Quarterly Report • Aug 1, 2019
Quarterly Report
Open in ViewerOpens in native device viewer
30 June 2019
Page 4 BMW Group in Figures
Page 59 Contacts
Page 4 BMW Group in Figures
1
BMW Group at a Glance
BMW Group in Figures
• 01
| 2nd quarter 2019 | 2nd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| Group | ||||
| Profit before tax2 | € million | 2,053 | 2,866 | – 28.4 |
| Automotive segment | ||||
| Deliveries3 | units | 647,504 | 637,878 | 1.5 |
| EBIT margin4 | % (change in %pts) | 6.5 | 8.6 | – 2.1 |
| Motorcycles segment | ||||
| Deliveries | units | 54,582 | 51,117 | 6.8 |
| EBIT margin4 | % (change in %pts) | 14.0 | 14.9 | – 0.9 |
1 Supplementary information which was not subject of the audit review.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
3 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,863 units, 2018: 106,944 units).
4 Profit before financial result as percentage of segment revenues.
Further performance figures 1
• 02
| 2nd quarter 2019 | 2nd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| Automotive segment | ||||
| Deliveries | ||||
| BMW2 | units | 556,652 | 541,849 | 2.7 |
| MINI | units | 89,524 | 95,055 | – 5.8 |
| Rolls-Royce | units | 1,328 | 974 | 36.3 |
| Total2 | 647,504 | 637,878 | 1.5 | |
| Production volume | ||||
| Total3 | 622,959 | 652,981 | – 4.6 | |
| Financial Services segment | ||||
| New contracts with retail customers | 501,663 | 480,303 | 4.4 | |
| Free cash flow Automotive segment | € million | 869 | 1,642 | – 47.1 |
| Group revenues4 | € million | 25,715 | 24,993 | 2.9 |
| Automotive | € million | 22,624 | 22,192 | 1.9 |
| Motorcycles | € million | 727 | 658 | 10.5 |
| Financial Services4 | € million | 7,364 | 7,027 | 4.8 |
| Other Entities | € million | 2 | 1 | 100.0 |
| Eliminations4 | € million | – 5,002 | – 4,885 | – 2.4 |
| Group profit before financial result (EBIT)4 | € million | 2,201 | 2,739 | –19.6 |
| Automotive | € million | 1,469 | 1,919 | – 23.4 |
| Motorcycles | € million | 102 | 98 | 4.1 |
| Financial Services4 | € million | 606 | 605 | 0.2 |
| Other Entities | € million | 2 | 7 | – 71.4 |
| Eliminations4 | € million | 22 | 110 | – 80.0 |
| Group profit before tax (EBT)4 | € million | 2,053 | 2,866 | – 28.4 |
| Automotive | € million | 1,483 | 2,062 | – 28.1 |
| Motorcycles | € million | 100 | 96 | 4.2 |
| Financial Services4 | € million | 573 | 603 | – 5.0 |
| Other Entities | € million | – 97 | 8 | – |
| Eliminations4 | € million | – 6 | 97 | – |
| Group income taxes4 | € million | – 573 | – 783 | 26.8 |
| Profit/ loss from continuing operations4 | € million | 1,480 | 2,083 | – 28.9 |
| Profit / loss from discontinued operations | € million | – | – 7 | – |
| Group net profit4 | € million | 1,480 | 2,076 | – 28.7 |
| Earnings per share4, 5 | € | 2.21 / 2.22 | 3.12 / 3.13 | – 29.2 / – 29.1 |
| Group pre-tax return on sales4, 6 | % (change in %pts) | 8.0 | 11.5 | – 3.5 |
1 Supplementary information which was not subject of the audit review.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,863 units, 2018: 106,944 units).
3 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 106,443 units, 2018: 103,703 units).
4 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
5 Common / preferred stock. In computing earnings per share of preferred stock, earnings to cover the additional dividend of €0.02 per share of preferred stock are spread
over the quarters of the corresponding financial year.
6 Group profit before tax as a percentage of Group revenues.
BMW Group at a Glance
in Figures
BMW GROUP IN FIGURES
• 03
| 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % | ||
|---|---|---|---|---|
| Group | ||||
| Profit before tax1 | € million | 2,815 | 6,005 | – 53.1 |
| Automotive segment | ||||
| Deliveries2 | units | 1,252,837 | 1,242,507 | 0.8 |
| EBIT margin3 | % (change in %pts) | 2.8 | 9.2 | – 6.4 |
| Motorcycles segment | ||||
| Deliveries | units | 93,188 | 86,975 | 7.1 |
| EBIT margin3 | % (change in %pts) | 14.5 | 14.8 | – 0.3 |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 265,516 units, 2018: 215,218 units). 3 Profit before financial result as percentage of segment revenues.
Further performance figures
• 04
| 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % | ||
|---|---|---|---|---|
| Automotive segment | ||||
| Deliveries | ||||
| BMW1 | units | 1,075,959 | 1,059,296 | 1.6 |
| MINI | units | 174,344 | 181,430 | – 3.9 |
| Rolls-Royce | units | 2,534 | 1,781 | 42.3 |
| Total1 | 1,252,837 | 1,242,507 | 0.8 | |
| Production volume | ||||
| Total2 | 1,295,001 | 1,316,314 | – 1.6 | |
| Financial Services segment | ||||
| New contracts with retail customers | 971,287 | 932,211 | 4.2 | |
| Free cash flow Automotive segment | € million | 310 | 1,944 | – 84.1 |
| Group revenues3 | € million | 48,177 | 47,658 | 1.1 |
| Automotive | € million | 41,837 | 41,518 | 0.8 |
| Motorcycles | € million | 1,313 | 1,182 | 11.1 |
| Financial Services3 | € million | 14,510 | 13,588 | 6.8 |
| Other Entities | € million | 3 | 3 | – |
| Eliminations3 | € million | – 9,486 | – 8,633 | – 9.9 |
| Group profit before financial result (EBIT)3 | € million | 2,790 | 5,446 | – 48.8 |
| Automotive | € million | 1,159 | 3,800 | – 69.5 |
| Motorcycles | € million | 191 | 175 | 9.1 |
| Financial Services3 | € million | 1,254 | 1,166 | 7.5 |
| Other Entities | € million | 6 | 16 | – 62.5 |
| Eliminations3 | € million | 180 | 289 | – 37.7 |
| Group profit before tax (EBT)3 | € million | 2,815 | 6,005 | – 53.1 |
| Automotive | € million | 1,456 | 4,343 | – 66.5 |
| Motorcycles | € million | 187 | 174 | 7.5 |
| Financial Services3 | € million | 1,200 | 1,156 | 3.8 |
| Other Entities | € million | –155 | 78 | – |
| Eliminations3 | € million | 127 | 254 | – 50.0 |
| Group income taxes3 | € million | – 791 | –1,640 | 51.8 |
| Profit/ loss from continuing operations3 | € million | 2,024 | 4,365 | – 53.6 |
| Profit / loss from discontinued operations | € million | 44 | – 7 | – |
| Group net profit3 | € million | 2,068 | 4,358 | – 52.5 |
| Earnings per share3, 4 | € | 3.06 / 3.07 | 6.56 / 6.57 | – 53.4 / – 53.3 |
| Group pre-tax return on sales3, 5 | % (change in %pts) | 5.8 | 12.6 | – 6.8 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 265,516 units, 2018: 215,218 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 244,834 units, 2018: 210,974 units).
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
4 Common / preferred stock. In computing earnings per share of preferred stock, earnings to cover the additional dividend of €0.02 per share of preferred stock are spread
over the quarters of the corresponding financial year.
5 Group profit before tax as a percentage of Group revenues.
Report on Economic Position General Economic Environment
Increase in automobile deliveries of the BMW Group, bucking market trend
Downturn on international automobile markets
International automobile markets saw a drop in volumes during the first half of 2019, with new registrations down year-on-year for the period from January to June (41.8 million units; – 4.5%). Key automobile markets performed as follows:
| Change in % | |
|---|---|
| Europe | – 3.1 |
| thereof Germany | + 0.5 |
| thereof France | – 2.1 |
| thereof Italy | – 3.8 |
| thereof Spain | – 5.6 |
| thereof United Kingdom (UK) | – 3.4 |
| USA | –1.9 |
| China | – 8.7 |
| Japan | + 0.6 |
| Total | – 4.5 |
Report on Economic Position General Economic Environment
Group Overview
Group Overview
The BMW Group set new records for automobile deliveries, both for a second quarter and for the first six-month period of a year. From April to June, a total of 647,504 1 BMW, MINI and Rolls-Royce brand vehicles were delivered to customers worldwide (2018: 637,878 1 units; + 1.5%). Six-month deliveries of the three brands therefore increased by 0.8% to 1,252,837 2 units (2018: 1,242,507 2 units), despite tough market conditions.
A total of 501,663 new lease and credit financing contracts were concluded with retail customers during the period from April to June 2019 (2018: 480,303 contracts; + 4.4%), bringing the six-month figure to 971,287 contracts (2018: 932,211 contracts; + 4.2%). In total, 5,806,248 contracts (31 December 2018: 5,708,032 contracts; + 1.7%) were in place with retail customers worldwide at 30 June 2019.
see
Group revenues for the first six-month period totalled € 48,177 million, slightly up on the previous year (2018: € 47,658 3 million; + 1.1 %). Adjusted for currency factors, revenues were at a similar level to one year earlier (–0.2%). At € 25,715 million, second-quarter revenues were also slightly higher year-on-year (2018: € 24,993 3 million; +2.9%; currency-adjusted +2.5%).
Group profit before financial result for the six-month period dropped sharply to € 2,790 million (2018: € 5,446 3 million; – 48.8%), mainly due to the provision recognised during the first quarter of 2019 in connection with ongoing antitrust proceedings. Further information is provided in note 6 to the Interim
Group Financial Statements. Earnings were also held down by the impact of challenging market conditions and intense competition as well as by higher manufacturing costs and scheduled depreciation and amortisation. Research and development expenses were mainly related to upcoming models in conjunction with the continuing new product initiative, the development of vehicle architectures and drivetrain systems and higher upfront expenditure for the future in connection with vehicle electrification and autonomous driving. note 6
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,863 units, 2018: 106,944 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 265,516 units, 2018: 215,218 units).
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements. In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
Group Overview
| 2019 | 2018 | Change in % | ||
|---|---|---|---|---|
| Research and development expenditure2 | € million | 1,477 | 1,484 | – 0.5 |
| Research and development expenditure ratio3 | % (change in %pts) | 5.7 | 5.9 | – 0.2 |
| Capitalisation rate4 | % (change in %pts) | 32.6 | 32.7 | – 0.1 |
• 07
• 06
| 2019 | 2018 | Change in % | ||
|---|---|---|---|---|
| Research and development expenditure2 | € million | 2,830 | 2,756 | 2.7 |
| Research and development expenditure ratio3 | % (change in %pts) | 5.9 | 5.8 | 0.1 |
| Capitalisation rate4 | % (change in %pts) | 29.7 | 29.1 | 0.6 |
see note 4
1 Supplementary information which was not subject of the audit review.
2 Total research and development expenditure comprises research costs, non-capitalised development costs and capitalised development costs (excluding amortisation thereon).
3 Research and development expenditure as a percentage of Group revenues.
4 Capitalised development costs as a percentage of research and development expenditure.
5 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements. In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
The financial result for the six-month period was € 534 million lower than one year earlier. The significant decrease was mainly due to a negative fair value measurement impact of € 220 million on interest rate hedges (2018: positive fair value measurement impact of € 35 million). In addition, the preliminary one-off revaluation effect of € 329 million in the Automotive segment arising from the pooling of mobility services with the Daimler Group was mostly offset by a loss of € 171 million on equity-accounted investments in the YOUR NOW companies. Furthermore, the previous year's financial result also included a positive revaluation effect of € 209 million in conjunction with the acquisition of DriveNow.
Group profit before tax was also impacted by the same set of factors and fell accordingly to € 2,815 million (2018: € 6,005 5 million; – 53.1%). Pre-tax profit for the second quarter amounted to € 2,053 million (2018: € 2,866 5 million: – 28.4%).
Bonds amounting to € 10.5 billion and ABS transactions in the US, the UK, China, Canada and Japan totalling € 3.7 billion were issued during the six-month period under report. During the second quarter, a bond amounting to US dollar 2.7 billion was issued in the USA.
The BMW Group began applying the new accounting requirements for leases in accordance with IFRS 16 (Leases) with effect from 1 January 2019. Explanatory information on the impact of IFRS 16 is provided in note 4 to the Interim Group Financial Statements.
At the beginning of July, Mr Harald Krüger, Chairman of the Board of Management of BMWAG, informed the Chairman of the Supervisory Board of BMWAG that he would not seek a second term of office.
During its meeting on 18 July, the Supervisory Board of BMWAG appointed Oliver Zipse as the new Chairman of the Board of Management with effect from 16 August 2019. Oliver Zipse has been a member of the Board of Management since 2015 and is currently responsible for production. The current Chairman of the Board of Management, Harald Krüger, will resign as Chairman and will leave the Board of Management by mutual agreement on 15 August 2019.
Report on Economic Position General Economic
Automobile deliveries at record level
The BMW Group's Automotive segment continued to buck the market trend by recording further volume growth overall. Second-quarter deliveries included 556,652 1 BMW (2018: 541,849 1 units; + 2.7%) and 89,524 MINI brand vehicles (2018: 95,055 units; –5.8%). Moreover, Rolls-Royce Motor Cars delivered 1,328 units to customers during the three-month period between April and June (2018: 974 units; +36.3%).
Deliveries in the six-month period from January to June included 1,075,959 2 BMW (2018: 1,059,296 2 units; + 1.6 %) and 174,344 MINI (2018: 181,430 units; – 3.9 %) vehicles. Rolls-Royce Motor Cars recorded a significant year-on-year increase, with deliveries up by 42.3 % to 2,534 units (2018: 1,781 units). These figures represented the best-ever half-year performance not only for the Group, but also for the BMW brand and the Rolls-Royce marque.
The BMW Group recorded strong growth in Asia in the second quarter of 2019, particularly in China. Business in this region grew significantly during the threemonth period, with 236,155 1 BMW, MINI and Rolls-Royce brand vehicles (2018: 211,197 1 units; + 11.8%)
delivered in total. Six-month deliveries rose by 7.0% to 453,355 2 units (2018: 423,890 2 units). In China, the BMW Group even recorded double-digit growth rates, thereby defying the current market trend towards significantly fewer registrations. Deliveries of the Group's three brands on the Chinese mainland totalled 181,929 1 units (2018: 147,059 1 units; + 23.7%) for the second quarter and 350,592 2 units for the sixmonth period (2018: 300,153 2 units), corresponding to a significant growth rate of 16.8%.
In Europe, deliveries remained below the previous year's level in most countries, in line with the declining market trend. Overall, the BMW Group sold a total of 279,496 automobiles in the region during the second quarter (2018: 291,377 units; –4.1%). The figure for the six-month period fell by 2.1% to 550,446 units (2018: 562,102 units). In Germany, by contrast, the BMW, MINI and Rolls-Royce brands recorded solid growth during the second quarter, with deliveries up by 9.0% to 88,716 units (2018: 81,424 units). The number of vehicles delivered in the period from January to June rose by 7.7% to 161,308 units (2018: 149,718 units). Consumer sentiment in the UK remained gloomy in the face of high Brexit-related uncertainty. Accordingly, deliveries in the period from April to June 2019 fell to 58,208 units (2018: 63,013 units; – 7.6 %). Figures for the first six-month period (120,576 units) were only slightly down on one year earlier (2018: 124,294 units; – 3.0%).
| Automotive segment at a glance | ||
|---|---|---|
| • 08 |
| 2nd quarter 20193 | 2nd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| Deliveries1, 4 | units | 647,504 | 637,878 | 1.5 |
| Production5 | units | 622,959 | 652,981 | – 4.6 |
| Revenues | € million | 22,624 | 22,192 | 1.9 |
| Profit before financial result (EBIT) | € million | 1,469 | 1,919 | – 23.4 |
| EBIT margin4, 6 | % (change in %pts) | 6.5 | 8.6 | – 2.1 |
| Profit before tax | € million | 1,483 | 2,062 | – 28.1 |
| 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % | ||
|---|---|---|---|---|
| Deliveries2, 4 | units | 1,252,837 | 1,242,507 | 0.8 |
| Production7 | units | 1,295,001 | 1,316,314 | –1.6 |
| Revenues | € million | 41,837 | 41,518 | 0.8 |
| Profit before financial result (EBIT) | € million | 1,159 | 3,800 | – 69.5 |
| EBIT margin4, 6 | % (change in %pts) | 2.8 | 9.2 | – 6.4 |
| Profit before tax | € million | 1,456 | 4,343 | – 66.5 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,863 units, 2018: 106,944 units).
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 265,516 units, 2018: 215,218 units).
3 Supplementary information which was not subject of the audit review.
4 Key performance indicators reported on during the year.
5 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 106,443 units, 2018: 103,703 units).
6 Profit before financial result as percentage of Automotive segment revenues. 7 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 244,834 units, 2018: 210,974 units). Management Report Report on Economic Position General Economic Environment
Interim Group
Automotive Segment
Deliveries of the BMW Group's three brands in the Americas region during the second quarter of 2019 totalled 118,057 units (2018: 119,713 units; – 1.4 %). Between January and June, 222,272 units were delivered to customers in the region (2018: 226,061 units; – 1.7 %). The trend in the USA was
almost identical to that recorded for the continent as a whole, with the number of vehicles delivered down year-on-year for both the second quarter (91,621 units; 2018: 91,940 units; – 0.3 %) and the six-month period (174,779 units: 2018: 176,570 units; – 1.0 %).
| in units | 2nd quarter 20191 | 2nd quarter 2018 | Change in % | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % |
|---|---|---|---|---|---|---|
| Europe | 279,496 | 291,377 | – 4.1 | 550,446 | 562,102 | – 2.1 |
| thereof Germany | 88,716 | 81,424 | 9.0 | 161,308 | 149,718 | 7.7 |
| thereof UK | 58,208 | 63,013 | – 7.6 | 120,576 | 124,294 | – 3.0 |
| Americas | 118,057 | 119,713 | –1.4 | 222,272 | 226,061 | –1.7 |
| thereof USA | 91,621 | 91,940 | – 0.3 | 174,779 | 176,570 | –1.0 |
| Asia | 236,1552 | 211,1972 | 11.8 | 453,3553 | 423,8903 | 7.0 |
| thereof China | 181,9292 | 147,0592 | 23.7 | 350,5923 | 300,1533 | 16.8 |
| Other markets | 13,796 | 15,591 | –11.5 | 26,764 | 30,454 | –12.1 |
| Total | 647,5042 | 637,8782 | 1.5 | 1,252,8373 | 1,242,5073 | 0.8 |
1 Supplementary information which was not subject of the audit review.
2 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 136,863 units, 2018: 106,944 units).
3 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 265,516 units, 2018: 215,218 units).
The BMW brand again set new records during the first half of 2019, including its best-ever delivery figures for a six-month period. Significant contributions, in each case with double-digit growth, were made by the BMW X family and by the various BMWi models.
Due to the model change in March, BMW 3 Series deliveries were down on the previous year at 178,228 units (2018: 192,400 units; – 7.4 %). The new model is not yet available in some major markets. At 169,527 units, deliveries of the BMW 5 Series fell short of the previous year's very high level (2018: 191,185 units; – 11.3 %). The new BMW Z4 and BMW 8 Series models both got off to an excellent start, recording worldwide deliveries of 7,267 units and 5,040 units respectively during the first half of 2019.
Deliveries of BMW X-family vehicles rose by almost a quarter during the six-month period. Now comprising seven X models, a total of 467,134 units were sold worldwide during the period under report (2018: 379,400 units; + 23.1 %), with good contributions coming in particular from the BMW X2 (48,730 units; 2018: 22,326 units), the BMW X3 (149,618 units; 2018: 78,464 units; + 90.7%) and the BMW X4 (29,742 units; 2018: 21,128 units; + 40.8%). At 76,347 units, deliveries of the X5 in the first six months fell below the previous year's level (2018: 85,307 units; – 10.5%), mainly due to the fact that not all motor variations are yet available in China. Over the course of the year, the complete availability of the motorisations should provide fresh momentum to the sales development of the X5. The new BMW X7 went on sale to customers in March 2019. It enjoys high demand across the globe, with 13,555 units already delivered to customers.
General Economic Environment Automotive Segment
| in units | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % |
|---|---|---|---|
| BMW 1 Series | 91,509 | 98,396 | – 7.0 |
| BMW 2 Series | 59,634 | 81,710 | – 27.0 |
| BMW 3 Series | 178,228 | 192,400 | – 7.4 |
| BMW 4 Series | 41,265 | 58,594 | – 29.6 |
| BMW 5 Series | 169,527 | 191,185 | –11.3 |
| BMW 6 Series | 12,188 | 13,146 | – 7.3 |
| BMW 7 Series | 23,502 | 27,530 | –14.6 |
| BMW 8 Series | 5,040 | – | – |
| BMW Z4 | 7,267 | – | – |
| BMW X1 | 135,103 | 152,866 | –11.6 |
| BMW X2 | 48,730 | 22,326 | – |
| BMW X3 | 149,618 | 78,464 | 90.7 |
| BMW X4 | 29,742 | 21,128 | 40.8 |
| BMW X5 | 76,347 | 85,307 | –10.5 |
| BMW X6 | 14,039 | 19,309 | – 27.3 |
| BMW X7 | 13,555 | – | – |
| BMW i | 20,665 | 16,935 | 22.0 |
| BMW total | 1,075,959 | 1,059,296 | 1.6 |
1 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2019: 265,516 units, 2018: 215,218 units).
Automotive segment deliveries of BMW vehicles by model series 1
With 174,344 units delivered worldwide, the MINI brand fell short of the previous year's volume record for the six-month period (2018: 181,430 units; – 3.9 %). Deliveries of the MINI 3- and 5-door models during this period fell slightly to 88,078 units (2018: 90,962 units; – 3.2 %). A total of 48,081 units of the MINI Countryman were handed over to customers
in the first half of 2019 (2018: 48,692 units; – 1.3 %). The MINI Convertible remained market leader in its segment with a volume of 16,985 units during the reporting period. In addition, MINI's first fully-electric series production vehicle, the MINI Cooper SE2 , was unveiled at the beginning of July 2019 and is generating a great deal of customer interest.
sions information are available on page 22.
2 Fuel consumption and CO2 emis-
Automotive segment deliveries of MINI vehicles by model variant • 11
| in units | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % |
|---|---|---|---|
| MINI Hatch (3- and 5-door) | 88,078 | 90,962 | – 3.2 |
| MINI Convertible | 16,985 | 18,154 | – 6.4 |
| MINI Clubman | 21,200 | 23,622 | –10.3 |
| MINI Countryman | 48,081 | 48,692 | –1.3 |
| MINI total | 174,344 | 181,430 | – 3.9 |
• 10
Interim Group Management Report Report on Economic Position General Economic Environment
Automotive Segment
Rolls-Royce Motor Cars delivered 2,534 luxury vehicles worldwide during the first six months of the year, representing a significant increase of 42.3% (2018: 1,781 units) and marking the Rolls-Royce marque's
all-time high for a six-month period. The new Cullinan* model made a significant contribution to this performance and 1,159 units of this vehicle had been delivered by the end of the reporting period.
| in units | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % |
|---|---|---|---|
| Phantom | 287 | 346 | –17.1 |
| Ghost | 381 | 494 | – 22.9 |
| Wraith /Dawn | 707 | 941 | – 24.9 |
| Cullinan* | 1,159 | – | – |
| Rolls-Royce total | 2,534 | 1,781 | 42.3 |
With strong demand, deliveries of electrified vehicles during the first half of 2019 remained stable, despite various model changes. The BMW Group currently offers ten electrified models worldwide. A total of 59,593 units were delivered to customers during the
period under report (2018: 60,660 units; – 1.8%). With an increase of 21.2 %, the BMWi3 continued to enjoy strong demand and 19,073 units were delivered to customers between January and June (2018: 15,736 units). The MINI Countryman Plug-in Hybrid* also continued to perform well, with 8,233 units delivered (2018: 5,285 units; + 55.8 %) during the same period.
| in units | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % |
|---|---|---|---|
| BMW i | 20,665 | 16,935 | 22.0 |
| BMW e | 30,695 | 38,440 | – 20.1 |
| MINI Electric | 8,233 | 5,285 | 55.8 |
| Total | 59,593 | 60,660 | –1.8 |
*Fuel consumption and CO2 emissions information are available on page 22.
Automotive Segment
At € 41,837 million, Automotive segment revenues during the six-month period under report were at a similar level to the previous year (2018: € 41,518 million; + 0.8 %). Currency and product mix effects, in particular deliveries of the X7 and the 8 Series, had an upward impact on segment revenues. These positive factors were offset in part by intense competition worldwide. Second-quarter revenues rose slightly to € 22,624 million (2018: € 22,192 million; + 1.9 %; currency-adjusted + 1.1 %).
The slight increase in cost of sales in the first half of 2019 was mainly due to adverse currency factors and higher raw materials prices as well as higher production costs due to stricter regulatory requirements. In addition, investments made in conjunction with the continued product offensive on the one hand and the electrification of vehicles and autonomous driving on the other are driving up research and development expenditure.
The expense for recognising the provision for the ongoing antitrust proceedings referred to above is included in other operating expenses. As a result of these various factors, segment EBIT for the first half of the year fell significantly to € 1,159 million (2018: € 3,800 million; – 69.5 %).
The EBIT margin went down accordingly to 2.8 % (2018: 9.2 %; – 6.4 percentage points) for the sixmonth period and to 6.5 % (2018: 8.6 %; – 2.1 percentage points) for the second quarter, significantly above the level of the first quarter of 2019. The segment result before taxes came in at € 1,456 million for the six-month period, significantly lower than one year earlier (2018: € 4,343 million; – 66.5 %) and at € 1,483 million for the second quarter (2018: € 2,062 million; – 28.1 %).
On 28 March 2018, the BMW Group signed an agreement with Daimler regarding the merger of certain business units that provide mobility services. Following approval by the relevant antitrust authorities, the transaction was completed on 31 January 2019. As planned, the two companies are pressing ahead to realise their joint vision of fully electric and autonomous on-demand mobility, including strategic plans to expand existing offerings in the field of individual urban mobility. The new range of mobility services will be easy to access, intuitive to use, and cater to customers' needs. The cooperation comprises the joint ventures REACH NOW (on-demand mobility and multimodal services), CHARGE NOW (battery charging), FREE NOW (ride-hailing), PARK NOW (parking) and SHARE NOW (car-sharing). Under the umbrella YOUR NOW, BMW and Daimler are offering innovative solutions for cities and municipalities seeking to make mobility more efficient and sustainable.
The YOUR NOW joint ventures have been operating successfully since their establishment. Over 75 million registered customers are already using the services of the five business entities.
Further information is provided in note 2 to the Interim Group Financial Statements. see note 2
On 4 July 2019, the BMW Group and Daimler AG signed an agreement for long-term strategic cooperation in the field of highly automated driving systems. Together, the two companies intend to develop next-generation technologies for driver assistance systems, automated driving on highways and automated parking (all to level 4). A key aim of the cooperation is the swift market launch of these newly developed technologies that are expected to feature in passenger car systems for retail customers from 2024 onwards. The two companies will each implement the technologies in their respective series products independently.
17
Report on Economic Position General Economic Environment
Interim Group Management Report
• 14
Automotive Segment
| in € million | 2019 | 2018 | Change |
|---|---|---|---|
| Cash inflow (+)/ outflow (–) from operating activities | 3,846 | 4,419 | – 573 |
| Cash inflow (+)/ outflow (–) from investing activities | – 3,616 | – 2,515 | –1,101 |
| Net investment in marketable securities and investment funds | 80 | 40 | 40 |
| Free cash flow Automotive segment | 310 | 1,944 | –1,634 |
The development of free cash flow generated by the Automotive segment in the first half of 2019 decreased year-on-year, mainly due to lower earnings and the planned increase in working capital, primarily reflecting higher inventories necessitated by the launch of new models, among other reasons. Additional contributing factors were higher investments in financial assets and property, plant and equipment, the latter mainly in connection with the BMW 1 and
BMW 3 Series model changes. Following the adoption of IFRS 16, lease payments are now included in cash flows from financing activities. In the first six months of 2019, this had a positive effect of € 212 million on free cash flow. If IFRS 16 had been applied similarly in the previous year, free cash flow would have been positively impacted by approximately the same amount.
Net financial assets comprised the following:
| in € million | 30. 6. 2019 | 31.12. 2018 | Change |
|---|---|---|---|
| Cash and cash equivalents | 7,971 | 8,631 | – 660 |
| Marketable securities and investment funds | 4,497 | 4,321 | 176 |
| Intragroup net financial assets | 5,478 | 7,694 | – 2,216 |
| Financial assets | 17,946 | 20,646 | – 2,700 |
| Less: external financial liabilities* | – 3,499 | –1,158 | – 2,341 |
| Net financial assets Automotive segment | 14,447 | 19,488 | – 5,041 |
*Excluding derivative financial instruments.
The increase in external financial liabilities was mainly attributable to the recognition of lease liabilities amounting to € 2.3 billion, recognised in connection with the first-time application of IFRS 16. Further information is provided in note 4 to the Interim Group Financial Statements. see note 4
Report on Economic Position General Economic
The strong performance of the Financial Services segment during the reporting period was mainly attributable to portfolio growth, the unchanged stable risk situation in the segment, reduced residual value risk expenses in individual markets and positive currency effects.
In balance sheet terms, the segment's business volume increased on the back of currency factors and growth in new business with retail customers, while a moderate reduction in receivables from dealership financing had an offsetting effect.
Financing and leasing business with retail customers grew by 4.2%, mainly in the area of credit financing in China. In total, 971,287 new contracts were signed during the first half of 2019 (2018: 932,211 contracts). New leasing business went up by 6.3%, mainly due to a strong performance on the European market. At the same time, new credit financing business grew by 3.2 %. Overall, leasing accounted for 33.8 % and credit financing for 66.2 % of new business in the first half of 2019.
Business concluded during the first six months of 2019 included 192,954 newly signed contracts relating to pre-owned BMW and MINI brand vehicles (2018: 203,352 contracts), down moderately by 5.1 % year-on-year.
The total volume of all new credit financing and leasing contracts concluded with retail customers during the six-month period amounted to € 29,169 million, representing a solid 7.2 % increase compared to the previous year (2018: € 27,205 million). Adjusted for currency factors, the increase was 4.9 %.
Compared to the end of the previous financial year, the Financial Services segment's worldwide contract portfolio with retail customers had grown by 2.3 % to 5,353,776 contracts at 30 June 2019 (31 December 2018: 5,235,207 contracts). These figures include significant growth (+ 10.8 %) in the China region compared to 31 December 2018. The Europe / Middle East / Africa region (+ 2.7 %) and the EU Bank 1 region (+ 2.5 %) also recorded growth. The contract portfolio with retail customers remained at a similar level to the end of 2018 in the Americas region (– 0.4 %) and decreased by 2.2 % in the Asia / Pacific region.
| 2nd quarter 20192 | 2nd quarter 2018 | Change in % | ||
|---|---|---|---|---|
| New contracts with retail customers | 501,663 | 480,303 | 4.4 | |
| Revenues3 | € million | 7,364 | 7,027 | 4.8 |
| Profit before financial result (EBIT)3 | € million | 606 | 605 | 0.2 |
| Profit before tax3 | € million | 573 | 603 | – 5.0 |
| 1 January to 30 June 2019 |
1 January to 30 June 2018 |
Change in % | ||
|---|---|---|---|---|
| New contracts with retail customers | 971,287 | 932,211 | 4.2 | |
| Revenues3 | € million | 14,510 | 13,588 | 6.8 |
| Profit before financial result (EBIT)3 | € million | 1,254 | 1,166 | 7.5 |
| Profit before tax3 | € million | 1,200 | 1,156 | 3.8 |
| 30. 6. 2019 | 31. 12. 2018 | Change in % | ||
|---|---|---|---|---|
| Total contract portfolio | 5,806,248 | 5,708,032 | 1.7 | |
| Contract portfolio with retail customers | 5,353,776 | 5,235,207 | 2.3 | |
| Business volume in balance sheet terms3, 4 | € million | 135,122 | 133,210 | 1.4 |
1 EU Bank comprises BMW Bank GmbH, its branches in Italy, Spain and Portugal and its subsidiary in France.
2 Supplementary information which was not subject of the audit review.
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
4 Calculated on the basis of the lines Leased products and Receivables from sales financing (current and non-current) of the Financial Services segment balance sheet.
Report on Economic Position General Economic Environment
Financial Services Segment
During the first half of the year, 50.6 %* of new BMW Group vehicles were either leased or financed by the Financial Services segment (2018: 47.4%; + 3.2 percentage points). The increase was largely attributable to growth in credit financing in China.
*The calculation only includes automobile markets in which the Financial Services segment is represented by a consolidated entity or a branch office.
In the fleet management business, the BMW Group – operating under the brand name Alphabet – is one of Europe's foremost leasing and full-service providers. Alphabet offers leasing and financing arrangements as well as other specific services to commercial customers. A portfolio of 709,637 contracts was in place at 30 June 2019 (31 December 2018: 700,080 contracts; + 1.4 %).
The total volume of dealership financing decreased moderately by 6.3 % to € 19,154 million during the first half of 2019 (31 December 2018: € 20,438 million).
Report on Outlook, Risks and Opportunities Outlook
Market conditions remain challenging
BMW Group confirms forecast announced in first quarter
The report on outlook, risks and opportunities describes the expected development of the BMW Group, including the significant risks and opportunities, from a Group management perspective. It contains forward-looking statements based on expectations and assessments that are subject to uncertainty. As a result, actual outcomes, including those attributable to political, legal and economic developments, could differ positively or negatively from those described below. Further information on this topic is provided in the Annual Report 2018 (Outlook, pp. 84, Risks and Opportunities, pp. 90).
Automobile markets worldwide are expected to continue to contract in 2019. Apart from minor momentum in a small number of European countries, the general trend is likely to be downward, particularly in the world's major markets.
Interim Group Management Report Report on Outlook,
Business conditions are expected to remain volatile throughout the remainder of the financial year 2019. While numerous new automobile and motorcycle models as well as an expanded range of individual mobility-related services will provide additional momentum, various political and economic challenges could well have an offsetting effect. Research and development expenses will remain at a high level in view of key future-oriented projects. Manufacturing costs are also being influenced by stricter regulatory requirements. Accordingly, Group profit before tax is expected to decrease significantly. Automotive segment deliveries to customers are expected to increase slightly, contrary to the general trend, and reach a new record level. At the same time, fleet carbon dioxide emissions are forecast to drop slightly. The Group intends to achieve its targets with a workforce similar in size to the previous year. Due to the provision recognised in connection with ongoing antitrust proceedings, the Automotive segment's EBIT margin is expected to lie within a range of between 4.5 and 6.5 % in 2019 and therefore 1 to 1.5 percentage points under the original guidance of 6 – 8 %.
BMW Group key performance indicators
The RoCE 1 of the Automotive segment is expected to decrease significantly. The RoE 2 for the Financial Services segment should remain at the previous year's level. However, both performance indicators will be above their long-term targets of 26% (RoCE) and 14% (RoE) respectively. Deliveries to customers in the Motorcycles segment are predicted to show a solid increase, with the EBIT margin set to be within the target range of between 8 and 10% and the RoCE also showing a solid year-on-year increase.
Depending on the political, legal and economic situation and the risks and opportunities described in the Annual Report 2018, actual business performance could differ from current expectations.
Growing uncertainty, fuelled in particular by unresolved political situations such as Brexit and international trade and customs policies, may cause economic developments in many regions to deviate from expected trends and outcomes, with a correspondingly significant impact on the business performance of the BMW Group.
| 2018 | 2018 | 2019 | ||
|---|---|---|---|---|
| reported | adjusted3 | Outlook4 | ||
| Group | ||||
| Profit before tax | € million | 9,815 | 9,627 | significant decrease |
| Workforce at year-end | 134,682 | – | in line with last year's level |
|
| Automotive segment | ||||
| Deliveries to customers5 | units | 2,490,664 | – | slight increase |
| Fleet emissions6 | g CO2 / km | 128 | – | slight reduction |
| EBIT margin | % | 7.2 | – | between 4.5 and 6.5 |
| Return on capital employed1 | % | 49.8 | – | significant decrease |
| Motorcycles segment | ||||
| Deliveries to customers | units | 165,566 | – | solid increase |
| EBIT margin | % | 8.1 | – | between 8 and 10 |
| Return on capital employed1 | % | 28.4 | – | solid increase |
| Financial Services segment | ||||
| Return on equity 2 | % | 14.8 | – | in line with last year's level |
1 RoCE in the Automotive and Motorcycles segments is measured on the basis of relevant segment profit before financial result and the average amount of capital employed in the segment concerned.
Capital employed corresponds to the sum of all current and non-current operational assets, less liabilities that do not incur interest.
2 RoE in the Financial Services segment is calculated as segment profit before taxes, divided by the average amount of equity capital attributable to the Financial Services segment balance sheet.
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
4 Based on adjusted figures.
5 Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2018: 459,581 units).
6 EU-28.
• 17
Opportunities
As a globally operating enterprise, the BMW Group is exposed to a broad range of risks and opportunities. The Group's corporate success is based on leveraging perceived opportunities as they present themselves. In order to achieve growth, profitability, efficiency and continued sustainable activity going forward, the BMW Group must consciously assume a certain amount of risk.
Compared with the overall risk situation presented in the Group Management Report 2018, the assessment of legal risks in conjunction with antitrust allegations made against five German car manufacturers has become more concrete following receipt of the Statement of Objections from the EU Commission. The EU Commission is alleging that German automobile manufacturers cooperated in technical working groups to restrict competition related to exhaust gas emissions systems for diesel and petrol passenger vehicles. The Statement of Objections leads the BMW Group to believe that it is probable ("more likely than not") that the Commission will impose a significant fine. If necessary, the BMW Group will contest the Commission's allegations with all the legal means at its disposal. A provision of approximately € 1.4 billion was recognised in the first quarter of 2019 in accordance with International Financial Reporting Standards for financial impacts that cannot yet be definitively assessed. Furthermore, the progress of the Brexit negotiations and developments in international trade policies will continue to be closely monitored and factored into the Group's forecasts as deemed appropriate. Further information on risks and opportunities as well as on the methods employed to manage them is also available in the "Report on Risks and Opportunities" section of the Annual Report 2018 (pp. 90).
| Model | Fuel consumption in l/100 km (combined) |
CO2 emissions in g / km (combined) |
Electric power consumption in kWh /100 km (combined) |
|---|---|---|---|
| MINI | |||
| MINI Cooper SE Countryman ALL4 | 2.1–1.9 | 47– 43 | 13.6 –13.5 |
| MINI Cooper SE | – | – | 16.8 –14.8 |
| Rolls-Royce | |||
| Cullinan | 15 | 341 | – |
24
Interim Group Financial Statements
BMW Group Income Statement Statement of
Income Statements for Group and Segments for the period from 1 January to 30 June • 19
| Group | Automotive1 | Motorcycles1 | |||||
|---|---|---|---|---|---|---|---|
| in € million | Note | 2019 | 20182 | 2019 | 2018 | 2019 | 2018 |
| Revenues | 5 | 48,177 | 47,658 | 41,837 | 41,518 | 1,313 | 1,182 |
| Cost of sales | – 39,576 | – 37,734 | – 35,562 | – 33,959 | – 999 | – 888 | |
| Gross profit | 8,601 | 9,924 | 6,275 | 7,559 | 314 | 294 | |
| Selling and administrative expenses | – 4,4233 | – 4,519 | – 3,676 | – 3,754 | –123 | –119 | |
| Other operating income | 6 | 315 | 312 | 308 | 320 | – | 1 |
| Other operating expenses | 6 | –1,703 | – 271 | –1,748 | – 325 | – | –1 |
| Profit/ loss before financial result | 2,790 | 5,446 | 1,159 | 3,800 | 191 | 175 | |
| Result from equity accounted investments | 188 | 405 | 188 | 405 | – | – | |
| Interest and similar income | 77 | 74 | 191 | 163 | 1 | – | |
| Interest and similar expenses | –191 | –174 | – 307 | – 240 | – 5 | –1 | |
| Other financial result | 7 | – 49 | 254 | 225 | 215 | – | – |
| Financial result | 25 | 559 | 297 | 543 | – 4 | –1 | |
| Profit/ loss before tax | 2,815 | 6,005 | 1,456 | 4,343 | 187 | 174 | |
| Income taxes | 8 | – 791 | –1,640 | – 405 | –1,212 | – 55 | – 52 |
| Profit/ loss from continuing operations | 2,024 | 4,365 | 1,051 | 3,131 | 132 | 122 | |
| Profit / loss from discontinued operations | 44 | – 7 | 44 | – 7 | – | – | |
| Net profit/ loss | 2,068 | 4,358 | 1,095 | 3,124 | 132 | 122 | |
| Attributable to minority interest | 53 | 45 | 13 | 13 | – | – | |
| Attributable to shareholders of BMW AG | 2,015 | 4,313 | 1,082 | 3,111 | 132 | 122 | |
| Basic earnings per share of common stock in € | 3.06 | 6.56 | |||||
| Basic earnings per share of preferred stock in € | 3.07 | 6.57 | |||||
| Dilutive effects | – | – | |||||
| Diluted earnings per share of common stock in € | 3.06 | 6.56 | |||||
| Diluted earnings per share of preferred stock in € | 3.07 | 6.57 | |||||
Condensed Statement of Comprehensive Income for Group for the period from 1 January to 30 June • 20
| in € million | Note 2019 |
20184 |
|---|---|---|
| Net profit | 2,068 | 4,358 |
| Remeasurement of the net liability for defined benefit pension plans | – 448 | 384 |
| Items not expected to be reclassified to the income statement in the future | – 448 | 384 |
| Marketable securities (at fair value through other comprehensive income) | 41 | – |
| Financial instruments used for hedging purposes | –120 | – 429 |
| Costs of hedging | –18 | – 298 |
| Other comprehensive income from equity accounted investments | – 4 | – 50 |
| Currency translation foreign operations | 62 | 197 |
| Items that can be reclassified to the income statement in the future | – 39 | – 580 |
| Other comprehensive income for the period after tax | – 487 | –196 |
| Total comprehensive income | 1,581 | 4,162 |
| Total comprehensive income attributable to minority interest | 53 | 45 |
| Total comprehensive income attributable to shareholders of BMW AG | 1,528 | 4,117 |
1 Supplementary information which was not subject of the audit review.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
3 Includes administrative expenses amounting to €1,799 million (2018: €1,736 million).
4 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
| Eliminations1 | Other Entities1 | Financial Services1 | ||||
|---|---|---|---|---|---|---|
| 20182 | 2019 | 2018 | 2019 | 20182 | 2019 | |
| Revenues | – 8,633 | – 9,486 | 3 | 3 | 13,588 | 14,510 |
| Cost of sales | 8,901 | 9,643 | – | – | –11,788 | –12,658 |
| Gross profit | 268 | 157 | 3 | 3 | 1,800 | 1,852 |
| Selling and administrative expenses | 4 | 4 | –14 | –10 | – 636 | – 618 |
| Other operating income | –100 | – 82 | 65 | 49 | 26 | 40 |
| Other operating expenses | 117 | 101 | – 38 | – 36 | – 24 | – 20 |
| Profit/ loss before financial result | 289 | 180 | 16 | 6 | 1,166 | 1,254 |
| Result from equity accounted investments | – | – | – | – | – | – |
| Interest and similar income | – 616 | – 875 | 525 | 759 | 2 | 1 |
| Interest and similar expenses | 581 | 822 | – 509 | – 698 | – 5 | – 3 |
| Other financial result | – | – | 46 | – 222 | – 7 | – 52 |
| Financial result | – 35 | – 53 | 62 | –161 | –10 | – 54 |
| Profit/ loss before tax | 254 | 127 | 78 | –155 | 1,156 | 1,200 |
| Income taxes | – 68 | – 40 | – 24 | 48 | – 284 | – 339 |
| Profit/ loss from continuing operations | 186 | 87 | 54 | –107 | 872 | 861 |
| Profit / loss from discontinued operations | – | – | – | – | – | – |
| Net profit/ loss | 186 | 87 | 54 | –107 | 872 | 861 |
| Attributable to minority interest | – | – | – | – | 32 | 40 |
| Attributable to shareholders of BMW AG | 186 | 87 | 54 | –107 | 840 | 821 |
| 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 € | ||||||
26
Interim Group Financial Statements
BMW Group Income Statement Statement of
Income Statements for Group and Segments for the period from 1 April to 30 June 1 • 21
| Group | Automotive | Motorcycles | |||||
|---|---|---|---|---|---|---|---|
| in € million | Note | 2019 | 20182 | 2019 | 2018 | 2019 | 2018 |
| Revenues | 5 | 25,715 | 24,993 | 22,624 | 22,192 | 727 | 658 |
| Cost of sales | – 21,170 | –19,909 | –19,169 | –18,300 | – 561 | – 496 | |
| Gross profit | 4,545 | 5,084 | 3,455 | 3,892 | 166 | 162 | |
| Selling and administrative expenses | – 2,3013 | – 2,342 | –1,907 | –1,944 | – 64 | – 63 | |
| Other operating income | 6 | 151 | 115 | 137 | 120 | – | – |
| Other operating expenses | 6 | –194 | –118 | – 216 | –149 | – | –1 |
| Profit/ loss before financial result | 2,201 | 2,739 | 1,469 | 1,919 | 102 | 98 | |
| Result from equity accounted investments | 31 | 182 | 31 | 182 | – | – | |
| Interest and similar income | 42 | 36 | 104 | 82 | – | – | |
| Interest and similar expenses | – 98 | – 71 | –156 | –107 | – 3 | –1 | |
| Other financial result | 7 | –123 | – 20 | 35 | –14 | 1 | –1 |
| Financial result | –148 | 127 | 14 | 143 | – 2 | – 2 | |
| Profit/ loss before tax | 2,053 | 2,866 | 1,483 | 2,062 | 100 | 96 | |
| Income taxes | 8 | – 573 | – 783 | – 412 | – 567 | – 30 | – 29 |
| Profit/ loss from continuing operations | 1,480 | 2,083 | 1,071 | 1,495 | 70 | 67 | |
| Profit / loss from discontinued operations | – | – 7 | – | – 7 | – | – | |
| Net profit/ loss | 1,480 | 2,076 | 1,071 | 1,488 | 70 | 67 | |
| Attributable to minority interest | 26 | 25 | 4 | 7 | – | – | |
| Attributable to shareholders of BMW AG | 1,454 | 2,051 | 1,067 | 1,481 | 70 | 67 | |
| Basic earnings per share of common stock in € | 2.21 | 3.12 | |||||
| Basic earnings per share of preferred stock in € | 2.22 | 3.13 | |||||
| Dilutive effects | – | – | |||||
| Diluted earnings per share of common stock in € | 2.21 | 3.12 | |||||
| Diluted earnings per share of preferred stock in € | 2.22 | 3.13 | |||||
Condensed Statement of Comprehensive Income for Group for the period from 1 April to 30 June 1 • 22
| in € million | Note 2019 |
20184 |
|---|---|---|
| Net profit | 1,480 | 2,076 |
| Remeasurement of the net liability for defined benefit pension plans | – 88 | 125 |
| Items not expected to be reclassified to the income statement in the future | – 88 | 125 |
| Marketable securities (at fair value through other comprehensive income) | 12 | – 21 |
| Financial instruments used for hedging purposes | 267 | – 428 |
| Costs of hedging | 15 | –120 |
| Other comprehensive income from equity accounted investments | – 5 | – 25 |
| Currency translation foreign operations | – 408 | 304 |
| Items that can be reclassified to the income statement in the future | –119 | – 290 |
| Other comprehensive income for the period after tax | – 207 | –165 |
| Total comprehensive income | 1,273 | 1,911 |
| Total comprehensive income attributable to minority interest | 26 | 25 |
| Total comprehensive income attributable to shareholders of BMW AG | 1,247 | 1,886 |
1 Supplementary information which was not subject of the audit review.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
3 Includes administrative expenses amounting to €938 million (2018: €928 million).
4 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
| Eliminations | Other Entities | Financial Services | ||||
|---|---|---|---|---|---|---|
| 20182 | 2019 | 2018 | 2019 | 20182 | 2019 | |
| Revenues | – 4,885 | – 5,002 | 1 | 2 | 7,027 | 7,364 |
| Cost of sales | 4,989 | 5,020 | – | – | – 6,102 | – 6,460 |
| Gross profit | 104 | 18 | 1 | 2 | 925 | 904 |
| Selling and administrative expenses | 2 | – | – 7 | – 6 | – 330 | – 324 |
| Other operating income | – 60 | – 47 | 32 | 24 | 23 | 37 |
| Other operating expenses | 64 | 51 | –19 | –18 | –13 | –11 |
| Profit/ loss before financial result | 110 | 22 | 7 | 2 | 605 | 606 |
| Result from equity accounted investments | – | – | – | – | – | – |
| Interest and similar income | – 323 | – 444 | 276 | 381 | 1 | 1 |
| Interest and similar expenses | 310 | 416 | – 270 | – 353 | – 3 | – 2 |
| Other financial result | – | – | – 5 | –127 | – | – 32 |
| Financial result | –13 | – 28 | 1 | – 99 | – 2 | – 33 |
| Profit/ loss before tax | 97 | – 6 | 8 | – 97 | 603 | 573 |
| Income taxes | – 56 | 2 | – 2 | 29 | –129 | –162 |
| Profit/ loss from continuing operations | 41 | – 4 | 6 | – 68 | 474 | 411 |
| Profit / loss from discontinued operations | – | – | – | – | – | – |
| Net profit/ loss | 41 | – 4 | 6 | – 68 | 474 | 411 |
| Attributable to minority interest | – | – | – | – | 18 | 22 |
| Attributable to shareholders of BMW AG | 41 | – 4 | 6 | – 68 | 456 | 389 |
| 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 € | ||||||
Interim Group Financial
BMW Group Balance Sheet
| Group | Automotive1 | Motorcycles1 | ||||||
|---|---|---|---|---|---|---|---|---|
| in € million | Note | 30. 6. 2019 | 1. 1. 20192 | 31.12. 20183 | 30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 2018 |
| Assets | ||||||||
| Intangible assets | 9 | 11,171 | 10,971 | 10,971 | 10,667 | 10,472 | 109 | 95 |
| Property, plant and equipment | 10 | 22,085 | 22,163 | 19,801 | 21,606 | 19,372 | 382 | 399 |
| Leased products Investments accounted |
39,649 | 38,259 | 38,259 | – | – | – | – | |
| for using the equity method | 3,987 | 2,624 | 2,624 | 3,987 | 2,624 | – | – | |
| Other investments | 737 | 739 | 739 | 4,927 | 4,843 | – | – | |
| Receivables from sales financing | 47,955 | 48,313 | 48,313 | – | – | – | – | |
| Financial assets | 11 | 1,656 | 1,010 | 1,010 | 194 | 216 | – | – |
| Deferred tax | 2,294 | 1,640 | 1,638 | 3,183 | 3,043 | – | – | |
| Other assets | 1,845 | 1,299 | 1,299 | 3,053 | 5,085 | 34 | 33 | |
| Non-current assets | 131,379 | 127,018 | 124,654 | 47,617 | 45,655 | 525 | 527 | |
| Inventories | 16,850 | 13,639 | 13,639 | 15,599 | 12,462 | 578 | 568 | |
| Trade receivables | 2,980 | 2,546 | 2,546 | 2,678 | 2,287 | 169 | 167 | |
| Receivables from sales financing | 39,639 | 38,700 | 38,700 | – | – | – | – | |
| Financial assets | 11 | 6,519 | 6,675 | 6,675 | 5,035 | 4,988 | – | – |
| Current tax | 12 | 1,510 | 1,378 | 1,378 | 641 | 618 | – | – |
| Other assets | 9,557 | 9,906 | 9,906 | 26,200 | 22,016 | 1 | 2 | |
| Cash and cash equivalents | 10,576 | 10,979 | 10,979 | 7,971 | 8,631 | 9 | 12 | |
| Assets held for sale | – | 463 | 461 | – | 461 | – | – | |
| Current assets | 87,631 | 84,286 | 84,284 | 58,124 | 51,463 | 757 | 749 | |
| Total assets | 219,010 | 211,304 | 208,938 | 105,741 | 97,118 | 1,282 | 1,276 | |
| Equity and liab ilities |
||||||||
| Subscribed capital | 13 | 658 | 658 | 658 | ||||
| Capital reserves | 2,118 | 2,118 | 2,118 | |||||
| Revenue reserves | 13 | 55,043 | 55,830 | 55,862 | ||||
| Accumulated other equity | –1,379 | –1,338 | –1,338 | |||||
| Equity attributable | ||||||||
| to shareholders of BMWAG | 13 | 56,440 | 57,268 | 57,300 | ||||
| Minority interest | 528 | 529 | 529 | |||||
| Equity | 56,968 | 57,797 | 57,829 | 37,696 | 39,778 | – | – | |
| Pension provisions | 3,030 | 2,330 | 2,330 | 2,637 | 2,089 | 87 | 64 | |
| Other provisions | 5,363 | 5,530 | 5,530 | 5,176 | 5,354 | 68 | 70 | |
| Deferred tax | 1,740 | 1,762 | 1,773 | 654 | 1,016 | – | – | |
| Financial liabilities | 15 | 70,865 | 66,744 | 64,772 | 2,235 | 1,017 | – | – |
| Other liabilities | 16 | 4,936 | 5,293 | 5,293 | 7,881 | 7,558 | 507 | 506 |
| Non-current provisions and liabilities | 85,934 | 81,659 | 79,698 | 18,583 | 17,034 | 662 | 640 | |
| Other provisions | 7,220 | 5,871 | 5,871 | 6,775 | 5,433 | 109 | 101 | |
| Current tax | 14 | 887 | 1,158 | 1,158 | 677 | 933 | – | – |
| Financial liabilities | 15 | 40,291 | 39,260 | 38,825 | 2,071 | 879 | – | – |
| Trade payables | 9,886 | 9,669 | 9,669 | 8,607 | 8,360 | 356 | 348 | |
| Other liabilities | 16 | 17,824 | 15,826 | 15,826 | 31,332 | 24,639 | 155 | 187 |
| Liabilities in conjunction with assets | ||||||||
| held for sale | – | 64 | 62 | – | 62 | – | – | |
| Current provisions and liabilities | 76,108 | 71,848 | 71,411 | 49,462 | 40,306 | 620 | 636 | |
| Total equity and liabilities | 219,010 | 211,304 | 208,938 | 105,741 | 97,118 | 1,282 | 1,276 |
1 Supplementary information which was not subject of the audit review.
2 The figures to 1 January 2019 have been adjusted, based on the first-time application of IFRS 16; see note 4 to the Interim Group Financial Statements.
3 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
| Group | ||
|---|---|---|
| in € million | 2019 | 20182 |
| Net profit | 2,068 | 4,358 |
| Profit / loss from discontinued operations | – 44 | 7 |
| Depreciation and amortisation of tangible, intangible and investment assets | 2,905 | 2,504 |
| Change in provisions | 614 | – 259 |
| Change in leased products and receivables from sales financing | –1,350 | –1,968 |
| Change in deferred taxes | – 290 | 1,313 |
| Changes in working capital | – 3,195 | – 2,558 |
| Other | 589 | – 725 |
| Cash inflow/outflow from operating activities | 1,297 | 2,672 |
| Total investment in intangible assets and property, plant and equipment | – 3,132 | – 2,561 |
| Net investment in marketable securities and investment funds | 53 | 128 |
| Other | – 520 | 26 |
| Cash inflow/outflow from investing activities | – 3,599 | – 2,407 |
| Cash inflow/outflow from financing activities | 1,860 | – 707 |
| Effect of exchange rate on cash and cash equivalents | 39 | 25 |
| Effect of changes in composition of Group on cash and cash equivalents | – | – 25 |
| Change in cash and cash equivalents | – 403 | – 442 |
| Cash and cash equivalents as at 1 January | 10,979 | 9,039 |
| Cash and cash equivalents as at 30 June | 10,576 | 8,597 |
1 Supplementary information which was not subject of the audit review.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
| Financial Services1 | Automotive1 | ||||
|---|---|---|---|---|---|
| 20182 | 2019 | 2018 | 2019 | ||
| Net profit | 872 | 861 | 3,124 | 1,095 | |
| Profit / loss from discontinued operations | – | – | 7 | – 44 | |
| Depreciation and amortisation of tangible, intangible and investment assets | 17 | 25 | 2,440 | 2,830 | |
| Change in provisions | – 2 | – 48 | – 212 | 990 | |
| Change in leased products and receivables from sales financing | – 2,126 | –1,311 | – | – | |
| Change in deferred taxes | 668 | 88 | 210 | 49 | |
| Changes in working capital | – 77 | –141 | – 2,509 | – 3,047 | |
| Other | –1,969 | – 987 | 1,359 | 1,973 | |
| Cash inflow/outflow from operating activities | – 2,617 | –1,513 | 4,419 | 3,846 | |
| Total investment in intangible assets and property, plant and equipment | – 4 | – 4 | – 2,522 | – 3,083 | |
| Net investment in marketable securities and investment funds | 138 | 133 | – 40 | – 80 | |
| 6 | 1 | 47 | – 453 | ||
| Cash inflow/outflow from investing activities | 140 | 130 | – 2,515 | – 3,616 | |
| Cash inflow/outflow from financing activities | 2,697 | 1,849 | – 2,600 | – 903 | |
| Effect of exchange rate on cash and cash equivalents | 26 | 19 | –1 | 13 | |
| Effect of changes in composition of Group on cash and cash equivalents | – | – | – 25 | – | |
| Change in cash and cash equivalents | 246 | 485 | – 722 | – 660 | |
| Cash and cash equivalents as at 1 January | 1,856 | 1,985 | 7,157 | 8,631 | |
| Cash and cash equivalents as at 30 June | 2,102 | 2,470 | 6,435 | 7,971 | |
Statements
BMW Group Statement of Changes in Equity
| in € million | Note | Subscribed capital |
Capital reserves |
Revenue reserves |
|
|---|---|---|---|---|---|
| 31 December 2018 (as originally reported) | 13 | 658 | 2,118 | 56,121 | |
| Impact of accounting policy change* | – | – | – 259 | ||
| 31 December 2018 (As amended due to accounting policy change) |
658 | 2,118 | 55,862 | ||
| Effects from the first-time application of IFRS 16 | – | – | – 32 | ||
| 1 January 2019 (adjusted according to IFRS 16) | 658 | 2,118 | 55,830 | ||
| Net profit | – | – | 2,015 | ||
| Other comprehensive income for the period after tax | – | – | – 448 | ||
| Comprehensive income at 30 June 2019 | – | – | 1,567 | ||
| Dividend payments | – | – | – 2,303 | ||
| Other changes | – | – | – 51 | ||
| 30 June 2019 | 13 | 658 | 2,118 | 55,043 |
| in € million | Note | Subscribed capital |
Capital reserves |
Revenue reserves |
Translation differences |
Securities | financial instruments |
Costs of hedging |
shareholders Minority of BMW AG interest |
Total | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 January 2018 (as originally reported) | 13 | 658 | 2,084 | 50,993 | –1,494 | 11 | 1,515 | 5 | 53,772 436 |
54,208 | 1 January 2018 (as originally reported) | |
| Impact of accounting policy change* | – | – | –116 | – – |
– | – | –116 | – –116 |
Impact of accounting policy change* | |||
| 1 January 2018 (As amended due to accounting policy change) |
658 | 2,084 | 50,877 | –1,494 | 11 | 1,515 | 5 | 53,656 436 |
54,092 | 1 January 2018 (As amended due to accounting policy change) |
||
| Net profit* | – | – | 4,313 | – – |
– | – | 4,313 45 |
4,358 | ||||
| Other comprehensive income for the period after tax | – | – | 384 | 227 – |
– 403 | – 404 | –196 | – –196 |
Other comprehensive income for the period after tax | |||
| Comprehensive income at 30 June 2018* | – | – | 4,697 | 227 – |
– 403 | – 404 | 4,117 45 |
4,162 | Comprehensive income at 30 June 2018 * | |||
| Dividend payments | – | – | – 2,630 | – – |
– | – | – 2,630 | – – 2,630 |
||||
| Other changes | – | – | 8 | – – |
–12 | – | – 4 | 7 3 |
||||
| 30 June 2018* | 13 | 658 | 2,084 | 52,952 | –1,267 | 11 | 1,100 | – 399 | 55,139 488 |
55,627 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4 to the Interim Group Financial Statements.
| Accumulated other equity | |||||||
|---|---|---|---|---|---|---|---|
| Total | Minority interest |
Equity attributable to shareholders of BMW AG |
Costs of hedging |
Derivative financial instruments |
Securities | Translation differences |
|
| 31 December 2018 (as originally reported) | 58,088 | 529 | 57,559 | – 569 | 558 | –1 | –1,326 |
| Impact of accounting policy change* | – 259 | – | – 259 | – | – | – | – |
| 31 December 2018 (As amended due to accounting policy change) |
57,829 | 529 | 57,300 | – 569 | 558 | –1 | –1,326 |
| Effects from the first-time application of IFRS 16 | – 32 | – | – 32 | – | – | – | – |
| 1 January 2019 (adjusted according to IFRS 16) | 57,797 | 529 | 57,268 | – 569 | 558 | –1 | –1,326 |
| Net profit | 2,068 | 53 | 2,015 | – | – | – | – |
| Other comprehensive income for the period after tax | – 487 | – | – 487 | 4 | –164 | 41 | 80 |
| Comprehensive income at 30 June 2019 | 1,581 | 53 | 1,528 | 4 | –164 | 41 | 80 |
| Dividend payments | – 2,364 | – 61 | – 2,303 | – | – | – | – |
| Other changes | – 46 | 7 | – 53 | – 2 | – | – | – |
| 30 June 2019 | 56,968 | 528 | 56,440 | – 567 | 394 | 40 | –1,246 |
| Accumulated other equity | |||||||
|---|---|---|---|---|---|---|---|
| Total | Minority interest |
Equity attributable to shareholders of BMW AG |
Costs of hedging |
Derivative financial instruments |
Securities | Translation differences |
|
| 1 January 2018 (as originally reported) | 54,208 | 436 | 53,772 | 5 | 1,515 | 11 | –1,494 |
| Impact of accounting policy change* | –116 | – | –116 | – | – | – | – |
| 1 January 2018 (As amended due to accounting policy change) |
54,092 | 436 | 53,656 | 5 | 1,515 | 11 | –1,494 |
| Net profit* | 4,358 | 45 | 4,313 | – | – | – | – |
| Other comprehensive income for the period after tax | –196 | – | –196 | – 404 | – 403 | – | 227 |
| Comprehensive income at 30 June 2018 * | 4,162 | 45 | 4,117 | – 404 | – 403 | – | 227 |
| Dividend payments | – 2,630 | – | – 2,630 | – | – | – | – |
| Other changes | 3 | 7 | – 4 | – | –12 | – | – |
| 30 June 2018* | 55,627 | 488 | 55,139 | – 399 | 1,100 | 11 | –1,267 |
Notes to the Group Financial Statements
Accounting Principles and Policies
The consolidated financial statements of Bayerische Motoren Werke Aktiengesellschaft (BMW Group Financial Statements or Group Financial Statements) at 31 December 2018 were drawn up in accordance with International Financial Reporting Standards (IFRS), as endorsed by the European Union (EU), and the supplementary requirements of § 315 e (1) of the German Commercial Code (HGB). The Interim Group Financial Statements (Interim Report) at 30 June 2019, which have been prepared in accordance with International Accounting Standard (IAS) 34 (Interim Financial Reporting), have been drawn up using, in all material respects, the same accounting methods as those utilised in the 2018 Group Financial Statements. Changes resulting from the first-time application of IFRS 16
see note 4
are presented in note 4. The BMW Group applies the option of publishing condensed group financial statements. All Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) which were mandatory at 30 June 2019 have been applied. The Interim Report also complies with German Accounting Standard No. 16 (GAS 16) – Interim Financial Reporting – issued by the German Accounting Standards Committee e. V. (GASC).
The reporting period for these Interim Group Financial Statements in accordance with IAS 34 is the sixmonth period from 1 January 2019 to 30 June 2019. In addition, the income statement and statement of comprehensive income and notes for the period from 1 April to 30 June 2019 are presented for informational purposes, which were not subject of the audit review.
With effect from the financial year 2019, the presentation of selected items for Group and Financial Services segment reporting purposes has been changed and the corresponding figures for 2018 have been made comparable. In particular, vehicles coming out of leases were reclassified from leased products to inventories (amount reclassified at 31 December 2018: € 592 million) and residual value risks on finance leases and vehicle financing receivables were reclassified from other provisions to receivables from sales financing (amount reclassified at 31 December 2018: € 441 million). Furthermore, the effect of amortising initial direct costs and transaction costs relating to finance leases and new loans was reclassified from cost of sales to revenues (amount reclassified for the period January to June 2018: € 227 million). The relevant tables and disclosures have been marked accordingly. The changes in presentation are not material for the results of operations, financial position and net assets of the BMW Group.
35
Interim Group Financial Statements
Notes to the Group Financial Statements Accounting
Principles and Policies
Further information regarding the Group's accounting principles and policies is contained in the BMW Group Financial Statements at 31 December 2018.
The Group currency is the euro. All amounts are disclosed in millions of euros (€ million) unless stated otherwise. Information regarding foreign currency translation is provided in note 3 to the Group Financial Statements at 31 December 2018.
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, Financial 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. These items are eliminated in the relevant "Eliminations" columns. More detailed information regarding the allocation of activities of the BMW Group to segments and a description of the segments is provided in the explanatory notes to segment information in the BMW Group Financial Statements at 31 December 2018.
The notes have been condensed in accordance with IAS 34 in order to provide a better overview of information useful for decision-making. The presentation of condensed notes has not resulted in the omission of relevant information. The Interim Group Financial Statements continue to provide a true and fair view of the results of operations, financial position and net assets.
The Interim Group Financial Statements at 30 June 2019 have been reviewed by the Group auditors, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, Munich office.
The BMW Group Financial Statements to 30 June 2019 include BMWAG and all material subsidiaries over which BMWAG – either directly or indirectly – exercises control. This also includes 54 structured entities used exclusively in conjunction with the BMW Group's asset-backed financing arrangements or as special purpose funds.
The following changes took place in the Group reporting entity during the first six months of 2019:
| Germany | Foreign | Total | |
|---|---|---|---|
| Included at 31 December 2018 |
23 | 194 | 217 |
| Included for the first time in 2019 |
– | 5 | 5 |
| No longer included in 2019 |
2 | 16 | 18 |
| Included at 30 June 2019 |
21 | 183 | 204 |
On 28 March 2018, the BMW Group signed an agreement with the Daimler Group regarding the merger of certain business units that provide mobility services. Following approval by the relevant antitrust authorities, the transaction was completed on 31 January 2019. Existing on-demand mobility offerings in the areas of car sharing, ride-hailing, parking, charging and multi-modality have already been combined with future strategic expansion in mind. As a result of the merger, the BMW Group and the Daimler Group each hold equal shares in Car2Go Deutschland GmbH, Berlin (ShareNow), Blitz 18-353 GmbH, Munich (FreeNow), Parkmobile Group Holding B. V., Amsterdam (ParkNow), Digital Charging Solutions GmbH, Berlin (ChargeNow) and Moovel Group GmbH, Berlin (ReachNow). The joint ventures are combined under the name YOUR NOW.
As a result of the merger, the investments in the companies previously held by BMW were remeasured to their fair value. DriveNow GmbH & Co. KG, Munich, including its subsidiaries and DriveNow Verwaltungs GmbH, Munich (DriveNow), are part of the agreement and, on a fully realised profit basis, were contributed in kind to Car2Go Deutschland GmbH, Berlin, in return for shares in the company. Up to 31 January 2019, DriveNow was accounted for as a discontinued operation. Profit after taxes amounted to € 44 million and resulted primarily from the contribution in kind of DriveNow to Car2Go Deutschland GmbH. This amount is reported in the income statement as part of the result from discontinued operations. The remaining BMW companies included in the agreement were not previously fully consolidated on the grounds of immateriality. In conjunction with the transaction, this resulted in a preliminary positive impact of € 329 million in the
see note 7
result from investments (see note 7). This amount comprises sale proceeds of € 232 million and revaluation gains of € 97 million arising on the remaining shares. The transaction resulted in a total cash outflow of € 890 million, comprising an inflow of € 295 million and an outflow of € 1,185 million. The items described above relating to YOUR NOW impacted in particular the Group's Cash flows from investing activities.
Interim Group Financial
36
Statements Notes to the Group Financial Statements Accounting
Principles and Policies
With effect from 1 February 2019, the joint ventures are accounted for in the BMW Group Financial Statements using the equity method. The BMW Group's share of the loss recorded for the YOUR NOW companies in the first half of 2019 amounted to € 171 million. The carrying amount of the BMW Group's interest in the relevant entities at 30 June 2019 is approximately € 1.5 billion. The work on opening balance sheets at the merger date and the calculation of the
final purchase prices have not yet been finalised. For this reason, the final purchase prices cannot yet be determined definitively. Similarly, purchase price allocations have not yet been finalised.
None of the other changes to the Group reporting entity have a material impact on the results of operations, financial position and net assets of the Group.
| the BMW Group and applied for the first time in the first six months of 2019: |
||||
|---|---|---|---|---|
| Standard / Interpretation | Date of issue by IASB |
Date of mandatory application IASB |
Date of mandatory application EU |
|
| IFRS 16 | Leases | 13.1. 2016 | 1.1. 2019 | 1.1. 2019 |
see note 4
Changes due to the new accounting standard IFRS 16 are described in note 4.
(a) Standards and Revised Standards significant for
(b) 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.
03
Financial reporting rules
The new Standard IFRS 16 (Leases) requires a new approach to accounting for leases by lessees. While under IAS 17, the accounting treatment of a lease was determined on the basis of the transfer of risks and rewards incidental to ownership of the asset, all leases are now required, as a general rule, to be accounted for at the level of the lessee as a financing transaction.
In accordance with IFRS 16, leases are recognised as right-of-use assets and lease liabilities with effect from the date on which the leased asset becomes available for use by the BMW Group.
The cost of a right-of-use asset is calculated as the sum of the present value of 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 received from the lessor are deducted. Right-of-use assets are depreciated on a straight-line basis over the shorter of the underlying asset's useful life and the expected lease term. The depreciation expense is allocated to costs by function.
Lease liabilities are measured on initial recognition on the basis of the present value of the future lease payments. Each lease payment is allocated to principal repayment and finance expense. Subsequent 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 included in financial liabilities, while the financing expense is included in net interest result.
Lease payments comprise fixed payments, variable lease payments that depend on an index or an (interest) rate and amounts expected to be payable under residual value guarantees. The exercise price of purchase, contract extension and termination options is taken into account in the lease liability if their exercise is reasonably certain.
The BMW Group makes use of the application exemptions available for short-term leases and leases of low-value assets. In addition, the BMW Group
Notes to the Group Financial Statements Accounting
Principles and Policies
generally makes use of the option not to separate the non-lease and lease components within a lease contract. This does not apply, however, to leased assets allocated to the real estate and IT asset classes.
The new Standard has been applied with effect from 1 January 2019 using the modified retrospective method. On transition to the new Standard, the BMW Group applied the following practical expedients permitted for lessees by IFRS 16:
| Financial obligations for operating leases at 31 December 2018 | 2,694 |
|---|---|
| Application exemption for short-term leases | –15 |
| Application exemption for leases of low-value assets | – 87 |
| Change in assessment of leases | 69 |
| Other | 4 |
| Gross lease liabilities for former operating leases at 1 January 2019 | 2,665 |
| Discounting impact | – 258 |
| Lease liabilities for former operating leases at 1 January 2019 | 2,407 |
| Present value of finance lease liabilities at 31 December 2018 | 105 |
| Total lease liabilities at 1 January 2019 | 2,512 |
see note 22
Lease liabilities were discounted using a weighted average incremental interest rate of 1.94% at 1 January 2019.
— Current information is taken into account when determining the lease term if the contract contains options to extend or terminate the lease.
At the date of initial application, the balance sheet total increased by approximately € 2.4 billion as a result of leases previously classified as operating leases. The reclassification resulted in a slight decline in the equity ratio. For a small number of real estate contracts, the carrying amount of right-of-use assets has been determined as if IFRS 16 had been applied from the commencement of the lease. After offsetting deferred tax effects amounting to € 13 million, this resulted in a reduction of approximately € 32 million in Group revenue reserves at 1 January 2019. In the current reporting period, there was a slightly positive impact on profit before financial result. Furthermore, there was a positive effect on cash inflows / outflows from operating activities and, conversely, a negative impact on cash inflows / outflows from financing activities.
Information on the impact on the BMW Group's segments is provided in note 22 (Explanatory notes to segment information).
Starting with financial obligations for operating leases at 31 December 2018, lease liabilities can be reconciled to the opening balance at 1 January 2019 as follows:
Notes to the Group Financial Statements Accounting
Principles and Policies
| in € million | 1. 1. 2019 | 30. 6. 2019 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Right-of-use assets – land and operational buildings | 2,387 | 2,274 |
| Right-of-use assets – plant and machinery | 1 | 1 |
| Right-of-use assets – other facilities, factory, office and IT equipment | 71 | 71 |
| Total | 2,459 | 2,346 |
In conjunction with the adoption of IFRS 16, the methods used to account for leases as a lessor have also been reviewed, resulting in a change of accounting policy as described below with effect from the financial year 2019. The change in accounting policy has been applied retrospectively in accordance with IAS 8, with comparative figures restated. In this context, the opening balance sheet at 1 January 2018 and figures for the financial year 2018 have been amended.
As a result of the revised definition of initial direct costs contained in IFRS 16, the BMW Group has changed the timing of income statement recognition for volume-dependent bonuses relating to Financial Services segment sales promotions. Rather than being spread over the term of the underlying lease, these costs are now recognised as an expense in full in the period in which the entitlement to the bonus arises. This resulted in a retrospective decrease in Group revenue reserves at 1 January 2018 of € 101 million, after offset of deferred tax amounting to € 44 million (31 December 2018: reduction of revenue reserves of € 113 million, after offset of deferred tax amounting to € 49 million).
Moreover, the BMW Group was required to account for finance leases concluded with retail customers via the Financial Services segment in accordance with the requirements applicable to manufacturers or dealers. For this reason, at Group level revenues and cost of sales arising on the sale of vehicles which will subsequently be leased to customers under finance lease arrangements are now recognised at a later date. Revenues and cost of sales relating to vehicle sales are no longer recognised at the time of sale, but rather at the commencement of the lease. Revenues are recognised on the basis of the leased asset's fair value, reduced by any unguaranteed residual value of vehicles that are expected to be returned to the Group. Similarly, cost of sales is reduced for unguaranteed residual values. In addition, initial direct costs incurred by the Financial Services segment are recognised at Group level as cost of sales. Overall, this resulted in a retrospective decrease in Group revenue reserves at 1 January 2018 of € 15 million, after offset of deferred tax amounting to € 4 million (31 December 2018: decrease of revenue reserves of € 146 million, after offset of deferred tax amounting to € 44 million). The adoption of these requirements did not have any significant impact on the accounting in the Automotive and Financial Services segments.
The following tables show the impact of accounting policy changes on the balance sheets at 1 January 2018 and 31 December 2018, as well as on the income statement, statement of comprehensive income and cash flow statement for the financial year 2018:
• 26
Principles and Policies
| in € million | As originally reported |
Impact of accounting policy changes1 |
As amended |
|---|---|---|---|
| Revenues | 47,717 | 168 | 47,885 |
| Cost of sales | – 37,765 | –196 | – 37,961 |
| Gross profit | 9,952 | – 28 | 9,924 |
| Selling and administrative expenses | – 4,514 | – 5 | – 4,519 |
| Profit / loss before financial result | 5,479 | – 33 | 5,446 |
| Profit / loss before tax | 6,038 | – 33 | 6,005 |
| Income taxes | –1,648 | 8 | –1,640 |
| Net profit / loss | 4,383 | – 25 | 4,358 |
| Attributable to shareholders of BMW AG | 4,338 | – 25 | 4,313 |
| Basic earnings per share of common stock in € | 6.60 | – 0.04 | 6.56 |
| Basic earnings per share of preferred stock in € | 6.61 | – 0.04 | 6.57 |
| Diluted earnings per share of common stock in € | 6.60 | – 0.04 | 6.56 |
| Diluted earnings per share of preferred stock in € | 6.61 | – 0.04 | 6.57 |
• 27
| in € million | As originally reported |
Impact of accounting policy changes1 |
As amended |
|---|---|---|---|
| Revenues | 25,023 | 84 | 25,107 |
| Cost of sales | –19,935 | – 88 | – 20,023 |
| Gross profit | 5,088 | – 4 | 5,084 |
| Selling and administrative expenses | – 2,339 | – 3 | – 2,342 |
| Profit / loss before financial result | 2,746 | – 7 | 2,739 |
| Profit / loss before tax | 2,873 | – 7 | 2,866 |
| Income taxes | – 784 | 1 | – 783 |
| Net profit / loss | 2,082 | – 6 | 2,076 |
| Attributable to shareholders of BMW AG | 2,057 | – 6 | 2,051 |
| Basic earnings per share of common stock in € | 3.13 | – 0.01 | 3.12 |
| Basic earnings per share of preferred stock in € | 3.14 | – 0.01 | 3.13 |
| Diluted earnings per share of common stock in € | 3.13 | – 0.01 | 3.12 |
| Diluted earnings per share of preferred stock in € | 3.14 | – 0.01 | 3.13 |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16.
2 Supplementary information which was not subject of the audit review.
Policies
| in € million | As originally reported |
Impact of accounting policy changes* |
As amended |
|---|---|---|---|
| Assets | |||
| Total non-current assets | 125,442 | – 80 | 125,362 |
| thereof receivables from sales financing | 48,109 | – 20 | 48,089 |
| thereof deferred tax | 1,590 | 48 | 1,638 |
| thereof other assets | 2,026 | –108 | 1,918 |
| Total current assets | 83,538 | 479 | 84,017 |
| thereof current tax | 1,366 | 12 | 1,378 |
| thereof other assets | 9,790 | 467 | 10,257 |
| Total assets | 208,980 | 399 | 209,379 |
| Equity and liab ilities |
|||
| Total equity | 58,088 | – 259 | 57,829 |
| thereof equity attributable to shareholders of BMW AG | 57,559 | – 259 | 57,300 |
| thereof revenue reserves | 56,121 | – 259 | 55,862 |
| Total non-current provisions and liabilities | 79,983 | – 48 | 79,935 |
| thereof other provisions | 5,776 | –9 | 5,767 |
| thereof deferred tax | 1,806 | – 33 | 1,773 |
| thereof other liabilities | 5,299 | – 6 | 5,293 |
| Total current provisions and liabilities | 70,909 | 706 | 71,615 |
| thereof other provisions | 6,078 | – 3 | 6,075 |
| thereof other liabilities | 15,117 | 709 | 15,826 |
| Total equity and liabilities | 208,980 | 399 | 209,379 |
• 29
| in € million | As originally reported |
Impact of accounting policy changes* |
As amended |
|---|---|---|---|
| Assets | |||
| Total non-current assets | 122,090 | –105 | 121,985 |
| thereof receivables from sales financing | 48,475 | –18 | 48,457 |
| thereof deferred tax | 1,965 | 6 | 1,971 |
| thereof other assets | 1,630 | – 93 | 1,537 |
| Total current assets | 73,496 | – 34 | 73,462 |
| thereof current tax | 1,566 | 11 | 1,577 |
| thereof other assets | 7,485 | – 45 | 7,440 |
| Total assets | 195,586 | –139 | 195,447 |
| Equity and liab ilities |
|||
| Total equity | 54,208 | –116 | 54,092 |
| thereof equity attributable to shareholders of BMW AG | 53,772 | –116 | 53,656 |
| thereof revenue reserves | 50,993 | –116 | 50,877 |
| Total non-current provisions and liabilities | 69,616 | – 31 | 69,585 |
| thereof other provisions | 5,632 | – | 5,632 |
| thereof deferred tax | 2,166 | – 31 | 2,135 |
| thereof other liabilities | 5,045 | – | 5,045 |
| Total current provisions and liabilities | 71,762 | 8 | 71,770 |
| thereof other liabilities | 13,443 | 8 | 13,451 |
| Total equity and liabilities | 195,586 | –139 | 195,447 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16.
| in € million | As originally reported |
Impact of accounting policy changes1 |
As amended |
|---|---|---|---|
| Net profit | 4,383 | – 25 | 4,358 |
| Total comprehensive income | 4,187 | – 25 | 4,162 |
| Total comprehensive income attributable to shareholders of BMW AG | 4,142 | – 25 | 4,117 |
| in € million | As originally reported |
Impact of accounting policy changes1 |
As amended |
|---|---|---|---|
| Net profit | 2,082 | – 6 | 2,076 |
| Total comprehensive income | 1,917 | – 6 | 1,911 |
| Total comprehensive income attributable to shareholders of BMW AG | 1,892 | – 6 | 1,886 |
• 32
| in € million | As originally reported |
Impact of accounting policy changes1 |
As amended |
|---|---|---|---|
| Cash inflow/outflow from operating activities | 2,672 | – | 2,672 |
| thereof net profit | 4,383 | – 25 | 4,358 |
| thereof change in deferred taxes | 1,322 | – 45 | 1,277 |
| thereof change in receivables from sales financing | –1,789 | 20 | –1,769 |
| thereof change in provisions | – 246 | –1 | – 247 |
| thereof change in other operating assets and liabilities | – 400 | 51 | – 349 |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16.
2 Supplementary information which was not subject of the audit review.
42
Notes to the Group Financial Statements Notes to the Income
Revenues by activity comprise the following:
NOTES TO THE INCOME
STATEMENT
| in € million | 2nd quarter 20191 | 2nd quarter 20182 | 1 January to 30 June 2019 |
1 January to 30 June 20182 |
|---|---|---|---|---|
| Sales of products and related goods | 18,075 | 17,563 | 33,211 | 33,530 |
| Sales of products previously leased to customers | 2,824 | 2,751 | 5,483 | 5,131 |
| Income from lease instalments | 2,551 | 2,410 | 5,064 | 4,791 |
| Interest income on loan financing and finance leases | 898 | 818 | 1,789 | 1,610 |
| Revenues from service contracts, telematics and roadside assistance | 760 | 640 | 1,461 | 1,358 |
| Other income | 607 | 811 | 1,169 | 1,238 |
| Revenues | 25,715 | 24,993 | 48,177 | 47,658 |
1 Supplementary information which was not subject of the audit review.
2 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
Revenues recognised from contracts with customers in accordance with IFRS 15 totalled € 40,325 million (2018: € 40,247 million).
An analysis of revenues by segment is shown in the segment information in note 22. Revenues from the sale of products and related goods are generated primarily in the Automotive segment and, to a lesser extent, in the Motorcycles segment. Revenues from sales of products previously leased to customers, income from lease instalments and interest income on loan financing and finance leases are allocated to the Financial Services segment. Other income relates mainly to the Automotive segment and the Financial Services segment.
Interest income on loan financing and finance leases includes interest calculated on the basis of the effective interest method amounting to € 1,723 million (2018: € 1,552 million). This interest income is not reported separately in the income statement as it is not significant compared to total Group revenues. The prior year's figures were adjusted due to a change in accounting policy for manufacturer leases (see note 4), as well as due to the change in presentation
see note 4
see note 22
of amortisation of initial direct costs.
06
Notes to the Group Financial Statements Notes to the Income
Statement
These items principally include exchange gains and losses, gains and losses on the disposal of assets, impairment losses, as well as income / expense from the reversal of and allocation to provisions, including provisions for ongoing legal disputes, legal disputes that have been concluded and other legal risks.
In an ad hoc announcement dated 5 April 2019, the BMW Group reported that the EU Commission had informed it of a "Statement of Objections" in conjunction with ongoing antitrust proceedings. The EU Commission is alleging that German automobile manufacturers cooperated in technical working groups to restrict competition related to exhaust gas emissions systems for diesel and petrol passenger vehicles. The allegations relate to Selective Catalytic Reduction (SCR) systems as well as the use
of petrol particulate filters (PPF). According to the EU Commission, such behaviour would violate the prohibition anchored in EU rules regarding cartel agreements to limit or control technical developments. The Statement of Objections leads the BMW Group to believe that it is probable ("more likely than not") that the EU Commission will issue a significant fine. The resulting requirement to recognise a provision increased other operating expenses by approximately € 1.4 billion in the first half of 2019.
The Statement of Objections and related files are currently being examined. During the second half of 2019, the BMW Group will provide a detailed response to the EU Commission regarding the Statement of Objections. The EU Commission will subsequently examine the response and determine the next steps on this basis.
Other financial result developed as follows:
| in € million | 2nd quarter 2019* | 2nd quarter 2018 | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
|---|---|---|---|---|
| Result on investments | 4 | – 25 | 179 | 203 |
| Sundry other financial result | –127 | 5 | – 228 | 51 |
| Other financial result | –123 | – 20 | – 49 | 254 |
*Supplementary information which was not subject of the audit review.
The sundry other financial result reflects mainly the interest rate development in the USA.
The effective tax rate for the six-month period to 30 June 2019 was 28.1 % (2018: 27.3 %) and corresponds to the best estimate of the weighted average annual income tax rate for the full year. This tax rate has been applied to the pre-tax profit for the period under report.
The increase in the effective tax rate results, among other things, from the non-deductibility of risk allocations for tax purposes in connection with the ongoing anti-trust proceedings instigated by the EU Commission (see note 6). see 44
Interim Group Financial Statements
Notes to the Group Financial Statements Notes to the
Balance Sheet
Intangible assets mainly comprise capitalised development costs on vehicle, module and architecture projects as well as subsidies for tool costs, licences, purchased development projects, software and purchased customer lists.
| in € million | 30. 6. 2019 | 31.12. 2018 |
|---|---|---|
| Capitalised development costs | 10,010 | 9,976 |
| Goodwill | 380 | 380 |
| thereof allocated to the Automotive cash-generating unit |
33 | 33 |
| thereof allocated to the Financial Services cash-generating unit |
347 | 347 |
| Other intangible assets | 781 | 615 |
| Intangible assets | 11,171 | 10,971 |
Intangible assets developed during the first six months of the year as follows:
| in € million | 2019 | 2018 |
|---|---|---|
| Capitalised development costs | ||
| Additions | 840 | 802 |
| Amortisation | 806 | 656 |
| Other intangible assets | ||
| Additions | 232 | 33 |
| Amortisation | 67 | 97 |
As in the previous year, there was no requirement to recognise impairment losses or reversals of impairment losses on intangible assets.
Property, plant and equipment developed during the first six months as follows:
| in € million | 2019 | 2018 |
|---|---|---|
| Additions | 1,943 | 1,547 |
| Depreciation | 2,032 | 1,701 |
| Disposals | 33 | 9 |
Purchase commitments for property, plant and equipment totalled € 3,437 million (31 December 2018: € 3,486 million).
Financial assets Financial assets comprise:
| in € million | 30. 6. 2019 | 31.12. 2018 |
|---|---|---|
| Marketable securities and investment funds |
5,367 | 5,316 |
| Derivative instruments | 2,305 | 1,977 |
| Loans to third parties | 22 | 20 |
| Credit card receivables | 2 | 244 |
| Other | 479 | 128 |
| Financial assets | 8,175 | 7,685 |
In June 2019, the Financial Services segment sold a credit card portfolio in the USA amounting to € 216 million for strategic reasons.
Current income taxes amounting to € 1,510 million (31 December 2018: € 1,378 million) include € 199 million (31 December 2018: € 222 million), which is expected to be settled after more than twelve months. Claims may be settled earlier than this depending on the timing of the underlying proceedings. The prior year's figures were adjusted due to a change in accounting policy in connection with the adoption of see IFRS 16; see note 4.
note 4
Notes to the Balance Sheet
The Group Statement of Changes in Equity is shown on pages 32 and 33.
The number of shares of common stock issued by BMWAG at 30 June 2019 was 601,995,196 shares, each with a par value of € 1, unchanged from 31 December 2018. The number of shares of preferred stock at that date was 56,126,904 shares, each with a par value of € 1, unchanged from 31 December 2018. Unlike the common stock, no voting rights are attached to the preferred stock. Subscribed capital therefore stood at € 658 million, unchanged from 31 December 2018. All of the Company's stock is issued to bearer. Preferred stock bears an additional dividend of € 0.02 per share.
The shareholders passed a resolution at the 2019 Annual General Meeting authorising the Board of Management, with the approval of the Supervisory Board, to increase the Company's share capital by up to € 5 million prior to 15 May 2024 by the issuance of new shares of non-voting preferred stock, carrying the same rights as existing non-voting preferred stock, in return for cash contributions. This authorisation has not been utilised up to the end of the reporting period. The number of authorised shares and amount of authorised capital at the level of BMWAG therefore remain at 5.0 million shares and € 5.0 million respectively. The BMW Group did not hold any treasury shares at 30 June 2019.
In the second quarter of 2019, BMWAG paid the dividend for the financial year 2018 amounting to € 2,107 million for common stock and € 196 million for preferred stock.
Further information regarding the transition effects recognised directly in equity on the initial application of IFRS 16 is provided in note 4.
see note 4
see pages 32 and 33
Current income taxes amounting to € 887 million (31 December 2018: € 1,158 million) include liabilities of € 53 million (31 December 2018: € 96 million), which are expected to be settled after more than twelve months. Liabilities may be settled earlier than this depending on the timing of the underlying proceedings.
Current income tax liabilities comprise € 217 million (31 December 2018: € 216 million) for taxes payable and € 670 million (31 December 2018: € 942 million) for tax provisions.
Financial liabilities of the BMW Group comprise the following:
| in € million | 30. 6. 2019 | 31.12. 2018 |
|---|---|---|
| Bonds | 59,250 | 53,346 |
| Asset backed financing transactions | 17,707 | 17,335 |
| Liabilities from customer deposits (banking) | 14,721 | 14,359 |
| Liabilities to banks | 12,867 | 13,196 |
| Lease liabilities | 2,414 | 105 |
| Derivative instruments | 1,862 | 1,675 |
| Commercial paper | 1,143 | 2,480 |
| Other | 1,192 | 1,101 |
| Financial liabilities | 111,156 | 103,597 |
The changes in financial liabilities affect cash flows from financing activities.
Other liabilities include contract liabilities relating to contracts with customers amounting to € 5,077 million (31 December 2018: € 4,976 million). These mainly comprise 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). The prior year's figures were adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4.
see note 4
Notes to the Group Financial Statements Other Disclosures
Research and development expenditure was as follows:
| in € million | 2nd quarter 2019* | 2nd quarter 2018 | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
|---|---|---|---|---|
| Research and development expenses | 1,400 | 1,322 | 2,796 | 2,610 |
| Expenditure for capitalised development costs | 481 | 486 | 840 | 802 |
| Amortisation | – 404 | – 324 | – 806 | – 656 |
| Total research and development expenditure | 1,477 | 1,484 | 2,830 | 2,756 |
*Supplementary information which was not subject of the audit review.
The following contingent liabilities existed at the balance sheet date:
| in € million | 30. 6. 2019 | 31.12. 2018 |
|---|---|---|
| Investment subsidies | 286 | 275 |
| Litigation | 136 | 125 |
| Performance guarantees | 13 | 14 |
| Other | 581 | 351 |
| Contingent liabilities | 1,016 | 765 |
Other contingent liabilities comprise mainly risks relating to taxes and customs duties.
The BMW Group determines its best estimate of contingent liabilities on the basis of the information available at the reporting date. 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 allegations against five German car manufacturers. The BMW Group has provided for the potential outcome of 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 6). In connection with these allegations, numerous class action lawsuits have been brought in the USA and Canada as well as several private lawsuits in South Korea. The class action lawsuits in the USA were initially dismissed on the basis of the lack of conclusiveness. However, the applicants may remedy the deficiencies of their lawsuits within a period expiring in August 2019. Class action lawsuits in Canada and private lawsuits in South Korea are at an early stage. Further civil lawsuits based on the allegations are possible. At present, the risk exposure for the BMW Group can neither be foreseen in detail nor quantified. 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 airbags supplied by the Takata group of companies. Provision for the costs involved has been recognised within warranty provisions. In addition to the risks already covered by warranty provisions, it cannot be ruled out that further BMW Group vehicles will be affected by future recall actions. Further disclosures pursuant to IAS 37.86 cannot be provided at present.
A description of the accounting treatment and measurement of derivative financial instruments and allocation of recognised financial instruments to different valuation levels is provided in notes 4 and 39 of the Group Financial Statements of BMWAG for see the year ended 31 December 2018.
note 6
Notes to the Group
Financial assets and liabilities measured at fair value are classified to valuation levels pursuant to IFRS 13 as follows:
| Financial Statements | |
|---|---|
| Other Disclosures |
| Level 1 | Level 2 | Level 3 |
|---|---|---|
| 4,609 | 187 | – |
| 189 | – | 323 |
| – | 85 | – |
| – | – | – |
| – | 1,563 | – |
| – | 496 | – |
| – | 241 | – |
| – | – | 5 |
| – | 1,047 | – |
| – | 511 | – |
| – | 304 | – |
| 30. 6. 2019 Level hierarchy in accordance with IFRS 13 |
| 31.12. 2018 | |||
|---|---|---|---|
| Level hierarchy in accordance with IFRS 13 | |||
| in € million | Level 1 | Level 2 | Level 3 |
| Marketable securities, investment funds and collateral receivables | 4,641 | – | – |
| Other investments | 164 | – | 265 |
| Cash equivalents | – | 885 | – |
| Loans to third parties | – | – | 3 |
| Derivative instruments (assets) | |||
| Interest rate risks | – | 1,069 | – |
| Currency risks | – | 713 | – |
| Raw materials price risks | – | 191 | – |
| Other risks | – | – | 4 |
| Derivative instruments (liabilities) | |||
| Interest rate risks | – | 923 | – |
| Currency risks | – | 409 | – |
| Raw materials price risks | – | 343 | – |
Any transfers between fair value hierarchy levels are made at the end of the relevant reporting period.
Marketable securities amounting to € 187 million were transferred at the end of the reporting period from Level 1 to Level 2 in view of the fact that their fair value is determined on the basis of observable market data.
Interim Group Financial Statements Notes to the Group
Financial Statements Other Disclosures
Where the fair value of a financial instrument is only required for disclosure purposes, the discounted cash flow method is used, taking account of the BMW Group's default risk. For this reason, the fair values can be allocated to Level 2.
Financial instruments measured at fair value using input factors not based on observable market prices are allocated to Level 3. Fair values are determined in accordance with the following table:
| in € million | Fair value 30. 6. 2019 |
Fair value 31.12. 2018 |
Valuation method | Input Parameter |
|---|---|---|---|---|
| Unquoted equity instruments | 323 | 265 | Last financing round | Price per share |
| Milestone analysis (quantitative and qualitative factors) |
Company performance | |||
| Contractual rights by share class | ||||
| Convertible bonds | – | 3 | Last financing round | Price per share |
| Milestone analysis (quantitative and qualitative factors) |
Company performance | |||
| Contractual rights by share class | ||||
| Options on unquoted equity instruments | 5 | 4 | Last financing round | Price per share |
| Milestone analysis (quantitative and qualitative factors) |
Company performance | |||
| Consideration of exercise price | Contractual rights by share class | |||
| Exercise price |
Unquoted equity instruments relate mainly to investments in a private equity fund. For valuation purposes, the investment advisor provides the external fund manager with relevant, investment-specific information on an ongoing basis (at least quarterly). The external fund manager subsequently assesses the underlying individual companies in accordance with the guidelines for international private equity and venture 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 figures. Based on this analysis, it is considered whether the price set at the most recent financing round can be accepted as an appropriate market valuation.
A detailed listing and quantification of potential sensitivities is not considered meaningful in view of the valuation methodology applied. An increase in input parameters (e. g. share price) would normally also lead to a similar increase in valuation. Similarly, a significant reduction in growth rates or financial ratio margins could result in impairment and therefore to a lower valuation of an investment.
49
Interim Group Financial Statements
| in € million | Unquoted equity instruments |
Convertible bonds | Options on unquoted equity instruments |
Financial Instru ments Level 3 |
|---|---|---|---|---|
| 1. January 2019 | 265 | 3 | 4 | 272 |
| Additions | 42 | – | – | 42 |
| Disposals | –1 | – 3 | – | – 4 |
| Gains (+)/ losses (–) recognised in accumulated other equity | – | – | – | – |
| Gains (+)/ losses (–) recognised in the income statement | 16 | – | 1 | 17 |
| Currency translation differences | 1 | – | – | 1 |
| 30 June 2019 | 323 | – | 5 | 328 |
| in € million | Unquoted equity instruments |
Convertible bonds | Options on unquoted equity instruments |
Financial Instru ments Level 3 |
|---|---|---|---|---|
| 1. January 2018 | 111 | 2 | 2 | 115 |
| Additions | 103 | 3 | – | 106 |
| Disposals | – 4 | – 2 | – | – 6 |
| Gains (+)/ losses (–) recognised in accumulated other equity | – | – | – | – |
| Gains (+)/ losses (–) recognised in the income statement | 45 | – | 2 | 47 |
| Currency translation differences | 10 | – | – | 10 |
| 31 December 2018 | 265 | 3 | 4 | 272 |
In the case of financial instruments held by BMW Group which are not measured at fair value, the carrying amounts and market values of such instruments generally coincide due to their generally short-term nature.
The following items are the exceptions to this general rule:
| 30. 6. 2019 | 31.12. 2018 | |||
|---|---|---|---|---|
| in € million | Fair value | Carrying amount | Fair value | Carrying amount* |
| Receivables from sales financing | 70,584 | 67,542 | 90,445 | 87,013 |
| Bonds | 60,418 | 59,250 | 53,831 | 53,346 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
With effect from the financial year 2019, the market and carrying amounts of receivables from financial services do not include receivables from finance and operating leases.
Differences between the fair values and carrying amounts of other financial liabilities are at a similar level to 31 December 2018.
20
Transactions of Group entities with related parties arise exclusively in the normal course of business of each of the parties concerned and are conducted at normal market conditions. Notes to the Group Financial Statements Other Disclosures
A significant proportion of the BMW Group's transactions with related parties relates to the joint venture BMW Brilliance Automotive Ltd.
| Supplies and services performed |
Supplies and services received |
Receivables | Payables | |||||
|---|---|---|---|---|---|---|---|---|
| in € million | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
1 January to 30 June 2019 |
1 January to 30 June 2018 |
30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 2018 |
| BMW Brilliance Automotive Ltd. | 4,113 | 3,471 | 48 | 41 | 1,680 | 1,829 | 786 | 772 |
| Supplies and services performed |
Supplies and services received |
Receivables | Payables | |||||
| in € million | 2nd quarter 2019* |
2nd quarter 2018 |
2nd quarter 2019* |
2nd quarter 2018 |
30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 2018 |
| BMW Brilliance Automotive Ltd. | 2,197 | 1,892 | 26 | 22 | 1,680 | 1,829 | 786 | 772 |
*Supplementary information which was not subject of the audit review.
Business relationships of the BMW Group with other associated companies and joint ventures as well as with non-consolidated subsidiaries are small in scale.
Stefan Quandt, Germany, is a shareholder and Deputy Chairman of the Supervisory Board of BMWAG. 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. Via its subsidiaries, DELTON Logistics S.à r. l., provided logistics services to the BMW Group during the first half of the financial year 2019. In addition, 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. Cooperation arrangements are in place between BMWAG and SOLARWATT GmbH, Dresden, within the field of electric mobility. The focus of this collaboration is on providing complete photovoltaic solutions for rooftop systems and carports to BMWi customers. SOLARWATT GmbH, Dresden, leased vehicles from the BMW Group during the first six months of 2019.
Susanne Klatten, Germany, is a shareholder and member of the Supervisory Board of BMWAG and also a shareholder and Deputy Chairwoman of the Supervisory Board of ALTANA AG, Wesel. ALTANA AG, Wesel, acquired vehicles from the BMW Group during the first six months of 2019 by way of leasing.
Susanne Klatten, Germany, is also the sole shareholder and Chairwoman of the Supervisory Board of UnternehmerTUM GmbH, Garching. During the first six months of 2019, the BMW Group bought in services from UnternehmerTUM GmbH, Garching, primarily in the form of consultancy and workshop services.
In addition, Susanne Klatten, Germany, and Stefan Quandt, Germany, are indirectly sole shareholders of Entrust Datacard Corp., Shakopee, Minnesota. Stefan Quandt is also a member of the supervisory board of this entity. Entrust Datacard Corp., Shakopee, Minnesota, leased vehicles from the BMW Group during the first six months of 2019.
Notes to the Group
Financial Statements Other Disclosures
Seen from the perspective of BMW Group entities, transactions with the above-mentioned entities were as follows:
| Supplies and services performed |
Supplies and services received |
Receivables | Payables | |||||
|---|---|---|---|---|---|---|---|---|
| in € thousand | 1 January to 30 June 2019 |
1 January to 30 June 2018 |
1 January to 1 January to 30 June 2019 30 June 2018 |
30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 2018 | |
| DELTON Health AG (formerly DELTON AG) | 1,032 | 1,774 | – | 11,546 | 25 | 34 | – | – |
| DELTON Logistics S.à r.l. | 754 | – | 10,752 | – | 17 | – | 2,051 | 2,235 |
| DELTON Technology SE | 3 | – | – | – | 1 | – | – | – |
| SOLARWATT GMBH | 59 | 13 | – | 1 | – | 1 | – | – |
| ALTANA AG | 1,029 | 1,019 | – | – | 207 | 401 | – | 5 |
| UnternehmerTUM GmbH | 82 | 54 | 710 | 558 | – | – | 295 | 367 |
| Entrust Datacard Corp. | 76 | 60 | – | – | 8 | 2 | – | – |
| Supplies and services performed |
Supplies and services received |
Receivables | Payables | |||||
|---|---|---|---|---|---|---|---|---|
| in € thousand | 2nd quarter 2019* |
2nd quarter 2018 |
2nd quarter 2019* |
2nd quarter 2018 |
30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 2018 |
| DELTON Health AG (formerly DELTON AG) | 520 | 881 | – | 5,751 | 25 | 34 | – | – |
| DELTON Logistics S.à r.l. | 361 | – | 5,193 | – | 17 | – | 2,051 | 2,235 |
| DELTON Technology SE | 3 | – | – | – | 1 | – | – | – |
| SOLARWATT GMBH | 54 | 7 | – | – | – | 1 | – | – |
| ALTANA AG | 520 | 512 | – | – | 207 | 401 | – | 5 |
| UnternehmerTUM GmbH | 82 | 54 | 470 | 440 | – | – | 295 | 367 |
| Entrust Datacard Corp. | 39 | 35 | – | – | 8 | 2 | – | – |
*Supplementary information which was not subject of the audit review.
Apart from vehicle sales, vehicle leasing and financing contracts at usual conditions, companies of the BMW Group concluded no further transactions with members of the Board of Management or Supervisory Board of BMWAG. This also applies to close members of the families of those persons.
BMW Trust e. V., Munich, manages fund assets on a trustee basis to secure pension obligations and manages the accrued entitlements relating to pre-retirement part-time working arrangements in Germany and is therefore a related party of the BMW Group in accordance with IAS 24. This entity has no assets of its own. It had no income or expenses during the period under report. BMWAG bears expenses on an immaterial scale and performs services for BMW Trust e. V., Munich.
No events have occurred after the balance sheet date with a particular significance for the results of operations, financial position or net assets of the BMW Group.
Interim Group Financial Statements Notes to the Group
Financial Statements Segment Information
For information on the basis used for identifying and managing reportable segments, please refer to the Group Financial Statements at 31 December 2018. Due to the management system, reported segment results and asset values are based on different performance measures. Details are provided in note 45 of the Group Financial Statements of BMW AG at 31 December 2018.
Segment information is prepared in conformity with the accounting policies used to prepare and present the Interim Group Financial Statements. Exceptions to this general principle include the treatment of inter-segment warranties, the earnings impact of which is allocated to the Automotive and Financial Services segments on the basis used internally to manage the business. In addition, intragroup repurchase agreements between the Automotive and Financial Services segments pursuant to IFRS 15, impairment allowances on intragroup receivables and changes in the value of consolidated other investments pursuant to IFRS 9 are also excluded. Intragroup leasing arrangements are not reflected in the internal management and reporting system on a IFRS 16 basis and therefore, in accordance with IFRS 8, do not give rise to any changes in the presentation of segment information.
Segment information by operating segment for the first six months is as follows:
| Automotive | Motorcycles | Financial Services | |||||
|---|---|---|---|---|---|---|---|
| in € million | 2019 | 20181 | 2019 | 2018 | 2019 | 20181 | |
| Segment information by operating segment |
|||||||
| External revenues | 33,025 | 33,466 | 1,316 | 1,183 | 13,835 | 13,008 | |
| Inter-segment revenues | 8,812 | 8,052 | – 3 | –1 | 675 | 580 | |
| Total revenues | 41,837 | 41,518 | 1,313 | 1,182 | 14,510 | 13,588 | |
| Segment result | 1,159 | 3,800 | 191 | 175 | 1,200 | 1,156 | |
| Result from equity accounted investments | 188 | 405 | – | – | – | – | |
| Capital expenditure on non-current assets | 2,958 | 2,344 | 46 | 34 | 12,442 | 11,726 | |
| Depreciation and amortisation on non-current assets | 2,830 | 2,390 | 50 | 46 | 5,375 | 5,066 |
Segment information by operating segment for the second quarter 2 is as follows:
| Automotive | Motorcycles | Financial Services | ||||
|---|---|---|---|---|---|---|
| in € million | 2019 | 20181 | 2019 | 2018 | 2019 | 20181 |
| Segment information by operating segment |
||||||
| External revenues | 17,949 | 17,605 | 729 | 659 | 7,036 | 6,729 |
| Inter-segment revenues | 4,675 | 4,587 | – 2 | –1 | 328 | 298 |
| Total revenues | 22,624 | 22,192 | 727 | 658 | 7,364 | 7,027 |
| Segment result | 1,469 | 1,919 | 102 | 98 | 573 | 603 |
| Result from equity accounted investments | 31 | 182 | – | – | – | – |
| Capital expenditure on non-current assets | 1,618 | 1,046 | 30 | 20 | 6,915 | 6,223 |
| Depreciation and amortisation on non-current assets | 1,427 | 1,190 | 25 | 22 | 2,790 | 2,585 |
| Automotive | Motorcycles | Financial Services | ||||
|---|---|---|---|---|---|---|
| in € million | 30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | 31.12. 20181 |
| Segment assets | 15,970 | 13,836 | 632 | 618 | 14,674 | 14,806 |
| Investments accounted for using the equity method | 3,987 | 2,624 | – | – | – | – |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
2 Supplementary information which was not subject of the audit review.
| Group | Reconciliation to Group figures | Other Entities | |||||
|---|---|---|---|---|---|---|---|
| 20181 | 2019 | 20181 | 2019 | 2018 | 2019 | ||
| Segment information by operating segment |
|||||||
| External revenues | 47,658 | 48,177 | – | – | 1 | 1 | |
| Inter-segment revenues | – | – | – 8,633 | – 9,486 | 2 | 2 | |
| Total revenues | 47,658 | 48,177 | – 8,633 | – 9,486 | 3 | 3 | |
| Segment result | 6,005 | 2,815 | 796 | 420 | 78 | –155 | |
| Result from equity accounted investments | 405 | 188 | – | – | – | – | |
| Capital expenditure on non-current assets | 10,918 | 12,048 | – 3,186 | – 3,398 | – | – | |
| Depreciation and amortisation on non-current assets | 4,291 | 5,200 | – 3,211 | – 3,055 | – | – |
| Group | Reconciliation to Group figures | Other Entities | |||||
|---|---|---|---|---|---|---|---|
| 20181 | 2019 | 20181 | 2019 | 2018 | 2019 | ||
| Segment information by operating segment |
|||||||
| External revenues | 24,993 | 25,715 | – | – | – | 1 | |
| Inter-segment revenues | – | – | – 4,885 | – 5,002 | 1 | 1 | |
| Total revenues | 24,993 | 25,715 | – 4,885 | – 5,002 | 1 | 2 | |
| Segment result | 2,866 | 2,053 | 238 | 6 | 8 | – 97 | |
| Result from equity accounted investments | 182 | 31 | – | – | – | – | |
| Capital expenditure on non-current assets | 5,576 | 6,655 | –1,713 | –1,908 | – | – | |
| Depreciation and amortisation on non-current assets | 2,128 | 2,714 | –1,669 | –1,528 | – | – | |
| Group | Reconciliation to Group figures | Other Entities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12. 20181 | 30. 6. 2019 | 31.12. 20181 | 30. 6. 2019 | 31.12. 2018 | 30. 6. 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment assets | 208,938 | 219,010 | 95,166 | 94,020 | 84,512 | 93,714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments accounted for using the equity method | 2,624 | 3,987 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Information
Notes to the Group Financial Statements Segment Information
| in € million | 2019 | 20181 |
|---|---|---|
| Reconciliation of segment result | ||
| Total for reportable segments | 2,395 | 5,209 |
| Financial result of Automotive segment | 297 | 543 |
| Financial result of Motorcycles segment | – 4 | –1 |
| Elimination of inter-segment items | 127 | 254 |
| Group profit before tax from continuing operations | 2,815 | 6,005 |
| Reconciliation of capital expenditure on non-current assets Total for reportable segments |
15,446 | 14,104 |
| Elimination of inter-segment items | – 3,398 | – 3,186 |
| Total Group capital expenditure on non-current assets | 12,048 | 10,918 |
| Reconciliation of depreciation and amortisation on non-current assets | ||
| Total for reportable segments | 8,255 | 7,502 |
| Elimination of inter-segment items | – 3,055 | – 3,211 |
| Total Group depreciation and amortisation on non-current assets | 5,200 | 4,291 |
Segment figures for the second quarter can be reconciled to the corresponding Group figures as follows:
| in € million | 20192 | 20181 |
|---|---|---|
| Reconciliation of segment result | ||
| Total for reportable segments | 2,047 | 2,628 |
| Financial result of Automotive segment | 14 | 143 |
| Financial result of Motorcycles segment | – 2 | – 2 |
| Elimination of inter-segment items | – 6 | 97 |
| Group profit before tax from continuing operations | 2,053 | 2,866 |
| Reconciliation of capital expenditure on non-current assets | ||
| Total for reportable segments | 8,563 | 7,289 |
| Elimination of inter-segment items | –1,908 | –1,713 |
| Total Group capital expenditure on non-current assets | 6,655 | 5,576 |
| Reconciliation of depreciation and amortisation on non-current assets | ||
| Total for reportable segments | 4,242 | 3,797 |
| Elimination of inter-segment items | –1,528 | –1,669 |
| Total Group depreciation and amortisation on non-current assets | 2,714 | 2,128 |
1 Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
2 Supplementary information which was not subject of the audit review.
55
Other Information
Segment figures can be reconciled to the corresponding Group figures as follows:
| in € million | 30. 6. 2019 | 31.12. 2018* |
|---|---|---|
| Reconciliation of segment assets | ||
| Total for reportable segments | 124,990 | 113,772 |
| Non-operating assets – Automotive | 51,465 | 48,639 |
| Liabilities of Automotive segment not subject to interest | 38,306 | 34,643 |
| Non-operating assets – Motorcycles | 43 | 45 |
| Liabilities of Motorcycles segment not subject to interest | 607 | 613 |
| Total liabilities – Financial Services segment | 134,534 | 131,415 |
| Non-operating assets – Other Entities segment | 7,269 | 7,084 |
| Elimination of inter-segment items | –138,204 | –127,273 |
| Total Group assets | 219,010 | 208,938 |
*Prior year's figures adjusted due to a change in accounting policy in connection with the adoption of IFRS 16; see note 4.
In addition, figures for the prior year have been adjusted due to changes in presentation of selected items, which are not material overall.
Munich, 23 July 2019
Aktiengesellschaft
The Board of Management
Harald Krüger
Milagros Caiña Carreiro-Andree Klaus Fröhlich
Pieter Nota Dr. Nicolas Peter
Peter Schwarzenbauer Dr.-Ing. Andreas Wendt
Oliver Zipse
Other Information
Responsibility Statement by the Company's Legal Representatives
"To the best of our knowledge, and in accordance with the applicable accounting principles for interim financial reporting, the Interim Group Financial Statements give a true and fair view of the net assets, financial position and results of operations of the Group, and the Interim Group Management Report includes a true and fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year."
Munich, 23 July 2019
Bayerische Motoren Werke Aktiengesellschaft
The Board of Management
Harald Krüger
Milagros Caiña Carreiro-Andree Klaus Fröhlich
Pieter Nota Dr. Nicolas Peter
Peter Schwarzenbauer Dr.-Ing. Andreas Wendt
Oliver Zipse
Information
Review Report
We have reviewed the condensed consolidated interim financial statements – comprising the income statement, condensed statement of comprehensive income, balance sheet, condensed cash flow statement, statement of changes in equity and selected explanatory notes – and the interim group management report of Bayerische Motoren Werke Aktiengesellschaft, München, for the period from 1 January 2019 to 30 June 2019, which are part of the half-year financial report pursuant to § (Article) 115 WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the parent Company's Board of Management. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Munich, 31 July 2019
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
Petra Justenhoven Andreas Fell Wirtschaftsprüferin Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
Page 59 Contacts
Other Information
Contacts
Telephone + 49 89 382-2 45 44 + 49 89 382-2 41 18 Fax + 49 89 382-2 44 18 E-mail [email protected]
Telephone + 49 89 382-2 53 87 Fax + 49 89 382-1 46 61 E-mail [email protected]
Further information about the BMW Group is available online at www.bmwgroup.com. Investor Relations information is available directly at www.bmwgroup.com/ir. Information about the various BMW Group brands is available at www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com.
This version of the Quarterly Report is a translation from the German version. Only the original German version is binding.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.