Dear colleagues, welcome back to the second part of our earnings call. We are going to continue in German, but there is English translation. We are looking forward to hearing your questions. As always, we will give you some technical remarks, and then we will have the first question answered. Ladies and gentlemen, we will now start with the Q&A session. If you would like to ask a question, then please raise your hand. You find it at the screen at the bottom right. If you are connected by phone, then please press star and then nine, and then you can ask your questions one by one. As soon as your name has been announced, it's your turn to speak. In order to withdraw your question, please lower your hand via the Zoom function, and on the phone, please press the star button and then nine. We would like to have the first question. Our first question comes from Christina Amann from Reuters. Please open your mic now. Good morning to Munich. Welcome, Mr. Nedeljković. Great to hear your speech. Yesterday, you announced that jobs will be cut, and you said you were going to dive deeper into the topic. You mentioned a measure yesterday. Can you put a figure to it? What do you expect, and as of when? What number are we talking about? Number of jobs. Yesterday in Germany, we heard 8,000. Could you please confirm? What about worldwide and China? You pointed out that the entire company will be reorganized, the business model, the structures. You would like to have a more stable setup. Could you give us some details? You're talking about technology models that will be revised. What are you going to focus on? What processes could just be omitted? Where do you see the possibilities of partnerships? The main topic, the other one is also China. BMW has difficulties in China, just like others right now. What are you doing in order to improve the situation? How long will it take, and when will we see results? Thank you. Mrs. Amann, thank you very much for your question. I hand over to Milan Nedeljković. You asked a lot of questions, and to answer all of them will take too long. We will keep it brief because we have a lot of colleagues in the call, and please ask a maximum of two questions because we would like to hear all of you and all of your questions. Milan, over to you. Mrs. Amann, good morning. Thank you very much for your greetings to Munich. Thank you. Your questions. Concerning the figures, we are not going to confirm anything. The mentioned figures are not the ones that we issued. We are a bit hesitant because it's not just a simple program, and we don't have overhang in the workforce and can derive how many jobs can be cut. The reduction program, it goes hand in hand with a reformation program in the company, and in this program, we analyze the core processes, sales processes, procurement, purchase, development, technology. In the context of this transformation, we analyze possibilities. Where can the processes get leaner? How can we use digital means? In principle, we have to reanalyze the setup of the processes. They have to be redefined. We see the need for restructuring internally. There will be new qualifications, and organizational units will be bundled. All of this is a comprehensive program, and it's accompanied by the severance program, which we are going to launch. One goes hand in hand with the other. We are on a good and constructive path with our social partner. We are going to initiate this process. We cannot give you any specific figure. The lever is we see a lot of potential. It's not just about cutting jobs. This is one element to be faster and more effective. The potentials are seen in our setup, in how we design the products, and in the processes with purchasing and our own production. You had a question on China. This year and last year, we changed the substance of our products and our products themselves. The content was reevaluated. We increased the value. We also changed the dealers' network, and we found a bottom line, so to speak, which has been persistent for the past months. In the second quarter, we had the downturn, and it's not just a downturn that we see only with us. It's just the market development of the ICEs in China. Of course, 39% in June in comparison to the previous year months, this, of course, was a heavy impact. Market share, our matters are relatively well- accompanied and welcomed, and we are now on the market with Neue Klasse. The Neue Klasse will get the ramp-up in China at the end of the year. It's a possibility for us to position ourself on the market. There was one more question. When will we see results or first results? I hand over to Walter Mertl to give a principal answer to this question. Mrs. Amann, I'm sure you're aware of our guidance for the year. It's 1%-3% of the EBIT margin, and 1.25% is contained for the severance programs. We can explain it later on, or maybe in March for 2027, when we set the guidance for 2027. Thank you, Mrs. Amann. We are looking forward to the next question. The next question comes from Sebastien Ash from the Financial Times. Please open your mic now. Good morning also from my side. You talked about a change in the organizational structure. Mr. Nedeljković, could you please give us some details? You said that you're going to use AI more and more. You said this in your presentation. What functions shall be replaced by AI? In this context, I would be interested to know more about consulting services. You are commissioning consulting services now, the restructuring, reorganization processes in comparison to the past years. Have you used less of those services, and is there a savings potential, maybe, also by using AI in this regard? Thank you very much, Sebastien. Milan. The organizational change does not target one single unit. It's about restructuring our processes and the way we work. Just one example to show you into what direction we are heading. We have a high degree of specialization in many departments, hence, we have a lot of sharing the work. To resolve this is very difficult because each department has a very high competence. Here we can use AI. We can use AI agents, we can use supporting AI tools. This way, we can provide more information to individual employees. This way, they can better bundle their functions and their responsibilities, this makes the decision process faster. If the organization has many small details, then we can have smaller teams to fulfill comprehensive tasks. This makes us faster and more cost-effective. This is our principle, this principle applies to all of the processes in the company. We would like to implement this one by one. We have very good approaches, you are saying consulting services. We're going to be supported by experts. We get benchmarks. We try to learn from other industries, the overall package from all of this enables us to harvest potentials. Okay. Thank you. Next question, please. Next question comes from Christof Rührmair from dpa. Please open your mic now. Mrs. Amann asked a lot of questions that I actually was planning to ask. Thank you. I would like to talk about the details of the severance program. As far as I know, it's a non-specific one, there is the possibility, some call it an open program. As a result, the best ones will usually go because they will find a new job soon. Why did you pick this variant? You are going to focus on local for local. Does that mean that from Europe, from Germany, you will go out in the upcoming years, go out more, or am I interpreting this too much? One minor detail, the FX effects that you mentioned, Mr. Mertl, does this apply just to the U.S. dollar, or does this also apply to other currencies as well? Thank you very much. First, Mr. Nedeljković, then Mr. Mertl. Milan, you have the floor. Good morning, Mr. Rührmair. You mentioned the severance program. We agreed with our social partner to have or to offer an open program. It applies to the indirect functions within BMW AG. The employees receive an offer in the form of a piece of information. They will be informed what the value is if they decide to leave the company. However, there's also an agreement that some key functions are not included in this offer. However, it's going to be very broad and offers the possibility to accept this to every possible employee. The employees are also flexible in their decisions to change within the company. It's also part of the agreement, because if an employee leaves a role, but this role is still necessary, a colleague will resume this role, they are going to further develop into that role. This is our common understanding that we agreed on, this flexibility matches the BMW flexibility. It's one of our strengths. Local for local, this is one element. In China, we intensify the local dealers, we harvest their potential more. We focus on the local production in China. In Europe, we stay in Europe. We don't want to deliver into other areas from Europe. We stay in Europe, we're going to further enhance our footprint here. Okay, thank you very much. There was a question to Walter. You talked about the FX effects. They have an effect not just concerning the U.S. dollar, but also for the Korean won and the Japanese yen. The renminbi, please don't forget, we have a full consolidation of our joint venture. The renminbi in the loss and profit and in the balance sheet, it has an effect, whether it's about translation, so conversion, or at the effective date, there's a fundamental difference to others, which might do equity consolidation. For us, it's more than just the U.S. dollar. Okay, thank you to Christof Rührmair. Next question, please. The next question comes from Stephen Wilmot from The Wall Street Journal. Please open the mic now. "Good morning. Thank you very much for the Q&A. I have two questions. First, please tell me more about the development of the BMW business model, because there are going to be market changes, and you talked about those changes during the last months. Second, you just talked about local for local, and you mentioned Europe and China. Could you please also tell us what that means for North America? Are you planning to localize the production in the United States a bit more? In the United States and Mexico, I should say. Thank you." Thank you very much, Stephen. Milan Nedeljković, you have the floor. Mr. Wilmot, good morning. Let me start with your second question, because before I already talked about local for local. We have a strong footprint in all of the regions. We have the largest plant in the U.S. with the production of the iX, and we also enhanced our footprint there. We have a very good dealer network and supplier network, and we are not planning any changes of our footprint in that region. With the new XM generation, so X generation that we have in Woodruff, we set up a new site for the high- voltage storage assembly. With this assembly plant, we further developed our footprint in the U.S. The business model. Whenever we say business model, we focus on our processes, and one thing is going to change, namely our sales concept with the direct sales, which we set up for the MINI and which is very successful in the market. We're going to plan it for BMW step by step. Direct sales is one of the major changes in our business activities. This, yes, for me is one part. Within the EU. Just to complement this applies to Europe. Next question, please. Next question comes from Felix Stöppler from the Handelsblatt. Please open your mic now. "Good morning, ladies and gentlemen. Thank you for taking your time. I have one question concerning the effect from the tariff reimbursements, which started in Q2. This is what you see in your annual report, financial report. What is the amount of the effect? Two questions on China. Yesterday, the GLA was presented, but it shall not be offered in China. What is the future of compact models from BMW? Will they exist in the future in China? Just briefly, a figure. What is your planned sales volume in that region?" Sales model in China? What do you mean exactly? Mr. Stöppler? Sorry, I was on mute. Yes, China. Yes. What is the level of sales after the downturn now that you would like to see again? Okay, sales level. Yes, okay. Tariff reimbursements, Walter Mertl. Good morning. Well, in the course of May until the beginning of June. There was an agreement about the procedures with the tariffs authorities for Section 232 with how we deal with the credits going forward. Then also the EPA reimbursement. The first payments were already made in the immaterial sector, and in the second half of the year and the fourth quarter, not so much of the third quarter, there will be more payments. In March, we already pointed out that the cash is balanced, which we already booked in the profit and loss, and we have it as debt in our balance sheet. Okay. China, the future of compact models in China and the sales prognosis. Milan, you have the floor. Mr. Stöppler. I talked about China just before. I already said that with Neue Klasse, we have very good momentum, and we have the iX3 and other models in China, and the feedback from the customers is highly positive. In social media and also in other media, we see a lot of good feedback. Our dealers are also highly interested, and the sale is about to start, so we can't really give you a prognosis. We can't really say how it's going to develop, but we are highly optimistic concerning the Neue Klasse. We think that we're going to be very successful with this in China. Okay, next question, please. The next question comes from Martin Hesse from Der Spiegel. Please open your mic now. Good morning, Mr. Mertl. Good morning, Mr. Nedeljković. I have one question concerning China, coming from the other direction. The Chinese competitors will be competitors in your segment in Europe. The market share has increased, clearly the market share of Chinese competitors in your segment. What do you expect in this regard? Now restructuring measures. In what type of scenario would you have to discuss the production and maybe savings in production? Other manufacturers also change working times, higher flexibility, or maybe going to 40 hours per week. What do you think? Thank you, Mr. Hesse. Milan, you have the floor. Good morning, Mr. Hesse. Let me give you an answer to your questions. Competitors from China in Europe. Of course, we see that the Chinese competitors have increasing sales figures for Europe right now. This does not yet have a direct impact on our figures. We are not directly affected, not yet by this development. Of course, we have to keep an eye on the development of the market, and we are preparing for this. We are staying competitive in terms of the content and our portfolio. Restructuring, as I said, it concerns the indirect functions, and we have a very flexible management for the plants. This is one of our traditional strengths. Right now we have three shifts in some plants in Germany, so this is a differentiating factor from our competitors, and this will be driven by the product momentum by the Neue Klasse for the upcoming years. We will have 40 new models within the next two years, which are going to be rolled out. I'm not really concerned about the capacity of our production plants. They are well set up. Working times, 40 hours per week. Well, we have a very high flexibility of our working time models. In the central areas and also at the other sites. We have a very broad working times account. This provides a high flexibility. If the need changes, the need for volumes, we can react to changes in the market in a flexible manner. There is no need for a change in this regard. Not for now. Walter? Let me add something. I would like to underline, we are growing in Europe with more than 7%, and we are growing in the Americas also with more than 9%. This underlines our competitiveness. Even though other Chinese competitors have growth in the two digits or three digits, it doesn't matter. We are growing as well. I would like to underline this. Yes. Thank you very much. Next question, please. Next question comes from Tim Loh from Bloomberg News. Please open your mic now. Thank you very much. Good morning. You already talked about the feedback in China, feedback concerning Neue Klasse. Could you tell us something about the price strategy? Of course, there is an intense competition in China. Some people say it's a race for customers driven by the price. My question is BMW even able to make profits given all of this? By how much would you lower the price in China? Second question, would you also accept losses in China just to gain the customers? Thank you very much, Tim. I hand over to Walter Mertl. Walter, you have the floor. Good morning, Mr. Loh. The first feedback concerning the Neue Klasse and the iX3 in the long version, long wheelbase, is extremely positive, the feedback. The version that will be sold will get tested very soon. Of course, we are not going to mention any prices. They're going to be officially announced, and we will announce the price as close to the start of sales as possible. That's how we normally do it. Thank you. Thank you. Next question, please. The next question comes from Andreas Höß from Münchner Merkur. Please open your mic now. Good morning, Mr. Mertl and Mr. Nedeljković. Two questions. First, the job program does not apply to the ones in production. The FIZ has 25,000 employees, more or less, the FIZ in Munich, and they are not working in production. They are designers, software developers, et cetera. This job program, what will the effect be on FIZ, the FIZ? Second question, the other competitors are reducing the model portfolio to have savings in the production and to also reduce the price. The individualization options are cut or reduced. Is that an option for you as well? Milan, you have the floor. Mr. Höß, thank you very much for your question. I already talked about the program, the severance program. I talked about the principles. It's not about identifying individual areas where there are going to be cuts. It's about a principle reorganization of the way we work. This applies to the FIZ or the FIZ as well. It applies to administration, it applies to indirect workforce, and the result of this new process enables us to make savings, to harvest potentials. It's a developing process. We are going to focus on it in the next 12- 18 months, and we're going to harvest the potentials. The model portfolio, of course, we are a premium manufacturer, so there is a high variance for the customers, and the product are highly individual. This characterizes us. We're not planning to make any reductions of the portfolio or to cut the individual offers. Nevertheless, it's about profitability of the derivatives on a global level. That is what we also focus on. We also look at the drivetrain variance and the product models in individual markets. All this will be reanalyzed. Thank you, Milan. Next question, please. Next question comes from Christoph Kapalschinski from Die Welt. Please open your mic now. Good morning. One question? You said you're going to assess drivetrain variance on a global level. Does this apply just to individual variance, or could you maybe not offer BEVs in the United States or no longer have ICEs in Europe? What does that exactly mean? Thank you very much. Milan, you have the floor. Well, this statement does not apply to entire drivetrain concepts or product portfolios. It applies specifically to markets, to countries, to sales regions. We check whether a drivetrain variance, the content of the vehicle, or individual derivatives which do not match the market, whether those can be withdrawn from the market, but it's not persistent. It doesn't mean that we are not going to offer an entire drivetrain. You're challenging the BEVs as a whole. This is not what I meant. Okay. Thank you very much. We will accept three more questions. Okay, next question. Next question comes from Stephan Radomsky from Süddeutsche Zeitung. Please open your mic now. Press the star button and then six. Good morning. Good morning, ladies and gentlemen. Can you all hear me? Yes, we can hear you. Yes, we can hear you. Just continue with your question. Okay, two questions. Mr. Nedeljković, before you said that you're going to analyze things because of this restructuring which were not analyzed before. What are you specifically referring to? What was inconceivable to analyze or to touch in the past and what you're going to do now? Then second question. Yesterday we heard a report which said that the managers, because of the austerity program, are going to have just 30 hours per week, and this will also reduce their wage. Could you confirm this, and could you tell us how many employees will be affected and what the expected savings volume is? Thank you. Thank you very much. Milan, you have the floor. Something that could not be touched, well, that was my statement. Everything can be reanalyzed and touched. Let me just give you an example to explain. Every company has a certain culture, of course, we have a high product affinity, we focus on every component and we focus on the development. Some things you don't have to develop yourself. It's about standardization. Things that you like and love and that you love doing can be omitted and then just purchased. That's one example which I meant by what I said. Of course, there is also a potential for change in our processes and in our content. We can redefine those. You mentioned the managers, the executives. Well, the executives and managers are not directly affected by this because they don't have working times. They're very sovereign and flexible when it comes to their working times, but they're still part of the severance program. Next question. Next question comes from Frank Volk from Automobilwoche. Please open your mic now. Good morning. Good morning, Mr. Mertl. You said before that you're growing in Europe and in the U.S. That's dynamic. It has turned out that you can't grow as fast as you're losing business in China. My question concerns the production. We talk a lot about the dealers' network and a new focus. The plant capacity in the joint venture plants in China is at a very low level. What is planned? Will there be adjustments in the production network in China as well? Just to be very direct. One follow-up question, just a small one. You mentioned in your speech, what did you say? The entire value chain was analyzed in order to find the potentials to be more efficient. This analysis, in what time period was it done? Thank you. We start with Walter Mertl. You have the floor. Mr. Volk, good morning. The Chinese production structure, I can only say that the cost structures are fundamentally different from the rest of the world. This has to be accepted in the first step. We have already made adjustments already last year and again this year. We react to the market situation, we can deal with this in a flexible manner. We make adjustments step by step. Milan, what about the value creation chain? Before I said that the analysis of the processes will last for the next 12-18 months. Pretty fast, we will have the first approaches. We are already in the implementation stage, we take it process by process. Until the end of next year, the transformation process should be implemented. Thank you very much. Last question. The last question comes from Regina Ehm-Klier from the Mediengruppe Bayern. Please open your mic now. Good morning. Good morning, Mr. Mertl. Good morning, Mr. Nedeljković. It's not just about the costs for me, but also the earnings. To which extent is BMW willing to enter the fight for prices in China? The competitors are also in Europe. Are you going to adjust the prices of the models? Can we expect a lowering of the prices? Thank you. Thank you very much. Greetings to Passau, I hand over to Walter Mertl. Good morning. In the past 18 months, we worked on our products. We broadened the products. We also changed the list, reduced the list prices, the transaction prices were kept. First, it was large discounts, then less, the transaction prices, this is key for the dealers, we have independent dealers, were kept. We are still on the price level of the first quarter of last year. That's also positive news. As for the rest, it principally applies that prices and profit has to be in balance. The profit doesn't just come from the BMW Group, but also from the dealers. This has to be taken into account, otherwise, the entire business model doesn't work. We are partners. In this system, we are well set up. Thank you. That's a good concluding remark. I would like to thank Walter Mertl. Dear colleagues, this brings us to the end of our call. Thank you for your participation. I wish you a good rest of the day and have a great summer, great holidays, we will be back soon. All the best from Munich.