BMW 2005 Annual Report Download - page 39

38
Exchange rate and commodity prices dominate
mood on stock exchanges
The 2005 stock exchange year was dominated by
the development of the US dollar exchange rate
against the euro and by the continuing high level of
commodity prices.
Over the course of the year, the relationship
between the euro and the US dollar turned in favour
of enterprises exporting into the dollar region. Com-
pared to the exchange rate at the beginning of the
year, the main European currency lost approximately
13% in value against the US dollar. At the end of
the last day of trading in 2005, one euro was worth
US dollar 1.18.
As in the previous year, the prices of important
raw materials went up again, with oil and steel prices
rising particularly steeply.
Despite the adverse impact of higher raw mate-
rial prices, the main stock exchange indices rose
sharply in 2005. Compared to the end of the pre-
vious year, the EUROSTOXX 50 registered a 21.3%
gain in 2005 and the main German index, the DAX,
rose by 27.1%.
The Prime Automobile index also performed
extremely well, closing at 453.24 points and thus
recording a gain of 31.1% over the year.
BMW common stock closed at euro 37.05 on
31 December 2005, giving an 11.6% increase for
the year: the modest gains seen during the course
of the year therefore continued towards the year-
end.
By contrast, BMW preferred stock, which closed
at euro 33.00 on 31 December 2005, rose by 33.1%
and therefore performed better than the market as
a whole.
With a market capitalisation of almost euro 25 bil-
lion, the BMW Group lies in fifth place amongst the
world’s car manufacturers.
As in the past, the investor relations team pro-
vided a full range of services to investors with a long-
term interest in the BMW Group. Activities included
personal discussions and group events in the rele-
vant financial centres of the world and at BMW AG’s
head office in Munich. These activities will be ex-
panded further in 2006.
Programme to buy back shares of
common stock
At the Annual General Meeting of Bayerische
Motoren Werke Aktiengesellschaft (BMW AG)on
12 May 2005, the shareholders authorised the
Board of Management to acquire treasury shares
via the stock exchange, up to a maximum of 10% of
the share capital in place at the date of the resolu-
tion and to withdraw these shares from circulation
without any further resolution by the Annual General
Meeting. The buy-back authorisation is valid until
11 November 2006. The consideration paid by the
Company per share (excluding transaction costs)
may not be more than 10% above or below the mar-
ket price on the date of trading as determined by
the opening auction in the Xetra trading system.
Following on from the authorisation given by
the shareholders at the Annual General Meeting on
12 May 2005, the Board of Management of BMW AG
resolved on 20 September 2005 to put a programme
BMW Stock in 2005
Group Management Report 8
A Review of the Financial Year 8
The General Economic Environment 11
Review of operations 15
BMW Stock in 2005 38
Financial Analysis 41
--Internal Management System 41
--Earnings performance 42
--Financial position 45
--Net assets position 46
--Subsequent events report 49
--Value added statement 49
--Key performance figures 51
--Comments on BMW AG 52
Risk Management 56
Outlook 60
Development of BMW stock compared to stock exchange indices
(Index: 31.12.1995 = 100)
450
400
350
300
250
200
150
100
50
96 97 98 99 00 01 02 03 04 05
BMW preferred stock
BMW preferred stock
BMW common stock
DAX
Prime Automobile
BMW common stock Prime Automobile DAX