Bayerische Motoren Werke Aktiengesellschaft (BMW) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders. I hereby open the 101st Annual General Meeting of Bayerische Motoren Werke Aktiengesellschaft. We transmit the AGM this year once again as a virtual assembly from BMW Welt in Munich live on the Internet. According to our Articles of Association as the Chairman of the Supervisory Board, I will chair this AGM, and I would like to welcome you most cordially on behalf of the Supervisory Board and the Board of Management. All the members of the Board of Management take part in this AGM right here at the BMW Welt. And moreover, all supervisory members follow our AGM, and most of them are present here. And the 2 remaining members of the Supervisory Board who cannot be here due to the current circumstances, use the audio and video transmission to follow our AGM, and I would like to welcome them as well. With the BMW Welt, we have an exceptionally large meeting hall for all the participants. On this area here, which we call Premiere, usually, new vehicles of the BMW Group are handed over to our customers. And we've developed a sophisticated hygienic concept specifically for this assembly hall. Amongst the focal points we have spacious seating and partitions between the seats and a highly efficient ventilation system. All those participants who haven't been fully vaccinated yet have been tested negatively for COVID-19 here on site. You've just seen fascinating new models of all our brands passed by the stage. The majority of them with a purely electrical drivetrain. The transition towards e-mobility is in full swing, and the BMW Group can now make full use of its competence and experience because with the BMW i3, we've had a fully electric series of vehicle on the road. And with this, we were a trailblazer amongst the European premium manufacturers. Mr. Zipse will explain to you later on how we want to shape the next phase of e-mobility. But before that, I would like to give you some information about today's Annual General Meeting. Following last year, this is the second virtual AGM for us. This means that we hold this meeting without the physical participation of our shareholders. We well know that this format is not similarly satisfactory for all of our shareholders. The event is easier, accessible for those who couldn't have traveled here, but others miss the opportunity to meet in person and enter into a direct dialogue with the Board of Management. But in the current pandemic situation, this virtual form is -- gives us the only possibility to conduct our AGM at all. Thus, we reduce infection risks for all, and we protect the health of all participants. For the company, but also for you as shareholders, it's more over important that the resolutions of the AGM can be passed in a timely manner. And that is why we, on the Supervisory Board, agree to this virtual form of the AGM. In preparing this Annual General Meeting, we considered in detail how we could further develop this format of the virtual AGM, which we have tried for the first time last year. Of course, you were able to submit your questions and countermotions before the AGM with which we will be dealing in today's event. Moreover, we followed the wishes of some shareholders and published summaries of the speeches of the Board members and of my speech upfront on our website. Mr. Zipse did that in the form of video. Moreover, we gave the possibility to hand in statements, both in the form of text or as a video contribution, so you could tell us and the other shareholders about important points and give us your opinion on the shareholders' portal. We've received 2 written statements and made them available in our online service for shareholders. The possibility to hand in video contributions hasn't been seized by anyone. In performing this virtual AGM, we're still using a temporary law regarding the COVID-19 situation, which does not cover all the points that need to be regulated in a comprehensive and balanced manner. Therefore, for a true life contribution and participation of shareholders online, we would need further and more precise legal regulations from our point of view. And it is, therefore, a task for the legislators to create a framework that provides legal certainty for virtual AGMs in the future. And we would appreciate if all stakeholders contributed constructively in developing such rules, and we are more than willing to participate in this. A true assembly with the ability to meet and have a direct dialogue with shareholders has our advantages also from our side. Dear shareholders, I would now like to acquaint you with some organizational remarks regarding our AGM. Here at BMW Welt, in addition to the members of the Board of Management and the Supervisory Board, only the proxies of the corporation take part as representatives of the shareholders. They exercise the voting rights according to the instructions by the shareholders who have given them power of attorney. The AGM was convened in due form by publication in the Federal Gazette on the 24th of March 2021, and proof of the publication was handed to notary public, [ Dr. Fascias ], who will take the minutes of today's AGM. All documents necessary for the shareholders have been available ever since the convocation on the website of the BMW AG, where you can also find notes on the rights of shareholders. I would also like to draw your attention to those remarks. The entire AGM will be broadcast on the Internet and the speeches of the Chairman of the Board and the CFO will, just as my report, also be made available to the interested public without any access restrictions, whereas registered shareholders can then follow the entire AGM on our online service. And you can find the credentials for the online service at the top right of your registration confirmation. Via the online service, registered shareholders can hand in their votes via postal vote during the AGM until the beginning of the vote or by instructing authorized proxies of the corporation. This only holds true for shareholders of common -- shares of common stock, whereas the shares of preferred stock do not entitle their shareholders to vote. Until the end of the 10th of May, that was day before yesterday, you could ask questions about today's agenda to the Board of Management, and the questions received will be answered later on during the AGM. As I had announced or mentioned at the beginning this year, registered shareholders could also hand in statements as video contribution or in text form and the contributions we've received, the statements will be available until the end of this meeting via the online service. On the online service, you also have the opportunity until the end of this AGM to raise objections to be recorded in the minutes of the notary public, if you deem a resolution of the AGM to be void or unlawful. Precondition for this is that you exercise your voting right or have authorized proxy. We ask for your understanding that for organizational reasons during the AGM, we cannot accept any motions of shareholders for votes in the AGM. This would surprise and ignore other shareholders who have already handed in their votes or instructions and who do not anticipate such an additional vote. Moreover, it could not be assured that an adoption of voting possibilities would be technically feasible during the AGM and transparent for all shareholders. To the contrary, it was possible as and every year to hand in motions to amend the agenda before the AGM, but we have not received any such motions. Moreover, countermotions on the resolution proposals of the Board of Management and the Supervisory Board could be handed in until 14 days before the AGM, just as well as election nominations. During this time frame, we've received countermotions by 2 shareholders, which we published on our website. The countermotions filed in due time are considered submitted at the AGM provided that the petitioners legitimize themselves as shareholders and register for the AGM. And the latter step was only taken by one of the petitioners. Therefore, only the countermotions of the [Foreign Language] are considered submitted. If you want to support these countermotions, you can vote no on the respective resolution proposals of the Board of Management and the Supervisory Board. And I will let you know about this during the voting process in more detail. As in the past, video and audio recordings of our AGM are not permitted, and I would ask you for your understanding for that. We will also not keep any verbatim minutes of the Annual General Meeting. Ladies and gentlemen, if you've ever taken part in a BMW AGM, yourselves, then you know that we traditionally commemorate the deceased in our own ranks before we enter into the agenda. As in the past year in view of the persistent corona pandemic, we do not only want to remember our deceased BMW colleagues, but we know that many people have lost friends or family members in connection with COVID-19. I would kindly ask everyone present to rise for a moment of remembrance. BMW is an international company. We cooperate with colleagues and business partners, and we have customers in many countries all over the world. We want to express our sympathy and solidarity to the relatives of the deceased all over the world. We remember the deceased BMW colleagues with gratitude. Ladies and gentlemen, you have commemorated the deceased and their families. And I would like to thank you for that. Now I would like to give you a short overview of today's agenda. First of all, I will report on the work of the Supervisory Board in the past business year. And after that, our Chairman of the Board, Mr. Zipse will, of course, report about the past business year, but he will also give you an outlook, a view into the future and give you a specific short, medium and long-term outlook. He will also talk about the sustainability goals that the company has set itself for the year 2030. Following that, our CFO, Dr. Peter will inform you about the utilization of the authorization to issue new preference shares since the last AGM, and he will moreover explain to you the proposed amendment to the profit and loss transfer agreement with BMW Bank GmbH. In our speech, we will also talk about the resolution proposal presented by the Board of Management and Supervisory Board to the AGM for approval. Following that, we will answer the questions handed in by our shareholders. After answering the questions, I will announce the beginning of the voting process here in the assembly hall, and this will then be the last possible time to cast postal votes or hand in instructions to the proxies of the corporation via the online service. Following that, we will have the ballots on the different proposals in the assembly hall. The list of participants is -- press is available here in -- on site, and we will also make it available together with the attendance record in the document area of our online service. Ladies and gentlemen, we will now enter into the agenda of the Annual General Meeting, starting with item 1 of the agenda, presentation of the adopted company financial statements and the approved group financial statements together with the combined company and group management report as of the 31st of December 2020, and the report of the Supervisory Board for the 2020 financial year. These documents were made available on our website and also in the assembly hall. And there, you can also find the explanatory report that the Board of Management, pursuant to Sections 289a and 315a of the German Commercial Code, HGB and the statement on corporate governance pursuant to Sections 289f and 315b HGB with the corporate governance reports. They are available for download there. You can find the written report of the Supervisory Board in the BMW Group report, and then I can, therefore, limit myself to selecting some important points. And I would like to start with changes to the composition of the Supervisory Board and the Board of Management ever since our last AGM. In last year's AGM, I introduced you to Ms. Anke Schäferkordt, who was elected in May 2020 by the AGM as a representative of the shareholders to the Supervisory Board. Ms. Schäferkordt is a financial expert and strengthens the Supervisory Board, especially when it comes to the fields of communication and media. There's also been a change in the composition of the Board of Management following the AGM last year. Klaus Fröhlich went into retirement last year. Mr. Fröhlich headed the development [ resource ] with a lot of vigor and innovative spirit for years. And amongst that has decisively advanced the electric offensive of the BMW Group. We're extremely grateful to Mr. Fröhlich for his successful work for the BMW Group. As a successor to Mr. Fröhlich, the Aufsichtsrat, the Supervisory Board appointed Frank Weber as a member of the Board of Management with effect from the 1st of July 2020. Ever since he's headed the Development Division and we introduced Mr. Weber in last year's AGM. As the Board member for Development, Mr. Weber is determined to push ahead with electrification and digitalization in our vehicles. And I'm looking forward to the cooperation with the 2 people. The year 2020 was an exceptionally challenging year due to the corona pandemic, and we, therefore, intensified our work on the Supervisory Board. The Supervisory Board continuously and diligently fulfilled its task of supervising the Management Board. At the same time, it gave the Board of Management advice on the strategic development and the management of the company. The situation of the company was discussed in detail with the Board of Management in each and every meeting, focusing especially on the development of production, sales and liquidity, but also on the measures of the corporation to contain the effects of the pandemic. We intensively dealt with the further development of our corporate strategy, focusing on the continuing transformation of the drivetrain technology towards e-mobility, including the realignment of our production network. We also dealt in detail with the sustainability strategy, which encompasses all steps from the supply chain through production up to the whole life cycle of our products. This is a core element of the corporate strategy and was therefore a focal point for us. The focal points stemmed from the different Board divisions, amongst others here, the status of our supply chain and the purchasing strategy regarding e-mobility, group finance with the liquidity and financial market risk management, the business development, the risk situation and strategy in the field of financial services, the topics data privacy and cybersecurity in connection with digitalization, the strategic cooperations of the BMW Group and the market China. Moreover, the Board of Management reported about important current topics such as the opening of our competence center for e-drivetrain technology in Dingolfing and for the battery center in China, just as well as about the technology and future next-gen 2020, which took place in a virtual format. The Supervisory Board also dealt with the planning of the long-term corporate development, and we received information about proposed plan changes here. Another topic that was important to our work in the last year was the revision of the system of Board remuneration based on the revised version of the German Corporate Governance Code. With support of an independent remuneration consultant, we first discussed the proposals for a new remuneration system intensively and then passed it on the recommendation of the Personnel Committee in December for the business years starting in 2021. The service contracts of the current Board members were, therefore, adjusted accordingly with effect from the 1st of January 2021. We will present the new system for approval on the agenda item 7, and I will come back to this later on during my speech. In the Personnel Committee and the Supervisory Board remuneration, we have also reviewed this structured expected amount of the Management Board remuneration for the past the 2020 financial year and found it to be appropriate. I would like to remind you that the majority of the annual target remuneration of the Board is made up of performance-related components. The decline in the group's net profit for the year and the group's return on sales in 2020 caused by the corona pandemic is therefore also reflected in the Management Board's performance-related bonus for 2020. In addition, this decrease in the performance cash plan not only affects the remuneration of the Management Board for the 2020 financial year. But also, the remuneration for the 2018 and 2019 financial years due to the 3 years assessment basis. We have made the lower levels of target achievement for the earnings component and the performance component of the Board of Management bonus for the financial year 2020 transparent in the remuneration report on Pages 301 and 302 of the BMW Group report. The Presiding Committee and the Audit Committee increased the number of their meetings and phone conferences last year in order to always be informed promptly about the cause of business and the liquidity situation. An important topic for the Audit Committee last year was the preparation of the first integrated reporting. This combines the annual report in the sustainability report in the new integrated report, which you can find on our website. As BMW Group report 2020, we also received a regulatory report on the current status of the EU Commission's investigation in 2 cartel allegations in connection with the former working group of some German car manufacturers. I would like to ask you for your understanding that we cannot comment on details of these ongoing proceedings at today's meeting. However, you may rest assured that the Supervisory Board is closely monitoring these proceedings. In connection with the proceedings of the German federal cartel office concerning the purchase of long steel, which were concluded in 2019 with a fine of EUR 28 million, the Supervisory Board dealt with a question of a possible obligation to act based on the expert opinion of a renowned law firm and the recommendation of the Audit Committee. The Supervisory Board decided after carefully weighing the pros and cons for the company not to assert any claims for damage against current or former Management Board members in connection with these proceedings. We also informed ourselves about the diversity concepts for the company and the current status of target achievement at the various levels. As a target for the proportion of women in the Management Board, the Supervisory Board has determined that the Management Board should continue to include at least one woman for the period from January 1, 2021, to December 1, 2025. We have stated that the Supervisory Board considers a higher proportion of women on the Management Board desirable and supports the activities of the Management Board to increase the proportion of women at the highest levels of management. This is also reflected in the remuneration of the Management Board. Our agenda also included a number of internal Supervisory Board issues such as updating our rules of procedure and our annual internal efficiency review. We also reviewed our corporate governance in the last financial year and issued a declaration of compliance with the German Corporate Governance Code in December 2020. We will comply with the recommendations of the code as amended on 16 -- on December 16, 2019. In the report of the Supervisory Board, we have again included an overview of the attendance of the Supervisory Board. At the meetings, the participation rate in the Supervisory Board and the committees was over 99% last year. In a revised corporate governance statement, we have provided you with a detailed overview of the composition objectives for our Supervisory Board, the competency profile and the individual areas of experience. Furthermore, a presentation on key aspects of corporate governance at the BMW Group is available on our website. We have come to the conclusion that the composition of the Supervisory Board as of December 31, 2020, meets the composition targets. We have explained our audit of the accounts as of December 31, 2020, in detail in the written Supervisory report. The PwC, Wirtschaftsprüfungsgesellschaft, acted as our auditor for the second time. They audited the annual financial statements and consolidated financial statements as of December 31, 2020, prepared by the Management Board on March 9 as well as the consolidated management report, combined with the management report, including the corporate governance statement for the 2020 financial year and issued an unqualified audit opinion. The Supervisory Board have proved that the results of the audit as proposed by the Audit Committee, following its own thorough examination and approved the annual financial statements and the consolidated financial statements of BMW AG prepared by the Board of Management for the financial year 2020 on March 11, 2021. No objections were raised. The financial statements are thus adopted. The Audit Committee and the Supervisory Board also examined the Management Board's proposal for the appropriation of the balance sheet profit. With the dividend, the shareholders participate in the success of the respective past financial year. At the last general meeting, the outlook for 2020 was still gloomy. Fortunately, and this once again demonstrates the resilience of our company to crisis, we also were able to close the pandemic year 2020 with a remarkable positive result. In line with our long-standing dividend policy, the Management Board and the Supervisory Board are today proposing to the Annual General Meeting, a dividend of EUR 1.92 per preference share and EUR 1.9 per ordinary share. The Supervisory Board considers this dividend amount reduced compared to the previous year 2019 to be appropriate. Mr. Zipse will also address this dividend proposal in his speech. Ladies and gentlemen, the challenges of the past business year for our company were enormous. The pandemic-related contact reduction measures such as the closure of dealerships in some cases for months led to an unprecedented slump in vehicle sales in all major sales regions in the first half of 2020. However, it was possible to stabilize liquidity during the crisis and bring the company back on track for success as early as the second half of the year. I, therefore, would like to take this opportunity to thank the members of the Board and all members worldwide for their joint efforts and the remarkable success on behalf of the Supervisory Board. We are confident that the Board and the workforce will continue to secure our company, a leading position in the field of sustainable and digitalized mobility. After the report of the Supervisory Board, I would now like to discuss further agenda items and proposed resolutions of the Supervisory Board. Under item 5, the Supervisory Board proposes based on the recommendation of the Audit Committee to appoint the auditing company PricewaterhouseCoopers GmbH as auditor of the annual financial statements and the auditor of the consolidated financial statements for the financial year 2021 as well as auditor for the -- audit review of the interim consolidated statement and interim consolidated management report. The experience with PwC were positive. Under item 6, 3 Supervisory Board members are to be elected by the shareholders in order to continue to meet statutory agenda quota, at least one woman is to be elected to the Supervisory Board. With the conclusion of today's annual general meeting, Dr. Karl-Ludwig Kley will retire from the Supervisory Board. In view of the standard limit for the term of office of 12 years, as set by the Supervisory Board in its composition targets, Dr. Kley is not standing for reelection. Dr. Kley has been a member of the Supervisory Board since 2008. And since 2010, he has been a Deputy Chairman of the Supervisory Board as well as a member of the Presiding Committee and the Personnel and Nominating Committee of the Supervisory Board. From 2010 to 2020, he was also a member of the Chairman of the Audit Committee. Dr. Kley has after many years and with the profound experience has rendered outstanding services to the Supervisory Board. Also at the end of today's Annual General Meeting, Mrs. Simone Menne will resign from the Supervisory Board. Unfortunately, she cannot attend the AGM today. Mrs. Menne has been a member of the Supervisory Board since 2015. She has enriched the work of the Supervisory Board with many constructive contributions. In consideration of other mandates and activities, Mrs. Menne is not standing for reelection to the Supervisory Board. Finally, Professor Reinhard Hüttl will also leave the Supervisory Board at the end of today's general meeting. He has resigned from his mandate due to his more than 12 years of membership on the Supervisory Board at the end of the meeting. Professor Hüttl has been a member of the Supervisory Board since 2008. He has contributed important scientific aspects to the work of the Supervisory Board. Dear Mr. Kley, dear Mrs. Menne, dear Mr. Hüttl, I'd like to take this opportunity on behalf of the entire Supervisory Board to express my sincere thanks for the good cooperation in some cases over many years. Based on the recommendation of the Nomination Committee, the Supervisory Board proposes to elect 3 new candidates to the Supervisory Board with effect from the end of today's general meeting for a term of office until the end of the Annual General Meeting that decides on the discharge for the 2024 financial year. That includes Mr. Marc Bitzer, Mrs. Rachel Empey and Professor Dr. Christoph Schmidt. We have made the CVs of the Supervisory Board candidates available to you on our website. We would like to briefly introduce the candidates for the Supervisory Board. Due to the infection situation, it was uncertain until the last moment, whether all candidates would be able to attend the meeting. We have asked them to make a short video contribution, which we are now going on to play...

Good morning. I'm Marc Bitzer, Chairman and Chief Executive Officer of Whirlpool Corporation. [Foreign Language]

Good morning. [Foreign Language] My name is Rachel Empey. [Foreign Language]

My name is Christoph Schmidt. [Foreign Language]

Thank you. The shareholder representatives of the Supervisory Board assess all the 3 candidates for the Supervisory Board as independent within the meaning of the German Corporate Governance Code. All candidates have given assurance that they will devote sufficient time to their mandate. On the side of the employee representatives, there will also be a change in the Supervisory Board. Mr. Horst Lischka, who has been a member of the Supervisory Board since 29 (sic) [ 2009 ], has resigned from the Supervisory Board at the end of the 2021 Annual General Meeting. The Metalworkers' Union has nominated Mr. Johann Horn, District Manager of IG Metall in Bavaria as his successor. The Management Board, also on behalf of the Supervisory Board and with the support of the General Works Council has applied for the judicial replacement of Mr. Horn. On behalf of the entire Supervisory Board, I would like to thank Mr. Lischka for the good cooperation during his long membership of the Supervisory Board. Ladies and gentlemen, as already mentioned, the Supervisory Board adopted a new remuneration system for the Management Board in December 2020 with the effect of 2021. We are presenting this new remuneration system to you as shareholders for approval today under item 7 of the agenda. This agenda item is, therefore, not about the approval of the amount of the remuneration for the past financial year, which incidentally is still based on the previous system, but about the criteria according to which it will be determined and set from the 2021 financial year onwards. According to the statutory transitional provision for the implementation of the second EU shareholders' rights directive, a vote on the new remuneration system must be brought about at today's Annual General Meeting. In preparation for today's vote, we had already presented the main features of the new system in the invitation to the Annual General Meeting and in the annual report. And we have also made further overviews of the remuneration system available on our website. The aim of the revision was to focus the remuneration of the Management Board with the new system even more consistently on sustainable and long-term corporate development and to link it to the successful implementation of the corporate strategy. To reduce complexity, the multiyear remuneration component of the performance cash plan is eliminated. In addition to the new system, no longer provides for a matching component in the share-based remuneration. The maximum remuneration for the Management Board members was not changed and corresponds to the previous total upper limits. The structure with fixed and variable components was not fundamentally changed compared to the previous system. The share of the variable remuneration is around 63% in the target structure. A key component of the new remuneration system is the revised share-based remuneration program as a long-term component. Under this program, the Board of Management is granted a cash amount, which is earmarked for investment in BMW common stock. The share of the share oriented long-term component in the variable remuneration has been significantly increased in comparison to the previous system in terms of the target value and amounts to approximately 52% of variable remuneration. Half of the cash amount earmarked for the acquisition of shares is dependent on the financial indicator, return on capital employed for the Automobile segment. The remaining 50% of the target amount is linked to the achievement of specific objectives derived from the strategy. These are nonfinancial strategic focus targets that the Supervisory Board sets before the beginning of each financial year and measures in terms of target achievement after the end of the financial year. For the 2021 financial year, the Supervisory Board has set targets for CO2 fleet consumption and sales of electrified vehicles as strategic focus targets. The shares acquired with the net cash amount after the end of the first financial year, must be held for 4 years since the cash remuneration component determined over the -- over 1 financial year is obligatory linked to the acquisition of shares and the full year holding period, the total performance period of the share-based remuneration program is 5 years. In principle, the shareholding obligation continues to apply after leaving the Management Board. We have restructured the bonus here to -- 50% of the target is dependent on financial indicators, namely the share of profit attributable to shareholders of BMW AG and the group's return on sales after tax in the past financial year. The other 50% are, again, based on the achievement of nonfinancial targets. One focus of the nonfinancial targets is on environmental and social criteria as well as the area of responsible corporate governance. The share of these ESG targets in the performance component of the bonus is 50%. The basic remuneration of the Management Board, which was last adjusted in 2018 and the contribution to the company pension scheme, which has remained unchanged since 2015 were increased moderately. As recommended in the German Corporate Governance Code, the service contracts also provide for the possibility for the Supervisory Board to take into account extraordinary developments and contain regulations on withholding and reclaiming the variable remuneration, so-called malus and clawback clauses. On item 8 of the agenda, we propose the confirmation of the remuneration of the Supervisory Board and the remuneration system applicable to the supervisory report since last year. Since we already dealt with the remuneration of the Supervisory Board in detail at the last year's meeting and the Annual General Meeting passed the underlying regulation of the statutes with almost 99% of the votes, I would like to be very brief today. The remuneration system for the Supervisory Board provides for a purely fixed remuneration. It is in line with the German Corporate Governance Code and the ideas of many investors. The remuneration of a member of the Supervisory Board is EUR 200,000 per year. It increases for members with special functions. For example, the Chairman of the Supervisory Board received EUR 600,000 and the Chairman of the Audit Committee, EUR 450,000 per year. The remuneration system thus takes into account the higher time, expenditure associated with these tasks. You will find all details of remuneration in the convening document on our website and in the annual report. In our opinion, the applicable remuneration level continues to be appropriate in view of the demands placed on the Supervisory Board, especially in such challenging years as the last financial year. We, therefore, propose that you confirm the current remuneration, including the applicable remuneration system for the members of the Supervisory Board unchanged. On to item 9 of the agenda, this provides for resolutions on amendments to the statutes. The amendments concern paragraph 16 and 17, which contain, among other things, regulations on participation in general meeting. According to the current version of the statute, members of the Supervisory Board may exceptionally be permitted to follow the Annual General Meeting by means of audio and video transmission, if the members of the Supervisory Board would have to accept considerable travel to the location of the general meeting due to their residence abroad. Under item 9-1 of the agenda, in addition to the linguistic revision of the regulation, we propose to expand the group of cases for a digital tracking of the general meeting. This is, of course, experience with the pandemic has shown that, for example, restrictions on freedom of movement or even health risks can also stand in the way of a trip to the meeting location. In these cases, too, it should, therefore, be possible to exceptionally refrain from the presence of Supervisory Board members on site. The fact that we are cautious about such exceptions can be seen from the almost complete presence of the Supervisory Board today. Under item 9-2 of the agenda, we propose an amendment to the statutes to reflect a change in the law. With the act of implementing the second EU shareholders rights directive, the regulations for the proof of share ownership were revised. Holders of Bayerische shares must provide this proof if they wish to participate in the Annual General Meeting or otherwise exercise their voting rights. The German Stock Corporation Act now stipulates that the proof can be provided in a specific standardized form. However, public-limited companies are free to accept the previous form of proof in text form as well. In recent months, it has become apparent that the conversion of IT systems of some custodian banks will take some time. We would like to avoid any disadvantages for our shareholders. We, therefore, propose a provision to you in the statutes that allows proof of share ownership in both the old and the new form. Under Item 9-3 of the agenda, we propose a provision in the statutes that would enable shareholders to exercise their rights at the Annual General Meeting digitally in the future. To this end, the Management Board shall be authorized to provide that shareholders may participate in the Annual General Meeting, even without being present on-site and exercise all or some of their rights in whole or in part by means of electronic communication. It should be noted that the proposed amendment to the statute does not allow for a purely virtual AGM to be held as was the case this year. According to the current legal situation, this would still require a statutory regulation as currently contained in the COVID-19 measures packed in a temporary form. The authorization in the statute is only intended to enable electronic participation to be offered for absent shareholders at a physical general meeting. We have provided a comparison of the proposed new version with the previous text of the statutes on our website. We hope that the proposed amendments to the statutes will also meet with your approval. I would like now to hand over to Mr. Zipse and ask him for his report on the past business year. And he gives also an outlook on the current and mid-term business year. Before, however, we would like to show you a short film. [Presentation]

Good morning, dear shareholders. A very warm welcome from BMW Welt here in Munich. The Annual General Meeting is the most important event of the year for us because it is where we answer to you the owners of BMW AG, and we show you where your company is headed. Almost all the members of the Supervisory Board and all members of the Board of Management are present today, which shows how much we value you. And of course, we have done everything in compliance with coronavirus restrictions, as Dr. Reithofer has mentioned. BMW has a "we" culture. "We" includes our customers, the fans of our brands, BMW, MINI, Rolls-Royce and BMW Motorrad, all those who are the key to our success. Even in the year of the coronavirus 2020, we delivered more than 2.3 million vehicles to customers. That was only 8.4% less than in 2019. And I would therefore like to thank each and every customer worldwide because you choose to buy our products, and that motivates us to do our very best. "We" also refers to our associates. Dedication, discipline and a tremendous passion for mobility. That is what they share. And together, we proved in 2020 that BMW can turn a crisis into progress. And on behalf of the entire Board of Management, I would like to thank each and every associate for that. Working on the assembly line, wearing a mask shift after shift can be enormously challenging. And I'm sure if we were in the Olympiahalle, all our shareholders would be applauding right now to show their appreciation. We stand together because that is our culture. Sometimes we have discussions, sometimes tough discussions between company managers and employee representatives. But at the end of the day, they always find the best solution for BMW. That is something we learned from the entrepreneur, Herbert Quandt. He believed in BMW. He stepped in to rescue the company in 1959 and laid the foundation for our success. And this very spirit lives on to this day. And we look forward to the next-generation carrying it together with us into the future. "We" that also includes our retailers and suppliers. They are our partners in whom we place our trust and who trust us. "We" also means you, ladies and gentlemen, our shareholders. You take a long-term view, just like we do. This is our 101st Annual General Meeting because you have given us stability, you have given us support and, therefore, it's only natural that you should share in our success. For the financial year 2020, the Board of Management and the Supervisory Board proposed a dividend of EUR 1.90 per share of common stock and EUR 1.92 per share of preferred stock to the AGM. Yes, this is lower than last year, but we also earned less than last year. And net profit totaled EUR 1.25 billion. But what's decisive is the payout ratio, which still remains within our target range of 30% to 40%. In good times and in bad, our dividend policy remains reliable also this year. And our employees will get a profit-sharing bonus for 2020, which is certainly well-deserved from our point of view. For 45 years, this has been the case provided we are successful together. And our "we" culture also carries over to society, a society that challenges us and asks, how do you contribute to the common good? And how do your actions meet the needs of our global world? You know what we do and who we are. We look far into the future and take bold determined actions in the here and now. This is the BMW way to 2050. And this is the way that I would like to describe to you today. At the BMW Group, we always look into the future. What are the prospects for your company in a changing environment? This is one of the most important questions for you. And this is why I would like to begin my speech by looking ahead. Technology is BMW's core expertise, and that's why our approach is tech forward. We meet the requirements set by the global community with technological innovations. And we do this our own way. If you just think about Efficient Dynamics since 2007? Or if you think about the BMW i3 since 2013. To this day, the i3 is the only electric car in the world with a truly sustainable 360-degree approach. And just think about our current electro-offensive. Our capacity for innovation is based on our ability to implement and scale highly complex requirements efficiently. And this physical industrialization will also retain its value to society even in a digital age. These days, technological progress stems from the integrated interaction between software, hardware and customer experience, especially in our industry because the car is one of the most complex and most sophisticated product there is. Technology is the key to the future in that. One of the biggest and most important tasks for humanity currently is effective climate protection. This is another area in which we can and will make a difference by using technology in a targeted manner. Climate neutrality unites people all around the world. It touches our lives and mobilizes us. Europe, the U.S. and China, the world's 3 largest markets are firmly committed to climate neutrality, along with other industrial nations. The plans are ambitious and the pace is picking up. At the BMW Group, we are already planning 2 steps ahead. For us, avoidance comes before offsetting. We will use technology to avoid producing over 200 million tonnes of CO2 by 2030. This is 20x the amount that a city with over 1 million inhabitants like Munich emits in a year. You know how ambitious BMW is. Our goal for reducing our own CO2 emissions is below the -- limiting the increase in global temperatures to 2 degrees. In some areas, it is even lower than the 1.5-degree goal. And we're only measuring ourselves against goals we can actually achieve. And that is why we joined the Science-Based Targets Initiative. Our approach is holistic: rethink, reduce, reuse and recycle. This is our core thoughts and a core idea for the IAA Mobility here in Munich in September. Circular economy is our focus topic in this regard. How much energy do we consume? How many resources? Where do we use them? What do we use them for? These are the questions that every business model will have to answer in the future. Humankind is still taking more than 100 billion tonnes of raw materials out of the Earth every year. And this cannot work over time. Our electric cars are to be sustainable. This will be the sum of how efficiently we can create motion from electricity, of how consistently we can lower supply chain CO2 emissions, how reliably we can avoid using so-called critical raw materials and of course, of how quickly and drastically, we can reduce our resource consumption and turn into a circular economy. This task is extremely demanding from a technological point of view because climate-friendly car is not created simply by using green power. We are completely rethinking our vehicles, right from the very first moment of their development, a radical new approach, and this is what die NEUE KLASSE, the NEW CLASS stands for. The name die NEUE KLASSE will be familiar to some of you, I'm sure. In the early 1960s, BMW completely reinvented itself. By then (sic) [ Back then ], our new mid-sized models capture the spirit of the times, fresh, dynamic and progressive. And today, although circumstances are different, we once again living through a time of change. Now by naming a whole vehicle generation, again die NEUE KLASSE, we're sending a clear signal for the future and for coming decades. Die NEUE KLASSE is a radically new product offering for the markets of the future, and we will launch it in 2025. All our know-how and expertise will go into this development as well as massive investments, electric digital circular. This is what characterizes die NEUE KLASSE. It will bring a variety of very different and surprising vehicles. And it is a decisive step in the transformation of our and your company. It will include a new vehicle architecture, which is uncompromisingly tailored to electric drivetrains. Our battery cells will not only be powerful, safe and cost effective, but also recyclable, ready for circular economy. One important factor for the carbon footprint of any electric car is the high-voltage battery. And with the next generation, we will reduce the battery's carbon footprint by half compared to the current Gen5 technology. One thing is clear. The situation in the global raw material markets is tense and will remain to be so. That is why we are tying die NEUE KLASSE to a new efficiency imperative. Instead of precious primary materials, we will be using secondary materials in our vehicles, such as recycled steel, plastics and aluminum. And this is a true paradigm shift, which we call secondary first. So we are creating a NEUE KLASSE for a new age, and we're making your company sustainable. By 2030, we will reduce our carbon footprint per vehicle by at least 1/3 compared to the levels of 2019. This is not just an ambition or a vision. It is a binding target for us because attitudes are reflected in behavior. Long before the U.S. elections, your company agreed on ambitious climate goals with the state of California. These are now being discussed with the Biden administration. Finally, this is one example of how we also act consistently in our second home in accordance with our convictions. So there will be no short-term U-turns from BMW. This year, for the first time, and as the first company in our industry, we are presenting an integrated report to you. We're documenting our sustainable development and financial indicators with equal weighting in one single report, and both are subject to the same degree of scrutiny. Our promise regarding e-mobility is overall 80, 40, 20. This is how we intend to reduce CO2 emissions per vehicle throughout the entire life cycle by 2040 -- 2030. In production by another 80%, and let me repeat this 80% less. During the use phase, by over 40%, 40% less during the use phase and then supply chain will reduce it by more than 20%, 20% less. Although CO2 emissions would actually increase significantly here due to the ramp-up of e-mobility. Therefore, our entire approach is holistic and implemented in conjunction with our suppliers as you can see here.

The BMW group is a pioneer when it comes to sustainability in the supply chain. And this also applies to our e-mobility flagship, the BMW iX. Let me give you some examples. First, around half of the aluminum we use at our plant in Landshut is produced in Dubai using the power of the desert sun. Green electricity accounts for more than 50% of our CO2 targets in the supplier network. Second, we pay a lot of attention to critical raw materials. We build direct links to sub-suppliers and buy the cobalt and the lithium for our battery cells ourselves. We are the first and the only ones to do so. This ensures that the raw materials are mined in an environmentally and socially sustainable way. And third, we already use an average of 20% of recycled plastics in the BMW iX. We safeguard critical raw materials by using them many times in our circular economy. We work closely together with our supplier network and develop solutions to achieve our ambitious sustainability goals and to ensure the high-volume growth of e-vehicles. Sustainability on a new level.

Sustainability is kind of like a jigsaw puzzle. Only the sum of the individual pieces will create the perfect picture. From 2021, production at all our locations will be net carbon neutral. Our suppliers are using only green power to produce battery cells, and we have signed supply contracts for sustainable lithium from South America. Half the aluminum for our light metal foundry in Landshut is produced using solar electricity from the desert outside of Dubai. And together with the WWF, we protect the deep seas and have pledged not to source minerals from deep-sea mining. As you can see, your company is taking a responsible action to create a wholly sustainable mobility. According to forecasts, e-mobility will continue to grow in leaps and bounds from 2025. That is why we are electrifying BMW faster than ever, and our production network is integrating electrification into the existing plan structure. Take a look at our e-mobility road map up to 2030. We aim to deliver more than 100,000 fully electric vehicles to customers in 2021 and currently have 5 electric models ready to go. 2023 will be a tipping point for us with 13 pure electric models on the roads that year. But the number of vehicles is not the only criteria for us. So it is the breadth and width of our product range. There will then be at least 1 fully electric option for customers in 90% of segments. You can offer -- customers offers from the compact class to the ultra-luxury segment. There might be certain markets where demand could shift entirely to e-mobility in the next few years. We expect this to happen. And that is why we are prepared for it. Our customers can find the right model in their preferred segment. This is the way for us to gain market share and stay profitable. By the end of 2025, we will have delivered around 2 million electric vehicles to customers, which is 10x more than in the year 2020. And in 2030, more than half the vehicles we will sell worldwide will be fully electric. So all in all, over the next 10 years, we will release a total of about 10 million pure electric vehicles onto the roads. So your company is growing, and it is entering into a new electric dimension. How quickly this happens will also depend to a large degree on charging infrastructure because everyone is asking how quickly the infrastructure can be expanded. As far as I'm concerned, it can't happen quickly enough. I mean, it should get faster. 4x faster, that is the range that sales of electric cars are growing. They are growing 4x faster than charging stations in Germany. And individual manufacturers' exclusive charging networks are of little use in this respect. Our charging joint venture IONITY can be used by anyone for high-power charging along motorways. By the end of the year, we will have set up 400 charging stations with over 1,500 charging points. E-Mobility is a project for the whole of society. And it should become a flagship project for a sustainable world without having to make sacrifices. And that will be possible if we take the approach correctly. That takes me to my second point. We're laying the foundation for the BMW Road to 2030 and beyond right now. Under the challenging conditions of the coronavirus pandemic, we focus on 2 things: Firstly, steering the company with a maximum of flexibility and precision; and secondly, significantly upping the pace of our transformation. You might remember that our last Annual General Meeting was held in the middle of the global lockdown during a time of great uncertainty. But the BMW Group never really stood still. I promised to you then that we were working on the best possible restart for your company. And in fact, we did achieve our adjusted targets for 2020. Group earnings before tax of EUR 5.2 billion and EBIT margin in the Automotive segment at the high end of our adjusted target range. And by the way, in the fourth quarter, it already reached 7.7%. But more than this, our global market share increased during the pandemic from 2.9% in the first quarter of 2019, that is before the pandemic, to 3.3% in the first quarter of 2021. And for our electrified vehicles, 2020 gave a real boost. Sales of fully electric vehicles went up 13% and plug-in hybrids 40%, a combined increase of 1/3 over the previous year. Electrified vehicles accounted for 15% of our total European sales last year. After all, we had made a binding commitment to reach the European Union's CO2 goals for 2020. And we delivered on that promise, with fleet emissions of 99.1 grams of CO2 per kilometer. This means that we went significantly below the limit value assigned to us, and we will do the same again this year. Now you might think that this would make high-performance models less desirable, but that doesn't hold true for BMW M GmbH, which had its best year ever in 2020. BMW Motorrad presented 13 new models and reported the second best sales result in its history. But in 2020, we also made sure that your company became even leaner and more efficient. 2 examples for this. On the one hand side, we're reducing complexity with fewer variants and fewer drivetrains, keeping only those for which there is real demand. About half the current drivetrain variants will no longer be offered by 2025. And on the other hand, we are qualifying our team for the transition towards e-mobility. We're developing expertise, building them up and retraining them. That is what transformation looks like at BMW. More than 5,000 colleagues took advantage of voluntary severance packages, when at the same time, 4,000 new experts joined us in future areas. That was a true phase of renewal, and we're taking everyone along with us. And you can see this at our oldest plant here in Munich, right in the heart of the city, right behind me. Our main plant is going electric just as well. Engine production is being relocated. And instead of this, we will get a state of the art new assembly line. To summarize the year 2020 for BMW, we mastered the effect of the pandemic. We achieved a solid group earnings together, and our global business model is robust. So once again, we learned that everything is constantly in motion. Some trends can be predicted, others cannot. And for this reason, we must continue to stick together and pull together in 2021. We anticipate a solid year-on-year increase in automotive deliveries and aim to build on our pre-coronavirus level of around 2.5 million vehicles. Our earnings before tax are expected to increase significantly. The EBIT margin in the Automotive segment should be at the high end of the 6% to 8% range. So at the high end of this range. And for this, we had a great start in the first quarter. Our customers bought more vehicles than ever before in a first quarter, especially in our largest market in China. And April was another strong month with sales of more than 10% compared to the comparable figure for the pre-coronavirus year 2019. The Automotive segment delivered an EBIT margin of 9.8% in the first quarter. With this, after -- for the first time in 10 quarters, we came back to our target range of 8% to 10% that we're aiming at for the mid-term, as you know. And this good start into the year is also reflected in our share price, with the price of our common stock up around 15% since the start of the year alone. But it's still a long way to go until the end of the year, and there are still a number of risks. The course of the coronavirus pandemic, difficulties with semiconductor supplies, the situation in the raw material markets. So risks are part of our business and companies want to grow in every environment. Global companies such as the BMW Group also face an additional challenge. They need to identify where markets are headed to, whether we are in progressive markets or in established markets. That is why we're aiming at the milestone of 3 million vehicles per year, and we're aiming at this well before the end of the decade. But at the same time, our aim is to achieve profitable growth within our target range. I'm confident because our product portfolio is perfectly suited to the current demographic and economic trends. If you look at the United States, if you look to Asia, it offers the technology to meet varied demand for different types of drivetrains. And our intelligent vehicle architectures prove once again that your company is able to integrate very different systems and requirements in an optimal manner. Our plants produce different types of drivetrains within 1 single structure. BMW is global. We serve over 140 markets, and that's why we offer our customers exactly the drivetrains they ask for in the specific markets because we do not want to miss out on any market opportunities because we are not on a consolidation course and we will not head towards that way. And because we master complexities. This is what's referred to in technology jargon as flexible exchangeability. The popular BMW X3, for example, already comes with 4 drivetrain variants, including the fully electric iX3, which we build in China. The iX3 received highest praise from German magazine, Auto Motor und Sport, beating all its rivals in a competitive test. And now we're ramping up things with the BMW X1 model series, the 5 Series, the 7 Series and the MINI Countryman, all with a choice of drive technologies. Technology openness pays off. Who is the global market leader in plug-in hybrids? That's BMW. At the same time, we're conducting research into e-fuels and hydrogen. Next year, we will unveil a BMW X5 with a fuel cell drive and a small series of the BMW i Hydrogen NEXT will show how we envision the hydrogen drivetrain. Ladies and gentlemen, climate protection through technological innovation is not just an exciting area of activity. It also offers a lot of joy. When we, on the Board of Management, get to test and rate our vehicles, we, of course, always try to be as neutral as possible. But truth be told, in the end, we're always absolutely thrilled by our product, just like our customers. Also, media representatives had a big smile on their faces last week when they tested a fully electric BMW i4, and I was very happy to see that. Their feedback was extremely positive, and we're delighted about this. But to be honest, we were not surprised by that because the i4 comes right from the heart of BMW. Last year, we had the BMW i4 concept cars standing here at this position. And today, it is the production model, which will be available as of this fall. Along with our innovation and technology flagship, the BMW iX, which offers up to 600 kilometers of electric range according to WLTP short charging times and experiential interior. It's technology in its purest form, but you don't see it, and you don't feel it because everything is intuitive. And we call this Shy Tech. Check it out for yourselves.

We're now launching a new era of electromobility. Our new fully electric vehicles and the line that we really mean business, and I promise you, we offer the very best of BMW. Let's start with the BMW iX. Last year, we presented the design of our new technology flagship. And now it's time to give some more details. The BMW iX will be launched with 2 engine variants, the xDrive 40 and the xDrive 50. It is our ambition to make premium e-mobility as attractive and accessible as possible. With the launches of our new fully electric vehicles, we will introduce our totally new forward-looking sales approach with a second-to-none customer experience. This is my personal commitment. The iX is truly outstanding. But in 2021, we won't stop there. We will continue our e-mobility drive with the launch of another pure electric icon. We know that customers are really excited about this new vehicle, and they won't have to wait much longer. We bring this 40 fully electric Gran Coupé to the market in autumn this year. Maybe you can already guess what I'm talking about. It's the BMW i4. A true BMW, with sporty looks, best-in-class driving dynamics and 0 local emissions. The heart of the BMW brand now is fully electric.

The i4 and iX offer the very best of electric driving pleasure. And by the way, they are produced using domestic hydroelectric power from the rivers Isar and Lech. Also, our new sales approach will come into effect with the launch of the i4 and iX. Our sales and marketing team is digitalizing the product and purchasing experience so mobility can be experienced in digital form. Configuration, ordering and delivery are all available digital and contact-free. And this already works in more than 60 countries. It is a basic understanding that digitalization should serve humankind. And because we all expect it to work without being too obvious, we're making the technology in our vehicles simple and precise. Shy Tech is designed to inspire our customers and make their lives easier, not more difficult. And together with Apple, we developed the BMW Digital Key, the first car key integrated directly into the iPhone. And then the BMW iX, the Digital Key Plus will now come with ultra-wideband technology, making it even safer and above all, more convenient. The iX is a digital powerhouse with our most powerful data processing system ever. Our BMW Operating System 8 processes 20x more data than before using 5G. We developed this ourselves for the new BMW iDrive. Our new operating system connects people with their cars, and it is the simplest and most secure operating system in our industry. Third-party services can be seamlessly integrated, be it Apple, Google, Tencent or Spotify. Our customers can be sure that their vehicles come with the very latest technology because we update them in real-time over the air, take a look for yourselves.

Mastering physics and [ bytes ]. This is what BMW is all about. BMW iDrive plays an integral role in our customers' mobility experience. Once again, we have totally reinvented it. There's one more thing you will enjoy very much.

I'm your BMW Intelligent Virtual Assistant. You can give me any name you like. I know every detail of your BMW and learn with every drive. I take on many tasks and make useful suggestions. I will always be there, but only appear if you need me.

Together with the new BMW iDrive, we are launching BMW Operating System 8, the most powerful data processing system and technology stack ever created by BMW. Every BMW will become a true digital powerhouse with absolute top performance and superfast over-the-air updates. Advanced digital technologies and pure driving emotion, no compromise quality, safety and security. This is what you can always and only expect from BMW.

We are digitalizing our vehicles, but also the processes across the company and in production. Just think about our partnership with NVIDIA, the global market-leader in graphics cards. Together, we are creating a virtual version of our production network. Imagine each plant having a digital twin. This makes our planning processes even more precise, faster and more efficient. And standing here next to me is the fully electric MINI. Customers just love it and our order books are full. It's been 20 years since the first MINI developed by BMW rolled off the production line at Plant Oxford. Since then, we've built more than 5 million MINIs in the U.K. I actually spent 2 years in charge of production in Oxford myself. So I'm especially pleased to share with you today that MINI will be our first all-electric brand. MINI is perfect for the city and for e-mobility. And in 2025 already, we will be releasing the last model with the combustion engine variance. And by the early 2030s, so in 9 years' time only, the brand will be exclusively fully electric. BMW Motorrad has been electric also for quite some time. Our CE 04, which is to my right, is the perfect fit for the city. And it will celebrate its world premiere in the summer. And at the IAA Mobility, we will show you much more in this regard. Also, the Rolls-Royce team is working intensively on a fully electric offering and look out for that. So dear shareholders, electric, digital, sustainable. This is your company. For a new age in which individual mobility will no longer be a climate factor. We are making big plans because we want to and because we can. And because we have an obligation towards the customers so they can stay mobile. But also because we want the investment made by you, dear shareholders, to continue to be worthwhile. And because we have an obligation towards the BMW Group, our unique company with emotional and globally desirable brands. Our long-term perspective is our way of making an effective contribution to society. We're looking far into the future, and we're laying the foundation today for the BMW way to 2050. We hope you will continue to stand by us, stay healthy, and thank you very much for your kind attention.

Thank you, Mr. Zipse, for your report and your exciting outlook. Now I would like to ask our Chief Financial Officer, Dr. Peter, to report to you on the utilization of the authorized preference share capital since the last annual journal meeting. He will also explain to you the amendment to the profit transfer agreement with BMW Bank, which we will propose for your approval on the agenda item 10. Dr. Peter?

Dear shareholders, ladies and gentlemen, at the 2019 Annual General Meeting, the Management Board was authorized to issue new nonvoting preference shares with the consent of the Supervisory Board. The authorization can be exercised until May 15, 2024, and is valid for a total volume of up to EUR 5 million of share capital. The new shares may only be issued against cash contributions. The authorized capital is exclusively intended for the issuance of employee shares. Due to this purpose, the shareholder subscription right was already excluded in the resolution of the Annual General Meeting. Now I will report on how and to what extent we have used this authorization since the last Annual General Meeting. Since the last Annual General meeting, we have made use of the authorization from the approved capital 2019 once. That is in November 2020. The shares were used exclusively for our employee share program. A total of 822,000 new voting preferred shares with a nominal value of EUR 1 each were issued. This corresponds to an increase in share capital of only 0.1%. A further 124 preferred stocks were bought back via the stock exchange and transferred to employees. The issue price of the new shares was set at EUR 36.55 per share. This corresponds to a discount of EUR 11.50 per share compared to the average closing price of BMW. Preferred to stock in Xetra trading during the period from November 3 to the November 6, 2020, around -- in 2020, around 31,000 employees participated in the employee share program, and each eligible employee could purchase up to 28 preference shares. The new shares are entitled to dividends from the 2021 financial year. They are subject to a lockup period until the end of 2023. The exclusion of subscription rights already approved by the Annual General Meeting is necessary in order to be able to transfer the shares to the employees. The dilution effect is extremely low. The authorized capital 2019 now amounts to approximately EUR 3.4 million. Further information on the utilization of the approved capital can also be found in the annual report of the BMW. The employee stock program is aimed at employees of BMW and its domestic wholly owned group companies to the extent that the respective group companies decide to participate in this program. Under this program, employees can generally purchase a certain number of nonvoting preference shares once a year within a period of a few weeks at an appropriate discount to the then current stock market price. As a rule, a sales restriction of several years, i.e., a holding period is agreed with the employees. Employee shares have been a proven instrument at BMW AG since 1989 to enable our employees to participate in the company's success. We are convinced that the moderate use of the approved capital since the last Annual General Meeting is in the best interest of the company and the shareholders. Dear shareholders, under item 10 of the agenda, we ask you to finally approve an amendment to the profit and loss transfer agreement between BMW AG and BMW Bank GmbH. In the EU and Germany, regulatory requirements have been recently been changed, making it necessary to adjust the existing profit transfer agreement. It is important for BMW Bank GmbH that its equity capital is recognized as so-called hard-core capital for regulatory purposes. In order to ensure that this remains the case in the future under the amended regulations, BMW Bank GmbH must, among other things, be given discretion as to whether it allocates all or part of its profit to retaining earnings or to the special item of the -- for general banking risks. Furthermore, the profit and loss transfer agreement must not contain an extraordinary right of termination without notice. It must provide for an ordinary period of notice, which allows termination of the agreement only at the end of the business year. In order to comply with these regulatory requirements, BMW AG and BMW Bank GmbH, concluded an amendment agreement to the existing profit transfer agreement on May 9 -- on March 9, 2021. On this occasion, individual updates and clarifications of the text of the contract were also made. Further information on this amendment agreement can also be found on our website. In particular, the content of the amendment agreement is described in detail there in the joint report of BMW AG and BMW Bank GmbH. We ask the Annual General Meeting to approve this amendment agreement. Thank you for your attention.

Thank you, Mr. Peter. This brings us to the end of the public part of the Annual General Meeting. For our registered shareholders, we are broadcasting the entire Annual General Meeting in our online service. If you have not yet done so, you should register now in the online service. The required access data are printed on the registration confirmation in the top right-hand corner. I would like to bid farewell to all viewers of our public broadcast, and thank you for your interest. [Statements in English on this transcript were spoken by an interpreter present on the live call.]