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BMW AG

euro adhoc: Bayerische Motoren Werke Aktiengesellschaft
Strategic management decisions
BMW Group Announces Future Strategic Realignment

  Disclosure announcement transmitted by euro adhoc. The issuer is responsible
  for the content of this announcement.
27.09.2007
BMW Group Announces Future Strategic Realignment
. New strategy focuses on increasing value
    . RoCE target for Automobile segment is 26% as of 2012
    . Program approved to tap euro 6 billion in efficiency potential by 2012
    . Shareholders to benefit to a greater extent from company success
    . Automobile retail sales to rise to significantly more than 2 million units
      by 2020
Munich - The BMW Group has set the course for a successful future 
with  its strategic realignment. In their joint meeting on Thursday, 
the Board of Management and the Supervisory Board of BMW AG approved 
the cornerstones of  the corporate strategy through 2020. The BMW 
Group's goal is to resolutely  maximize profitability and increase 
value over  the  long term.  The  Group's  strategic direction up to 
2020 is clearly defined: The BMW Group is the world's  leading 
provider of premium products and premium services for individual 
mobility.
This strategic realignment includes, among other items, the following
measures:
Capital-Efficiency Targets
The BMW Group intends to focus even more on the return on capital 
employed  when monitoring company performance. The company set  
itself  the  following  interim targets: The BMW Group aims to 
achieve  a  return  on  capital  employed  before taxes (RoCE) of 26%
in the Automobile segment as of 2012.  This  results  in  an 
EBIT-based return on sales of between 8% and 10% for the Automobile 
segment.
Program to tap into efficiency potential
In order to achieve earnings targets for 2012,  the  BMW  Group  will
launch  a program to increase profitability. This will encompass all 
divisions  and  apply to both performance and costs. In terms of 
performance,  the  company  plans  to increase revenues and earnings 
per vehicle, while in terms of  costs,  it  plans to reduce 
development, production, sales and administration  costs  per  
vehicle to achieve a cumulative efficiency effect of about 6 billion 
euros by 2012. The company intends to employ less  capital  than  
today  when  generating further growth. To this end, the BMW Group 
intends to reduce its  capital expenditure ratio as well as capital 
employed per vehicle by 2012.
Growth Targets
The BMW Group is going to continue its product initiative. The  BMW  
Group  aims to achieve retail sales of more than 1.8 million vehicles
by 2012. By then,  the BMW Group plans to increase deliveries in the 
motorcycle  business  by  50%  to 150,000 units per annum. The 
company intends to increase  retail  sales  in  the automobile 
business to clearly more than two million vehicles by 2020.
Change in Dividend Policy/Significantly Higher Dividend Planned for 
2007
The Board of Management is convinced that the BMW  Group's  continued
strategic development will be successful over the long term. 
Therefore, the company plans to increase its dividend payout ratio 
substantially. The Board of Management will propose a first step for 
the business year 2007 to the Supervisory Board and the Annual 
General Meeting. In addition, BMW AG will keep the option of 
conducting a share buyback. However, this step is not planned for the
next twelve months.
Funding out Pension Obligations
BMW AG will gradually fund out its pension obligations in  Germany  
of  about  4 billion euros in three steps starting in 2008.
Natural Hedging and Purchasing in US Dollars to be Expanded
In order to strengthen independence from currency fluctuations,  the 
BMW  Group will strategically step up natural hedging as well as 
purchasing in  US  dollars in particular.
Further details on the company's strategic realignment will be  
communicated  at a press conference on Thursday, September 27, 2007, 
which  will  be  held  from 3:00 p.m. to 4:00 p.m., and during an 
analyst conference call from 5:00 p.m.  to 6:00 p.m.
end of announcement                               euro adhoc 27.09.2007 13:18:25

Further inquiry note:

Bill McAndrews
Tel.: +49(0)89 382 22332
E-Mail: Bill.McAndrews@bmw.de

Marc Hassinger
Tel.: +49(0)89 382 23362
E-Mail: Marc.Hassinger@bmw.de

Branche: Automotive Equipment
ISIN: DE0005190003
WKN: 519000
Index: DAX, CDAX, HDAX, Prime All Share
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