BMW 2004 Annual Report Download - page 49

Group Management Report 8
A review of the Financial Year 8
Outlook 29
Financial Analysis 30
--Earnings performance 30
--Financial position 33
--Net assets position 34
--Events after the
Balance Sheet date 37
--Value added statement 37
--Key performance figures 39
--Comments on the financial
statements of BMW AG 40
Risk Management 44
BMW Stock in 2004 48
48
After a good year in 2003, the stock markets per-
formed inconsistently in 2004. The main issues
perceived by market participants were rising raw
material prices and the weak US dollar. The German
DAX-30 index opened 2004 at 3,965.04 points
and closed at 30 December 2004 at 4,256.08
points, an increase of approximately 300 points or
7.6 %.
German automobile stocks, represented in the
Prime Automobile Performance Index, came under
particular pressure as a result of the developments
on the commodity and currency markets.The index
started the year at 350.96 points and closed1.5%
lower on 30 December 2004 at 345.65 points.
Stocks of the major automobile manufacturers
suffered particularly in the wake of the weak US dollar
and the sharp rise in raw material prices. BMW
common stock was not able to avoid the effects
of these developments. Despite the fact that the
BMW Group reported new highs in car volume sales,
revenues and earnings for the year 2004, the weight
of external factors tipped the balance in the other
direction. The BMW common stock therefore also
under-performed, closing the year at euro 33.20,
compared to euro 36.75 one year earlier. This repre-
sents a decline of 9.7% for the year.
By contrast, BMW preferred stock performed
better. Its price rose by euro 0.20 to euro 24.80
between the final day of trading in 2003 and the end
of 2004, an increase of 0.8%.
Sustainability as a success factor
In 2004, the BMW Group remained one of the world’s
leading enterprises in relation to sustainability. For
the sixth time in succession, the BMW Group was
included in 2004 in the family of sustainability indices
published by Dow Jones Indexes and Stoxx Limited.
BMW stock is therefore still represented in the most
important sustainability indices used on the global
financial markets. Based on a studyof Morgan Stanley
and oekom research, the segment for investments
based on sustainability criteria again saw an
above-
average performance. In the Corporate Responsibility
Rating published by oekom research AG, the BMW
Group heads the list for the automobile sector.
Attaining financial success is the main goal of the
BMW Group which, at the same time, also provides
a sound basis to allow it to accept responsibility in
environmental and social issues. Sustainability is thus
a duty of management as well as an important factor
for success.This link is documented in the Sustain-
able Value Report of the BMW Group. The report
has been prepared along the lines of the guidelines
issued by Global Reporting Initiative (GRI). It provides
detailed information about the BMW Group’s involve-
ment in the areas of environmental care, employees
and social responsibility issues and underlines the
link with the Group’s financial success.
The Sustainable Value Report is available in
German, English, Chinese and Japanese and can
be obtained, free of charge, via the e-mail address
[e-mail] report can also be
accessed online at www.bmwgroup.com/sustainability.
BMW stock in 2004. Rising raw material prices and a weak US dollar have
negative impact on the price of BMW stock.
Development of BMW stock compared to stock exchange indices
(Index: January 1995 = 100)
450
400
350
300
250
200
150
100
50
95 96 97 98 99 00 01 02 03 04
BMW preferred stock
BMW preferred stock
BMW common stock
DAX
Prime Automobile
BMW common stock Prime Automobile DAX