RESULTS OF OPERATIONS OF THE GROUP
The Volkswagen Group generated sales revenue of €113.8 billion in 2008. This 4.5% increase is primarily attributable to the consolidation of Scania from July 22, 2008. The positive business development also contributed to this increase. The largest proportion of sales revenue was generated outside Germany, at 75.7% (75.3%). The cost of sales rose by 4.3%, while the gross margin was 15.1%, marginally higher than in the previous year. The Group’s operating profit was €6.3 billion (€6.2 billion). In spite of the difficult economic climate, we exceeded our high level of earnings in fiscal year 2007 as we had set out to do. The operating return on sales remained constant at 5.6%.
CONSOLIDATED PROFIT
The Volkswagen Group’s profit before tax in 2008 amounted to €6.6 billion (€6.5 billion), up slightly on the high level recorded in the previous year. The return on sales before tax slipped back to 5.8% (6.0%). The Volkswagen Group’s profit after tax was €4.7 billion and thus 13.7% higher than in 2007.
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INCOME STATEMENT BY DIVISION |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Volkswagen Group |
Automotive* |
Financial Services | |||||||||||
|
€ million |
2008 |
2007 |
2008 |
2007 |
2008 |
2007 | ||||||||
| ||||||||||||||
|
Sales revenue |
113,808 |
108,897 |
102,632 |
98,752 |
11,176 |
10,145 | ||||||||
|
Cost of sales |
96,612 |
92,603 |
87,895 |
84,674 |
8,717 |
7,929 | ||||||||
|
Gross profit |
17,196 |
16,294 |
14,737 |
14,078 |
2,459 |
2,216 | ||||||||
|
Distribution expenses |
10,552 |
9,274 |
10,061 |
8,781 |
491 |
493 | ||||||||
|
Administrative expenses |
2,742 |
2,453 |
2,254 |
1,970 |
488 |
483 | ||||||||
|
Net other operating income |
2,431 |
1,584 |
3,006 |
1,867 |
–575 |
–283 | ||||||||
|
Operating profit |
6,333 |
6,151 |
5,428 |
5,194 |
905 |
957 | ||||||||
|
Share of profits and losses of equity-accounted investments |
910 |
734 |
809 |
580 |
101 |
154 | ||||||||
|
Other financial result |
–635 |
–342 |
–560 |
–300 |
–75 |
–42 | ||||||||
|
Financial result |
275 |
392 |
249 |
280 |
26 |
112 | ||||||||
|
Profit before tax |
6,608 |
6,543 |
5,677 |
5,474 |
931 |
1,069 | ||||||||
|
Income tax expense |
1,920 |
2,421 |
1,668 |
2,254 |
252 |
167 | ||||||||
|
Profit after tax |
4,688 |
4,122 |
4,009 |
3,220 |
679 |
902 | ||||||||
|
Minority interests |
–65 |
2 |
–71 |
2 |
6 |
– | ||||||||
|
Profit attributable to shareholders |
4,753 |
4,120 |
4,080 |
3,218 |
673 |
902 | ||||||||
RESULTS OF OPERATIONS IN the automotive division
Sales revenue in the Automotive Division rose by 3.9% year-on-year to €102.6 billion. This improvement was mainly due to the initial consolidation of Scania and the increased sales volume. As the cost of sales rose at a slower pace, at 3.8%, the gross margin remained improved slightly to 14.4% (14.3%). The gross profit was €14.7 billion (€14.1 billion). Distribution expenses rose to €10.1 billion because of the intensified marketing activities. Administrative expenses were higher than in the previous year, at €2.3 billion.
Net other operating income rose by €1.1 billion to €3.0 billion, primarily because of positive effects from currency hedging activities. In particular because of the traditionally high write-downs resulting from purchase price allocation in the initial phase following the acquisition, the inclusion of Scania made a negative contribution of €0.2 billion to the Volkswagen Group’s operating profit.
The Automotive Division generated an operating profit of €5.4 billion in the reporting period, an improvement of 4.5% on the previous year. The ratio of operating profit to sales revenue was unchanged at 5.3%.
The financial result decreased by €31 million to €249 million on account of effects from the measurement of financial instruments.
SEGMENT REPORTING – SHARE OF SALES REVENUE BY MARKET 2008
in percent
RESULTS OF OPERATIONS in the financial services division
The Financial Services Division generated sales revenue of €11.2 billion in 2008, 10.2% more than in the previous year. This improvement was driven by the rental business and dealer and customer financing. At €2.5 billion, gross profit was up 11.0% year-on-year. Both distribution and administrative expenses remained on a level with the previous year at €491 million and €488 million respectively. Their respective proportions of sales revenue declined, however. Higher valuation adjustments on receivables meant that net other operating income was €292 million lower than in the previous year, at €–575 million. Although the financial crisis considerably impacted business development in the reporting period, the Financial Services Division achieved an operating profit of €905 million, only moderately lower than the high prior-year figure of €957 million. As a result, the division once again made a substantial contribution to consolidated profit.
The return on equity before tax was 12.1% (16.1%).
