nextprevious
Annual Report

Financial Position

PRINCIPLES AND GOALS OF FINANCIAL MANAGEMENT

Liquidity management, currency, interest rate and commodity risk management, as well as credit and country risk management, are the core elements of financial management at the Volkswagen Group. This is performed centrally for all Group companies except Scania by Group Treasury, based on internal directives and risk parameters.

With regard to liquidity, the goals of financial management are to ensure that the Volkswagen Group remains solvent at all times and to achieve an adequate return from the investment of surplus funds. The aim of currency, interest rate and commodity risk management is to hedge the prices on which investment, production and sales plans are based using derivative financial instruments. The goal of credit and country risk management is to use diversification to avoid exposing the Volkswagen Group to the risk of loss or default.

To achieve this diversification, internal limits are defined for the volume of business per counterparty when entering into financial transactions. In setting these limits, various rating criteria are taken into account, including the ratings awarded by independent agencies and the equity base of potential counterparties. The Executive Committee for Liquidity and Foreign Currency approves risk limits, authorized financial instruments, and hedging methods and horizons.

For more information on the principles and goals of financial management, please refer to the notes to the 2010 consolidated financial statements as well as to the Risk Report.

  Download

CASH FLOW STATEMENT BY DIVISION

 

 

 

 

 

 

Volkswagen Group

 

Automotive1

 

Financial Services

€ million

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

1

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

2

These relate mainly to the fair value measurement of financial instruments, application of the equity method and reclassification of gains/losses on disposal of noncurrent assets to investing activities.

3

Before consolidation of intra-Group transactions: €14,481 million (€13,306 million).

4

Cash and cash equivalents comprise cash at banks, checks, cash-in-hand and call deposits.

Profit before tax

 

8,994

 

1,261

 

7,878

 

603

 

1,116

 

657

Income taxes paid

 

–1,554

 

–529

 

–1,364

 

–265

 

–190

 

–264

Depreciation and amortization expense

 

10,097

 

8,877

 

7,751

 

6,740

 

2,346

 

2,137

Change in pension provisions

 

77

 

135

 

72

 

130

 

5

 

5

Other noncash income/expense and reclassifications2

 

–2,073

 

–118

 

–1,981

 

–623

 

–91

 

505

Gross cash flow

 

15,540

 

9,626

 

12,355

 

6,585

 

3,185

 

3,040

Change in working capital

 

–4,086

 

3,116

 

1,575

 

6,230

 

–5,661

 

–3,114

Change in inventories

 

–2,507

 

4,155

 

–2,035

 

3,820

 

–471

 

335

Change in receivables

 

–1,980

 

465

 

–1,910

 

750

 

–70

 

–285

Change in liabilities

 

4,064

 

260

 

3,350

 

193

 

714

 

67

Change in other provisions

 

2,577

 

1,525

 

2,377

 

1,457

 

199

 

68

Change in leasing and rental assets (excluding depreciation)

 

–3,138

 

–2,571

 

–98

 

–48

 

–3,040

 

–2,523

Change in financial services receivables

 

–3,102

 

–719

 

–108

 

57

 

–2,993

 

–777

Cash flows from operating activities

 

11,455

 

12,741

 

13,9303

 

12,8153

 

–2,476

 

–74

Cash flows from investing activities

 

–9,278

 

–10,428

 

–9,095

 

–10,252

 

–183

 

–176

of which: acquisition of
              property,
              plant and equipment

 

–5,758

 

–5,963

 

–5,656

 

–5,783

 

–102

 

–180

capitalized development costs

 

–1,667

 

–1,948

 

–1,667

 

–1,948

 

 

acquisition and disposal of equity investments

 

–2,150

 

–2,669

 

–2,061

 

–2,667

 

–89

 

–3

Net cash flow

 

2,176

 

2,313

 

4,835

 

2,563

 

–2,659

 

–250

Change in investments in securities and loans

 

–1,770

 

753

 

–1,432

 

509

 

–338

 

244

Cash flows from financing activities

 

–852

 

5,536

 

–3,161

 

5,497

 

2,309

 

39

of which: capital increase by new preferred shares

 

4,099

 

 

4,099

 

 

 

Changes in cash and cash equivalents due to exchange rate changes

 

438

 

190

 

397

 

155

 

41

 

35

Net change in cash and cash equivalents

 

–8

 

8,792

 

640

 

8,724

 

–647

 

69

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at Dec. 314

 

18,228

 

18,235

 

17,002

 

16,362

 

1,226

 

1,873

Securities, loans and time deposits

 

9,437

 

7,312

 

7,482

 

5,701

 

1,954

 

1,611

Gross liquidity

 

27,664

 

25,547

 

24,484

 

22,063

 

3,180

 

3,484

Total third-party borrowings

 

–77,012

 

–77,599

 

–5,845

 

–11,427

 

–71,166

 

–66,172

Net liquidity

 

–49,347

 

–52,052

 

18,639

 

10,636

 

–67,986

 

–62,688

top
nextprevious
Deutsch | English
Download Manager
Collect files for a combined download.
Compare Key Figures
Create your personal overview of important key figures.