Value contribution and return on investment in the current fiscal year


The operating profit after tax of the Automotive Division was €1,633 million (€4,469 million) in fiscal year 2009. The year-on-year decline was due primarily to volume losses (unit sales excluding China –6.1%), a deterioration in country mixes, higher distribution expenses relating to scrapping premium programs, the trend towards smaller vehicles and exchange rate effects.

Invested capital rose by an annual average of €2,169 million in connection with the renewal and expansion of our product portfolio and the full effect of Scania’s consolidation. As the cost of capital has fallen, the cost of invested capital was only €26 million higher year-on-year at €2,976 million. The fall in operating profit after tax resulted in a negative value contribution of €1,343 million (positive value contribution of €1,519 million).

The return on investment is the return on invested capital for a particular period based on the operating profit after tax. For the reasons already mentioned, this declined year-on-year to 3.8% (10.9%).

More information on value-based management is contained in our publication “Financial Control System of the Volkswagen Group”, which can be downloaded from our Investor Relations website.

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VALUE CONTRIBUTION BY THE AUTOMOTIVE DIVISION*

 

 

€ million

 

2009

 

2008

*

Including proportionate inclusion of the Chinese joint ventures Shanghai-Volkswagen Automotive Company Ltd. and FAW-Volkswagen Automotive Company Ltd. (including the respective sales companies starting in 2009) and allocation of consolidation adjustments between the Automotive and Financial Services divisions.

Operating profit (starting point)

 

1,264

 

5,428

Plus effects of Scania purchase price allocation on earnings

 

295

 

575

Plus share of operating profit of Chinese joint ventures
(as from 2009 including the respective sales companies)

 

774

 

381

Tax expense

 

–700

 

–1,915

Operating profit after tax

 

1,633

 

4,469

Invested capital (average)

 

43,135

 

40,966

Return on investment (ROI) in %

 

3.8

 

10.9

Cost of capital in %

 

6.9

 

7.2

Cost of invested capital

 

2,976

 

2,950

Value contribution

 

–1,343

 

1,519

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