We look back on 2023 as a successful financial year in which the BMW Group continued to make decisive progress in ramping up electromobility. This is impressively demonstrated by the fact that all-electric automobiles now make up nearly 15% of total sales. The record high achieved in 2023 for total deliveries across all drivetrain types, and the leading position of the BMW brand in the global premium segment further demonstrate that the BMW Group’s flexible drivetrain strategy is the right approach. Rigorous, far-sighted decision-making have made this overall corporate success possible, ensureing that the Group remains resilient, especially in volatile times.

We also achieved a great deal in terms of sustainability in 2023, as our vehicle fleet once again attained figures well within the EU’s target limit for fleet carbon emissions.

2024 promises to be an exciting year for the BMW Group with a record number of product launches. We firmly believe that, thanks to the enthusiasm and precision of our strong workforce, we will master the challenges ahead and continue to set ourselves apart from the competition with our wide range of products across all brands and drivetrain types. The enthusiastic response to the presentation of the BMW VISION Neue Klasse at IAA Mobility in Munich clearly demonstrates that the BMW Group is on the right path.

The Supervisory Board again performed the duties incumbent upon it with the utmost diligence throughout the financial year 2023.

We continuously and thoroughly monitored the governance of the BMW Group based on in-depth reports received from the Board of Management and provided its members with prudent advice on the management and strategic development of the Group. We focused in particular on driving forward the Group’s electrification strategy and expanding it to include all segments and markets, as well as on implementing the corporate strategies adopted in the fields of digitalisation and sustainability. At each of the five plenary sessions of the Supervisory Board (including one two-day meeting), we held detailed discussions with the Board of Management regarding the Group’s position. The Board of Management also kept the Supervisory Board well informed regarding any matters of significance outside the framework of formal meetings. Furthermore, I discussed matters personally and on a regular basis with the Chairman of the Board of Management. In addition, the Chairman of the Audit Committee maintained a direct line of contact with the Board of Management member responsible for Finance as well as with the external auditor’s representatives outside of meetings. We regularly dealt with internal Supervisory Board issues and personnel-related matters without the presence of the Board of Management. Our cooperation, both within the Supervisory Board and its committees and with the Board of Management, was conducted in a spirit of trust, respect and constructiveness. Detailed documents on the main topics of each meeting were distributed to the members in advance. Moreover, the shareholder and employee representatives regularly prepared for the meetings in separate preliminary discussions.

In its reports on the BMW Group’s position, the Board of Management kept us well informed at each meeting regarding current developments and the Group’s overall performance. A regular topic of discussion at Supervisory Board meetings was the development of current sales trends based on figures analysed by brand, segment and market region, for both the BMW Group and its competitors. There was also a keen focus on electrified vehicles and an overview of the Group’s key financial indicators and liquidity situation.

Corporate strategy, including sustainability, remained high on the Supervisory Board’s agenda. Following an analysis of the current situation in the automotive industry and the ramifications of geopolitical developments, the Board of Management presented us with a detailed strategy for implementing the automotive transformation. The strategy covered the topics of electrification, digitalisation and sustainability, highlighting in particular the circular economy concept as a key element of the Group’s sustainable corporate approach. The BMW Group’s ambitious decarbonisation targets for 2030 were also reaffirmed. With regard to digitalisation, the Board of Management has placed the NEUE KLASSE at the centre of its strategy, making it the benchmark for a holistic customer experience. The Board of Management also described the digitalisation of key business processes to the Supervisory Board. Further topics covered by the Board of Management’s extensive report were market strategies focusing particularly on China and Europe, the resilience of supply chains, and the holistic, Group-wide performance programme. The report was rounded off with an analysis of the competition and the outlook for the BMW Group’s product portfolio.

At each meeting, the Board of Management updated us on current issues and projects related to strategy development work and implementation. The Board of Management also reported on recent events such as the Group’s successful appearance at the IAA Mobility in Munich, the world premiere of the all-electric BMW iX2 and the BMW iX5 Hydrogen at the Japan Mobility Show, and the implementation of the major internal training programme “Digital Boost”.

The Supervisory Board also closely monitored developments relating to major strategic collaborations. In 2023, the focus was once again on the Chinese market in particular, with respect to both the BMW Brilliance Automotive joint venture and the cooperation with Great Wall Motors for the local production of an all-electric MINI. We were also informed about the status of the investments in YOUR NOW.

At Supervisory Board meetings we regularly addressed the topics of sustainability and ESG. In a report on recent developments within the Group, the Board of Management informed us about the cooperation with IONITY on rapid charging networks, the conversion of BMW Group plants in Oxford and Swindon to enable the manufacturing of all-electric MINI vehicles, and the successful outcome of the local referendum held in Irlbach-Straßkirchen on the proposed construction of a new BMW Group plant to manufacture high-voltage batteries, among other things. Furthermore, we were very pleased to note that the BMW Group was presented with awards for activities relating to its sustainability strategy, conferred by a management consultancy and the magazine “Automobilwoche”, which voted the Group number one in the automobile manufacturer category. Moreover, the Fair Pay Innovation Lab awarded the BMW Group a gold medal in the category “Fair Pay Leader”.

Within the framework of a presentation on the perception of the sustainability of the BMW Group and its brands, we examined the objectives of the Group’s corporate ESG strategy in greater detail and looked at corporate communication regarding sustainability issues as well as their media coverage. Regarding the energy transformation within the BMW Group as well as decarbonisation at Group sites, we were informed in particular about the further improvement of energy management and the strategy involving the transition to renewable energy sources at the BMW Group’s existing production sites by 2030. We were also provided with reports on plans for new structures where no fossil fuels will be used (such as the plant in Debrecen, where production is scheduled to begin in 2025).

In the course of our work on corporate governance, we further developed and updated parts of the Supervisory Board’s skills matrix, which was introduced in 2022. Based on a self-assessment, we concluded that the composition of the Supervisory Board at 31 December 2023 fully meets the targets stipulated in the diversity concept and the competency profile.

In the Declaration of Compliance with the German Corporate Governance Code issued in December 2023, the Board of Management and the Supervisory Board confirmed that they have complied with the recommendations of the Code as amended on 28 April 2022 without exception and will continue to fully comply with them in future.

We also dealt with the Group’s compliance management system in great depth. In his annual report, the Chief Compliance Officer presented changes to the structure and content of the BMW Group’s compliance management system and the revision of compliance regulations. The report also addressed the implementation of the German Supply Chain Due Diligence Act and the handling of individual cases. Moreover, at the Compliance Days in Munich, the Chief Compliance Officer relayed a message from the Chairman of the Board of Management that set the “tone from the top”, and addressed operational prevention measures.

At each meeting, the Board of Management informed us about the current status of important legal framework conditions and regulatory projects. These included in particular the EU’s regulations regarding fleet carbon emissions in conjunction with the EU’s “Fit for 55” package and the Euro 7 emissions standards.

The Supervisory Board examined the Board of Management’s remuneration in great detail. It reviewed the target structure, maximum remuneration and expected remuneration for the Board of Management for the financial year 2023, considering in particular the Group’s performance and the development of remuneration for senior executives and employees in Germany over the past few years. Based on a comparative study conducted by an external independent remuneration consultant and subsequent oral advice, we concluded that the remuneration paid to Board of Management members for the financial year 2022 and the target remuneration for 2023 were appropriate. Detailed information on the Board of Management’s remuneration for the financial year 2023 is provided in the Remuneration Report. In December 2023, following thorough preparation by the Personnel Committee, we adopted the variable remuneration targets applicable to Board of Management members for the financial year 2024, taking into account the budget for 2024, the long-term business plan and the BMW Group’s corporate strategy, including its ESG goals.

The Board of Management updated the members of the Supervisory Board biannually on the current status of the level of attainment of defined financial KPIs and the KPIs for our ESG targets, such as deliveries of all-electric automobiles, fleet carbon emissions, attractiveness as an employer, and diversity.

In addition, key topics from the Board of Management’s individual areas of responsibility were on our agenda. Markets in the USA, Canada and Mexico as well as the “fourth pillar” markets, in particular India, South Korea and Japan, were the subject of an in-depth sales report. We discussed regional resilience and the growth strategy for these markets in great depth.

In the highly detailed risk report, we were brought up to date with the structure and working methods of the risk management system. A key focus of the report was on geopolitical risks, especially in the areas of purchasing/supply chains and sales markets as well as the presentation of measures to mitigate risk. On the subject of information security with a focus on IT security, we were informed about the organisation and functioning of the information security management system and the structure of the IT security risk model, as well as the measures derived from it and their effectiveness. The Board of Management also reported on the business performance, sector-specific risk profile and current projects of the Financial Services segment. In addition, we received a report on key topics relating to the Group’s treasury system, such as funding, liquidity management, hedging strategies for price and currency risks and the current state of share buyback programmes.

In conjunction with the report on HR-related strategies, we looked at the BMW Group’s attractiveness as an employer, employee performance and commitment, and workforce availability. The Board of Management also brought us up to date on the status of the Group’s diversity concepts and the extent to which targets have been achieved regarding the proportion of women employed at various levels.

In December 2022, the Supervisory Board agreed to the plan to hold the Annual General Meeting 2023 on a virtual basis in accordance with the regulations applicable at the time. In March 2023, the detailed concept proposed by the Board of Management was approved. With regard to the Annual General Meeting 2024, the Board of Management explained the reasons for its decision in favour of the virtual format to the Supervisory Board.

The BMW Group’s long-term business plan was the subject of comprehensive examination by the Supervisory Board. In view of the ramp-up of electric mobility in an environment that remains challenging and volatile, the focus was on safeguarding growth and returns. The Board of Management informed us about plans for the various vehicle and corporate segments and ambitious long-term targets, while confirming its key objectives for growth, market shares and profitability. We were presented with key financial indicators for each segment, in addition to opportunities and risks for the planning period. After thorough examination, the Supervisory Board approved the long-term business plan drawn up by the Board of Management.

In December 2023, the Board of Management presented the budget for the financial year 2024. After exhaustive discussion with the Board of Management, we gave the budget our approval.

I also met with investor representatives on a regular basis to discuss topics specific to the Supervisory Board during the financial year 2023. We touched on corporate governance issues such as succession planning for the Supervisory Board, the system for the Board of Management’s remuneration and the future format of the Annual General Meeting as well as committee work and the Supervisory Board’s handling of geopolitical risks.

With the BMW Group’s support, Supervisory Board members attended advanced training courses on various topics during 2023. At our July meeting held at the BMW Group’s Leipzig plant, the subject of which was “BMW Group Production – Electrified. Digital. Sustainable”, we discussed the topic of sustainability in production and energy generation at BMW Group sites. In September, we took a first in-depth look at the Group’s technology, architecture and product strategy for the period as of 2025, and more closely at the strategic modules of the NEUE KLASSE. The members of the Supervisory Board then tested new BMW, MINI and Rolls-Royce models at the BMW M Driving Academy in Maisach. This involved a drive on the A8 motorway in the new BMW 5 Series sedan, where we tried out the level 2+ Highway Assistant. In addition, we were presented with BMW brand design vehicles, supplemented by a preview of the NEUE KLASSE. A talk by a renowned Chinese economics expert on the state of the Chinese economy in the wake of the coronavirus pandemic and on opportunities for multinational corporations provided some interesting insights into the Chinese market. The Supervisory Board held two hybrid meetings in October and November at which the heads of the responsible internal departments and an external consultant provided us with a comprehensive update on non-financial reporting and the EU taxonomy, focusing on implementation by the BMW Group. We also delved more deeply into the complex processes involved in implementing and reviewing the ambitious decarbonisation targets within the supply chain as well as the main levers for decarbonisation in this area.

The onboarding programme for new Supervisory Board members was also continued in 2023. As part of the programme, new members are given an insight into the BMW Group’s key business areas and planning processes by representatives of internal specialist departments. The programme also includes an introduction to the ongoing work of the Supervisory Board.

In late 2023, we reviewed the effectiveness of the work of the Supervisory Board and its committees with the aid of a questionnaire, and discussed the findings in our subsequent meeting. Cooperation both within the Supervisory Board and with the Board of Management was unanimously perceived as constructive and trustworthy. In the current financial year, we intend to act on proposals to explore certain topics in greater depth, such as battery technology and the circular economy concept.

The Supervisory Board is careful to avoid any conflicts of interest in the course of its deliberations and decision-making processes. No conflicts of interest occurred in the financial year 2023.

The Supervisory Board resolved to extend the term of office of one member and appointed two new members to the Board of Management in the financial year 2023.

The Supervisory Board extended the mandate of Oliver Zipse, the Chairman of the Board of Management.

Dr Nicolas Peter left the Board of Management on 11 May 2023 by mutual agreement as part of a succession arrangement following three decades of successful work at the BMW Group. As the Board of Management member responsible for Finance, he played a key role in shaping the development of the BMW Group with his profound expertise, entrepreneurial flair and vision. His work served to further cement the Group’s excellent reputation, both on the capital market and in the public eye. We are greatly indebted to Nicolas Peter for his outstanding contribution.

On 12 May 2023, Walter Mertl was appointed as member of the Board of Management responsible for Finance. He joined the BMW Group in 1998 and was most recently responsible for corporate controlling. Mr Mertl has embodied the Group’s commitment to sustainable profitability during the transformation for many years.

On 31 October 2023, Pieter Nota left the Board of Management by mutual agreement, also in line with the BMW Group’s succession plans. After becoming the member of the Board of Management responsible for Customer, Brands and Sales in 2018, Mr Nota was a key figure in driving forward the sale of all-electric models and the digitalisation of the customer interface. He was also responsible for introducing a pioneering agency model for direct sales in selected markets. We wish to thank Pieter Nota for his excellent work and valuable inspiration.

On 1 November 2023, Jochen Goller was appointed as member of the Board of Management responsible for Customer, Brands and Sales. Mr Goller has been at the BMW Group since 1999 and has headed up activities in the China region since 2018. In Jochen Goller, we have appointed an internationally experienced sales manager with particular expertise in the Chinese market to the Board of Management.

There were no changes to the composition of the Supervisory Board during the past year on the shareholder representative side. The Annual General Meeting elected Dr Kurt Bock to the Supervisory Board for a further term of office of approximately four years. He was subsequently appointed as Deputy Chairman of the Supervisory Board, member of the Presiding Board and of the Personnel Committee as well as member and Chairman of the Audit Committee.

With regard to the employee representatives, in January 2023 Dr Martin Kimmich was appointed to succeed the departing long-serving First Deputy Chairman of the Supervisory Board, Manfred Schoch, for his remaining term of office. Dr Kimmich has been Chairman of the Munich Works Council and the BMW AG Works Council since 2022.

The attendance rate at Supervisory Board meetings was 99%, and 100% for the meetings held by the various committees and the Presiding Board. The meetings were held in person, with individual members participating virtually only in justified exceptional cases. Three meetings of the Audit Committee that dealt with the quarterly reports were held as hybrid meetings, with individual members connected by either telephone or video call as planned. Individual meeting attendance can be seen in the table below:

PwC was appointed external auditor for the financial year 2023. PwC initially conducted a review of the condensed Interim Group Financial Statements and the Interim Group Management Report for the first half of 2023 and presented its findings to the Audit Committee. No issues were identified that might indicate that the condensed Interim Group Financial Statements and Interim Group Management Report had not been prepared in accordance with the applicable provisions in all material respects.

The Company Financial Statements and the Group Financial Statements of BMW AG for the financial year ended 31 December 2023, including the Combined Management Report, on which PwC has issued unqualified audit opinions, were authorised by the Board of Management on 12 March 2024. These audit opinions were signed for the fifth consecutive financial year by independent auditor Petra Justenhoven (Wirtschaftsprüferin) and, for the second time, by Michael Popp (Wirtschaftsprüfer) as the auditor responsible for the performance of the engagement.

At its meeting held on 29 February 2024, the Audit Committee initially gave in-depth consideration to the preliminary version of the Company and Group Financial Statements and the Combined Management Report (including the combined Non-financial (Group) Statement and the information on the EU taxonomy) as well as the draft version of the auditor’s long-form reports.

Immediately after authorising their issue, the Board of Management submitted the Company and Group Financial Statements for the financial year 2023 and the Combined Management Report (including the Combined Non-financial (Group) Statement) to the Supervisory Board. The auditor’s long-form audit reports were also submitted to the Supervisory Board in a prompt manner. In order to facilitate preparations, drafts of these documents had already been made available to the Supervisory Board in advance.

At its meeting held on 13 March 2024, the Audit Committee diligently examined and deliberated on these documents before they were considered in detail at the plenary session of the Supervisory Board on 14 March 2024.

At the two respective meetings, the Board of Management provided a detailed explanation of the reporting documents submitted to the Audit Committee and the Supervisory Board. The representatives of the external auditor reported on the main findings of their audit and answered questions put to them by members of the Audit Committee and the Supervisory Board, partially without the presence of the members of the Board of Management. Both the Audit Committee and the Supervisory Board gave meticulous consideration to the key audit matters and the related audit procedures.

The representatives of the external auditors confirmed that the risk management system established by the Board of Management is capable of identifying at an early stage any developments that might threaten the Company’s going-concern status. They also confirmed that no material weaknesses in the internal control system and risk management system were identified with regard to the financial reporting process.

In the course of their audit work, they did not identify any facts inconsistent with the contents of the Declaration of Compliance pursuant to § 161 of the German Stock Corporation Act (AktG) jointly issued by the Board of Management and the Supervisory Board.

Based on a thorough examination conducted by the Audit Committee and the Supervisory Board, we concurred with the results of the external audit. In accordance with the final result of this examination, no objections were raised. At our meeting held on 14 March 2024, we accordingly approved the Group and Company Financial Statements of BMW AG for the financial year 2023. The Company Financial Statements for the year ended 31 December 2023 have therefore been adopted.

Furthermore, in both the Audit Committee and the full Supervisory Board, we examined the Board of Management’s proposal to use the unappropriated profit to pay a dividend of € 6.00 for each share of common stock entitled to receive a dividend and € 6.02 for each share of preferred stock entitled to receive a dividend and to transfer the remaining amount to other revenue reserves. We consider the proposal appropriate and have therefore approved it.

Based on the preparatory work of the Audit Committee, the Supervisory Board and the Board of Management jointly prepared the Remuneration Report for the financial year 2023 in accordance with § 162 AktG. At the request of the Audit Committee, PwC reviewed the contents of the Remuneration Report, reported to both the Audit Committee and the Supervisory Board on the results of the review, and confirmed that the Remuneration Report complies with the financial reporting provisions contained in § 162 AktG in all material respects.

The Audit Committee and the Supervisory Board also carefully examined the combined Non-financial (Group) Statement for the year ended 31 December 2023. Following an in-depth explanation of the statement by the Board of Management, representatives of PwC presented the key findings of their audit and answered additional questions posed by the members of the Supervisory Board. Based on the “limited assurance” audit performed by PwC on those parts of the Management Report and certain sustainability disclosures in the integrated BMW Group Report 2023 that were not subject to a reasonable assurance engagement, PWC issued an unqualified opinion, signed for the second time by Michael Popp (Wirtschaftsprüfer) and for the first time by Annette Fink.

The Supervisory Board acknowledged and approved the combined Non-financial (Group) Statement drawn up by the Board of Management. Following a preparatory review conducted by the Presiding Board as well as a further review at Supervisory Board level, the Statement on Corporate Governance drawn up by the Board of Management was also approved by the Supervisory Board.

With their great dedication and an outstanding collaborative effort during the past financial year, the members of the Board of Management and the employees of the BMW Group worldwide successfully defended the BMW brand’s leading position in the global premium segment and significantly expanded the share of electric mobility in Group sales. We therefore wish to express our deep thanks and appreciation to all of them.

We are confident that the Board of Management and the BMW Group’s workforce will continue to pursue the BMW Group’s chosen path of sustainable and digitalised mobility in 2024, and we eagerly await the launch of the NEUE KLASSE in 2025.

Munich, March 2024

On behalf of the Supervisory Board

Norbert Reithofer
Chairman of the Supervisory Board