Welcome to the BMW Group Annual Conference, Analyst and Investor Day 2022.
Good morning, ladies and gentlemen. Welcome to the BMW Group Analyst and Investor Conference. This year, once again, our event is unfortunately completely virtual. Thank you to all of you for joining us today. I would like to start by noting that everyone in the room has tested negative for COVID-19. We are following all the necessary health and safety protocols. Ladies and gentlemen, we of course all hoped this event would take place under different circumstances. However, we are all moved by the images and news reaching us from Ukraine over the past couple of weeks. Yesterday, at our annual press conference, I offered a brief assessment of the current geopolitical situation and the implication for the BMW Group.
Ladies and gentlemen, for today, with me are the Chairman of the Board of Management of BMW AG, Oliver Zipse, and our Member of the Board of Management for Finance, Nicolas Peter. Oliver will first explain to us how the BMW Group is addressing the technological transformation. Then our CFO, Nicolas Peter, will follow with the figures for 2021 and our outlook for 2022. After that, we will see Oliver again with the strategic outlook. Oliver, and now the stage is yours.
Good morning, ladies and gentlemen. The BMW Group has proven time and time again that it can master challenging situations, emerging even stronger than before. Think about the global economic and financial crisis, the coronavirus pandemic, or the semiconductor supply shortages. In unpredictable times, it is even more important to do the right thing. For us, this currently means three things. First, we're helping out wherever our assistance is needed. Our thoughts are with all those who are suffering, as well as with our suppliers and our partners. The BMW Group stands for both the peaceful coexistence of all cultures and free global trade, which brings people closer together and leads to progress and prosperity in every region of the world.
Second, we are working to secure and keep our operating business running because we can only provide effective support for others and serve the common good if we as a company are able to perform in a strong manner. Thirdly, we're also continuing to work tirelessly towards our long-term goals. This is our most fundamental task. It is what BMW is all about. If we fail to do this, we lose valuable time. The commitment to climate neutrality is a huge task for the global community. We all must act intensively and without delay. The BMW Group has a robust capital structure. We're a highly flexible global company that calls all regions of the world home. Even the current situation will not change our long-term perspective. For us, every year is just the next step in our BMW journey.
We will make a difference to create value that our customers ask for to generate meaningful added value. We balance the legitimate demands of all stakeholders because we all need, live with, and benefit from mobility. Our aim is to lead the transformation of our industry. This will require adaptability as well as resilience, and this means reliability, stability, and at the same time, operational excellence on the one hand, and courage, disruption, and forging our own technology-based path on the other side. These characteristics can turn transformation into a competitive advantage for us because in this process, we can fully exploit our renowned BMW capabilities. Let me give you a few examples. We're accelerating our e-mobility ramp-up in a precise manner in line with growing demand. By the end of 2025, we aim to have delivered 2 million fully electric vehicles to customers.
By 2030, at least half of our global deliveries should be BEVs. We're doing everything we can do to meet this goal even earlier. By then, our BEV sales could already surpass 1.5 million per year, depending, among other things, on how quickly the charging infrastructure expands worldwide and how the supply of raw materials for batteries shapes up. The BMW i Vision Circular is our look ahead to what sustainable and luxurious mobility could look like in the urban environment of 2040. With this vehicle, BMW has impressively laid claim to the next big cross-industry topic of circularity and defined it for itself. In 2025, we will embark now on phase three of our transformation with a major leap in technology. The Neue Klasse will be built on our new vehicle architecture.
This means digital and circular with substantially improved efficiency for uncompromising e-mobility. Our future Gen6 drivetrain generation enables lower cost, enhanced performance, new cell chemistry, and also new cell formats. The profitability of the Neue Klasse therefore needs to be on par with vehicles that have state-of-the-art internal combustion engines. BMW should remain an attractive investment. The car is becoming a digital device, and BMW is right at the forefront. Independent from the drive technology, we also offer over-the-air remote software upgrades. In this way, BMW has the world's largest fleet that can be upgraded continuously already today. We are collaborating with the best tech players in all regions of the world and with partners from other industry. For example, with the framework of Catena-X. When it comes to all-solid-state batteries, we believe we have the strongest partner in this field with Solid Power.
We're establishing long-term cooperation with Qualcomm Technologies and Arriver to develop next-generation software for driver assistance systems and automated driving. Together, we will provide industry-leading software functions for automated driving, ranging from SAE Level 2 and Level 2+ driving assistance systems all the way to Level 3 highly automated driving functionalities. Our BMW Brilliance Automotive joint venture has been fully consolidated in the group financial statements of BMW AG since this February. With this move, the BMW Group is taking its growth to the next level. BMW continues to be a long-standing partner of China and the Liaoning province. China is a driving force and pace setter for digital trends. We will now be even closer to customers there, keeping our finger on the digital pulse. All these examples show we are leveraging the transformation with purpose in order to highlight our strength.
In 2021, the company achieved all-time highs in important key figures, and we aim to maintain this financial strength in 2022. Nicolas Peter will now talk about our performance in 2021 in more detail and pre-present our targets for 2022. We will see each other again here in a bit to discuss our strategic outlook. This will include a first look at the new 7 Series. Stay tuned.
Long-term thinking, responsible action, and entrepreneurial independence characterize the spirit of the BMW Group and form the foundation for success. Now, our focus is on maintaining the profitability of the current business while investing in our future course worldwide. With a strong performance, the BMW Group proved again in 2021 that it maintains an unparalleled capacity to deliver. At the same time, we're becoming more efficient and speeding up our efforts in the transformation. This is why we can afford ambitious plans to expand our innovation leadership also and especially in times of change. The foundation of today's success ensures our role as a leader and pioneer in individual mobility, and our investments and engagement create added value, particularly in the world's three largest markets. This allows us to meet the various needs of our customers across the globe with the right products.
At the right time.
Good morning, ladies and gentlemen. The images that reach us every day from Ukraine make it difficult to move on to day-to-day business. In these times, we are all called upon. We must not turn a blind eye to the pervasive human suffering. We need to help those who urgently need it quickly and decisively. As a company, we are of course making our contribution. Let us now look back on the past year. Despite the challenging conditions, the BMW Group once again achieved its goal in all segments. Our positive business performance is reflected in our strong financial result for the past year. An EBIT margin of 10.3% for our automotive business puts us at the upper end of our adjusted target range as expected. The free cash flow in the automotive segment amounted to EUR 6.4 billion as forecast.
We also met all our non-financial targets, in particular, the further reduction of our CO2 fleet emission. The rating agencies, Moody's and Standard & Poor's, have also recognized the BMW Group's positive business development and revised their outlook upwards over the course of the year. We have published our financial statements in our integrated BMW Group report for the second time. In addition to financial key figures, we have also expanded our reporting to include non-financial indicators fully in line with SASB standards. Information on the EU Taxonomy was also included for the first time. Let's take a look at the business development in detail. After a difficult 2020 due to the pandemic, 2021 was no less demanding. Despite problems with semiconductor supplies, we came through the year relatively well and took advantage of opportunities to further improve price realization worldwide.
At this point, I would like to thank the many colleagues in all areas of the company who continue to show extraordinary commitment. In particular, our thoughts are with the many employees of our suppliers in Ukraine. After a strong first half year, semiconductor supply issues intensified as expected in the second half of 2020 to 2021. Fixed costs, which increased as planned towards the end of the year, also had an impact. Revenues for the full year climbed to around EUR 111 billion against the backdrop of positive pricing for new and pre-owned vehicles and the higher volume of sales. The significantly higher financial result primarily reflects the positive earnings contribution of our Chinese joint venture BBA, which increased by more than 40%. Valuation effects, including interest rate hedging instruments, also had a positive impact.
Group earnings before tax increased significantly to around EUR 16 billion. The previous year had been weak due to the pandemic. At 14%, the Group EBT margin was well above our long-term minimum target of 10%. Strong pricing for new and pre-owned vehicles in particular was a key driver for earnings. We also delivered more vehicles to customers than in the previous year. Finally, there was a positive one-time effects we have already communicated. This included the partial reversal of the provision for the EU antitrust proceedings and the modernization of the pension scheme for employees in Germany. Ladies and gentlemen, our strategic approach remains focused on emission-free mobility. The new all-electric BMW iX and the sporty BMW i4 are once again demonstrating our technology leadership. Our order books are very well filled.
The BMW i7 will once again set new standards in all major areas of innovation, especially electrification, digitalization, including, for example, rear seat entertainment and highly automated driving. We will present the i7 to you in April. Our sixth generation electric drivetrains developed in-house will bring further major steps in efficiency and range. We invested a total of around EUR 5 billion in these and other future projects in 2021, as well as in our global production network and new models. The CapEx ratio of 4.5% was below our target figure of 5% as planned. With a full consolidation of BBA, where extensive plant expansions are currently underway, we expect a slightly higher ratio of around 5% for 2022. I will address the details of the impact of full consolidation later. Research and development expenditure remains at a high level with a priority on emission-free mobility.
In addition to expenses for new models, a major focus in 2021 was on preparations for the Neue Klasse, which is scheduled to ramp up in the middle of the decade. R&D costs according to IFRS increased to EUR 6.3 billion. The R&D ratio of 6.2% according to the German Commercial Code was in line with our expectations. In 2022, the ratio will be back within our long-term target range of 5%-5.5%, also due to the full consolidation of BBA. Today, well over half of our total investments are in the future fields of e-mobility, digitalization, and highly automated driving. Ladies and gentlemen, this year, in recognition of this positive business development, our employees in Germany will also enjoy the highest-ever profit-sharing bonus for the financial year 2021.
Last autumn, we also expanded the preferred stock program for employees, which has been in place since 1989. This has enjoyed a very positive response. We also want our shareholders to participate in the company's success. The Board of Management and the Supervisory Board will propose a dividend of EUR 5.80 per share of common stock and EUR 5.82 per share of preferred stock to the annual general meeting. This represents a payout ratio of 30.7%, which is within our long-term strategic target range of 30%-40%. Already today, the BMW Group has a healthy balance sheet and the potential to generate sustainably high free cash flow. The full consolidation of BBA in the BMW Group financial statements from February onwards will further increase this potential.
The Board of Management and Supervisory Board will therefore propose to the annual general meeting that the Board of Management be authorized to repurchase and retire reacquired shares. This would create the option of returning available capital to shareholders via share repurchases in addition to the annual dividend. Ladies and gentlemen, let's take a closer look now at business development in 2021 in the individual segments. In the automotive segment, we delivered a total of more than 2.5 million vehicles to customers last year, including over 100,000 all-electric cars. The segment's operating earnings totaled almost EUR 10 billion. At 10.3%, the EBIT margin is at the upper end of our adjusted target range as forecast. The year-on-year comparison mainly reflected the positive effects of improved pricing and higher volumes. Our aftersales business also saw significant growth.
The exceptionally strong residual value development was another factor that contributed to the increase. Ongoing efficiency measures from our performance program also took effect in 2021. The partial reversal of the provision for the EU antitrust proceedings, as well as the valuation effect of modernizing the pension scheme for employees in Germany, also had a positive effect. Higher research and development spending, in particular for further ramp-up of e-mobility due to very strong demand as well as for digitalization, dampened EBIT much more than the previous year, as we had projected. The net balance of raw material prices and currency effects resulted in a headwind in the mid three-digit EUR million range as forecast. The positive operating result was also the main driver for strong cash development in the financial year 2021.
Despite higher capital expenditure, free cash flow in the automotive segment totaled EUR 6.4 billion and therefore met our expectations and our guidance. In contrast to the previous year, this did not include an inflow from BBA's dividend payments. For 2022, we expect a free cash flow of at least EUR 12 billion, which includes an expected one-time cash inflow of about EUR 5 billion from the BBA full consolidation. This consists of a positive effect from recognizing BBA's liquid assets in the balance sheet for the first time. This effect is partially offset by payment of the acquisition price of around EUR 3.7 billion. This strong free cash flow in the financial year 2021 is also reflected positively in the BMW Group's liquidity position.
In preparation for the payment of the purchase price for increasing our shareholding in BBA, the company had increased its liquidity to EUR 20.3 billion at the end of last year. Let's turn now to the financial services segment, which posted pre-tax earnings at a high level of EUR 3.75 billion in 2021, mostly due to the favorable risk situation. The number of new contracts with retail customers climbed 6% year-on-year to almost 2 million. At the same time, the average financing volume per vehicle also increased. Residual values and credit risks improved significantly from the previous year, which had been impacted by the pandemic. The return on equity of 22.6% was at the high end of our adjusted target range of 20%-23%.
We review our risk provisioning on an ongoing basis, taking into account all relevant current developments. From today's perspective, we have continued to make appropriate provisions for our business risks. The motorcycle segment also delivered a very strong performance in 2021, with five new models and three model updates. With total sales of more than 194,000 units worldwide, we reported strong growth in all regions, especially our strategic growth markets, the U.S. and China. At 8.3%, the EBIT margin was within our target range of 8%-10%. Pre-tax earnings more than doubled year-on-year to almost EUR 230 million. Let's move on to the other entities segment and inter-segment eliminations. As expected, the net balance for pre-tax earnings of EUR 274 million was significantly lower than the previous year.
Positive valuation effects from interest rate hedging instruments driven by higher interest rates were more than offset by higher inter-segment eliminations caused by the increased leasing business volume. Ladies and gentlemen, let's turn our attention now to the current year. As you know, we have increased our stake in our Chinese joint venture BBA to 75% and extended the joint venture contract to 2040 as planned. With the completion of this transaction in February of this year, BBA will be fully consolidated in the BMW Group's financial statements. BBA's earnings contribution was previously reported in the financial result as part of the at-equity consolidation. With full consolidation, BBA will be fully reflected in all positions of the income statement, balance sheet, and cash flow statement. This also includes revaluing the existing 50% stake to the current market value.
This will result in an estimated positive one-off effect of between EUR 7 billion-EUR 8 billion in the financial result. Full consolidation will increase both revenues and the absolute EBIT result in the automotive segment. This will, however, be partially offset by an annual depreciation expense from the purchase price allocation over the coming years. A technical effect from the initial consolidation in connection with intragroup deliveries will also dampen earnings in 2022. For this reason, we do not anticipate any significant impact on the EBIT margin in the automotive segment in the current year. Ladies and gentlemen, we are securing our future competitiveness by investing in future technologies today. At the same time, we always maintain a clear focus on our financial performance. We remain committed to our long-term target range of 8%-10% for the EBIT margin in the automotive segment.
Profitability and efficiency remain our focus in all segments and across all brands. Let's now turn to our outlook for 2022 in detail. Our guidance for this year reflects the current status of our planning and includes the impact of the BBA full consolidation. The war in Ukraine is having a substantial effect on the country's automotive suppliers with supply restrictions resulting in production interruptions at several BMW Group plants. This is already taken into account in our outlook to the extent that the impact is currently predictable. Regarding the ongoing semiconductor supply shortages, we do not expect the situation to ease before the second half of 2022. An initial impact of rising raw material and energy prices is included in the outlook for the current year. Further significant price increases in connection with the war in Ukraine and the related sanctions are not part of the forecast.
Possible long-term effects of the conflict in Ukraine cannot be estimated at the present time and are therefore also not reflected in our outlook. We continue to monitor closely current developments regarding the coronavirus pandemic, particularly in China. Any further possible negative impact on our business is not currently included in our outlook. Ladies and gentlemen, the BMW Group has proven its financial strength and flexibility time and again. In extremely volatile times, we manage our business with prudence and clear focus. Our young, attractive product portfolio is well received by customers, particularly the MINI Electric, the BMW iX, and the BMW i4. Despite the current supply bottlenecks due to the current geopolitical situation, we are confident that the positive business development will continue in 2022. For the group's pretax profit, we expect a significant increase compared to the previous year.
The main driver is the BBA full consolidation from February 11. Due to the inclusion of the approximately 26,500 employees from China in the workforce for the first time, the BMW Group's head count will increase significantly in 2022. Thanks to high customer demand and new models, we had originally planned a slight growth in deliveries in the automotive segment. As a result of the negative effects of the war in Ukraine, in particular, the production interruptions due to supply constraints at local suppliers, we now expect deliveries to remain at the level of the previous year. Deliveries of electrified vehicles are forecast to increase significantly this year. The number of all electric vehicles is expected to more than double.
Based on the original planning, including BBA full consolidation, we had expected the EBIT margin in the Automotive segment to be in the upper half of our strategic target range of 8%-10%. As previously mentioned, the BBA full consolidation has no significant impact on the margin in 2022. As a result of the war in Ukraine, however, we now expect a margin of between 7% and 9%. In the Motorcycle segment, we expect a slight increase in deliveries. The EBIT margin is forecast to be in the target range of 8%-10%. In the Financial Services segment, we should see a return on equity within the range of 14%-17% in 2022. The reporting year 2021 was characterized by an exceptionally positive risk situation.
Ladies and gentlemen, the BMW Group is committed to consistently strong performance even in volatile times, and we have been able to accomplish this yet again. Operationally, we are well positioned for the challenges ahead. Over the past two years, the coronavirus pandemic and semiconductor shortages have challenged our flexibility and commitment to deliver top performance more than ever before. Despite the high volatility, we have continued to drive forward our transformation. We remain committed to the BMW way. Now I hand over to Oliver, who will talk about what this means for us in more detail. Thank you.
Ladies and gentlemen, the new BMW 7 that will be released this year is tech magic at its best. This is the first time we are fully using our tech stack for driver assistance functions. It will also enable Level 3 highly automated driving, which we will present before the end of 2022. We developed its sound system with the Hollywood film score composer Hans Zimmer. The new 7 will be the next ace in our successful growth strategy in the luxury class. The new 7 is the only luxury sedan with true drivetrain diversity, offered as a BEV, of course, a plug-in hybrid, and a modern ICE. The most powerful variant of the 7 is the fully electric model. The BMW i7 is part of the success story of how we perceive our role as a leader.
We will remain open to all technologies as long as there is customer demand and it benefits the climate. The new BMW 7 also kicks off the new generation of our highly efficient combustion engines. It is already geared towards the likely incoming legislation for the Euro 7 standard. In other words, our conventional drivetrains are already prepared in accordance with 2030 regulatory requirements, and we have already covered the main financial expenses for these requirements. On the 20th of April, we will present our new 7 for the first time at its public world premiere. We will also give you a sneak preview now.
Creating an all-new 7 Series is something very special.
Like no other car, the 7 represents the innovative power of BMW.
Therefore, it comes as no surprise.
In the new 7, everything is exceptional and unrivaled.
The new face, powerful and present, highlighting BMW's kidney contour and iconic glowing crystal headlights.
Of course, approaching and entering the new 7 is already a remarkable experience.
It goes without saying the new 7 offers the best driving experience in the segment.
On top of that, highly automated Level 2+ and Level 3 functions. Needless to say, the new 7 is fully electric. The most powerful 7 is driven by a unique BMW electric drivetrain with more than 600 electric horsepower, and with battery cells that were of course produced with green electricity. It offers the ultimate digital experience, minimalistically designed, top digital performance, perfect interaction, and highly progressive functions. With a 31-inch theater screen and 8K streaming resolution, the new 7 is without a doubt the new entertainment benchmark. Of course you are surrounded by modern art in the new 7, for the first time in a BMW and unique in the world. In the new 7, everything is unprecedented and absolutely trendsetting in every detail. The new 7 is the choice of future-thinking responsible leaders. See you in April.
Digitalized mobility primarily needs robust international supply chains for both software and hardware. The flow of goods around the world is highly interconnected, as the semiconductor supply bottlenecks have shown, and this is typical for all technologies. We build several thousand chips into every vehicle every day. Now, we are increasingly relying on direct supply contracts. The supply chain takes on a whole new meaning with the ramp-up of e-mobility. We are signing targeted agreements with our suppliers, for instance, for energy-intensive primary materials like steel or aluminum. Already today, we have contractually agreed with our suppliers that by 2030 we will save around 20 million tons of CO2 in the supply chain alone, compared to 2019. We are very selective about the companies we work with. This could even be an innovative startup if they are the ones developing exactly the right technology we need.
In this way, we're able to significantly improve the transfer of technological innovations into our products, our development, and our production in a targeted, permanent manner. The same applies to our partners' contribution to our climate goals for 2030. The global commitment to climate neutrality is bringing the topic of production back into the public focus. It is, and will remain, one of BMW's greatest strength, something we're able to explore even more during the transformation. I want to put it clearly, cool digitalized products are built in cool digitalized plants. In Shenyang, for example, we will be opening a completely new plant at the Tiexi site this year. Our plant in the Dadong District is also undergoing a comprehensive expansion. We're using this capacity to produce additional BEV models in and for China.
This year we will start producing a fully electric variant of the BMW 3 Series long sedan tailor-made for the Chinese market. As you know, our MINI and Rolls-Royce brands will be all electric from 2030 onwards. By the end of this year, we will give you a glimpse of the new MINI family lineup, new models with a remarkable character and the MINI-specific electrified go-kart feeling, full digitalization reflecting the lifestyle of our MINI customers, and an overall ecological footprint that is minimal. Now, at BMW Motorrad, all future urban models will be fully electric. BMW Motorrad has been developing electrified two-wheelers for over 10 years now. Here you can see the latest model, the BMW CE 04. Ladies and gentlemen, all our brands are focused on the customer and their mobility experience.
We are digitalizing the customer interface and leveraging digital and physical options to reach out to customers through all channels. We are scaling up online sales, however, our retailers will have an important and future role as the point of sales and service. We see the premium customer experience, especially in sales and service, as a potential competitive advantage we want to exploit and expand. Ladies and gentlemen, standing here next to the iX Flow, I want to share our promise with you for the CES in January 2023. You can look forward to our next gen and our digital vision vehicle, our next vision for mobility in 2040. I refer to it as a metaverse experience combining the physical vehicle and the digital future. Technology will enable emission free, digitalized, and circular mobility. As you've already heard, 2022 will not be an easy year.
That much is already certain. However, we have experience handling challenging situations and at the same time we have always pursued and reached our long-term goals. In order to do this, our world must remain peaceful with the possibility of free global trade which drives innovation in a competitive environment. We will do everything in our power to achieve this, and we are providing help when and wherever it is needed. Thank you very much.
Thank you very much, Oliver. Ladies and gentlemen, after a short break of 15 minutes, we will begin with our Q&A session. See you. Thank you very much. Ladies and gentlemen, welcome back. With me are, on my left side, Oliver Zipse and Nicolas Peter. They will answer your questions here in the room. We are streaming around the world, so please understand if there are minor technical delays. We don't expect this to happen. However, should the connection not work, you can also send your questions per email to ir@bmwgroup.com. Now, ladies and gentlemen, the line is now open for your question. Please, the first question.
Good morning, ladies and gentlemen. Before we start with our first question, I'd like to make some brief remarks on technical details. If you'd like to ask a question, please raise your hand in the Q&A tool. We will then place you in our virtual waiting queue, and then we will call your name in due course. Thank you. Now on to our very first question, which comes from Dorothee Cresswell from Exane BNP Paribas. Dorothy, your line is open now. You can ask your question.
Hi to Munich, and thank you for taking my question. My first one is around China. We've obviously seen really strong margin levels there in 2021. I wondered whether you could elaborate how you expect the profitability in China locally to evolve going forward, and perhaps tell us what you think the key head and tailwinds are there in the next few years. My second question is around the sort of top end of your vehicle lineup. In the past you've focused, or said you're gonna focus more on the super premium end of the range. I think there was a time when you had a target to double the volumes of products like the X7, the 7 Series and the 8 Series, between 2018 and 2020. Now you're adding the XM.
I'm wondering, do you have a new volume aspiration that you could share with us, or maybe a target for the proportion of sales that those vehicles will make up in the future? Thank you.
Thank you very much, Dorothy. We start with Nicolas and then Oliver.
Dorothy, good to see you. Good to see you on the screen. China, as you rightly said, had a very strong development, not only in 2021, it's already started in the mid of 2020. We've seen volume and prices going up in the right way, in an impressive manner, I have to say. We have seen that the start of 2022 was encouraging, as well. Of course it's extremely difficult to forecast will it exactly stay on the levels we've seen in 2021.
I'm definitely not pessimistic that also with our strong network, our very consistent sales and marketing strategy, we will continue to perform well in China, well in terms of margin development and well in terms of also of volume growth.
Hi, Dorothy. Good morning. Your observation is completely right that the top end of our segment has a specific focus. We will add this year the XM, the i7, of course, not only electric, but of course that's the focus of that product, but also with plug-in hybrids and a combustion engine, but all at the very high end. At Rolls-Royce, we will very soon to add the BEV Spectre, which we already announced. I would also include in that segment the already launched iX. You see, we have a strong focus on that segment. Moreover, the current 8 Series will get a ramp-up. Overall, you see the focus we have in there.
At the same time, we are adding other product at the lower end, for example, the iX1, which will be launched this year. Talking about volume aspiration, we set all together in the premium segment, we will reach this in this decade three million units. I would foresee that this will happen rather earlier than later.
Good. Thank you very much, Oliver. Thank you very much, Dorothy. The next question, please.
Our next question comes from Tim Rokossa from Deutsche Bank. Tim, the line's open for you. Please ask your question now. Sorry, Tim, we seem to have some.
I was wondering about two questions.
Okay, we can hear you now.
Okay. Hey, great. Hello again to Munich. Great to see you guys, and thank you very much for hosting this call. I have two questions, please. The first one is probably for Nicolas on the dividend. With the share buybacks, do you set yourself a specific absolute number that you would like to return to your shareholders? And also, this may sound a bit greedy 'cause we're still about to get the dividend for last year, but when we follow your usual payout logic for next year with the non-cash gains for the German consolidation, we obviously do get to very high stated earnings. Is it fair to assume that you're also gonna follow your usual payout logic for this year's earnings next year with 30%-40% on stated earnings? And then secondly, Oliver, this is probably for you.
I was just in Berlin the last few days meeting the German government and speaking at a technical congress of the VDA, and there were lots and lots of questions about what the Russian war situation means for geopolitics going forward, especially with respect to China, obviously. You are an extremely global company. You have production footprints everywhere in the world. How do you think this is going to develop any further? Are you playing through scenarios where you cannot, for example, repatriate cash from China anymore, or is this just really ruled out for you? Do you think the way that we know the industry for the last few years is also gonna be the way going forward?
Thank you very much, Tim. I think we start with the question to the Russia conflict. Oliver, please.
Tim, good morning from Munich. I think the current situation we see in the geopolitical sphere, it raises the question of what is resilient in the future? We see two things. First of all, a global setup is almost mandatory to be resilient for future developments. If you look at our setup, we almost have a third divide into the global sphere, about one third in the Americas, another third in Europe, and another third in China. That is a robust structure. By the way, percentage-wise, and in absolute terms in volumes, the Americas have grown faster for us last year than China, something I think is notable. At the same time, China is growing as well.
The second question is, the supply chains, and inside the supply chains, the access to raw materials is absolutely of fundamental importance. It's not only suppliers where they're located, but to have access to the raw materials, and the raw materials access is always a global issue. It is never a regional issue. Manufacturing sites are regional, as you see here with Spartanburg and our new Tiexi plant, for example, and our footprint we have in Europe. Raw materials, they do not follow that localization strategy. To repeat again, a global setup with an equal geopolitical distribution, first and foremost, access to raw materials is the most critical parameter to stay resilient.
Thank you very much, Oliver. Now to the first part of the question. It was the question about the dividend and the share buyback. Oliver. No, Nicolas.
Nicolas.
Sorry, Oliver. Nicolas.
Tim, as you know, we attach very great attention to assure that our shareholders participate in the performance and the success of our company. Therefore, we've decided, assuming that the annual shareholder meeting will approve our share buyback program, to add a second tool next to the dividend payment to be in a position to react in a very smart and flexible way. Now, I think if we cross the bridge when we get there.
Too early to judge, in such a volatile environment we are in, as we are right now, what exactly will happen in the next 10 months. In principle, we want to stick to our payout ratio of 30%-40%, as we've implemented in many, many years ago.
Thank you very much, Tim Rokossa. Next question, please.
Our next question comes from Henning Cosman from HSBC. Henning, feel free to ask your question now. We have opened the line for you.
Yeah. Hi, good morning. Thank you very much. My first question was going to be about the increasing divergence between yourselves and your key competitor, Mercedes-Benz. It's a little bit of a follow-up question to Dorothy's question, I suppose. But we're anticipating, of course, that Mercedes-Benz is gonna emphasize again this year even more their focus on the very top end of the premium segment. Whereas yourselves, I suppose you see yourself more at the core of the premium segment. Oliver, you've just repeated your volume ambition, three million units by the end of the decade or earlier, whereas Mercedes-Benz is looking to potentially sacrifice deliberately some market share, especially at the lower end of the segment.
I was just hoping you could remind us why you think that is the right strategy for BMW, whereas historically you've been much more closely aligned with Mercedes-Benz in the strategies you were pursuing. Secondly, also a question on the shareholder returns, probably for Nicolas. I was hoping you could confirm the total dividend potential next year with a focus on the special dividend to arise from the book gain from the China joint venture consolidation. If you could please confirm the fact that you don't have to pay taxes on that and your intention to pay that out as a sort of special dividend next year. Finally on the free cash flow, if I may.
Obviously very welcome that you've become much more constructive with the absolute number that you've given us. At the same time, of course, we acknowledge that historically your targets were sort of above EUR 3 billion, and then the actual number exceeded that target by a factor of two. I'm trying to get a bit of a feeling for how conservative your guidance remains. If you could maybe walk us in a sort of bridge from the very strong cash flow level of this year, if we consider that you had sort of EUR 6.5 million in the core of BMW and another EUR 3.5 million in the China joint venture.
This HGB is obviously a bit of a step down relative to where you're coming from, while the operating result is arguably not that much worse. CapEx, R&D, if you could just remind us of the factors that could lead to a lower free cash flow in the EUR 7 billion range. Thank you very much.
Thank you very much, Henning. The first part will be answered by Oliver and then Nicolas. Oliver.
Yes, Henning. Good morning as well. I think to concentrate on the top end is one of the key strategic issues we have here at BMW, and I don't see that there is much difference in the industry. Look at what we do at Rolls-Royce. Look at what we do with the 7 Series now. Look what we do with the acquiring Alpina brand. Look at the XM. Look at the iX. So there is a top end which is highly attractive for BMW, and I don't see any big difference there. Now, what is happening to the rest of the portfolio? What does it mean to a 3 Series driver if you say, "This is not premium, this is not luxury," you know? There is continuing premium demand in all segments. In the lower segment, something very interesting is happening.
This is not the lower end of our portfolio. The competition is changing down there. If you can stay there profitable, what BMW does, we have a high focus on profitability. This is a highly relevant market segment and remains a highly relevant market segment. Driven by technology, digitalization, but also legislative requirements, that competition is shaping up down there. We see, through the competencies we have, a growing segment which is highly profitable for us, especially at BMW. We didn't talk about MINI today, but also for MINI, that's highly relevant. If you're able to build brand-true products and at the same time to follow the technological race which is happening down there. I think with our strategy, and that is not a volume aspiration, we follow a very profitable market, and that's the result. Thank you.
Henning, coming first to your question regarding dividend potential for next year. There is only one dividend amount. There will be no special dividends for the consolidation of China. This is part of the net profit and therefore not taxable. Our dividend payment is based on net profit and free cash flow. Free cash flow, and you've probably listened to my speech, free cash flow is at least a number. At least. On one hand, you are absolutely right. We have seen a good development in 2021 with EUR 6.4 billion free cash flow.
We see some negative impacts in 2022 with higher bonus payments due to the results. Taxes for BBA are now part of the free cashflow. Those are some examples which will impact free cashflow in 2022. Nevertheless, we are very confident to achieve minimum EUR 7 billion.
Good. Thank you very much, Henning, for your question. The next one, please.
Our next question comes from Patrick Hummel from UBS. Patrick, we've opened the line for you. Please ask your question now.
Thank you very much. Good morning to all of you. I would like to start with a question regarding your guidance for this year, the volume guidance. You're saying, including the effects of the Ukraine conflict, you are now forecasting sort of flattish volume outlook. I'm just wondering what you think from today's perspective is a limiting factor to your volumes. Is it supply or the supply chain? Or is it the demand side? More specifically, I wonder what this means regarding the ability for you to pass on higher commodity costs. You know, over the past few years, we've seen a supply constraint market which has made it basically very easy for OEMs to pass on higher commodity costs to the customers.
I'm just wondering for the next 12 months, let's say, or even beyond, how do you feel about your ability to pass on the rapidly rising bill of materials to your customers in a market that might be less undersupplied? If I may specifically, staying with the raw materials, can you elaborate on the contract structure of your battery raw material contracts? What is the spot exposure there? What is secured long-term? And if you can, what is the regional exposure to Russia? Very lastly, I'm wondering about EV margin parity. We heard from competitors that they now see EV margin parity being reached sooner because of a very strong demand situation.
I'm a little bit under the impression, and Nicola, you probably will disagree with that your margins on EVs are a little bit more dilutive than for others. Can you just give us an updated timeline when you think EV margin parity is a reality for BMW? Thank you.
Thank you very much, Patrick. We start with Nicola and the commodity prices to the customer, and then Oliver.
First of all, Patrick, good news is that commodities are hedged to a very high degree from 2022. Yes, we expect an impact from commodity prices in the mid-three-digit EUR area if you combine commodities plus foreign exchange. Nevertheless, this is something we've been able to manage in the last two years as well. Regarding battery raw materials, we have different type of contracts in place. We have on one hand side direct sourcing, and we have also contracts where we agreed on direct supply to our cell suppliers.
We have due to the high demand we have increased the volume in order to follow the high demand we have in particular for the iX and for the i4. For lithium in particular, as you know, it's not hedgeable, so therefore we have a direct sourcing. Regarding your third question, margin parity between BEV and ICE, as you know, this is definitely one of the number one questions, challenges we are tackling and discussing really week by week. Positive news we've seen also thanks to our pricing power.
We have seen a good development in contribution per unit for our all-electric cars as well, and clear target for our Neue Klasse is that we are at parity in terms of contribution per unit, and therefore able to maintain the corridor of 8%-10% EBIT margin.
Okay. Thank you, Nicola. Coming back to the question, to the volume target and volume guidance 2022. Oliver?
Hello, Patrick. I think we have to acknowledge that global demand is still on unprecedented high levels in all regions. In Europe, in China, and also in the United States. Because of, I think, our product line is very favorable to increase the demand. If you would have asked us in January what our forecast would be, there would have been a clear statement that we are growing compared to last year. If you look at the first two months, we were in terms of market share and volume better than the year 2021. We really had a very good start.
Now, of course, the situation is different that we're our forecast is on the level of same year. On the cost side, we went from 8%-10% to 7%-9%, so we made that adjustment. To assume now in early March that we will continue, that it will continue in exactly the same manner until December, there is no indication, so the next month is really difficult to forecast. Remember, 2020, when we sat here in March and had the pandemic and all plants were closed, would we have forecasted that the second half of 2020 was probably the highest production half year the industry almost has ever had. No one predicted it.
You see, it's very difficult to prognose, but we remain slightly optimistic that the global demand will continue, and we will be able to supply. To your question also to raw materials, I think what we learn today is that technology openness is mandatory to not run into a trap of raw materials. You know? Having flexibility, having a wide array of product offerings gives you more resilience to be not depending on specific supply chain of raw materials. Thank you.
Thank you very much, Patrick. Next question, please.
Our next question comes from Daniel Roeska from Bernstein. Daniel, the line is open for you. Please ask your question now.
Good morning, München. The sector has started implementing a more visible split between the economics of the ICE and EV business down to the profit or even beyond. Knowing that the joint production makes this a little bit artificial, could you share the discussions you've had in the board on how far down the P&L you're willing to go to extend that visibility? And following from that, do you think this is helpful in steering the business internally? And then secondly, with a more strategic time horizon, what's your view on the future relevance of mobility services and recurring revenues for your group? Other OEMs have set themselves ambitious targets, but we've not seen you go in that same direction.
Do you think there just isn't that much opportunity for you, or are other auto OEMs kind of following a little bit of a mirage in this sense?
Thank you very much, Daniel. This will be answered by Nicolas.
Well, first of all, you're absolutely right, Daniel. We are quite pleased with the development of our mobility services, in particular our joint venture we are running with Mercedes-Benz. We've seen an operational improvement in all relevant areas of the now family, be it ChargeNow, be it FreeNow, be it ShareNow. This makes us confident that we are on the right track. I think, because this is the nice bridge to your first question, we are also very pleased to see that investors from outside our industry are ready to invest money in this industry.
If you take IONITY, our joint venture we operate with a couple of our competitors to develop a charging infrastructure in Europe, we've seen additional investments in the first quarter of last year of around EUR 700 million, which were agreed. This is a very positive signal. Now, if we look at profitability, number one, for the first time in our integrated reporting, we have included the EU Taxonomy, and the EU Taxonomy will of course help exactly to drive year after year this in a transparent way.
Having said this, we believe it doesn't make any sense at this point in time to disclose profit, and it's extremely complicated, in particular, if you look at that, the i4 is run in the plant, which is producing other cars as well. Therefore, the clear aim and the clear ambition is to be on contribution parity with the Neue Klasse, which will be launched mid of the decade. At the same time, we of course have a c-
Strong focus, a clear focus on the profitability of every single car, of every single model. What we do, if you look at i4, if you look at iX, if you look at MINI Electric, of course, we follow the profitability of those cars market by market and quarter by quarter in order to see whether we are yes or no on track. Good news is that the profitability of those cars, as I said earlier, is better than we've anticipated.
Okay. Thanks. Daniel, next question, please.
Before we move on to our next question, again, a brief reminder, if you would like to ask a question, please raise your hand virtually in our Q&A tool. Thank you. Now on to the next question, which comes from Daniel Schwarz from Stifel. Daniel, your line is open. Please ask your question now.
Yes, thank you for taking my question. I wanted to follow up one more time on the volume outlook. Last year, in the second half, volumes were lower than in the first half. January and February, you said, is up year-over-year. We have a strong order book. You expect chip supply to improve the second half. Despite the war in Ukraine, why would you not deliver more cars in the second half year-over-year? There is of course a lot of uncertainty, but I'm asking because among the German OEMs, BMW is now the only one that sold more cars January, February, year-over-year, and is the only one that is not forecasting growth for the full year.
I guess I want to know how conservative that might be. Second question is regarding the share buyback. Dr. Peter, you explained yesterday that the timing of the buyback depends on the environment, and my question is, would the current environment be good, as you have a lot of cash and the share price is low, or would you rather say, BMW would rather not buy back shares due to the uncertainty? The last question is really a technical question regarding the credit rating. How do rating agency look at the consolidation of the JV? Are your KPIs further improving because of the extra cash that you get, or has that already been anticipated by the credit ratings before? Thank you.
Thank you, Daniel. We start again with the volume outlook and with our CEO. Oliver, please.
Hello, Daniel. Thank you for your question. The question is not, is it bullish or is it conservative? The question is it realistic? You know, and I have not heard from any other OEM who recently has made any statements on volume without a big list of what is excluded, you know? What you hear from us, it's from today's perspective, everything is included, and I wouldn't see it as conservative. It's optimistic, you know? Because in March, we also have substantial restrictions in our supply chain, as you know, and still we say we will be on the same level as the year before. I think it's a realistic and a slightly optimistic forecast we have on our volume.
I repeat again, the demand is even higher, which gives us backwinds as well. Thank you.
Daniel, let's start with the share buyback. First priority is of course our ongoing business and our investments in our future, meaning allocation of financial resources to electrification, Generation 6, cell technology, autonomous driving, and so that's top priority. Nevertheless, we are very confident that, thanks to our strong balance sheet, our ability to deliver and to generate cash, and share buyback program is the right program to be approved by the AGM in May. Let's see at what point in time we will now the.
After the approval by the AGM, we will decide to start with a buyback. It's too early now to make a very concrete statement. Credit rating, well, you know that the BBA balance sheet is a very strong balance sheet, so this will definitely further strengthen our balance sheet. By the way, one of the reasons why we believe that the share buyback program was exactly the right thing to be proposed to the AGM in May.
If you look at the two leading rating agencies, Moody's and Standard & Poor's, we have the best A- rating of all European OEMs. Cash flow will further improve. Balance sheet parameters will further strengthen due to the consolidation of BBA. This definitely should solidify the metrics the rating agencies are using.
Thanks, Daniel. Next question, please.
The next question comes from Tom Narayan from RBC. Tom, the line is open for you. Please ask your question now.
Hi. Yeah, thanks for taking the question, and thank you, by the way, for providing the Russia-Ukraine guidance. It's something that, like you said, nobody's really doing, so it's great that somebody's taking a stab at it although it's very difficult. I guess my question has to do with my first question has to do with that on that guidance. You know, you're calling for about EUR 1 billion of EBIT lower, specifically related to Russia-Ukraine. That's about a 10% cut. If I look at the P/E ratio of BMW before the crisis and today, it would suggest that the market is pricing in something like a 17%-18% cut. I suspect what's happening here is, one, volumes, so I don't think you guys are being too conservative.
The second thing has to do with components. I understand you're hedging some of these components, but the question I think folks have has to do with availability on hand. Put it another way, you know, if you weren't able to get palladium, wire harnesses, nickel today, for how long could you keep producing cars? I think that's something that folks really wanna understand. The second question is kind of a very big picture question, if you indulge me, what do you think about shared AVs, the robotaxi market? I went to CES this year, saw your guys' exhibit, very impressive. You guys, I think in the past, have talked about being committed to private car ownership as it relates to Level 4 autonomous.
Given what we're hearing in terms of the technology innovations in autonomous, would you consider playing a role in the robotaxi market? Thank you.
Thank you very much, Tom. We start with the Ukraine guidance with Nicola and then Oliver. Yes.
As Oliver just has outlined, we believe taking into account everything we know and how we can evaluate the situation, in particular related to the shortage in supply due to the Ukraine situation, and guidance between 7%-9% is absolutely appropriate. You can imagine, I've said in my speech that we were aiming for, before the crisis, to be in the upper part of our 8%-10% margin corridor. Of course you can probably, if you use this matrix that our ambition is to be in the upper part of the 7%-9% corridor.
It's very difficult at this point in time because there is a lot of volatility in all sorts of areas. To be even more precise, we are at the end of the first quarter, too early to be more precise in the guidance.
Oliver, I think that's a question for you.
Yeah.
The role of BMW with robotaxi markets.
Yeah
BEV, especially BEV and so on. Yeah.
Let's have a look at the current lineup of BMW. We're currently not in the taxi transporting people mover business. We're not in there currently. What we see in the robotaxi business, it will, and you see it in the German legislation, which allows some Level 3 and Level 4 for ultra-slow movements, something like 20-30 km/h, you know. We see the real robotaxi business, where no driver is needed, will be in very restricted areas for some time, by the way, all over the world. There is no big difference between the regions in the world, and it will be in the highway only, in the transport business. That is where the robotaxi market will focus on for the next foreseeable time.
Our architectures will always be able to jump in immediately if that would be relevant for the passenger car market. There, everything which has four wheels is not the same, you know, and we are in the passenger car market. There, I think it will grow from Level 2, Level 2 plus, Level 3, and then it will slowly evolve into Level 4, and that's what we closely develop. What we see there, we will jump in right when it becomes relevant for a state, which is currently through the strong restrictions in applicable areas. That's currently, as of the year 2022, not a part of our business model. That's what's the robotaxi market.
The components on the wire harness, I think it's important to know that BMW in Europe does not supply all wire harness from the Ukraine. We have other countries like Romania, Northern Africa, where we source wire harnesses from. Also to know is the United States, the Americas, and China is currently not affected because they have their own wire harness business and supply chain. Third of all, the Ukraine plants have not stopped production. On the contrary, they have resumed production right now, not on the same level, you know, and that is also to note, they did not come to a complete halt, at least most of them not.
I think strategies to make that supply more robust helps if you do not concentrate on only mono-sourcing but dual sourcing, which we do. I think that helps you to be a little bit more resilient, and flexibility is key.
Thanks, Tom. Next question, please.
Our next question comes from Stephen Reitman from Société Générale. Steven, we have opened the line for you. Please feel free to ask your question now.
Thank you very much. I have two questions. First of all, on the 2021 results and specifically the fourth quarter, the margin at automotive was relatively light compared to some of your peers, Audi at 13% and maybe Mercedes passenger cars, if you take out vans, probably over 15%. Obviously, we know there are differences in some of the accounting, particularly at Mercedes in relation to how they treat China. But if you also maybe also in terms of where they are in their product cycle. But you did perform better than them in terms of losing fewer sales. Mix would have probably been quite good. I guess really it's a question about what was really happening on pricing in the fourth quarter.
My second question is about China and about the full consolidation of the BBA joint venture. On the face of it's a fantastic deal. You're clearly acquiring an asset at below its asset value and which is requiring obviously significant revaluation, which is triggering the EUR 7 billion-EUR 8 billion revaluation just in your own 50% stake, and you're getting the 25% stake from BBA also at a low price of EUR 3.7 billion, which of course is being funded by the cash that's coming in with the JV as well.
I'd just like to get a better explanation about the PPA charges that are now neutralizing the positive impact going forward on this, the EUR 2 billion-EUR 3 billion in 2022 and the EUR 1 billion-EUR 1.5 billion for 5-7 years after this, really. Because it seems very much more from the outside and from decisions of others that, you know, that this is actually you're buying an asset below its value rather than at an inflated price normally in terms when you pay, when you make acquisitions and you have to pay a higher price and then obviously bigger write-downs of goodwill that occur after that. Maybe just a bit, a better explanation about the accounting on this, please.
Okay. Thank you very much, Stephen. This will be answered by Nicolas.
Yes. Steven, let's start with Q4 results 2021. On the one hand, we have, as usual, some backloading of R&D. If you look across a year, quarter by quarter, we have in our organization significantly higher R&D spending in the fourth quarter. Of course, a significantly lower volume if you make a year-on-year comparison. We've lost more than 80,000 cars compared to Q4 2020. If you just make a theoretical equation, what this would have meant for the profitability of the first quarter, if we would...
It was on the question of demand. We had enough demand for our products. Those are the main explanation. We had some FX effects as well. Now, BBA consolidation, you've asked for a little bit more color on PPA. The PPA charges stretch over a 5-6-year period. The main elements are the reacquired rights and the recognized dealer relationships.
This is explaining the amount of approximately between EUR 1.4-1.5 billion on a preliminary calculation per year, plus initial consolidation effects for only 2022, intercompany profit eliminations in the area of EUR 1 billion, but only for 2022.
Okay. Thank you very much, Stephen Reitman. Next question, please.
The next question comes from Gabriel Adler from Citi. Gabriel, we have opened the line for you. Please speak now.
Hi. Thanks for taking my questions. I've got two. My first is on residual values. I'd be really interested to hear your thoughts on how a normalization of residual values of used cars could impact the business in the coming years. You've guided to a headwind this year from lower remarketing profits, but what do you think of the risk that the pricing power you've seen on new cars could also soften as a consequence of lower residuals, as well as the increased supply we're expecting in the coming years and potentially weaker consumer spending power? My second question is on the guidance for a workforce increase. Maybe you can just elaborate here on the rationale behind the decision to significantly increase your workforce this year.
I think automotive headcount has declined now for each of the past three years, so I'd be interested to understand what's driven the change of thinking here. Thank you.
Okay, Gabriel, thank you very much. This will be answered by Nicolas.
Gabriel, if we start with the workforce increase, we are, if you take our situation end of last year, so, 31st of December, compared to this situation, we are increasing slightly. Slightly means, as you know in our definition, somewhere between 1%-5%. Why slightly? Because we see an ongoing need to invest and to accelerate our programs in the area of digitalization of the car, of our business processes. We are ramping up Neue Klasse as a new architecture for our all-electric cars for the second half of the decade and so on. This requires an increase in our workforce.
The second element is and that's something to be seen in line with the development of our volume. Of course, the significant increase comes from the full consolidation of our China joint venture, which simply brings us in a completely different area by adding more than 25,000 Chinese employees to our BMW Group workforce. Now, residual values, you're asking the $1 million question. What will be the impact of normalization? We have seen an improvement. If you compare to the situation we had before 2020, before also the shortage in the market, of course, in the beginning by Corona and then reinforced by the semiconductor shortage.
We have a positive gap between EUR 1,200-EUR 1,500, depending on the quarters. This is quite significant and substantial. By the way, despite the volatility we have seen in the last weeks, we have seen strong pricing, including residual values in the first two months of the year.
That's a positive element, which is encouraging us to work on and to develop initiatives to fine-tune and to make our sales and marketing processes even more robust, to maintain the strong pricing even in an environment when more semiconductors are available and there might be more product availability in the overall market. Again, clearly one key element plays also the initiatives we develop with regard to stock management, where we use digital tools in order to be even more precise regarding stock levels on dealer and on company level.
Thank you very much, Gabriel, and your $1 million question. There are no more questions now. Ladies and gentlemen, thank you very much for your interest and your questions. Before we go, we have one final agenda item. For this, I'd like to hand over to Nicolas.
Thank you. Thank you, Max. As you know, we have a changeover at Group Treasury, and I'd like to invite Birgit Böhm-Wannenwetsch and Ritu Chandy on stage. Dear Birgit, we have worked closely together for almost four years. The company has benefited greatly from the profound experience and expertise you have acquired over the many years at international companies in both Europe and the United States. At the BMW Group, you helped guide the company through challenging times, and your contributions over the past years were indispensable. Your experience and opinion are highly valued. I look forward to continuing working with you in your new role as Chief Executive Officer of our financial services business in the Americas.
Thank you, Nicolas. Thank you very much for these kind words. It's actually amazing it's been four years already, and I think it's fair to say that there really has never been a dull moment in these times. I think it's a great opportunity, dear investors, dear analysts, that I have the opportunity here to thank you and say that I really enjoyed the dialogue, the exchange, the ongoing challenging that we've had over the last years, be it at you know, our many events that we had together or in our individual discussions that we had over the years. I really appreciate that also when we had to switch to more virtual formats, we were able to really stay connected and keep up that good dialogue.
I'm now really excited about my new role and looking forward to taking it up. Also, I want to thank you one more time for really the great exchange and the great and valuable collaboration that we had over the past years.
Thank you, Birgit. Ladies and gentlemen, I have the pleasure of introducing to you our new Senior Vice President, Finance and Group Treasury, Ritu Chandy. Ritu brings a wealth of experience in corporate treasury and financial services, which she has gained in various leadership positions in Asia-Pacific and the United States. She brings a deep understanding of the BMW Group with her, having worked here for more than 20 years, 21 years. She has demonstrated the ability to be a progressive and transformational thinker, delivering sustainable value for the BMW Group. Ritu, I'm very happy that you will be joining our team here at headquarters. Welcome.
Thank you very much, Nicolas. I just wanted to take a moment to just also say hello. I think the BMW Group is synonymous with long-term value and credibility. Our team has done an exceptional job, thank you, Birgit, over the time, creating a great narrative with all of you. With the unprecedented velocity of change facing our industry and the wider landscape, I very much look forward to working with you to shape our narrative and continuously deliver transparency, credibility, sticking to our long-term objectives of growth and sustainability. I look forward to working with all of you. Thank you very much.
Thank you both. Ladies and gentlemen, we are at the end of today's event. Thank you for joining us today. Have a good day.