BMW 2011 Annual Report Download - page 43

43 COMBINED GROUP AND COMPANY MANAGEMENT REPORT
BMW Stock and Capital Market in 2011
Debt crisis unnerves stock markets
Stock markets around the world came under pressure
in 2011 as a result of the debt crisis in the euro zone and
concerns about the US economy. Unlike in 2010, the
German stock index, the DAX, was not impervious to
these developments in 2011 and dropped sharply over
the course of 2011 against a background of high vola-
tility. The advances made during the first six months of
the year could not be sustained in the second half of
the year. The 2011 stock market year came to an end with
the index down by 14.7 % at 5,898 points. In May the
DAX reached its high for the year at 7,600 points. The
European debt crisis caused the index to tumble by
some 30 % during the period from July to September. At
4,966 points, the index’s low for the year was recorded
in September. The aversion of investors to finance-re-
lated securities and economy-sensitive stocks became
particularly evident in the second half of the year, as re-
flected in the performance of the Prime Automobile
Index. After a strong start, the sector index lost 161 points
during the period under report, finishing the year at
688 points (– 19.0 %). The EURO STOXX 50 performed
just as weakly, dropping 17.0 % in value to 2,317 points.
BMW stocks were also affected by these negative market
developments in the second half of 2011 and accordingly
marked down. BMW common stock closed at € 51.76
on the last day of trading in 2011, 12.0 % lower than one
year earlier. In July it had reached a new all-time high
of € 73.85 and in October recorded its low for the year at
€ 43.49. BMW preferred stock held up a little better, losing
only 5.1 % in value compared to its closing price at the
end of the previous year. It finished the stock market
year at € 36.55, compared to its high of € 46.05 in July.
Employee share programme
BMW AG has enabled its employees to participate in its
success for more than 30 years. Since 1989 this partici-
pation has taken the form of an employee share pro-
gramme. In total, 408,140 shares of preferred stock were
issued to employees in 2011 as part of this programme.
In accordance with a resolution taken by the Board of
Management on 15 November 2011 and with the ap-
proval of the Supervisory Board, the share capital was in-
creased by € 407,960 from € 655,158,608 to € 655,566,568
by the issue of 407,960 new non-voting shares of pre-
ferred stock. This increase was executed on the basis of
Authorised Capital 2009 in Article 4 (5) of the Articles
of Incorporation. The new shares of preferred stock
carry the same rights as existing shares of preferred stock
and were issued to enable employees to obtain an equity
participation in the Company. Shares of preferred stock
were also bought back via the stock market in order to
service the employee share programme.
Top-level ratings
BMW AG’s long-term and short-term ratings were raised
by one level in July 2011 by the rating agency Moody’s
from A3/P-2 to A2/P-1 with a stable outlook. In Septem-
ber 2011 the rating agency Standard & Poor’s confirmed
BMW AG’s rating of A– /A-2 and raised the outlook from
stable to positive. This resulted in BMW AG currently
having the best ratings of all European car manufacturers.
The improved ratings and outlook reflect the worldwide
rise in demand for our products, the successful imple-
mentation of measures in conjunction with Strategy
Number ONE and the stable financial position of the
Development of BMW stock compared to stock exchange indices
(Index: 29 December 2001 = 100)
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BMW preferred stock BMW common stock Prime Automobile DAX