March 26, 2015 BMW GROUP FINANCIAL SERVICES IN THE AMERICAS. ED ROBINSON PRESIDENT & CHIEF EXECUTIVE OFFICER BMW GROUP FINANCIAL SERVICES, AMERICAS REGION.
BMW GROUP – THE WORLD’S LEADING PROVIDER OF PREMIUM PRODUCTS AND PREMIUM SERVICES FOR INDIVIDUAL MOBILITY. BMW Group Network National Sales Company (NSC) Financial Services Dealership Company (NFSC) Dealer financing / Insurance Commission payments Customer Capital Markets Day – Ed Robinson Page 3
BMW FINANCIAL SERVICES IS AS AN INTEGRAL PART OF THE BMW GROUP VALUE CHAIN. After-Sales Research & Production Sales & Marketing Financial Services Development Used Car Financial Services Support of Sales Customer Interface Profit Contribution + + Capital Markets Day – Ed Robinson Page 3
BMW GROUP FINANCIAL SERVICES AT A GLANCE. Global Presence 2014 Business Lines (Portfolio Size 2014) Global Operations in 54 Countries Retail Finance Commercial Finance € 67.0 bn. € 13.1 bn. > 7,000 Employees (80 % outside Germany) Fleet Multi Make HQ & others Business Financing € 9.7 bn. € 7.5 bn. 11% Alphabet 30% Asia, Pacific 15% 13% Americas Insurance 17% Banking 14% ‘EU Bank’ 3.2 Mio. Contracts € 9.2 bn. EMEA Capital Markets Day – Ed Robinson Page 4
BMW FINANCIAL SERVICES – 22 YEARS OF EVOLUTION IN THE AMERICAS. FROM DIVERSIFICATION TO INTEGRATED SERVICES. RSC Integrate BMW Financial Ultimate Drive Services takes Ohio expansion to Mobile App hold of U.S. Regional Service Center (RSC) 1993 1996 1997 1998 1999 2000 2006 2007 2009 2010 2011 2012 2014 RSC Integrate Introduction direct financing and eContracting 700K + Active Accounts 1996 National Customer Service Center built in Ohio - Launch of BMW i Expansion of Insurance Business all Operations under one roof. BMW Bank launch Salt Lake City Capital Markets Day – Ed Robinson Page 4
SUSTAINABLE GROWTH OF SERVICED UNITS, PORTFOLIO & NEW BUSINESS WITH THE UNITED STATES AND THE REGION. US share of Total Serviced Vehicle Units (Thousands) FS 2014 United States 31% 1,067 1,031 978 900 932 855 814 69% Rest of Region 2008 2009 2010 2011 2012 2013 2014 Serviced Vehicle Portfolio (Billion € ) 36% 27.0 21.9 20.0 20.5 19.1 64% 18.5 18.2 2008 2009 2010 2011 2012 2013 2014 New Business Volume (Billion € ) 33% 12.5 12.2 10.8 9.3 9.3 9.1 8.4 67% 2008 2009 2010 2011 2012 2013 2014 Around 1/3 of Global Financial Services Volume is generated in the United States. Capital Markets Day – Ed Robinson Page 6
THE US RISK MANAGEMENT HOUSE SETS THE STANDARDS FOR OUR COMPREHENSIVE RISK MANAGEMENT STRATEGY. Evolution of Captive Financial Services Comprehensive Risk Management Strategy Retail Credit Risk Commercial Credit Residual Risk Operational Risk Compliance Risk Interest Rate Risk Risk Risk Disciplines Essential Core Communication Skills Business and Market Knowledge Quant analytics, expert opinion Capital Markets Day – Ed Robinson Page 7
MAJORITY OF RETAIL FINANCE CUSTOMERS HAVE A GOOD RATING. DELINQUENCIES AND AVERAGE LOAN TERMS ARE BELOW MARKET LEVEL. Development average Loan Contract Terms: * Development Retail Finance Booking: 59 59 58 6.8% 2010: 2012: 2014: 6.4% 8.6% 56 56 Contract Term 16.7% 19.0% 19.1% 700+ 77.0% 72.3% 74.1% 640-699 Ø = 753 Ø = 743 Ø = 753 <640 2011 2010 2012 2013 2014 2010 2011 2012 2013 2014 Retail Finance Delinquency Development: Experian Industry comparison 2014 1.40% Average Term - industry: New vehicles: 66 months 1.26% Ø 64 month Used vehicles: 62 months 1.20% 1.03% 1.01% 0.99% 0.98% 30+ Delinquency Rate 30+ days past due delinquency – industry: 2.38% 1.00% Average industry loan score development: ** 0.80% 736 732 727 723 0.60% 715 712 750 700 0.40% New vehicles Used vehicles 650 657 659 0.20% 653 650 648 646 600 Q4-2009 Q4-2010 Q4-2011 Q4-2012 Q4-2013 Q4-2014 0.00% 2010 2011 2012 2013 2014 *FICO Score ** Experian VantageScore Capital Markets Day – Ed Robinson Page 8
INTRODUCE UPSTREAM CHANNELS TO OPTIMIZE SALES OPPORTUNITIES AND LIMIT AUCTION VOLUME. Introduction of Upstream Channels via virtual market platform Customer Grounding Dealer Improved offering to entire Dealer network. Upstream Channels • National Sale • VIP Independents Maximize US National re-distribution opportunities • Direct customer Physical Auction 2/3 units sold to BMW Dealers. Strong After sales 20% of auction volume parts cooperation purchased by BMW Dealers. Capital Markets Day – Ed Robinson Page 9
FOCUS ON STRONG DEALER NETWORK AND NATIONAL DISTRIBUTION TO FURTHER OPTIMIZE REMARKETING AND MAINTAIN HIGH RESIDUAL VALUES. High Used Car Demand as opportunity Joint BMW Group Used Car Strategy Used Car Demand New Car Demand 41 Million 16 Million Used Car Demand 41 Million Maximize National re-distribution opportunities by implementing additional sales channels through virtual market platform. Increase Marketing activities to gain and loyalize existing customer as well as providing additional dealer network support. Capital Markets Day – Ed Robinson Page 10
REGIONAL SERVICE CENTER IN USA - ESTABLISHED AS CENTRAL CUSTOMER INTERFACE FOR BMW GROUP IN NORTH AMERICA. In 1996 the National Customer Service Center is built in Dublin, Ohio – all operations under one roof. With the final integration of Brazil in 2012, Ohio is established as Regional Service Center (RSC) . The RSC is strengthening the Customer Interface for the BMW Group. The RSC provides service offerings for a portfolio of more than $ 27 Billion. More than 1.7 Mio. direct customer contacts p.a. for Sales & Financial Services Companies. Capital Markets Day – Ed Robinson Page 11
FINANCIAL SERVICES IS PREPARED FOR THE FUTURE. Capital Markets Day – Ed Robinson Page 12
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