offset against pen-
sion obligations.
The expense for income taxes related primarily to
withholding taxes incurred during the financial year
2020.
After deducting the expense for taxes, the Compa-
ny reports a net profit of € 1,702 million, compared to
€ 2,107 million in the previous year.
Subject to the shareholders’ approval of the appro-
priation of results at the Annual General Meeting, the
unappropriated profit available for distribution amounts
to € 1,253 million (2019: € 1,646 million). As a percentage
of Group net profit, the dividend corresponds to a payout
ratio of 32.5 % (2019: 32.8 %).
FINANCIAL AND NET ASSETS POSITION
BMW AG BALANCE SHEET AT 31 DECEMBER
in € million
ASSETS
Intangible assets
Property, plant and equipment
Investments
Tangible, intangible and investment assets
Inventories
Trade receivables
Receivables from subsidiaries
Other receivables and other assets
Marketable securities
Cash and cash equivalents
Current assets
Prepaid expenses
Surplus of pension and similar plan assets over liabilities
Total assets
156
2020
2019
488
12,520
3,826
16,834
5,748
778
18,939
3,849
3,336
6,822
39,472
73
1,261
57,640
405
12,473
3,762
16,640
5,994
964
16,698
3,513
4,109
6,757
38,035
58
1,086
55,819
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
157
in € million
EQUITY AND LIABILITIES
Subscribed capital
Capital reserves
Revenue reserves
Unappropriated profit available for distribution
Equity
Registered profit-sharing certificates
Pension provisions
Other provisions
Provisions
Liabilities to banks
Trade payables
Liabilities to subsidiaries
Other liabilities
Liabilities
Deferred income
Total equity and liabilities
Capital expenditure on intangible assets and proper-
ty, plant and equipment in the year under report totalled
€ 2,790 million (2019: € 3,233 million), down by 13.7 %
compared to the previous year. Depreciation and amorti-
sation amounted to € 2,646 million (2019: € 2,573 million).
Investments increased to € 3,826 million (2019:
€ 3,762 million) mainly due to a contribution of € 88 mil-
lion made to the capital reserves of BMW Bank GmbH,
Munich.
Inventories decreased to € 5,748 million (2019:
€ 5,994 million), mainly due to the lower level of finished
goods held.
Receivables from subsidiaries rose to € 18,939 million
(2019: € 16,698 million), mainly reflecting the higher level
of intragroup trade receivables.
The increase in other receivables and other assets to
€ 3,849 million (2019: € 3,513 million) was mainly attrib-
utable to higher receivables from companies with which
an investment relationship exists. The decrease in tax
receivables had an offsetting effect.
Equity rose by € 86 million to € 15,165 million due
to the transfer to other revenue reserves and the issue
of shares of preferred stock in conjunction with the
BMW AG’s Employee Share Programme. These increas-
es were offset by the lower balance of unappropriated
profit available for distribution compared to the paid-out
dividend for the previous financial year. The equity ratio
changed from 27.0 % to 26.3 %.
2020
2019
660
2,239
11,013
1,253
15,165
27
229
10,093
10,322
101
4,785
23,404
221
28,511
3,615
57,640
659
2,210
10,564
1,646
15,079
28
205
8,784
8,989
511
5,751
21,777
187
28,226
3,497
55,819
BMW GroupReport 2020
Combined Management Report
Report on Economic Position
In order to secure pension obligations, cash funds
totalling € 531 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 obliga-
tions. The resulting surplus of assets over liabilities is
reported in the BMW AG balance sheet on the line item
Surplus of pension and similar plan assets over liabilities.
Provisions for pensions increased from € 205 million
to € 229 million, after offsetting of pension plan assets
against pension obligations.
Other provisions increased year-on-year, mainly due
to additions to provisions for statutory and non-statutory
warranty and product guarantees obligations in connec-
tion with the exhaust gas recirculation cooler on the one
hand and for selling activities on the other.
Liabilities to banks decreased by € 410 million as a
result of the repayment of project-related loans.
Liabilities to subsidiaries increased to € 23,404 mil-
lion (2019: € 21,777 million), mainly in connection with
intragroup refinancing.
Deferred income increased by € 118 million to
€ 3,615 million and included mainly amounts for services
still to be performed relating to service and maintenance
contracts.
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 BMW AG. An im-
portant instrument in this context is the cash pool based
at BMW AG. The liquidity position reported by BMW AG
158
therefore reflects the global activities of BMW AG and
other Group companies.
OUTLOOK
Cash and cash equivalents increased by € 65 million
to € 6,822 million, mainly due to surpluses from operating
activities and cash inflows from marketable securities
held as current assets. Cash outflows from financing ac-
tivities and investments in long-lived assets particularly
had an offsetting effect.
RISKS AND OPPORTUNITIES
BMW AG’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,
BMW AG participates in the risks entered into by Group
companies in proportion to the respective shareholding
percentage. At the same time, the result on investments
has a significant impact on the earnings of BMW AG.
BMW AG is integrated in the Group-wide risk
management system and internal control system of the
BMW Group. Further information is provided in the
section Internal Control System Relevant for Accounting
and Financial Reporting Processes within the Combined
Management Report.
For the financial year 2021, BMW AG expects a divi-
dend payout ratio (unappropriated profit of BMW AG in
accordance with HGB in relation to net profit for the year
of the BMW Group in accordance with IFRS) within a
range of between 30 % and 40 % (2020: 32.5 %).
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 indicators
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. The outlook for 2021 takes account of the expect-
ed impact of the coronavirus pandemic.
PricewaterhouseCoopers GmbH Wirtschaftsprü-
fungsgesellschaft, Frankfurt am Main, Munich branch,
has issued an unqualified audit opinion on the financial
statements of BMW AG, of which the balance sheet and
the income statement are presented here. The BMW AG
financial statements for the financial year 2020 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 BMW Group’s website
at
www.bmwgroup.com/ir.
BMW GroupReport 2020
Combined Management Report
Report on Outlook, Risks and Opportunities
REPORT ON
OUTLOOK, RISKS
AND OPPORTUNITIES
OUTLOOK
The BMW Group’s report on outlook, risks and
opportunities presents the expected development in
2021, including the main risks and opportunities from
the perspective of the Group’s management. 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.
The continuous forecasting process within the
BMW Group ensures that it is always ready to take ad-
vantage of opportunities as they arise, but also to react
appropriately to unexpected risks. The principal risks
and opportunities are described in detail in the Report
on 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.
From the 2020 reporting year onwards, the outlook
report will include the following key performance in-
dicators in addition to existing ones: the proportion of
women in management positions in the BMW Group, the
proportion of electrified vehicles to total deliveries and
carbon emissions per vehicle produced.
Strategy, Goals
and Management System. This is in line with the integrated
approach used by BMW Group to manage its business
systematically on the basis of financial and sustainability
targets.
ECONOMIC OUTLOOK
According to the latest assessment of the Internation-
al Monetary Fund (IMF), the global economy is projected
to grow by 5.5 % in 2021. Many countries are expected
to continue implementing a comprehensive range of
monetary and fiscal policy measures in 2021, in a bid to
boost economies battered by the coronavirus pandemic.
Moreover, post-lockdown catch-up effects could generate
additional momentum. Ultimately, however, the actual
growth rate will depend heavily on the success of the vac-
cination campaigns now underway. Potential new waves
of the virus and its mutations pose an additional risk.
Further information on political and global economic
Report on Risks and Opportunities.
risks is also provided in the
The eurozone economy is projected to grow by
around 4.3 % in 2021. The rate for Germany, however,
is likely to be somewhat lower (+ 3.6 %). The economic
outlook for the other eurozone member states is very
positive in some cases, with countries such as France
(+ 5.6 %), Italy (+ 4.6 %) and Spain (+ 5.7 %) expected to
post strong GDP growth over the forecast period.
159
The performance of the UK economy in 2021 will not
only depend on the impact of the coronavirus pandemic,
but also on that of the Trade and Cooperation Agreement
reached with the EU. The latest projection for the UK
economy is a growth rate of 4.6 %.
The US economy is also projected to grow consider-
ably by 4.8 % in 2021. The US Federal Reserve is likely
to continue pursuing its low-interest-rate policies. At
the same time, the stimulus packages announced by US
President Biden are expected to provide a boost to the
economy.
The Japanese economy, which has also been severely
affected by the pandemic, is projected to grow by 2.8 %
in 2021.
China was the only economy to expand slightly in
2020. With a projected rate of 8.4 %, the Chinese econo-
my is set to continue its growth course in 2021.
CURRENCY MARKETS
Currencies of particular importance for the interna-
tional operations of the BMW Group are the US dollar,
the British pound, the Chinese renminbi and the Japa-
nese yen. All of these major currencies are expected to
be subject to a high degree of fluctuation in 2021.
BMW GroupReport 2020
Combined Management Report
Report on Outlook, Risks and Opportunities
It seems reasonable to assume that the US Federal
Reserve will continue its expansionary monetary policies
in 2021. The USA’s central bank may also be willing to
allow inflation to run at a rate higher than 2 % in future,
even over an extended period of time, thereby possibly
leading to further depreciation of the US dollar against
the euro.
Looking at the Chinese renminbi, the close economic
ties between the USA and China suggest that the cur-
rencies of these two countries will develop more or less
synchronously. The renminbi is expected to depreciate
slightly against the euro in 2021.
In 2021, the value of the British pound will be large-
ly determined by the consequences of the agreement
reached between the UK government and the EU. In view
of the prevailing uncertainties, the exchange rate of the
relatively weak pound is expected to move sideways over
the course of 2021.
The central bank in Japan is unlikely to change its
highly expansionary monetary policy in 2021. For this
reason, the euro / yen exchange rate is also expected to
remain more or less stable.
The currencies of numerous emerging markets could
come under pressure against the US dollar and the euro
due to the ongoing coronavirus pandemic. This applies
in particular to countries such as Russia, Brazil and India.
160
Change
in registrations %
+ 4.2
– 0.6
+ 9.1
+ 9.0
+ 4.3
+ 3.2
+ 9.8
+ 7.6
+ 6.0
+ 7.7
INTERNATIONAL AUTOMOBILE MARKETS
INTERNATIONAL AUTOMOBILE MARKETS
Europe
thereof Germany
thereof France
thereof Italy
thereof Spain
thereof UK
USA
China
Japan
Total
The pandemic will continue to have a perceptible
impact on international automobile markets in 2021.
Although new registrations are expected to rise to around
78 million units (+ 7.7 %), overall sales are likely to remain
significantly lower than before the coronavirus crisis.
Europe’s automobile markets are forecast to see sig-
nificant growth (12.4 million units; + 4.2 %), albeit still
below pre-crisis levels. The latest forecast for Germany
indicates that new registrations may even decline slight-
ly (2.9 million units; – 0.6 %). By contrast, considerable
growth is predicted for France (1.8 million units; + 9.1 %),
Italy (1.5 million units; + 9.0 %) and Spain (approximately
0.9 million units; + 4.3 %). Likewise, new registrations
in the UK are forecast to rise in 2021 (1.7 million units;
+ 3.2 %).
The negative trend in the USA is also expected to
come to an end, at least for the time being. Based on
current forecasts, the US market is set to grow in 2021
and reach a total of 16.0 million units (+ 9.8 %).
According to current estimates, passenger car regis-
trations in China are likely to rise sharply year-on-year
(22.0 million units; + 7.6 %).
The Japanese market is also expected to show a sig-
nificant upward trend in 2021 (around 4.7 million units;
+ 6.0 %).
INTERNATIONAL MOTORCYCLE MARKETS
The BMW Group expects worldwide motorcycle mar-
kets in the 250 cc plus class to grow slightly overall in
2021. After contracting in 2020, demand in Spain is likely
to see a solid recovery. Market volumes are expected to
be slightly higher in Italy and slightly lower in Germany
and France. A slight contraction is also forecast for the
US market. Brazil is expected to bounce back with a solid
recovery. The market in China is set to grow sharply again
in 2021. As in the past year, motorcycle market demand
will continue to be influenced by the course of the pan-
demic and its impact on the global economy in 2021.
BMW GroupReport 2020
Combined Management Report
Report on Outlook, Risks and Opportunities
161
INTERNATIONAL INTEREST RATE ENVIRONMENT
Trade relations between the USA and China should
improve under the new US administration, whilst still
remaining strained. Low inflation rates give central
banks sufficient headroom to continue their expansion-
ary monetary policies. However, the rise in inflation
rates since the beginning of the year, especially in the
eurozone, indicates that consumer prices are also likely
to increase again in the course of 2021.
Within the eurozone, the course of the pandemic and
delays in the vaccine rollout suggest that the pathway
back to normality could take some time yet. Any further
lockdowns during the first half of the year could damp-
en economic growth and hold down inflation figures,
potentially leaving the ECB with little flexibility to raise
interest rates in 2021.
The UK’s economy is not expected to improve signif-
icantly during the first quarter. Following the initial suc-
cess of the vaccination programme, the UK government
is now looking to ease the lockdown on a cautious step-
by-step basis. It remains to be seen, however, to what
extent the virus mutation circulating there could cause
the situation to deteriorate again. In light of the fiscal
and monetary policy measures taken by the government
and the Bank of England, the economy is not expected to
see an upturn before the summer. It is therefore safe to
assume that the Bank of England will keep interest rates
stable for the time being.
In the USA, the House of Representatives has ap-
proved President Biden’s 1.9 trillion dollar stimulus pack-
age aimed at countering the impact of the pandemic on
the economy. Despite inflation being expected to rise in
2021, the Federal Reserve seems determined to continue
its current programme of quantitative easing and leave
the benchmark interest rate unchanged.
The Chinese central bank is expected to maintain an
unchanged course. Despite strained trade relations with
the USA, economic growth in China is likely to gather
additional pace in 2021.
CONSEQUENCES FOR THE BMW GROUP
Future developments on international automobile
markets also have a direct impact on the BMW Group.
Challenges in the competitive environment as well as
the course of the coronavirus pandemic are likely to
have a significant impact on sales volumes. Due to its
global business model, the BMW Group is well placed
to capitalise on opportunities that present themselves,
even at short notice. Coordination between the Group’s
sales and production networks also enables it to even
out the impact of unforeseeable developments in various
regions. Moreover, investments in key future-oriented
markets form a sound basis for further growth, while
simultaneously strengthening the global presence of the
BMW Group.
An unpredictable political environment may cause
actual economic growth in some regions to deviate from
expected trends and developments. Areas affected in this
context include trade and customs policies, security and
potential additional international trade conflicts.
Furthermore, risks continue to exist for upstream
processes, including possible bottlenecks due to sup-
ply shortages arising in regions that could become the
focus of a pandemic. Due to the high demand on inter-
national semiconductor markets, there is currently an
additional risk of bottlenecks in the supply of electronic
components to production.
Risks and opportunities relating
to purchasing
The BMW Group continues to observe these develop-
ments and is ready to implement all necessary measures
quickly and effectively.
ASSUMPTIONS USED IN THE OUTLOOK
The report on outlook, risks and opportunities con-
tains forward-looking statements. These are based on the
BMW Group’s expectations and assessments and may be
influenced by unforeseeable events. As a result, actual
outcomes can deviate either positively or negatively from
the expectations described below, among other things
due to changes in the political and economic environ-
ment as well as the further course of the coronavirus
pandemic.
Report on Risks and Opportunities.
BMW GroupReport 2020
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Report on Outlook, Risks and Opportunities
162
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
which could have an effect on the overall performance of
the Group. The expectations contained in the outlook are
based on the BMW Group’s forecast for 2021 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
takes account of these assumptions.
The coronavirus pandemic will continue to have an
impact on business performance in 2021 and hence on
the results of operations, financial position and net assets
of BMW AG and the BMW Group. Due to the continuing
uncertainty surrounding the course and potential conse-
quences of the pandemic going forward, it is difficult to
make an accurate forecast of the BMW Group’s business
performance in 2021. For the forecast year 2021, the
BMW Group is working on the basis that the original
widespread prevalence of the infection that was the
dominant feature of 2020 will be replaced by recurrent,
regional hotspots. The outlook has been therefore been
drawn up on the assumption that, outside of hot spots,
the overall incidence of infection can be controlled
worldwide. The successive launch of vaccination cam-
paigns and improved vaccine supply should also have
an increasingly positive effect in 2021.
Uncertainties remain, however, as mutated strains
of the virus emerge and spread, raising questions about
the efficacy of currently available vaccines in combat-
ting mutations. It is not possible to assess the extent to
which such risks could impact the global economy, the
financial markets and therefore the BMW Group and,
for this reason, they have not been taken into account
in the outlook.
With demand on international semiconductor mar-
kets currently at a high level, the supply situation for
electronic chips has become increasingly tense, which
could result in supply bottlenecks affecting the availabili-
ty of semiconductor components required for production.
The BMW Group is monitoring the situation closely.
Should the situation deteriorate further and significant
supply bottlenecks occur, it cannot be ruled out that this
will have an adverse impact on the outlook.
The BMW Group expects that the tensions between
the USA and China will persist after the change in the
US administration and remain a source of uncertainty.
However, based on up-to-date assessments, customs
tariffs are not expected to rise.
Current estimates and assumptions for the finan-
cial year 2021, to the extent already known to the
BMW Group, have been taken into account and described
in the outlook report. Beyond these assessments, no fur-
ther significant opportunities and risks are known or can
be estimated at the present time. However, it cannot be
ruled out that the assumptions underlying estimates may
need to be changed over the course of the year.
OUTLOOK FOR THE BMW GROUP
OVERALL ASSESSMENT BY GROUP MANAGEMENT
Despite the volatile situation brought about by the
global spread of coronavirus, the BMW Group expects
business to develop positively and the risk situation to
remain stable in the financial year 2021. New automobile
and motorcycle models as well as individual mobili-
ty-related services are expected to generate momentum.
Group profit before tax is therefore expected to rise
significantly during the outlook period.
The Automotive segment is expected to record a solid
year-on-year increase in the number of BMW, MINI and
Rolls-Royce brand vehicles delivered to customers. At the
same time, the BMW Group is targeting a further signif-
icant reduction in carbon emissions in the new vehicle
fleet ¹, calculated using the revised base ². In addition to
improvements achieved through developments in highly
efficient combustion engines, the expected reduction also
reflects the significant increase in the forecast proportion
of electrified vehicles sold. According to the planning,
carbon emissions per vehicle produced are likely to fall
moderately. The Automotive segment’s EBIT margin is set
to recover in 2021, most likely finishing within a range of
6 to 8 % and thus causing the segment RoCE to improve
significantly.
1 EU including Norway and Iceland; since 2018 figure based on WLTP (Worldwide Harmonised Light Vehicles
Test Procedure) and converted back to the New European Driving Cycle (NEDC).
2 Efficiency indicator calculated on the basis of Scope 1 and Scope 2 emissions (i. e. a market-based method
according to GHG protocol Scope 2 guidance that excludes climate-changing gases other than carbon dioxide)
of vehicle production excluding motorcycles, adjusted for CHP losses and divided by the total number of
vehicles produced, including the joint venture BMW Brilliance Automotive Ltd., Shenyang, but excluding
vehicles produced by the contract manufacturers Magna Steyr and Nedcar.
BMW GroupReport 2020
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Report on Outlook, Risks and Opportunities
163
The RoE in the Financial Services segment is expect-
ed to finish within a range of 12 to 15 %. The switch to
a forecast corridor for RoE allows for a narrower and
therefore more precise outlook.
BMW GROUP KEY PERFORMANCE INDICATORS
The Motorcycles segment is expected to record a solid
increase in deliveries to customers. The EBIT margin is
predicted to lie within the target range of 8 to 10 %, en-
abling the segment to record a significantly higher level
of RoCE than one year earlier.
GROUP
Profit before tax
Workforce at year-end
Share of women in management positions
in the BMW Group
The proportion of women in management positions
in the BMW Group is expected to increase slightly.
AUTOMOTIVE SEGMENT
Deliveries to customers 2
The targets described above are to be met with a
slightly lower number of employees.
Ongoing uncertainty, particularly regarding the fur-
ther course of the coronavirus pandemic, macroeconomic
and political developments as well as international trade
and customs policies, could cause economic conditions in
many regions to differ quite considerably from expected
trends and developments. All these factors could have
significant effects on the overall business performance of
the BMW Group. Furthermore, the Group’s actual busi-
ness performance may also differ from current expecta-
tions as a result of the risks and opportunities discussed
below in the Report on Risks and Opportunities.
Share of electrified vehicles in deliveries
CO2-Emissions EU New Vehicle Fleet 3
CO2 emissions per vehicle produced 4
EBIT margin
Return on capital employed 5
MOTORCYCLES SEGMENT
Deliveries to customers
EBIT margin
Return on capital employed 5
FINANCIAL SERVICES SEGMENT
Return on equity
2020
reported
2020
adjusted
2021
Outlook1
€ million
%
units
%
g / km
tons
%
%
5,222
120,726
17.8
2,324,809
8.3
996
0.23
2.7
12.7
units
169,272
%
%
%
4.5
15.0
11.2
–
–
–
–
–
Significant increase
Slight decrease
Slight increase
Solid increase
Significant increase
1357
Significant decrease
0.31
8
Moderate decrease
–
–
–
–
–
–
between 6 and 8
Significant increase
Solid increase
between 8 and 10
Significant increase
between 12 and 15
Glossary for the definition of terminology / ranges used in forecasting.
1 Based on adjusted outlook; see
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2020: 602,247 units).
3 EU including Norway and Iceland; since 2018 value converted WLTP (Worldwide Harmonised Light Vehicles Test Procedure) basis.
4 Efficiency indicator calculated from Scope 1 and Scope 2 CO2 emissions (market-based method according to GHG Protocol Scope 2 Guidance. Other climate-impacting gases than CO2 not included) from vehicle production, without
motorcycles, minus CHP losses divided by the total number of vehicles produced, incl. BMW Brilliance Automotive Ltd. joint venture, Shenyang, not including the vehicles from the Magna Steyr and Nedcar contract production plants.
5 Unlike the other key performance indicators, the RoCE forecast for the Automotive and Motorcycles segments is based on the change in percentage points.
6 Value (internal calculation) takes account of flexibilities as defined in regulatory requirements: phase-in with 5 g / km, supercredits BEV / PHEV with 7.5 g / km and eco-innovations with 2.4 g / km.
7 The CO2 fleet emissions figure of 99 g / km for the year 2020, as measured internally, is based on NEDC and takes due account of permitted offsetting factors (phase-in, super-credits and eco-innovations). The CO2 fleet emissions
forecast for 2021 is based on WLTP in accordance with legal requirements and includes fewer offsetting factors due to the fact that phase-in is no longer permitted for 2021 and the BMW Group fully utilised the maximum amount
of super-credits in 2020. For better comparability of the CO2 fleet emissions forecast for 2021 and the fleet value for 2020, the 2020 figure has been converted internally from an NEDC basis (including offsetting factors) to a WLTP
basis (excluding offsetting factors). The figure derived for 2020 serves only to enable reconciliation with the 2021 figure: it is not official and does not correspond to legislation that was in place in 2020.
8 From 2021, CO2 emissions according to Scope 1 and 2 include not only production emissions but also emissions at locations not allocated to production, e. g. research centres, distribution centres, office buildings.
BMW GroupReport 2020
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Report on Outlook, Risks and Opportunities
164
RISKS AND OPPORTUNITIES
OVERALL ASSESSMENT OF THE RISK
AND OPPORTUNITIES SITUATION
ORGANISATION OF RISK MANAGEMENT
As a globally leading provider of premium automo-
biles, motorcycles, mobility services and financial
services, the BMW Group is exposed to an array of un-
certainties and changes. To ensure growth, profitability,
efficiency and continued sustainability going forward, the
BMW Group needs to take well calculated risks and make
full use of any opportunities that present themselves.
The management of opportunities and risks is essen-
tial in order to respond in an appropriate manner to any
changes that occur in political, economic, technical or le-
gal conditions. The BMW Group has put a comprehensive
risk management system in place to effectively with risks
as they arise. The aim of the risk management system
is to identify, assess and actively manage any risks that
could threaten the attainment of the Group’s corporate
targets. As part of that process, individual and cumulative
risks capable of posing a threat to the profitability of the
business are monitored and managed.
All opportunities and risks expected to materialise
have already been addressed in the Outlook Report. The
following sections focus on potential future developments
or events that could result in a positive (opportunity)
or a negative deviation (risk) from the outlook for the
BMW Group.
The assessment of the overall risk situation is based
on a consolidated view of all significant individual risks.
The overall risk situation for the BMW Group has wors-
ened moderately compared to one year earlier, reflecting –
in the worst-case scenario – a significant deterioration
in the global economic situation due to the coronavirus
pandemic. The BMW Group has already adjusted its sales
and production planning to take account of expected
macroeconomic developments and incorporated their
impact in the outlook. Should the effect of the pandemic
prove less severe in 2021 and if the economy recovers
more quickly than expected, opportunities for both rev-
enues and earnings could arise.
Management does not see any threat to the
BMW Group’s status as a going concern. Similar to one
year earlier, the current set of risks to the BMW Group
are considered manageable. If these risks – or opportu-
nities – were to materialise, they could have an impact
on underlying key performance indicators, thus causing
deviations from the outlook. The BMW Group’s finan-
cial resources are stable, with liquidity requirements
currently covered by existing liquidity and available
financing instruments.
In addition to the risks described below, unforeseen
events could have a negative impact on business opera-
tions and hence on the BMW Group’s results of opera-
tions, financial position and net assets as well as on its
reputation.
Risk management is organised as a decentralised,
Group-wide network and steered by a centralised risk
management function. Every BMW Group division is rep-
resented by Network Representatives. This formal struc-
ture reinforces the network’s visibility and underlines the
importance of risk management within the BMW Group.
The responsibilities and duties of the centralised risk
management function and the Network Representatives
are clearly documented and understood. Significant risks
reported from within the network are firstly presented
for review to the Risk Management Steering Committee,
which is chaired by Group Controlling. After review,
any significant risks identified are reported to both the
Board of Management and the Supervisory Board’s Audit
Committee.
Other functions such as
Compliance and Human Rights and
the
Internal Control System serve as key interfaces to the risk
management system. In its capacity as an independent
control body, Corporate Audit reviews the risk manage-
ment system established by the Board of Management
on an annual basis.
BMW GroupReport 2020
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Report on Outlook, Risks and Opportunities
165
RISK MANAGEMENT IN THE BMW GROUP
RISK MEASUREMENT
Group-wide
risk management
Identification
Analysis and
Measurement
Effectiveness
Practicability
Compliance
Committee
Reporting /
Monitoring
Completeness
Controlling
Risk Manage-
ment Steering
Committee
Supervisory
Board
Board of
Management
Measures
Group
Audit
Internal Control System
The BMW Group utilises standardised methods to
assess risks. All significant risks are measured using
value-at-risk models and assessed on the basis of uni-
form loss distribution metrics, thereby enabling better
comparability of risks for both internal and external
reporting purposes. The overall effect of risks on the
results of operations, financial and net assets position
is referred to in the following sections uniformly as
“earnings impact”.
Risks are classified both according to their potential
impact on earnings (worst-case scenario) and according
to the risk amount (average earnings impact, taking into
account the probability of occurrence). The impact of
risks is measured and reported net of any mitigation
measures that are already taking effect (net basis). Risks
are measured over a two-year assessment period.
According to Group-wide guidelines, every employee
and manager has a duty to report risks via the relevant
reporting channels. The key elements of an effective risk
culture are embedded in the BMW Group’s core values,
in its risk management guidelines and in the risk strategy.
New information and new requirements are continuous-
ly fed into the BMW Group’s risk management system,
thereby ensuring its ongoing development. Training
programmes and informational events are regularly con-
ducted across the BMW Group, particularly within the
risk management network. These measures are essential
ways of preparing those involved in the process to comply
with any new or additional requirements.
The risk management process applies across the
entire Group and comprises the early identification,
analysis and assessment of risks, the coordinated use of
appropriate management tools and the monitoring and
evaluation of the measures taken.
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The potential earnings impact in the worst-case sce-
MONITORING RISK-BEARING CAPACITY
nario is classified as follows:
Class
Low
Medium
High
Potential earnings impact
in a worst-case scenario
> € 0 – 500 million
> € 500 – 2,000 million
> € 2,000 million
The following criteria apply for the purpose of clas-
sifying the risk amount:
Class
Low
Medium
High
Risk amount
> € 0 – 50 million
> € 50 – 400 million
> € 400 million
The earnings impact of risks and opportunities is
presented separately without offsetting. If no specific
reference is made, opportunities and risks relate to
the Automotive segment. The scope of entities covered
in the report on risks and opportunities corresponds
to the scope of consolidated entities included in the
BMW Group Financial Statements.
Group-wide effects and trends can be identified by
aggregating all significant risks at Group level using
value-at-risk models. For this purpose, the potential
earnings impact of the risks (confidence level: 99 %) is
aggregated, taking correlation effects into account. In or-
der to assess the risk-bearing capacity of the BMW Group,
the aggregated amount of risks is compared with the risk
cover amount (equity recognised for accounting purpos-
es). A limit system for various risks helps monitor the
risk-bearing capacity.
MANAGING NON-FINANCIAL RISKS AS REPORTED
IN THE NFS
Alongside comprehensive risk management, sus-
tainability constitutes a core strategic principle of the
BMW Group. Risks resulting from sustainability issues
are generally identified via the Group-wide risk man-
agement network.
When analysing sustainability-related opportunities
and risks, the physical risks associated with climate
change (e. g. disruption of supply chains due to natural
hazards) and transition risks (such as meeting emissions
requirements) are also assessed.
In accordance with § 289 c of the German Commer-
cial Code (HGB) risks that could have an impact on the
non-financial aspects referred to in the Act are reviewed
as part of the reporting process. Significant risks in this
context are defined as those stemming from business
activities, business relationships and products and / or
services provided by the BMW Group that are highly
likely to have a seriously adverse impact. No significant
non-financial risks were identified during the year under
report.
OPPORTUNITIES MANAGEMENT
A dynamic market environment also gives rise to op-
portunities. Identifying these opportunities is an integral
part of the BMW Group’s strategic planning process. The
Group’s range of products and services is continually
reviewed on the basis of these analyses, resulting, for
example, in new product projects being presented to
the Board of Management for consideration. In order to
compete successfully in the long term and at the same
time effectively help play an active role in achieving the
goal of climate neutrality – as called for by politicians
and desired by society in general – the Group’s vehicle
platforms are designed to operate flexibly with various
types of drivetrain, enabling it to respond more swiftly
to changing customer needs.
The continuous monitoring of key business processes
and strict cost controls are also essential for ensuring
high levels of profitability and return on capital employed.
Once identified, opportunities are acted upon in
the relevant operational areas on a decentralised basis.
The importance of opportunities for the BMW Group is
classified on a qualitative basis in the categories “signif-
icant” and “insignificant”. Probable measures aimed at
increasing profitability are already incorporated in the
outlook.
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RISKS AND OPPORTUNITIES
The following table provides an overview of signif-
icant risks and opportunities and indicates their level
of importance for the BMW Group. Overall, no risks
capable of threatening the continued existence of the
RISKS AND OPPORTUNITIES
Macroeconomic risks and opportunities
Strategic and sector risks and opportunities
Changes in legislation and regulatory requirements
Market developments
Risks and opportunities relating to operations
Production and technology
Purchasing
Sales network
Information, data protection and IT
Financial risks and opportunities
Foreign currencies
Raw materials
Liquidity
Other financial risks
Pension obligations
Legal risks
167
BMW Group were identified either at the balance sheet
date or at the date on which the Group Financial State-
ments were drawn up. Due to the particular features of
the business model applied for the Financial Services
segment, risks and opportunities relating to it are pre-
sented separately on
Risk Management System in the Financial
Services Segment
Risks
Opportunities
Classification of
risk amount
Change compared
to prior year
Classification
Change compared to
prior year
High
High
High
High
High
Low
High
High
Medium
Medium
Medium
High
Medium
Stable
Significant
Increased
Stable
Stable
Insignificant
Insignificant
Stable
Insignificant
Increased
Insignificant
Stable
Stable
Insignificant
Insignificant
Increased
Stable
Increased
–
Stable
Stable
Significant
Significant
–
Significant
Significant
–
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
–
–
Stable
–
MACROECONOMIC RISKS AND OPPORTUNITIES
Economic conditions have an impact on business
performance and hence the level of earnings generated
by the BMW Group. Unforeseen disruptions in global
economic relations can have highly unpredictable effects.
Macroeconomic risks due to sales volume fluctuations
could have a high earnings impact over the two-year
assessment period. The risk amounts attached to macro-
economic risks are classified as high.
Currently, the greatest risk for the global economy
is the further spread and the consequences of the coro-
navirus pandemic. Considerable uncertainty remains
regarding the dynamics of the coronavirus pandemic
going forward, despite the current decline in infection
figures. The situation is highly dependent on the pro-
gress and success of the vaccination campaigns currently
underway. It is not currently possible to predict with any
degree of certainty the point in time from which a high
vaccination rate could significantly mitigate the course of
the pandemic. As a result, restrictions to public life and
regional lockdowns are likely to be a continued source
of uncertainty for consumers and weigh heavily on the
sales situation across all markets. The BMW Group is
monitoring the situation on a continuous basis and tak-
ing appropriate measures as required.
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However, risks that existed prior to the outbreak of the
pandemic still remain, despite being partially displaced
in the public perception. The trade conflict between the
USA and China is likely to be an enduring topic, despite
the inauguration of the new US president. However, the
focus could well shift from pure tariff increases to import
and export restrictions on certain technologies. The po-
tential introduction of further trade restrictions on both
sides could have a significantly adverse impact on the
BMW Group’s business operations due to less favourable
conditions for importing vehicles.
In the wake of ongoing climate change, natural
disasters could occur more frequently and impact the
BMW Group in a variety of ways. For instance, economic
activity in the affected regions could be negatively influ-
enced. For consumers, this would mean a loss of income
and the threat of unemployment and have a negative
effect on sales. In the context of its “Adaptation to Climate
Change” project, the BMW Group is preparing for numer-
ous possible scenarios and has taken the step of systemat-
ically integrating the reporting of opportunities and risks
associated with climate change within this report.
Other risks to the economy include political instability
in Belarus, the conflict between Armenia and Azerbaijan,
political unrest in the USA, the impact of the change in
Hong Kong’s status, and uncertainty regarding the sus-
tainability of debt levels in some European countries.
and its economic partners could result in significantly
stronger sales volume growth, reduced competitive
pressures and improved pricing. Against this backdrop,
macroeconomic opportunities capable of generating a
sustainably positive impact on earnings are currently
classified by the BMW Group as significant.
STRATEGIC AND SECTOR-SPECIFIC RISKS AND OPPOR-
TUNITIES; CHANGES IN LEGISLATION AND REGULATORY
REQUIREMENTS
The short-term introduction of more stringent legis-
lation and regulations, particularly with regard to emis-
sions, safety and consumer protection as well as regional,
vehicle-related purchase and usage taxes, represents a
significant risk for the automobile industry. Country-
and sector-specific trade barriers can also be subject to
change at short notice. Any sudden tightening of regula-
tions in these areas could necessitate significantly higher
investments and ongoing expenses or exert influence on
customer behaviour. If the risk of market disruption due
to unforeseeable short-term changes in legislation and
regulations were to materialise, this could have a highly
negative earnings impact over the two-year assessment
period and beyond. The resulting risk amounts are there-
fore classified as high.
If the coronavirus is overcome with the help of ef-
fective vaccines over the course of 2021, opportunities
could arise for the BMW Group in terms of revenues
and earnings. Significantly higher GDP growth in our
strongest sales regions, positive signals in Europe and
the USA on the back of new economic stimulus packages,
and a de-escalation of the trade conflict between the USA
At present, the BMW Group sees a continuous trend
towards increasingly stringent vehicle emissions regula-
tions, particularly for conventional drivetrain systems.
The BMW Group is addressing this risk primarily by sys-
tematically electrifying its entire portfolio of brands and
models: based on its existing plans, the BMW Group will
already have 25 electrified models on the road by 2023.
At the same time, the Group is pressing ahead with the
continued development of highly efficient combustion
engines in order to further reduce fuel consumption
and emissions.
Additional risks could result from the tightening of
existing import and export regulations, which could,
in turn, lead primarily to additional expenses, but also
complicate the import and export of vehicles and parts.
Changes in trade policies could also have a positive
impact on the BMW Group’s earnings in the short to
medium term. Any reduction in tariff barriers, import
restrictions or direct excise duties could result in lower
manufacturing costs or enable products and services to
be offered to customers at more attractive prices. Further
opportunities to improve the BMW Group’s earnings
performance due to changes in legislation and regulatory
requirements compared to the outlook are classified as
insignificant.
Market developments
Apart from economic factors and sector-specific
political conditions, increasingly fierce competition
among established manufacturers and the emergence of
new market competitors could also have effects that are
difficult to predict. Unforeseen consumer preferences
and changes in brand perceptions can also give rise
to both opportunities and risks. If market risks were
to materialise, they could have a high earnings impact
over the two-year assessment period. The risk amount
is classified as high.
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A potential further intensification in terms of com-
petition could put pressure on sales volumes, selling
prices and margins. For instance, the BMW Group could
be confronted with supply and demand distortions in
the transition from conventionally powered vehicles
to alternative drivetrain concepts, despite complying
with legal requirements. Customer behaviour can also
alter due to changes in attitudes, values, environmental
factors and fuel or energy prices. The flexibility of the
BMW Group’s sales and production processes makes
it possible to mitigate risks and take any opportunities
arising in corresponding market and product segments.
Local product usage restrictions in specific sectors
could have a limiting impact on the BMW Group’s sales
in individual markets. In some urban areas, for instance,
local measures have been, or are being, introduced,
including entry restrictions, congestion charges or, in
some situations, highly restrictive registration rules.
These could influence 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. Among other measures, the BMW Group is ad-
dressing this risk by broadening its range of electrified
vehicles and mobility services.
Moreover, the BMW Group continuously monitors
its sales markets with the aim of increasing added value
for customers and making the most of opportunities in
terms of sales volume growth and pricing. The further
development of the product and mobility portfolio as
well as expansion in growth regions offer the greatest
medium- to long-term growth opportunities for the
BMW Group. This depends above all on the Group’s
ability to develop innovative products and services and
bring them to market. If the negative impact of the cur-
rent competitive situation is reduced more quickly than
expected, additional opportunities are likely to arise for
the BMW Group. Compared to the assumptions made
in the outlook, the BMW Group does not expect these
opportunities to have a significant earnings impact over
the two-year assessment period.
RISKS AND OPPORTUNITIES RELATING TO OPERATIONS
Risks and opportunities relating to production and
technologies
Risks relating to production processes and fields of
technology can lead to unplanned production interrup-
tions or additional costs due to vehicle recalls. If any
such risks were to materialise, they could have a high
earnings impact over the two-year assessment period.
The corresponding risk amounts are classified as high.
Potential causes of production downtimes include
fires, infrastructural damage, machine and tooling break-
downs, IT malfunctions, temporary disruptions in utility
supply or transportation and logistical disruptions, or
the outbreak of a pandemic. All production units have a
variety of measures in place to deal with potential pro-
duction interruptions and downtimes, some of which are
already integrated in the planning process and can be
implemented operationally with a high degree of flexibil-
ity. These measures have an effect on both the amount of
damage and the probability of the risks occurring.
Technical fire protection, rapid response by on-site
fire brigades and appropriate employee training are the
key strategies for preventing and reducing any potential
damage from fires. Furthermore, policies are in place
with insurance companies of high credit standing to
cover the risk of fire-related events that lead to significant
production interruptions at the Group’s or at suppliers’
premises.
The BMW Group’s successful business continuity
management concept helps minimise downtimes in the
event of a production stoppage and make up for lost
production volumes as quickly as possible.
Flexible working time models and working time
accounts designed to manage employee deployment,
coupled with the ability to build individual vehicle mod-
els or engine types with a high degree of flexibility at
other BMW Group plants as required, make a significant
contribution to ensuring that fluctuations in demand can
be met.
Detect-analyse-respond measures have been rolled
out to counter the threat of targeted cyberattacks, re-
flecting the fact that such attacks could cause damage
to production facilities, resulting in long downtimes and
substantial losses.
Vehicles may be damaged or destroyed by natural
hazards or other risks during transport from production
plants to the sales regions. Due to the growing number
of major claims, deductible amounts included in trans-
port insurance policies have risen significantly. In fact,
as more and more insurance companies withdraw from
this market segment, 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.
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The BMW Group recognises appropriate provisions
for statutory and non-statutory warranty obligations. It
cannot be ruled out, however, that additional costs arise
in conjunction with vehicle recalls that are either not
covered or not fully covered by provisions. Despite thor-
ough quality assurance processes, such risks can always
arise if the materials and / or processing procedures used
prove insufficient, in some cases years after a product is
launched. Further information on risks in conjunction
with provisions for statutory and non-statutory warranty
obligations is provided in
note 33 to the Group Financial
Statements.
The BMW Group sees opportunities relating to
production processes and fields of technology primarily
in the competitive edge gained by mastering new and
complex technologies. Innovations in the technologies
deployed and in IT in general are driving the pace of
digitalisation in production processes. Given the long
lead times involved in developing new products and
processes, additional opportunities are not expected to
have a significant earnings impact for the BMW Group
during the outlook period.
Risks and opportunities relating to purchasing
Purchasing risks relate primarily to supply risks
caused by the failure of a supplier to deliver as well as
to threats to BMW Group-relevant know-how within
the supplier network. Production problems at supplier
level could lead to consequences caused by increased
expenditure for the BMW Group due to production inter-
ruptions and a corresponding reduction in vehicle sales.
The BMW Group deploys an extensive set of checks and
proactive management measures to tackle the challenges
currently facing the automotive supply industry. If pur-
chasing risks were to materialise, they could have a high
earnings impact over the two-year assessment period.
The risk amount attached to purchasing risks is classified
as high.
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 to deliver include, in
particular, IT-related risks, non-compliance with sus-
tainability or quality standards and the occurrence of
natural hazards and fires. Insufficient financial capacity
on the part of individual suppliers could also jeopardise
supplies to production plants. In this context, additional
countermeasures have been put in place in the wake of
the coronavirus pandemic.
Moreover, any major deterioration of a particular
country’s national security situation is incorporated in
the risk measurement process as a potential reason for
the failure of a value and / or supply chain. Any risks
potentially arising for individual suppliers and / or entire
supply chains in conjunction with the need to adapt to
the consequences of climate change are continually as-
sessed on the basis of in-house expert knowledge, taking
scientific findings into due account.
The growing complexity of the supplier network, par-
ticularly in the case of sub-suppliers whose operations
can only be indirectly monitored by the BMW Group, is
a further potential cause of downtimes at supplier loca-
tions. For instance, there is a risk that strong demand
on international semiconductor markets gives rise to
bottlenecks in the supply of electronic components for
production. The increased threat of cyberattacks along
the entire value chain also affects supply security as
well as the ability to protect know-how relevant to the
BMW Group. To ensure a uniform level of IT security for
all those involved along the value and supply chain, the
BMW Group impresses on suppliers the importance of
obtaining appropriate IT security certification.
By monitoring and developing global supplier mar-
kets, the BMW Group continuously strives to become
more competitive by working together with the world’s
best product and service providers. As part of its supplier
preselection process, the BMW Group checks for com-
pliance with the sustainability standards established for
its supplier network. This includes due consideration of
and compliance with internationally recognised human
rights and applicable labour and social standards.
The level of carbon emissions generated by prospec-
tive suppliers is taken into account as an independent
criterion when processing tenders and awarding new
contracts. This approach ensures that first-tier suppliers
regard the issue of carbon emissions – alongside other
factors – as relevant for their business and, in turn, set
targets for other supply chain levels in which they are
involved. The aim is to reduce carbon emissions across
all relevant supply chains on the basis of constructive
cooperation with suppliers. It is important to point out,
however, that the BMW Group depends on receiving
accurate information from suppliers in this regard.
Furthermore, fire risks at series suppliers are eval-
uated by means of questionnaires and selective on-site
inspections. Suppliers are required to implement the
necessary measures on a continuous basis. Following
evaluation, the results are fed back into the process for
awarding contracts for new projects.
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The risks associated with the supply of raw materials
are mitigated either by reducing the use of raw materials
or substituting them with alternative products.
Within the Purchasing and Supplier Network, oppor-
tunities arise above all in the area of global sourcing and
the associated efficiency improvements. Making optimal
use of any innovations developed by suppliers is a key
prerequisite for developing future-oriented mobility prod-
ucts and services. Similarly, favourable location-related
cost factors, in particular those arising due to the close
proximity of supplier structures to new and existing
BMW Group production plants as well as the introduc-
tion of innovative production technologies, could lead to
lower cost of materials for the BMW Group.
One of the BMW Group’s aims is to have battery cells
manufactured in Europe. Key prerequisites for achieving
this aim, however, are primarily further advances in the
development of battery cell technology and the mastery
of cell production processes. Contracts have been con-
cluded with various suppliers as part of the Group’s elec-
trification strategy. A further source of opportunities is
seen in the possible integration of previously unidentified
supplier-driven innovations in the Group’s product range.
The BMW Group offers innovative suppliers numerous
options for creating specific contractual arrangements
that promote companies developing innovative solutions.
Compared to the assumptions made in the outlook, the
BMW Group does not expect such additional oppor-
tunities to have a significant earnings impact over the
two-year assessment period.
Risks and opportunities relating to the sales network
In order to sell its products and services, the
BMW Group operates a global sales network mainly com-
prising independent dealerships, branches, subsidiaries
and importers. In addition, a pilot project to promote
direct sales was launched in South Africa in 2020. Any
threat to the continued activities of parts of the sales
network, for example due to the impending insolvency
of a dealership, would entail risks for the BMW Group.
The occurrence of sales and marketing risks would have
only a low earnings impact over the two-year assessment
period. The risk amount is classified as low.
New developments in the field of digital communica-
tion and connectivity provide new opportunities for the
BMW Group’s brands to take advantage of additional
sales channels in their efforts to bring new products to
market. Based on vehicle-driven telematics data, custom-
ers can elect to use a specific service and actively consent
to the relevant data being transferred. The service provid-
ers contracted to perform the work receive the necessary
data via the BMW Group’s secure back end system. The
information forms the basis for customised, data-driven,
innovative service options. Additional oppor tunities
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 does not expect these
opportunities to have a significant earnings impact over
the two-year assessment period.
Information security, data protection and IT
The advance of digitalisation throughout all areas of
the business world places considerable demands on the
confidentiality, integrity and availability of electronical-
ly processed data and the associated use of information
technology (IT). Alongside higher threat levels in this
area, regulatory requirements worldwide relating to
the use of personal data are becoming increasingly
stringent, for example due to the California Consumer
Privacy Act. If risks relating to information security,
data protection and IT were to materialise, they could
have a high earnings impact over the two-year assess-
ment period. Despite extensive security measures and
constant efforts to ensure compliance with applicable
data protection legislation, the risk amount in this area
is classified as high.
In addition to cyberattacks and direct physical inter-
vention, there is a risk that either a lack of knowledge
or misconduct on the part of employees could also pose
a danger to the confidentiality, integrity and availability
of information, data and systems. The main direct con-
sequences could range from negative effects on revenues
due to the misuse of information through to disruption
in the production of components or vehicles. A further
indirect consequence could be reputational damage.
The BMW Group places great emphasis on protecting
the confidentiality, integrity and availability of informa-
tion from unauthorised access or misuse, whether relat-
ing to business, employees or customers. Data security
is an integral part of all Group business processes and
practised in accordance with the ISO / IEC 27001 inter-
national standard. In conjunction with risk management
requirements, risks relating to information security, data
protection and IT are systematically documented, allocat-
ed appropriate measures by the departments concerned
and continuously monitored with regard to threat level
and risk mitigation. Regular analyses and controls as
well as rigorous security management policies ensure
an appropriate level of security.
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However, despite continuous testing and preventive
security measures, it is impossible to eliminate risks com-
pletely in this area. All Group employees are required to
treat information such as confidential business, customer
and employee data with care, use information systems se-
curely and handle risks in a transparent manner. Group-
wide requirements are documented in a comprehensive
set of principles, guidelines and instructions, such as, for
example, the Privacy Corporate Rules for handling per-
sonal data. Regular communication, awareness-raising
and training measures form the basis for a high level of
security and risk awareness. With regard to cooperations
and business partnerships, the BMW Group protects its
intellectual property as well as its customer and employee
data by issuing clearly defined instructions on informa-
tion security, data protection and the use of information
technology. Trade secrets and sensitive personal data
are subject to particularly stringent security measures.
Technical data protection incorporates industry-wide
standards and good practices. Responsibility for informa-
tion security and data protection for each Group entity
lies with either the Board of Management or the relevant
management team.
With the advance of digitalisation, the BMW Group
is continually improving the customer experience in its
existing lines of business. At the same time, new busi-
ness segments are emerging, which have only become
feasible due to innovation in the field of information
technology. The development and provision of digital ser-
vices for customers, increased vehicle connectivity and
automated driving solutions are opening up new oppor-
tunities. Via BMW ConnectedDrive and BMW CarData,
the range of services and apps on offer to customers is
constantly being expanded and updated. Compared to
the assumptions made in the outlook, the BMW Group
does not expect these opportunities to have a significant
earnings impact over the two-year assessment period.
FINANCIAL RISKS AND RISKS RELATING TO THE
USE OF FINANCIAL INSTRUMENTS
Currency risks and opportunities
As an internationally operating enterprise, the
BMW Group conducts business in a variety of currencies,
thus giving rise to currency risks and opportunities. A
substantial portion of Group revenues, purchasing and
funding occur outside the eurozone, particularly in China
and the USA. Regularly updated 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 high earnings impact over
the two-year assessment period. The risk amount relating
to currency risks is classified as high. The risk assessment
is therefore slightly less favourable than one year earlier,
due to the increased volatility of individual currencies
in the wake of the coronavirus pandemic. Significant
opportunities can arise if currency developments are
favourable for the BMW Group.
Operational currency management is based on the re-
sults of currency risk analyses. The BMW Group manages
currency risks at both strategic (medium to longterm)
and operational level (short to mediumterm). Medium- to
long-term measures include increasing production and
purchase volumes in foreign currency regions, i. e. nat-
ural 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 finan-
cial partners of good credit standing. Opportunities are
also secured through the use of options during specific
market phases.
Risks and opportunities relating to raw materials prices
As a large-scale manufacturing company, the
BMW Group is exposed to purchase price risks, par-
ticularly in relation to the raw materials used in vehicle
production. The analysis of raw materials price risks is
based on planned purchases of raw materials and com-
ponents containing those products. Cash-flow-at-risk
models and scenario analyses are used to measure risks
and opportunities relating to raw materials prices.
If such risks were to materialise, they could have a
medium earnings impact over the two-year assessment
period. The risk amount is classified as medium. Signif-
icant opportunities could arise if raw materials prices
develop favourably for the BMW Group.
Changes in prices are monitored via a well-defined
management process, the primary objective of which is
to increase planning reliability for the BMW Group. Price
fluctuations for precious metals (platinum, palladium,
rhodium), nonferrous metals (aluminium, copper), raw
materials for batteries (lead, nickel, cobalt) and, to some
extent, for steel and its basic ingredients (iron ore, coking
coal) as well as energy (gas, electricity) are hedged using
financial derivatives and supply contracts with fixed
pricing arrangements.
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The BMW Group holds equity investments of varying
amounts in numerous entities, which could result in risk
from depreciation and amortisation.
If other financial risks were to materialise, they could
have a medium earnings impact over the two-year as-
sessment period. The risk amount associated with other
financial risks is classified as medium. Revaluations
of investments could give rise to opportunities with a
significant earnings impact.
Risks and opportunities relating to pension obligations
Future pension obligations are financed largely via
external pension funds or trust constructs that are le-
gally separate from BMW. Externally managed funds are
invested on capital markets in a broadly diversified port-
folio with a view to enabling future pension payments to
be disbursed out of pension assets. These arrangements
greatly reduce the need to fund pension payments out
of ongoing operations.
Combined Management Report
Report on Outlook, Risks and Opportunities
Liquidity risks
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 medium earnings impact over the two-year assess-
ment period. The risk amount associated with liquidity
risks, including the risk of the BMW Group’s rating being
downgraded, is classified as medium. The year-on-year
change in the assessment of the risk amount reflects
the sharp short-term rise in refinancing costs on capital
markets at the beginning of the coronavirus pandemic.
Based on the experience gained during the global
financial crisis, a liquidity concept has been drawn up,
which is rigorously adhered to and continuously devel-
oped. The concept has been recently updated to take
account of the implications of the coronavirus pandemic.
The use of the “matched funding principle” to finance
the Financial Services segment’s operations ensures
that liquidity risks are generally avoided. Furthermore,
scenarios have been calculated to present and analyse
the potential impact of the coronavirus pandemic on the
matched funding principle.
Solvency is assured at all times throughout the
BMW Group by adhering to liquidity ratios and using a
broadly diversified range of refinancing sources. Regular
measurement and monitoring ensure that cash inflows
and outflows for the various maturities and currencies
offset one another. This approach is an integral part of
the BMW Group’s liquidity concept.
The liquidity position is monitored continuously and
managed through the Group-wide planning of financial
requirements and funding. The diversified refinancing
strategy employed reduces dependency on financial
instruments and markets. Moreover, the BMW Group’s
solid financial and earnings position results in high credit
ratings from internationally recognised rating agencies.
At present, opportunities relating to liquidity are not
expected to have any significant earnings impact.
Further information on risks in conjunction with fi-
note 39 to the Group
nancial instruments is provided in
Financial Statements.
Other financial risks
Other financial risks worth mentioning include coun-
terparty risks as well as those arising in connection with
investments in other entities.
The BMW Group works together with banks to en-
sure that the available liquidity is optimally invested and
to hedge against financial market risks (particularly cur-
rency, commodity and interest rate risks) using derivative
financial instruments. Counterparty risk describes the
risk that the BMW Group will not receive the payments
due to it in connection with the investment and hedging
transactions referred to above. An enhanced value-at-risk
model is employed to measure counterparty risk, taking
into account the creditworthiness (rating) of the banks
and the business volumes involved. Risk is managed
using a limit system, which includes daily monitoring of
the extent to which limits are being utilised.
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174
Risks arise from fluctuations in pension obligations
on the one hand and the related pension assets on the
other. Opportunities arise if the value of pension assets
on capital markets develops favourably or if pension
obligations decrease at a more pronounced rate than
the related assets.
Pension obligations are primarily measured using a
discount rate based on market yields from high-quality
corporate bonds. These yields are subject to market
fluctuations and therefore influence the level of pension
obligations. Changes in other parameters, such as rising
inflation rates and longer life expectancy, also impact
the amount as well as the duration of future pension
payments. Regulatory requirements or changes may also
affect the amount of pension obligations.
The fluctuation of pension assets reflects the vola-
tility of individual asset classes on capital markets. The
broadly diversified portfolio comprises investments in
interest-bearing securities, equities, real estate and other
asset classes.
Despite the high level of external funding, risks re-
lating to pension obligations could have a high earnings
impact over the two-year assessment period. The risk
amounts attached to pension obligations are classified as
high. The strategic portfolio allocation of pension assets
therefore comprises two key components. One part is al-
located with a view to hedging against value fluctuations,
applying the “liability-driven investment approach”,
whereby capital market instruments are employed on
a targeted basis to hedge against financial risks arising
from the measurement of pension obligations. A second
part is allocated with a view to generating income. Within
a favourable capital market environment, this part of the
pension assets offers the opportunity to further reduce
pension plan deficits by generating positive returns and
thereby impact the BMW Group’s financial position to a
significant degree. The risks and opportunities described
above are continuously monitored and managed.
Remeasurements on the liability and asset sides are
recognised net of deferred taxes through other compre-
hensive income and hence directly in equity (within
revenue reserves).
Further information on risks in conjunction with
note 32 to the Group
pension provisions is provided in
Financial Statements.
LEGAL RISKS
The BMW Group is exposed to various legal risks,
not least due to the global nature of its 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 amounts
attached to significant identified legal risks are classified
as medium. However, it cannot be ruled out that new
legal risks, as yet unforeseen, materialise that could have
a high earnings impact for the BMW Group.
The growing globalisation of the BMW Group’s
operations as well as of business interdependencies
in general, combined with the variety and complexity
of legal provisions – increasingly including import
and export regulations – give rise to a greater risk of
non-compliance with applicable law. A Compliance Man-
agement System is in place across the BMW Group to
ensure that its representative bodies, executives and staff
members worldwide consistently act in a lawful manner.
In 2020, the system was further developed, primarily by
establishing additional compliance functions in various
centralised departments within BMW AG, stepping up
face-to-face training on antitrust compliance and via a
Group-wide “Tone from the Top” communication initi-
ative that reflects the compliance management culture
within the BMW Group.
Corporate Governance
Like all entities with international operations, the
BMW Group is confronted with legal disputes, alleged
claims (particularly relating to warranties and product
liability or intellectual property 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 pro-
ceedings are typical for the sector, may result as a con-
sequence of realigning product or purchasing strategies
to changed market conditions or are antitrust-related.
Particularly in the US market, class action lawsuits and
product liability risks can have substantial financial con-
sequences and cause damage to the Group’s reputation.
More rigorous application or interpretation of existing
regulations or the introduction of new regulations could
result in a greater number of recalls.
BMW GroupReport 2020
175
Combined Management Report
Report on Outlook, Risks and Opportunities
In an antitrust investigation, the EU Commission al-
leges that five German car manufacturers colluded with
the aim of restricting competition for innovation with
regard to certain exhaust treatment systems for diesel-
and petrol-driven passenger vehicles. The current investi-
gation is solely concerned with possible infringements of
competition law. The EU Commission is not alleging that
the BMW Group conducted a deliberate and unlawful ma-
nipulation of the emissions control system. The Statement
of Objections leads the BMW Group to believe that it is
probable (“more likely than not”) that the Commission
will issue a significant fine. A provision of approximately
€ 1.4 billion was recognised in 2019 in accordance with
International Financial Reporting Standards for negative
financial impacts that cannot yet be definitively assessed.
In December 2019 the BMW Group submitted a detailed
reply to the Statement of Objections. The EU Commis-
sion is currently examining the reply and, on that basis,
will determine the next procedural steps. Therefore, the
financial impact cannot yet be definitively assessed.
For several years, lawsuits have been filed against
BMW Bank GmbH (BMW Bank) in which consumers
claim the withdrawal of their loan and leasing contracts
on the basis of allegedly incorrect and insufficient
pre-contractual information. The focus is on loan con-
tracts. Since 2017, BMW Bank has won the vast majority
of these lawsuits. In November 2019, the Federal Court
of Justice (BGH) adopted a decision of principle in favour
of BMW Bank, confirming the accuracy of consumer-rel-
evant information in loan contracts. In addition, in Octo-
ber 2020 the BGH decided in a case in which BMW Bank
was not involved that consumers are generally obliged to
pay a compensation after a successful withdrawal. Since
the beginning of 2020, several references for a prelim-
inary ruling on the scope of information obligations
have been filed with the European Court of Justice (ECJ).
On the basis of these requests, there is a risk that BMW
Bank’s prospects of success in the withdrawal lawsuits
could deteriorate in the event of negative future ECJ case
law. The possible financial impact cannot be definitively
assessed at this stage.
The BMW Group recognises appropriate levels of pro-
vision for lawsuits. In addition, a part of these risks is in-
sured to an economically reasonable extent. Further risks
from legal proceedings are reported as other contingent
liabilities. It cannot be ruled out, however, that damages
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, Con-
tingent Liabilities and Contingent Assets), the required
information is not provided if the BMW Group concludes
that its disclosure could seriously prejudice the outcome
of the relevant legal proceedings. Further information on
contingent liabilities is provided in
note 38 to the Group
Financial Statements.
BMW GroupReport 2020
Combined Management Report
Report on Outlook, Risks and Opportunities
RISK MANAGEMENT SYSTEM IN THE
FINANCIAL SERVICES SEGMENT
In the Financial Services segment, the risk manage-
ment process also takes financial regulatory require-
ments such as Basel III into account. Internal methods
for identifying, measuring, managing and monitoring
risks within the Financial Services segment comply with
national and international standards. Risk management
within the Financial Services business is built on the
prevailing risk culture, the defined risk strategy, the
internal capital adequacy assessment process framework
and a set of rules comprising principles and guidelines.
In organisational terms, the risk management process
is ensured by means of a clear division between front-
and back-office activities and a comprehensive internal
control system. The main tool used to manage risk
within the Financial Services segment is to ensure the
segment’s risk-bearing capacity.
All risks – in the sense of unexpected losses – must
be covered at all times. Based on the entity’s risk ap-
petite, this is achieved by ensuring specified levels of
risk-covering assets (asset cushions) in the form of equity
capital. Unexpected losses are measured using various
value-at-risk models, which are validated at regular in-
tervals. 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.
176
Sustainability has developed into a megatrend of
our time and is increasingly becoming the focus of
political and social debate. Both the effects of climate
change and the changes brought about by the fight
against climate change are also likely to be reflected
across the world’s financial system. Due to the potential
macroeconomic consequences, the related sustainability
risks are seen as a threat to the stability of financial
markets. In the context of bank supervision at national
and international level, it is therefore essential that the
banks concerned take sustainability risks adequately
into account.
The Financial Services segment not only helps its
customers to satisfy their mobility needs by offering
credit financing and leasing products, it also promotes
the BMW Group’s industrial business from a sales point
of view. The far-reaching consequences of the debate
on sustainability and sustainability risks affect both the
non-financial economy (and therefore the BMW Group)
and the financial economy (and therefore the Financial
Services segment). Due to the close interrelationships
within the Group, developments that affect the
BMW Group’s industrial business in the first step (e. g.
diesel driving bans, adjustments to carbon emissions
targets, the growing proportion of e-vehicles, etc.) are
also relevant for the Financial Services segment in the
second step. This environment has always been part
of the underlying framework of the Financial Services
segment’s business model.
The growing challenges posed by climate change
and the resulting impact on the financial system are
taken into account in the Financial Services segment by
adequately addressing sustainability risks. As an inte-
gral part of the BMW Group’s value chain, the Financial
Services segment is highly aware of the importance of
managing sustainability risks and is therefore fully inte-
grated in the BMW Group’s comprehensive sustainable
corporate strategy.
The following overview provides a general summary
of the main risks and opportunities in the Financial
Services segment:
Risks
Opportunities
Classification of
risk amount
Change compared
to prior year
Classification
Change compared
to prior year
RISKS AND OPPORTUNITIES
Risks and opportunities relating to the provision of financial services
Credit risk
Residual value
Interest rate changes
Operational risks
Medium
High
Medium
Medium
Stable
Stable
Stable
Stable
Insignificant
Significant
Significant
–
Stable
Stable
Stable
–
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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 commencement date
of the lease. 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 unexpected 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 Automotive
segments. The risk amount is classified as high for the
Group as a whole. Opportunities can arise out of a pos-
itive deviation between the actual market value and the
original residual value forecast. The BMW Group classi-
fies potential residual value opportunities as significant.
Risks and opportunities relating to the Financial Services
segment
The main categories of risk relevant for the Finan-
cial Services segment are credit and counterparty risk,
residual value risk, interest rate risk, operational risk
and liquidity risk. The evaluation of liquidity risk for the
Financial Services segment is included in the liquidity
risk category for the Group as a whole.
During the financial year 2020, the aggregate risk
cushion for risks in the Financial Services segment was
sufficient at all times, thereby ensuring the segment’s
risk-bearing capacity.
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
(e. g. a customer or dealership) becomes either unable or
only partially able to fulfil its contractual obligations, so
that lower income is generated or losses are incurred. If
unexpected credit and counterparty default risks were to
materialise, they could have a medium earnings impact
over the two-year assessment period. The risk amount is
classified as medium. The BMW Group classifies poten-
tial opportunities in this area as insignificant.
In light of the uncertainties surrounding the future
course of the coronavirus pandemic, additional credit
loss provisions were recognised during the financial year
2020 for expected credit losses, in order to reflect the
possible negative impact of the coronavirus pandemic on
retail customer and dealership business for accounting
purposes.
Initial and continuous creditworthiness testing is an
important aspect of the BMW Group’s credit risk man-
agement system. For this reason, every borrower’s cred-
itworthiness is tested for all credit financing and leasing
contracts entered into by the BMW Group. Opportunities
may arise if the managed portfolio performs better over
time than estimated when the credits were granted. The
intensive management of purchasing processes and col-
lateral assessment as well as favourable macroeconomic
developments could accentuate these opportunities. In
the case of retail customer financing, creditworthiness
is assessed using validated scoring systems integrated in
the purchasing process. In the area of dealership financ-
ing, 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 relationships. Changes in the cred-
itworthiness of customers arising during the credit term
are covered by risk provisioning procedures. The credit
risk of 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.
Due to the coronavirus pandemic, moratoria were
granted to customers and dealers, particularly during
the first six months of the year, taking into account the
prevailing legal requirements. The simultaneous im-
provement in the economic situation in most markets in
the second half of the year meant that the low percentage
of actual loan defaults was kept stable.
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Combined Management Report
Report on Outlook, Risks and Opportunities
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 ve-
hicle at the end of the contractual period. Developments
on pre-owned car markets are an important factor for the
BMW Group. In 2020, the number of electrified vehicles
also continued to increase. Changes in the value of these
vehicles are largely determined by a set of known influ-
encing factors. Prices on pre-owned car markets in the
premium segment fluctuated within the usual range and
were even favourably influenced in some cases by coro-
navirus-related catch-up effects. As part of the manage-
ment of residual value risks, the net present value of risk
costs is also calculated at the contract commencement
date. Market developments are monitored throughout
the contractual period and the risk assessment updated
accordingly. Residual value risk management essentially
follows the same established process, regardless of the
drivetrain variant.
Based on current expectations of a rising level of re-
sidual value losses in subsequent years, the level of risk
provisioning has been raised in the form of additional
provisions and in line with applicable financial reporting
standards. Accordingly, risk costs for residual value risks
in the Financial Services segment are significantly higher
than one year earlier.
178
Interest rate risks and opportunities relating to the
Financial Services segment
Operational risks 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 recognised
in the balance sheet. If interest rate risks were to mate-
rialise, they could have a medium earnings impact over
the two-year assessment period. The risk amount is clas-
sified as medium. Favourable interest rate developments
compared to the outlook represent opportunities that
the BMW Group classifies as significant. Interest rate
risks in the Financial Services business are managed by
ensuring that fixed interest rate periods match to a large
extent and through the use of interest-rate derivatives. If
the relevant recognition criteria are fulfilled, derivatives
used by the BMW Group are accounted for as hedging
relationships. Further information on risks in conjunc-
tion with financial instruments is provided in
note 39 to
the Group Financial Statements.
In the Financial Services segment, operational risks
are defined as the risk of losses arising as a consequence
of the unsuitability or failure of internal procedures
(process risks), people (personnel-related risks), systems
(infrastructure- and IT-related risks) and external events
(external risks). The recording and measurement of risk
scenarios, loss events and countermeasures in the op-
erational risk management system provide the basis for
the systematic analysis and management of potential or
materialised operational risks. Annual self-assessments
are also carried out. This risk category also includes
sustainability risks that correspond to the definition of
operational risks, such as external events or natural and
man-made disasters.
If operational risks were to materialise, they would be
likely to have a low earnings impact over the two-year as-
sessment period. The risk amount is classified as medium.
At present, no significant opportunities for the earnings
situation are seen with regard to operational risks.
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Internal Control System Relevant for Accounting and Financial Reporting Processes
179
*
INTERNAL CONTROL
SYSTEM RELEVANT
FOR ACCOUNTING AND
FINANCIAL REPORT-
ING PROCESSES
The internal control system relevant for accounting
and financial reporting processes has the task of en-
suring that accounting and financial reporting of the
BMW Group is both accurate and reliable. Within the
framework of the “Three Lines of Defence” model used
to manage risk across the Group, the internal control
system represents a key component of the second line
of defence, serving as a link between the operating units,
the corporate audit function and the external auditors.
Internationally recognised standards for internal
control systems were taken into account when designing
the various components of the BMW Group’s internal
control system. The system comprises:
— Group-wide mandatory accounting guidelines
— Controls integrated in processes and IT systems
— Organisational measures incorporating the principles
of the risk-oriented segregation of duties
— Process-independent monitoring measures
The system and the methodologies applied are sub-
ject to continuous improvement, with system effective-
ness 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 Group 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 required.
Preventive and detective controls are integrated in
Group accounting and financial reporting processes.
Preventive controls serve to prevent errors and omis-
sions, whereas detective controls serve to detect and
correct errors. To the extent possible, they are designed
to comply with the principle of the segregation of duties.
Key IT systems that are relevant for accounting and fi-
nancial reporting incorporate controls designed, among
other things, to prevent business transactions from being
recorded incorrectly as well as to ensure the timely rec-
ognition and measurement of all business transactions
in accordance with applicable requirements. Controls are
also in place to test the appropriateness of consolidation
procedures.
* Disclosures pursuant to sections 289 and 315 HGB.
In conjunction with the ongoing development of
IT systems relevant for accounting and financial report-
ing processes at both individual entity and Group level,
controls are adapted to take account of new requirements
and opportunities arising as a result of advances in infor-
mation technology. Moreover, the BMW Group uses data
analysis tools to identify and subsequently eliminate any
weaknesses in the control system.
Responsibilities for ensuring the effectiveness of
the internal control system in Group accounting and
financial reporting processes are clearly defined and
allocated to the relevant line and process managers.
These managers report annually on their assessment
of the effectiveness of the internal control system for
accounting and financial reporting purposes. The assess-
ment also includes the results of internal and external
audits as well as of data analysis that is conducted on a
continual basis. In this context, the Group’s various units
confirm the effectiveness of the internal control system
for accounting and financial reporting. The results of
the assessment are gathered and documented with the
aid of appropriate tools. Any weaknesses in the control
system are eliminated, taking into account their potential
impact on accounting and financial reporting processes.
The Board of Management and the Audit Committee
are briefed annually on the effectiveness of the internal
control system for accounting and financial reporting.
The Board of Management and, where appropriate, the
Supervisory Board, are informed without delay if there
are any significant changes in the effectiveness of the
internal control system.
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Disclosures Relevant for Takeovers and Explanatory Comments
180
RESTRICTIONS AFFECTING VOTING RIGHTS OR THE
TRANSFER OF SHARES
In addition to shares of common stock, the Company
has also issued non-voting shares of preferred stock. Fur-
ther information is provided 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 generally
subject to a Company-imposed blocking period of four
years, calculated from the beginning of the calendar year
in which the shares were issued.
Contractual holding period arrangements also
apply to shares of common stock acquired by Board of
Management members and certain senior department
heads in conjunction with the share-based remuneration
programmes (Remuneration Report of the Corporate
Governance section;
note 41 to the Group Financial
Statements).
DISCLOSURES
RELEVANT FOR
TAKEOVERS AND
EXPLANATORY
COMMENTS
*
COMPOSITION OF SUBSCRIBED CAPITAL
The subscribed capital (share capital) of BMW AG
amounted to € 659,684,500 at 31 December 2020 (2019:
€ 658,862,500) and, in accordance with Article 4 no. 1
of the Articles of Incorporation is sub-divided into
601,995,196 shares of common stock (91.26 %) (2019:
601,995,196; 91.37 %) and 57,689,304 shares of non-vot-
ing preferred stock (8.74 %) (2019: 56,867,304; 8.63 %),
each with a par value of € 1. The Company’s shares are
issued to bearer.
The rights and obligations of shareholders derive from
the German Stock Corporation Act (AktG) in conjunction
with the Company’s Articles of Incorporation, the full
www.bmwgroup.com. The right
text of which is available at
of shareholders to have their shares evidenced is ex-
cluded in accordance with the Articles of Incorporation.
* Disclosures pursuant to § 289a and § 315a HGB.
The voting power attached to each share corresponds to
its par value. Each € 1 of par value of share capital repre-
sented in a vote entitles the holder to one vote (Article 18
no. 1 of the Articles of Incorporation).
The Company’s shares of preferred stock are shares
as defined in § 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 preference amount has either not
been paid or has not been fully paid within 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:
a Subsequent payment of any arrears on dividends on
non-voting shares of preferred stock in the order of
accruement
b Payment of an additional dividend of € 0.02 per € 1
par value on non-voting preferred shares
c Uniform payment of any other dividends on shares
of common and preferred stock, provided the share-
holders do not resolve otherwise at the Annual
General Meeting
BMW GroupReport 2020
Combined Management Report
Disclosures Relevant for Takeovers and Explanatory Comments
DIRECT OR INDIRECT INVESTMENTS IN CAPITAL
EXCEEDING 10% OF VOTING RIGHTS
Based on information available to the Company, 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
in %
Stefan Quandt, Germany
AQTON SE, Bad Homburg v. d. Höhe, Germany
AQTON Verwaltung GmbH, Bad Homburg v. d. Höhe, Germany
AQTON GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe, Germany
Susanne Klatten, Germany
Susanne Klatten Beteiligungs GmbH, Bad Homburg v. d. Höhe, Germany
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 shareholdings only if such
changes are subject to mandatory notification rules.
SHARES WITH SPECIAL RIGHTS THAT CONFER
CONTROL RIGHTS
There are no shares with special rights that confer
control rights.
Direct share of
voting rights
Indirect share of
voting rights
0.2
9.0
16.6
0.2
20.7
25.6 2
16.6 3
16.6 4
20.7 5
CONTROL OF VOTING RIGHTS WHEN EMPLOYEES
PARTICIPATE IN CAPITAL AND DO NOT DIRECTLY
EXERCISE THEIR CONTROL RIGHTS
Like all other shareholders, employees exercise their
control rights pertaining to shares they have acquired in
conjunction with the Employee Share Programme and / or
the share-based remuneration programme directly on
the basis of relevant legal provisions and the Company’s
Articles of Incorporation.
181
STATUTORY REGULATIONS AND PROVISIONS CONTAINED
IN THE ARTICLES OF INCORPORATION GOVERNING THE
APPOINTMENT AND REMOVAL OF MEMBERS OF THE
BOARD OF MANAGEMENT AND CHANGES TO THE ARTI-
CLES OF INCORPORATION
The appointment or removal of members of the Board
of Management is based on the rules contained in § 84 f.
AktG in conjunction with § 31 of the German Co-Deter-
mination Act (MitbestG).
Amendments to the Articles of Incorporation must
comply with § 179 ff. AktG. Amendments must be de-
cided upon by the shareholders at the Annual General
Meeting (§ 119 (1) no. 6, § 179 (1) AktG). The Supervi-
sory Board is authorised to approve amendments to the
Articles of Incorporation that only affect its wording
(Article 14 no. 3 of the Articles of Incorporation). Reso-
lutions are passed at the Annual General Meeting by a
simple majority of shares cast unless otherwise explicitly
required by binding provisions of law or, if a majority of
share capital is required, by a simple majority of shares
represented in the vote (Article 20 no. 1 of the Articles
of Incorporation).
1 Based on voluntary notifications provided by the listed shareholders as at 31 December 2020.
2 Controlled entities, of which 3 % or more are attributed: AQTON SE, AQTON Verwaltung GmbH, AQTON
GmbH & Co. KG für Automobilwerte.
3 Controlled entities, of which 3 % or more are attributed: AQTON Verwaltung GmbH, AQTON GmbH & Co. KG
für Automobilwerte.
4 Controlled entities, of which 3 % or more are attributed: AQTON GmbH & Co. KG für Automobilwerte.
5 Controlled entities, of which 3 % or more are attributed: Susanne Klatten Beteiligungs GmbH.
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Disclosures Relevant for Takeovers and Explanatory Comments
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AUTHORISATIONS OF THE BOARD OF MANAGEMENT,
IN PARTICULAR WITH RESPECT TO THE ISSUING OR
BUYING BACK OF SHARES
SIGNIFICANT AGREEMENTS OF THE COMPANY TAKING
EFFECT IN THE EVENT OF A CHANGE IN CONTROL
FOLLOWING A TAKEOVER BID
The Board of Management is authorised to buy back
shares and sell repurchased shares in situations specified
in § 71 AktG, for example to avert serious and imminent
damage to the Company and / or to offer shares to per-
sons employed or previously employed by BMW AG or
one of its affiliated companies.
In accordance with Article 4 no. 5 of the Articles of
Incorporation, the Board of Management is authorised,
with the approval of the Supervisory Board, to increase
by means of cash contributions BMW AG’s share capital
during the period up to and including 15 May 2024 by up
to € 3,437,600 for the purposes of an Employee Share Pro-
gramme by issuing new non-voting shares of preferred
stock, which carry the same rights as existing non-voting
preferred stock (Authorised Capital 2019). The subscrip-
tion rights of existing shareholders are excluded. No
conditional capital was in place at the reporting date.
BMW AG 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:
— An agreement concluded with an international con-
sortium 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 out-
standing amounts, including interest, would fall due
with immediate effect if one or more parties jointly
acquire direct or indirect control of BMW AG. The
term “control” is defined as the acquisition of more
than 50 % of the share capital of BMW AG, the right
to receive more than 50 % of the dividend or the right
to direct the affairs of the Company or appoint the
majority of members of the Supervisory Board.
— 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 ex-
traordinary 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 regarding the impact of the change
of control on the cooperation arrangements are not
resolved during the subsequent discussion process.
— BMW AG acts as guarantor for all obligations arising
from the joint venture agreement relating to BMW
Brilliance Automotive Ltd. in China. This agreement
grants an extraordinary right of termination to ei-
ther joint venture partner in the event of a change
in control at one of the parties or if more than 25 %
of the shares of the other party are acquired by a
third party – either directly or indirectly – or if the
other party is merged with another legal entity.
Termination of the joint venture agreement may
lead to the dissolution of the joint venture with an
optional purchase right for BMW (or for the partner)
to acquire the shares of the other partner or to the
liquidation of the joint venture company.
— Framework agreements are in place with financial
institutions and banks (ISDA Master Agreements)
with respect to trading activities with derivative
financial instruments. These agreements include
an extraordinary right of termination that triggers
actions in the event that the creditworthiness of the
party involved is materially weaker following a direct
or indirect acquisition of beneficially owned equity
capital which confers the power to elect a majority of
the Supervisory 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.
BMW GroupReport 2020
Combined Management Report
Disclosures Relevant for Takeovers and Explanatory Comments
— Financing agreements in place with the European
Investment Bank (EIB) entitle the EIB to demand
early repayment of its loans in the event of an im-
minent or actual change in control of BMW AG, 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 BMW AG arises if one or more
individuals take over or lose control of BMW AG,
with control being defined in the above-mentioned
financing agreements as (i) holding or having control
over more than 50 % 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 50 % of dividends payable or
(iv) any other comparable controlling influence over
BMW AG.
— BMW AG 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 BMW AG (hereafter referred to as “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 50 %
has been attained or, in accordance with § 20 AktG
of the German Stock Corporation Act (AktG) that a
shareholding of more than 50 % has been attained or
(ii) a shareholder or a third party – including shares
183
attributed pursuant to § 30 WpHG – holds more
than 50 % 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 procedure is that the joint
venture will go to the principal making the highest bid.
the HERE Group or certain potential competitors of
the HERE Group from the technology sector acquire
at least 25 % of BMW AG. If none of the other share-
holders acquire these shares, the other shareholders
are entitled to resolve that There Holding B. V. be
dissolved.
— The development collaboration agreement between
BMW AG, Intel Corporation and Mobileye Vision
Technologies Ltd., relating to the development of
technologies used in automated vehicles, may be
terminated by any of the contractual parties if a
competitor of one of the parties acquires and sub-
sequently holds at least 30 % of the voting shares of
one of the contractual parties.
— The development collaboration agreement between
BMW AG, FCA US LLC and FCA Italy S. p. A. relating
to the development of technologies used in conjunc-
tion with automated vehicles may be terminated by
any of the contractual parties if certain competitors
in the technology sector acquire and subsequently
hold at least 30 % of the voting shares of one of the
other contractual parties.
— Several supply and development contracts between
BMW AG and various industrial customers, all relat-
ing to the sale of components for drivetrain systems,
grant an extraordinary right of termination to the
relevant industrial customer in specified cases of a
change in control at BMW AG (for example BMW AG
merges with a third party or is taken over by a third
party; an automobile manufacturer acquires more
than 50 % of the voting rights or share capital of
BMW AG).
— BMW AG is party to the shareholder agreement re-
lating 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 sharehold-
ers in the event of a change in control. A change in
control of BMW AG arises if a person takes over or
loses control of BMW AG, with control defined as (i)
holding or having control over more than 50 % of the
voting rights, (ii) the possibility to control more than
50 % of voting rights exercisable at Annual General
Meetings 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. Further-
more, a change in control occurs if competitors of
BMW GroupReport 2020
184
COMPENSATION AGREEMENTS WITH MEMBERS OF THE
BOARD OF MANAGEMENT OR WITH EMPLOYEES IN THE
EVENT OF A TAKEOVER BID
The BMW Group has not concluded any compen-
sation agreements with members of the Board of Man-
agement or with employees for situations involving a
takeover offer.
Combined Management Report
Disclosures Relevant for Takeovers and Explanatory Comments
— Until 19 June 2020, BMW AG was party to a collab-
oration agreement with Mercedes-Benz AG for the
development of technologies for second-generation
automated driving (from 2024), which could be
terminated by either party in the event that a third
party – either directly or indirectly – acquires at least
30 % of the voting rights in one of the contractual par-
ties (§ 29 (2) and § 30 of the German Securities Acqui-
sition and Takeover Act (WpÜG)). This collaboration
was terminated with immediate effect in accordance
with an agreement dated 18 / 19 June 2020.
— BMW AG has entered into an agreement with Great
Wall Motor Company Limited to establish the joint
venture Spotlight Automotive Ltd. in China. The
agreement grants an extraordinary right of termi-
nation to either joint venture partner in the event
that – either directly or indirectly – more than 25 % of
the shares of the other party are acquired by a third
party or if 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.
BMW GroupReport 2020
Group Financial Statements
185
GROUP FINANCIAL
STATEMENTS
186
187
188
190
192
194
194
208
217
219
242
264
269
Income Statement for Group and Segments
Statement of Comprehensive Income for Group
Balance Sheet for Group and Segments
Cash Flow Statement for Group and Segments
Statement of Changes in Equity for Group
Notes to the Group Financial Statements
Accounting Principles and Policies
Notes to the Income Statement
Notes to the Statement of Comprehensive Income
Notes to the Balance Sheet
Other Disclosures
Segment Information
List of investments at 31 December 2020
BMW GroupReport 2020
Group Financial Statements
Income Statement for Group and Segments
186
INCOME STATEMENT
FOR GROUP AND SEGMENTS
Automotive
(unaudited supplementary
information)
Motorcycles
(unaudited supplementary
information)
Financial Services
(unaudited supplementary
information)
Other Entities
(unaudited supplementary
information)
Eliminations
(unaudited supplementary
information)
Group
Note
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
98,990
104,210
80,853
91,682
2,284
2,368
30,044
29,598
– 85,408
– 86,147
– 71,456
– 78,062
– 1,941
– 1,911
– 26,958
– 25,938
in € million
Revenues
Cost of sales
Gross profit
Selling and administrative expenses
Other operating income
Other operating expenses
Profit / loss before financial result
Result from equity accounted investments
Interest and similar income
Interest and similar expenses
Other financial result
Financial result
Profit / loss before tax
Income taxes
Profit / loss from continuing operations
Profit / loss from discontinued operations
Net profit / loss
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
Diluted earnings per share of common stock in €
Diluted earnings per share of preferred stock in €
7
8
9
10
10
24
11
11
12
13,582
18,063
9,397
13,620
– 8,795
– 9,367
– 7,237
– 7,762
916
1,031
931
976
– 873
– 2,316
– 929
– 2,335
4,830
7,411
2,162
4,499
920
116
– 458
– 186
392
136
179
– 499
– 109
– 293
5,222
7,118
13
– 1,365
– 2,140
3,857
4,978
–
44
920
236
– 613
17
560
2,722
– 713
2,009
–
136
420
– 737
149
– 32
4,467
– 1,354
3,113
44
3,857
5,022
2,009
3,157
82
107
17
30
3,775
4,915
1,992
3,127
5.73
5.75
–
5.73
5.75
7.47
7.49
–
7.47
7.49
31
14
14
14
14
343
– 240
2
– 2
103
–
–
– 3
–
– 3
100
– 26
74
–
74
–
74
457
– 264
2
– 1
3,086
3,660
– 1,326
– 1,341
34
– 73
73
– 80
194
1,721
2,312
–
1
– 8
–
– 7
187
– 56
131
–
131
–
131
–
3
– 4
5
4
1,725
– 456
1,269
–
–
4
– 7
– 37
– 40
2,272
– 672
1,600
–
1,269
1,600
67
77
1,202
1,523
3
–
3
– 26
125
– 66
36
–
5
–
5
– 24
173
– 125
29
–
– 14,194
– 19,443
14,947
19,764
753
34
– 176
197
808
–
321
24
– 193
225
377
–
1,169
1,515
– 1,292
– 1,761
– 1,232
– 1,419
1,394
1,672
– 208
– 271
– 235
62
– 173
–
– 173
– 2
– 171
– 221
– 125
– 96
29
– 67
–
– 67
–
– 67
–
102
910
– 232
678
–
678
–
678
–
– 89
288
– 87
201
–
201
–
201
BMW GroupReport 2020
Group Financial Statements
Statement of Comprehensive Income for Group
187
STATEMENT OF COMPREHENSIVE INCOME
FOR GROUP
in € million
Net profit / loss
Remeasurement of the net liability for defined benefit pension plans
Deferred taxes
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
Costs of hedging
Other comprehensive income from equity accounted investments
Deferred taxes
Currency translation foreign operations
Items that can be reclassified to the income statement in the future
Other comprehensive income for the period after tax
Total comprehensive income
Total comprehensive income attributable to minority interests
Total comprehensive income attributable to shareholders of BMW AG
Note
2020
2019
32
19
31
3,857
– 354
139
– 215
7
991
201
106
– 444
– 1,283
– 422
– 637
3,220
82
3,138
5,022
– 1,254
387
– 867
42
– 706
125
– 3
171
544
173
– 694
4,328
107
4,221
BMW GroupReport 2020
Group Financial Statements
Balance Sheet for Group and Segments
188
BALANCE SHEET FOR GROUP
AND SEGMENTS
in € million
ASSETS
Intangible assets
Property, plant and equipment
Leased products
Investments accounted for using the equity method
Other investments
Receivables from sales financing
Financial assets
Deferred tax
Other assets
Non-current assets
Inventories
Trade receivables
Receivables from sales financing
Financial assets
Current tax
Other assets
Cash and cash equivalents
Current assets
Total assets
Automotive
(unaudited supplementary
information)
Motorcycles
(unaudited supplementary
information)
Financial Services
(unaudited supplementary
information)
Other Entities
(unaudited supplementary
information)
Eliminations
(unaudited supplementary
information)
Group
Note
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
11,809
21,371
11,212
22,749
155
401
127
407
21
22
23
24
25
26
13
28
29
30
25
26
27
28
12,342
21,850
41,995
3,585
735
11,729
23,245
42,609
3,199
703
48,025
51,030
2,644
2,459
1,216
1,370
2,194
1,325
–
3,585
4,711
–
559
3,196
2,861
–
3,199
5,144
–
131
3,451
2,203
134,851
137,404
48,092
48,089
14,896
15,891
13,391
14,404
2,298
2,518
1,979
2,228
36,252
41,407
5,108
606
9,110
13,537
5,955
1,209
11,614
12,036
–
4,152
342
–
4,772
1,000
33,747
33,492
9,522
9,077
–
–
–
–
–
–
33
589
687
219
–
–
–
2
5
81,807
90,630
63,133
64,973
913
377
78
389
89
48,759
50,348
–
20
–
1
48,082
51,079
161
550
139
512
1
–
–
–
1
–
–
–
–
–
–
–
– 6,764
– 7,739
–
–
6,938
6,847
– 10,934
– 11,289
–
1,939
131
–
1,168
– 57
– 15
– 49
– 68
84
– 1,418
– 1,853
–
–
–
–
–
–
36
2,929
3,351
41,860
38,919
– 46,467
– 43,184
570
100,956
105,908
50,869
47,019
– 65,655
– 64,182
679
186
–
–
–
1
11
877
818
100
808
103
36,252
41,407
612
64
5,952
2,863
1,009
84
5,106
2,075
–
–
–
392
200
–
1
–
187
125
–
–
–
– 48
–
–
–
–
– 13
–
52,625
64,692
– 83,216
– 91,677
1,147
873
–
–
46,661
50,592
54,364
65,878
– 83,264
– 91,690
216,658
228,034
111,225
113,062
1,502
1,447
147,617
156,500
105,233
112,897 – 148,919 – 155,872
BMW GroupReport 2020
Group Financial Statements
Balance Sheet for Group and Segments
189
in € million
Note
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Automotive
(unaudited supplementary
information)
Motorcycles
(unaudited supplementary
information)
Financial Services
(unaudited supplementary
information)
Other Entities
(unaudited supplementary
information)
Eliminations
(unaudited supplementary
information)
Group
EQUITY AND LIABILITIES
Subscribed capital
Capital reserves
Revenue reserves
Accumulated other equity
Equity attributable to shareholders of BMW AG
Minority interest
Equity
Pension provisions
Other provisions
Deferred tax
Financial liabilities
Other liabilities
Non-current provisions and liabilities
Other provisions
Current tax
Financial liabilities
Trade payables
Other liabilities
31
31
31
31
31
32
33
13
35
36
33
34
35
37
36
660
2,199
659
2,161
59,550
57,667
– 1,518
– 1,163
60,891
59,324
629
583
61,520
59,907
41,117
40,174
3,693
6,488
509
3,335
5,788
632
67,390
70,647
5,095
5,100
3,197
6,268
697
2,087
7,270
2,820
5,605
543
2,680
7,929
83,175
85,502
19,519
19,577
7,494
747
38,986
8,644
16,092
7,421
963
46,093
10,182
17,966
6,960
537
897
7,365
6,962
704
1,929
8,814
34,830
34,902
Current provisions and liabilities
71,963
82,625
50,589
53,311
–
109
74
–
–
522
705
100
–
–
378
319
797
–
96
81
–
–
569
746
105
–
–
413
183
701
15,555
15,545
21,389
21,972
– 16,541
– 17,784
49
146
2,812
17,730
42,506
47
102
3,804
18,170
39,639
338
–
78
372
–
34
–
–
–
–
– 3,078
– 3,749
47,588
49,865
– 15
– 68
1,011
102
– 46,214
– 43,139
63,243
61,762
49,015
50,373
– 49,307
– 46,956
388
192
299
184
46
18
55
75
25,178
26,938
12,959
17,239
892
943
9
12
–
–
– 48
–
–
–
– 13
–
42,169
50,829
21,797
23,171
– 83,023
– 91,119
68,819
79,193
34,829
40,552
– 83,071
– 91,132
Total equity and liabilities
216,658
228,034
111,225
113,062
1,502
1,447
147,617
156,500
105,233
112,897 – 148,919 – 155,872
BMW GroupReport 2020
Group Financial Statements
Cash Flow Statement for Group and Segments
190
CASH FLOW STATEMENT FOR GROUP
AND SEGMENTS
in € million
Profit/loss before tax 1
Income taxes paid
Interest received 2
Other interest and similar income / expenses 2
Depreciation and amortisation of tangible and intangible 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 leased products
Change in receivables from sales financing
Changes in working capital
Change in inventories
Change in trade receivables
Change in trade payables
Change in provisions
Change in other operating assets and liabilities
Cash inflow / outflow from operating activities
The reconciliation of liabilities from financing activities
is presented in
note 35.
Group
2019
7,118
– 3,389
91
51
6,017
– 200
– 136
4
– 3,825
– 3,560
– 1,117
– 1,560
14
429
1,512
1,096
3,662
Automotive
(unaudited supplementary information)
Financial Services
(unaudited supplementary information)
2020
2019
2020
2019
2,722
– 382
283
152
5,974
94
– 920
–
–
–
– 841
422
191
– 1,454
1,122
– 26
8,178
4,467
– 1,984
91
61
5,853
– 262
– 136
3
–
–
– 831
– 1,255
43
381
1,745
683
9,690
1,725
– 1,513
3
1
46
6
–
–
– 311
4,184
– 76
– 43
1
– 34
129
– 1,432
2,762
2,272
– 345
–
3
54
23
–
–
– 3,600
– 3,589
– 222
– 193
– 11
– 18
– 59
118
– 5,345
2020
5,222
– 1,605
163
104
6,139
99
– 920
–
– 1,016
4,192
– 996
370
160
– 1,526
1,115
754
13,251
BMW GroupReport 2020
Group Financial Statements
Cash Flow Statement for Group and Segments
191
in € million
2020
Group
2019
2020
2019
Automotive
(unaudited supplementary information)
Financial Services
(unaudited supplementary information)
Total investment in intangible assets and property, plant and equipment
– 6,150
– 6,902
– 5,990
– 6,734
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
Proceeds from the disposal of investment assets and other business units 3
Investments in marketable securities and investment funds
Proceeds from the sale of marketable securities and investment funds
53
34
– 176
1,328
– 925
2,200
50
32
– 1,598
1,087
– 775
822
45
34
– 199
1,327
– 829
1,679
50
31
– 1,557
1,087
– 507
465
Cash inflow / outflow from investing activities
– 3,636
– 7,284
– 3,933
– 7,165
Payments into equity
Payment of dividends for the previous year
Intragroup financing and equity transactions
Interest paid 2
Proceeds from issue of non-current financial liabilities
Repayment of non-current financial liabilities
Change in other financial liabilities
Cash inflow / outflow from financing activities
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
Cash and cash equivalents as at 1 January
Cash and cash equivalents as at 31 December
28
– 1,671
–
– 275
164,478
– 171,532
718
– 8,254
180
– 40
1,501
12,036
13,537
33
– 2,366
–
– 199
150,517
– 143,500
305
4,790
– 28
– 83
1,057
10,979
12,036
28
– 1,671
– 901
– 447
–
– 982
–
33
– 2,366
877
– 197
173
– 605
–
– 3,973
– 2,085
130
43
445
9,077
9,522
– 22
28
446
8,631
9,077
1 At the beginning of the financial year 2020, the starting point for determining cash flow was changed to profit / loss before tax; the previous year’s figures have been adjusted accordingly.
2 With the exception of interest for lease liabilities, interest relating to financial services business is classified as revenues / cost of sales.
3 Includes dividends received from investment assets amounting to € 1,020 million (2019: € 643 million).
2020
– 14
8
–
–
–
– 91
521
424
–
–
– 2,438
– 18
153,823
– 156,657
2,782
– 2,508
110
–
788
2,075
2,863
2019
– 19
2
1
–
57
– 268
356
129
–
–
5,491
– 1
132,408
– 133,089
491
5,300
6
–
90
1,985
2,075
BMW GroupReport 2020
Group Financial Statements
Statement of Changes in Equity for Group
STATEMENT OF CHANGES
IN EQUITY FOR GROUP
192
in € million
1 January 2020
Net profit
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2020
Dividend payments
Subscribed share capital increase out of Authorised Capital
Premium arising on capital increase relating to preferred stock
Other changes
31 December 2020
Note
31
Subscribed
capital
Capital
reserves
Revenue
reserves
Translation
differences
Marketable
Securities
659
2,161
57,667
– 760
29
–
–
–
–
1
–
–
–
–
–
–
–
38
–
3,775
– 215
3,560
– 1,646
–
–
– 31
–
– 1,396
– 1,396
–
–
–
–
–
5
5
–
–
–
–
31
660
2,199
59,550
– 2,156
34
Accumulated other equity
Derivative
financial
instruments
Costs
of hedging
Equity
attributable to
shareholders
of BMW AG
Minority
interest
Total
15
–
781
781
–
–
–
72
868
– 447
59,324
583
59,907
–
188
188
–
–
–
– 5
– 264
3,775
– 637
3,138
82
–
82
3,857
– 637
3,220
– 1,646
– 25
– 1,671
1
38
36
60,891
–
–
– 11
629
1
38
25
61,520
BMW GroupReport 2020
Group Financial Statements
Statement of Changes in Equity for Group
in € million
1 January 2019 (as originally reported)
Effects of accounting policy change*
1 January 2019 (as adjusted
due to accounting policy change)
Net profit
Other comprehensive income for the period after tax
Comprehensive income at 31 December 2019
Dividend payments
Subscribed share capital increase out of Authorised Capital
Premium arising on capital increase relating to preferred stock
Other changes
31 December 2019
Note
31
Subscribed
capital
Capital
reserves
Revenue
reserves
Translation
differences
Marketable
Securities
Accumulated other equity
Derivative
financial
instruments
Costs
of hedging
Equity
attributable to
shareholders
of BMW AG
Minority
interest
658
–
2,118
55,862
– 1,326
–
– 32
–
658
2,118
55,830
– 1,326
–
–
–
–
1
–
–
–
–
–
–
–
43
–
4,915
– 867
4,048
– 2,303
–
–
92
–
566
566
–
–
–
–
– 1
–
– 1
–
30
30
–
–
–
–
29
558
–
– 569
57,300
–
– 32
558
– 569
57,268
–
– 551
– 551
–
–
–
8
15
–
128
128
–
–
–
– 6
– 447
4,915
– 694
4,221
– 2,303
1
43
94
59,324
529
–
529
107
–
107
– 63
–
–
10
583
* The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, Note 6 to the Group Financial Statements).
31
659
2,161
57,667
– 760
193
Total
57,829
– 32
57,797
5,022
– 694
4,328
– 2,366
1
43
104
59,907
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
NOTES TO THE
GROUP FINANCIAL
STATEMENTS
Accounting Principles
and Policies
01 BASIS OF PREPARATION
The consolidated financial statements of Bayerische
Motoren Werke Aktiengesellschaft (BMW Group Financial
Statements or Group Financial Statements) at 31 Decem-
ber 2020 were drawn up in accordance with International
Financial Reporting Standards (IFRS), as endorsed by the
European Union (EU), and the supplementary require-
ments of § 315 e (1) of the German Commercial Code
(HGB). The Group Financial Statements and Combined
Management Report will be submitted electronically to
the operator of the Federal Gazette and are accessible
via the website of the Company Register. Bayerische
Motoren Werke Aktiengesellschaft (BMW AG), which
has its seat in Germany, Munich, Petuelring 130, is
registered in the Commercial Register of the District
Court of Munich under the number HRB 42243.
BMW AG manufactures automobiles and motorcycles
in the premium segment.
The Group currency is the euro. All amounts are
disclosed in millions of euros (€ million) unless stated
otherwise.
presentation in the notes relating to relevant balance
sheet and income statement items. Prior year figures
have been adjusted accordingly.
194
Key figures presented in the report have been round-
ed 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
segments 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”).
Approval for the publication of the Group Financial
Statements was granted by the Board of Management
on 9 March 2021 and by the Supervisory Board on
11 March 2021.
The presentation of selected items was changed in
the financial year 2020, whereby the changes were not
material overall. Attention is drawn to the changes in
02 GROUP REPORTING ENTITY AND
CONSOLIDATION PRINCIPLES
The BMW Group Financial Statements include
BMW AG and all material subsidiaries over which
BMW AG – either directly or indirectly – exercises con-
trol. This also includes 57 structured entities, consisting
of asset-backed financing arrangements and special
purpose funds.
In relation to fully consolidated companies, the fol-
lowing changes took place in the Group reporting entity
in the financial year 2020:
Included at
31 December 2019
Included for the
first time in 2020
No longer included
in 2020
Included at
31 December 2020
Germany
Foreign
Total
21
–
–
21
186
207
14
15
14
15
185
206
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
All consolidated subsidiaries have the same year-end
as BMW AG 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 considers
contractual arrangements and other circumstances, as
well as the structure and legal form of the entity. Dis-
cretionary decisions may also be required. 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 BMW AG – ei-
ther 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 ability 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.
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.
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 arrange-
ment. Assets, liabilities, revenues and expenses of a joint
operation are recognised proportionately in the Group
195
Financial Statements on the basis of the BMW Group
entity’s rights and obligations (proportionate consolida-
tion).
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.
The two largest joint operations that are accounted
for by the BMW Group and which are described below
are of minor significance for the Group Financial State-
ments as a whole:
— The BMW Group is party to a cooperation with
Toyota Motor Corporation, Toyota City, which has
developed a sports car.
— In 2019, the BMW Group and the Chinese auto-
mobile manufacturer Great Wall Motor Company
Limited (Great Wall) established the jointly operated
company, Spotlight Automotive Limited (Spotlight)
for the future joint development and manufacture
of electric vehicles in China. The BMW Group and
Great Wall each hold 50 % of the joint operation’s
equity. In addition to electric MINI vehicles, Spot-
light will also develop and produce electric vehicles
for Great Wall.
In June 2020, a joint decision was taken to temporar-
ily put on hold the cooperation with the Daimler Group
for the development of highly automated driving systems,
which is accounted for as a joint operation. This has no
impact on the 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.
Associated companies and joint ventures are account-
ed for using the equity method, with measurement on
initial recognition based on acquisition cost.
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
trans lated at the average exchange rate. Differences
arising on foreign currency translation are presented in
“Accumulated other equity“.
In the single entity accounts of BMW AG 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. Advance
payments to suppliers or from customers in a foreign
currency that result in the addition of non-monetary
assets or liabilities are recorded at the exchange rate
prevailing at the date of payment. At the end of the
reporting period, foreign currency receivables and pay-
ables are measured using the closing exchange rate. The
resulting unrealised gains and losses, as well as realised
gains and losses arising on settlement, are recognised
in the income statement, in line with the underlying
substance of the transaction. Non-monetary balance
sheet items denominated in foreign currencies are rolled
forward on the basis of historical exchange rates.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
The exchange rates of currencies which have a
material impact on the Group Financial Statements were
as follows:
1 Euro =
US-Dollar
British Pound
Chinese Renminbi
South African Rand
Russian Rouble
Argentina has fulfilled the definition of a hyper-
inflationary economy since 1 July 2018. Since that
date, IAS 29 (Financial Reporting in Hyperinflationary
Economies) has therefore been 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.
196
In accordance with the amendments, hedge account-
ing is not required to be discontinued solely because of
the reform. Instead, the hedge relationships are deemed
to remain in place even if the existing benchmark interest
rate is replaced by an alternative interest rate, provided
that the underlying documentation has been appropri-
ately updated.
Replacing a previous benchmark rate results in a
change in the basis for determining the contractual cash
flows relating to financial assets and financial liabilities.
For simplification purposes, it is permitted to account for
the change by updating the effective interest rate without
any immediate impact on profit or loss. This practical
expedient is also available for finance leases, in that
the requirements contained in IFRS 9 for modifications
are deemed to apply. A similar practical expedient is
available for lease liabilities accounted for in accordance
with IFRS 16. In this case, any modification required by
the benchmark reform results only in the lease liability
being remeasured when the alternative interest rate is
used to discount the modified lease payments.
The amendments are mandatory for financial years
beginning on or after 1 January 2021. The BMW Group
intends to apply the proposed practical expedients
for transactions affected by the benchmark reform. The
amendments have not been adopted early for the finan-
cial year 2020.
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.
Closing rate
Average rate
31. 12. 2020
31. 12. 2019
1.23
0.90
8.00
17.97
90.54
1.12
0.85
7.82
15.72
69.60
2020
1.14
0.89
7.87
18.77
82.71
2019
1.12
0.88
7.73
16.17
72.43
04 FINANCIAL REPORTING RULES
a
Financial reporting standards applied for
the first time in the financial year 2020
Standards or amendments to standards applied
for the first time in the financial year do not have any
significant impact on the BMW Group Financial State-
ments.
b
Financial reporting standards issued by
the IASB, but not yet applied
In August 2020, the IASB published the Amendment
Standard Interest Rate Benchmark Reform (IBOR) –
Phase 2. The amendments contain a number of reliefs to
mitigate the impact on the accounting treatment of hedge
relationships, financial instruments and lease liabilities
resulting from the reform of interest rate benchmarks.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
197
05 ACCOUNTING POLICIES, ASSUMPTIONS,
JUDGEMENTS AND ESTIMATIONS
Revenues from customer contracts include in particu-
lar revenues from the sale of products (primarily new
and pre-owned vehicles and related products) as well
as revenues from services. Revenue is recognised 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
may also be agreed. In the case of services, control is
transferred over time. Consideration for the rendering
of services to customers usually falls due for payment
at 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 revenue 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
multi-component contracts, allocated to all performance
obligations unless directly attributable to the sale of a
vehicle.
Revenues from the sale of products, for which re-
purchase arrangements are in place, are not recognised
immediately in full. Instead, revenues are either rec-
ognised proportionately or the difference between the
sales and repurchase price 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
recognised 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 leases of own-manufactured vehicles
are recognised at Group level in accordance with the re-
quirements for manufacturer or dealer leases. 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.
Revenues also include interest income from financial
services. Interest income arising on finance leases as well
as on retail customer and dealership financing is recog-
nised 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.
Earnings per share are calculated as follows: Basic
earnings per share are calculated for common and pre-
ferred stock by dividing the net profit for the year after
minority interests and attributable to each category 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 proposals or resolutions for com-
mon and preferred stock. Diluted earnings per share are
calculated and separately disclosed in accordance with
IAS 33.
Intangible assets are measured at acquisition or man-
ufacturing 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 impairment.
Internally generated intangible assets mainly comprise
development costs for vehicle, module and architecture
projects.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
198
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 (usually seven
to twelve years).
Goodwill arises on first-time consolidation of an
acquired business when the cost of acquisition exceeds
the Group’s share of the net fair value of the assets, li-
abilities and contingent liabilities identified during the
acquisition.
Intangible assets also include emission allowances and
similar rights arising from programmes aimed at reducing
carbon or other climate-damaging emissions (for example
in conjunction with the EU Emissions Trading System
or vehicle-related emissions regulations in the USA or
China). These allowances and rights are carried at cost
and, in the event that they are allocated free of charge,
recorded at a value of zero. Amounts are derecognised
at the date of the return, sale or expiry of the allowances
or rights. In parallel to the recognition of these allow-
ances and rights as assets, provisions are recognised in
accordance with IAS 37 corresponding to the amount
of obligations expected to arise in conjunction with the
related emission regulations. Provisions are measured
on the basis of the expected value of the allowances or
rights that are to be returned.
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 independent from the
cash flows generated by other assets or other groups of
assets. In these cases, impairment is tested at the level
of a cash-generating unit, which is the norm for the
BMW Group.
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 car-
rying 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.
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 manufacturing cost.
Impairment losses on goodwill are not reversed.
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.
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 perpetual annuity return is assumed which
does not take growth into account. Forecasting assump-
tions are continually adjusted to current information and
regularly compared with external sources. The assump-
tions 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.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
199
Amounts are discounted on the basis of a market-re-
lated cost of capital rate. Impairment tests are performed
for accounting and financial reporting purposes for the
Automotive and Motorcycles cash-generating units using
a risk-adjusted pre-tax cost of capital (WACC). 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 %
Automotive
Motorcycles
Financial Services
2020
2019
10.2
10.2
13.2
10.9
10.9
11.5
manufacturing process as well as an appropriate pro-
portion 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.
The following useful lives are applied throughout the
BMW Group:
in years
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. Even in the
case of a 10 % deterioration in the individual measure-
ment assumptions, the need to recognise an impairment
loss did not arise.
Factory and office buildings, residential buildings, fixed
installations in buildings and outside facilities
Plant and machinery
Other equipment, factory and office equipment
8 to 50
3 to 21
2 to 25
For machinery used in multiple-shift operations,
depreciation rates are increased to account for the addi-
tional utilisation. If there is any indication of impairment
of property, plant and equipment, an impairment test is
performed as described above for intangible assets.
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
In the case of leased items of property, plant and
equipment, 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 deduct-
ed. 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 automatically 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.
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.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
200
The lease payments to be taken into account to meas-
ure 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 eco-
nomic incentive to exercise or not to exercise the option.
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.
Determining which items are to be counted as lease
payments – including the issue of the lease term under-
lying 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.
market data as well as on forecasts of external institu-
tions. Furthermore, assumptions are regularly validated
by comparison with external data.
The BMW Group has not applied the exemptions
available to lessees to account for COVID-19-related rent
concessions (amendment to IFRS 16 dated 28 May 2020).
Group products recognised by BMW Group entities
as leased products under operating leases are measured
at manufacturing cost and all other leased products at
acquisition cost, in each case including initial direct costs.
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 carrying amount, changes
in residual value expectations are recognised by adjusting
scheduled depreciation prospectively over the remain-
ing 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 recognised in prior years no longer exists or has de-
creased. 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.
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 im-
pairment test is performed on the basis of a discounted
cash flow method. An indicator 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 lease receivables, financial assets
are measured on initial recognition at their fair value.
Financial assets include in particular other investments,
receivables from sales financing, marketable securities
and investment funds, derivative financial assets, trade
receivables and cash and cash equivalents. As a gen-
eral rule, initial recognition takes place as soon as the
BMW Group becomes a party to a contract; in the case
of standard purchases or sales of non-derivative financial
assets, initial recognition takes place at the settlement
date.
Assumptions and estimations are required regarding
future residual values, since these represent a significant
part of future cash inflows. Relevant factors to be consid-
ered include the trend in market prices and demand on
the pre-owned automobile market. The assumptions are
based on internally available historical data and current
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
comprehensive income or at fair value through profit
or loss. The category “measured at fair value through
comprehensive income” at the BMW Group comprises
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
201
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 instruments at fair value through profit
or loss.
The market values of financial instruments measured
at fair value are determined on the basis of market infor-
mation available at the balance sheet date, such as quoted
prices or using appropriate measurement methods, in
particular the discounted cash flow method.
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 are also included in other investments.
Receivables from sales financing are measured at
amortised cost using the effective interest rate method.
Operating lease receivables due for payment at the end
of the reporting period and included in this balance sheet
line item are also measured on this basis, and the related
vehicles reported as leased products. Receivables from
sales financing also include finance lease receivables
which are measured at the amount of the net investment
in the lease.
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 recog-
nition 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 recog-
nition, the impairment allowance is measured on the
basis of lifetime expected credit losses (stage 2 – general
approach). 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.
The BMW Group applies the simplified approach de-
scribed 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 of lifetime expected credit losses (stage 2 –
simplified approach). For the purposes of allocating at
item to stage 2, it is irrelevant whether the credit risk of
the assets concerned has increased significantly since
initial recognition.
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 insolvency, such as
the opening of insolvency proceedings. Credit-impaired
assets are identified as such on the basis of this definition
of default. 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 credit losses (stage
3). This is the case regardless of whether the general or
simplified approach is applied. In the case of stage 3 as-
sets, interest income is calculated on the asset’s carrying
amount less any impairment loss.
The BMW Group derecognises financial assets when
it has no reasonable expectation of recovery. 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.
Loss allowances relating to the balance sheet item
“Receivables from sales financing” are determined pri-
marily on the basis of past experience 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.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Loss allowances on trade receivables are determined
primarily on the basis of information relating to overdue
amounts. Input factors available on the market, such as
ratings and probabilities of default, are used to calcu-
late valuation allowance for cash and cash equivalents,
financial receivables, receivables from subsidiaries and
receivables from companies in which an investment is
held. 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 differ-
ent stages. Accordingly, assets with an investment grade
rating are always allocated to stage 1.
Expected credit losses are only presented separately
if they are material for the BMW Group Financial State-
ments.
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. Depending on
their market value at measurement date, these financial
instruments are reported in the balance sheet as financial
assets or financial liabilities.
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.
202
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 adjust-
ments (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).
Where hedge accounting is applied, changes in fair
value of derivative financial instruments are presented
as part of other financial result in the income statement
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 financial liabilities. The currency
basis is not designated as part of the hedging relationship
in the case of cross currency interest rate hedges account-
ed for as fair value hedges. Accordingly, changes in the
market value of such components are recorded as costs
of hedging within accumulated other equity. Amounts
accumulated in equity are reclassified to other financial
result within the income statement over the term of the
hedging relationship.
In addition, for selected fixed-interest assets, a
portion of the interest rate risk is hedged on a portfolio
basis in accordance with IAS 39. The designated hedged
items (underlying transactions) are reported in the
balance sheet as receivables from sales financing and
financial liabilities. 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 constant-
ly changing content of each portfolio.
Fair value hedge ineffectiveness is generally recog-
nised in other financial result.
The time values of option transactions and the in-
terest 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 fair
value of such components are recorded as costs of hedg-
ing 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.
In the case of raw materials hedges that are account-
ed 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 of 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.
Ineffectiveness arising on cash flow hedges is rec-
ognised directly in cost of sales, whereas the impact of
terminated hedging relationships is recognised in other
operating income and expenses.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
203
Deferred income taxes are recognised for all tempo-
rary 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, to the extent that they can be
utilised. Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply for the period
when the asset is realised or the liability settled, based
on tax rates and tax laws that have been enacted or sub-
stantively enacted at the balance sheet date.
The recoverability of deferred tax assets is assessed at
each balance sheet date on the basis of planned taxable
income in future financial years. If with a probability
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 assump-
tions 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 certainty and to some extent cannot
be influenced by the BMW Group, the measurement of
deferred tax assets is subject to uncertainty.
Deferred tax liabilities on taxable temporary differ-
ences arising from investments in subsidiaries, branches
and associated companies as well as interests in joint
arrangements 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.
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 authorities may
take a different position.
As a general rule, each income tax treatment is con-
sidered 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 taxable profit
and the tax base.
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 ve-
hicles held for sale in the financial services business, are
stated at the lower of manufacturing cost and net realisa-
ble value. Manufacturing cost comprises all costs which
are directly attributable to the manufacturing process as
well as an appropriate proportion of production-related
overheads. This includes production-related deprecia-
tion and amortisation and an appropriate proportion
of administrative and social costs. Financing costs are
not included in the acquisition or manufacturing cost
of inventories.
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 am-
ortised cost.
Financial liabilities, with the exception of lease lia-
bilities, 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 lia-
bilities 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 amortised cost using the ef-
fective interest method.
Provisions for pensions are measured using the
projected 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.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
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.
The calculation of the amount of the provision re-
quires assumptions to be made with regard to discount
rates, salary trends, employee fluctuation and the life
expectancy of employees. Discount rates are determined
by reference to market yields at the end of the reporting
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 in-
flation and the career development of employees within
the Group.
Net interest expense on the net defined benefit lia-
bility or net interest income on the net defined benefit
assets are presented within the financial result. All other
costs relating to allocations to pension provisions are
allocated to costs by function in the income statement.
Past service cost arises where a BMW Group company
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.
204
Remeasurement of the net liability can result from
changes in the present value of the defined benefit ob-
ligation, 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 immediately through
other comprehensive income and ultimately in equity
(within revenue reserves).
Other provisions are recognised when the BMW Group
has a present legal or factual 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.
The measurement of provisions for statutory and
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 (assurance-
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.
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 cus-
tomer or when it is decided to introduce new warranty
measures. With respect to the level of the provision, esti-
mations 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
information is provided in
note 33. Similar estimates
are also made in conjunction with the measurement of
expected reimbursement claims.
The recognition and measurements of provisions for
litigation and liability risks necessitates making assump-
tions in order to determine the probability of liability, the
amount of claim and the duration of the legal dispute.
The assumptions made, especially the assumption about
the outcome of legal proceedings, are subject to a high
degree of uncertainty. The appropriateness of assump-
tions is regularly reviewed, based on assessments under-
taken both by management and external experts, such
as lawyers. If new developments arise in the future that
result in a different assessment, provisions are adjusted
accordingly.
If the recognition 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 as-
sociated companies, joint ventures and non-consolidated
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 ap-
plies to members of the Board of Management and the
Supervisory Board. Details relating to these individuals
note 40 and in the list of
and entities are provided in
investments disclosed in
note 46.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Share-based remuneration programmes which are
expected 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.
The share-based remuneration programme for
Board of Management members and senior heads of
department entitles BMW AG to elect whether to settle
its commitments in cash or with shares of BMW AG
common stock. Based on the decision to settle in cash,
the share-based remuneration programmes for Board of
Management members and senior heads of department
are accounted for as cash-settled, share-based remuner-
ation programmes. Further information on share-based
remuneration programmes is provided in
note 41.
06 IMPACT OF THE CORONAVIRUS PANDEMIC
ON THE FINANCIAL STATEMENTS
GENERAL SITUATION
The BMW Group’s earnings for the financial year
2020 have been negatively impacted by the course of the
coronavirus pandemic and the related measures put in
place to contain the virus.
Whereas the main negative factors in the first quarter
were the drop in demand in China and the closure of
dealerships in a few other markets, business in the sec-
ond quarter was adversely impacted by the global spread
of the pandemic affecting other key sales markets of the
BMW Group. Although customer demand increased in
many markets during the second half of the year, the
repercussions of the coronavirus pandemic on business
in the first half of the year continued to be felt. This is
reflected in particular in the decline in revenues, main-
ly due to the lower number of vehicle sales and lower
revenues from spare parts. The decline in vehicle sales
was also reflected in cost of sales, whereby fixed costs
fell on a less pronounced scale by comparison to the
reduction in capacity utilisation levels. Group earnings
were also negatively impacted by higher risk provisioning
expenses relating in particular to the reassessment of
residual value and credit risks.
205
Due to lower new leasing business as well as lower
expected new leasing business, the amount of revenues
eliminated on consolidation fell compared to the previ-
ous year.
The year-on-year decrease in selling and adminis-
trative expenses mainly reflected the reduction in com-
munication, marketing and travel expenses arising as
a result of the containment measures implemented in
connection with the coronavirus pandemic. Short-time
work allowances received have been netted in the income
statement against the corresponding expenses.
In light of the developments described above, Group
net profit was significantly lower than in the previous
year.
Significant effects on the Group Financial Statements
are described below.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
ACCOUNTING POLICIES
Impairment tests
The increasing global spread of the coronavirus and
the related low market capitalisation of BMW AG gave
rise to an indication that tangible and intangible assets
of the BMW Group could be impaired. As a result, im-
pairment tests were performed for the Automotive, Mo-
torcycles and Financial Services cash-generating units.
In this context, values in use were determined on the
basis of updated long-term forecasts that already reflect
adjustments to expectations made in light of coronavi-
rus. Against this backdrop, it was decided not to include
probability-weighted scenarios. A detailed description of
the methodology applied to perform impairment tests is
provided in
note 5.
From the BMW Group’s perspective, the spread of
coronavirus also provided an indication of impairment
relating to investments accounted for using the equity
method. The exception to this general consideration was
the BMW Brilliance Automotive joint venture in China,
given the rapid economic recovery registered in that
region. Further information is provided in
note 24.
206
De-designation of hedge relationships
For the purposes of accounting for currency and
commodity hedges, coronavirus-related effects on sales
and production were taken into account as unscheduled
exposure updates. If the hedged item was no longer
expected to occur, the hedge relationships were de-
designated. The corresponding amounts were then re-
classified immediately from other comprehensive income
to profit and loss (other operating income and expenses).
Residual value risk
For the purposes of measuring and accounting for re-
sidual value risks, discretionary adjustments were made
to the expected market values of vehicles in order to take
account of the effects of the pandemic that are not con-
sidered in the existing measurement models (post-model
adjustments). The adjustments were determined using a
market-specific approach, thereby taking account of the
varying effects and measures arising in each market as
well as the structure of the valuation models.
In the case of the US market, past experience
relevant for market value changes arising during the
financial crisis was taken into account in the calculation
of post-model adjustments. In the case of the UK and
Canadian markets, the procedures applied also included
projections drawn up by external providers on the impact
of the coronavirus pandemic. In all cases, assumptions
pertaining to the scale and duration of the pandemic’s ef-
fects took account of current market value developments.
If the regression models used were highly affected by
market values realised in recent months, the outcomes
were adjusted for exceptionally positive results in the
second half of the year for instance, in the UK and the
Netherlands. In the case of the Belgian and German mar-
kets, for instance, procedures included the derivation
of a number of macroeconomic scenarios to calculate
the potential impact on pre-owned vehicle valuations.
Probabilities were weighted where necessary, taking into
account external indicators (e. g. consumer confidence
indices) and internal indicators (e. g. inventory trends).
In some cases, including for the French market, macro-
economic parameters based on current risk estimates
were adjusted.
Discretionary model adjustments are regularly re-
viewed in order to ensure that allowances for residual
value losses are continuously updated on the basis of
expected market values. In light of the volatile market
environment and the current high level of uncertainty
surrounding the future course of the coronavirus pan-
demic, only limited conclusions can be drawn from the
recent improvement in market values observed on pre-
owned automobile markets. A summary of the relevant
values is provided in
note 23.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Credit risk
I. Receivables from sales financing
In connection with the coronavirus pandemic, al-
lowances for expected credit losses were increased to
take account of the negative impact on retail customer
and dealership business, to the extent not covered by
the BMW Group’s standard loss provisioning models
(post-model adjustments).
In the case of retail customer business, portfolios
were measured taking into account market-specific
qualitative factors with the aim of identifying particu-
larly affected portfolio segments (such as the tourism
sector). This assessment was based on local expertise
and took into account various scenarios, including the
number of payment deferral applications, government
measures and additional qualitative portfolio data. For
the identified portfolio segments affected, amounts were
reclassified from stage 1 (impairment allowance based on
the 12-month expected credit losses) to stage 2 (impair-
ment allowance based on lifetime expected credit losses),
resulting in the recognition of additional risk allowances.
Credit risk parameters were otherwise left unchanged.
In the case of dealership business, creditworthiness
expectations of individual dealerships were assessed
on the basis of market-specific scenarios, including
207
downgrades based on adjusted expectations of future
business performance. In this context, increased default
probabilities were assigned to dealerships that could be
exposed to deteriorating business conditions as a result
of the coronavirus pandemic. However, this reassessment
did not result in amounts being reclassified from stage
1 to stage 2 or stage 3. Instead, additional impairment
allowances were recognised to take account of the higher
anticipated risk of default.
overdue status of these receivables is seen as a risk. A
simulated reclassification of receivables to a higher over-
due band was run, taking account of macroeconomic
influencing factors, the development of the gross domes-
tic product (GDP), of the countries concerned. An addi-
tional allowance for expected credit losses was calculated
and recorded on the basis of this simulation. Further
information on the calculation of valuation allowances
in accordance with IFRS 9 is provided in
note 5.
Overall, the additional impairment losses described
above were offset by a volume-related decrease in receiv-
ables. The lower level of impairment allowances com-
pared to 31 December 2019 therefore arose as a result of
the lower level of receivables overall. A summary of the
relevant values is provided in
note 30.
Furthermore, additional scenarios were considered
for the economic development of individual markets
(for example, the UK), for which an increased level of
uncertainty exists. In addition, in light of current risk
assessments, macroeconomic parameters were adjusted
to take account of specific circumstances in some markets
(for instance, South Africa and Malaysia). A summary of
the values is provided in
note 25.
II. Trade receivables
The effects of a higher risk on receivables within
stage 2 were calculated using a scenario model as the
basis for recognising additional credit risk allowances
for trade receivables. The standard model used by the
BMW Group to determine expected credit losses is
unable – at present – to appropriately take account of
the impact of the coronavirus pandemic. An increasing
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
NOTES TO THE INCOME
STATEMENT
07 REVENUES
Revenues by activity comprise the following:
in € million
2020
2019
Sales of products and related goods
67,548
73,433
Sales of products previously
leased to customers
Income from lease instalments
Interest income on loan financing
and finance leases
Revenues from service contracts,
telematics and roadside assistance
Other income
Revenues
11,345
11,322
11,020
10,746
3,677
3,996
2,763
2,335
2,820
2,195
98,990
104,210
Revenues recognised from contracts with customers
in accordance with IFRS 15 totalled € 83,814 million
(2019: € 89,610 million).
208
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 re-
lated goods are generated primarily in the Automotive
segment and, to a lesser extent, in the Motorcycles
segment. Revenues from the sale of products previously
leased to customers, income from lease instalments and
interest income on loan financing are allocated to the
Financial Services segment. Other income relates mainly
to the Automotive segment and the Financial Services
segment.
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 next financial year.
The services included in vehicle sale contracts that will
be recognised as revenues in subsequent years represent
only an insignificant portion of expected revenues. Ac-
cordingly, 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.
Interest income on loan financing and finance
leases includes interest calculated on the basis of the
effective interest method totalling € 3,424 million (2019:
€ 3,687 million). This interest income is not reported
separately in the income statement as it is not significant
compared to total Group revenues.
08 COST OF SALES
Cost of sales comprises:
in € million
2020
2019*
Manufacturing costs
46,878
48,776
Cost of sales relating to financial
services business
thereof: interest expense relating
to financial services business
Research and development expenses
Expenses for service contracts, tele-
matics and roadside assistance
Warranty expenditure
Other cost of sales
Cost of sales
* Prior year’s figures adjusted.
27,114
25,828
1,960
5,689
1,411
2,971
1,345
2,288
5,952
1,641
2,566
1,384
85,408
86,147
Cost of sales is reduced by public-sector subsidies
in the form of reduced taxes on assets and reduced con-
sumption-based taxes amounting to € 105 million (2019:
€ 105 million). Other cost of sales included expenses that
were able to be allocated to manufacturing costs or cost
of sales relating to financial services business. Prior year
figures have been adjusted accordingly.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
209
Impairment losses recognised in the income state-
ment 2020 in connection with receivables from sales
financing amounted to € 646 million (2019: € 219 million).
In view of the fact that the impairment losses are of
minor importance compared to total Group cost of sales,
they have not been disclosed separately in the income
statement.
Research and development expenditure was as follows:
in € million
2020
2019
Research and development expenses
Amortisation
New expenditure for capitalised
development costs
Total research and
development expenditure
5,689
– 1,710
5,952
– 1,667
2,300
2,134
6,279
6,419
09 SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses relate mainly to
expenses for marketing and communication, personnel
and IT.
in € million
2020
2019
Selling expenses
Administrative expenses
Total selling and administrative
expenses
5,300
3,495
5,656
3,711
8,795
9,367
10 OTHER OPERATING INCOME AND EXPENSES
Other operating income and expenses comprise the
following items:
in € million
Exchange gains
Income from the reversal of provisions
Income from the reversal of impairment
losses and write-downs
Gains on the disposal of assets
Sundry operating income
Other operating income
Exchange losses
Expense for additions to provisions
Expense for impairment losses and
write-downs
Loss on the disposal of assets
Sundry operating expenses
Other operating expenses
2020
326
114
164
30
282
916
– 286
– 157
– 47
– 117
– 266
– 873
2019
148
433
8
41
401
1,031
– 181
– 1,732
– 173
– 20
– 210
– 2,316
Other operating income and expenses
43
– 1,285
Income from the reversal of and expenses for the
recognition of impairment allowances and write-downs
relate mainly to impairment allowances on receivables.
Impairment losses recognised on receivables from
contracts with customers amounted to € 47 million (2019:
€ 48 million).
The expense for additions to provisions includes liti-
gation and other legal risks. Income from the reversal of
provisions includes income arising on the reassessment
of risks from legal disputes.
In the previous year, an expense of approximately
€ 1.4 billion was also recognised in connection with the
ongoing anti-trust proceedings carried out by the Euro-
pean Commission (see also note 10 to the BMW Group
Financial Statements for the financial year 2019). In
December 2019, the BMW Group submitted a detailed
response to the European Commission regarding the
latter’s Statement of Objections. A decision by the Eu-
ropean Commission is pending. There was no impact
on the income statement in the financial year 2020. The
financial impact cannot be definitively assessed at this
point in time.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
210
11 NET INTEREST RESULT
12 OTHER FINANCIAL RESULT
13 INCOME TAXES
2019
in € million
2020
2019
Taxes on income of the BMW Group comprise the
in € million
Other interest and similar income
thereof from subsidiaries:
Interest and similar income
Expense relating to interest impact
on other long-term provisions
Net interest expense on the net defined
benefit liability for pension plans
Other interest and similar expenses
thereof subsidiaries:
Interest and similar expenses
Net interest result
2020
116
8
116
179
9
179
Income from investments in
subsidiaries and participations
thereof from subsidiaries:
Expenses from investments in
subsidiaries and participations
– 199
– 226
Result on investments
– 34
– 225
– 1
– 458
– 342
– 41
– 232
– 4
– 499
– 320
Income (+) and expenses (–) from
financial instruments
Sundry other financial result
Other financial result
135
12
– 87
48
– 234
– 234
– 186
387
13
– 307
80
– 189
– 189
– 109
following:
in € million
2020
2019
Current tax expense
Deferred tax expense (+) /
deferred tax income (–)
thereof relating to temporary
differences
thereof relating to tax loss
carryforwards and tax credits
Income taxes
2,023
3,316
– 658
– 1,176
– 450
– 1,439
– 208
1,365
263
2,140
Sundry other financial result comprises mainly in-
come and expenses arising on the measurement of stand-
alone derivatives and fair value hedge relationships, as
well as income and expenses from the measurement and
sale of marketable securities and shares in investment
funds.
The tax expense was reduced by € 4 million (2019:
€ 30 million) as a result of utilising tax loss carryforwards,
for which deferred assets had not previously been recog-
nised and in conjunction with previously unrecognised
tax credits and temporary differences.
The tax expense resulting from the change in the
valuation allowance on deferred tax assets relating to
tax losses available for carryforward and temporary
differences amounted to € 10 million (2019: € 7 million).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
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 muni-
cipal trade tax multiplier rate (Hebesatz) of 428,0 (2019:
428,0), the underlying income tax rate for Germany was
as follows:
in %
Corporate tax rate
Solidarity surcharge
Corporate tax rate including solidarity
surcharge
Municipal trade tax rate
German income tax rate
2020
15.0
5.5
15.8
15.0
30.8
15.0
5.5
15.8
15.0
30.8
Deferred taxes for non-German entities are calculat-
ed on the basis of the relevant country-specific tax rates.
These ranged in the financial year 2020 between 9.0 %
and 40.0 % (2019: between 9.0 % and 40.0 %).
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:
The tax increases as a result of non-deductible ex-
penses mainly relate to non-recoverable withholding
taxes.
211
in € million
2020
2019
Profit before tax
Tax rate applicable in Germany
2019
Expected tax expense
5,222
30.8 %
1,608
7,118
30.8 %
2,192
Tax expense for prior years resulted primarily from
adjustments to income tax receivables and provisions for
prior years, among other things due to transfer pricing
issues in conjunction with unconcluded and ongoing
transfer pricing proceedings.
Variances due to different tax rates
– 397
– 373
Tax increases (+) / tax reductions (–) due to:
Other variances include various reconciling items.
Tax-exempt income
Non-deductible expenses
Equity accounted
Tax expense (+) / benefits (–)
for prior years
Effects from tax rate changes
Other variances
Actual tax expense
Effective tax rate
– 97
398
– 210
61
17
– 15
1,365
26.1 %
– 314
909
5
– 162
– 17
– 100
2,140
30.1 %
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
The allocation of deferred tax assets and liabilities to
balance sheet line items at 31 December is shown in the
following table:
in € million
Intangible assets
Property, plant and equipment
Leased products
Other investments
Sundry other assets
Tax loss carryforwards
Capital Losses
Provisions
Liabilities
Eliminations
Valuation allowances on tax loss carryforwards
Valuation allowances on capital losses
Netting
Deferred taxes
Net
Deferred tax assets
Deferred tax liabilities
2020
17
49
282
6
1,013
476
348
6,655
3,717
3,721
2019
17
53
324
3
1,125
306
329
6,239
3,544
3,883
16,284
15,823
– 138
– 348
– 177
– 329
2020
2019
3,354
673
3,203
1
3,966
–
–
33
852
1,766
13,848
–
–
3,186
780
4,085
22
3,454
–
–
42
647
1,539
13,755
–
–
– 13,339
– 13,123
– 13,339
– 13,123
2,459
1,950
2,194
1,562
509
–
632
–
Tax loss carryforwards relating to Germany and
foreign operations amounted to € 1,568 million (2019:
€ 954 million). This includes one tax-loss carryforward
amounting to € 406 million (2019: € 519 million), on
which a valuation allowance of € 138 million (2019:
€ 177 million) was recognised on the related deferred
tax asset. The increase in tax losses available for carry-
forward was mainly attributable to the decline in earn-
ings as a consequence of the coronavirus pandemic.
For entities with tax losses available for carryforward,
a net surplus of deferred tax assets over deferred tax
212
liabilities is reported amounting to € 392 million (2019:
€ 292 million). The basis for the recognition of deferred
taxes is the BMW Group business model or manage-
ment’s assessment that there is material evidence that
the entities will generate future taxable profit, against
which deductible temporary differences can be offset. In
this context, it is also expected that the loss recorded
by BMW AG tax group for income tax purposes for the
financial year 2020 can be utilised in full in the coming
years, taking into account the minimum taxation rules
in Germany. Furthermore, it is assumed that tax start-up
losses relating to the San Luis Potosí plant in Mexico,
opened in 2019, can be utilised by offset against planned
future profits.
Loss carryforwards amounting to € 1,129 million
(2019: € 553 million) can be used indefinitely, while
€ 439 million (2019: € 401 million) expire after more than
3 years.
Capital losses available for carryforward in the Unit-
ed Kingdom which do not relate to ongoing operations
decreased to € 1,832 million (2019: € 1,938 million) due
to currency factors. As in previous years, deferred tax
assets recognised on these tax losses – amounting to
€ 348 million at the end of the reporting period (2019:
€ 329 million) – were fully written down since they can
only be utilised against future capital gains.
Deferred tax assets and deferred tax liabilities are
netted for each relevant tax entity if they relate to the
same tax authorities.
BMW GroupReport 2020
213
Group Financial Statements
Notes to the Group Financial Statements
Deferred taxes recognised directly in equity amount-
ed to € 1,710 million (2019: € 2,015 million).
in € million
2020
2019 *
Deferred taxes at 1 January (assets (+) / liabilities (–))
Deferred tax expense (–) / income (+) recognised through income statement
Change in deferred taxes recognised directly in equity
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
Exchange rate impact and other changes
Deferred taxes at 31 December (assets (+) / liabilities (–))
* Sign convention changed compared to previous year’s Group Financial Statements.
1,562
658
– 305
– 443
161
– 23
35
1,950
– 122
1,176
558
170
376
12
– 50
1,562
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.
Taxable temporary differences relating to investments
in subsidiaries, associated companies and joint ventures
amount to € 22,174 million (2019: € 21,215 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 probable 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 of income taxes on
the grounds of proportionality. Deferred tax liabilities
on expected dividends amount to € 76 million (2019:
€ 64 million) and relate primarily to dividends from for-
eign subsidiaries and joint ventures.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
214
14 EARNINGS PER SHARE
15 PERSONNEL EXPENSES
Net profit attributable to the shareholders of BMW AG
€ million
3,775.0
4,914.5
2020
2019
The income statement includes personnel expenses
as follows:
Profit attributable to common stock
Profit attributable to preferred stock
Average number of common stock shares in circulation
Average number of preferred stock shares in circulation
Basic / diluted earnings per share of common stock
Basic / diluted earnings per share of preferred stock
Dividend per share of common stock
Dividend per share of preferred stock
* Proposal by management.
Earnings per share of preferred stock are computed
on the basis of the number of preferred stock shares enti-
tled to receive a dividend in each of the relevant financial
years. As in the previous year, diluted earnings per share
correspond to basic earnings per share.
€ million
€ million
number
number
€
€
€
€
3,448.1
326.9
4,494.4
420.1
601,995,196
601,995,196
56,867,180
56,122,857
5.73
5.75
1.90*
1.92*
7.47
7.49
2.50
2.52
in € million
2020
2019
Wages and salaries
Pension and welfare expenses
Social insurance expenses
Personnel expenses
10,081
10,370
1,252
911
1,133
948
12,244
12,451
Personnel expenses include € 602 million (2019:
€ 72 million) of costs relating to workforce measures.
The total pension expense for defined contribution
plans of the BMW Group amounted to € 150 million
(2019: € 148 million). Employer contri butions paid to
state pension insurance schemes totalled € 634 million
(2019: € 667 million).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
215
The average number of employees during the year
16 LEASES
was:
Average number of employees
122,874
123,868
In terms of accounting for leases as a lessee, the
following amounts are included in the income statement:
2020
2019 *
a As lessee
thereof at proportionately-consolidated
entities
* Prior year’s figures adjusted.
139
–
in € million
2020
2019
Expenses for leases of low-value assets
and short-term leases
– 91
– 94
Total cash outflows for leases in 2020 amounted to
€ 653 million (2019: € 591 million).
Information on right-of-use assets, lease liabilities as
well as further explanatory comments are provided in
note 5 (Accounting policies, assumptions, judgments
and estimates),
note 20 (Analysis of changes in Group
tangible, intangible and investment assets in 2020),
note 22 (Property, plant and equipment (including
note 35
right-of-use assets arising from leases)) and
(Financial liabilities).
The previous year’s figure was adjusted in view of the
change in the internal management system (see Annual
Report 2019, Group Management Report). The number
of employees at the end of the reporting period is dis-
closed in the Combined Management Report.
Expenses relating to variable lease
payments not included in the
measurement of lease liabilities
Interest expense arising on the
measurement of lease liabilities
– 13
– 55
– 3
b As lessor
– 54
in € million
2020
2019
Most of the expenses for leases for low-value assets
and short-term leases relate to low-value assets.
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 € 225 million (2019: € 42 million).
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
Selling profit on the sale of vehicles
previously leased to retail customers
under finance leases *
* Prior year’s figures adjusted.
148
17
890
171
19
885
1,167
1,384
Variable lease payments are based on distance driven.
The agreements have, in part, extension and purchase
options.
BMW GroupReport 2020
216
18 GOVERNMENT GRANTS
AND GOVERNMENT ASSISTANCE
Income from asset-related and performance-related
grants, amounting to € 67 million (2019: € 41 million)
and € 210 million (2019: € 199 million) respectively, was
recognised in the income statement in 2020.
These amounts relate mainly to public sector grants
aimed at the promotion of regional structures as well as
to subsidies received for plant expansions.
Group Financial Statements
Notes to the Group Financial Statements
17 FEE EXPENSE FOR THE GROUP AUDITOR
The fee expense pursuant to § 314 (1) no. 9 HGB
recognised in the financial year 2020 for the Group
auditor and the PwC network of audit firms amounted
to € 18 million (2019: € 19 million) and consists of the
following:
in € million
Audit of financial statements
Other attestation services
Tax advisory services
Other services
Fee expense
PwC International
thereof: PwC GmbH
2020
14
1
–
3
18
2019
14
1
1
3
19
2020
2019
4
–
–
–
4
4
1
–
2
7
Services provided during the financial year 2020
by the Group auditor PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main,
Munich branch, on behalf of BMW AG and subsidi aries
under its control relate to the audit of the financial
statements, other attestation services, tax advisory
services and other services.
The audit of financial statements comprises mainly
the audit of the Group Financial Statements and the
separate financial statements of BMW AG and its sub-
sidiaries, and 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 commissioned attes-
tation work.
Tax advisory services include primarily services
related to transfer pricing and tax compliance.
Other services mainly include consulting services
relating to production processes.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
217
NOTES TO THE STATEMENT
OF COMPREHENSIVE INCOME
19 DISCLOSURES RELATING TO THE STATEMENT
OF COMPREHENSIVE INCOME
Other comprehensive income for the period after tax
comprises the following:
in € million
2020
2019
Remeasurement of the net liability for defined benefit pension plans
Deferred taxes
Items not expected to be reclassified to the income statement in the future
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
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
Currency translation foreign operations
Items that can be reclassified to the income statement in the future
Other comprehensive income for the period after tax
– 354
139
– 215
7
20
– 13
991
1,636
– 645
201
– 437
638
106
– 444
– 1,283
– 422
– 637
– 1,254
387
– 867
42
59
– 17
– 706
– 229
– 477
125
– 611
736
– 3
171
544
173
– 694
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Deferred taxes on components of other comprehensive
income are as follows:
in € million
Before tax
Deferred taxes
After tax
Before tax
Deferred taxes
After tax
2020
2019
218
Remeasurement of the net liability for defined benefit
pension plans
Marketable securities
(at fair value through other comprehensive income)
Derivative financial instruments
Costs of hedging
Other comprehensive income from equity accounted
investments
Currency translation foreign operations
Other comprehensive income
– 354
139
– 215
– 1,254
7
991
201
106
– 1,283
– 332
– 2
– 328
– 59
– 55
–
– 305
5
663
142
51
– 1,283
– 637
42
– 706
125
– 3
544
387
– 12
211
– 34
6
–
– 867
30
– 495
91
3
544
– 1,252
558
– 694
Other comprehensive income relating to equity
accounted investments is reported in the Group State-
ment of Changes in Equity within currency translation
differences with a negative amount of € 113 million (2019:
positive amount of € 22 million), within derivative finan-
cial instruments with a positive amount of € 118 million
(2019: negative amount of € 56 million) and within costs
of hedging with a positive amount of € 46 million (2019:
positive amount of € 37 million).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
NOTES TO THE BALANCE SHEET
20 ANALYSIS OF CHANGES IN GROUP TANGIBLE,
INTANGIBLE AND INVESTMENT ASSETS 2020
219
1. 1. 2020
Translation
differences
Additions
Reclassi-
fications
Disposals
31. 12. 2020
1. 1. 2020
Translation
differences Current year
Reclas si-
fications
Value
adjustments ¹
Disposals
31. 12. 2020
31. 12. 2020
31. 12. 2019
Acquisition and manufacturing cost
Depreciation and amortisation
Carrying amount
in € million
Development costs
Goodwill
Other intangible assets
Intangible assets
Land, titles to land, buildings, including
buildings on third party land
thereof right-of-use assets from leases
Plant and machinery
thereof right-of-use assets from leases
15,391
385
2,075
17,851
15,449
3,107
40,061
82
–
– 1
– 52
– 53
– 380
– 72
– 765
– 1
2,300
–
271
2,571
621
280
1,841
8
248
41
–
–
2
2
538
12
710
–
44
–
941
– 1,294
715
16,976
4,948
–
545
384
5
1,751
1,169
1,260
19,111
6,122
293
219
15,935
6,104
3,108
426
1,548
40,299
29,177
31
226
20
–
58
6
3,138
2,147
121
1,619
31
–
–
–
– 16
– 16
– 135
– 14
– 511
– 1
– 59
– 1
–
1,710
–
183
1,893
846
452
3,071
15
333
37
–
Other facilities, factory and office equipment
3,172
– 100
thereof right-of-use assets from leases
Advance payments made and construction in progress
104
1,991
– 4
– 19
Property, plant and equipment
60,673
– 1,264
3,651
– 2
2,067
60,991
37,428
– 705
4,250
Leased products
49,942
– 1,930
17,820
Investments accounted for using the equity method
3,439
–
1,440
Investments in non-consolidated subsidiaries
Participations
Non-current marketable securities
Other investments
1 Including € 57 million recognised through the income statement.
2 Including assets under construction of € 1,297 million.
292
1,000
–
1,292
– 11
– 24
–
– 35
72
84
–
156
–
–
–
–
–
–
15,712
50,120
7,333
– 300
5,833
1,054
3,825
52
97
–
301
963
–
149
1,264
240
88
501
–
589
–
– 3
10
–
7
–
–
–
–
–
–
–
2
2
–
5
2
–
– 4
–
–
– 2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 57
–
– 57
689
–
543
5,969
11,007
10,443
5
795
379
956
380
906
1,232
6,769
12,342
11,729
124
73
6,691
796
9,244
2,312
9,345
2,681
1,500
30,239
10,060
10,884
2
206
16
–
18
2,211
51
–
40
927
70
76
1,025
73
1,6192
1,991
1,830
39,141
21,850
23,245
4,741
8,125
41,995
42,609
–
–
10
–
10
240
3,585
3,199
85
444
–
529
216
519
–
735
204
499
–
703
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
220
ANALYSIS OF CHANGES IN GROUP TANGIBLE,
INTANGIBLE AND INVESTMENT ASSETS 2019
1. 1. 2019
Translation
differences
Additions
Reclassi-
fications
Disposals
31. 12. 2019
1. 1. 2019
Translation
differences Current year
Reclas si-
fications
Value
adjustments1
Disposals
31. 12. 2019
31. 12. 2019
31. 12. 2018
Acquisition and manufacturing cost
Depreciation and amortisation
Carrying amount
in € million
Development costs
Goodwill
Other intangible assets
Intangible assets
Land, titles to land, buildings, including
buildings on third party land
thereof right-of-use assets from leases
Plant and machinery
thereof right-of-use assets from leases
Other facilities, factory and office equipment
thereof right-of-use assets from leases
Advance payments made and construction in progress
14,990
385
1,798
17,173
14,023
2,387
38,190
1
3,061
71
2,392
–
–
11
11
115
22
224
–
23
1
18
2,134
–
448
2,582
1,013
751
–
–
–
–
1,733
15,391
5,014
–
182
385
5
2,075
1,183
1,915
17,851
6,202
397
– 8
99
45
15,449
5,310
3,107
–
–
–
4
4
44
1
1,667
–
148
1,815
794
430
–
–
–
–
2
–
2,581
1,253
2,187
40,061
28,111
158
3,086
– 6
75
311
33
6
63
1
1,297
– 1,713
–
286
2
3
82
–
3,172
2,082
104
1,991
–
–
–
14
–
–
6
322
31
–
Property, plant and equipment
57,666
380
5,202
Leased products
45,851
619
20,513
Investments accounted for using the equity method
2,624
Investments in non-consolidated subsidiaries
Participations
Non-current marketable securities
Other investments
1 Including € 71 million recognised through the income statement.
2 Carrying amounts at 1. 1. 2019 (from the first-time application of IFRS 16).
3 Including assets under construction of € 1,555 million.
444
938
28
1,410
–
2
4
–
6
2,876
139
86
–
225
–
–
–
–
–
–
–
2,575
60,673
35,503
216
4,202
17,041
49,942
7,592
95
4,732
2,061
3,439
293
28
28
292
1,000
–
349
1,292
–
191
480
–
671
–
–
– 1
–
– 1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
240
– 322
11
–
1,733
4,948
10,443
9,976
–
166
5
1,169
380
906
380
615
1,899
6,122
11,729
10,971
46
5
6,104
426
9,345
2,681
6,420
2,387 2
2,172
29,177
10,884
10,078
6
76
2,147
1,025
31
–
73
1,991 3
2,395
1 2
908
71 2
2,493
37,428
23,245
19,801
5,086
7,333
42,609
38,259
–
240
3,199
2,624
–
275
–
–
– 219
– 11
–
88
501
–
589
204
499
–
703
253
458
28
739
– 311
– 230
–
4
–
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
221
21 INTANGIBLE ASSETS
22 PROPERTY, PLANT AND EQUIPMENT (INCLUDING
23 LEASED PRODUCTS
RIGHT-OF-USE ASSETS ARISING FROM LEASES)
Intangible assets mainly comprise capitalised
development costs on vehicle, module and architecture
projects as well as subsidies for tool costs, licences,
purchased development projects, emission allowances,
software and purchased customer lists.
Other intangible assets include a brand-name right
amounting to € 40 million (2019: € 43 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 € 3 million decrease in the carrying
amount is entirely due to currency factors. Intangible as-
sets also include goodwill of € 33 million (2019: € 33 mil-
lion) allocated to the Automotive cash- generating unit
(CGU) and goodwill of € 346 million (2019: € 347 million)
allocated to the Financial Services CGU.
As in the previous year, there was no requirement to
recognise impairment losses or reversals of impairment
losses on intangible assets in 2020.
As in the previous year, no financing costs were
recognised as a cost component of intangible assets
in 2020.
No impairment losses were recognised in 2020, as in
the previous year.
Minimum lease payments of non-cancellable ope-
rating leases amounting to € 20,872 million (2019:
€ 20,894 million) fall due as follows:
As in the previous year, no financing costs were
recognised as a cost component of property, plant and
equipment in 2020.
Right-of-use assets arising from leases of land and
buildings relate primarily to logistics and office prem-
ises and, to a lesser extent, to selling and production
premises. In order to secure these premises and, in the
interests of flexibility, the property rental agreements
concerned often contain extension and termination
options.
in € million
31. 12. 2020
31. 12. 2019
within one year
between one and two years
between two and three years
between three and four years
between four and five years
later than five years
9,285
6,327
3,416
1,534
275
35
9,804
6,489
3,278
1,073
225
25
Minimum lease payments
20,872
20,894
Impairment losses amounting to € 312 million (2019:
€ 198 million) were recognised on leased products in
2020 as a consequence of changes in residual value
expectations. Income from the reversal of impairment
losses amounted to € 110 million (2019: € 74 million).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
222
24 INVESTMENTS ACCOUNTED FOR USING
YOUR NOW
THERE
THE EQUITY METHOD
Investments accounted for using the equity method
comprise the joint venture BMW Brilliance Auto motive Ltd.
(BMW Brilliance), Shenyang, the joint venture YOUR
NOW Holding GmbH, Munich, the joint venture IONITY
Holding GmbH & Co. KG (IONITY), Munich, and the
interest in the associated company THERE Holding B. V.
(THERE), Rijswijk.
BMW Brilliance Automotive Ltd.
BMW Brilliance produces BMW brand models mainly
for the Chinese market and also has engine manufactur-
ing facilities, which supply the joint venture’s two plants
with petrol engines.
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 Holdings Ltd. (CBA), to
acquire an additional 25 % shareholding in BMW Bril-
liance. The two partners agreed on a purchase price
of an equivalent of € 3.6 billion. The contractual term
of the joint venture, which would currently expire in
2028, is to be extended to 2040 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 Jan-
uary 2019 and remains subject to the approval of the
relevant authorities. The transaction is scheduled to
close 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. The at-equity
loss reported for YOUR NOW Holding GmbH for 2020
amounted to € 349 million (2019: loss of € 662 million).
This loss includes impairment losses amounting to
€ 113 million (2019: loss of € 277 million), recorded at the
level of YOUR NOW Holding GmbH. The impairment
losses arose in light of the fact that – with respect to its
impact on the BMW Group’s investments accounted for
using the equity method – the spread of the coronavirus
gave rise to an indication of possible impairment, both
at the level of the BMW Group and at the level of YOUR
NOW Holding GmbH. The test only resulted in the need
to recognise an impairment loss at the level of YOUR
NOW Holding GmbH. In the previous year, impairment
losses amounting to € 240 million were also recognised
in the BMW Group Financial Statements on the carrying
amount of individual YOUR NOW companies. These
impairment losses were reported in the result on invest-
ments within other financial result.
IONITY
Together with Daimler AG, Stuttgart (Daimler AG),
the Ford Motor Company, the Volkswagen Group, Kia
Motors Corporation and Hyundai Motor Corporation,
the BMW Group operates the joint venture IONITY
Holding GmbH & Co. KG, whereby each of the parties
has an equal shareholding. The entry of Kia Motors
Corporation and Hyundai Motor Corporation was com-
pleted in October 2020. Since then, the BMW Group
has held a 20 % stake in IONITY. IONITY’s business
model envisages the construction and operation of
high- performance charging stations for battery electric
vehicles in Europe.
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 automated driving.
In December 2019, it was announced that Mitsubishi
Corporation (MC) and Nippon Telegraph and Telephone
Corporation (NTT) would jointly acquire a 30 % stake
in HERE. This acquisition was completed in May 2020
following the receipt of approval from the antitrust au-
thorities. The sale of the shares gave rise to a positive im-
pact of € 105 million which is reported within the result
from equity accounted investments. In addition, share
capital reductions were carried out at the level of THERE
in June and September 2020, resulting in € 197 million
being returned to the BMW Group.
The spread of the coronavirus also gave rise to an in-
dication of possible impairment from the BMW Group’s
perspective. The impairment test was based on HERE’s
current business plan, which already incorporates
its lowered expectations in the wake of the coronavirus
pandemic. The value in use was determined on the basis
of a present value computation derived from the revised
business plan. A pre-tax discount rate of 18.5 % was
applied. Following the impairment test, an impairment
loss of € 27 million was recognised in the BMW Group
Financial Statements and included in the result on in-
vestments within other financial result.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Financial information relating to equity accounted
investments is summarised in the following tables (from
a 100 % perspective):
223
in € million
2020
2019
2020
BMW Brilliance
DISCLOSURES RELATING TO THE BALANCE SHEET
Non-current assets
Current assets
thereof cash and cash equivalents
Equity
Non-current financial liabilities, provisions and liabilities
Current financial liabilities, provisions and liabilities
RECONCILIATION OF AGGREGATED FINANCIAL INFORMATION
Assets
Provisions and liabilities
Net assets
Group’s interest in net assets
Eliminations
Carrying amount
1 Prior year’s figures adjusted.
2 Including shareholder impairment.
7,292
9,859
5,137
7,388
1,546
8,217
17,151
9,763
7,388
3,694
– 1,084
2,610
7,248
7,381
2,937
5,293
1,358
7,978
14,629
9,336
5,293
2,646
– 960
1,686
1,190
24
24
1,214
–
–
1,214
–
1,214
335 2
–
335 2
THERE
2019
1,131
467
1
1,597
–
1
1,598
1
1,597
475
–
475
YOUR NOW
2020
2019¹
2020
IONITY
2019 ¹
945
767
341
1,226
113
373
1,712
486
1,226
591
–
591
1,610
1,116
818
2,073
184
469
2,726
653
2,073
987
–
987
244
55
17
244
13
42
299
55
244
49
–
49
175
70
50
205
10
30
245
40
205
51
–
51
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
224
in € million
2020
2019
2020
BMW Brilliance
DISCLOSURES RELATING TO THE INCOME STATEMENT
Revenues
Scheduled depreciation
Profit / loss before financial result
Interest income
Interest expense
Income taxes
Profit / loss after tax
thereof from continuing operations
thereof from discontinued operations
Other comprehensive income
Total comprehensive income
Group dividend income 2
1 Prior year’s figures adjusted.
2 Including dividends received in the amount of € 1,020 million (2019: € 643 million).
23,913
707
3,174
80
5
822
2,560
2,560
–
169
2,729
379
21,910
651
2,374
84
5
654
1,947
1,947
–
– 14
1,933
1,284
–
–
– 1
4
–
–
206
206
–
10
216
–
THERE
2019
–
–
– 1
–
–
–
– 383
– 383
–
1
– 382
–
YOUR NOW
2020
2019 ¹
2020
IONITY
2019 ¹
234
127
– 693
–
3
6
– 749
– 701
– 48
– 81
– 830
–
424
150
– 1,349
–
23
– 28
– 1,805
– 1,805
–
17
– 1,788
–
8
19
– 43
–
1
– 8
– 37
– 37
–
–
– 37
–
1
10
– 29
–
1
– 5
– 24
– 24
–
–
– 24
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
25 RECEIVABLES FROM SALES FINANCING
Receivables from sales financing comprise the
following:
Impairment allowances on receivables from sales
financing in accordance with IFRS 9, which only arise
within the Financial Services segment, developed as
follows:
in € million
31. 12. 2020
31. 12. 2019
in € million
General
Simplified
Stage 1
Stage 2
Stage 3
Credit financing for retail customers
and dealerships *
Finance lease receivables
Receivables from sales financing
* Figure contains Operating leases.
Impairment allowances at 1 January 2020
63,584
20,693
84,277
71,104
21,333
92,437
Reclassification to Stage 1
Reclassification to Stage 2
Reclassification to Stage 3
Derecognition and origination of receivables
Write-off of receivables
Changes in risk parameters
Other changes
Impairment allowances at 31 December 2020
361
1
– 15
– 4
12
– 1
60
69
483
209
– 6
153
– 30
21
– 14
66
75
474
12
–
–
– 1
1
– 1
1
27
39
517
– 4
– 15
195
– 33
– 90
49
24
643
in € million
General
Simplified
Stage 1
Stage 2
Stage 3
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
Changes in risk parameters
Other changes
Impairment allowances at 31 December 2019
363
2
– 17
– 6
17
– 2
– 40
44
361
175
– 13
107
– 24
– 26
– 17
31
– 24
209
12
–
–
– 1
1
–
–
–
12
482
– 1
– 16
175
– 15
– 133
1
24
517
225
Total
1,099
– 9
123
160
1
– 106
176
195
1,639
Total
1,032
– 12
74
144
– 23
– 152
– 8
44
1,099
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Impairment allowances include € 95 million (2019:
€ 74 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 reporting
period totalled € 517 million (2019: € 541 million). The
carrying amount of assets held as collateral and taken
back as a result of payment default amounted to € 33 mil-
lion (2019: € 39 million).
226
Finance leases are analysed as follows:
26 FINANCIAL ASSETS
in € million
31. 12. 2020
31. 12. 2019*
due within one year
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 later than five years
6,970
6,293
5,190
3,695
558
48
6,918
6,761
5,412
3,725
479
32
Gross investment in finance leases
22,754
23,327
due within one year
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 later than five years
Net investment in finance leases
without loss allowances
6,426
5,809
4,770
3,395
503
45
6,384
6,263
5,006
3,421
433
30
20,948
21,537
Unrealised interest income
1,806
1,790
Loss allowances
255
204
Net investment in finance leases
20,693
21,333
* Prior year’s figures adjusted.
Financial assets comprise:
in € million
31. 12. 2020
31. 12. 2019
Marketable securities and
investment funds
Derivative instruments
Loans to third parties
Other
Financial assets
thereof non-current
thereof current
27 INCOME TAX ASSETS
4,226
3,256
71
199
5,391
1,620
54
260
7,752
7,325
2,644
5,108
1,370
5,955
Income tax assets totalling € 606 million (2019:
€ 1,209 million) include claims amounting to € 43 million
(2019: € 186 million), which are expected to be settled
after more than one year. Claims may be settled earlier
than this depending on the timing of the underlying
proceedings. The decrease in income tax assets was
mainly attributable to tax reimbursements.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
227
28 OTHER ASSETS
29 INVENTORIES
30 TRADE RECEIVABLES
Other assets comprise:
Inventories comprise the following:
Trade receivables comprise the following:
in € million
31. 12. 2020
31. 12. 2019
in € million
31. 12. 2020
31. 12. 2019
in € million
31. 12. 2020
31. 12. 2019
3,041
4,807
Work in progress, unbilled contracts
Finished goods and goods for resale
10,542
11,491
Gross carrying amount
2,345
2,590
Raw materials and supplies
Vehicles held for sale in the
financial services business
Advance payments to suppliers
1,373
1,660
818
503
1,286
1,674
808
632
Allowances for impairment of stage 2 –
simplified procedure
Allowances for impairment of stage 3
– 24
– 23
– 26
– 46
Net carrying amount
2,298
2,518
Return right assets for future
leased products
Receivables from companies
in which an investment is held
Other taxes
Expected reimbursement claims
Receivables from subsidiaries
Collateral assets
Prepaid expenses
Sundry other assets
Other assets
thereof non-current
thereof current
2,048
1,581
1,046
546
454
364
1,246
10,326
1,216
9,110
2,641
1,935
1,086
308
413
396
1,353
12,939
1,325
11,614
Collateral assets comprise mainly customary collater-
al (banking deposits) arising on the sale of asset-backed
financing instruments.
Inventories
14,896
15,891
Out of the total amount recognised for inventories at
31 December 2020, inventories measured at net realisa-
ble value amounted to € 899 million (2019: € 973 million).
Write-downs to net realisable value in the financial year
2020 amounted to € 59 million (2019: € 126 million), while
reversals of write-downs amounted to € 2 million (2019:
€ 22 million).
The expense recorded in conjunction with inventories
during the financial year 2020 amounted to € 48,128 million
(2019: € 53,524 million). The previous year’s figures were
adjusted due to a change in the computational logic. The
adjusted amount disclosed no longer relates only to prod-
ucts sold, but also includes the impact of inter-segment
eliminations. Excluding inter-segment eliminations,
the prior-year figure amounted to € 62,633 million. At
31 December 2020, the carrying amounts of inventories
expected to be realised after more than twelve months
amount to € 359 million (2019: € 445 million).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
228
Impairment allowances on trade receivables in
31 EQUITY
accordance with IFRS 9 developed as follows:
in € million
Balance at 1 January
Allocated (+)
Reversed (–)
Utilised
Exchange rate impact and other changes
Balance at 31 December
2020
72
16
– 36
– 1
– 4
47
2019
Number of shares issued
54
30
– 7
– 7
2
72
Preferred stock
Common stock
2020
2019
2020
2019
Shares issued / in circulation at 1 January
56,867,304
56,126,904
601,995,196
601,995,196
Shares issued in conjunction with Employee Share Programme
Less: shares repurchased and re-issued
822,124
124
744,447
4,047
–
–
–
–
Shares issued / in circulation at 31 December
57,689,304
56,867,304
601,995,196
601,995,196
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.
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.
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.
In 2020, a total of 822.124 shares of preferred stock
was sold to employees at a reduced price of € 36.55
per share in conjunction with an Employee Share
Programme. These shares are entitled to receive
dividends for the first time with effect from the finan-
cial year 2021.
Issued share capital increased by € 0.8 million as a
result of the issue to employees of 822.000 new shares
of non-voting preferred stock. BMW AG is authorised up
to 15 May 2024 to issue 5 million shares of non-voting
preferred stock amounting to nominal € 5.0 million. At
the end of the reporting period, 3.4 million of these
amounting to nominal € 3.4 million remained available
for issue.
In addition, 124 previously issued shares of preferred
stock were acquired and re-issued to employees.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
229
Capital reserves
Accumulated other equity
The capital structure at the end of the reporting
Capital reserves include premiums arising from
the issue of shares and totalled € 2,199 million (2019:
€ 2,161 million). The change amounting to € 38 million
related to the share capital increase in conjunction with
the issue of shares of preferred stock to employees.
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 instruments and
marketable securities, costs of hedging recognised direct-
ly in equity as well the related deferred taxes.
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.
Capital management disclosures
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.
It is proposed that the unappropriated profit of
BMW AG for the financial year 2020 amounting to
€ 1,253 million be utilised as follows:
The capital structure is managed in order to meet
needs arising from changes in economic conditions and
the risks of the underlying assets.
— Distribution of a dividend of € 1.92 per share of
preferred stock (€ 109 million)
— Distribution of a dividend of € 1.90 per share of
common stock (€ 1,144 million)
The BMW Group is not subject to any unified exter-
nal 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.
period was as follows:
in € million
31. 12. 2020
31. 12. 2019
Equity attributable to shareholders
of BMW AG
Proportion of total capital
Non-current financial liabilities
Current financial liabilities
Total financial liabilities
Proportion of total capital
Total capital
60,891
36.4 %
67,390
38,986
59,324
33.7 %
70,647
46,093
106,376
116,740
63.6 %
66.3 %
167,267
176,064
Equity attributable to shareholders of BMW AG
increased during the financial year by 2.6 %, primarily
reflecting the increase in revenue reserves.
The proposed distribution was not recognised as a
liability in the Group Financial Statements.
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 requirements. 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.
BMW GroupReport 2020
230
Group Financial Statements
Notes to the Group Financial Statements
32 PENSION PROVISIONS
In the case of defined benefit plans, the BMW Group
is required to pay the benefits it has granted to pres-
ent and past employees. Defined benefit plans may be
covered by provisions or pension assets. In Germany,
pension obligations of the BMW Group are mostly cov-
ered by assets transferred to BMW Trust e. V., Munich, in
conjunction with a Contractual Trust Arrangement (CTA)
(funded plan). Funded plans also exist in the UK, the
USA, Switzerland, Belgium and Japan. In the meantime,
most of the defined benefit plans have been closed to
new entrants.
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 follow-
ing weighted average values have been used for Germany,
the UK and other countries:
Germany
United Kingdom
Other
in %
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
Discount rate
Pension level trend
Weighted duration of all pension obligations in years
0.55
1.33
21.6
1.00
1.38
21.3
1.19
2.19
19.8
1.92
2.15
19.2
1.88
–
15.9
2.42
–
16.0
The following mortality tables are applied in coun-
tries, in which the BMW Group has significant defined
benefit plans:
Germany
United Kingdom
Mortality Table 2018 G issued by Prof. K. Heubeck (with invalidity rates reduced by 70 %)
S2PA tables and S3PA light tables
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Based on the measurement principles contained in
IAS 19, the following balance sheet carrying amounts
apply to the Group’s pension plans:
231
in € million
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
Germany
United Kingdom
Other
Total
Present value of defined benefit obligations
Fair value of plan assets
Effect of limiting net defined benefit asset to asset ceiling
Carrying amounts at 31 December
thereof pension provisions
thereof assets
15,535
12,451
–
3,084
3,084
–
14,022
11,320
–
2,702
2,702
–
9,944
9,589
–
355
355
–
9,503
9,137
–
366
371
– 5
1,108
1,127
870
3
241
254
– 13
883
2
246
262
– 16
26,587
22,910
3
3,680
3,693
– 13
24,652
21,340
2
3,314
3,335
– 21
The most significant of the BMW Group’s pension
plans are described below.
by multiplying a fixed amount by the number of years
of service.
Germany
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 in-
validity and surviving dependants’ benefits. The level of
ongoing pension payments is adjusted in accordance with
§ 16 of the Company Pensions Act (Betriebsrentengesetz).
The defined benefit plans have been closed to new
entrants since 2014. Defined contribution plans with a
minimum rate of return, comprising employer- and em-
ployee-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
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 BMW AG.
An ordinary Members’ General Meeting takes place once
every calendar year, and deals with a range of matters, in-
cluding receiving and approving the association’s annual
report, ratifying the activities of the Board of Directors
and adopting changes to the association’s statutes.
United 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 contribu-
tions made to a defined contribution plan.
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 represent-
ed 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 investment strategies. Funding contributions
to the funds are determined in agreement with the
BMW Group.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
The change in the net liability for defined benefit pension
plans can be derived as follows:
in € million
1 January 2020
EXPENSE / INCOME
Current service cost
Interest expense (+) / income (–)
Past service cost
Gains (–) or losses (+) arising from settlements
REMEASUREMENTS
Gains (–) or losses (+) on plan assets, excluding amounts included in interest income
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
Changes in the limitation of the net defined benefit asset to the asset ceiling
Transfers to fund
Employee contributions
Pensions and other benefits paid
Translation differences and other changes
31 December 2020
thereof pension provisions
thereof assets
232
Net defined
benefit liability
3,314
488
34
– 54
–
– 1,880
2,726
– 239
– 144
1
– 524
–
– 6
– 36
3,680
3,693
– 13
Effect of limitation
of the net defined
benefit asset to the
asset ceiling
2
–
–
–
–
–
–
–
–
1
–
–
–
–
3
Defined
benefit obligation
Plan assets
Total
24,652
– 21,340
3,312
488
337
– 54
–
–
2,726
– 239
– 144
–
–
84
– 645
– 618
–
– 303
–
–
488
34
– 54
–
– 1,880
– 1,880
–
–
–
–
– 524
– 84
639
582
2,726
– 239
– 144
–
– 524
–
– 6
– 36
3,677
26,587
– 22,910
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
in € million
1 January 2019
EXPENSE / INCOME
Current service cost
Interest expense (+) / income (–)
Past service cost
Gains (–) or losses (+) arising from settlements
REMEASUREMENTS
Gains (–) or losses (+) on plan assets, excluding amounts included in interest income
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
Changes in the limitation of the net defined benefit asset to the asset ceiling
Transfers to fund
Employee contributions
Pensions and other benefits paid
Translation differences and other changes
31 December 2019
thereof pension provisions
thereof assets
Defined
benefit obligation
Plan assets
Total
21,247
– 18,937
2,310
473
485
– 191
– 3
–
3,201
– 3
– 4
–
–
78
– 1,104
473
24,652
–
– 444
–
–
– 2,002
–
–
–
–
– 527
– 78
1,103
– 455
473
41
– 191
– 3
– 2,002
3,201
– 3
– 4
–
– 527
–
– 1
18
– 21,340
3,312
233
Effect of limitation
of the net defined
benefit asset to the
asset ceiling
Net defined
benefit liability
3
–
–
–
–
–
–
–
–
– 1
–
–
–
–
2
2,313
473
41
– 191
– 3
– 2,002
3,201
– 3
– 4
– 1
– 527
–
– 1
18
3,314
3,335
– 21
In 2020, employment contract termination agree-
ments were agreed with employees, resulting in the de-
parture of the persons concerned and to vested pension
benefits. Past service cost resulted mainly from differing
assumptions used to calculate statutory pension entitle-
ments on the one hand and for the ongoing accounting
for active employees on the other.
Past service cost in the previous year resulted mainly
from the complete closure of two defined benefit plans
in the USA.
Depending on the cash flow profile and risk structure
of the pension obligations involved, plan assets relating
to defined benefit plans are invested in a diversified
portfolio.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Plan assets in Germany, the UK and other countries
comprised the following:
in € million
2020
2019
2020
2019
2020
Germany
United Kingdom
COMPONENTS OF PLAN ASSETS
Equity instruments
Debt instruments
thereof investment grade
thereof mixed funds (funds without a rating)
thereof non-investment grade
Real estate funds
Money market funds
Absolute return funds
Other
Total with quoted market price
Debt instruments
thereof investment grade
thereof mixed funds (funds without a rating)
thereof non-investment grade
Real estate
Cash and cash equivalents
Absolute return funds
Other
Total without quoted market price
31 December
2,166
7,326
5,041
–
2,285
–
–
–
128
9,620
779
324
455
–
428
159
645
820
2,031
6,513
4,275
–
2,238
–
–
–
109
8,653
911
316
595
–
394
20
632
710
2,831
2,667
12,451
11,320
234
Total
2019
2,705
13,754
10,752
–
3,002
19
103
–
124
Other
2019
91
592
585
–
7
19
29
–
15
2020
2,588
14,898
11,982
–
2,916
19
87
–
134
348
6,940
6,316
–
624
–
85
–
–
584
6,648
5,891
–
757
–
74
–
–
74
632
625
–
7
19
2
–
6
7,373
7,306
733
746
17,726
16,705
673
–
673
–
656
–
643
244
2,216
9,589
256
–
256
–
716
–
640
219
1,831
9,137
1
–
–
1
–
–
23
113
137
870
1
–
–
1
–
1
31
104
137
883
1,453
324
1,128
1
1,084
159
1,311
1,177
5,184
1,168
316
851
1
1,110
21
1,303
1,033
4,635
22,910
21,340
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
235
In the financial year 2021, disbursements out of
the plan assets are expected to exceed the employer’s
contributions to plan assets by € 85 million. Plan assets
of the BMW Group include own transferable financial
instruments amounting to € 1 million (2019: € 8 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 fluctu-
ation and therefore influence the level of the obligations.
Furthermore, changes in other actuarial parameters, such
as expected rates of inflation, also have an impact on pen-
sion 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 report-
ing procedures and for internal management purposes,
financial 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 structured to match the
timing of pension payments and the expected develop-
ment of pension obligations. In this way, fluctuations in
pension funding shortfalls are reduced.
The defined benefit obligation relates to current em-
ployees, pensioners and former employees with vested
benefits as follows:
in %
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
Germany
United Kingdom
Other
Current employees
Pensioners
Former employees with vested benefits
66.2
27.4
6.4
67.6
27.4
5.0
–
42.2
57.8
–
45.5
54.5
62.9
29.9
7.2
64.3
29.0
6.8
Defined benefit obligation
100.0
100.0
100.0
100.0
100.0
100.0
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
236
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.
It is only possible to aggregate sensitivities to a
limited extent. Since the change in obligation follows a
non-linear pattern, estimates made on the basis of the
specified sensitivities are only possible with this restric-
tion. The calculation of sensitivities using ranges other
than those specified could result in a disproportional
change in the defined benefit obligation.
Change in defined benefit obligation
31. 12. 2020
31. 12. 2019
in € million
in %
in € million
in %
increase of 0.75 %
– 3,514
– 13.2
– 3,352
– 13.6
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 %
4,585
766
– 721
1,078
– 1,081
218
– 210
17.2
2.9
– 2.7
4.1
– 4.1
0.8
– 0.8
4,290
905
– 810
1,155
– 1,097
200
– 192
17.4
3.7
– 3.3
4.7
– 4.4
0.8
– 0.8
Discount rate
Pension level trend
Average life expectancy
Pension entitlement trend
In the UK, the sensitivity analysis for the pension
level trend also takes account of restrictions due to caps
and floors.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
33 OTHER PROVISIONS
Other provisions changed during the year as follows:
237
in € million
as of
1. 1. 2020*
Translation
differences
Additions
Reversal of
discounting
Utilised
Reversed
31. 12. 2020
thereof due
within one year
Statutory and non-statutory warranty obligations, product guarantees
Obligations for personnel and social expenses
Other obligations
Other obligations for ongoing operational expenses
Other provisions
* 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. Warranty provisions include
amounts recognised in connection with the exhaust gas
recirculation cooler. Expected reimbursement claims at
31 December 2020 amounted to € 1,046 million (2019:
€ 1,086 million) and are disclosed within other assets (see
note 28).
Provisions for obligations for personnel and social
expenses comprise mainly obligations relating to per-
formance-related remuneration components, workforce
measures as well as pre-retirement part-time working
arrangements and long-service awards.
5,550
2,496
3,271
1,892
13,209
– 277
– 19
– 43
– 94
– 433
3,178
1,405
1,361
1,288
7,232
158
19
9
–
186
– 2,354
– 1,288
– 508
– 1,399
– 5,549
– 124
– 31
– 337
– 171
– 663
6,131
2,582
3,753
1,516
13,982
1,731
1,483
2,794
1,486
7,494
The provisions for other obligations cover numerous
identifiable specific risks and uncertain obligations, in
particular for litigation and liability risks, including the
provision recognised in the previous year for the ongoing
EU Commission’s antitrust proceedings. Further infor-
note 10.
mation is provided in
Other obligations for ongoing operational expenses
include in particular expected payments for bonuses and
other price deductions.
34 INCOME TAX LIABILITIES
Current income tax liabilities totalling € 747 million
(2019: € 963 million) include € 40 million (2019: € 89 mil-
lion) 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.
BMW GroupReport 2020
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
Total
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
31. 12. 2020
12,642
6,863
12,735
4,578
492
593
550
533
32,001
11,956
3,709
3,159
1,181
517
–
248
12,022
–
22
1,300
838
38
–
399
56,665
18,819
16,466
9,037
2,511
1,148
550
1,180
14,077
7,952
11,216
7,903
544
1,149
2,615
637
35,801
11,597
3,414
2,204
1,363
886
–
271
12,287
–
27
1,329
988
61
–
419
238
31. 12. 2019
Total
62,165
19,549
14,657
11,436
2,895
2,096
2,615
1,327
38,986
52,771
14,619
106,376
46,093
55,536
15,111
116,740
Group Financial Statements
Notes to the Group Financial Statements
35 FINANCIAL LIABILITIES
Financial liabilities of the BMW Group comprise the
following:
in € million
Bonds
Asset-backed financing transactions
Liabilities from customer deposits (banking)
Liabilities to banks
Lease liabilities
Derivative instruments
Commercial paper
Other
Financial liabilities
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 € 57 million (2019: € 56 million).
Similarly, potential future cash outflows amounting
to € 1,252 million (2019: € 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 74 years (2019: up to
59 years).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Liabilities related to financing activities can be rec-
onciled as follows:
in € million
Bonds
Asset-backed financing transactions
Liabilities from customer deposits (banking)
Liabilities to banks
Lease liabilities
Commercial paper
Financial liabilities towards companies in which an investment is held
Other (excluding interest payable)
Liabilities relating to financing activities
in € million
Bonds
Asset-backed financing transactions
Liabilities from customer deposits (banking)
Liabilities to banks
Lease liabilities
Commercial paper
Financial liabilities towards companies in which an investment is held
Other (excluding interest payable)
Liabilities relating to financing activities
239
as of
1. 1. 2020
Cash inflows /
outflows
Changes due to
the acquisition or
disposal of companies
Changes due to
exchange rate factors
Changes
in fair values
Other changes
31. 12. 2020
62,165
19,549
14,657
11,436
2,895
2,615
296
864
– 4,306
– 82
2,329
– 2,172
– 494
– 2,025
492
– 78
114,477
– 6,336
–
–
–
–
–
–
–
–
–
– 1,972
– 648
– 520
– 248
– 63
– 40
– 48
– 34
766
–
–
21
–
–
–
–
12
–
–
–
173
–
–
–
56,665
18,819
16,466
9,037
2,511
550
740
752
– 3,573
787
185
105,540
as of
1. 1. 2019
Cash inflows /
outflows
Changes due to
the acquisition or
disposal of companies
Changes due to
exchange rate factors
Changes
in fair values
Other changes
31. 12. 2019
53,346
17,335
14,359
13,196
105
2,480
529
626
101,976
7,342
1,869
202
– 1,754
– 440
134
– 233
202
7,322
–
–
–
–
–
–
–
–
–
618
345
96
– 43
6
1
–
36
859
–
–
44
–
–
–
–
–
–
–
– 7
3,224
–
–
–
62,165
19,549
14,657
11,436
2,895
2,615
296
864
1,059
903
3,217
114,477
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Bonds comprise:
Issuer
BMW Finance N. V.
BMW US Capital, LLC
BMW International Investment B.V.
Other
240
Issue volume
in relevant currency
(ISO-Code)
Weighted average
maturity period
(in years)
Weighted average
nominal interest rate
(in %)
EUR 3,350 million
NOK 1,730 million
SEK 1,500 million
USD 500 million
JPY 24,500 million
EUR 23,800 million
CNY 13,500 million
HKD 2,352 million
USD 2,050 million
NOK 1,500 million
GBP 850 million
AUD 273 million
USD 2,158 million
USD 16,255 million
EUR 2,500 million
AUD 30 million
SEK 500 million
GBP 250 million
GBP 1,800 million
NOK 1,000 million
CHF 600 million
CNY 6,000 million
CAD 1,600 million
2.1
3.0
4.0
3.0
5.3
6.5
2.3
5.8
5.3
3.8
6.0
10.0
3.5
6.4
7.6
5.0
3.0
2.2
4.1
10.0
6.8
3.0
3.2
0.0
1.9
0.5
1.0
0.5
0.8
3.6
2.6
2.5
1.9
1.3
3.2
0.7
3.2
0.9
3.0
0.7
0.1
1.3
3.3
0.5
4.8
2.4
Interest
variable
variable
variable
variable
fixed
fixed
fixed
fixed
fixed
fixed
fixed
fixed
variable
fixed
fixed
fixed
variable
variable
fixed
fixed
fixed
fixed
fixed
The following details apply to commercial paper:
Issuer
BMW Finance N.V.
Issue volume
in relevant currency
(ISO-Code)
EUR 550 million
Weighted average
maturity period
(in days)
Weighted average
nominal interest rate
(in %)
71
– 0.2
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
241
36 OTHER LIABILITIES
37 TRADE PAYABLES
Other liabilities comprise the following items:
As in the previous year, trade payables are due within
in € million
Contract liabilities
Refund liabilities for future leased products
Deferred income
Bonuses and sales aides
Other taxes
Deposits received
Payables to other companies in which an investment is held
Payables to subsidiaries
Other advance payments received for orders
Social security
Sundry
Other liabilities
* Prior year’s figures adjusted.
31. 12. 2020
31. 12. 2019*
one year.
5,485
3,926
3,546
2,911
1,484
1,019
814
180
139
133
5,038
6,103
3,635
2,971
1,265
983
519
192
160
109
1,550
21,187
2,091
23,066
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 (in some cases multi-component arrangements).
An amount of € 2,604 million (2019: € 2,255 million) 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, China, Germany, Mexico,
Austria and South Africa amongst others. The grants
are partly subject to holding periods for the assets con-
cerned of up to five years and / or minimum employment
figures or minimum production figures. Grant income is
recognised in the income statement over the useful lives
of the assets to which it relates.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
OTHER DISCLOSURES
38 CONTINGENT LIABILITIES AND OTHER FINANCIAL
COMMITMENTS
Contingent liabilities
The following contingent liabilities existed at the
balance sheet date:
in € million
31. 12. 2020
31. 12. 2019
Investment subsidies
Litigation
Guarantees
Other
Contingent liabilities
77
105
43
1,067
1,292
284
139
46
618
1,087
Other contingent liabilities comprise mainly risks
relating to taxes and customs duties.
The BMW Group determines its best estimate of con-
tingent liabilities on the basis of the information available
at the date of preparation of the Group Financial State-
ments. 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.
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
242
the investigation in the form of a provision measured
on the basis of the Statement of Objections, at the best
possible estimate (see also note 10 to the Group Financial
Statements for the financial year 2019). In relation to
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 law-
suits in the USA were dismissed in the first instance
in October 2020. The plaintiffs have appealed this
decision. Class action lawsuits in Canada and private
lawsuits in South Korea are still at an early stage. Further
civil lawsuits based on the allegations are possible going
forward. In addition, the Chinese State Administration
for Market Regulation opened antitrust proceedings
against BMW AG in March 2019, followed by the Korea
Fair Trade Commission in May 2020 and the Turkish
Competition Authority in July 2020. Possible risks for
the BMW Group cannot be currently foreseen, either in
terms of their outcome or the amounts involved. Further
disclosures pursuant to IAS 37.86 cannot be provided
at present.
Regulatory authorities have ordered the BMW Group
to recall various vehicle models in conjunction with air-
bags supplied by the Takata group of companies. Provi-
sion for the costs involved has been recognised within
warranty provisions. In addition to the risks already cov-
ered 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.
In September 2019, the Japan Fair Trade Commission
conducted a search of BMW Japan Corp. in connection
with its market practices in relation to dealerships. In
mid-December 2020, the authority signalled its principle
willingness to end the investigation without sanctions
and determination of a violation of the law, provided that
an agreement with BMW Japan on future-oriented meas-
ures can be reached. The discussions in that regard are
still ongoing. Any remaining risks for the BMW Group
can currently not be ruled out and foreseen in detail,
either in terms of their outcome or the amounts involved.
Further disclosures pursuant to IAS 37.86 cannot be
provided at present.
On January 22, 2020, the U. S. Securities and Exchange
Commission (SEC) had opened an investigation into po-
tential violations of U. S. securities laws by BMW Group
relating to disclosures regarding BMW Group’s unit sales
of new vehicles. This matter was settled on September
24, 2020 with the SEC, without admitting or denying the
allegations, and BMW Group consented to the entry of
an Order finding violations of the U. S. Securities Act
and agreed to pay a penalty of $18 million. Certain
BMW Group entities and their officers are defendants
in private securities litigation following the SEC Order.
Possible risks for the BMW Group cannot be quantified
at present. Further disclosures pursuant to IAS 37.86
cannot be provided at present.
Other financial commitments
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. 2020
31. 12. 2019
Purchase commitments for property,
plant and equipment
Purchase commitments for
intangible assets
3,264
3,128
2,787
2,146
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
39 FINANCIAL INSTRUMENTS
The carrying amounts of financial instruments are
assigned to IFRS 9 categories in the following table.
in € million
ASSETS
Other investments
Receivables from sales financing
Financial assets
Derivative instruments
Cash flow hedges
Fair value hedges
Other derivative instruments
Marketable securities and investment funds
Loans to third parties
Other
Cash and cash equivalents
Trade receivables
Other assets
Receivables from subsidiaries
Receivables from companies in which an investment is held
Collateral assets
Remaining other assets
Total
243
At amortised cost
At fair value
through other
comprehensive income
At fair value
through profit or loss
Not assigned
to an IFRS 9 category
At amortised cost
At fair value
through other
comprehensive income
At fair value
through profit or loss
Not assigned
to an IFRS 9 category
31. 12. 2020
31. 12. 2019
–
63,104
–
–
–
115
49
199
12,622
2,298
546
2,048
454
1,504
–
–
–
–
–
3,245
–
–
–
–
–
–
–
–
477
–
–
–
413
866
22
–
915
–
–
–
–
–
258
21,173
851
1,992
–
–
–
–
–
–
–
–
–
5,774
–
70,625
–
–
–
444
40
260
11,574
2,518
308
2,641
413
1,519
–
–
–
–
–
3,889
–
–
–
–
–
–
–
–
461
–
–
–
50
1,058
14
–
462
–
–
–
–
–
242
21,812
326
1,244
–
–
–
–
–
–
–
–
–
8,058
82,939
3,245
2,693
30,048
90,342
3,889
2,045
31,682
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
244
in € million
LIABILITIES
Financial liabilities
Bonds
Liabilities to banks
Liabilities from customer deposits (banking)
Commercial paper
Asset-backed financing transactions
Derivative instruments
Cash flow hedges
Fair value hedges
Other derivative instruments
Lease liabilities
Other
Trade payables
Other liabilities
Payables to subsidiaries
Payables to other companies in which an investment is held
Remaining other liabilities *
Total
* Prior year’s figures adjusted.
At amortised cost
At fair value
through other
comprehensive income
At fair value
through profit or loss
Not assigned
to an IFRS 9 category
At amortised cost
At fair value
through other
comprehensive income
At fair value
through profit or loss
Not assigned
to an IFRS 9 category
31. 12. 2020
31. 12. 2019
56,665
9,037
16,466
550
18,819
–
–
–
–
1,180
8,644
180
814
5,250
117,605
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
788
–
–
–
–
–
–
–
–
–
–
–
112
248
–
2,511
–
–
–
–
14,943
62,165
11,436
14,657
2,615
19,549
–
–
–
–
1,327
10,182
192
519
4,917
788
17,814
127,559
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,020
–
–
–
–
–
–
–
–
–
–
–
805
271
–
2,895
–
–
–
–
17,438
1,020
21,409
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
245
Disclosures relating to financial instruments measured at
amortised cost
The following table shows the fair values and carry-
ing amounts of financial assets and liabilities that are
measured at amortised cost and whose carrying amounts
differ from their fair value.
The fair values are generally determined using the
discounted cash flow method, taking into account the
relevant risk of default. For the purposes of fair value
measurement using the discounted cash flow method,
expected future cash flows are discounted on the basis
of up-to-date interest curves observable on the market.
The fair values of receivables from sales financing
are measured using the discounted cash flow method,
taking into account customer-specific credit risk. In view
of the fact that these allowances are calculated in part on
the basis of internal information, receivables from sales
financing are allocated to Level 3 in the level hierarchy in
accordance with IFRS 13. The fair values of the financial
assets shown in the table relate to financial institutions
and are also measured using the discounted cash flow
method, taking into account the risk of default. Given
that these financial institutions all have excellent credit
ratings, the risk of default is low and can be observed on
the market. The fair values of these items are therefore
allocated to Level 2.
In the case of financial liabilities, own credit risk is
also taken into account based on credit default swaps
available on the market, so that the fair values of these
items are also allocated to Level 2.
For all other financial instruments not listed here
that are measured at amortised cost, the carrying amount
corresponds to the fair value. For this reason, they are
not presented separately.
in € million
Fair value
Carrying amount
Fair value
Carrying amount
31. 12. 2020
31. 12. 2019
Receivables from sales financing – credit financing
Receivables from sales financing – finance and operating leases
Financial assets – Marketable securities and investment funds
Financial liabilities
Bonds
Asset-backed financing transactions
Liabilities from customer deposits (banking)
Liabilities to banks
65,326
23,116
116
58,136
18,818
16,599
9,209
63,104
21,173
115
56,665
18,819
16,466
9,037
73,699
22,741
446
62,757
19,659
14,739
12,071
70,625
21,812
444
62,165
19,549
14,657
11,436
BMW GroupReport 2020
246
Group Financial Statements
Notes to the Group Financial Statements
Disclosures relating to financial instruments measured at
fair value
The carrying amounts of financial instruments
measured at fair value are allocated to the measurement
levels pursuant to IFRS 13 as described below.
in € million
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
31. 12. 2020
31. 12. 2019
Level hierarchy in accordance with IFRS 13
Level hierarchy in accordance with IFRS 13
Marketable securities, investment funds and
collateral assets
Other investments
Cash equivalents
Loans to third parties
Derivative instruments (assets)
Interest rate risks
Currency risks
Raw material market price risks
Other risks
Derivative instruments (liabilities)
Interest rate risks
Currency risks
Raw material market price risks
3,608
80
915
–
–
–
–
–
–
–
–
503
–
–
–
2,344
335
573
–
919
171
52
–
397
–
22
–
–
1
3
–
–
6
4,582
106
–
–
–
–
–
–
–
–
–
365
–
462
–
1,274
74
267
–
1,155
723
218
–
355
–
14
–
–
–
5
–
–
–
In the financial year 2020, the availability of market or
stock exchange prices was re-assessed as at 31 December.
As a result, an amount of € 275 million relating to mar-
ketable securities, investment funds and collateral assets
was reclassified from Level 1 to Level 2, in view of the fact
that the fair values of the marketable securities concerned
are derived on the basis of comparable instruments in the
form of a theoretical price. Furthermore, money market
funds amounting to € 915 million were reclassified from
Level 2 to Level 1 as at 31 December 2020, due to the
fact that corresponding market or stock exchange prices
are available.
As a general rule, any transfers between fair-value hi-
erarchy levels are made at the end of the relevant interim
or year-end reporting period.
In the previous financial year, marketable securi-
ties amounting to € 187 million were transferred as at
30 June 2019 from Level 1 to Level 2, reflecting the fact
that their fair value was determined on the basis of ob-
servable market data.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Financial instruments measured at fair value using
input factors not based on observable market prices are
allocated to Level 3. The fair values of these financial
instruments are shown in the following table:
in € million
31. 12. 2020
Fair value
31. 12. 2019
Fair value
Unquoted equity instruments
Convertible bonds
Options on unquoted equity instruments
Derivative instruments
397
22
3
– 5
355
14
5
–
247
Financial instruments allocated to Level 3 relate
mainly to investments in a private-equity fund. The
valuation of unquoted equity instruments is determined
primarily using the market-based approach. In particular,
the financing rounds that take place within the private
equity sector – usually on a regular basis at intervals of
approximately 12 to 24 months – represent a significant
input factor for these purposes. In addition, the invest-
ment advisor provides the external fund manager with
relevant, investment-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 Ven-
ture Capital Valuations (IPEV).
As part of the process of analysing valuations, the
external fund manager reviews the investment-specific
milestones, including an analysis of financial, technical
and liquidity-specific performance indicators. Based on
this analysis, it is considered whether the price of the
most recent financing round is acceptable as a reasonable
market valuation, in particular 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
and patents held, the stage of technology development
such as evidence of feasibility and prototypes, market en-
tries, customer and user growth and appointments to key
management positions. Key financial performance indi-
cators used are revenues, EBITDA and the correspon ding
growth rate and / or development of specific contribution
margins. Key liquidity-specific performance indicators
are cash on hand, cash burn rates and prospects for
future financing rounds.
Since the pricing of equity investments derived from
financing rounds is considered to be the key input factor
for the valuation, adjustments in valuation give rise to a
similar change in the equity instrument that is required
to be recorded with income statement effect.
In addition, the valuation of selected equity instru-
ments is based on the income approach. This involves
discounting cash flows on the basis of current business
cases using the weighted average cost of capital to
determine the fair value of the financial instrument.
Changes in fair values determined in connection with
adjustments to significant input factors are not material
for the BMW Group.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
The convertible bonds that have been classified to
Level 3 are primarily used as instruments in advance of
future financing rounds relating to private equity invest-
ments. Valuations are therefore performed in accordance
with the International Private Equity and Venture Capital
Valuation (IPEV) guidelines.
Mandatory conversions are usually structured in such
a way that the number of shares to be received depends
on the future share price. Due to the generally short ma-
turities, the instruments are subject to only insignificant
fluctuations in value. Irrespective of this fact, impairment
tests are performed at regular intervals.
The exercise price for share options in such compa-
nies is generally low, verging towards zero. Consequently,
financing rounds have a direct impact on the market
value of the options. In this respect, they are valued in a
similar way to unquoted equity instruments, as described
above.
For selected derivatives, a complete set of data rele-
vant for valuation purposes is not available due to their
limited market maturity. In order to model forward curves,
data is collated and updated on the basis of regular bank
and trader inquiries. The valuation methodology applied
is in line with the general valuation principles for deriv-
atives used within the treasury management system of
the BMW Group. Changes in fair values resulting from
shifts in forward curves within a range of + / – 10 % are not
material for the BMW Group.
248
The balance sheet carrying amount of Level 3 finan-
cial instruments developed as follows:
in € million
1 January 2020
Additions
Disposals
Gains (+) / losses (–) recognised in accumulated other equity
Gains (+) / losses (–) recognised in the income statement
Currency translation differences
31 December 2020
in € million
1 January 2019
Additions
Disposals
Gains (+) / losses (–) recognised in accumulated other equity
Gains (+) / losses (–) recognised in the income statement
Currency translation differences
31 December 2019
Unquoted equity
instruments
Convertible
bonds
Options on
unquoted equity
instruments
Derivative
instruments
Financial
Instruments
Level 3
355
73
– 87
–
85
– 29
397
14
17
– 7
–
–
– 2
22
5
–
– 2
–
–
–
3
–
–
2
– 7
–
–
– 5
374
90
– 94
– 7
85
– 31
417
Unquoted equity
instruments
Convertible
bonds
Options on
unquoted equity
instruments
Derivative
instruments
Financial
Instruments
Level 3
265
90
– 38
–
33
5
355
3
14
– 3
–
–
–
14
4
–
–
–
1
–
5
–
–
–
–
–
–
–
272
104
– 41
–
34
5
374
Gains and losses recognised in the income statement
are reported within the line item “Other financial result”.
Gains and losses recognised in the income statement
in the 2020 financial year included an unrealised net
positive amount of € 84 million (2019: € 32 million).
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Offsetting of financial instruments
Derivative financial instruments of the BMW Group
are subject to legally enforceable master netting agree-
ments or similar contracts. However, receivables and
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:
in € million
Balance sheet amounts as reported
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 require-
ments 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
Financial instruments measured at fair value through other comprehensive income
Financial instruments measured at fair value through profit or loss
Financial assets measured at amortised cost
Financial liabilities measured at amortised cost
249
Net gains and losses arising on financial instruments
measured at fair value through other comprehensive
income mainly relate to changes in the fair value of
marketable securities. Further details are provided in
the disclosures relating to the statement of comprehen-
note 19). Total interest income arising on
sive income (
financial assets measured at fair value through other
comprehensive income amounted to € 37 million (2019:
€ 49 million) and total interest expense to € 30 million
(2019: € 41 million).
31. 12. 2020
31. 12. 2019
Reported on
assets side
Reported on equity
and liabilities side
Reported on
assets side
Reported on equity
and liabilities side
3,256
– 790
2,466
1,148
– 790
358
1,620
– 833
787
2,096
– 833
1,263
Net gains and losses arising on financial instruments
measured at fair value through profit and loss mainly
include results from the fair value measurement of stand-
alone derivatives, marketable securities and shares in
investment funds, as well as other financial assets.
Net gains and losses arising on financial assets meas-
ured at amortised cost comprise mainly exchange rate
gains / losses and impairment losses / reversals. Net gains
and losses arising on financial liabilities measured at am-
ortised cost comprise mainly exchange rate gains / losses
as well as fair value gains / losses on hedged items in
designated hedging relationships that are recognised in
the income statement.
Total interest income arising on financial assets
measured at amortised cost relates mainly to the interest
income earned on credit financing and reported within
revenues. Total interest expense arising on financial
liabilities measured at amortised cost amounted to
€ 1.8 billion (2019: € 1.9 billion).
2020
7
310
– 1,050
– 350
2019
42
– 1,012
160
296
BMW GroupReport 2020
250
The credit risk on trade receivables is assessed mainly
on the basis of information relating to overdue amounts.
The gross carrying amounts of these receivables are allo-
cated in accordance with IFRS 9 to overdue ranges used
for management purposes as follows:
in € million
Not overdue
1 – 30 days overdue
31 – 60 days overdue
61 – 90 days overdue
More than 90 days overdue
Total
31. 12. 2020
31. 12. 2019
2,002
229
31
23
60
1,947
369
89
40
145
2,345
2,590
Group Financial Statements
Notes to the Group Financial Statements
Credit risk
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 finan-
cial services is provided in the Combined Management
Report on Outlook, Risks and Opportunities).
Report (see section
Notwithstanding the existence of collateral accept-
ed, the carrying amount of financial assets (with the
exception of derivative financial instruments) generally
represents the maximum credit risk. In addition, the
credit risk is increased by additional unutilised loan com-
mitments in the dealership financing line of business.
Total dealership financing credit risk at the end of the
reporting period therefore amounted to € 30,682 million
(2019: € 31,943 million).
In the case of all relationships underlying non-
derivative 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.
In the case of trade receivables, customers are regu-
larly assessed with regard to their credit risk. Depend-
ing on contractual status, necessary measures, such as
dunning procedures, are initiated in good time.
The credit risk relating to cash deposits and deriva-
tive financial instruments is minimised by the fact that
the Group only enters into such contracts with parties
of first-class credit standing.
Within the financial services business, items fi-
nanced for retail customers and dealerships (such as
vehicles, 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, supple-
mented where appropriate by warranties and guarantees.
Items previously held as collateral that are subsequently
acquired relate mainly to vehicles. As a rule, these as-
sets 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 test-
ed 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 in 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.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Receivables from sales financing are allocated to
internally 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:
251
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
31. 12. 2020
31. 12. 2019
in € million
General
Simplified
Total
Expected
credit loss
General
Simplified
Total
Expected
credit loss
Gross carrying amount of financial assets with good credit ratings
Gross carrying amount of financial assets with medium credit ratings
Gross carrying amount of financial assets with poor credit ratings
Total
76,356
3,778
118
1,633
1,653
937
80,252
4,223
367
38
17
422
–
–
1,019
78,356
5,469
2,091
406
431
802
85,399
4,102
38
696
1,167
704
1,019
85,916
1,639
89,539
2,567
378
22
16
416
–
–
1,014
86,473
5,291
1,772
272
199
628
1,014
93,536
1,099
Further disclosures relating to credit risk – in par-
ticular with regard to the amounts of impairment losses
recognised – are provided in the explanatory notes to the
relevant categories of receivables in
note 25 and 30.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Liquidity risk
The following table shows the maturity structure
of expected contractual cash flows (undiscounted) for
financial liabilities:
in € million
NON-DERIVATIVE FINANCIAL LIABILITIES
Bonds
Asset-backed financing transactions
Liabilities to banks
Liabilities from customer deposits (banking)
Trade payables
Lease liabilities
Commercial paper
Other financial liabilities
DERIVATIVE FINANCIAL LIABILITIES
With gross settlement
Cash outflows
Cash inflows
With net settlement
Cash outflows
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
Total
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
31. 12. 2020
13,456
7,067
5,295
12,808
8,644
512
550
120
432
14,910
– 14,478
380
380
33,224
12,369
3,317
3,781
–
1,227
–
288
248
5,544
– 5,296
144
144
11,930
–
1,388
22
–
1,028
–
357
14
631
– 617
28
28
58,610
19,436
10,000
16,611
8,644
2,767
550
765
694
21,085
– 20,391
552
552
14,977
8,255
8,751
11,277
10,182
562
2,618
188
1,524
33,826
– 32,302
374
374
37,477
12,090
2,317
3,505
–
1,523
–
435
758
18,485
– 17,727
338
338
12,595
–
1,378
27
–
1,302
–
384
– 26
598
– 624
23
23
252
31. 12. 2019
Total
65,049
20,345
12,446
14,809
10,182
3,387
2,618
1,007
2,256
52,909
– 50,653
735
735
Total financial liabilities
49,264
54,598
14,767
118,629
58,708
58,443
15,683
132,834
The cash flows relating to non-derivative liabilities
comprise principal repayments and the related interest.
The amounts disclosed for derivative instruments com-
prise 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 2020 credit commitments available at
short notice to dealerships which had not been called
upon at the end of the reporting period amounted to
€ 14,367 million (2019: € 10,776 million).
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 financing requirements and
in alignment with a dynamic target debt structure.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
253
showing the impact of potential exchange rate fluctua-
tions on operating cash flows on the basis of probability
distributions. Volatilities and correlations serve as the
main input factors to determine the relevant probability
distributions.
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.
The following table shows the potential negative im-
pact for the BMW Group for the following year resulting
from unfavourable changes in exchange rates, measured
on the basis of the cash-flow-at-risk approach.
in € million
31. 12. 2020
31. 12. 2019
Cash flow at risk
531
487
As a further reduction of risk, a syndicated credit line
totalling € 8 billion (2019: € 8 billion) from a consortium
of international banks is available to the BMW Group.
Intra-group cash flow fluctuations are balanced out by
the use of daily cash pooling arrangements.
Further information is provided in the Combined
Management Report.
Market risks
As part of the implementation of the risk manage-
ment 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. Items are hedged on the basis of a constant
ratio of one to one between hedging instrument and risk
exposure.
The principal market risks to which the BMW Group
is exposed are currency risk, interest rate risk and raw
materials market price risk.
Causes of hedge ineffectiveness are seen potentially
only for counterparty credit risk. However, in view of
the processes that have been established for credit risk
management, ineffectiveness is not expected to arise.
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 remain-
ing after netting.
Currency, interest rate and raw materials market
price risks of the BMW Group are managed at a corpo-
rate level.
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 currency
cash inflows and cash outflows. At the end of the report-
ing 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:
Further information is provided in the “Report
on outlook, risks and opportunities” section of the
Combined Management Report.
in € million
31. 12. 2020
31. 12. 2019
Currency exposure
33,975
33,950
Currency risk
As an enterprise with worldwide operations, the
BMW Group conducts business in a variety of curren-
cies, from which currency risks arise. In order to hedge
currency risks, the BMW Group holds, as at 31 Decem-
ber 2020, derivative financial instruments mostly in the
form of forward currency contracts and currency swaps.
Currency exposures include short positions amount-
ing to € 5,222 million (2019: € 2,789 million).
This exposure is compared to all hedges that are in
place. The net cash flow surplus represents an uncovered
risk position. The cash-flow-at-risk approach involves
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
254
Interest rate risk
Interest rate risks arise when funds are borrowed
and invested with differing fixed-rate periods or differ-
ing 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.
The fair value of the Group’s interest rate portfolios
was as follows at the end of the reporting period:
in € million
31. 12. 2020
31. 12. 2019
Fair values of interest rate portfolios
58,545
55,697
Interest rate risk is managed through the use of
interest rate derivatives. As part of the implementa-
tion 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, for example start date, term and currency,
are the same. Items are hedged on the basis of a con-
stant ratio of one to one between hedging instrument
and risk exposure.
In view of the fact that own credit risk is excluded
from the hedging relationship, ineffectiveness is expected
to be low.
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.
In view of the plans to reform and replace certain
benchmark interest rates, the timing and exact nature
of these changes is currently subject to uncertainty.
Across the BMW Group, a considerable number of con-
tracts are directly affected by the benchmark interest
rates reform. Hedging relationships entered into by the
BMW Group are mainly based on USD LIBOR and GBP
LIBOR benchmark interest rates, which are designated
as hedged risks in fair value hedging relationships. The
hedging relationships affected are subject to uncertain-
ty with respect to the identifiability of the designated
benchmark interest rates.
The transition to the newly created or revised bench-
mark rates is being managed and monitored as part of
a multidisciplinary project. The conversion project will
involve making changes to systems, processes, risk and
valuation models, as well as dealing with the associated
accounting implications. The uncertainty arising from
the benchmark interest rate reform is likely to continue
to exist up to the end of 2021.
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 portfolios are com-
pared 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 the following table, the potential volumes of fair
value fluctuations – measured on the basis of the val-
ue-at-risk approach – are compared with the expected
value for the interest-rate-sensitive exposures of the
BMW Group:
in € million
Value at risk
31. 12. 2020
31. 12. 2019
1,160
1,094
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 uses 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. Items are hedged on the basis of a
constant ratio of one to one between hedging instrument
and risk exposure.
Causes of hedge ineffectiveness are seen potentially
only for counterparty credit risk. However, in view of
the processes that have been established for credit risk
management, ineffectiveness is not expected to arise.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
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.
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
“exposure”. At each reporting date, the exposure for the
following financial year amounted to:
255
The potential negative impact on earnings is calculat-
ed 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
95 %. The risk mitigating effect of correlations between
the various categories of raw materials is taken into
account when the risks are aggregated.
Disclosures on hedging measures
The following disclosures on hedging measures in-
clude derivatives of fully consolidated companies that are
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.
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:
The nominal amounts of hedging instruments were
as follows:
in € million
Currency risks
Interest rate risks
31. 12. 2020
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
11,939
8,082
1,449
4,530
28,213
1,792
–
12,373
–
in € million
31. 12. 2020
31. 12. 2019
in € million
31. 12. 2020
31. 12. 2019
Raw material price exposures
4,204
4,382
Cash flow at risk
310
419
Raw material price risks
This exposure is compared to all hedges that are in
place. The net cash flow surplus represents an uncovered
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.
Nominal amounts of
hedging instruments
21,470
34,535
12,373
in € million
Maturity within
one year
Maturity between
one and five years
Maturity later
than five years
31. 12. 2019
Currency risks
Interest rate risks
Raw material price risks
Nominal amounts of
hedging instruments
14,823
6,672
1,651
9,020
29,691
1,920
–
12,938
–
23,146
40,631
12,938
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
256
The following table shows the most significant aver-
age hedging rates of hedging transactions used by the
BMW Group:
Currency risks
31. 12. 2020
31. 12. 2019
Average hedging rates
EUR / CNY
EUR / USD
EUR / GBP
EUR / KRW
EUR / JPY
8.05
–
0.87
8.26
1.16
0.87
1,334.86
1,328.59
124.20
124.92
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 corre-
spond in each case to current market interest rate levels.
Most of the hedges used in this context relate to variable
yield curves relating to the euro, US dollar and British
pound currency areas.
The following table provides information on the nom-
inal amounts, carrying amounts and fair value changes
of contracts designated as hedging instruments:
A cash-flow-at-risk approach to risk management
involves making use of portfolio effects. No USD-denomi-
nated hedging transactions were in hedging relationships
at the balance sheet date.
in € million
Cash Flow Hedges
31. 12. 2020
31. 12. 2019
Carrying Amounts
Carrying Amounts
Nominal
amounts
Assets
Liabilities
Change in
fair value of
designated
components
Nominal
amounts
Assets
Liabilities
Change in
fair value of
designated
components
Raw material price risks
Aluminium (EUR / t)
Copper (EUR / t)
Nickel (EUR / t)
Palladium (EUR / oz)
Platinum (EUR / oz)
Average hedging rates
Currency risks
31. 12. 2020
31. 12. 2019
Raw material price risks
16,469
3,241
277
574
54
58
1,169
23,843
466
3,571
60
266
590
215
– 479
250
Fair Value Hedges
Interest rate risks
1,573
4,568
1,833
5,173
11,188
12,307
1,350
701
1,022
916
59,774
1,992
248
723
59,999
1,244
271
758
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
The following table shows key information on hedged
items for each risk category as well as the balances of
designated components within accumulated other equity:
in € million
Cash Flow Hedges
Currency risks
Raw material price risks
Fair Value Hedges
Interest rate risks
The accumulated amount of hedge-related fair value
adjustments is € 10 million (2019: € 8 million) for assets
and € 1,680 million (2019: € 1,012 million) for liabilities.
Hedge relationships give rise to the following effects:
in € million
Cash Flow Hedges
Currency risks
Raw material price risks
Fair Value Hedges
Interest rate risks
257
Carrying Amounts
Balances in accumulated other equity
Carrying Amounts
Balances in accumulated other equity
Assets
Liabilities
Change in value
of hedged items
Continuing
hedge
relationships
Terminated
hedge
relationships
Assets
Liabilities
Change in value
of hedged items
Continuing
hedge
relationships
Terminated
hedge
relationships
31. 12. 2020
31. 12. 2019
–
–
–
–
– 1,169
– 467
8,483
58,714
– 720
532
510
–
–
–
–
–
–
–
–
479
– 250
8,631
58,723
– 759
– 23
1
–
–
–
–
Change of designated
components in other
comprehensive income
Change in costs of
hedging in other
comprehensive income
Hedge ineffectiveness
recognised in
income statement
Change of designated
components in other
comprehensive income
Change in costs of
hedging in other
comprehensive income
Hedge ineffectiveness
recognised in
income statement
2020
2019
554
509
–
198
– 5
2
–
–
3
– 961
264
–
117
– 7
9
–
–
– 1
BMW GroupReport 2020
258
Group Financial Statements
Notes to the Group Financial Statements
Designated components and costs of hedging within
accumulated other equity changed as follows:
in € million
Designated component
Costs of hedging
Costs of hedging Designated component
Costs of hedging
Currency risks
Interest rate risk
Raw material price risk
Opening balance at 1 January 2020
Change in fair value during the reporting period
Reclassification to profit or loss
for continuing hedge relationships
for terminated hedge relationships
Reclassification to acquisition costs for inventories
Closing balance at 31 December 2020
– 22
1,170
– 512
– 104
–
532
– 497
– 443
557
84
–
– 299
– 4
5
– 3
–
–
– 2
1
466
–
– 29
72
510
5
1
–
–
– 6
–
in € million
Designated component
Costs of hedging
Costs of hedging Designated component
Costs of hedging
Currency risks
Interest rate risk
Raw material price risk
Opening balance at 1 January 2019
Change in fair value during the reporting period
Reclassification to profit or loss
for continuing hedge relationships
for terminated hedge relationships
Reclassification to acquisition costs for inventories
Closing balance at 31 December 2019
940
– 480
– 491
9
–
– 22
– 614
– 622
716
23
–
– 497
– 13
13
– 4
–
–
– 4
– 262
250
–
5
8
1
12
– 1
–
–
– 6
5
The nominal amount of hedging instruments directly
affected by the reform of benchmark interest rates is
€ 14,469 million (of which USD LIBOR € 11,581 million
and GBP LIBOR € 2,500 million).
BMW GroupReport 2020
259
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 2020. In addition,
the DELTON companies held by Stefan Quandt acquired
vehicles from the BMW Group by way of leasing.
Stefan Quandt, Germany, is also the indirect majority
shareholder of SOLARWATT GmbH, Dresden. Cooper-
ation arrangements are in place between BMW Group
and SOLARWATT GmbH, Dresden, within the field of
electric mobility. The focus of this cooperation is on the
provision of complete photovoltaic solutions for roof-
top systems and carports to BMW i customers. In 2020
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 Super visory
Board of ALTANA AG, Wesel. In 2020, ALTANA AG,
Wesel, acquired vehicles from the BMW Group, mainly
by way of leasing.
Susanne Klatten, Germany, is also the sole share-
holder and Chairwoman of the Supervisory Board
of UnternehmerTUM GmbH, Garching. In 2020, the
BMW Group bought in services from Unternehmer-
TUM GmbH, Garching, mainly in the form of consul-
tancy and workshop services.
In addition, Susanne Klatten, Germany, and Stefan
Quandt, Germany, are indirectly sole shareholders of
Entrust Corp., Shakopee, Minnesota. Stefan Quandt is
also a member of the supervisory board of this entity.
In 2020, Entrust Corp., Shakopee, Minnesota, acquired
vehicles from the BMW Group by way of leasing.
Group Financial Statements
Notes to the Group Financial Statements
40 RELATED PARTY RELATIONSHIPS
The following individuals and entities are related
parties in accordance with IAS 24:
— Stefan Quandt and Susanne Klatten, as well as
companies controlled by them,
— The Board of Management and the Supervisory Board
of the BMW Group,
— Associated companies, joint ventures, non-consoli-
dated subsidiaries, BMW Trust e. V. and BMW Foun-
dation Herbert Quandt
Transactions of the Group companies with related
parties were carried out, without exception, in the nor-
mal course of business of each of the parties concerned
and conducted at market conditions, i. e. conditions that
are also granted to other third-party manufacturers.
During the year under report, members of the Board
of Management and the Supervisory Board concluded
vehicle purchase contracts and related service contracts
as well as vehicle rental, vehicle leasing and vehicle fi-
nancing contracts with BMW Group entities on market
conditions.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Seen from the perspective of BMW Group entities,
the volume of transactions with the above-mentioned
entities was as follows:
260
Supplies and services performed
Supplies and services received
Receivables at 31 December
Payables at 31 December
in € thousand
2020
2019
DELTON Health AG (formerly DELTON AG)
DELTON Logistics S. à r. l.
DELTON Technology SE
SOLARWATT GmbH
ALTANA AG
UnternehmerTUM GmbH
EnviroChemie GmbH
Entrust Corp.
1,950
1,235
6
2,363
2,425
37
11
134
2,065
1,473
6
453
2,529
104
28
154
2020
–
2019
–
19,068
21,596
–
–
273
1,310
–
–
–
–
462
2,651
107
–
2020
2019
1
5
–
287
243
–
–
9
20
14
–
8
355
27
–
10
2020
–
1,574
–
–
80
510
–
–
2019
–
1,871
–
–
65
693
–
–
A significant proportion of the BMW Group’s trans-
actions with related parties relates to the joint venture
BMW Brilliance Automotive Ltd.
in € million
BMW Brilliance Automotive Ltd.
Supplies and services performed
Supplies and services received
Receivables at 31 December
Payables at 31 December
2020
2019
9,701
9,227
2020
155
2019
107
2020
2019
2,045
2,639
2020
804
2019
496
For the most part, this involves the sale of vehicle
components to BMW Brilliance Automotive Ltd. for
further processing. BMW Group entities also perform
services on behalf of BMW Brilliance Automotive Ltd.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
In total, the following amounts of goods and services
were supplied to or received from other joint ventures
and associated companies:
261
in € million
Other joint ventures and associated companies
2020
32
2019
28
2020
64
2019
78
2020
8
2019
1
2020
9
2019
9
Supplies and services performed
Supplies and services received
Receivables at 31 December
Payables at 31 December
Business relationships with non-consolidated com-
41 SHARE-BASED REMUNERATION
panies are small in scale.
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. BMW AG bears expenses on an
immaterial scale and performs services for BMW Trust
e. V., Munich.
The BMW Foundation Herbert Quandt, Munich, is
an independent corporate foundation and due to the
BMW Group’s significant influence, qualifies as a related
party according to IAS 24. BMW Group made donations
to the BMW Foundation Herbert Quandt during the
financial year 2020 totaling € 6.3 million (2019: € 6.4 mil-
lion). No other significant transactions took place.
For disclosures relating to key management person-
nel, please see
note 43 and the Remuneration Report.
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.
Employee Share Programme
In connection with the Employee Share Programme,
non-voting shares of preferred stock in BMW AG were
granted in 2020 to qualifying employees at favourable
conditions (see
note 31 for the number and price of is-
sued shares). Participants in the programme were entitled
in 2020 to acquire packages of 8, 18 or 28 shares of pre-
ferred stock (2019: 10, 17 or 25) with a discount in each
case of € 11.50 (2019: € 13.00) per share compared to the
market price (average closing price in Xetra trading in the
period from 3 November to 6 November 2020: € 48.05).
The programme was open to employees who have been
in an employment relationship with BMW AG or by a
wholly-owned BMW AG subsidiary in Germany, provided
that the management of the subsidiary concerned has
decided 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, 822,124 (2019: 744,447)
shares of preferred stock were acquired by employees.
This figure includes 822,000 (2019: 740,400) shares out
of Authorised Capital 2019, with the remainder bought
back via the stock exchange. Every year the Board of
Management of BMW AG decides whether the scheme
is to be continued.
In the financial year 2020, the BMW Group recorded
a personnel expense of € 9 million (2019: € 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 purchased by em-
ployees.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
262
Programme for senior heads of department and members
of the Board of Management
The share-based remuneration programme for quali-
fying department heads, introduced with effect for finan-
cial years beginning after 1 January 2012, is closely based
on the programme for Board of Management 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 performance-based bonus in 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 programme was revised and the invest-
ment requirement increased to 26 % of the earnings-re-
lated bonus. In return for the investment requirement,
BMW AG pays 100 % 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 BMW AG’s discretion.
For financial years beginning after 1 January 2011,
BMW AG has added a share-based remuneration com-
ponent to the existing compensation system for Board
of Management members.
Members of the Board of Management receive a
cash compensation (investment component) for the
specific purpose of investment – after tax and contribu-
tions – in shares of common stock of BMW AG. For the
financial years 2018 to 2020, the investment component
corresponds 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
BMW AG for the relevant financial year are presented.
The shares of common stock are purchased immediate-
ly 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. Under the compensation system valid up to
the financial year 2020, Board members receive from
BMW AG, for every three shares of common stock held,
either one additional share of common stock or the cash
equivalent, to be decided at BMW AG’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 ex-
traordinary right of termination, or if the Board member
resigns without the Company’s agreement, entitlements
to amounts as yet unpaid relating to share-based remu-
neration are forfeited.
The members of the Board of Management in office
at the end of the reporting period hold 44,037 shares
of BMW common stock based on holding requirements
arising from share-based remuneration for the financial
years 2016 to 2019 (2019: 36,921).
The share-based remuneration component is meas-
ured 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
BMW AG common stock in Xetra trading at 31 Decem-
ber 2020).
The total carrying amount of the provision for the
share-based remuneration component of current and for-
mer Board of Management members and senior heads of
department at 31 December 2020 was € 6,383,766 (2019:
€ 5,851,703).
The total expense recognised in 2020 for the share-
based remuneration component of current and former
Board of Management members and senior heads of
department was € 1,820,265 (2019: € 1,979,477).
The fair value of the programmes for Board of Man-
agement members and senior heads of department at
the date of grant of the share-based remuneration com-
ponents was € 987,759 (2019: € 1,374,798), based on a
total of 13,444 shares (2019: 19,983 shares) of BMW AG
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 Remuneration 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 pursu-
ant to § 161 of the German Stock Corporation Act. It is
included in the Corporate Governance Statement, which
is on the BMW Group website at
www.bmwgroup.com/ezu.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
263
43 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 BMW AG expensed for the financial year 2020 in
accordance with IFRS comprised the following:
in € million
2020
2019
Compensation to members of the
Board of Management
Fixed remuneration
Variable remuneration
thereof Performance Cash Plan
Share-based remuneration component
Allocation to pension provisions
Benefits in conjunction with the
termination of board activity
Compensation to members
of the Supervisory Board
Fixed compensation and
attendance fees
Variable compensation
Total expense
thereof due within one year
18.8
7.3
10.9
1.3
0.6
2.6
0.6
5.6
5.6
–
27.6
23.1
30.0
8.1
20.9
8.3
1.0
2.9
7.1
5.6
2.0
3.6
45.6
28.6
Since the financial year 2018 and up to and including
the financial year 2020, variable cash compensation has
been supplemented by a multi-year and future-orient-
ed Performance Cash Plan (PCP). The PCP evaluation
period comprises three years, the grant year and the two
subsequent years. The PCP is paid out after the end of
the three-year assessment period. The total remunera-
tion of former members of the Board of Management
and their dependants amounted to € 13.1 million (2019:
€ 16.0 million).
Pension obligations to current members of the Board
of Management are covered by provisions amounting
to € 14.7 million (2019: € 14.6 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 € 118.8 million (2019: € 113.1 million).
The compensation arrangements applicable for
members of the Supervisory Board for the financial year
2020 do not include any stock options, value appreciation
rights comparable to stock options or any other stock-
based compensation components. Apart from an advance
amount paid out of the Performance Cash Plan 2019 –
2021 to individual members of the Board of Management,
no loans or advances were granted to members of the
Board of Management and the Supervisory Board by
BMW AG or its subsidiaries in the financial year 2020,
nor were any contingent liabilities entered into in their
favour. During the year under report, members of the
Board of Management and the Supervisory Board con-
cluded vehicle purchase contracts and related service
contracts as well as vehicle rental, vehicle leasing and
vehicle financing contracts with BMW Group entities on
market conditions.
Further details about the remuneration of current
members of the Board of Management and the Super-
visory Board can be found in the Remuneration Report,
which is part of the Combined Management Report.
44 EVENTS AFTER THE END OF THE
REPORTING PERIOD
The coronavirus pandemic will continue to influence
the course of business for the BMW Group in 2021. The
situation remains volatile and could have an impact on
the results of operations, financial position and net assets
of BMW AG and the BMW Group.
The further course of the pandemic and implications
for the BMW Group’s business performance is being
continually monitored.
Current estimates and assumptions for the finan-
cial year 2021, to the extent already known to the
BMW Group, have been taken into account and described
in the Report on Outlook. Apart from these assessments,
no further significant negative effects are known or can
be estimated at the present time. However, further neg-
ative effects could arise in the course of the year.
No other events have occurred since the end of the
financial year which could have a major impact on the
results of operations, financial position and net assets of
BMW AG and the BMW Group.
BMW GroupReport 2020
264
Holding and Group financing companies are report-
ed in the Other Entities segment. This segment also
includes the operating companies BMW (UK) Invest-
ments Ltd. and Bavaria Lloyd Reisebüro GmbH, which
are not allocated to one of the other segments.
Group Financial Statements
Notes to the Group Financial Statements
SEGMENT INFORMATION
45 EXPLANATORY NOTES TO SEGMENT INFORMATION
Information on reportable segments
For the purposes of presenting segment information,
the activities of the BMW Group are divided into oper-
ating segments in accordance with IFRS 8. The segmen-
tation follows the internal management and reporting
system and takes account of the organisational structure
of the BMW Group based on the various products and
services of the reportable segments.
Within the Automotive segment, the BMW Group
develops, 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 BMW AG and
by independent, authorised dealerships. Sales outside
Germany are handled mainly by subsidiary companies
and by independent import companies in some markets.
Rolls-Royce brand vehicles are sold in selected markets
via subsidiary companies and elsewhere by independent,
authorised dealers.
Activities relating to the development, manufacture,
assembly and sale of motorcycles as well as spare parts
and accessories are reported in the Motorcycles segment.
The activities of the BMW Group are broken down
into the operating segments Automotive, Motorcycles,
Financial Services and Other Entities.
Automobile leasing, fleet business, multi-brand busi-
ness, retail and dealership financing, customer deposit
business and insurance activities are the main activities
allocated to the Financial Services segment.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
265
The success of the Other Entities segment is assessed
on the basis of profit or loss before tax. The correspond-
ing measure of segment assets used to manage the Other
Entities segment is total assets less asset-side income tax
items and intragroup investments.
Internal management and reporting
Segment information is prepared as a general rule in
conformity with the accounting policies adopted for pre-
paring and presenting the Group Financial Statements.
Exceptions to this general principle include the treat-
ment 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 agree-
ments 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 an IFRS 16 basis and therefore, in accord-
ance with IFRS 8, do not give rise to any changes in the
presentation of segment information. Inter-segment re-
ceivables and payables, provisions, income, expenses and
profits are eliminated upon consolidation. Inter-segment
revenues are based on market prices. Centralised func-
tions are included in the segments concerned. Expenses
for centralised administrative functions allocated to the
Financial Services segment are not settled in cash.
The role of “chief operating decision maker” with re-
spect 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 man-
aged 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 cor-
responding measure of segment assets used to determine
how to allocate resources and comprises all current and
non-current operational assets after deduction of liabil-
ities used operationally which are generally not subject
to interest (e. g. trade payables).
The success of the Financial Services segment is
measured 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.
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Segment information by operating segment is as
follows:
266
in € million
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Automotive
Motorcycles
Financial Services
Other Entities
Reconciliation
to Group figures
Group
SEGMENT INFORMATION BY OPERATING SEGMENT
External revenues
Inter-segment revenues
Total revenues
Segment result
Result from equity accounted investments
Capital expenditure on non-current assets
Depreciation and amortisation on non-current assets
68,106
12,747
73,624
18,058
2,293
2,374
28,590
28,210
– 9
– 6
1,454
1,388
80,853
91,682
2,284
2,368
30,044
29,598
1
2
3
2
3
5
–
–
98,990
104,210
– 14,194
– 19,443
–
–
– 14,194
– 19,443
98,990
104,210
2,162
920
6,041
5,978
4,499
136
7,607
5,853
103
–
146
119
194
–
149
110
1,725
2,272
– 235
– 96
1,467
–
24,146
12,054
–
27,544
11,142
–
–
–
–
–
–
249
–
–
– 6,291
– 7,003
– 6,175
– 6,356
Reconciliation
to Group figures
5,222
920
24,042
11,976
7,118
136
28,297
10,749
Group
in € million
Segment assets
Investments accounted for using the equity method
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
31. 12. 2020
31. 12. 2019
15,779
16,193
3,585
3,199
681
–
712
–
15,555
15,545
98,226
106,038
86,417
89,546
216,658
228,034
–
–
–
–
–
–
3,585
3,199
Automotive
Motorcycles
Financial Services
Other Entities
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Write-downs on inventories to their net realisable
value amounting to € 59 million (2019: € 126 million)
were recognised by the Automotive segment in the fi-
nancial year 2020. The reversal of impairment losses had
a positive impact of € 2 million (2019: € 22 million) on the
segment result of the Automotive segment.
267
The total of the segment figures can be reconciled to
in € million
the corresponding Group figures as follows:
31. 12. 2020
31. 12. 2019
Reconciliation of segment assets
in € million
2020
2019
Total for reportable segments
130,241
138,488
Reconciliation of segment result
Total for reportable segments
3,755
6,869
The result of the Financial Services segment was neg-
atively impacted by impairment losses totalling € 362 mil-
lion (2019: € 254 million) recognised on leased products.
Income from the reversal of impairment losses on leased
products amounted to € 126 million (2019: € 95 million).
Financial result of Automotive segment
Financial result of Motorcycles segment
Elimination of inter-segment items
Group profit before tax from
continuing operations
560
– 3
910
– 32
– 7
288
5,222
7,118
The Other Entities’ segment result includes interest
and similar income amounting to € 1,169 million (2019:
€ 1,515 million) and interest and similar expenses
amounting to € 1,232 million (2019: € 1,419 million).
The information disclosed for capital expenditure
and depreciation and amortisation relates to non-cur-
rent property, plant and equipment, intangible assets
and leased products.
Reconciliation of capital expenditure on
non-current assets
Total for reportable segments
Elimination of inter-segment items
Total Group capital expenditure on
non-current assets
Reconciliation of depreciation and
amortisation on non-current assets
Total for reportable segments
Elimination of inter-segment items
Total Group depreciation and
amortisation on non-current assets
30,333
– 6,291
35,300
– 7,003
24,042
28,297
18,151
– 6,175
17,105
– 6,356
11,976
10,749
Non-operating assets – Automotive
59,677
58,612
Liabilities of Automotive segment not
subject to interest
Non-operating assets – Motorcycles
Liabilities of Motorcycles segment not
subject to interest
Total liabilities – Financial Services
segment
Non-operating assets – Other Entities
segment
35,769
38,257
39
782
47
688
132,062
140,955
7,007
6,859
Elimination of inter-segment items
– 148,919
– 155,872
Total Group assets
216,658
228,034
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
268
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 Automotive seg-
ment, which are subsequently accounted for as leased
products in the Financial Services segment. In the recon-
ciliation 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.
Information by region
in € million
Germany
China
USA
Rest of Europe
Rest of Asia
Rest of the Americas
Other regions
Eliminations
Group
External revenues
Non-current assets
2020
2019
2020
2019
13,638
21,315
17,837
30,258
10,433
3,379
2,130
–
13,428
20,564
19,720
32,805
11,344
3,904
2,445
–
98,990
104,210
40,254
170
19,487
17,630
1,599
3,192
619
– 6,764
76,187
39,237
199
22,470
17,373
1,756
3,834
453
– 7,739
77,583
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
269
LIST OF INVESTMENTS AT
31 DECEMBER 2020
AFFILIATED COMPANIES (SUBSIDIARIES) OF BMW AG
AT 31 DECEMBER 2020
46 LIST OF INVESTMENTS AT 31 DECEMBER 2020
The List of investments of BMW AG pursuant to § 285
and § 313 HGB is presented below. Disclosures 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 BMW AG pursuant
to § 286 (3) sentence 1 no. 1 HGB and § 313 (3) sen-
tence 4 HGB. It is also shown in the list which subsidiar-
ies apply the exemptions available in § 264 (3) and § 264 b
HGB with regard to the publication of annual financial
statements and the drawing up of a management report
and / or notes to the financial statements (footnotes 5 and
6). The Group Financial Statements of BMW AG serve as
exempting consolidated financial statements for these
companies.
Companies
DOMESTIC 1
BMW Beteiligungs GmbH & Co. KG, Munich 6
BMW INTEC Beteiligungs GmbH, Munich 3, 6
BMW Bank GmbH, Munich 3
BMW Finanz Verwaltungs GmbH, Munich
BMW Verwaltungs GmbH, Munich 3, 6
Parkhaus Oberwiesenfeld GmbH, Munich
BMW High Power Charging Beteiligungs GmbH, Munich 4, 6
Alphabet Fuhrparkmanagement GmbH, Munich 4
Alphabet International GmbH, Munich 4, 5, 6
BMW Hams Hall Motoren GmbH, Munich 4, 5, 6
BMW Vertriebszentren Verwaltungs GmbH, Munich
BMW Fahrzeugtechnik GmbH, Eisenach 3, 5, 6
BMW Anlagen Verwaltungs GmbH, Munich 3, 6
Bavaria Wirtschaftsagentur GmbH, Munich 3, 5, 6
Rolls-Royce Motor Cars GmbH, Munich 4, 5, 6
BAVARIA-LLOYD Reisebüro GmbH, Munich
BMW M GmbH Gesellschaft für individuelle Automobile, Munich 3, 5, 6
BMW Vermögensverwaltungs GmbH, Munich
Bürohaus Petuelring GmbH, Munich
LARGUS Grundstücks-Verwaltungsgesellschaft mbH, Munich
FOREIGN 2
Europe 10
BMW Holding B. V., The Hague
BMW International Holding B. V., The Hague
BMW Österreich Holding GmbH, Steyr
BMW International Investment B. V., The Hague
Equity
in € million
Profit / loss
in € million
Capital invest-
ment in %
6,897
3,558
2,075
210
153
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
797
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
21,742
9,477
3,041
1,706
2,634
1,165
761
– 1
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
100
100
100
100
100
100
100
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
BMW España Finance S. L., Madrid
BMW Financial Services (GB) Ltd., Farnborough
BMW (UK) Holdings Ltd., Farnborough
BMW (Schweiz) AG, Dielsdorf
BMW Motoren GmbH, Steyr
BMW Finance S. N. C., Guyancourt
BMW (UK) Manufacturing Ltd., Farnborough
BMW i Ventures SCS SICAV-RAIF, Senningerberg
ALPHABET (GB) Ltd., Farnborough
BMW Finance N. V., The Hague
BMW (UK) Ltd., Farnborough
BMW France S. A., Montigny-le-Bretonneux
Rolls-Royce Motor Cars Ltd., Farnborough
BMW Iberica S. A., Madrid
BMW Austria Leasing GmbH, Salzburg
BMW Russland Trading OOO, Moscow
BMW Italia S. p. A., San Donato Milanese
BMW Austria Bank GmbH, Salzburg
Alphabet Nederland B. V., Breda
BMW Finanzdienstleistungen (Schweiz) AG, Dielsdorf
BMW Financial Services Scandinavia AB, Sollentuna
BMW Vertriebs GmbH, Salzburg
Alphabet Belgium Long Term Rental NV, Aartselaar
BMW Bank OOO, Moscow
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., The Hague
BMW Norge AS, Fornebu
Alphabet Italia Fleet Management S. p. A., Rome
270
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
1,190
1,157
1,111
1,050
927
530
496
340
272
225
223
216
202
195
193
189
156
148
122
100
–
–
–
–
–
–
–
–
–
–
–
–
65
242
417
20
143
35
51
54
63
16
46
2
54
1
17
134
– 5
11
13
13
–
–
–
–
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
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
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., The Hague
Oy BMW Suomi AB, Helsinki
BMW Distribution S. A. S., Vélizy-Villacoublay
Park Lane Ltd., Farnborough
BMW Renting (Portugal) Lda., Porto Salvo
BMW Hungary Kft., Vecsés 9
BMW Romania S. R. L., Bucharest
BMW Italia Retail S. r. l., Rome
BMW Automotive (Ireland) Ltd., Dublin
BMW Danmark A / S, Copenhagen
BMW Czech Republic s. r. o., Prague
BMW Madrid S. L., Madrid
BMW Slovenská republika s. r. o., Bratislava
BMW Slovenia distribucija motornih vozil d. o. o., Ljubljana
BMW Bulgaria EOOD, Sofia
Alphabet Polska Fleet Management Sp. z o. o., Warsaw
BMW (UK) Investments Ltd., Farnborough
BiV Carry I SCS, Senningerberg
BMW (UK) Capital plc, Farnborough
Alphabet Luxembourg S. A., Leudelange
271
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 GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Riley Motors Ltd., Farnborough
Triumph Motor Company Ltd., Farnborough
BMW Central Pension Trustees Ltd., Farnborough
BLMC Ltd., Farnborough
Bavarian Sky S. A., Compartment German Auto Loans 7, Luxembourg 11
Bavarian Sky S. A., Compartment German Auto Loans 8, Luxembourg 11
Bavarian Sky S. A., Compartment German Auto Loans 9, Luxembourg 11
Bavarian Sky S. A., Compartment German Auto Loans 10, Luxembourg 11
Bavarian Sky S. A., Compartment German Auto Leases 5, Luxembourg 11
Bavarian Sky S. A., Compartment A, Luxembourg 11
Bavarian Sky S. A., Compartment B , Luxembourg 11
Bavarian Sky Europe S. A. Compartment A, Luxembourg 11
Bavarian Sky UK 2 plc, London 11
Bavarian Sky UK 3 plc, London 11
Bavarian Sky UK A Ltd., London 11
Bavarian Sky UK B Ltd., London 11
Bavarian Sky UK C Ltd., London 11
Bavarian Sky UK D Ltd., London 11
The Americas
BMW (US) Holding Corp., Wilmington, Delaware
BMW Manufacturing Co. LLC, Wilmington, Delaware
BMW Bank of North America Inc., Salt Lake City, Utah
BMW Financial Services NA LLC, Wilmington, Delaware
BMW of North America LLC, Wilmington, Delaware
BMW Canada Inc., Richmond Hill, Ontario
Financial Services Vehicle Trust, Wilmington, Delaware
BMW do Brasil Ltda., Araquari
BMW SLP, S. A. de C. V., Villa de Reyes
BMW US Capital LLC, Wilmington, Delaware
BMW Financeira S. A. Credito, Financiamento e Investimento, São Paulo
BMW de Mexico S. A. de C. V., Mexico City
272
100
100
100
100
0
0
0
0
0
0
0
0
0
0
0
0
0
0
100
100
100
100
100
100
100
100
100
100
100
100
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,873
2,150
1,304
1,127
769
550
293
125
109
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
164
208
80
738
309
89
– 521
– 6
59
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
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 Corporation, Wilmington, Delaware
BMW Facility Partners LLC, Wilmington, Delaware
BMW Manufacturing LP, Woodcliff Lake, New Jersey
BMW FS Receivables Corporation, Wilmington, Delaware
BMW Receivables 1 Inc., Richmond Hill, Ontario
BMW Receivables Ltd. Partnership, Richmond Hill, Ontario
BMW Receivables 2 Inc., Richmond Hill, Ontario
BMW Extended Service Corporation, Wilmington, Delaware
BMW Vehicle Lease Trust 2018-1, Wilmington, Delaware 11
BMW Vehicle Lease Trust 2019-1, Wilmington, Delaware 11
BMW Vehicle Owner Trust 2018-A, Wilmington, Delaware 11
BMW Vehicle Owner Trust 2019-A, Wilmington, Delaware 11
BMW Vehicle Owner Trust 2020-A, Wilmington, Delaware 11
BMW Floorplan Master Owner Trust Series 2018-1, Wilmington, Delaware 11
BMW 2020-A Lease Conduit, Wilmington, Delaware 11
BMW Canada 2018-A, Richmond Hill, Ontario 11
BMW Canada Auto Trust 2018-1, Richmond Hill, Ontario 11
BMW Canada Auto Trust 2019-1, Richmond Hill, Ontario 11
BMW Canada Auto Trust 2020-1, Richmond Hill, Ontario 11
273
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
0
0
0
0
0
0
0
0
0
0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
Africa
BMW (South Africa) (Pty) Ltd., Pretoria
BMW Financial Services (South Africa) (Pty) Ltd., Midrand
SuperDrive Investments (RF) Ltd., Cape Town 11
Asia
BMW Automotive Finance (China) Co. Ltd., Beijing
BMW Financial Services Korea Co. Ltd., Seoul
BMW Japan Finance Corp., Tokyo
BMW China Automotive Trading Ltd., Beijing
Herald International Financial Leasing Co. Ltd., Tianjin
BMW Korea Co. Ltd., Seoul
BMW Leasing (Thailand) Co. Ltd., Bangkok
BMW Manufacturing (Thailand) Co. Ltd., Rayong
BMW Japan Corp., Tokyo
BMW (Thailand) Co. Ltd., Bangkok
BMW India Financial Services Private Ltd., Gurgaon
BMW Malaysia Sdn Bhd, Kuala Lumpur
BMW China Services Ltd., Beijing
BMW China Investment Ltd., Beijing 9
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
2016-2 ABL, Tokyo 11
2017-1 ABL, Tokyo 11
2017-2 ABL, Tokyo 11
274
100
100
0
58
100
100
100
58
100
100
100
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
0
0
0
839
154
–
2,664
610
583
522
259
207
184
140
108
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
81
7
–
280
55
62
477
36
14
10
84
– 35
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
2017-3 ABL, Tokyo 11
2018-1 ABL, Tokyo 11
2018-2 ABL, Tokyo 11
2018-3 ABL, Tokyo 11
2019-1 ABL, Tokyo 11
2019-2 ABL, Tokyo 11
2019-3 ABL, Tokyo 11
2020-1 ABL, Tokyo 11
Bavarian Sky China 2018-2, Beijing 11
Bavarian Sky China 2019-1, Beijing 11
Bavarian Sky China 2019-2, Beijing 11
Bavarian Sky China 2019-3, Beijing 11
Bavarian Sky China 2020-1, Beijing 11
Bavarian Sky China 2020-2, Beijing 11
Bavarian Sky China Leasing 2019-1, Tianjin 11
Bavarian Sky China Leasing 2019-2, Tianjin 11
Bavarian Sky China Leasing 2020-1, Tianjin 11
Oceania
BMW Australia Finance Ltd., Mulgrave
BMW Australia Ltd., Melbourne
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, Mulgrave 11
Bavarian Sky Australia Trust A, Mulgrave 11
275
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
100
100
100
100
100
100
0
0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
323
115
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
21
22
–
–
–
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
BMW AG’S NON-CONSOLIDATED COMPANIES
AT 31 DECEMBER 2020
Companies
DOMESTIC 7
Alphabet Fleetservices GmbH, Munich 4
Automag GmbH, Munich
BMW Car IT GmbH, Munich 4
BMW i Ventures GmbH, Munich
IDEALworks GmbH, Munich
FOREIGN 7
Europe
Alphabet Insurance Services Polska Sp. z o. o., Warsaw
BMW (GB) Ltd., Farnborough
BMW (UK) Pensions Services Ltd., Hams Hall
BMW Car Club Ltd., Farnborough
BMW Drivers Club Ltd., Farnborough
BMW Poland sp. z o. o., Warsaw
BMW Financial Services Slovakia s. r. o., Bratislava
BMW Financial Services Czech Republic s. r. o., Prague
BMW Group Benefit Trust Ltd., Farnborough
BMW i Ventures B. V., Den Haag
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 PL GmbH, Salzburg
John Cooper Garages Ltd., Farnborough
John Cooper Works Ltd., Farnborough
OOO BMW Leasing, Moscow
U. T. E. Alphabet España-Bujarkay, Seville
276
Equity
in € million
Profit / loss
in € million
Capital invest-
ment in %
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
The Americas
217-07 Northern Boulevard Corporation, Wilmington, Delaware
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
Urban X Accelerator SPV LLC, Wilmington, Delaware
BMW Shared Services LLC, Wilmington, Delaware
BMW Mobility Services 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
Asia
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
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 (Beijing) Automotive Trading Co. Ltd., Beijing
THEPSATRI Co. Ltd., Bangkok
277
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
100
100
100
100
100
100
70
100
100
100
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
278
BMW AG’S ASSOCIATED COMPANIES, JOINT VENTURES
AND JOINT OPERATIONS AT 31 DECEMBER 2020
Companies
Joint ventures – equity accounted
DOMESTIC
YOUR NOW Holding GmbH, Munich 8
IONITY Holding GmbH & Co. KG, Munich 8
FOREIGN
BMW Brilliance Automotive Ltd., Shenyang 8
Associated companies – equity accounted
FOREIGN
THERE Holding B. V., Amsterdam 8
Joint operations – proportionately consolidated entities
FOREIGN
Spotlight Automotive Ltd., Zhangjiagang 8
Not equity accounted or proportionately consolidated entities
DOMESTIC 7
Encory GmbH, Unterschleißheim
The Retail Performance Company GmbH, Munich
PDB – Partnership for Dummy Technology and Biomechanics GbR, Gaimersheim
FOREIGN 7
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
Equity
in € million
Profit / loss
in € million
Capital invest-
ment in %
1,226
244
– 749
– 37
7,388
2,560
50
20
50
1,214
206
30
217
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
50
50
50
20
20
40
40
50
50
BMW GroupReport 2020
Group Financial Statements
Notes to the Group Financial Statements
279
BMW AG’S PARTICIPATIONS AT 31 DECEMBER 2020
Companies
DOMESTIC 7
Deutsches Forschungszentrum für Künstliche Intelligenz GmbH, Kaiserslautern
GSB Sonderabfall-Entsorgung Bayern GmbH, Baar-Ebenhausen
Hubject GmbH, Berlin
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
Mobimeo GmbH, Berlin
FOREIGN 7
Northvolt AB, Stockholm
Equity
in € million
Profit / loss
in € million
Capital invest-
ment in %
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5
3
16
20
10
17
6
9
18
10
4
1 The amounts shown for the German subsidiaries correspond to the annual financial statements drawn up in accordance with German accounting requirements (HGB).
2 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.
3 Profit and Loss Transfer Agreement with BMW AG.
4 Profit and Loss Transfer Agreement with a subsidiary of BMW AG.
5 Exemption from drawing up a management report applied in accordance with § 264 (3) and § 264 b HGB.
6 Exemption from publication of financial statements applied in accordance with § 264 (3) and § 264 b HGB.
7 These entities are neither consolidated nor accounted for using the equity method due to their overall immateriality for the Group Financial Statements.
8 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.
9 First-time consolidation.
10 Deconsolidation in the financial year 2020: Sutum ROM GmbH (merger), Société Nouvelle WATT Automobiles S. A. R. L. (merger), Alphabet France SAS (merger), Alphabet (UK) Ltd. (liquidation),
BMW Retail Nederland B. V. (liquidation), BMW Amsterdam B. V. (sale).
11 Control on basis of economic dependence.
BMW GroupReport 2020
280
Group Financial Statements
Notes to the Group Financial Statements
Munich, 9 March 2021
Bayerische Motoren Werke
Aktiengesellschaft
THE BOARD OF MANAGEMENT
OLIVER ZIPSE
ILKA HORSTMEIER
DR. MILAN NEDELJKOVIĆ
PIETER NOTA
DR. NICOLAS PETER
FRANK WEBER
DR.-ING. ANDREAS WENDT
BMW GroupReport 2020
Corporate Governance
281
CORPORATE
GOVERNANCE
282
282
282
283
284
284
284
285
286
289
291
Fundamental Aspects of Corporate Governance
(Part of the Combined Management Report)
Information on the Company’s Governing Constitution
Board of Management
Supervisory Board
Shareholders and Annual General Meeting
Declaration of Compliance
Corporate Governance Statement
Members of the Board of Management
Members of the Supervisory Board
Overview of Supervisory Board Committees
and their Composition
Remuneration Report
(Part of the Combined Management Report)
326
Glossary and Explanation of Key Figures
330
331
340
Responsibility Statement by the Company’s
Legal Representatives
Independent Auditor’s Report
Independent Practitioner’s Report
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
FUNDAMENTAL
ASPECTS OF CORPO-
RATE GOVERNANCE
(PART OF THE COM-
BINED MANAGEMENT
REPORT)
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
corporate communication, corporate governance in the
interest of stakeholders, trustful cooperation both of
the Board of Management and the Supervisory Board
as well as among employees, and compliance with ap
plicable law.
The Board of Management and the Supervisory
Board report below on the main features of corporate
governance. The Corporate Governance Report pursu
ant to Principle 22 of the German Corporate Govern
ance Code (DCGK), as amended on 16 December 2019,
is part of the Corporate Governance Statement. which
www.bmwgroup.com/ezu (Corporate
can be accessed at
Governance).
282
INFORMATION ON THE
COMPANY’S GOVERNING
CONSTITUTION
BOARD OF MANAGEMENT
The Board of Management manages the enterprise
under its own responsibility, acting in the best interests
of the BMW Group with the aim of achieving sustainable
growth in value. The interests of shareholders, employees
and other stakeholders are also taken into account in the
pursuit of this aim.
In accordance with § 7 of the Articles of Association,
the Board of Management of BMW AG 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 2020, 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 responsible for ensuring that all provisions of law and
internal regulations are complied with. Further details
on compliance within the BMW Group are available
in the section
Compliance and Human Rights. The Board of
Management is also responsible for ensuring that appro
priate risk management and risk controlling systems are
in place throughout the Group.
The designation BMW Group comprises Bayerische
Motoren Werke Aktiengesellschaft (BMW AG) and its
Group entities. BMW AG is a stock corporation (Aktien
gesellschaft) within the meaning of the German Stock
Corporation Act (Aktiengesetz) and has its registered
office in Munich, Germany. It has three representative
bodies, namely the Annual General Meeting, the Supervi
sory Board and the Board of Management. The duties and
authorities of those bodies derive from the Stock Corpo
ration Act and the Articles of Incorporation of BMW AG.
Shareholders, as the owners of the business, exercise their
rights at the Annual General Meeting. The Board of Man
agement is fully 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 reason, revoke
an appointment at any time. The Board of Management
informs the Supervisory Board and reports to it regularly,
promptly and comprehensively, in line with the principles
of conscientious and faithful accountability and in accord
ance 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 proceedings. The Supervisory Board is not, however,
authorised to undertake management measures itself.
The close interaction between Board of Management
and Supervisory Board in the interests of the enterprise
as described above is also known as a “twotier board
structure”.
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
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 BMW AG 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.
Deliberations are held and decisions taken by the
Board of Management as a collegiate body at full Board
meetings as well as at Product and Customer full Board
meetings. The Board of Management also deliberates and
makes decisions at meetings of its three committees –
Customer, Operations and Senior Executives. The overall
framework for developing business strategies, the use of
resources, the implementation of strategies and matters
of particular importance to BMW AG are decided upon
at Board of Management meetings.
SUPERVISORY BOARD
BMW AG’s Supervisory Board is composed of ten
shareholder representatives (elected by the Annual
General Meeting) and ten employee representatives
(elected in accordance with the CoDetermination Act).
The ten Supervisory Board members representing em
ployees comprise seven Company employees, including
one executive staff representative, and three members
elected following nomination by unions. The Supervi
sory Board has the task of advising and supervising the
Board of Management in its management of BMW AG. It
is involved in all decisions of fundamental importance for
BMW AG. The Supervisory Board appoints the members
of the Board of Management and decides upon the level
of remuneration they receive. The Supervisory Board can
revoke appointments for important reasons.
The Board of Management Board has issued terms of
procedure for itself. The allocation of areas of responsi
bility and business segments among the members of the
Board of Management is set out in the Board’s Schedule
of Responsibilities.
Members of the Supervisory Board of BMW AG are
obliged to act in the best interest of the enterprise as a
whole. They may not pursue personal interests in their
decisions or take advantage of business opportunities
intended for the benefit of the BMW Group.
Further information on the composition and working
methods of the Management Board and its committees
is provided in the Corporate Governance Statement at
www.bmwgroup.com/ezu (Corporate Governance).
Members of the Supervisory Board are obliged to
inform the full Supervisory Board of any conflicts of
interest so that the latter can report to the shareholders
at the Annual General Meeting on its treatment of the
issue. Conflicts of interest requiring to be disclosed in
clude, in particular, conflicts of interest that may arise
as a result of a consultant or board function with clients,
suppliers, lenders or other business partners. Significant
and nontemporary conflicts of interest of a Supervisory
Board member result in the termination of mandate.
283
The Supervisory Board regularly assesses the effi
ciency of its activities. To this end, shared discussion is
conducted within the Supervisory Board and, at regular
intervals, in personal discussions with the Chairman,
prepared on the basis of a questionnaire sent in advance,
which is drawn up by the Supervisory Board.
The Supervisory Board has stated specific targets for
its composition, agreed to a diversity concept and deter
mined a competency profile. Members of the Supervisory
Board are responsible for undertaking any training re
quired for the performance of their duties. The Company
provides them with appropriate assistance therein.
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, namely the Personnel Committee, the Audit
Committee, the Nomination Committee and the Media
tion Committee. These serve to raise the efficiency of the
Supervisory Board’s work and facilitate the handling of
complex issues.
Composition of the Presiding Board and the various
committees is based on legal requirements, the Articles
of Incorporation, rules of procedure and corporate gov
ernance principles, while taking into particular account
the expertise of the members concerned.
BMW AG ensures that the Supervisory Board and
its committees are appropriately equipped to carry out
their duties. This includes providing a central Supervi
sory Board office to support the chairpersons in their
coordination work.
Further information on the composition and working
procedures of the Supervisory Board and its committees
is provided in the Corporate Governance Statement at
www.bmwgroup.com/ezu (Corporate Governance).
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
284
SHAREHOLDERS AND
ANNUAL GENERAL MEETING
DECLARATION OF COMPLIANCE
CORPORATE GOVERNANCE
STATEMENT
Once a year, the Board of Management and the Su
pervisory Board of BMW AG issue an annual Declaration
of Compliance pursuant to § 161 of the German Stock
Corporation Act (AktG) with regard to recommenda
tions of the Government Commission on the German
Corporate Governance Code as officially published and
valid at the date of the declaration. BMW AG’s current
and previous Declarations of Compliance are available
online at
www.bmwgroup.com/compliancedeclaration (Corpo
rate Governance). In the Declaration of Compliance
issued in December 2020, the Board of Management
and the Supervisory Board declared that all recommen
dations of the German Corporate Governance Code
(version dated 16 December 2019) will be complied
with going forward.
Further information on corporate management and
governance, including the declaration of compliance
pursuant to § 161 of the German Stock Corporation Act,
can be found in the Corporate Governance Statement
(§ 289 f and § 315 HGB) at
www.bmwgroup.com/ezu (Corpo
rate Governance).
The shareholders of BMW AG exercise their rights at
the Annual General Meeting. The Annual General Meet
ing decides in particular on the utilisation of unappropri
ated 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 Su
pervisory Board.
Moreover, the systems for the remuneration of Board
of Management members and Supervisory Board mem
bers are presented to the Annual General Meeting for
approval in the case of significant changes, but at least
every four years. This is scheduled to take place at the
Annual General Meeting in 2021.
Shareholders may exercise their voting rights at the
Annual General Meeting either in person, by proxy or via
a representative designated by BMW AG. Voting rights
may also be exercised via postal vote.
Due to the Covid19 pandemic, the 2020 Annual
Meeting was held for the first time as a virtual meeting,
i. e., without the physical presence of shareholders and
proxies, except for the Company representatives bound
by instructions issued by shareholders. In this case, the
Company enabled shareholders to exercise their voting
rights by issuing instructions to Company representatives
or by postal vote (in both cases in paper form and online).
BMW GroupReport 2020
285
Corporate Governance
Fundamental Aspects of Corporate Governance System
MEMBERS OF THE
BOARD OF MANAGEMENT
OLIVER ZIPSE (b.1964)
Chairman
KLAUS FRÖHLICH (b.1960)
Development (until 30 June 2020)
Mandates
E.ON SE
PIETER NOTA (b.1964)
Customer, Brands, Sales
Mandates
Rolls-Royce Motor Cars Limited ♦, Chairman
ILKA HORSTMEIER (b.1969)
Human Resources, Labour Relations Director
DR. NICOLAS PETER (b.1962)
Finance
DR. MILAN NEDELJKOVIĆ (b.1969)
Production
Mandates
Mandates
BMW Brilliance Automotive Ltd.♦,
Deputy Chairmann
BMW (South Africa) (Pty) Ltd.♦, Chairman
BMW Motoren GmbH ♦, Chairman
FRANK WEBER (b.1966)
Development (since 1 July 2020)
DR.-ING. ANDREAS WENDT (b.1958)
Purchasing and Supplier Network
General Counsel:
DR. ANDREAS LIEPE
♦ Not listed on the stock exchange.
Membership of other statutory supervisory boards.
Membership of equivalent national or foreign boards
of business enterprises.
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
286
MEMBERS OF THE
SUPERVISORY BOARD
STEFAN QUANDT (b.1966)
Member since 1997, elected until the AGM 2024
CHRISTIANE BENNER² (b.1968)
Member since 2014, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Second Chairwoman of IG Metall
DR.-ING. DR.-ING. E. H. NORBERT REITHOFER (b.1956)
Member since 2015, elected until the Annual General
Meeting (AGM) 2025
Chairman of the Supervisory Board
Former Chairman of the Board of Management
of BMW AG
Mandates
Siemens Aktiengesellschaft
Henkel Management AG (since 22 June 2020)
Henkel AG & Co. KGaA (Shareholders’ Committee)
MANFRED SCHOCH¹ (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
Entrepreneur
Mandates
DELTON Health AG ♦, Chairman
DELTON Technology SE ♦, Chairman
Frankfurter Allgemeine Zeitung GmbH ♦
AQTON SE ♦, Chairman
Entrust Corp. ♦
Mandates
Continental AG, Deputy Chairwoman
DR. RER. POL. KURT BOCK (b.1958)
Member since 2018, elected until the AGM 2023
Chairman of the Supervisory Board of BASF SE
(since 18 June 2020)
Mandates
BASF SE, Chairman
STEFAN SCHMID¹ (b.1965)
Member since 2007, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Chairman of the Works Council, Dingolfing
FUCHS PETROLUB SE, Chairman
Fresenius Management SE ♦ (until 30 June 2020)
Münchener RückversicherungsGesellschaft
Aktiengesellschaft in München (until 29 April 2020)
DR. JUR. KARL-LUDWIG KLEY (b.1951)
Member since 2008, elected until the AGM 2021
VERENA ZU DOHNA-JAEGER² (b.1975)
Member since 2019, elected until the AGM 2024
Deputy Chairman of the Supervisory Board
Chairman of the Supervisory Board of E.ON SE
and Deutsche Lufthansa Aktiengesellschaft
Department head for Industrial Relations and
Co determination Policy with the Executive Board of
IG Metall / (In-house) counsel
Mandates
E.ON SE, Chairman
Deutsche Lufthansa Aktiengesellschaft, Chairman
Mandates
ABB AG
1 Employee representatives (Company employees).
2 Employee representatives (union representatives).
3 Employee representatives (members of senior management).
♦ Not listed on the stock exchange.
Membership of other statutory supervisory boards.
Membership of equivalent national or foreign boards of business enterprises.
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
287
DR.-ING. HEINRICH HIESINGER (b.1960)
Member since 2017, elected until the AGM 2022
PROF. DR. RER. POL. RENATE KÖCHER (b.1952)
Member until 14 May 2020
SIMONE MENNE (b.1960)
Member since 2015, elected until the AGM 2021
Member of supervisory boards
Director of Institut für Demoskopie
Member of supervisory boards
Mandates
Deutsche Post AG
Allensbach Gesellschaft zum Studium der
öffentlichen Meinung mbH
Mandates
Deutsche Post AG
Fresenius Management SE ♦ (since 1 July 2020)
Mandates
Henkel AG & Co. KGaA (since 17 June 2020)
ZF Friedrichshafen AG ♦ (since 1 January 2021)
Infineon Technologies AG (until 20 February 2020)
PROF. DR. RER. NAT. DR. H. C.
REINHARD HÜTTL (b.1957)
Member since 2008, elected until the AGM 2023
Scientific Director and Managing Director of EUREF
Energy Innovation GmbH
University Professor
SUSANNE KLATTEN (b.1962)
Member since 1997, elected until the AGM 2024
Entrepreneur
Mandates
SGL Carbon SE, Chairwoman
ALTANA AG ♦, Deputy Chairwoman
UnternehmerTUM GmbH ♦,Chairwoman
Nestlé Deutschland AG ♦
Robert Bosch GmbH ♦
HORST LISCHKA² (b.1963)
Member since 2009, elected until the AGM 2021
Secretary with the Executive Board of IG Metall
Mandates
KraussMaffei Group GmbH ♦
MAN Truck & Bus SE ♦
München Klinik gGmbH (until 15 May 2020)
WILLIBALD LÖW¹ (b.1956)
Member since 1999, elected until the AGM 2024
Chairman of the Works Council, Landshut
Springer Nature AG & Co. KGaA ♦
(until 3 March 2020)
Johnson Controls International plc
Russell Reynolds Associates Inc. ♦
DR. DOMINIQUE MOHABEER¹ (b.1963)
Member since 2012, elected until the AGM 2024
Member of the Works Council, Munich
BRIGITTE RÖDIG¹ (b.1963)
Member since 2013, elected until the AGM 2024
Member of the Works Council, Dingolfing
1 Employee representatives (Company employees).
2 Employee representatives (union representatives).
3 Employee representatives (members of senior management).
♦ Not listed on the stock exchange.
Membership of other statutory supervisory boards.
Membership of equivalent national or foreign boards of business enterprises.
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
288
ANKE SCHÄFERKORDT (b.1962)
Member since 14 May 2020, elected until the AGM 2025
WERNER ZIERER¹ (b.1959)
Member since 2001, elected until the AGM 2024
Member of supervisory boards
Chairman of the Works Council, Regensburg
Mandates
BASF SE
Serviceplan Group Management SE ♦
Wayfair Inc.
DR. VISHAL SIKKA (b.1967)
Member since 2019, elected until the AGM 2024
CEO & Founder, Vianai Systems, Inc.
Mandates
Oracle Corporation
DR. THOMAS WITTIG³ (b.1960)
Member since 2019, elected until the AGM 2024
Senior Vice President Financial Services
Mandates
BMW Bank GmbH ♦, Chairman
BMW Automotive Finance (China) Co., Ltd. ♦,
Chairman
1 Employee representatives (Company employees).
2 Employee representatives (union representatives).
3 Employee representatives (members of senior management).
♦ Not listed on the stock exchange.
Membership of other statutory supervisory boards.
Membership of equivalent national or foreign boards of business enterprises.
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
OVERVIEW OF SUPERVISORY
BOARD COMMITTEES AND
THEIR COMPOSITION
289
Principal duties, basis for activities
Members
PRESIDING BOARD
— preparation of Supervisory Board meetings to the extent that the subject matter to be discussed does not fall within
Norbert Reithofer 1, Manfred Schoch, Stefan Quandt, Stefan Schmid, Karl-Ludwig Kley
Norbert Reithofer 1, Manfred Schoch, Stefan Quandt, Stefan Schmid, Karl-Ludwig Kley
Kurt Bock 1, 2, Norbert Reithofer, Manfred Schoch, Stefan Quandt, Stefan Schmid
the remit of a committee
— activities based on terms of procedure
PERSONNEL COMMITTEE
— preparation of decisions relating to the appointment and revocation of appointment of members of the Board of
Management, the remuneration and the regular review of the Board of Management’s remuneration system
— conclusion, amendment and revocation of employment contracts (in conjunction with the resolutions taken by the
Supervisory Board regarding the remuneration 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 Manage ment 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, activi-
ties based on terms of procedure
AUDIT COMMITTEE
— 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)
— 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 audi-
tor 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, activi-
ties based on terms of procedure
BMW GroupReport 2020
Corporate Governance
Fundamental Aspects of Corporate Governance System
290
Principal duties, basis for activities
Members
NOMINATION COMMITTEE
— identification of suitable candidates as shareholder representatives on the Supervisory Board to be put forward for
inclusion in the Super visory Board’s proposals for election at the Annual General Meeting
— established in accordance with the recommendation contained in the German Corporate Governance Code, activi-
ties based on terms of procedure
MEDIATION COMMITTEE
— 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
— established as required by law
1 Chair.
2 (Independent) financial expert within the meaning of §§ 100 (5) and 107 (4) AktG, C.10, D.4 DCGK.
Norbert Reithofer 1, 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.)
Norbert Reithofer, Manfred Schoch, Stefan Quandt, Stefan Schmid
(In accordance with statutory require ments, the Mediation Committee comprises the Chairman and Deputy Chairman of
the Supervisory Board and one member each selected by shareholder representatives and employee representatives.)
BMW GroupReport 2020
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Remuneration Report
291
REMUNERATION
REPORT (PART OF THE
COMBINED MANAGE-
MENT REPORT)
The following section describes the principles gov
erning the remuneration of the Board of Management
and the stipulations set out in the statutes relating to the
remuneration of the Supervisory Board. In addition to
explaining the system of remuneration for the financial
years 2018 to 2020, details of components of remuner
ation are also provided with figures. Furthermore, the
remuneration of each member of the Board of Manage
ment and the Supervisory Board for the financial year
2020 is disclosed by individual member and analysed
with its component parts.
The Supervisory Board has resolved a new remuner
ation system for the Board of Management for financial
year from 2021 onwards. In accordance with the statu
tory requirements, the new remuneration system will
be submitted to the 2021 Annual General Meeting for
resolution.
1. Board of Management remuneration
Responsibilities
The determination and regular review of the system
and structure of Board of Management remuneration is
a task of the full Supervisory Board, as is the determi
nation of the individual level of remuneration of Board
of Management members. The Supervisory Board’s
Personnel Committee assumes a preparatory function
in determining and reviewing the system and level of
Board of Management remuneration.
The Supervisory Board reviews the remuneration
system annually for appropriateness in terms of structure,
target and maximum remuneration as well as and actual
remuneration. In preparation, the Personnel Committee
also consults remuneration studies. In order to check
that the remuneration system is in line with peers, the
Supervisory Board compares remuneration paid by oth
er DAX companies in horizontal terms. For a vertical
view, it compares Board remuneration with the salaries
of executive managers and with the average salaries of
employees of BMW AG based in Germany, also with re
gard to the development over time. Recommendations
made by an independent external remuneration expert
and suggestions made by investors and analysts are also
considered in the consultative process.
The Supervisory Board is required to submit the re
muneration system to the Annual General Meeting for
approval in the event of significant changes, but at least
every four years. The remuneration system valid for the
2020 financial year was approved by the Annual General
Meeting in 2018.
Principles of remuneration
The remuneration system for the Board of Manage
ment at BMW AG is designed to encourage a manage
ment approach focused on the sustainable and longterm
development of the BMW Group. One further principle
applied when designing remuneration systems at BMW is
that of consistency at different levels. This means that re
muneration systems for the Board of Management, senior
management and employees of BMW AG are composed
of similar elements. The Supervisory Board performs an
annual review to ensure that all Board of Management re
muneration components are appropriate, 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 remuneration model used for the Board
of Management needs to be attractive for highly qualified
executives in a competitive environment.
The remuneration 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 remuneration. It also ensures that variable
components based on multiyear 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.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Remuneration system, remuneration components
Board of Management remuneration comprises fixed
and variable cash elements as well as a sharebased com
ponent. Retirement and surviving dependants’ benefit
entitlements are also in place. The remuneration com
ponents are described in more detail below.
OVERVIEW OF REMUNERATION SYSTEM FOR FINANCIAL
YEARS 2018 – 2020: DEPICTION OF ALLOCATION TO
CASH BENEFITS (TARGET REMUNERATION) AND PEN-
SION CONTRIBUTION ¹
in %
approx. 8
Pension contribution
approx. 14
Share-based
remuneration
approx. 27
Base salary
approx. 8
Earnings-based
component
of the bonus
approx. 24
Performance Cash Plan
approx. 19 Performance
component of the bonus
1 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.
292
OVERVIEW OF REMUNERATION SYSTEM FOR FINANCIAL
YEARS 2018 – 2020: DEPICTION OF VARIABLE REMU-
NERATION (TARGET REMUNERATION) ²
Variable remuneration
The variable remuneration of the Board of Manage
ment comprises three components:
— Bonus
— Performance Cash Plan
— Sharebased remuneration
Payment of a discretionary additional bonus is not pro
vided for. An upper limit has been set for each component
of variable remuneration (see Overview of remuneration
system and remuneration components).
Bonus
Assuming 100 % target achievement, the bonus for the
2020 financial year comprises an earningsrelated compo
nent of 30 % and performancerelated component of 70 %.
The target bonus (100 %) is € 0.85 million p. a. for a Board
member during the first period of office, € 1.0 million
p. a. 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. For all Board members, the
upper limit of the bonus is set at 180 % of the relevant
target bonus.
in %
approx. 22
Share-based remuneration
approx. 37
Performance Cash Plan
approx. 12
Earnings-based
component
of the bonus
approx. 29
Performance
component
of the bonus
2 Simplified depiction of target amounts for the variable cash remuneration of the Chairman of the Board of Man-
agement. 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.
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 pre
miums and contributions towards security systems). The
basic remuneration of Board of Management members
for the financial year 2020 is € 0.8 million p. a. for a Board
member during the first period of office, € 0.95 million p. a.
for a Board member with effect 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.
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293
In order to calculate the earningsrelated 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 earningsrelated component
depends on the degree to which the targets set by the Su
pervisory Board for Group net profit and Group posttax
return on sales are achieved. The degree of achievement
is expressed in an earnings factor. The underlying meas
urement values for the bonus payable for the financial
year 2020 were determined three financial years ago (i. e.
back in 2017) and may not be changed retrospectively.
The earnings factor is capped at a maximum value of 1.8.
The bonus is paid out after the end of the Annual General
Meeting, at which the separate financial statements of
BMW AG for the relevant financial year are presented.
For the financial year 2020, an earnings factor of
1.000 would give rise to an earningsrelated 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 of mandate and € 0.54 million for the
Chairman of the Board of Management. For instance,
in the event of a Group net profit of € 5.3 billion and a
posttax return on sales of 5.6 %, the earnings factor is
1.000. Similarly, a Group net profit of € 6.9 billion and a
posttax 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 posttax return on sales of 8.0 % to one of 1.637. A
minimum earnings factor of 0.135 arises in the event of
a Group net profit of € 3 billion and a post-tax return on
sales of 3 %. If the Group net profit were below € 3 billion
or the posttax return on sales below 3 %, the earnings
EARNINGS COMPONENTS: ALLOCATION TABLE FOR CALCULATING EARNINGS FACTOR ¹
%
n
i
s
e
l
a
s
n
o
n
r
u
t
e
r
x
a
t
-
t
s
o
p
p
u
o
r
G
9.0 Upper limit
8.0
7.4
7.3
5.6
4.8
3.9
1.500
1.000
0.444 ⁴
0.798 ³
3.0 Lower Limit
0.135
1.520 ²
1.637
1.800
3.0
Lower limit
3.9
5.0
5.3
6.9 7.2
9.0
11.0
Upper Limit
Group net profit after tax (in € billion)
1 Simplified depiction 2 Earnings factor 2018 3 Earnings factor 2019 4 Earnings factor 2020
factor would be zero. In this case, an earningsrelated
component would not be paid. The maximum earnings
factor of 1.800 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.
The performancerelated component for the financial
year 2020 bonus is calculated using a performance factor
which the Supervisory Board has set 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 longterm 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 longterm success,
the interests of shareholders and stakeholders as well as
social responsibility.
The criteria include in particular innovation (econom
ic and ecological, for example in the reduction of carbon
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 employ
er, progress in implementing the diversity concept, and
activities that foster corporate social responsibility. The
Supervisory Board also draws comparisons with com
petitors. The individual performance factor lies between
zero and a maximum 1.8.
BMW GroupReport 2020
294
business development during the evaluation period, the
forecast trend in the business development, the Board
member’s individual contribution to profitability and the
status of compliance within the Board member’s area of
responsibility. The multiyear performance factor can be
between 0.9 and 1.1.
Members of the Board of Management who were
Board members on 1 January 2018 received and will
receive an advance payment out of the 2018 – 2020 Per
formance Cash Plan in 2019 and from the 2019 – 2021
Performance Cash Plan in 2020. At the end of each rele
vant assessment period, the advance payment is set off or
repaid, depending on the amount then determined. The
advance payment for each relevant year is € 0.5 million for
a Board member in the first period of office and € 0.6 mil
lion from the second period of office or the fourth year of
mandate. For the Chairman of the Board of Management
the amount is € 0.9 million p. a.
Corporate Governance
Remuneration Report
BONUS OVERVIEW
EARNINGS COMPONENT BONUS
Earnings factor
x 0.3 of target amount
— Value between 0 and 1.8
Basis for earnings factor:
— Group net profit
— Group post-tax return on sales
+
PERFORMANCE COMPONENT
Performance factor
x 0.7 of target amount
— Value between 0 and 1.8
=
TOTAL
— Cash payment
— Capped at 180 %
of target amount
Basis for performance factor:
— Contribution to sustainable and long-term
business development over a period of
at least three financial years
— Qualitative, mainly non-financial parameters
Performance Cash Plan
Up to and including the grant year 2020, variable cash
remuneration includes a multiyear and futureoriented
Performance Cash Plan (PCP). The PCP is calculated at
the end of a threeyear evaluation period by multiplying
a predefined target amount by a factor that is based on
multiyear 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.
The PCP evaluation period comprises three years, the
grant year and the two subsequent years. PCP entitle
ments are paid in cash. The bonus is paid out after the
end of the Annual General Meeting, at which the separate
financial statements of BMW AG for the third year of the
evaluation period are presented.
In order to determine the PCP factor, a multiyear
profit factor is multiplied by a multiyear performance
factor. The PCP factor is capped at a maximum value
of 1.8.
In order to determine the multiyear 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 earningsrelated
component of the bonus, the earnings factor for each indi
vidual year within the evaluation period is determined on
the basis of Group net profit and posttax 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.
In addition to the multiyear earnings factor, the Su
pervisory Board also determines a multiyear performance
factor after the end of the evaluation period. To this end,
the Supervisory Board takes account in particular of the
BMW GroupReport 2020
Corporate Governance
Remuneration Report
PERFORMANCE CASH PLAN OVERVIEW
TARGET AMOUNT
PCP FACTOR OVERVIEW
MULTI-YEAR EARNINGS FACTOR
— Average earnings factor
— Based on Group net profit and
Group post-tax return on sales
— Value between 0 and 1.8
×
×
PCP FACTOR
=
CASH PAYMENT
— Cash payment at end of evaluation period
— Capped at 180 % of target amount
PCP FACTOR
=
MULTI-YEAR PERFORMANCE FACTOR
Measurement based on
multi-year performance factor:
— Trend in business development
— 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
Share-based 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 for financial years up to
and including the financial year 2020 a cash remuner
ation (investment component) for the specific purpose
of investment – after tax and deductions – in shares of
common stock of BMW AG. The investment component
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 gener
al 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,
including in the case of retirement.
At the end of the holding period, Board members
receive from the Company, for every three shares of com
mon stock held, either one additional share of common
stock or the cash equivalent, to be decided at the Compa
ny’s discretion (matching component). Upper limits have
been defined for both the investment component and
the matching component (see Overview of remuneration
system and remuneration components).
295
Other
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 performance cash plans and share
based remuneration are forfeited.
A oneyear postcontractual noncompetition clause
has been agreed with the Board members under speci
fied circumstances against payment of a remuneration
amount. Service agreements taking effect after 1 Janu
ary 2021 provide for the payment of a monthly amount
corresponding to the respective monthly base salary dur
ing the period of the postcontractual noncompetition
clause. In accordance with the recommendation of the
German Corporate Governance Code dated 16 Decem
ber 2019, any severance payment is offset against the
noncompetition clause remuneration amount. The same
applies to other income, unless it relates to remuneration
for supervisory board mandates approved during the
term of office. The Company may unilaterally waive
the requirement to comply with the postcontractual
noncompetition clause.
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Remuneration Report
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Overview for Financial Years 2018 – 2020 of remuneration system and remuneration components
Component
BASE SALARY
VARIABLE REMUNERATION
Bonus
(sum of earnings-related bonus and performance-related bonus)
a) Earnings-related bonus
(at 100 % target achievement corresponds to 30 % of target amount)
Parameter / measurement base
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.
Target amount p. a. (at 100 % target achievement):
— € 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
— 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 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)
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Remuneration Report
297
Component
b) Performance-related bonus
(at 100 % target achievement corresponds to 70 % of target amount)
Performance Cash Plan
a) Multi-year earnings factor
b) Multi-year performance factor
Parameter / measurement base
— 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 financial 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, leader-
ship, corporate culture, promotion of compliance and integrity, contribution to the Group’s attractiveness as an employ-
er, progress in implementing the diversity concept, and activities that foster corporate social responsibility, reputation
— 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)
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 statements of BMW AG for the
third year of the evaluation period are presented
— 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
— 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
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Component
Share-based remuneration programme
a) Cash remuneration component
(investment component)
b) Share-based remuneration component
(matching component)
OTHER REMUNERATION
298
Parameter / measurement base
— 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
— Earmarked cash remuneration amounting to 45 % of the gross bonus
— Cash remuneration p. a. at 100 % target achievement of the bonus:
— € 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
— Once the four-year holding period requirement is fulfilled, Board of Management members 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
Contractual agreement, main points: non-cash benefits from use of Company car, use of corporate cars or the
BMW chauffeur service, insurance premiums, contributions towards security systems
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Overview for Financial Years 2018 – 2020 of remuneration system and remuneration components onwards
RETIREMENT BENEFITS
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
REMUNERATION CAPS
(MAXIMUM REMUNERATION)
in € p. a.
Bonus
Performance
Cash Plan
Cash remuneration
for share acquisition
Monetary value of
matching component
Total*
Share-based remuneration programme
Member of the Board of Management
in the first period of office
Member of the Board of Management in the second
period of office or from fourth year of mandate
Chairman of the Board of Management
1,530,000
1,530,000
688,500
344,500
4,925,000
1,800,000
3,240,000
1,710,000
2,880,000
810,000
1,458,000
405,000
729,000
5,500,000
9,850,000
* Including base salary, other fixed remuneration elements and pension contribution. For the purposes of the overall cap, German accounting rules (HGB) require the relevant grant year to be taken in the calculation for the PCP;
in the case of the matching component, the actual amount deemed to have been received is required to be added retrospectively to the total remuneration of the grant year concerned. The overall cap in absolute terms is lower
than the sum of the maximum amounts for the individual components.
Retirement benefits
With effect from 1 January 2010, the provision of
retirement benefits for members of the Board of Man
agement was changed to a defined contribution system
with a guaranteed minimum return.
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 oneoff 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 amount of the benefits to be paid is determined
on the basis of the amount accrued in each Board mem
ber’s individual pension savings account. The amount on
this account results from annual contributions paid in,
plus interest earned depending on the type of investment.
If a member of the Board of Management with a
vested entitlement dies prior to the commencement of
benefit payments, a surviving spouse or registered part
ner, or otherwise surviving children – in the latter case
depending on their age and education – are entitled to
receive benefits as surviving dependants.
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 contribu
tions).
The annual contribution paid by the Company for the
financial year 2020 is € 350,000 for a Board member and
€ 500,000 for the Chairman of the Board of Management.
The guaranteed 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 entitle
ments, the Supervisory Board considers the targeted level
of pension provision in each case as well as the resulting
expense for the BMW Group.
Contributions falling due under the defined contribu
tion model are paid into an external fund in conjunction
with a trust model that is also used to fund pension obli
gations to employees.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Income earned on an employed or a selfemployed
basis up to the age of 63 may be offset against instalment
payments. In addition, certain circumstances have been
specified, in the event of which the Company 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.
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 en
titled 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
Klaus Fröhlich left the Board of Management on
30 June 2020. In accordance with the provisions of his
service contract, a oneyear postcontractual noncom
petition clause applies. The proportionate amount
of remuneration relating to the financial year 2020 is
€ 0.3 million. The corresponding figure for the remaining
period from 1 January 2021 to 30 June 2021 is € 0.3 mil
lion, for which a provision has been recognised.
In line with the recommendation of the German Cor
porate Governance Code dated 16 December 2019, Board
of Management service contracts provide for severance
pay to be paid to the Board member in the event of pre
mature termination by the Company without important
reason, the amount of which is limited to a maximum
of two years’ remuneration (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 remuneration is based on
the sum of base remuneration and the target amount
of variable remuneration components for the last full
financial year before termination. If the relevant target
amount for variable remuneration was not reached, the
amounts granted are used instead.
300
No commitments or agreements exist for payment
of remuneration 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 2020 on account of their activities
as members of the Board of Management.
Remuneration caps
The Supervisory Board has stipulated upper limits
for all variable remuneration components and for the
remuneration of Board of Management members in total.
The total upper limit amounts are lower than the sum
of the maximum amounts applicable for the individual
components. The upper limits are shown in the table
Overview of remuneration system and remuneration
components for the financial years 2018 – 2020.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Total remuneration of the Board of Management for the
financial year 2020 (2019)
The total remuneration of the current members of the
Board of Management of BMW AG for the financial year
2020 amounted to € 17.5 million (2019: € 21.4 million), of
which € 7.3 million (2019: € 8.1 million) relates to fixed
components (including other remuneration). Variable
components amounted to € 9.7 million (2019: € 12.6 mil
lion) and the sharebased remuneration component to
€ 0.5 million (2019: € 0.7 million).
In particular, the members of the Board of Manage
ment jointly exceeded the targets for the following criteria
deemed particularly relevant by the Supervisory Board:
— Market position compared to competitors: Despite the
restrictions due to the pandemic, the BMW Group re
mained the world’s leading manufacturer of premium
automobiles for the 17th year in succession. Sales of
electrified vehicles saw a sharp rise compared to the
previous year.
For the financial year 2020, the BMW Group achieved
a net profit of € 3,857 million (2019: € 5,022 million) and a
posttax return on sales of 3.9 % (2019: 4.8 %). According
to the defined allocation table, these results yield an
earnings factor of 0.444 (2019: 0.798) for the earnings
component relevant for the bonus for the financial year
2020.
In determining the performance factor, the Su
pervisory Board uses agreedupon criteria to evaluate
the contribution of Board members to the sustainable
and longterm development and future viability of the
BMW Group.
The Supervisory Board’s decisionmaking process is
based on a detailed, documented analysis of performance
based on all agreedupon criteria, as well as indepth dis
cussions at Personnel Committee and full Supervisory
Board level.
DELIVERIES OF ELECTRIFIED VEHICLES
Units / Year
230,000
115,000
0
192,662
146,158
+ 31.8 %
PHEV 106,639
148,121
BEV 39,519
44,541
2019
2020
301
DELIVERIES OF ELECTRIFIED VEHICLES
Units / Year
200,000
150,000
100,000
50,000
2016
2017
2018
2019
2020
BMW GroupReport 2020
Corporate Governance
Remuneration Report
— Ecological benefits from innovation: At 99 g / km ¹, ²
the figure for the BMW Group’s fleet carbon emis
sions was 5 g / km below the EU legal limit, as in
previous years. Further progress is likely to be made
in the foreseeable future on the back of measures
already adopted.
FLEET EMISSIONS IN THE EU ¹
in CO₂ g / km
130
110
90
2018
2019
2020 2
302
— Customer orientation: As in previous years, the
BMW Group won several industry awards for concept
studies on various vehicles and plants, assessed on
the basis of the concept of quality.
— Customer orientation and innovative solutions: New
software was installed in approximately 624,000 vehi
cles via remote upgrades, without the need for a visit
to a service partner. The proportion of new vehicles
sold with the new software has risen sharply over the
past few years, and a further increase in the number
of such vehicles is foreseeable as a result of product
decisions already taken.
— Reputation: Capital market rating agencies once again
ranked the BMW Group as the best European automo
bile manufacturer. The BMW Group again performed
excellently in sustainability indices such as the Dow
Jones Sustainability Index, taking first place in the
“Automobiles” segment as the most sustainable man
ufacturer. It is also in the top CDP grouping (Climate
A List).
— Adaptability: Prudent management limited the im
pact of the pandemic on the Group, particularly in
terms of keeping global supply chains running.
On the basis of these criteria, the Supervisory Board’s
first calculated and then set a performance factor of 1.15
for all members of the Board of Management for the
financial year 2020 (2019: 1.20).
In the case of the 2020 grant year, the PCP assess
ment period covers the financial years 2020 to 2022. The
target amount for the PCP 2020 – 2022 is € 1.6 million
for Mr Zipse, € 0.85 million each for Ms Horstmeier, Mr
Nedeljković, Mr Nota and Dr Wendt, € 0.95 million for
Dr Peter and € 0.425 million for Mr Weber. The target
amount for Mr Fröhlich is € 0.475 million. Due to the fact
that the criteria established for the PCP 2020 – 2022 have
not yet been fully met, this component is not included in
variable remuneration for the financial year 2020.
In the 2020 financial year, in line with contractually
agreed arrangements, advances were paid out of the PCP
2019 – 2021 to the Board members in office at 31 Decem
ber 2020 (Mr Zipse, Mr Nota and Dr Peter) with a total
amount of € 1.7 million, and an advance of € 0.6 million
paid to Mr Fröhlich.
At the end of assessment period, the advance pay
ments will be set off or refunded, depending on the
actual entitlement arising. The expense of the PCP for
the financial year 2020 recognised in accordance with
IAS 19 amounted to € 1.3 million (2019: € 8.3 million).
Remuneration awarded for the financial year 2020
(2019) is presented in the table below on an individual
ised basis.
1 Based on the New European Driving Cycle (NEDC) test procedure. With effect from September 2018, all vehicles
in the EU are required to be approved in accordance with the new WLTP testing cycle. However, the EU Commis-
sion will not start using WLTP to calculate fleet CO2 emissions until 2021. For this reason, WLTP fleet emissions
must be retroactively calculated as NEDC values for the purposes of reporting up to and including 2020.
2 Taking into account the offset of certain flexibilities that are defined in the regulatory requirements (phase-in
with 5 g / km, supercredits BEV / PHEV with 7.5 g / km and eco-innovations with 2.4 g / km). This is a preliminary
internal calculation with a potential variation of ± 0.5 g CO2 / km, as official registration figures from the authori-
ties are not available from all EU states. Officially published values by the EU Commission are not expected to
be available until November 2021.
The performance cash plan (PCP) included in the
remuneration system for the financial years 2018 to 2020
serves as a longterm incentive. The PCP is paid out in
cash after the end of the relevant threeyear assessment
period.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Remuneration of the individual members of the
Board of Management for the financial year 2020 (2019) ¹
303
in € or
number of matching shares
Oliver Zipse
Klaus Fröhlich 2
Ilka Horstmeier
Milan Nedeljković
Pieter Nota
Nicolas Peter
Frank Weber 3
Andreas Wendt
Total 4
Fixed remuneration
Variable cash remuneration
Share-based remuneration component
(matching component) ⁵
Sub-total
Base salary
Other remuneration
Total
Bonus
Share-based
remuneration
component
(investment component)
Total
Number
Monetary value
1,800,000
(1,269,892)
475,000
(950,000)
800,000
(133,333)
800,000
(200,000)
800,000
(800,000)
950,000
(800,000)
400,000
(–)
800,000
(800,000)
66,256
(50,947)
56,546
(71,822)
87,374
(29,375)
101,973
(5,105)
18,408
(20,782)
24,231
(29,988)
28,593
(–)
56,319
(102,701)
1,866,256
1,688,760
759,942
2,448,702
(1,320,839)
(1,404,380)
(631,971)
(2,036,351)
531,546
469,100
211,095
680,195
(1,021,822)
(1,079,400)
(485,730)
(1,565,130)
887,374
(162,708)
901,973
(205,105)
818,408
(820,782)
974,231
(829,988)
428,593
(–)
856,319
(902,701)
797,470
(152,915)
797,470
(229,373)
797,470
(917,490)
938,200
(917,490)
398,735
(–)
797,470
(917,490)
358,862
(68,812)
358,862
1,156,332
(221,727)
1,156,332
(103,218)
(332,591)
358,862
1,156,332
422,190
1,360,390
(412,871)
(1,330,361)
179,431
578,166
(–)
(–)
358,862
1,156,332
(412,871)
(1,330,361)
6,825,000
439,700
7,264,700
6,684,675
3,008,106
9,692,781
(7,659,140)
(496,271)
(8,155,411)
(8,697,280)
(3,913,778)
(12,611,058)
1,669
(1,725)
463
(1,135)
846
(173)
846
(280)
846
927
(965)
558
(–)
846
(1,036)
7,001
(9,728)
123,873
4,438,831
(103,037)
(3,460,227)
34,364
(79,155)
62,790
(12,013)
62,790
(18,026)
62,790
(72,251)
68,802
(67,299)
31,360
(–)
62,790
(72,251)
1,246,105
(2,666,107)
2,106,496
(396,448)
2,121,095
(555,722)
2,037,530
(2,223,394)
2,403,423
(2,227,648)
1,038,119
(–)
2,075,441
(2,305,313)
509,559
17,467,040
(659,614)
(21,426,083)
(412,871)
(1,330,361)
(1,036)
1 Contains disclosures in accordance with HGB and the requirements of German Accounting Standard No. 17.
2 Member of the Board of Management until 30 June 2020.
3 Member of the Board of Management from 1 July 2020.
4 Disclosures for the previous year include amounts relating to members of the Board of Management who left office during the financial year 2019.
5 Preliminary number or preliminary monetary value calculated in accordance with German Financial Reporting 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 remuneration component.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
304
Remuneration in accordance with HGB and the require-
ments of German Accounting Standard No. 17
The PCP 2018 – 2020 was awarded for the perfor
mance of Board of Management members in the financial
year 2018. The threeyear assessment period for this re
muneration component, which was subject to specified
forfeiture provisions, expired on 31 December 2020. The
earnings factors determined for each year of the assess
ment period (financial year 2018: 1.520; financial year
2019: 0.798, financial year 2020: 0.444), give rise to a mul
tiyear earnings factor of 0.921. The Supervisory Board
set the multiyear performance factor at 1.0 for members
of the Board of Management in office in financial year
2018, so that the PCP factor for the PCP 2018 – 2020 is
0.921. For the purposes of determining the multiyear
performance factor, the Supervisory Board took account
in particular of business development during the assess
ment period, the outlook for business development going
forward, the Board member’s individual contribution to
profitability and the status of compliance within the
Board member’s area of responsibility. When consider
ing actual and forecasted business development for the
relevant periods, the Supervisory Board paid particular
attention to the development of certain key performance
figures such as the number of deliveries, the EBIT margin
and the return on capital employed. For the financial
year 2020, the Supervisory Board took account of the
impact of the coronavirus pandemic of these figures. It
was not necessary to change the assessments relating to
individual contributions to profitability or the status of
compliance within Board members’ area of responsibility.
In accordance with the requirements of HGB and
German Accounting Standard No. 17, PCPrelated re
muneration is required to be included in the total remu
neration figure for the financial year in which the plan’s
conditions are fulfilled. The amount arising for the PCB
2018 – 2020 is therefore required to be included in the
financial year 2020. The following tables show the remu
neration of the members of the Board of Management in
accordance with the requirements of HGB and applicable
accounting standards for the financial year 2020 (2019)
and in the financial year 2020 (2019) respectively.
in € million
Amount
Proportion in %
Amount
Proportion in %
2020
2019
Fixed remuneration
Variable cash remuneration 1
Share-based remuneration component 2
Total remuneration
7.3
13.0
0.5
20.8
34.9
62.6
2.5
100.00
8.1
12.6
0.7
21.4
37.8
58.9
3.3
100.0
1 Variable cash payments for the financial year 2020 also include a payment out of the PCP 2018 – 2020 for the 2018 grant year amounting to € 3.3 million. PCP 2018 – 2020 accounts for 16.0 % of total remuneration in
accordance with HGB and the requirements of German Accounting Standard No. 17.
2 Matching component; provisional number / provisional monetary value calculated in accordance with 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.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Remuneration in accordance with HGB and the
requirements of German Accounting Standard No. 17
Total remuneration in
accordance with HGB
and the requirements
of German Accounting
Standard No. 17
Variable cash remuneration
Sub-total as shown in
the table Remuneration
of the individual mem-
bers of the Board of
Management for the fi-
nancial year 2020 (2019) ¹
Performance
Cash Plan
2018 – 2020 ²
Performance
Cash Plan
2019 – 2021 ³
Performance
Cash Plan
2020 – 2022 ⁴
4,438,831
(3,460,227)
1,246,105
(2,666,107)
2,106,496
(396,448)
2,121,095
(555,722)
2,037,530
(2,223,394)
2,403,423
(2,227,648)
1,038,119
(–)
2,075,441
(2,305,313)
844,250
(–)
729,125
(–)
(–)
(–)
(–)
(–)
782,850
(–)
782,850
(–)
(–)
(–)
195,713
(–)
17,467,040
3,334,788
(21,426,083)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
(–)
5,283,081
(3,460,227)
1,975,230
(2,666,107)
2,106,496
(396,448)
2,121,095
(555,722)
2,820,380
(2,223,394)
3,186,273
(2,227,648)
1,038,119
(–)
2,271,154
(2,305,313)
20,801,828
(21,426,083)
in €
Oliver Zipse
Klaus Fröhlich 5
Ilka Horstmeier
Milan Nedeljković
Pieter Nota
Nicolas Peter
Frank Weber 6
Andreas Wendt
Gesamt 7
1 Breakdown of remuneration for the financial year 2020 (2019) in the table Remuneration of the individual members of the Board of Management for the financial year 2020 (2019).
2 Amounts include an advance payment made in 2019 in line with contractually agreed arrangements.
3 PCP 2019 – 2021 will not be reported until the end of the three-year assessment period.
4 PCP 2020 – 2022 will not be reported until the end of the three-year assessment period.
5 Member of the Board of Management until 30 June 2020. In accordance with the requirements of the HGB, only the proportionate amount of the PCP 2018 – 2020 corresponding to the
length of service of the Board member is reported.
6 Member of the Board of Management since 1 July 2020.
7 Disclosures for the previous year include amounts relating to members of the Board of Management who left office during the financial year 2019.
305
DEVELOPMENT OF BOARD OF MANAGEMENT REMU-
NERATION FOR THE FINANCIAL YEARS 2016 TO 2020
IN ACCORDANCE WITH HGB ¹
in € million
50
25
0
37.6
40.3
24.0
21.4
20.8 2
3.3
17.5
2016
2017
2018
2019
2020
1 Total remuneration in accordance with HGB.
2 Total remuneration in accordance with HGB and the requirements of German Accounting Standard No. 17
for the financial year 2020 include the PCP 2018-2020, amounting to approximately € 3.3 million. Total
remuneration for the financial year 2020 excluding the PCP 2018-2020 amounted to approximately
€ 17.5 million.
In addition to the disclosures required by HGB and ap
plicable accounting standards, the following tables – based
on the model tables contained in the German Corporate
Governance Code (GCCC) dated 7 February 2017 – show
figures for amounts awarded as well as amounts paid to
the individual members of the Board of Management.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
OLIVER ZIPSE
Chairman of the Board of Management
since 16 August 2019
Member of the Board of Management
since 13 May 2015
306
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
1,800,000
1,800,000
1,800,000
1,269,892
1,800,000
1,269,892
Fringe benefits (other remuneration)
66,256
66,256
66,256
50,947
66,256
50,947
Total
1,866,256 1,866,256 1,866,256 1,320,839 1,866,256 1,320,839
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
540,000
0
972,000
390,323
239,760
311,477
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
1,260,000
Performance Cash Plan
PCP 2018 – 2020 2
PCP 2019 – 2021 3
PCP 2020 – 2022
–
–
1,600,000
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
–
810,000
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
Share-based remuneration component
(matching component) 2018 for holding obligation 2019 – 2023
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2025
Other
Total
Pension expense 4
Total remuneration
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid out in 2021 and 2020 respectively.
2 An advance payment was made out of PCP 2018 – 2020. This was reported as an amount deemed received
(Zufluss) for the financial year 2018 and paid out in 2019.
3 The advance payment out of PCP 2019 – 2021, which is reported deemed received (Zufluss) for the
financial year 2019, was paid out in 2020.
4 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
5 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
–
–
–
–
–
123,873
–
–
0
–
–
0
–
0
–
–
–
–
–
0
–
–
910,753
–
1,092,903
–
–
1,449,000
277,584
–
–
2,268,000
–
–
1,194,624
2,880,000
–
–
–
712,900
–
–
585,484
–
631,971
1,458,000
–
–
–
–
–
729,000
–
–
–
–
–
103,037
–
–
759,942
33,423
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,200,129 1,866,256 10,173,256 4,505,060 4,625,965 4,070,090
502,626
502,626
502,626
406,452
502,626
406,452
6,702,755 2,368,882 9,850,000 5 4,911,512 5,128,591 4,476,542
BMW GroupReport 2020
Corporate Governance
Remuneration Report
KLAUS FRÖHLICH
Development
Member of the Board of Management
since 9 December 2014
until 30 June 2020
307
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
475,000
475,000
475,000
950,000
475,000
950,000
Fringe benefits (other remuneration)
56,546
56,546
56,546
71,822
56,546
71,822
Total
531,546
531,546
531,546 1,021,822
531,546 1,021,822
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
150,000
0
270,000
300,000
66,600
239,400
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
350,000
Performance Cash Plan
PCP 2018 – 2020 2
PCP 2019 – 2021 3
PCP 2020 – 2022
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
Share-based remuneration component
(matching component) 2014 for holding obligation 2015 – 2019
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
Share-based remuneration component
(matching component) 2018 for holding obligation 2019 – 2023
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2024
Other
Total
Pension expense 4
Total remuneration
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid in 2021 and 2020 respectively.
2 An advance payment was made out of PCP 2018 – 2020. This was reported as an amount deemed received
(Zufluss) for the financial year 2018 and paid out in 2019. The amount paid out of PCP 2018 – 2020 is allo-
cated proportionately over the assessment period on the basis of period of time in office and as a former
member of the Board of Management.
3 The advance payment out of PCP 2019 – 2021, which is reported deemed received (Zufluss) for the
financial year 2019, was paid out in 2020.
4 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
5 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
–
–
475,000
–
225,000
–
–
–
–
–
–
34,364
–
–
0
–
–
0
–
0
–
–
–
–
–
–
0
–
–
700,000
–
840,000
–
–
402,500
129,125
–
–
630,000
–
–
950,000
855,000
–
–
–
600,000
–
–
450,000
–
485,730
405,000
–
–
–
–
–
–
202,500
–
–
–
–
–
–
–
79,155
–
–
211,095
–
–
2,966
52,723
–
–
–
–
–
–
–
–
–
–
–
–
–
1,765,910
531,546 2,894,046 3,500,977 1,393,589 3,189,918
175,000
175,000
175,000
353,327
175,000
353,327
1,940,910
706,546 2,750,000 5 3,854,304 1,568,589 3,543,245
BMW GroupReport 2020
Corporate Governance
Remuneration Report
308
ILKA HORSTMEIER
Human Resources, Industrial Relations Director
Member of the Board of Management
since 1 November 2019
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
800,000
800,000
800,000
133,333
800,000
133,333
Fringe benefits (other remuneration)
87,374
87,374
87,374
29,375
87,374
29,375
Total
887,374
887,374
887,374
162,708
887,374
162,708
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
255,000
0
459,000
42,500
113,220
33,915
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
595,000
Performance Cash Plan
PCP 2018 – 2020
PCP 2019 – 2021
PCP 2020 – 2022
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2025
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid out in 2021 and 2020 respectively.
2 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
3 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
Other
Total
Pension expense 2
Total remuneration
–
–
850,000
–
382,500
–
62,790
–
–
0
–
–
0
–
0
–
0
–
–
99,167
–
119,000
1,071,000
–
–
–
–
141,667
1,530,000
–
–
63,750
684,250
–
–
–
–
–
0
–
68,812
688,500
–
358,862
–
12,013
344,500
–
–
–
–
–
–
–
–
–
–
3,032,664
887,374 4,980,374
521,805 2,043,706
384,435
352,433
352,433
352,433
58,333
352,433
58,333
3,385,097 1,239,807 4,925,000 3
580,138 2,396,139
442,768
BMW GroupReport 2020
Corporate Governance
Remuneration Report
MILAN NEDELJKOVIĆ
Production
Member of the Board of Management
since 1 October 2019
309
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
800,000
800,000
800,000
200,000
800,000
200,000
Fringe benefits (other remuneration)
101,973
101,973
101,973
5,105
101,973
5,105
Total
901,973
901,973
901,973
205,105
901,973
205,105
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
255,000
0
459,000
63,750
113,220
50,873
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
595,000
Performance Cash Plan
PCP 2018 – 2020
PCP 2019 – 2021
PCP 2020 – 2022
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2025
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid out in 2021 and 2020 respectively.
2 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
3 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
Other
Total
Pension expense 2
Total remuneration
–
–
850,000
–
382,500
–
62,790
–
–
0
–
–
0
–
0
–
0
–
–
–
–
–
1,071,000
148,750
684,250
178,500
–
–
–
212,500
1,530,000
–
–
–
–
–
0
–
–
95,625
–
103,218
688,500
–
358,862
–
18,026
344,500
–
–
–
–
–
–
–
–
–
–
3,047,263
901,973 4,994,973
743,756 2,058,305
537,696
352,121
352,121
352,121
87,500
352,121
87,500
3,339,384 1,254,094 4,925,000 3
831,256 2,410,426
625,196
BMW GroupReport 2020
Corporate Governance
Remuneration Report
PIETER NOTA
Customer, Brands, Sales
Member of the Board of Management
since 1 January 2018
310
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
800,000
800,000
800,000
800,000
800,000
800,000
Fringe benefits (other remuneration)
18,408
18,408
18,408
20,782
18,408
20,782
Total
818,408
818,408
818,408
820,782
818,408
820,782
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
255,000
0
459,000
255,000
113,220
203,490
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
595,000
Performance Cash Plan
PCP 2018 – 2020 2
PCP 2019 – 2021 3
PCP 2020 – 2022
–
–
850,000
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
–
–
0
–
–
0
–
–
595,000
–
714,000
1,071,000
–
684,250
–
–
850,000
–
282,850
1,530,000
–
–
–
500,000
–
–
–
–
382,500
–
412,871
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
382,500
0
688,500
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid out in 2021 and 2020 respectively.
2 An advance payment was made out of PCP 2018 – 2020. This was reported as an amount deemed received
(Zufluss) for the financial year 2018 and paid out in 2019.
3 The advance payment out of PCP 2019 – 2021, which is reported deemed received (Zufluss) for the
financial year 2019, was paid out in 2020.
4 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
5 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
Share-based remuneration component
(matching component) 2018 for holding obligation 2019 – 2023
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2025
Other
Total
Pension expense 4
Total remuneration
–
–
62,790
–
–
–
0
–
–
–
344,500
–
–
–
72,251
–
–
358,862
–
–
–
–
–
–
–
–
–
2,963,698
818,408
4,911,408
2,975,533 2,257,590 2,651,143
354,680
354,680
354,680
359,979
354,680
359,979
3,318,378 1,173,088
4,925,000 5 3,335,512 2,612,270 3,011,122
BMW GroupReport 2020
Corporate Governance
Remuneration Report
NICOLAS PETER
Finance
Member of the Board of Management
since 1 January 2017
311
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
950,000
950,000
950,000
800,000
950,000
800,000
Fringe benefits (other remuneration)
24,231
24,231
24,231
29,988
24,231
29,988
Total
974,231
974,231
974,231
829,988
974,231
829,988
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
300,000
0
540,000
255,000
133,200
203,490
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
700,000
Performance Cash Plan
PCP 2018 – 2020 2
PCP 2019 – 2021 3
PCP 2020 – 2022
–
–
950,000
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
–
–
0
–
–
0
–
–
595,000
–
714,000
1,260,000
–
805,000
–
–
850,000
–
282,850
1,710,000
–
–
–
500,000
–
–
–
–
382,500
–
412,871
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
450,000
0
810,000
Share-based remuneration component
(matching component) 2017 for holding obligation 2018 – 2022
Share-based remuneration component
(matching component) 2018 for holding obligation 2019 – 2023
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2025
Other
Total
Pension expense 4
Total remuneration
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid out in 2021 and 2020 respectively.
2 An advance payment was made out of PCP 2018 – 2020. This was reported as an amount deemed received
(Zufluss) for the financial year 2018 and paid out in 2019.
3 The advance payment out of PCP 2019 – 2021, which is reported deemed received (Zufluss) for the
financial year 2019, was paid out in 2020.
4 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
5 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
–
–
–
68,802
–
–
–
–
0
–
–
–
–
405,000
–
–
–
–
67,299
–
–
422,190
–
–
–
–
–
–
–
–
–
–
–
3,443,033
974,231
5,699,231
2,979,787 2,617,471 2,660,349
351,746
351,746
351,746
353,327
351,746
353,327
3,794,779 1,325,977
5,500,000 5 3,333,114 2,969,217 3,013,676
BMW GroupReport 2020
Corporate Governance
Remuneration Report
FRANK WEBER
Development
Member of the Board of Management
since 1 July 2020
in €
BASE SALARY
Fixed remuneration
Fringe benefits (other remuneration)
Total
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
312
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
400,000
400,000
400,000
28,593
28,593
28,593
428,593
428,593
428,593
–
–
–
400,000
28,593
428,593
127,500
0
229,500
–
56,610
Performance component of the bonus 2019 (three-year plan term)
–
Performance component of the bonus 2020 (three-year plan term) 1
297,500
Performance Cash Plan
PCP 2018 – 2020
PCP 2019 – 2021
PCP 2020 – 2022
–
–
425,000
Aktienbasiertes Vergütungsprogramm
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024
–
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
191,250
–
0
–
–
0
–
0
0
–
–
535,500
–
–
765,000
–
344,250
172,125
–
–
–
–
–
–
–
–
–
–
–
342,125
–
–
–
–
179,431
–
–
Share-based remuneration component
(matching component) 2020 for holding obligation 2021 – 2025
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial 2020 will be paid out in 2021.
2 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
3 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
Other
Total
Pension expense 2
Total remuneration
31,360
–
1,501,203
428,593 2,474,968
175,000
175,000
175,000
– 1,006,759
–
175,000
1,676,203
603,593
2,462,500 3
– 1,181,759
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Corporate Governance
Remuneration Report
ANDREAS WENDT
Purchasing and Supplier Network
Member of the Board of Management
since 1 October 2018
313
in €
BASE SALARY
Fixed remuneration
FJ 2020
FJ 2020 (Min)
FJ 2020 (Max)
FJ 2019
FJ 2020
FJ 2019
Grants
Payout
800,000
800,000
800,000
800,000
800,000
800,000
Fringe benefits (other remuneration)
56,319
56,319
56,319
102,701
56,319
102,701
Total
856,319
856,319
856,319
902,701
856,319
902,701
ONE-YEAR VARIABLE REMUNERATION
Earnings-based component of the bonus 1
MULTI-YEAR VARIABLE REMUNERATION
Performance component of the bonus
255,000
0
459,000
255,000
113,220
203,490
Performance component of the bonus 2019 (three-year plan term) 1
–
Performance component of the bonus 2020 (three-year plan term) 1
595,000
Performance Cash Plan
PCP 2018 – 2020
PCP 2019 – 2021
PCP 2020 – 2022
–
–
850,000
Share-based remuneration programme
Cash remuneration component
(investment component) 2019 for holding obligation 2020 – 2024 1
–
–
0
–
–
0
–
–
595,000
–
714,000
1,071,000
–
684,250
–
–
850,000
–
195,713
–
–
1,530,000
–
–
–
–
–
–
382,500
–
412,871
Cash remuneration component
(investment component) 2020 for holding obligation 2021 – 2025 1
382,500
0
688,500
Share-based remuneration component
(matching component) 2018 for holding obligation 2019 – 2023
Share-based remuneration component
(matching component) 2019 for holding obligation 2020 – 2024
Share-based remuneration component
(matching component) 2020 for holding obligation 2020 – 2025
1 The bonus components and cash remuneration component reported in accordance with the GCCC for the
financial years 2020 and 2019 will be, or were, paid out in 2021 and 2020 respectively.
2 The pension expense in accordance with IAS 19 reflects the expense recognised by the BMW Group;
this amount was not paid out in the financial year.
3 Agreed maximum amount. The overall cap in absolute terms is lower than the sum of the maximum amounts
for the individual components.
Other
Total
Pension expense 2
Gesamtvergütung
–
–
62,790
–
–
–
0
–
–
–
344,500
–
–
–
72,251
–
–
358,862
–
–
–
–
–
–
–
–
–
3,001,609
856,319
4,949,319
3,057,452 2,208,364 2,233,062
351,746
351,746
351,746
353,327
351,746
353,327
3,353,355
1,208,065
4,925,000 3 3,410,779 2,560,110 2,586,389
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Share ownership
The members of the Board of Management hold a to
tal of 59,341 shares of BMW common stock (2019: 92,519)
which they are required to hold in accordance with the
terms of the sharebased remuneration programme for
the financial years 2016 – 2019. The cash component
of the sharebased remuneration programme for the
financial year 2020 will be paid out after the end of the
Annual General Meeting 2021, triggering the requirement
to purchase additional shares of BMW common stock.
Shares of BMW common stock held by individual
members of the Board of Management subject to holding
requirements in connection with share-based
remuneration for the financial years 2016 – 2019 ¹
Shares of stock
Oliver Zipse
Klaus Fröhlich 2
Ilka Horstmeier
Milan Nedeljković
Pieter Nota
Nicolas Peter
Frank Weber 3
Andreas Wendt
Total
1 Includes only shares of BMW common stock acquired using the cash remuneration component of the share-based remuneration programme for members of the Board of Management,
for which the four-year holding period has not yet expired.
2 Member of the Board of Management until 30 June 2020.
3 Member of the Board of Management from 1 July 2020.
4 Disclosures for the previous year include shares held by members of the Board of Management who left office during the financial year 2019.
314
Total ¹
16,637
(11,938)
15,304
(13,305)
782
(–)
1,174
(–)
8,650
(3,954)
11,110
(6,736)
–
(–)
5,684
(988)
59,341
(92,519)4
BMW GroupReport 2020
315
Corporate Governance
Remuneration Report
Share-based remuneration component (matching
component) for individual members of the Board of
Management for the financial year 2020 (2019) ¹
in €
Oliver Zipse
Klaus Fröhlich 2
Ilka Horstmeier
Milan Nedeljković
Pieter Nota
Nicolas Peter
Frank Weber 3
Andreas Wendt
Total 4
1 Value at the end of the reporting period calculated on the basis of the closing price of BMW common stock in Xetra trading on 30 December 2020 (€ 72.23).
2 Member of the Board of Management until 30 June 2020.
3 Member of the Board of Management from 1 July 2020.
4 Disclosures for the previous year include amounts relating to members of the Board of Management who left office during the financial year 2019.
Expense in 2020
in accordance with
HGB and IFRS
Provision at
31. 12. 2020 in
accordance with
HGB and IFRS1
73,882
(135,272)
98,458
(104,384)
28,258
(668)
32,561
(1,516)
168,949
(76,736)
63,765
(150,428)
6,773
(–)
98,843
(34,672)
398,503
(358,043)
401,743
(356,008)
28,925
(668)
34,078
(1,516)
269,346
(100,397)
295,180
(231,415)
398,503
(–)
135,147
(36,304)
571,489
1,961,425
(957,504)
(2,456,758)
BMW GroupReport 2020
Corporate Governance
Remuneration Report
316
In addition, an expense of € 2.6 million (2019:
€ 2.9 million) was recognised in the financial year 2020
for current members of the Board of Management for the
period after the end of their service relationship. This re
lates to the expense for allocations to pension provisions
in accordance with IAS 19.
Total benefits paid to former members of the Board
of Management and their surviving dependants for the
financial year 2020 amounted to € 13.1 million (2019:
€ 16.0 million). The total remuneration of former mem
bers of the Board of Management also includes the
amounts described above amounting to € 0.6 million
arising in connection with the departure of Mr. Fröhlich.
Some of these amounts have not yet been paid out.
Pension obligations to former members of the Board
of Management and their surviving dependants are fully
covered by pension provisions amounting to € 118.8 mil
lion (2019: € 113.1 million), computed in accordance
with IAS 19.
Pension entitlements
in €
Oliver Zipse
Klaus Fröhlich 2
Ilka Horstmeier
Milan Nedeljković
Pieter Nota
Nicolas Peter
Frank Weber 3
Andreas Wendt
Total 4
Service cost in
accordance with
IFRS for the
financial year 2020 ¹
Service cost in
accordance with
HGB for the
financial year 2020 ¹
Defined benefit
obligation IFRS ¹
Defined benefit
obligation HGB ¹
502,626
(406,452)
175,000
(353,327)
352,433
(58,333)
352,121
(87,500)
354,680
(359,979)
351,746
(353,327)
175,000
(–)
351,746
(353,327)
506,861
3,701,016
3,700,982
(406,452)
(3,054,273)
(3,054,125)
175,000
3,556,660
3,556,660
(355,573)
(3,256,267)
(3,256,267)
355,375
(58,333)
355,076
(87,500)
1,391,936
1,391,331
(993,548)
(992,662)
1,830,168
1,829,906
(1,421,605)
(1,421,152)
357,593
1,157,145
1,156,993
(362,125)
(760,562)
(760,306)
354,711
3,134,163
3,134,163
(355,573)
(2,656,550)
(2,656,550)
175,000
655,460
655,172
(–)
(–)
(–)
354,711
2,863,441
2,863,441
(355,573)
(2,414,082)
(2,414,082)
2,615,352
2,634,327
18,289,989
18,288,648
(2,876,116)
(2,890,450)
(27,962,636)
(27,960,893)
1 Service cost differs due to the different valuation bases used to measure the present value of defined benefit pension obligations for IFRS purposes and the expected settlement amount for HGB purposes.
2 Member of the Board of Management until 30 June 2020.
3 Member of the Board of Management since 1 July 2020.
4 Disclosures for the previous year include amounts relating to members of the Board of Management who left office during the financial year 2019.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Revision of Board of Management remuneration for
financial years from 2021 onwards
During the financial year 2020, the Supervisory Board
considered in detail the new requirements for Board of
Management remuneration resulting from the Act Im
plementing the Second EU Shareholder Rights Directive
(ARUG II) as well as the recommendations and sugges
tions contained in the German Corporate Governance
Code (GCCC) dated December 16, 2019. At its meeting
in December 2020, the Supervisory Board, acting on the
recommendation of the Personnel Committee, resolved
to revise the existing system of Board of Management
remuneration for financial years from 2021 onwards.
In its deliberations, the Supervisory Board also took
into account the recommendations of an independent
remuneration expert as well as suggestions from investor
representatives and analysts. In agreement with the mem
bers of the Board of Management in office at that time,
the relevant service contracts were amended with effect
from 1 January 2021, in order to implement changes to
the remuneration system for financial years from 2021
onwards for all Board members at the same time.
317
recommendation of the GCCC in the version dated
16 December 2019. In order to simplify the remu
neration system, the matching component that was
previously paid out in cash or shares at the end of
the fouryear holding period no longer applies. As in
the past, the company awards a socalled “personal
cash investment amount”, which is required to be
used – after tax and deductions – to acquire shares
of BMW common stock. Compared to the previous
arrangements, the personal cash investment amount
will have a significantly higher weighting within the
target structure, given that it replaces the PCP as a
longterm incentive. Within the target structure, one
half of the personal cash investment amount will be
linked to the attainment of an RoCE target for the
Automotive segment and one half to the attainment
of strategic focus targets set by the Supervisory Board
in accordance with corporate planning.
— The members of the Board of Management are re
quired to hold the BMW common stock acquired with
the personal cash investment amount on a longterm
basis, i. e. at least for a period of four years.
— In the new remuneration system, the payment of var
iable remuneration components is subject to special
malus and clawback clauses.
The Supervisory Board will submit the new system
for Board of Management remuneration to the 2021
Annual General Meeting for approval. The new remu
neration system will be explained in detail in the notice
document inviting shareholders to the Annual General
Meeting.
Key features of the new remuneration system include
in particular:
— The new remuneration system for members of the
Board of Management is designed to be simple,
clear and easy to understand. It complies with the
requirements of the German Stock Corporation Act
(AktG) and the recommendations and suggestions of
the GCCC for executive board remuneration.
— Under the new remuneration system, variable,
earningsrelated remuneration will be oriented even
more closely towards the company’s sustainable de
velopment. Nonfinancial targets, particularly in the
areas of the environment (e. g. reduction of carbon
emissions), social issues and governance are taken
into account appropriately.
— The Performance Cash Plan will no longer apply in
the future, resulting in a simplification of the remu
neration system.
— In future, most of the variable remuneration of the
Board of Management will be determined using
a sharebased approach, in compliance with the
BMW GroupReport 2020
Corporate Governance
Remuneration Report
318
Outlook: Remuneration elements, parameters, target remuneration levels and caps for financial years from financial year 2021 onwards
Component
BASE SALARY
VARIABLE REMUNERATION
Bonus
(sum of earnings component and performance component)
a) Earnings component
(at 100 % target achievement corresponds to 50 % of target amount)
Parameters / measurement base, applicable amounts
Member of the Board of Management:
— € 0.90 million p. a. (first period of office)
— € 1.05 million p. a.(from second period of office or fourth year of mandate)
Chairman of the Board of Management:
— € 1.95 million p. a.
— Monthly payment on time-apportioned basis
— Target amount p. a. (at 100 % target achievement):
— € 0.95 million (first period of office)
— € 1.15 million (from second period of office or fourth year of mandate)
— € 2.1 million (Chairman of the Board of Management)
— Capped at 180 % of target amount
— Payment after the Annual General Meeting at which the Company Financial Statements are presented for the
relevant financial year
— Assessment period one year
— Base amount p. a. (50 % of target bonus amount):
— € 0.475 million (first period of office)
— € 0.575 million (from second period of office or fourth year of mandate)
— € 1.050 million (Chairman of the Board of Management)
— Formula: 50 % of target amount x performance factor
— Earnings factor is derived from an allocation table based on the parameters profit attributable to shareholders of
BMW AG and Group post-tax return on sales in grant year
— Allocation table is determined in advance
— The earnings factor is 1.0 in case of a profit attributable to shareholders of BMW AG amounting to € 5.3 billion
and a post-tax return on sales of 5.6 %
— The earnings factor is 1.5 in case of a profit attributable to shareholders of BMW AG amounting to € 6.9 billion
and a post-tax return on sales of 7.3 %
— The earnings factor is 0 in case of a profit attributable to shareholders of BMW AG below € 3.0 billion or a post-
tax return on sales of below 3.0 %
— Earnings factor may not exceed 1.8
— Maximum amount of earnings component p. a.:
— € 0.855 million (first period of office)
— € 1.035 million (from second period of office or fourth year of mandate)
— € 1.890 million (Chairman of the Board of Management)
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Component
b) Performance component
(at 100 % target achievement corresponds to 50 % of target amount)
319
Parameters / measurement base, applicable amounts
— Assessment period one year
— Base amount p. a. (50 % of target bonus amount):
— € 0.475 million (first period of office)
— € 0.575 million (from second period of office or fourth year of mandate)
— € 1.050 million (Chairman of the Board of Management)
— Formula: 50 % of target amount x performance factor
— Primarily qualitative, non-financial criteria, expressed in terms of a performance factor, aimed at measuring the
Board member’s contribution to sustainable and long-term performance and corporate orientation
— Additional trend analysis over at least three financial years to assess the impact of past decisions and actions in the
grant year as well as the impact of decisions and actions in the grant year on future financial years
— Composition of the performance factor within target structure
— 10 % individual targets
— 50 % cross-divisional targets with ESG criteria
— 40 % other cross-divisional targets
— Criteria for the cross-divisional targets with ESG criteria include in particular: innovation performance
( environmental, e. g. reduction of carbon emissions), development of the BMW Group's reputation based on ESG
aspects (e. g. corporate culture, promotion of integrity and compliance), adaptability, attractiveness as an employ-
er, leadership performance
— Criteria for the other cross-divisional targets include in particular: market position compared to competitors, inno-
vation performance (economic), development of the BMW Group's reputation based on non-ESG-related aspects
(e. g. perception on capital markets, brand strength), customer orientation
— Measurement parameters and target values are determined before the start of the financial year
— Performance factor may not exceed 1.8
— Maximum amount of performance component p. a.:
— € 0.855 million (first period of office)
— € 1.035 million (from second period of office or fourth year of mandate)
— € 1.890 million (Chairman of the Board of Management)
Performance Cash Plan
Not applicable
BMW GroupReport 2020
Corporate Governance
Remuneration Report
320
Component
Parameters / measurement base, applicable amounts
Share-based remuneration programme with holding requirements
a) Personal cash investment amount
aa) RoCE component
(at 100 % target achievement corresponds to 50 % of target amount)
bb) Strategic focus target component
(at 100 % target achievement corresponds to 50 % of target amounts)
— Requirement for Board of Management members to invest an earmarked cash amount
(personal cash investment amount), net of tax and deductions, in shares of BMW common stock
— Requirement for Board of Management members to hold the acquired shares of BMW common stock for
at least four years (share ownership)
— Assessment period of five years in total (one year for determining the personal cash investment amount,
four years holding requirement)
— Target amount p. a. (at 100 % target achievement):
— € 1.10 million (first period of office)
— € 1.28 million (from second period of office or fourth year of mandate)
— € 2.35 million (Chairman of the Board of Management)
— 50 % of target amount depends on RoCE achieved in the Automotive segment (RoCE component)
— 50 % of the target amount depends on the achievement of predefined strategic focus targets
(strategic focus target component)
— Capped at 180 % of target amount
— Payment after the Annual General Meeting at which the Company Financial Statements are presented for the
relevant financial year
— Target amount of RoCE component p. a. (50 % of target amount for personal cash investment amount):
— € 0.55 million (first period of office)
— € 0.64 million (from second period of office or fourth year of mandate)
— € 1.175 million (Chairman of the Board of Management)
— Formula: 50 % of target amount x RoCE factor
— RoCE factor is derived from the RoCE achieved in the Automotive segment for the grant year
— Minimum, target and maximum values for RoCE are defined before the start of the financial year
— RoCE factor may not exceed 1.8
— Strategic focus target component p. a. (50 % of target amount for personal cash investment amount):
— € 0.55 million (first period of office)
— € 0.64 million (from second period of office or fourth year of mandate)
— € 1.175 million (Chairman of the Board of Management)
— At least two strategic focus targets of a non-financial nature derived from strategic plan and business forecast
— Weighting of the strategic focus targets is decided upon before the start of the financial year
— Formula in the case of two strategic focus targets with equal weighting p. a.: 25 % of target amount for personal
cash investment amount x factor for strategic focus target 1 + 25 % of target amount for personal cash investment
amount x factor for strategic focus target 2
— Minimum, target and maximum values for each focus target are defined before the start of the financial year
— Factor for each strategic focus target may not exceed 1.8
b) Share-based remuneration component
(matching component)
Not applicable
BMW GroupReport 2020
Corporate Governance
Remuneration Report
321
Component
Parameters / measurement base, applicable amounts
RULES FOR WITHHOLDING AND CLAWING BACK REMUNERATION
a) Malus
a) Clawback
OTHER FIXED REMUNERATION (FRINGE BENEFITS)
REIIMBURSEMENT OF LOSSES AND EXPENSES
— Agreement to withhold variable remuneration in the event of specified serious compliance violations or ( withholding
amounts provisionally) in the event of reasonable suspicions of such
— Amounts may also be withheld in principle after a member has left the Board
— Applies from financial year 2021 onwards
— Agreement entitling the BMW Group to reclaim variable remuneration already paid out in the event of specified seri-
ous incidences of non-compliance, incorrect calculation bases for remuneration or incorrect financial statements
— Amounts may also be clawed back in principle after a member has left the Board
— Applies from financial year 2021 onwards
Contractual agreement, main points: non-cash benefits from the use of company cars and the BMW chauffeur service,
insurance premiums, contributions towards security systems, employee discounts
The Supervisory Board may award payments to compensate for loss of salary from a previous employment relationship
and to cover relocation costs in the case of new entrants. These payments are to be included for the purposes of deter-
mining the maximum remuneration
RETIREMENT BENEFITS
Model
Principal features
Defined contribution system with a guaranteed minimum return
Benefits based on amounts credited to individual savings accounts for contributions paid and interest earned, various
forms of disbursement
Pension contribution p. a.:
Member of the Board of Management: € 400,000
Chairman of the Board of Management: € 700,000
CAPS
p. a. in €
Member of the Board of Management in the first period of office
Member of the Board of Management from second period of office or fourth year of mandate
Chairman of the Board of Management
* Maximum remuneration as defined in section 87a (1) sentence 2 no. 1 AktG. The overall cap is lower than the sum of the maximum amounts for the individual components.
Bonus
Share-based remuneration
(personal investment cash amount)
Maximum remuneration *
1,710,000
2,070,000
3,780,000
1,980,000
2,304,000
4,230,000
4,925,000
5,500,000
9,850,000
BMW GroupReport 2020
Corporate Governance
Remuneration Report
2. Supervisory Board remuneration
Provisions of Articles of Incorporation, procedures
The remuneration regulation valid for the financial
year under report was resolved by shareholders at the
Annual General Meeting on 14 May 2020 and is set out
in Article 15 of BMW AG’s Articles of Incorporation.
With effect from the financial year 2020, members of the
Supervisory Board are remunerated exclusively on the
basis of a fixed remuneration structure. In accordance
with the Act Implementing the Second EU Shareholder
Rights Directive (ARUG II), a resolution on the remu
neration of the members of the Supervisory Board is
required to be adopted by the Annual General Meeting
of a listed stock corporation at least every four years. A
proposal will be submitted to the Annual General Meet
ing on 12 May 2021 to confirm the existing remuneration
arrangements.
Remuneration principles, remuneration components
The exclusively fixed remuneration structure for Su
pervisory Board remuneration is intended to strengthen
the independent exercise of its control and advisory
functions and complies with Suggestion G.18 of the
German Corporate Governance Code (GCCC) dated
16 December 2019. In accordance with the Articles of
Incorporation, each member of the Supervisory Board
of BMW AG who does not perform any additional re
munerationrelevant functions receives – in addition
to reimbursement of reasonable expenses – a fixed
remuneration of € 200,000, payable after the end of the
financial year.
The latest version of the GCCC dated 16 Decem
ber 2019 recommends that the exercising of chair and
deputy chair positions in the Supervisory Board as well
322
the chair and membership of committees should also be
considered when determining the level of remuneration
(Recommendation G.17) due to the higher time con
sumption. Accordingly, the Articles of Incorporation of
BMW AG stipulate that the Chairman of the Supervisory
Board shall receive three times the amount and each Dep
uty Chairman twice the amount of remuneration paid to
a Supervisory Board member, excluding amounts relat
ing to additional remunerationrelevant functions. The
chair of the Audit Committee receives twoandaquarter
times the amount, the chair of other Supervisory Board
committees twice the amount and each member of a
committee oneandahalf times the amount of the remu
neration paid to a Supervisory Board member, provided
the relevant committee convened 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, their remuneration is measured only on the
basis of the function receiving the highest amount.
In the event of changes in the composition of the Super
visory Board during the year or in the performance of
additional remunerationrelevant functions, remunera
tion is determined on a proportion ate basis.
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.
Furthermore, the Company reimburses each member
of the Supervisory Board for their reasonable expenses.
In order to be able to perform his duties, the Chair
man of the Supervisory Board is provided with secretar
iat and chauffeur services.
Overview of remuneration ¹
Member of the Supervisory Board
Chairman of the Supervisory Board
Deputy Chairman of the Supervisory Board
Chairman of the Audit Committee 2
Chairman of another committee 2
Member of the Audit Committee 2
Member of another committee 2
Factor
Amount in € p. a. ³
1.00
3.00
2.00
2.25
2.00
2.00
1.50
200,000
600,000
400,000
450,000
400,000
400,000
300,000
1 If a Supervisory Board member performs several additional remuneration-relevant functions, their remuneration remuneration is measured only on the basis of the function that is remunerated with the highest amount.
2 Provided the relevant committee convened for meetings on at least three days during the financial year.
3 Plus attendance fee of € 2,000 per plenary session.
BMW GroupReport 2020
323
Corporate Governance
Remuneration Report
Remuneration of the Supervisory Board for the financial
year 2020 (total)
In accordance with Article 15 of the Articles of Incor
poration, the remuneration of the Supervisory Board for
activities during the financial year 2020 totalled € 5.6 mil
lion (2019: € 5.6 million).
in € million
Fixed remuneration
Variable remuneration
Total remuneration
2020
2019
Amount
Proportion in %
Amount
Proportion in %
5.6
–
5.6
100.0
–
100.0
2.0
3.6
5.6
35.7
64.3
100.0
Supervisory Board members did not receive any fur
ther remuneration or benefits from the BMW Group for
advisory or agency services personally rendered.
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Remuneration of the individual members of the
Supervisory Board for the financial year 2020 (2019)
in €
Norbert Reithofer (Chairman)
Manfred Schoch (Deputy Chairman) 1
Stefan Quandt (Deputy Chairman)
Stefan Schmid (Deputy Chairman) 1
Karl-Ludwig Kley (Deputy Chairman) 2
Kurt Bock (Chairman of the Audit Committee) 3
Christiane Benner 1
Verena zu Dohna-Jaeger 1
Heinrich Hiesinger
Reinhard Hüttl 4
Susanne Klatten
Renate Köcher 5
324
Total
610,000
(640,000)
410,000
(430,000)
410,000
(430,000)
410,000
(430,000)
428,548
(428,000)
367,930
(220,000)
210,000
(220,000)
210,000
(139,532)
210,000
(220,000)
200,000
(200,000)
210,000
(220,000)
76,194
Fixed
remuneration
Attendance fee
Variable
remuneration ⁸
600,000
(210,000)
400,000
(140,000)
400,000
(140,000)
400,000
(140,000)
418,548
(140,000)
357,930
(70,000)
200,000
(70,000)
200,000
(43,844)
200,000
(70,000)
190,000
(70,000)
200,000
(70,000)
74,194
(70,000)
10,000
(10,000)
10,000
(10,000)
10,000
(10,000)
10,000
(10,000)
10,000
(8,000)
10,000
(10,000)
10,000
(10,000)
10,000
(8,000)
10,000
–
(420,000)
–
(280,000)
–
(280,000)
–
(280,000)
–
(280,000)
–
(140,000)
–
(140,000)
–
(87,688)
–
(10,000)
(140,000)
10,000
(8,000)
10,000
(10,000)
2,000
(10,000)
–
(122,000)
–
(140,000)
–
(140,000)
(220,000)
BMW GroupReport 2020
Corporate Governance
Remuneration Report
Remuneration of the individual members of the
Supervisory Board for the financial year 2020 (2019)
in €
Horst Lischka 1
Willibald Löw 1
Simone Menne
Dominique Mohabeer 1
Brigitte Rödig 1
Anke Schäferkordt 6
Vishal Sikka
Thomas Wittig
Werner Zierer 1
Total 7
325
3. Other
With exception of the advance payments relating to
the PCP 2019 – 2021 described above, neither BMW AG
nor any of its subsidiaries granted loans or advances to
members of the Board of Management or the Supervisory
Board during the financial year 2020, nor were any con
tingent liabilities entered into in their favour. During the
year under report, members of the Board of Management
and the Supervisory Board concluded vehicle purchase,
service, rental, leasing and financing contracts for vehi
cles on customary market terms and conditions.
Total
210,000
(220,000)
210,000
(220,000)
210,000
(220,000)
210,000
(220,000)
210,000
(220,000)
134,344
(–)
208,000
(139,532)
210,000
(139,532)
210,000
(220,000)
Fixed
remuneration
Attendance fee
Variable
remuneration 8
200,000
(70,000)
200,000
(70,000)
200,000
(70,000)
200,000
(70,000)
200,000
(70,000)
126,344
(–)
200,000
(43,844)
200,000
(43,844)
200,000
(70,000)
5,367,016
10,000
(10,000)
10,000
(10,000)
10,000
(10,000)
10,000
(10,000)
10,000
(10,000)
8,000
(–)
8,000
(8,000)
10,000
(8,000)
10,000
(10,000)
198,000
–
(140,000)
–
(140,000)
–
(140,000)
–
(140,000)
–
(140,000)
–
(–)
–
(87,688)
–
(87,688)
–
(140,000)
1 In line with the guidelines of the Deutscher Gewerkschaftsbund, these employee representatives have requested that their remuneration be paid into the Hans Böckler-Stiftung.
2 Chairman of the Audit Committee until 14 May 2020.
3 Chairman of the Audit Committee since 14 May 2020.
4 Due to the requirements of his employer, Prof. Dr. Hüttl has waived his Supervisory Board remuneration until further notice, to the extent that this would exceed the amount of € 200,000 p. a.
5 Member of the Supervisory Board until 14 May 2020.
6 Member of the Supervisory Board since 14 May 2020.
7 Figures for the previous year include the remuneration of members of the Supervisory Board who left office during the financial year 2019.
8 Earnings-related remuneration for the financial year 2019 was capped at the maximum amount.
(1,820,564)
(196,000)
(3,623,128)
(5,639,692)
–
5,565,016
BMW GroupReport 2020
Corporate Governance
Glossary and Explanation of Key Figures
GLOSSARY AND
EXPLANATION OF
KEY FIGURES
ASSET-BACKED FINANCING TRANSACTIONS
A form of corporate financing involving the sale of
receivables to a financing company.
BOND
CAPITAL EXPENDITURE RATIO
CARBON EMISSIONS OF THE NEW VEHICLE FLEET
326
Investments in property, plant and equipment and
other intangible assets (excluding capitalised develop
ment costs) as a percentage of Group revenues.
CAPITALISATION RATE
Capitalised development costs as a percentage of
research and development expenditure.
CASH FLOW
Liquid funds generated (cash inflows) or used (cash
outflows) during a reporting period.
The average carbon emissions of a manufacturer’s
fleet are calculated on the basis of the weighted average
of carbon emissions across all vehicles newly registered
during the reporting period. New registrations for these
purposes comprise all newly registered vehicles of a given
manufacturer in the EU, including Norway and Iceland,
during the calendar year, plus any individual vehiclespe
cific carbon emissions determined in accordance with the
WLTP type test procedure and converted back to the New
European Driving Cycle (NEDC). The BMW Group’s fleet
carbon emissions figure for 2020, as measured internally,
includes legally permitted offsetting factors (i. e. phase-in,
supercredits and ecoinnovations).
In accordance with legal requirements, the forecast
of fleet carbon emissions for 2021 is based on WLTP
and includes lower offsetting factors, as phasein is no
longer permitted for 2021 and the BMW Group fully
utilised the maximum amount of supercredits in 2020.
For better comparability of the fleet carbon emissions
forecast for 2021 and the actual figure for the fleet in
2020, the latter has been converted internally from NEDC
(including offsetting factors) to a WLTP basis (excluding
offsetting factors). The figure derived for 2020 serves
only to reconcile it with the 2021 figure; it is not official
in nature and does not correspond to legislation that was
in place in 2020.
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.
CASH FLOW AT RISK
BUSINESS VOLUME IN BALANCE SHEET TERMS
Similar to “value at risk” (see definition below).
The sum of the balance sheet line items “Leased prod
ucts” and “Receivables from sales financing” (current and
noncurrent), as reported in the balance sheet for the
Financial Services segment.
CASH FLOW HEDGE
A hedge against exposures to the variability in
forecasted cash flows, particularly in connection with
exchange rate fluctuations.
BMW GroupReport 2020
Corporate Governance
Glossary and Explanation of Key Figures
COMMERCIAL PAPER
Shortterm debt instruments with a term of less than
one year which are usually issued at a discount to their
face value.
CONSOLIDATION
The process of combining separate financial state
ments of Group entities into Group Financial Statements,
depicting the financial position, net assets and results
of operations of the Group as a single economic entity.
CREDIT DEFAULT SWAP (CDS)
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.
327
Services and – in the US and Canada – dealers when they
designate a vehicle as a service loaner or demonstrator
vehicle. In the case of used vehicles, end users may in
clude dealers and other third parties when they purchase
a vehicle at auction or directly from BMW Group. Vehi
cles designated for the end user and suffering total loss in
transit will also be recorded as deliveries. Deliveries may
be made by BMW AG, one of its international subsidiar
ies, a BMW Group retail outlet, or independent dealers.
The vast majority of deliveries – and hence the reporting
to BMW Group of deliveries – is made by independent
dealers.
EBIT MARGIN
Profit / loss before financial result as a percentage of
revenues.
EBT
EBIT plus financial result.
EARNINGS PER SHARE (EPS)
EFFECTIVE TAX RATE
Basic earnings per share are calculated for common
and preferred stock by dividing the net profit after mi
nority 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.
EBIT
The effective tax rate is calculated by dividing the
income tax expense by the Group profit before tax.
ELECTRIFIED VEHICLES
The BMW Group uses the terms Battery Electric Ve
hicle (BEV) to denote fully electric vehicles and Plugin
Hybrid Vehicle (PHEV) to denote vehicles that can be
charged and also driven on a fully electric basis.
DELIVERIES
A new or used vehicle will be recorded as a delivery
once handed over to the end user. End users also include
leaseholders under lease contracts with BMW Financial
Abbreviation for “Earnings Before Interest and Taxes”,
equivalent in the BMW Group income statement to
“Profit / loss before financial result”. This is comprised
of revenues less cost of sales, selling and administrative
expenses and the net amount of other operating income
and expenses.
BMW GroupReport 2020
Corporate Governance
Glossary and Explanation of Key Figures
328
EMPLOYEES
FAIR VALUE HEDGE
LIQUIDITY
The number of employees includes BMW AG and all
companies in which it holds a majority interest, irrespec
tive of whether they are consolidated in the Group Finan
cial Statements. The figure does not include employees
in dormant employment relationships, those in the non
work phase of partial retirement working arrangements
and lowwage earners. With effect from the financial
year 2020, the definition also includes employees with
permanent and fixedterm contracts. Up to 2019, it also
included temporary staff, postgraduate students, interns,
apprentices, those on extended sick leave and sabbaticals.
EQUITY RATIO
Equity capital as a percentage of the balance sheet
total.
FAIR VALUE
The amount at the measurement date for which an
asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length trans
action.
A hedge against exposures to fluctuations in the fair
Cash and cash equivalents as well as marketable
value of a balance sheet item.
securities and investment funds.
FREE CASH FLOW
OUTLOOK
Free cash flow is derived from cash flows from
operating and investing activities. The cash flows from
investing activities from the purchase and sale of mar
ketable 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.
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.
The BMW Group uses the following terminology and
ranges when forecasting key performance indicators:
At previous year’s level
Slight increase
Slight decrease
Solid increase
Moderate decrease
Significant increase
Significant decrease
[– 0.9 % / + 0.9 %]
[+ 1.0 % / + 4.9 %]
[– 1.0 % / – 4.9 %]
[+ 5.0 % / + 9.9 %]
[– 5.0 % / – 9.9 %]
>+ 10.0 %
>– 10.0 %
Unlike the other key performance indicators, the
RoCE forecast for the Automotive and Motorcycles seg
ments is based on the change in percentage points:
At previous year’s level
Slight increase
Slight decrease
Solid increase
Moderate decrease
Significant increase
Significant decrease
[– 0.9 %-pts. / + 0.9 %-pts.]
[+ 1.0 %-pts. / + 4.9 %-pts.]
[– 1.0 %-pts. / – 4.9 %-pts.]
[+ 5.0 %-pts. / + 9.9 %-pts.]
[– 5.0 %-pts. / – 9.9 %-pts.]
>+ 10.0 %-pts.
>– 10.0 %-pts.
GROSS PROFIT MARGIN
Gross profit as a percentage of Group revenues.
BMW GroupReport 2020
Corporate Governance
Glossary and Explanation of Key Figures
329
POST-TAX RETURN ON SALES
RESEARCH AND DEVELOPMENT LOCATIONS
TRAINING AND FURTHER EDUCATION
Group net profit as a percentage of Group revenues.
PRE-TAX RETURN ON SALES
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.
Expenditure for training comprises all costs incurred
in the year under report for vocational training within
the BMW Group in a total of seven countries, including
personnel costs for trainers and apprentices as well as
other costs and investments related to vocational training.
Group profit / loss before tax as a percentage of
Group revenues.
RETURN ON CAPITAL EMPLOYED (ROCE)
RESEARCH AND DEVELOPMENT EXPENDITURE
The sum of research and noncapitalised development
cost and capitalised development cost (not including the
associated scheduled amortisation).
RoCE in the Automotive and Motorcycles segments
is measured on the basis of relevant segment profit be
fore financial result and the average amount of capital
employed – at the end of the last five quarters – in the
segment concerned. Capital employed corresponds to
the sum of all current and noncurrent operational assets,
less liabilities that generally do not incur interest.
RESEARCH AND DEVELOPMENT EXPENDITURE RATIO
RETURN ON EQUITY (ROE)
Research and development expenditure as a percent
age of Group revenues.
RoE in the Financial Services segment is calculated
as segment profit before taxes, divided by the average
amount of equity capital – at the end of the last five
quarters – attributable to the Financial Services segment.
The number of apprentices undergoing training with
in the BMW Group includes those employed at domestic
and international plants in a total of seven countries as
well as those working in corporate functions, at Group
plants in Germany and international sales companies as
well as in the Financial Services segment.
Expenditure for further education includes all costs
incurred by the BMW Group’s consolidated companies
in connection with ongoing and advanced training. This
includes preparation and implementation costs, oppor
tunity costs and investments made in order to provide
such training. Costs also include notional depreciation,
measured on the basis of asset inventory lists.
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.
BMW GroupReport 2020
Corporate Governance
Responsibility Statement by the Company’s Legal Representatives
330
RESPONSIBILITY
STATEMENT BY THE
COMPANY’S LEGAL
REPRESENTATIVES
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)
Munich, 9 March 2021
Bayerische Motoren Werke
Aktiengesellschaft
“To the best of our knowledge, and in accordance
with the applicable reporting principles, the Group Fi
nancial Statements give a true and fair view of the assets,
liabilities, financial position and results of operations of
the Group, and the Group Management Report includes
a fair review of the development and performance of
business and position of the Group, together with a
description of the principal opportunities and risks
associated with the expected development of the Group.”
THE BOARD OF MANAGEMENT
OLIVER ZIPSE
ILKA HORSTMEIER
DR. MILAN NEDELJKOVIĆ
PIETER NOTA
DR. NICOLAS PETER
FRANK WEBER
DR.-ING. ANDREAS WENDT
BMW GroupReport 2020
Corporate Governance
Independent Auditor’s Report
The following copy of the auditor’s report also includes a “Report
on the audit of the electronic renderings of the financial state-
ments and the management report prepared for disclosure pur-
poses in accordance with § 317 Abs. 3b HGB” (“Separate report
on ESEF conformity”). The subject matter (ESEF documents)
to which the Separate report on ESEF conformity relates is not
attached. The audited ESEF documents can be inspected in or
retrieved from the Federal Gazette.
INDEPENDENT
AUDITOR’S REPORT
TO BAYERISCHE MOTOREN WERKE
AKTIENGESELLSCHAFT, MUNICH
REPORT ON THE AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS AND OF THE GROUP
MANAGEMENT REPORT
331
Audit Opinions
We have audited the consolidated financial state
ments of Bayerische Motoren Werke Aktiengesellschaft,
Munich, and its subsidiaries (the Group), which comprise
the BMW Group Income Statement for Group, Statement
of Comprehensive Income for Group, BMW Group Balance
Sheet at 31 December 2020, BMW Group Cash Flow State
ment for BMW Group and BMW Group Statement of Chang
es in Equity for the financial year from January 1 to Decem
ber 31, 2020, and Notes to the Group Financial Statements,
including a summary of significant accounting policies. In
addition, we have audited the group management report
of Bayerische Motoren Werke Aktiengesellschaft, which
is combined with the Company’s management report, for
the financial year from January 1 to December 31, 2020.
In accordance with the German legal requirements, we
have not audited the content of those parts of the group
management report listed in the “Other Information”
section of our auditor’s report.
In our opinion, on the basis of the knowledge obtained
in the audit,
— the accompanying consolidated financial statements
comply, in all material respects, with the IFRSs as
adopted by the EU, and the additional requirements
of German commercial law pursuant to § [Article]
315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch:
German Commercial Code] and, in compliance
with these requirements, give a true and fair view
of the assets, liabilities, and financial position of the
Group as at December 31, 2020, and of its financial
performance for the financial year from January 1 to
December 31, 2020, and
— the accompanying group management report as a
whole provides an appropriate view of the Group’s
position. In all material respects, this group man
agement report is consistent with the consolidated
financial statements, complies with German legal
requirements and appropriately presents the oppor
tunities and risks of future development. Our audit
opinion on the group management report does not
cover the content of those parts of the group manage
ment report listed in the “Other Information” section
of our auditor’s 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 fi
nancial statements and of the group management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial
statements and of the group management report in ac
cordance with § 317 HGB and the EU Audit Regulation
(No. 537 / 2014, referred to subsequently as “EU Audit
Regulation”) in compliance with German Generally Ac
cepted Standards for Financial Statement Audits prom
ulgated by the Institut der Wirtschaftsprüfer [Institute of
Public Auditors in Germany] (IDW). Our responsibilities
under those requirements and principles are further de
scribed 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 com
mercial and professional law, and we have fulfilled our
other German professional responsibilities in accordance
with these requirements. In addition, in accordance with
Article 10 (2) point (f) of the EU Audit Regulation, we
declare that we have not provided nonaudit 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 statements and on
the group management report.
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Independent Auditor’s Report
332
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 for the fi
nancial year from January 1 to December 31, 2020. These
matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in
forming our audit opinion thereon; we do not provide a
separate audit opinion on these matters.
Our presentation of these key audit matters has been
structured in each case as follows:
1 Matter and issue
2 Audit approach and findings
3 Reference to further information
Hereinafter we present the key audit matters:
In our view, the matters of most significance in our
1 Measurement of leased products
audit were as follows:
1 Measurement of leased products
2 Valuation of receivables from sales financing
3 Valuation of provisions for statutory and
non-statutory warranty obligations and product
guarantees
4 Measurement of YOUR NOW equity investment
5 Measurement of provision for risks relating to
an EU antitrust proceeding
1 The BMW Group leases vehicles to end customers
under operating leases (leased products). At the bal
ance sheet date, the figure reported under the “leased
products” line item for operating leases was EUR
41,995 million (approximately 19.4 % of total assets).
Leased products are measured at cost, which is de
preciated on a straightline 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 in
ternally 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.
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 signif
icance in the context of our audit.
2 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. Fur
thermore, we evaluated the appropriateness and
effectiveness of the internal control system, par
ticularly 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 mathemati
cally correctness of the forecast values using the key
calculation steps.
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.
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333
3 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 5 and on leased products
are contained under note 23.
2 Valuation of receivables from sales financing
1 The BMW Group offers end customers, dealerships
and importers various financing models for vehicles.
In this context, current and noncurrent receivables
from sales financing totaling EUR 84,277 million are
reported in the consolidated statement of financial
position as at the balance sheet date ( approximately
EUR 38.9 % of total assets). Impairment losses
amounting to EUR 1,639 million were recognized
on these receivables as at the balance sheet date.
In order to determine the amount of the necessary
valuation allowances to be recognized with respect
to receivables 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.
The determination of the valuation allowances by the
executive directors is subject to a significant degree
of judgment due to several valueinfluencing factors
such as the estimation of creditworthiness, the de
termination of probabilities of default and loss ratios
and was therefore of particular significance in the
context of our audit.
2 As part of our audit we obtained a comprehensive
understanding of the development of receivables
from sales financing, the associated defaultrelated
risks as well as the business processes for the identi
fication, management, monitoring and measurement
of default risks , among other things by inquiries
and inspection of documents on the internal cal
culation methods. Furthermore, we evaluated the
appropriateness 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 pro
cesses. The evaluation 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 auto
mated 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 as
sess 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 impairment losses had
been calculated using the parameters defined for
these risk categories.
In our view, the assumptions and parameters used in
the measurement of receivables from sales financing
were appropriate overall.
3 The Company’s disclosures on the applied “Account
ing policies, assumptions, judgments and estima
tions” are contained in the notes to the consolidated
financial statements under note 5 and on “receivables
from sales financing” are contained under note 25.
3 Valuation of provisions for statutory and non-statuto-
ry warranty obligations and product guarantees
1 Provisions for statutory and nonstatutory warranty
obligations as well as product guarantees are in
cluded in the consolidated financial statements of
BMW Group as a material amount in other provi
sions. The obligations amounted to EUR 6,131 mil
lion (approximately 2.8 % of total assets) as at De
cember 31, 2020. 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 nonstatutory
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.
BMW GroupReport 2020
Corporate Governance
Independent Auditor’s Report
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 In order to assess the appropriateness of the val
uation method used for the determination of the
provisions for statutory and nonstatutory warranty
obligations as well as product guarantees including
the assumptions and parameters, we primarily ob
tained an understanding of the process for deter
mining the assumptions and parameters through
discussions with the responsible employees of the
BMW Group. We also evaluated the appropriateness
as well as effectiveness of controls for determining
the assumptions and parameters. With the involve
ment of our IT specialists, we checked the IT systems
used regarding their compliance. We compared the
expenses for claims and technical actions with ac
tual 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 assump
tions 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 nonstatutory warranties.
In our view, the method for the valuation of provi
sions for statutory and nonstatutory warranty obli
gations as well as product guarantees is overall ap
propriate. Taking into consideration the information
334
available, we believe that, overall, the measurement
parameters and assumptions used by the executive
directors are appropriate.
uncertainties. Against this background, this matter
was of particular significance during our audit.
3 The Company’s disclosures on the applied “Account
ing policies, assumptions, judgments and estima
tions” are contained in the notes to the consolidated
financial statements under note 5 and on “Other
provisions” are contained under note 33.
4 Measurement of YOUR NOW equity investment
1 In the BMW Group’s consolidated financial state
ments as at December 31, 2020, the YOUR NOW
equity investment is reported under the balance
sheet item “Investments accounted for using the
equity method” with a carrying amount of EUR
591 million (approximately 0.3 % of total assets). The
BMW Group and a competitor have bundled mobility
services within YOUR NOW. In the financial year
2020 YOUR NOW generated negative operating
earnings amounting to EUR 349 million, which were
recognized in the consolidated financial statements.
Furthermore, there was a triggering event at the level
of the BMW Group. The Company has identified as a
triggering event in particular a significant deviation
from target figures and the impacts of the coronavi
rus crisis regarding the YOUR NOW equity invest
ment. As a result of the impairment test performed,
no further writedowns were necessary as at balance
sheet date.
The measurement of the YOUR NOW equity invest
ment, including the performance of the impairment
test, depends to a significant degree on the estimates
made by the executive directors and their exercise of
judgment, which are subject to significant estimation
2 As part of our audit, we examined and evaluated the
methodological procedure adopted for the purposes
of measuring the YOUR NOW equity investment as
well as for performing the impairment test, among
other things. We also assessed the appropriateness
of the valuation parameters and assumptions on
which the measurement was based. We examined
the impairment test conducted by the BMW Group
based on the occurrence of a triggering event. After
comparing the future cash inflows used in the calcu
lation against the underlying budget, we assessed the
appropriateness of the calculation, in particular by
reconciling it with general and sectorspecific market
expectations. Moreover, we evaluated the estimates
made by the executive directors with respect to the
impacts of the coronavirus crisis on the YOUR NOW
equity investment and examined its consideration
in the calculation of future cash inflows. We also as
sessed the parameters used to determine the discount
rate applied and examined the measurement model.
The valuation parameters and assumptions used by
the executive directors are overall in line with our ex
pectations and are also within the ranges considered
by us to be acceptable.
3 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 5 and on the YOUR NOW
equity investment are contained under note 24.
BMW GroupReport 2020
Corporate Governance
Independent Auditor’s Report
5 Measurement of provision for risks relating to an
EU antitrust proceeding
1 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 re
strict competition in the field of innovation. In this
connection, as in the previous year, a EUR 1.4 billion
provision for litigation and risk provisioning was rec
ognized at the balance sheet date 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.
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 BMW AG’s assets, liabil
ities, financial position and financial performance.
2 With the knowledge that estimated values result in an
increased risk of accounting misstatements and that
the executive directors’ recognition and measure
ment decisions have a direct effect on consolidated
result, we evaluated the retention 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 updates on current developments
and the reasons for the corresponding estimates. The
335
development of the aforementioned risks arising
from the EU antitrust proceeding, including the
executive directors’ estimates concerning the poten
tial 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.
In our view, the estimates made by the executive di
rectors 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 disclosures marked with “╚ ... ╝” of the nonfinan
cial statement pursuant to § 289 b Abs. 1 HGB and § 315 d
Abs. 1 HGB
The other information comprises further the remain
ing parts of the annual report – excluding crossreferenc
es to external information – with the exception of the
audited consolidated financial statements, the audited
group management report and our auditor’s report.
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.
3 The Company’s disclosures on the applied “Account
ing policies, assumptions, judgments and estima
tions” are contained in the notes to the consolidated
financial statements under note 5 and on “Other
operating expenses” are contained under note 10.
Other Information
The executive directors are responsible for the other
information. The other information comprises the follow
ing nonaudited parts of the group management report:
— the statement on corporate governance pursuant to
§ 289 f HGB and § 315 d HGB included in section
“Corporate Governance” of the group management
report
— the subsections “Information on the Company’s
Governing Constitution”, “Board of Management”,
“Supervisory Board”, “Shareholders and Annual
General Meeting” and “Declaration of Compliance”
listed in the “Corporate Governance” section of the
group management report
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Corporate Governance
Independent Auditor’s Report
336
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 finan
cial statements, with the group management report
or our knowledge obtained in the audit, or
— otherwise appears to be materially misstated.
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
preparation of the consolidated financial statements that
comply, in all material respects, with IFRSs 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 compliance
with these requirements, give a true and fair view of the
assets, liabilities, financial position, and financial perfor
mance of the Group. In addition the executive directors
are responsible for such internal control as they have
determined necessary to enable the preparation of con
solidated financial statements that are free from material
misstatement, whether due to fraud or error.
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 reporting 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.
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 appropriately presents
the opportunities and risks of future development. In
addition, the executive directors are responsible for such
arrangements and measures (systems) as they have con
sidered necessary to enable the preparation of a group
management report that is in accordance with the ap
plicable 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 prepara
tion of the consolidated financial statements and of the
group management report.
Auditor’s Responsibilities for the Audit of the Consoli-
dated Financial Statements and of the Group Manage-
ment 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 appropriate view of the
Group’s position and, in all material respects, is con
sistent 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 auditor’s report that includes our audit
opinions on the consolidated financial statements and on
the group management report.
Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance
with § 317 HGB and the EU Audit Regulation and in com
pliance with German Generally Accepted Standards for
Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer (IDW) will always detect a mate
rial 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.
We exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement
of the consolidated financial statements and of the
group management report, whether due to fraud or
error, design and perform audit procedures respon
sive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our
audit opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collu
sion, forgery, intentional omissions, misrepresenta
tions, or the override of internal controls.
— Obtain an understanding of internal control relevant
to the audit of the consolidated financial statements
and of arrangements and measures (systems) relevant
to the audit of the group management report in order
to design audit procedures that are appropriate in the
circumstances, but not for the purpose of express
ing an audit opinion on the effectiveness of these
systems.
BMW GroupReport 2020
Corporate Governance
Independent Auditor’s Report
— Evaluate the appropriateness of accounting policies
used by the executive directors and the reasonable
ness of estimates made by the executive directors and
related dislosures.
— Conclude on the appropriateness of the executive di
rectors’ 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 continue 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 modify
our respective audit opinions. Our conclusions are
based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or
conditions may cause the Group to cease to be able
to continue as a going concern.
— Evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the consol
idated financial statements present the underlying
transactions and events in a manner that the con
solidated financial statements give a true and fair
view of the assets, liabilities, financial position and
financial performance of the Group in compliance
with IFRSs as adopted by the EU and the additional
requirements of German commercial law pursuant
to § 315 e Abs. 1 HGB.
— Obtain sufficient appropriate audit evidence re
garding the financial information of the entities
or business activities within the Group to express
audit opinions on the consolidated financial state
ments and on the group management report. We
are responsible for the direction, supervision and
performance of the group audit. We remain solely
responsible for our audit opinions.
— Evaluate the consistency of the group management
report with the consolidated financial statements, its
conformity with German law, and the view of the
Group’s position it provides.
— Perform audit procedures on the prospective infor
mation presented by the executive directors in the
group management report. On the basis of sufficient
appropriate audit evidence we evaluate, in particular,
the significant assumptions used by the executive
directors as a basis for the prospective information,
and evaluate the proper derivation of the prospec
tive information 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.
337
We communicate with those charged with govern
ance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with the relevant in
dependence 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 consolidated
financial statements of the current period and are there
fore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes
public disclosure about the matter.
BMW GroupReport 2020
Corporate Governance
Independent Auditor’s Report
338
OTHER LEGAL AND REGULATORY REQUIREMENTS
Assurance Report in Accordance with § 317 Abs. 3b HGB
on the Electronic Reproduction of the Consolidated
Financial Statements and the Group Management Report
Prepared for Publication Purposes
Reasonable Assurance Conclusion
We have performed an assurance engagement in ac
cordance with § 317 Abs. 3b HGB to obtain reasonable
assurance about whether the reproduction of the consol
idated financial statements and the group management
report (hereinafter the “ESEF documents”) contained in
the attached electronic file BMW_AG_KA+KLB_ESEF-
20201231.zip and prepared for publication purposes
complies in all material respects with the requirements
of § 328 Abs. 1 HGB for the electronic reporting format
(“ESEF format”). In accordance with German legal re
quirements, this assurance engagement only extends
to the conversion of the information contained in the
consolidated financial statements and the group man
agement report into the ESEF format and therefore
relates neither to the information contained within this
reproduction nor to any other information contained in
the abovementioned electronic file.
In our opinion, the reproduction of the consolidated
financial statements and the group management report
contained in the abovementioned attached electronic
file and prepared for publication purposes complies
in all material respects with the requirements of § 328
Abs. 1 HGB for the electronic reporting format. We do
not express any opinion on the information contained
in this reproduction nor on any other information con
tained in the abovementioned electronic file beyond this
reasonable assurance conclusion and our audit opinion
on the accompanying consolidated financial statements
and the accompanying group management report for the
financial year from 1 January to 31 December 2020 con
tained in the “Report on the Audit of the Consolidated
Financial Statements and on the Group Management
Report” above.
Basis for the Reasonable Assurance Conclusion
We conducted our assurance engagement on the
reproduction of the consolidated financial statements
and the group management report contained in the
abovementioned attached electronic file in accordance
with § 317 Abs. 3b HGB and the Exposure Draft of IDW
Assurance Standard: Assurance in Accordance with § 317
Abs. 3b HGB on the Electronic Reproduction of Financial
Statements and Management Reports Prepared for Publi
cation Purposes (ED IDW AsS 410) and the International
Standard on Assurance Engagements 3000 (Revised).
Accordingly, our responsibilities are further described
below in the “Group Auditor’s Responsibilities for the
Assurance Engagement on the ESEF Documents” section.
Our audit firm has applied the IDW Standard on Quality
Management: Requirements for Quality Management in
the Audit Firm (IDW QS 1).
Responsibilities of the Executive Directors and the
Supervisory Board for the ESEF Documents
The executive directors of the Company are re
sponsible for the preparation of the ESEF documents
including the electronic reproduction of the consolidated
financial statements and the group management report
in accordance with § 328 Abs. 1 Satz 4 Nr. 1 HGB and
for the tagging of the consolidated financial statements
in accordance with § 328 Abs. 1 Satz 4 Nr. 2 HGB.
In addition, the executive directors of the Company
are responsible for such internal control as they have
considered necessary to enable the preparation of ESEF
documents that are free from material noncompliance
with the requirements of § 328 Abs. 1 HGB for the elec
tronic reporting format, whether due to fraud or error.
The executive directors of the Company are also
responsible for the submission of the ESEF documents
together with the auditor’s report and the attached
audited consolidated financial statements and audited
group management report as well as other documents
to be published to the operator of the German Federal
Gazette [Bundesanzeiger].
The supervisory board is responsible for overseeing
the preparation of the ESEF documents as part of the
financial reporting process.
Group Auditor’s Responsibilities for the Assurance
Engagement on the ESEF Documents
Our objective is to obtain reasonable assurance about
whether the ESEF documents are free from material
noncompliance with the requirements of § 328 Abs.
1 HGB, whether due to fraud or error. We exercise pro
fessional judgment and maintain professional skepticism
throughout the assurance engagement. We also:
— Identify and assess the risks of material noncom
pliance with the requirements of § 328 Abs. 1 HGB,
whether due to fraud or error, design and perform
assurance procedures responsive to those risks, and
obtain assurance evidence that is sufficient and
appropriate to provide a basis for our assurance
conclusion.
BMW GroupReport 2020
339
FURTHER INFORMATION PURSUANT TO ARTICLE 10 OF
THE EU AUDIT REGULATION
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR
THE ENGAGEMENT
We were elected as group auditor by the annual
general meeting on May 14, 2020. We were engaged by
the supervisory board on June 17, 2020. We have been
the group auditor of the Bayerische Motoren Werke Ak
tiengesellschaft, Munich, without interruption since the
financial year 2019.
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 (longform audit report).
The German Public Auditor responsible for the
engagement is Andreas Fell.
Munich, 10 March 2021
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
PETRA JUSTENHOVEN
Wirtschaftsprüferin
[German public auditor]
ANDREAS FELL
Wirtschaftsprüfer
[German public auditor]
Corporate Governance
Independent Practitioners Report
— Obtain an understanding of internal control relevant
to the assurance engagement on the ESEF documents
in order to design assurance procedures that are
appropriate in the circumstances, but not for the
purpose of expressing an assurance conclusion on
the effectiveness of these controls.
— Evaluate the technical validity of the ESEF documents,
i. e., whether the electronic file containing the ESEF
documents meets the requirements of the Delegated
Regulation (EU) 2019 / 815 in the version applicable
as at the balance sheet date on the technical specifi
cation for this electronic file.
— Evaluate whether the ESEF documents enables a
XHTML reproduction with content equivalent to the
audited consolidated financial statements and to the
audited group management report.
— Evaluate whether the tagging of the ESEF documents
with Inline XBRL technology (iXBRL) enables an
appropriate and complete machinereadable XBRL
copy of the XHTML reproduction.
BMW GroupReport 2020
Corporate Governance
Independent Practitioners Report
INDEPENDENT
PRACTITIONER’S
REPORT
INDEPENDENT PRACTITIONER’S REPORT ON A
LIMITED ASSURANCE ENGAGEMENT ON DISCLOSURES
ON NON-FINANCIAL REPORTING AND SUSTAINABILITY
DISCLOSURES ¹
1
PricewaterhouseCoopers GmbH has performed a limited assurance engagement on the German version
of the „BMW Group Report 2020“ and issued an independent practitioner’s report in German language,
which is authoritative. The following text is a translation of the independent practitioner’s report.
340
To BMW AG, Munich
We have performed a limited assurance engagement
on the disclosures in the „BMW Group Report 2020“ for
the period from 1 January to 31 December 2020 (herein
after the “Integrated Group Report”) of BMW AG, Mu
nich, (hereinafter the “Company”) denoted with “╚ ... ╝”
of the combined nonfinancial statement pursuant to §§
(Articles) 289b (paragraph) Abs. 1 and 315b Abs. 1 HGB
(“Handelsgesetzbuch”: “German Commercial Code”),
which is integrated into the combined management
report (hereinafter the “Disclosures on Nonfinancial
Reporting”) contained in the Integrated Group Report,
as well as the sustainability disclosures contained in the
sections “Dialog with Stakeholders” and “Further GRI
Information” of the Integrated Group Report (hereinafter
referred to as “Sustainability Disclosures”). Our engage
ment in this context relates solely to the disclosures
denoted with the symbol “╚ ... ╝” and the disclosures
in the sections “Dialog with Stakeholders” and “Further
GRI Information”.
Responsibilities of the Executive Directors
The executive directors of the Company are respon
sible for the preparation of the combined nonfinancial
statement in accordance with §§ 315 c in conjunction
with 289c to 289e HGB and the Sustainability Disclo
sures in accordance with the principles stated in the Sus
tainability Reporting Standards of the Global Reporting
Initiative (hereinafter the “GRICriteria”).
This responsibility of Company’s executive directors
includes the selection and application of appropriate
methods of nonfinancial reporting and sustainability
reporting as well as making assumptions and estimates
related to individual nonfinancial disclosures and
sustainability disclosures which are reasonable in the
circumstances. Furthermore, the executive directors are
responsible for such internal control as they have consid
ered necessary to enable the preparation of an Integrated
Group Report that is free from material misstatement
whether due to fraud or error.
Independence and Quality Control of the Audit Firm
We have complied with the German professional pro
visions regarding independence as well as other ethical
requirements.
Our audit firm applies the national legal require
ments and professional standards – in particular the
Professional Code for German Public Auditors and Ger
man Chartered Auditors (“Berufssatzung für Wirtschafts
prüfer und vereidigte Buchprüfer“: “BS WP / vBP”) as well
as the Standard on Quality Control 1 published by the
Institut der Wirtschaftsprüfer (Institute of Public Audi
tors in Germany; IDW): Requirements to quality control
for audit firms (IDW Qualitätssicherungsstandard 1: An
forderungen an die Qualitätssicherung in der Wirtschaft
sprüferpraxis – IDW QS 1) – and accordingly maintains a
comprehensive system of quality control including doc
umented policies and procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements.
BMW GroupReport 2020
Corporate Governance
Independent Practitioners Report
Practitioner´s Responsibility
Our responsibility is to express a limited assurance
conclusion on the Disclosures on Nonfinancial Report
ing denoted with the symbol “╚ ... ╝” of the combined
nonfinancial statement and the Sustainability Disclo
sures in the sections “Dialog with Stakeholders” and
“Further GRI Information” of the Integrated Group
Report based on the assurance engagement we have
performed.
Within the scope of our engagement we did not
perform an audit on external sources of information
or expert opinions, referred to in the Integrated Group
Report.
We conducted our assurance engagement in accord
ance with the International Standard on Assurance
Engagements (ISAE) 3000 (Revised): Assurance Engage
ments other than Audits or Reviews of Historical Finan
cial Information, issued by the IAASB. This Standard
requires that we plan and perform the assurance en
gagement to allow us to conclude with limited assurance
that nothing has come to our attention that causes us to
believe that
— the Disclosures on Nonfinancial Reporting denoted
with the symbol “╚ ... ╝” of the Company’s com
bined nonfinancial statement pursuant to §§ 289 b
Abs. 1 and 315b Abs. 1 HGB for the period from
1 January to 31 December 2020, which is integrated
into the combined management report contained in
the Integrated Group Report, have not been prepared,
in all material aspects, in accordance with the re
quirements of §§ 315 c in conjunction with 289c to
289e HGB relevant to these disclosures, or
341
— the Sustainability Disclosures in the sections “Dialog
with Stakeholders” and “Further GRI Information”
of the Company’s Integrated Group Report for the
period from 1 January to 31 December 2020 have not
been prepared, in all material aspects, in accordance
with the relevant GRICriteria.
— Inquiries of the employees responsible for the in
formation on fleet emissions and fuel consumption
contained in the Integrated Group Report and recon
ciliation of individual data on fleet emissions and fuel
consumption with the technical vehicle data
— Evaluation of the presentation of the disclosures
In a limited assurance engagement the assurance pro
cedures are less in extent than for a reasonable assurance
engagement, and therefore a substantially lower level of
assurance is obtained. The assurance procedures selected
depend on the practitioner’s judgment.
Within the scope of our assurance engagement, we
performed amongst others the following assurance pro
cedures and further activities:
— Obtaining an understanding of the structure of the
sustainability organization and of the stakeholder
engagement
— Inquiries of personnel involved in the preparation of
the Integrated Group Report regarding the prepara
tion process, the internal control system relating to
this process and selected disclosures in the Integrat
ed Group Report
— Identification of the likely risks of material misstate
ment of the Integrated Group Report
— Testing of processes for the collection, control, anal
ysis and aggregation of selected data from various
Group sites on a sample basis
— Analytical evaluation of selected disclosures in the
Integrated Group Report
BMW GroupReport 2020
Corporate Governance
Independent Practitioners Report
342
Assurance Conclusion
Intended Use of the Assurance Report
Based on the assurance procedures performed and
assurance evidence obtained, nothing has come to our
attention that causes us to believe that
— the Disclosures on Nonfinancial Reporting denoted
with the symbol “╚ ... ╝” of the Company’s combined
nonfinancial statement pursuant to §§ 289 b Abs. 1
and 315b Abs. 1 HGB for the period from 1 January
to 31 December 2020, which is integrated into the
combined management report contained in the In
tegrated Group Report, have not been prepared, in
all material aspects, in accordance with the require
ments of §§ 315 c in conjunction with 289c to 289e
HGB relevant to these disclosures, or
— the Sustainability Disclosures in the sections “Dialog
with Stakeholders” and “Further GRI Information”
of the Company’s Integrated Group Report for the
period from 1 January to 31 December 2020 have not
been prepared, in all material aspects, in accordance
with the relevant GRICriteria.
We issue this report on the basis of the engagement
agreed with the Company. The assurance engagement
has been performed for purposes of the Company and
the report is solely intended to inform the Company
about the results of the limited assurance engagement.
The report is not intended for any third parties to
base any (financial) decision thereon. Our responsibil
ity lies only with the Company. We do not assume any
responsibility towards third parties.
Munich, 10 March 2021
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
ANDREAS FELL
Wirtschaftsprüfer
[German public auditor]
NICOLETTE BEHNCKE
Wirtschaftsprüferin
[German public auditor]
BMW GroupReport 2020
Other Information
343
OTHER
INFORMATION
344
344
352
357
359
363
364
365
367
368
Further GRI Information
Production, Purchasing and Supplier Network
Employees and Society
Reporting Concept
TCFD-Index
NFE-Index
BMW Group Fuel Consumption and
CO₂ Emissions Information
BMW Group Ten-year Comparison
Financial Calendar
Contacts
BMW GroupReport 2020
Other Information
Further GRI Information
FURTHER
GRI INFORMATION
PRODUCTION, PURCHASING
AND SUPPLIER NETWORK
344
BMW GROUP CO2 FOOTPRINT
in t CO₂ / CO₂e
Total emissions 1
2016
2017
2018
2019
2020
70,818,970
72,850,7242
74,213,4023
75,987,119
65,828,005
SCOPE 1: DIRECT GREENHOUSE GAS EMISSIONS
Total emissions
Emissions of BMW Group locations 4
Emissions of company vehicles 5
Emissions of company-owned planes
SCOPE 2: INDIRECT GREENHOUSE GAS EMISSIONS
Total emissions
Electricity / heat purchased by BMW Group locations 4, 7
SCOPE 3: INDIRECT GREENHOUSE GAS EMISSIONS
Total emissions
Emissions of logistics
Emissions of business trips 9
Emissions of employees’ commuter traffic 10
Emissions of upstream chain 11
Emissions of utilisation phase 12
Emissions of disposal 11
562,146
472,021
85,008
5,117
625,072
529,728
88,782
6,562
581,703
487,249
88,272
6,182
642,259
550,494
85,667
6,098
642,885
568,538
72,554
1,793 6
868,089
868,089
510,911
510,911
538,622
538,622
302,574
302,574
84,257
84,257
69,388,735
71,714,7412
73,093,0773
75,042,286
65,100,863
1,427,399
1,497,0752
1,563,919
1,570,397
1,322,8598
142,250
139,797
169,233
140,187
159,039
136,608
129,646
146,298
25,217 6
166,586
15,391,154
16,786,192
17,221,109
18,505,921
16,234,959
51,079,073
51,887,708
52,759,5673
53,421,006
46,200,385
1,185,148
1,234,346
1,252,835
1,269,018
1,150,857
1 The emissions listed account for approximately 90 % of the BMW Group’s total Scope 1 to Scope 3 emissions. Scope 1 and Scope 2 emissions exclude climate-changing gases other than carbon dioxide.
2 Due to new input data from an external service provider, the figures for 2017 were adjusted.
3 Figure not directly comparable to previous years’ figures. Calculated using EU fleet emissions according to NEDC correlated. Using NEDC correlated values in 2017 would result in a value of 52,933,132 t of CO2. This is
equivalent to a reduction of absolute emissions by 0.3 % in 2018.
4 Emissions from BMW Group-owned production sites including BMW Motorrad Berlin as well as administration, development and central distribution centres. VDA factors (updated in June 2019) used since the reporting year 2020.
5 Includes refuelling of service and function-related vehicles in Germany and at individual international locations (USA, Sweden, France). Private refuelling is not recorded.
6 Decrease is due to the pandemic-related reduction in travel activities.
7 Market-based emissions according to GHG Protocol Scope 2 guidance. VDA factors (updated in June 2019) used since the reporting year 2020. Scope 2 emissions calculated using the location-based method (total bought-in
electricity and heat calculated using VDA factors): 1,250,572 t CO2.
8 The volume of carbon emissions in 2020 is not directly comparable with the figures reported for previous years, as the scope of analysis has been expanded to include local data from suppliers involved in supplying specified
production plants as well as data from service providers involved in distributing vehicles to dealerships in specified markets and spare parts deliveries.
9 Includes air travel, train travel and rental cars.
10 The figures from 2020 onwards are not directly comparable with previous years due to the improved data basis. In some cases, figures are extrapolated based on surveys conducted at major national and international
BMW Group locations.
11 Emissions from the upstream value chain and from disposal are calculated from the life cycle assessments in accordance with ISO 14040 / 44 of representative vehicles of the product lines using the LCA tool GaBi from the com-
pany Thinkstep (including the climate-changing gases CO2, CH4, N2O, SF6, NF3). Corresponding to the CO2e emissions, the life cycle assessments show the energy consumption (lower calorific value): around 75,640,609 MWh
in the upstream chain and around 502,243 MWh at disposal companies.
12 The fleet emissions are extrapolated from the average fleet emissions of the main sales markets of the BMW Group. The calculation was based on an average mileage of 150,000 km.
GRI 302-2, 305-1, 305-2, 305-3
BMW GroupReport 2020
345
Other Information
Further GRI Information
ENERGY CONSUMPTION IN DETAIL ¹, ²
in MWh
2016
2017
2018
2019
2020
TOTAL ENERGY CONSUMPTION
Total energy consumption
of which vehicle production
of which motorcycle production
of which non-manufacturing areas
TOTAL ENERGY CONSUMPTION IN DETAIL
Electricity (external source)
Community heating
Community cooling in Mwh
FOSSIL FUELS
Heating oil
Natural gas
of which CHP losses
NON-FOSSIL FUELS
Biogas (landfill gas)
of which CHP losses
Wood pellets
RENEWABLES
Solar (photovoltaics)
5,783,841
5,852,666
5,788,965
5,974,625
5,714,610
5,328,856
5,362,618
5,169,266
5,226,227
4,946,865
85,559
95,493
89,300
120,583
369,426
394,555
530,399 3
627,815
114,072
653,673
2,584,570
2,588,409
2,513,308
2,439,675
2,154,899 4
381,340
408,735
395,609
358,992
266,112
1,084
1,095
1,072
1,123
1,113
3,698
4,450
2,888
2,205
3,660
2,575,089
2,624,557
2,669,457
3,005,902
3,093,543
245,899
258,380
294,724
412,451
498,299
237,446
108,536
220
224,819
205,320
164,957
192,911
84,166
86,787
68,560
65,065
220
220
68
56
394
381
1,091
1,703
2,316
1 Energy consumption at BMW Group-owned production sites including BMW Motorrad Berlin (Germany) as well as administration, development and central distribution centres.
2 Upper calorific value for fossil fuels.
3 Figures since 2018 not directly comparable to previous years’ figures, mainly due to a more refined distinction between production and non-manufacturing areas (e. g. administration, development, central distribution centres).
4 The decrease was mainly due to the pandemic-related interruption of production at most BMW Group plants. For further explanations, see
Resource Consumption and Resource Efficiency.
GRI 302-1
BMW GroupReport 2020
Other Information
Further GRI Information
LOGISTICS: CARRIERS AND CO2 EMISSIONS ¹
INBOUND (MATERIAL PROVISION OF THE PLANTS AND SPARE
PARTS DELIVERY)
Transport volume in million tkm
CO2 emissions in t
OUTBOUND (DISTRIBUTION OF VEHICLES AND SPARE PARTS)
Transport volume in million tkm
CO2 emissions in t
TOTAL (INBOUND AND OUTBOUND)
Transport volume in million tkm
CO2 emissions in t
PERCENTAGE SHARE OF CARRIERS IN TOTAL (INBOUND AND OUT-
BOUND) IN TERMS OF TRANSPORT VOLUME AND CO2 EMISSIONS
Sea
Road
Rail
Air
346
2016
2017
2018
2019
2020
15,202
506,604
25,006
920,795
40,208
1,427,399
g CO2
55.0
30.8
3.1
11.1
tkm
77.7
14.9
6.9
0.5
14,5453
537,9283
25,881
959,147
40,4263
1,497,0753
g CO2
52.93
31.73
2.5
12.93
tkm
75.8
17.2
6.32
0.72
14,491
589,730
25,777
974,189
40,268
1,563,919
g CO2
50.3
31.1
2.3
16.3
tkm
75.0
17.6
6.5
0.9
15,634
577,077
26,489
993,320
42,123
1,570,397
g CO2
47.8
37.5
2.6
12.2
tkm
73.0
20.1
6.3
0.6
13,623 4
472,290
23,622 4
850,569
37,245 4
1,322,859 2
g CO2
52.0
33.6
3.8
10.6
tkm
74.7
17.1
7.7
0.5
1 Figures refer to BMW and MINI (i. e. without Rolls-Royce) including BMW Brilliance Automotive Ltd., Shenyang, excluding contract manufacturing. CO2 emissions calculated in accordance with DIN EN 16258 and TREMOD 5.2 (air cargo belly / freighter). Scope: Inbound volumes (supply of materials to plants and spare parts delivery)
for BMW and MINI vehicle plants worldwide as well as for the delivery of spare parts to central parts distribution. Outbound volumes (distribution of vehicles and spare parts) to distribution centres in markets worldwide and for certain markets to the trade, including contract manufacturing.
2 The volume of carbon emissions in 2020 is not directly comparable with the figures reported for previous years, as the scope of analysis has been expanded to include local data from suppliers involved in supplying specified production plants as well as from service providers involved in distributing vehicles to dealerships in specified markets
and spare parts deliveries.
3 Due to new input data from an external service provider, the 2017 values were adjusted.
4 Decrease mainly due to lower production volumes.
GRI 305-3
BMW GroupReport 2020
Other Information
Further GRI Information
347
INPUT / OUTPUT ASSESSMENT
OF BMW GROUP PRODUCTION ¹, ²
AVERAGE DISTRIBUTION OF MATERIALS IN BMW GROUP
VEHICLES ¹
INPUT
Water 3
Energy
OUTPUT
Total waste 3
of which recyclable
of which waste for disposal
Total wastewater 3
CO2 emissions
Volatile org. compounds (VOC) 3
NOX 4
CO 4
SO2 4
Particulates, dust 4
m³
4,722,310
MWh
4,946,865
in %
M.O.N.
(modif. organ.
Naturwerkst.) 0.4
Thermoplastic
resins 12.0
Textiles 1.1
Others 9.8
1.9 Duromers
t
t
t
775,459
768,292
7,168
m³
3,378,877
Non-ferrous metals
(e.g. aluminium) 18.1
Elastomers
(e.g. tyres and seals) 3.8
52.9 Steel and iron
1 Calculation based on aggregated mean values of vehicles of the BMW 1, 2, 3, 4, 5, 6, 7, X1, X2, X3, X4, X5
and X6 series, MINI and MINI Countryman as well as the i3 and i8 BMW i models and the PHEV versions of
BMW 3, 5, 7, X1 and X5 series and MINI Countryman.
GRI 301-1
t
t
t
t
t
t
566,804
1,697
670
393
11
41
1 Incl. BMW Brilliance Automotive Ltd., Shenyang, not including contract production.
2 The number of vehicles produced in 2020 decreased to around 2.25 million units (2019: around 2.56 mil-
lion units). Based on an average weight of BMW Group vehicles of around 1.6 t, the total weight of input
materials is around 3.6 million t. To calculate the individual material flows, the total weight is multiplied by
the average distribution of the materials in BMW Group vehicles.
3 The figure includes only automobile production (i. e. excluding motorcycles).
4 BMW Group measurements / capture as well as calculations based on energy consumption (primarily
heating oil and gas) with the aid of the VDA emission factors.
GRI 301-1, 302-1, 305-1, 305-7
BMW GroupReport 2020
5,017,816
5,073,220
5,425,073
5,417,428
4,722,310 2
87.1
12.5
0.5
0.0
88.0
11.7
0.3
0.0
90.4
9.6
0.0
0.0
87.4
12.6
0.0
0.0
86.3
13.6
0.0
0.1
1 These figures refer to the production sites of the BMW Group incl. the BMW Brilliance Automotive Ltd. joint venture in Shenyang. BMW Motorrad is not included.
2 Decrease mainly due to lower production volumes and reduced cooling requirements at BMW Group locations worldwide.
348
WATER CONSUMPTION PER VEHICLE PRODUCED ¹
2016
2017
2018
2019
2020
in m³
2.25
2.22
2.39
2.32
2.25
3.0
1.5
1.0
2016
2017
2018
2019
2020
1 Efficiency indicator = water consumption from vehicle production divided by the total number of vehicles
produced, incl. BMW Brilliance Ltd. joint venture in Shenyang, not including vehicles from the Magna Steyr
and Nedcar contract production plants. BMW Motorrad is not included either.
PROCESS WASTEWATER PER VEHICLE PRODUCED ¹
Other Information
Further GRI Information
WATER CONSUMPTION ¹
in m ³
Water consumption
of which drinking water in %
of which groundwater in %
of which surface water in %
of which rainwater in %
WASTEWATER ¹
in m ³
Total wastewater
2016
2017
2018
2019
2020
in m³
3,312,562
3,633,306
3,432,982
3,578,497
3,378,877
of which process wastewater
944,008
914,016
1,015,736
1,036,179
988,392
of which wastewater from sanitary facilities
2,368,554
2,719,290
2,417,246
2,542,318
2,390,485
Total heavy metals and heavy metal compounds in kg
742
406
461
402
313
COD 2 in kg
AOX 3 in kg
2,085,398
2,273,678
1,902,577
1,960,211
1,491,848
131
101
64
63
54
1 The key performance indicator “Process wastewater” is measured after wastewater treatment in BMW Group plants (incl. the BMW Brilliance Automotive Ltd. joint venture in Shenyang) has taken place. BMW Motorrad is not in-
cluded. Together with the wastewater from sanitary facilities at the plants, this is the figure for total wastewater. Due to factors such as evaporation, water input does not correspond to total wastewater.
0.8
0.4
0
0.42
0.40
0.45
0.44
0.47
2 COD = chemical oxygen demand.
3 AOX = absorbable organic halides in water.
2016
2017
2018
2019
2020
1 Efficiency indicator = process wastewater from vehicle production divided by the total number of vehicles
produced, incl. BMW Brilliance Automotive Ltd. joint venture in Shenyang, not including vehicles from the
Magna Steyr and Nedcar contract production plants. BMW Motorrad is not included either.
BMW GroupReport 2020
Other Information
Further GRI Information
WASTE ¹
in t
Total waste
Hazardous waste for recovery
Hazardous waste for disposal
Non-hazardous waste for recovery
Non-hazardous waste for disposal
Materials for recycling 3
Metals for recycling (scrap)
Waste for disposal
349
WASTE FOR DISPOSAL PER VEHICLE PRODUCED ¹
2016
2017
2018
2019
2020
in kg
762,924
785,209
789,817
780,911
775,459
30,855
4,219
36,379
4,992
37,259
4,717
44,572
4,894
44,267
3,882 2
723,632
739,799
742,652
726,590
724,025
3,732
754,486
569,841
7,951
4,039
776,179
571,685
9,031
5,189
779,911
560,164
9,906
4,855
771,162
503,928
9,749
3,286 2
768,292
453,106
7,168
10
5
0
3.51
3.86
4.27
4.09
3.33
2016
2017
2018
2019
2020
1 These figures refer to the production sites of the BMW Group incl. the BMW Brilliance Automotive Ltd. joint venture in Shenyang. BMW Motorrad is not included.
2 Decrease mainly due to changes in the structure of the existing recovery and recycling firms at the individual locations. For further explanations, see
3 Includes both recycling and thermal utilisation.
Resource Consumption and Resource Efficiency.
1 Efficiency indicator = waste for disposal from vehicle production divided by the total number of vehicles
produced, incl. BMW Brilliance Automotive Ltd. joint venture, Shenyang, not including vehicles from the
Magna Steyr and Nedcar contract production plants. BMW Motorrad is not included either.
SOLVENT EMISSIONS PER VEHICLE PRODUCED ¹
in kg
2.0
1.0
0
1.14
1.03
0.93
0.85
0.81
2016
2017
2018
2019
2020
1 Efficiency indicator = VOC emissions from vehicle production divided by the total number of vehicles
produced, without motorcycles, incl. BMW Brilliance Automotive Ltd. joint venture Shenyang, not including
the vehicles from the Magna Steyr and Nedcar contract production plants.
BMW GroupReport 2020
Other Information
Further GRI Information
350
ENVIRONMENTAL MANAGEMENT SYSTEMS AT PRODUCTION LOCATIONS
Production plant
BMW GROUP PLANTS
Araquari / BR
Berlin / DE
Chennai / IN
Dingolfing / DE
Eisenach / DE
Goodwood / UK
Hams Hall / UK
Landshut / DE
Leipzig / DE
Manaus / BR
Munich / DE
Oxford / UK
Rayong / TH
Regensburg / DE
Rosslyn / ZA
San Luis Potosí / MX
Spartanburg / US
Steyr / AT
Swindon / UK
Wackersdorf / DE
ASSEMBLY PLANTS
Jakarta / ID
Cairo / EG
Kaliningrad / RU
Kulim / MY
Environmental management system
Date of most recent ISO 14001 certification
ISO 14001
ISO 14001 / EMAS
ISO 14001
ISO 14001 / EMAS
ISO 14001 / EMAS
ISO 14001
ISO 14001
ISO 14001 / EMAS
ISO 14001 / EMAS
January 2018 1
January 2018 1
January 2018 1
January 2018 1
January 2018 1
January 2018 1
January 2018 1
January 2018 1
January 2018 1
National Standard 2 / ISO 14001
Certification planned in 2021
ISO 14001 / EMAS
ISO 14001
ISO 14001
ISO 14001 / EMAS
ISO 14001
ISO 14001
ISO 14001
ISO 14001 / EMAS
ISO 14001
ISO 14001 / EMAS
ISO 14001
ISO 14001
ISO 14001
ISO 14001
January 2018 1
January 2018 1
January 2018 1
January 2018 1
January 2018 1
March 2019
January 2018 1
January 2018 1
January 2018 1
January 2018 1
May 2019
November 2018
August 2020
December 2018
BMW BRILLIANCE AUTOMOTIVE HOLDINGS LTD. JOINT VENTURE
BMW Brilliance Automotive, Shenyang / CN (joint venture) 3
ISO 14001
December 2018
CONTRACT PRODUCTION
Loncin Motor Co., Chongqing / CN
Magna Steyr Fahrzeugtechnik, Graz / AT
TVS Motor Company, Hosur / IN
VDL Nedcar, Born / NL
1 Three-year validity period extended by a further six months due to the coronavirus pandemic..
2 Compliance with legal requirements.
3 The joint venture comprises three locations.
ISO 14001
ISO 14001/EMAS
ISO 14001
ISO 14001
August 2018
July 2018
January 2020
October 2020
BMW GroupReport 2020
351
Other Information
Further GRI Information
SUSTAINABILITY ASSESSMENT OF RELEVANT SUPPLIER LOCATIONS
2018
2019
2020
Number of supplier locations assessed 1
Proportion of audited suppliers of production-related material with a contract volume greater
than € 2 million 1
Proportion of audited suppliers of non-production-related material with a contract volume
greater than € 10 million 1
Number of identified sustainability deficits at potential and existing supplier locations
from an ESG perspective 1
Number of agreed corrective measures aimed at addressing those sustainability deficits 1
Number of audits and assessments conducted by or on behalf of the BMW Group 2
Number of supplier locations not awarded contracts because they fail to meet the BMW Group’s
sustainability or other requirements 1
Number of existing supplier relationships that had to be terminated prematurely due to
serious sustainability violations
Number of notifications of potential violations of our sustainability principles received
through our supply chain reporting channels
of which number of notifications that were clarified during the reporting year
1 Basis: Industry-specific sustainability questionnaire.
2 Includes on-site visits and remote audits.
GRI 308-1, 308-2, 414-1, 414-2
4,168
97 %
80 %
2,320
1,123
89
193
0
9
9
BMW GROUP SUPPLIERS PARTICIPATING IN THE CDP SUPPLY CHAIN PROGRAMME
Number of reporting suppliers
Number of suppliers newly admitted to the programme the year under report
Proportion of reporting suppliers in the BMW Group’s production-relevant purchasing volume
Average score of participating suppliers evaluated
Proportion of suppliers with a score of B or higher
2018
190
20
75 %
C
30 %
3,921
95 %
72 %
2,131
1,317
105
153
0
2
2
2019
199
24
78 %
C
34 %
3,220
98 %
56 %
1,902
1,225
313
108
0
3
2
2020
218
25
79 %
C
35 % 1
1 The target of at least 60 % of BMW Group suppliers participating in the CDP Supply Chain Programme achieving a score of at least B by 2020 was not achieved. The target period was therefore extended to 2025.
BMW GroupReport 2020
Other Information
Further GRI Information
EMPLOYEES AND SOCIETY
352
EMPLOYEES AT END OF YEAR ¹
EMPLOYEES IN GERMANY AND ABROAD ¹
BMW Group
Automotive
Motorcycles
Financial Services
Other
Share of employees with fixed-term contracts 2
Employees in part-time employment 3
2016
2017
2018
old 2019
new 2019
2020
Number of employees in thousands
124,729
112,869
129,932
117,664
134,682
121,994
133,778
126,016
120,726
121,208
113,719
108,676
200
3,351
8,394
115
4,270
4,753
3,506
8,645
117
4,685
5,553
3,709
8,860
119
4,638
6,299
3,658
8,798
114
3,803
6,318
3,503
8,684
110
3,489
6,318 4
3,474
8,473
103
2,892
6,433
1 The term “employee” has been redefined with effect from the reporting year 2020 (for definition, see
Glossary). For the period 2018 and earlier, the percentage of employees no longer covered by the new definition is
between 7.5 % and 8.0 %.
2 Within BMW AG (which employs around two-thirds of the entire workforce of BMW Group), 0.8 % of employees are on fixed-term contracts. Approximately 27 % of employees are on fixed-term contract are women.
Under the current system, this data is only collated for BMW AG.
3 Permanent and fixed-term employees.
4 Corresponds to the new definition of an employee with effect from 2020, therefore no change in the figure.
GRI 102-8
124.7 2
129.9 3
134.7 4
133.8 5
126.0 6
120.7 7
Employees
in foreign
countries
100
Employees
in Germany
0
2016
2017
2018
2019
OLD
2019
NEW
2020
1 The term “employee” has been redefined with effect from the reporting year 2020 (for definition,
Glossary). For the period 2018 and earlier, the percentage of employees no longer covered
see
by the new definition is between 7.5 % and 8.0 %.
2 Of whom 35.4 % are tariff-bound production employees of the BMW Group.
3 Of whom 35.7 % are tariff-bound production employees of the BMW Group.
4 Of whom 35.3 % are tariff-bound production employees of the BMW Group.
5 Of whom 36.7 % are tariff-bound production employees of the BMW Group.
6 Of whom 38.2 % are tariff-bound production employees of the BMW Group.
7 Of whom 37.9 % are tariff-bound production employees of the BMW Group.
GRI 102-7
BMW GroupReport 2020
353
2020
100
84
100
100
63
0
100
Other Information
Further GRI Information
SHARE OF EMPLOYEES PER COUNTRY WITH PRODUC-
TION LOCATION(S)
SHARE OF EMPLOYEES REPRESENTED BY A TRADE
UNION OR FALLING UNDER COLLECTIVE AGREEMENTS
in %
Germany 1
UK
China (plant)
Austria 1
South Africa
USA (no collective agreements exist)
Mexico 1
1 Excluding executives and contractors.
GRI 102-41
866 Brazil
of which fixed-term 24
2,911 Mexico
of which fixed-term 1
7,301 Other countries
of which fixed-term 370
81,367 Germany
of which fixed-term 799
ALTERNATIVE WAYS OF WORKING AT BMW AG ¹
2016
100
85
100
100
58
0
–
2017
100
86
100
100
53
0
–
2018
100
85
100
100
62
0
–
2019
100
85
100
100
59
0
100
Number of employees
China 2,110
of which fixed-term
809
Thailand 566
of which fixed-term 45
India 591
of which fixed-term
20
South Africa 2,878
of which fixed-term
652
Austria 3,618
of which fixed-term 67
USA 11,924
of which fixed-term 0
UK 6,594
of which fixed-term 105
A good two-thirds the BMW Group workforce are employed in Germany,
followed by the USA with 9.9 % and the UK with 5.5 %.
GRI 102-8
Number of employees
Part-time workers 2
in % of total number of employees
2016
2017
2018
old 2019
new 2019
2020
4,294
5.0
4,572
5.2
5,000
5.6
5,630
6.4
5,440
6.6
5,568
7.0
Teleworking positions 3
28,088
31,754
34,339
36,066
36,208
43,309
in % of total number of employees
Number of employees who use “Vollzeit Select”
in % of total number of employees 4
Sabbaticals
in % of total number of employees
Parental leave
in % of total number of employees
59.4
3,998
5.1
598
0.7
3,028
3.5
63.3
4,690
5.3
567
0.6
3,389
3.9
66.1
5,508
6.1
648
0.7
3,675
4.1
69.4
5,500
6.2
764
0.9
4,096
4.6
70.8
5,474
6.6
764
0.9
4,082
4.9
87.2
4,747
6.0
653
0.8
4,158
5.2
1 The term “employee” has been redefined with effect from the reporting year 2020 (for definition, see
Glossary). For the period 2018 and earlier, the percentage of employees no longer covered by
the new definition is between 7.5 % and 8.0 %.
2 Of which 3,608 were female (65 %). For systemic reasons, this number is only calculated for BMW AG.
3 Only workers in administrative positions who engaged in teleworking.
4 Statistical population not including apprentices, interns, thesis students working at the company and doctoral candidates.
GRI 102-8, 401-3
BMW GroupReport 2020
Other Information
Further GRI Information
354
AVERAGE TRAINING HOURS AT THE BMW AG ACADEMY,
BY EMPLOYEE CATEGORY
SHARE OF WOMEN IN THE WORKFORCE BY COUNTRY
WITH PRODUCTION SITE(S) ¹
Employee category
2018
2019
2020
in %
Non-tariff employees
“Meister”
(master craftsmen)
Tariff
GRI 404-1
22.7
17.7
11.9
16.7
14.1
10.6
14.1
21.1
7.1
TOTAL NUMBER OF EMPLOYEES LEAVING BMW AG,
BY REASON FOR LEAVING ¹
Number
Total
Part-time retirement, retirement, death
Voluntarily left company
(termination or suspension of employment contract by employee)
Dismissed by employer
2016
2017
2018
2019
2020
2,067
1,199
809
59
2,077
1,207
809
61
2,247
1,314
873
60
2,794
1,700
1,029
65
4,535
1,884
2,601 2
50
1 Figures refer to employees with permanent contracts.
2 Increase mainly due to a set of personnel measures. For further explanations, see
Long-term Employee Development and Employer Attractiveness.
GRI 401-1
16.4 Germany
16.6 UK
24.9 USA
15.8 Austria
22.1 South Africa
8.0 India
32.0 Thailand
50.3 China
19.4 Brazil
30.0 Mexico
35.7 Other countries
0
25
50
1 For the purposes of calculating the total number of employees in the BMW Group, the term "employee" has
been redefined with effect from the reporting year 2020 (for definition, see
Glossary).
GRI 405-1
BMW GroupReport 2020
Other Information
Further GRI Information
355
SHARE OF LOCAL EMPLOYEES IN MANAGEMENT
POSITIONS AT MAJOR COMPANY LOCATIONS ¹
SHARE OF EMPLOYEES WITH SEVERE DISABILITIES
AT BMW AG ¹
in %
Germany
UK
USA
Austria
South Africa
India
Brazil
China 2
Thailand
Mexico 3
2016
2017
2018
2019
2020
in %
99.3
87.5
89.4
84.8
85.4
66.7
67.6
65.8
65.6
–
99.4
86.3
87.7
82.8
83.0
70.0
76.1
76.5
56.8
–
99.5
86.9
88.3
85.6
82.8
74.4
77.6
76.7
56.8
–
99.7
87.5
87.4
82.3
82.7
82.1
78.2
73.7
57.1
48.4
99.7
89.8
89.1
78.7
85.9
68.4
84,9
78.8
57.8
62.9
1 “Local” refers to managers with local contracts. People deployed to work at the location who do not have a local employment contract are not included. These are reflected in the difference to 100 in each case.
2 Including employees of the joint venture BMW Brilliance Automotive Ltd., Shenyang, which is not consolidated in the BMW Group.
3 Start of production 06 / 2019.
GRI 405-1
6.4
6.3
6.4
6.5
6.6
8.0
6.0
4.0
2016
2017
2018
2019
2020
1 The share of employees with severe disabilities is based on the statutory requirements in accordance with
the German Social Code (SGB IX). In addition, the BMW Group awarded contracts amounting to around
€ 25 million (2019: € 35.5 million) to workshops for the severely disabled in Germany in 2020, of which
around € 7 million (2019: € 8.5 million) can be written off in accordance with the compensatory levy act.
The significant year-on-year decline in orders placed with workshops for the severely disabled was mainly
due to corona virus-related restrictions imposed on workshops, which also results in a reduction of the off-
settable portion of the disabled persons levy.
MAIN ACCIDENT FACTORS ¹
in %
Other 8.3
Transport 9.3
Cleaning 1.6
Testing 3.6
Secondary
activities 9.6
Assembly / dismantling 17.4
7.2 Processing
3.9 Driving
26.4 Walking
12.7 Handling parts
1 The accident severity rate in the reporting year was 53.4 lost days (due to occupational accidents)
per 1 million hours worked (2019: 78.3).
GRI 403-9
BMW GroupReport 2020
Other Information
Further GRI Information
356
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEMS AT PRODUCTION LOCATIONS
Production plant
BMW GROUP PLANTS
Araquari / BR
Berlin / DE
Chennai / IN
Dingolfing / DE
Eisenach / DE
Goodwood / UK
Hams Hall / UK
Landshut / DE
Leipzig / DE
Manaus / BR
Munich / DE
Oxford / UK
Rayong / TH
Regensburg / DE
Rosslyn / ZA
San Luis Potosí / MX
Spartanburg / US
Steyr / AT
Swindon / UK
Wackersdorf / DE
ASSEMBLY PLANTS
Jakarta / ID
Cairo / EG
Kaliningrad / RU
Kulim / MY
Management system
Most recent year of certification
ISO 45001
OHSAS 18001
ISO 45001
OHRIS
OHSAS 18001
ISO 45001
ISO 45001
OHRIS
OHRIS
National standard2
OHRIS
ISO 45001
OHSAS 18001
OHRIS
ISO 45001
ISO 45001
ISO 45001
ISO 45001
ISO 45001
OHRIS
OHSAS 18001
OHSAS 18001
National standard2
OHSAS 18001
December 2019
December 20171
November 2020
May 2018
September 2018
August 2020
November 2020
October 2018
March 2019
Implemented
March 2018
November 2020
January 2019
August 2018
December 2020
June 2020
April 2019
April 2019
October 2020
August 2018
May 20171
October 2020
Implemented
December 2018
BMW BRILLIANCE AUTOMOTIVE HOLDINGS LTD. JOINT VENTURE
BMW Brilliance Automotive Ltd., Shenyang / CN (joint venture) 3
ISO 45001
December 2020
CONTRACT PRODUCTION
Loncin Motor Co., Chongqing / CN
Magna Steyr Fahrzeugtechnik, Graz / AT
TVS Motor Company, Hosur / IN
VDL Nedcar, Born / NL
1 Three-year validity period extended until March 2021 due to coronavirus pandemic.
2 Compliance with legal requirements.
3 The joint venture comprises three locations.
GRI 403-8
ISO 45001
OHSAS 18001
ISO 45001
National standard2
January 2021
August 2018
January 2020
Implemented
BMW GroupReport 2020
Other Information
Reporting Concept
REPORTING
CONCEPT
The BMW Group Report 2020 is based on the follow-
ing reporting and accounting standards:
SUSTAINABILITY DISCLOSURES
The NFS contained in the Combined Management
Report, the chapter “Dialogue with Stakeholders”, the
supplementary sustainability-related disclosures in
the chapter Additional GRI Information and the GRI
Content Index have been prepared in accordance with
the standards of the Global Reporting Initiative (GRI)
(comprehensive option).
MANAGEMENT REPORT
UN GLOBAL COMPACT – REPORT ON PROGRESS
German Commercial Code (HGB); German Ac-
counting Standards (DRS); Guidelines on Alternative
Performance Measures of the European Securities and
Markets Authority (ESMA)
Combined Non-Financial Statement (NFS) at Group
and Company level in accordance with § 289 b and § 315 b
HGB
In 2001, the BMW Group committed to implement-
ing the principles of the United Nations Global Compact
and provides information in this report on the progress
made towards achieving that aim. References to the
Global Compact principles have been integrated in the
GRI Content Index.
TCFD DISCLOSURES
GROUP FINANCIAL STATEMENTS OF BMW AG
The Group Financial Statements of Bayerische
Motoren Werke Aktiengesellschaft for the year ended
31 December 2020 have been prepared in accordance
with International Financial Reporting Standards (IFRS),
as endorsed by the European Union (EU), and the
supplementary requirements of § 315 e of the German
Commercial Code (HGB).
The BMW Group follows the recommendations
of the Task Force on Climate-related Financial Disclo-
sures (TCFD) with a view to providing information on
climate-related risks and opportunities as transparently
as possible within the framework of corporate financial
reporting. The BMW Group reports on these issues both
in its own integrated report as well as through its CDP
2020 CDP questionnaire is availa-
scoring disclosures. The
TCFD Index in the
ble on the BMW Group website. The
357
appendix to this report provides a compact overview of
the key statements in the four TCFD core elements and
their location in the BMW Group Report and the CDP
questionnaire.
MAIN TOPICS ADDRESSED IN THE NFS
The main topics addressed in the NFS to ensure com-
pliance with § 289 c and § 315 c HGB were determined
partly on the basis of the results of the materiality anal-
ysis updated in 2018 and in line the requirements of
the Global Reporting Initiative (GRI) and partly on the
basis of the BMW Group’s own long-term sustainability
goals. For these purposes, consideration was given to the
BMW Group’s own business operations, products and
services on the one hand and its business relationships
(e. g. along the supply chain) on the other. Topics of par-
ticular relevance are presented in the combined, separate
non-financial statement.
The order of topics covered is aligned with the long-
term sustainability goals of the BMW Group and does
not represent any particular weighting of the topics. In
accordance with the statutory materiality requirements,
information has been in each case with a view to pro-
viding an understanding of the BMW Group’s business
performance, results of operations and financial position,
while also showing the impact of business activities on
the non-financial aspects specified in the legislation.
BMW GroupReport 2020
Other Information
Reporting Concept
358
EXTERNAL AUDIT
PUBLICATION AND SCOPE
The entire report of BMW AG, comprising the Com-
bined Management Report, the Group Financial State-
ments, the disclosures on corporate governance and the
additional GRI information, has been subject to an annu-
al independent audit by PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft (“PwC” or “Auditor”).
The external audit serves to underpin the reliability and
trustworthiness of the information for the public.
PwC has audited the Group Financial Statements and
the Combined Management Report for the year ended
31 December 2020 and issued an unqualified audit opin-
ion thereon.
Those parts of the Combined Management Report,
which relate primarily to the NFS pursuant to §§ 289 b
and 315b HGB as well as the chapter “Dialogue with
Stakeholders” and the section ”Additional GRI Informa-
tion” were subjected to a limited assurance engagement
and are marked with the symbol
. In addition, in-
dividual parts of the NFS were subjected to a reasonable
assurance engagement. The external audit supports the
Supervisory Board of BMW AG in the fulfilment of its
auditing duties.
...
The report is published annually in German and
English on the BMW Group website. The
GRI Content
Index is also available on the website as a separate PDF
document. The reporting period covers the financial
year from 1 January to 31 December 2020. The state-
ments made in the report relate to the BMW Group
reporting entity. Any deviations from this are marked
accordingly. Nothing significant has changed in the
reporting period with regard to the organisation of the
BMW Group. The global supplier network is subject to
continuous change. The 2021 report will be published
in spring 2022.
GRI 102-10, 102-45, 102-50, 102-51, 102-52,
102-55
FORWARD-LOOKING STATEMENTS
The report contains various forward-looking state-
ments about future developments which are based on
the current status of the BMW Group’s assumptions
and forecasts. They are therefore subject to a variety of
predictable and unpredictable risks, uncertainties and
other factors, so that the actual outcome, including the
BMW Group’s net assets, financial position and results of
operations, its development or performance could differ
considerably. The BMW Group makes no commitment
to update such forward- looking statements or to adapt
them to future events or developments.
BMW GroupReport 2020
Other Information
TCFD-Index
TCFD-INDEX
359
TCFD Key elements
Key elements of summarised disclosures / Key messages
GOVERNANCE
A. Responsibility of the Board of Management for climate-related risks and opportunities
The highest level of direct responsibility for climate change issues is the Board of Management, which determines the Group’s strategic course with regard to sustain-
ability issues, including addressing climate change. Every proposal considered by the Board of Management must be assessed from a sustainability perspective.
The new substance targets for 2030 developed and adopted in 2020 that focus on decarbonisation have been incorporated into the BMW Group’s target controlling
system and will be taken into account in the compensation of the Board of Management and top management going forward.
B. The role of management in assessing and managing climate-related risks and opportunities
All Board of Management members bear responsibility for climate change-related issues and ensure that the Group’s strategy with regard to sustainability and climate
change is implemented as a systematic driver in all Board areas of responsibility. One focus of the Group’s strategy in the 2020 reporting year was the topic of addressing
climate-related risks and opportunities. The impacts of this topic were assessed, internal structures for decision-making and controlling were established with the partici-
pation of top management, and project organisations were set up in the relevant Board areas of responsibility.
STRATEGY
Sustainability is the basic pattern that shapes the BMW Group’s strategy. From beginning to end, activities and plans should comprehensively be examined with regard to
their economic, ecological and social impacts and the corresponding decisions taken based on an integrated approach. The BMW Group is firmly convinced that the fight
against climate change and the responsible use of resources will determine the future of our society – and thus also that of the BMW Group. Particularly as a premium
manufacturer, the BMW Group aspires to lead the way in promoting sustainability. In addition to the Group’s activities to reduce greenhouse gas emissions (mitigation),
addressing the consequences of climate change (adaptation) is also being dealt with and assessed within the framework of the “Adaptation to Climate Change” strategy
project.
A. Climate-related risks and opportunities
As a globally leading provider of premium automobiles, motorcycles, mobility services and financial services, the BMW Group is exposed to an array of uncertainties and
changes. In order to ensure growth, profitability, efficiency and continued sustainability going forward, the BMW Group needs to take well calculated risks and make full use
of any opportunities that present themselves.
In the context of its “Adaptation to Climate Change” strategy project, the BMW Group is preparing for a broad range of possible consequences and plans to systematically
integrate reporting on the opportunities and risks associated with climate change in its Group Report.
Reference to chapters in the BMW Group Report
2020 and the CDP questionnaire for 2020
BMW Group Report 2020:
Strategy, Goals and Management
System
Corporate Governance
CDP questionnaire 2020:
A: C1.1b
B: C1.2, C1.2a
CDP questionnaire 2020:
Strategy, Goals and Management
System
Risks and Opportunities
Products and Services
Production, Purchasing and
Supplier Network
CDP questionnaire 2020:
A: C2.1, C2.3, C2.3a, C2.4, C2.4a
BMW GroupReport 2020
Other Information
TCFD-Index
360
TCFD Key elements
Key elements of summarised disclosures / Key messages
Reference to chapters in the BMW Group Report
2020 and the CDP questionnaire for 2020
STRATEGY
Significant opportunities
— The BMW Group intends to press ahead with the systematic electrification of all its brands and model series. By 2023, it plans to have 25 electrified vehicles on the road.
Achieving this aim will provide the Group with an attractive portfolio to respond to the growing customer demand for battery-electric and plug-in hybrid vehicles.
— Smart, scalable vehicle architectures that can be equipped with all available types of drivetrain systems are intended to give the Group the flexibility to successfully
implement the shift towards climate neutrality that is both called for politically and aspired to socially.
— The BMW Group’s production system is capable of manufacturing both conventional internal combustion and electrically powered vehicles on a single line, enabling it
to respond flexibly to changing customer requirements for various drivetrain systems.
— (The BMW Group is convinced that the ability to produce electric drivetrains, batteries and prototypes for battery cells in-house creates a decisive competitive advan-
tage that enables it...)
The BMW Group is convinced that the ability to produce electric drivetrains, batteries and prototypes for battery cells in-house gives it a decisive competitive edge that
enables it to safeguard its know-how in new technologies, gain crucial system expertise and leverage cost advantages.
— Contracts have been concluded with various battery cell suppliers in order to safeguard the Group’s electrification strategy. Volume flexibility has been written into the
contracts to ensure additional latitude in the supply of battery cells.
— The BMW Group has already contractually agreed with its cell manufacturers that only green electricity will be used to produce the fifth generation of battery cells.
From the BMW Group’s point of view, establishing the carbon footprint as an award criterion in the supply chain is a key competitive advantage in efficiently reducing
carbon emissions in upstream processes.
— The BMW Group is boosting efficiency and cutting costs by switching to lower-carbon processes and technologies in its own production facilities.
— By generating its own electricity from renewable sources, the BMW Group is reducing not only its carbon footprint, but also its dependence on external sources.
— The BMW Group is adapting to the expected consequences of climate change by conducting an assessment and deriving measures required to mitigate the physical
risks for BMW-relevant assets (e. g. properties, suppliers, logistics).
Significant risks
— As climate change progresses, natural disasters are likely to occur on an increasing scale and impact the BMW Group in a variety of ways, with a negative influence on
economic growth in the affected regions, among other factors. Any ensuing drop in consumer purchasing power due to a loss of income and the threat of unemploy-
ment would, in turn, have a negative earnings impact for the BMW Group.
— The short-term introduction of more stringent legislation and regulations in the BMW Group’s main markets (EU, USA, China), particularly regarding carbon emissions
regulations, could have an effect on the Group’s range of products and services.
— The scale of acute and chronic physical risks (e. g. floods, storms, droughts) to BMW-relevant assets (e. g. properties, suppliers, logistics) could rise.
— There could a greater risk of interruptions in the supply chain or the inability of individual suppliers to deliver, particularly due to breaches of sustainability or quality
standards and the danger of natural disasters.
— The risk of bottlenecks in the availability of raw materials, particularly those required to manufacture battery cells could increase. Moreover, if commodity price risks
materialise, they could have an impact on earnings.
— The rising price required to be paid for CO2 emissions in energy-intensive supply chains could result in higher purchasing prices.
— More stringent regulatory requirements for issuers could make the BMW Group less attractive as a sustainable investment.
BMW GroupReport 2020
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361
TCFD Key elements
Key elements of summarised disclosures / Key messages
STRATEGY
B. The impact of climate-related risks and opportunities on the Group's business activities and its strategic and financial corporate planning
The necessity to contain climate change has a major impact on both short- and long-term decision-making at the BMW Group. In the year under report, the BMW Group
assessed its carbon emissions over the entire life cycle of its vehicles, using the internationally recognised method devised by the Science Based Targets Initiative (SBTI).
Decarbonisation targets for the supply chain, production and use phase of its vehicles were developed for the period up to 2030, approved by the Board of Management
and registered with the SBTI. From the BMW Group’s perspective, these science-based decarbonisation targets are intended to provide a clearly defined pathway to sus-
tainable growth.
Reference to chapters in the BMW Group Report
2020 and the CDP questionnaire for 2020
CDP questionnaire 2020:
B: C2.3, C2.3a, C2.4a, C3.1, C3.1b,
C3.1d as well as examples of strategic
decisions
C: C3.1a, C3.1d well as assessment of
strategy resilience
BMW Group Report 2020:
Risks and Opportunities
CDP questionnaire 2020:
A: C2.2, C2.2a
B: C2.2a
C: C2.2
RISK
MANAGEMENTT
C. Resilience of the BMW Group's strategy
The BMW Group conducts stress tests using qualitative and quantitative sensitivity analyses. Product planning, sales volumes and R&D investments all take the goals of
the Paris Climate Agreement into account.
A. Group processes for identifying and assessing climate-related risks
Risk management is organised as a decentralised, Group-wide network and controlled via a centralised risk management function. Every BMW Group divisional area of
responsibility is represented by Network Representatives. Any significant risks reported from within the network, including sustainability- and climate-related risks, are
presented for review to the Risk Management Steering Committee, which is chaired by Group Controlling. After review, any risks regarded as significant are reported to the
Board of Management and the Supervisory Board’s Audit Committee. In addition, topics that represent opportunities or risks for the BMW Group’s business in the long
term are identified by means of an environmental radar that continuously monitors external changes.
Apart from reducing greenhouse gas emissions (mitigation), the topic of adaptation (adjustment to the consequences of climate change) was also addressed in line with
Group strategy. As part of the strategy project set up for this purpose, key links in the BMW Group’s value chain were singled out (e. g. properties, suppliers, logistics,
products) for which the consequences of climate change are likely to be particularly relevant and for which adaptation measures will need to be taken in order to mitigate
medium-term climatic changes.
Various annual time slices as well as climate scenarios are used to determine the risks. Based on the IPCC (Intergovernmental Panel on Climate Change), three scenarios
were defined in order to present and assess climate change-related risks. A low-emission scenario takes a < 2°C pathway into account. Accordingly, all countries world-
wide agree to combat climate change and implement rigorous climate protection policies. On the one hand, this scenario means greater transition-related risks for the
BMW Group, for example due to stricter carbon emissions regulations in its main markets, but on the other hand it limits physical risks. The second climate scenario cho-
sen by the BMW Group outlines a “medium” emissions scenario in which moderate emissions levels are assumed. Limited climate protection will lead to a medium level of
transitional and physical risk. Another scenario portrays how the world will look if little or nothing is undertaken to protect the climate. This scenario would mean the high-
est level of emissions and therefore the highest level of physical risk.
B. Group processes for managing climate-related risks
The efficient management of opportunities and risks is key to responding appropriately to changes that occur in political, economic, technical or legal conditions. The
BMW Group has put a comprehensive risk management system in place to manage these risks in a structured manner as they arise. The aim of the risk management sys-
tem is to identify, assess and actively manage any risks that could threaten the attainment of the Group’s corporate targets. Within that process, any individual and cumula-
tive risks that pose a threat to the BMW Group’s success are monitored and managed. As part of its “Adaptation to Climate Change” project, the BMW Group is discussing
the integration of sustainability and, above all, climate-related risks in Group-wide risk management processes.
Risks are classified both according to their potential impact on earnings (worst-case scenario) and according to the risk amount (average earnings impact, taking into
account the probability of occurrence).
As part of the existing natural hazard assessment process for properties and suppliers, current climate change-related hazards are also taken into account and assessed
accordingly. The consideration of future medium-term physical risks is being investigated within the context of a current strategy project.
C. Integrating processes for identifying, assessing and managing climate-related risks within the Group's general risk management system
Alongside comprehensive risk management, sustainability constitutes a core strategic principle of the BMW Group. Risks resulting from sustainability aspects that could
have an impact on the BMW Group are generally identified via the Group-wide risk management network.
When analysing sustainability-related opportunities and risks, the physical risks associated with climate change (e. g. disruption of supply chains due to natural hazards)
and transition-related risks (such as the ability to meet emissions requirements) are also assessed.
BMW GroupReport 2020
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TCFD-Index
362
TCFD Key elements
Key elements of summarised disclosures / Key messages
KEY SUSTAINABILITY
INDICATORS AND
TARGETS
A. Key sustainability indicators the Group uses to assess climate-related risks and opportunities
The BMW Group Report provides an overview of key sustainability indicators that the BMW Group uses to measure, monitor and manage its sustainability targets. The key sus-
tainability indicators here are carbon emissions per vehicle produced and carbon emissions (g CO2 / km) generated by the new vehicle fleet (EU including Norway and Iceland).
B. Disclosure of Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions
The BMW Group discloses its Scope 1, Scope 2 and Scope 3 emissions within the framework of its carbon footprint reporting process.
C. Targets according to which the Group addresses climate-related opportunities and risks
The BMW Group has set itself the following carbon reduction targets per vehicle produced throughout their life cycle for 2030 (base year 2019): – 20 % supply chain;
– 80 % production; – 40 % use phase.
Reference to chapters in the BMW Group Report
2020 and the CDP questionnaire for 2020
BMW Group Report 2020:
Products and Services
Production, Purchasing and
Supplier Network
Carbon footprint of the BMW Group
CDP questionnaire 2020:
A: C4.2, C9.1
B: C6.1, C6.3, C6.5
C: C4.1, C4.1a, C4.1b, C4.2
BMW GroupReport 2020
363
Other Information
NFE-Index
NFE-INDEX
Mandatory disclosure pursuant to section 289 c – e HGB
Chapter in BMW Group Report 2020
Business model
Organisation and Business Model
Integration of top management
Strategy, Goals and Management System
Risks
Report on Risks and Opportunities
Connection to figures in financial statements
Environmental matters
Employee matters
Social matters
Respect for human rights
About this Report
Compliance and Human Rights
Long-term Employee Development and Employer Attractiveness
Products and Services
Production, Purchasing and Supplier Network
Long-term Employee Development and Employer Attractiveness
Health and Performance
Employee Diversity
Design and Product Safety
Corporate Citizenship
Compliance and Human Rights
Purchasing and Supplier Network
Combatting corruption and bribery
Compliance and Human Rights
BMW GroupReport 2020
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BMW Group Fuel Consumption and CO₂ Emissions Information
364
BMW GROUP FUEL CONSUMPTION AND CO2 EMISSIONS INFORMATION
As of February 2021
Model
BMW
BMW 330e Sedan
BMW 330e xDrive Sedan
BMW M3 Competition
BMW M3
BMW 330e Touring
BMW 330e xDrive Touring
BMW M4 Competition
BMW M4
BMW 530e Sedan
BMW 530e xDrive Sedan
BMW 545e xDrive Sedan
BMW 530e Touring
BMW 530e xDrive Touring
BMW M8
BMW X1 xDrive25e
BMW X2 xDrive25e
BMW X3 xDrive30e
BMW X5 xDrive45e
Figures according to NEDC
Figures according to NEDC
Fuel consumption
in l / 100 km
(combined / weighted
combined) max / min
CO₂ emissions
in g / km
( combined / weighted
combined) max / min
Electricity power
consumption
in kWh / 100 km
(combined / weighted
combined) max / min
Model
MINI
Fuel consumption
in l / 100 km
(combined / weighted
combined) max / min
CO₂ emissions
in g / km
(combined / weighted
combined) max / min
Electricity power
consumption
in kWh / 100 km
(combined / weighted
combined) max / min
1.8 – 1.5
2.0 – 1.7
10.2
10.8
1.9 – 1.7
2.2 – 1.9
10.2
10.8
1.9 – 1.7
2.1 – 2.0
2.3 – 2.2
2.0 – 1.8
2.4 – 2.2
11.3
1.9
1.9
2.4 – 2.1
2.1 – 1.6
41 – 35
45 – 40
234
248
44 – 38
49 – 43
234
248
43 – 39
49 – 46
53 – 49
46 – 42
54 – 50
260
43
43
54 – 48
47 – 37
14.8 – 13.9
MINI Cooper SE
15.9 – 15.2
MINI Cooper SE Countryman ALL4
–
1.7
–
40
16.8 – 14.8
14 – 13.1
MINI John Cooper Works GP
7.4 – 6.0
169 – 137
ROLLS-ROYCE
Rolls-Royce Phantom incl. EWB
Rolls-Royce Dawn
Rolls-Royce Cullinan
Rolls-Royce Wraith
Rolls-Royce Ghost incl. EWB
Rolls-Royce Dawn Black Badge
Rolls-Royce Cullinan Black Badge
Rolls-Royce Wraith Black Badge
Rolls-Royce Ghost Black Badge
14.5 – 14.4
16.3 – 16.1
15.0
330 – 328
372 – 367
341
16.0 – 15.9
365 – 363
15.0
16.3
15.1
16.1
16.2
343
371
343
367
370
–
–
15.6 – 14.5
15.8 – 14.7
–
–
14.9 – 13.8
16.5 – 15.9
16.3 – 15.8
16.1 – 15.4
16.7 – 16.1
–
13.8
13.7
16.9 – 16.3
25.2 – 23.5
–
–
17.8 – 17.5
13.1
14.6 – 14.0
< 21*
BMW X5 M and X5 M Competition
BMW X6 M and X6 M Competition
13.0 – 12.8
296 – 291
13.1
301
BMW iX3
BMW i3 120 Ah
BMW i3s 120 Ah
BMW iX*
* Figures are provisional and based on forecasts based on WLTP testcycle.
–
–
–
–
–
–
–
–
BMW GroupReport 2020
Other Information
BMW Group Ten-year Comparison
BMW GROUP TEN-YEAR
COMPARISON
365
DELIVERIES
Automobiles 2
Motorcycles 3
PRODUCTION VOLUME
Automobiles
Motorcycles 3
FINANCIAL SERVICES
Contract portfolio
Business volume
(based on balance sheet carrying amounts)
INCOME STATEMENT
Revenues
Gross profit margin
Earnings before financial result
Earnings before tax
Return on sales (earnings before tax / revenues)
Income taxes
Effective tax rate
Net profit for the year
2020
2019
2018 1
2017
2016
2015
2014
2013
2012
2011
units
units
units
units
2,325,179
2,537,504
2,486,149
2,465,021
2,349,962
2,259,733
2,117,965
1,963,798
1,845,186
1,668,982
169,272
175,162
165,566
164,153
145,032
136,963
123,495
115,215
106,358
104,286
2,255,637
2,564,025
2,541,534
2,505,741
2,359,756
2,279,503
2,165,566
2,006,366
1,861,826
1,738,160
168,104
187,116
162,687
185,682
145,555
151,004
133,615
110,127
113,811
110,360
contracts
5,981,928
5,973,682
5,708,032
5,380,785
5,114,906
4,718,970
4,359,572
4,130,002
3,846,364
3,592,093
€ million
133,093
142,834
133,147
124,719
123,394
111,191
96,390
84,347
80,974
75,245
€ million
98,990
104,210
96,855
98,282
94,163
92,175
80,401
76,059
76,848
68,821
%
€ million
€ million
%
€ million
%
€ million
13.7
4,830
5,222
5.3
1,365
26.1
3,857
17.3
7,411
7,118
6.8
2,140
30.1
5,022
19.0
8,933
9,627
9.9
2,530
26.3
7,064
20.3
9,899
10,675
10.9
2,000
18.7
8,675
19.9
9,386
9,665
10.3
2,755
28.5
6,910
19.7
9,593
9,224
10.0
2,828
30.7
6,396
21.2
9,118
8,707
10.8
2,890
33.2
5,817
20.1
7,978
7,893
10.4
2,564
32.5
5,329
20.2
8,275
7,803
10.2
2,692
34.5
5,111
21.1
8,018
7,383
10.7
2,476
33.5
4,907
BMW GroupReport 2020
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BMW Group Ten-year Comparison
366
BALANCE SHEET
Non-current assets
Current assets
Capital expenditure
(excluding capitalised development costs)
Capital expenditure ratio
(capital expenditure / revenues)
Equity
Equity ratio
Non-current provisions and liabilities
Current provisions and liabilities
Balance sheet total
CASH FLOW STATEMENT
Cash and cash equivalents at balance sheet date
Free cash flow Automotive segment
PERSONNEL
Workforce at year-end 4
Personnel cost per employee 4
DIVIDEND
Dividend total
2020
2019
2018 1
2017
2016
2015
2014
2013
2012
2011
€ million
134,851
137,404
124,202
121,964
121,671
110,343
€ million
81,807
90,630
84,736
73,542
66,864
61,831
97,959
56,844
86,193
52,184
81,305
50,530
74,425
49,004
€ million
3,922
5,650
5,029
4,688
3,731
3,826
4,601
4,967
4,151
2,720
%
4.0
5.4
5.2
4.8
4.0
4.2
5.7
6.5
5.4
4.0
€ million
61,520
59,907
57,829
54,107
47,363
42,764
37,437
35,600
30,606
27,103
%
€ million
€ million
28.4
83,175
71,963
26.3
85,502
82,625
27.7
79,698
71,411
27.7
69,634
71,765
25.1
73,183
67,989
24.8
63,819
65,591
24.2
58,288
59,078
25.7
51,643
51,134
23.2
52,834
48,395
22.0
49,113
47,213
€ million
216,658
228,034
208,938
195,506
188,535
172,174
154,803
138,377
131,835
123,429
€ million
€ million
13,537
3,395
12,036
2,567
10,979
2,713
9,039
4,459
7,880
5,792
6,122
5,404
7,688
3,481
7,671
3,003
8,370
3,809
7,776
3,166
120,726
126,016
134,682
129,932
124,729
122,244
116,324
110,351
105,876
100,306
€
99,647
98,901
101,178
100,760
99,575
97,136
92,337
89,869
89,161
84,887
€ million
1,2535
1,646
2,303
2,630
2,300
2,102
1,904
1,707
1,640
1,508
Dividend per share of common stock / preferred stock
€
1.90 5 / 1.925
2.50 / 2.52
3.50 / 3.52
4.00 / 4.02
3.50 / 3.52
3.20 / 3.22
2.90 / 2.92
2.60 / 2.62
2.50 / 2.52
2.30 / 2.32
1 The 2018 figures were adjusted due to the change in accounting policy in conjunction with the adoption of IFRS 16 (see Annual Report 2019, note 6 to the Group Financial Statements).
In addition, prior year figures were adjusted due to changes in the presentation of selected items that are of minor importance overall.
2 Retail vehicle delivery data presented for 2020 is not directly comparable to such data presented for previous years. For further information on retail vehicle delivery data, please see
3 Excluding Husqvarna, deliveries up to 2013: 59,776 units; production up to 2013: 59,426 units.
4 Since the reporting year 2020, a new definition for workforce size has been applied (see
Glossary). To enable better comparability, the value for 2019 was adjusted accordingly (2019 before adjustment: 133,778 employees).
Comparison of Forecast with Actual Outcomes.
For the timeframe including and prior to 2018, the share of the employees that are no longer reflected in reporting is about 7.5-8 %.
5 Proposal by management.
BMW GroupReport 2020
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Other Information
Financial Calendar
FINANCIAL CALENDAR
2021
2022
17 March 2021
BMW Group Annual Conference.
Media Day
18 March 2021
BMW Group Annual Conference.
Analyst and Investor Day
7 May 2021
Quarterly Statement to 31 March 2021
16 March 2022
BMW Group Report 2021
16 March 2022
BMW Group Annual Conference.
Media Day
17 March 2022
BMW Group Annual Conference.
Analyst and Investor Day
12 May 2021
Annual General Meeting
5 May 2022
Quarterly Statement to 31 March 2022
3 August 2021
Half-Year Report to 30 June 2021
11 May 2022
Annual General Meeting
3 November 2021
Quarterly Statement to 30 September 2021
3 August 2022
Half-Year Report to 30 June 2022
3 November 2022
Quarterly Statement to 30 September 2022
BMW GroupReport 2020
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Contacts
CONTACTS
368
BUSINESS AND FINANCE PRESS
THE BMW GROUP ON THE INTERNET
PUBLISHED BY
Telephone + 49 89 382-2 45 44
+ 49 89 382-2 41 18
Further information about the BMW Group is
available online at:
Fax
+ 49 89 382-2 44 18
www.bmwgroup.com
E-mail
presse@bmwgroup.com
Investor Relations information is available directly at:
Bayerische Motoren Werke
Aktiengesellschaft
80788 Munich
Germany
Telephone + 49 89 382-0
INVESTOR RELATIONS
Information about the various BMW Group brands
www.bmwgroup.com/ir
Telephone + 49 89 382-2 53 87
Fax
+ 49 89 382-1 46 61
is available at:
www.bmw.com
www.mini.com
E-mail
ir@bmwgroup.com
www.rolls-roycemotorcars.com
www.bmw-motorrad.com
BMW GroupReport 2020