Balance sheet structure

CONSOLIDATED BALANCE SHEET STRUCTURE

Due to the sale of Volkswagen Caminhões e Ônibus Indústria e Comércio de Veículos Comerciais Ltda. (VW CO), Resende, Brazil, to MAN AG, Munich, effective January 1, 2009, we have reported the assets and liabilities of VW CO contained in the consolidated balance sheet as “assets held for sale and associated liabilities” in accordance with IFRS 5.

The Volkswagen Group’s total assets amounted to €167.9 billion on December 31, 2008, an increase of 15.5% versus the previous year. The Automotive and Financial Services divisions contributed equally to this development.

The structure of the consolidated balance sheet as of December 31, 2008 can be seen from the chart below. The Volkswagen Group’s equity ratio was 22.3% (22.0%).

CONSOLIDATED BALANCE SHEET STRUCTURE 2008
in percent
Consolidated balance sheet structure 2008 in percent (bar chart)

Automotive Division balance sheet structure

Scania’s consolidation led to an increase in noncurrent assets in particular – mainly intangible assets – as well as current liabilities and equity.

Noncurrent assets in the Automotive Division were 23.5% higher at the balance sheet date than on December 31, 2007. The carrying amount of property, plant and equipment rose by 19.5%. Current assets were up by 8.1% year-on-year as a consequence of higher inventories resulting from the massive market turbulence in the second half of the year and increased receivables. Marketable securities and cash and cash equivalents decreased, principally as a result of the acquisition of the Scania shares. Marketable securities were also increasingly converted into cash and cash equivalents as part of our liquidity management activities.

The Automotive Division’s equity attributable to shareholders of Volkswagen AG amounted to €26.8 billion at the end of the reporting period, 8.5% higher than the year before. This was primarily due to positive earnings growth. After adjustment for minority interests, which chiefly relate to minority interests in Scania, equity rose by 16.8% to €29.0 billion. The equity ratio was 32.6% (32.3%).

Noncurrent liabilities increased by 7.6%. As a result of changes in maturities, there was a shift in certain financial liabilities from noncurrent to current maturities in fiscal year 2008. Current liabilities increased by 24.1% in particular as a result of the inclusion of Scania.

Total assets in the Automotive Division amounted to €88.7 billion on December 31, 2008, an increase of 15.6% year-on-year. Scania accounted for €11.1 billion of total assets, including the effects of purchase price allocation.

Financial services division BALANCE SHEET STRUCTURE

Financial services receivables and liabilities in particular increased as a result of the consolidation of Scania’s financial services business. On December 31, 2008, total assets in the Financial Services Division were up €10.6 billion on the end of 2007, €4.5 billion of which was attributable to Scania. On the assets side, noncurrent assets rose by 15.5% and current assets by 15.2%, primarily because of increased financial services receivables. Overall, the Financial Services Division accounted for approximately 47% of the Volkswagen Group’s assets as of December 31, 2008.

At the balance sheet date, the Financial Services Division’s equity amounted to €8.4 billion, an 18.0% increase on December 31, 2007. This was due to the profit for the period and a capital increase by Volkswagen AG. The equity ratio was 10.6% (10.4%). Noncurrent liabilities were 21.5% higher than in the previous year, mainly on account of higher financial liabilities due to the expansion of business. Deposits at Volkswagen Bank direct increased by €3.2 billion to €12.8 billion. The debt/equity ratio remained unchanged at 8:1.

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