FINANCIAL POSITION AND CASH AND CASH EQUIVALENTS IN THE GROUP
The indirect investment in Dr. Ing. h.c. F. Porsche AG via Porsche Zwischenholding GmbH and the sale of the Brazilian commercial vehicles business to the MAN Group had a significant influence on the Volkswagen Group’s financial position in fiscal year 2009. The following sections give an overview of the Group’s liquidity development and outline the operating factors by division.
The Volkswagen Group’s gross cash flow amounted to €9.6 billion (€13.7 billion) in the reporting period.
Following a cash outflow of €11.0 billion in 2008, funds of €3.1 billion were released from working capital in fiscal year 2009. Cash flows from operating activities increased to €12.7 billion (€2.7 billion).
At €10.4 billion, cash flows from investing activities were 10.2% lower than in fiscal year 2008. Net cash flow improved by €11.2 billion to €2.3 billion.
Cash and cash equivalents in the Volkswagen Group as reported in the cash flow statement amounted to €18.2 billion (€9.4 billion) at the end of the reporting period. At €25.5 billion, gross liquidity was €8.2 billion up on the prior-year figure. At €–52.1 billion, net liquidity in the Group was at the prior-year level.
FINANCIAL POSITION IN THE AUTOMOTIVE DIVISION
The Automotive Division’s gross cash flow for the reporting period was significantly lower year-on-year at €6.6 billion due to the lower level of profit. €6.2 billion of funds were released from working capital, mainly because of the pronounced reduction in stockpiled inventories and lower receivables; in the previous year, the division had reported funds tied up in working capital of €2.1 billion. As a result, cash flows from operating activities rose sharply, by 45.6% to €12.8 billion.
At €5.8 billion, investments in property, plant and equipment in the Automotive Division were 14.6% lower year-on-year in fiscal year 2009. The ratio of investments in property, plant and equipment to sales revenue (capex) was in line with our expectations at 6.2% (6.6%). We invested mainly in the new production facilities in India, Russia and the USA and in models that we launched in 2009 or are planning to launch in 2010. These are primarily the successor models to the Polo, the Sharan, the Jetta, the Touareg and the Audi A8, as well as the Audi A1, the Audi A4 allroad quattro, the convertible and sportback versions of the Audi A5 and the Amarok. Further investments were made in the ecological focus of the model range. At €1.9 billion, capitalized development costs were lower than in the previous year. Overall, investing activities resulted in an outflow of €10.3 billion. Here, the indirect investment of €3.9 billion in Dr. Ing. h.c. F. Porsche AG via Porsche Zwischenholding GmbH was partly offset by the sale of the Brazilian commercial vehicles business to the MAN Group (€1.3 billion). Overall, the Automotive Division’s net cash flow improved by €5.2 billion to €2.6 billion.
The cash inflow from the Automotive Division’s financing activities increased from €0.9 billion in the previous year to €5.5 billion in 2009. Cash and cash equivalents rose by a total of €8.7 billion to reach €16.4 billion on December 31, 2009. At €10.6 billion, the Automotive Division’s net liquidity at the end of the reporting period was €2.6 billion higher than on December 31, 2008.
FINANCIAL POSITION IN THE FINANCIAL SERVICES DIVISION
The Financial Services Division recorded a gross cash flow of €3.0 billion in fiscal 2009, a 10.6% increase on the prior-year figure. Due primarily to lower funds tied up in financial services receivables and the more pronounced reduction in stockpiled inventories, funds tied up in working capital fell from €8.8 billion in 2008 to €3.1 billion in the reporting period. Cash flows from investing activities amounted to €0.2 billion (€0.1 billion). Financing activities declined to €39 million (€7.2 billion). Cash and cash equivalents reached €1.9 billion on December 31, 2009. After accounting for securities and loans, the gross liquidity of the Financial Services Division was €3.5 billion (€4.0 billion). The expansion of business activities pushed up third-party borrowings to €66.2 billion (€64.3 billion). As a result, the Financial Services Division’s negative net liquidity, which is common in the industry, was €–2.4 billion higher at €–62.7 billion.