Results of Operations


RESULTS OF OPERATIONS OF THE GROUP

The Volkswagen Group’s sales revenue for fiscal 2009 failed to reach the prior-year level due to the decline in sales. At €105.2 billion, it was 7.6% lower year-on-year. The largest proportion of sales revenue, at 71.6% (75.7%), was generated outside Germany. Cost of sales declined by 5.2%. The gross margin dropped from 15.1% in the previous year to 12.9%. The Group’s operating profit fell to €1.9 billion (€6.3 billion) in the reporting period. This included proceeds of €0.6 billion from the sale of the Brazilian commercial vehicles business to the MAN Group. The operating return on sales fell to 1.8% (5.6%).

CONSOLIDATED PROFIT

The Volkswagen Group generated profit before tax of €1.3 billion (€6.6 billion) in fiscal 2009. The return on sales before tax declined to 1.2% (5.8%). At €0.9 billion, the Volkswagen Group’s profit after tax was 80.6% lower than in fiscal year 2008.

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INCOME STATEMENT BY DIVISION

 

 

 

 

 

 

Volkswagen Group

 

Automotive*

 

Financial Services

€ million

 

2009

 

2008

 

2009

 

2008

 

2009

 

2008

*

Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.

Sales revenue

 

105,187

 

113,808

 

93,041

 

102,632

 

12,146

 

11,176

Cost of sales

 

–91,608

 

–96,612

 

–82,068

 

–87,895

 

–9,540

 

–8,717

Gross profit

 

13,579

 

17,196

 

10,973

 

14,737

 

2,606

 

2,459

Distribution expenses

 

–10,537

 

–10,552

 

–10,002

 

–10,061

 

–535

 

–491

Administrative expenses

 

–2,739

 

–2,742

 

–2,259

 

–2,254

 

–480

 

–488

Net other operating income

 

1,553

 

2,431

 

2,553

 

3,006

 

–1,000

 

–575

Operating profit

 

1,855

 

6,333

 

1,264

 

5,428

 

591

 

905

Share of profits and losses of equity-accounted investments

 

701

 

910

 

610

 

809

 

91

 

101

Other financial result

 

–1,296

 

–635

 

–1,271

 

–560

 

–25

 

–75

Financial result

 

–595

 

275

 

–661

 

249

 

66

 

26

Profit before tax

 

1,261

 

6,608

 

603

 

5,677

 

657

 

931

Income tax expense

 

–349

 

–1,920

 

–151

 

–1,668

 

–198

 

–252

Profit after tax

 

911

 

4,688

 

452

 

4,009

 

459

 

679

Minority interests

 

–49

 

–65

 

–40

 

–71

 

–9

 

6

Profit attributable to shareholders of
Volkswagen AG

 

960

 

4,753

 

492

 

4,080

 

468

 

673

RESULTS OF OPERATIONS IN THE AUTOMOTIVE DIVISION

The Automotive Division generated sales revenue of €93.0 billion in the reporting period. The 9.3% decline compared with the previous year was mainly due to volume and mix deteriorations. As our Chinese joint ventures are accounted for using the equity method, the Group’s sales revenue only reflects the positive development of our sales in the Chinese car market in the form of deliveries of vehicle parts. Cost of sales declined by 6.6%. As a result, the gross margin dropped to 11.8% (14.4%). The Automotive Division’s gross profit amounted to €11.0 billion (€14.7 billion). Distribution expenses were 0.6% lower than in the previous year; administrative expenses amounted to €2.3 billion, as in 2008.

At €2.6 billion, net other operating income was €0.5 billion below the prior-year figure due to lower reversals of provisions and declining currency hedging gains.

The Automotive Division recorded an operating profit of €1.3 billion for fiscal 2009, a decrease of 76.7% on the previous year. The shift in volumes towards smaller vehicles, especially in Germany, had a particularly adverse effect. Profit was also negatively impacted by exchange rate effects, including from currencies such as the Russian ruble, the Swedish krona, or the Polish zloty. The positive business performance in China is not reflected in operating profit, as our Chinese joint ventures are accounted for using the equity method.

The ratio of operating profit to sales revenue declined to 1.4% (5.3%). The financial result decreased by €0.9 billion to €–0.7 billion. In the case of the equity-accounted investments reported in the consolidated financial statements, the positive effect on earnings in China was offset by a negative result for the MAN Group. A reduction in net interest income and net income from securities and higher expenses for interest unwinding on provisions also negatively impacted the financial result.

SEGMENT REPORTING – SHARE OF SALES REVENUE BY MARKET 2009
as percent
Segment reporting – Share of sales revenue by market 2009 (bar chart)

RESULTS OF OPERATIONS IN THE FINANCIAL SERVICES DIVISION

In fiscal 2009, the Financial Services Division’s sales revenue was 8.7% higher year-on-year at €12.1 billion. The rise was due primarily to higher proceeds from the marketing of pre-registered vehicles in the leasing business. Gross profit rose by 6.0% to €2.6 billion. While distribution costs increased year-on-year, administrative costs were slightly lower than in 2008. Net other operating expense increased by €425 million to €–1.0 billion due to higher write-downs of receivables. As a result of the difficult business environment, operating profit declined to €591 million (€905 million) in fiscal 2009. Nevertheless, the Financial Services Division again made a significant contribution to the Group’s operating profit. The return on equity before tax was 7.9% (12.1%).

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