nextprevious
Annual Report

Results of Operations

Volkswagen Group generates record results in 2010

The Volkswagen Group significantly increased its sales revenue and operating profit in fiscal 2010. Against the background of the planned creation of an integrated automotive group with Porsche, the capital increase strengthened the Group’s financial stability and flexibility.

In compliance with IFRS 8, the Volkswagen Group’s revised segment reporting comprises the three reportable segments Passenger Cars and Light Commercial Vehicles, Scania Vehicles and Services, and Financial Services in accordance with the Group’s internal reporting and management.

At Volkswagen, segment profit or loss is measured on the basis of operating profit or loss.

The reconciliation contains activities and other operations that do not by definition constitute segments. It also includes all of the unallocated Group financing activities. Consolidation adjustments between the segments (including the purchase price allocation for Scania and the holding company functions) are also contained in the reconciliation.

In addition to the Passenger Cars and Light Commercial Vehicles segment, the Automotive Division discussed in the course of this chapter continues to comprise Scania Vehicles and Services as well as the figures from the reconciliation. The Financial Services segment corresponds to the Financial Services Division.

The activities of the Passenger Cars and Light Commercial Vehicles segment cover the development of vehicles and engines, the production and sale of passenger cars and light commercial vehicles, and the genuine parts business. The individual passenger car brands and light commercial vehicles of the Volkswagen Group are combined on a consolidated basis in this segment.

The Scania Vehicles and Services segment comprises in particular the development, production and sale of heavy commercial vehicles, the corresponding genuine parts business and related services.

The activities of the Financial Services segment comprise dealer and customer financing, leasing, banking and insurance activities, as well as fleet management.

RESULTS OF OPERATIONS OF THE GROUP

In fiscal year 2010, the Volkswagen Group generated sales revenue of €126.9 billion, up 20.6% on the prior-year figure. The increase is due mainly to higher volumes and positive exchange rate effects. The largest proportion of sales revenue, at 77.4% (71.6%), was generated outside Germany. As the cost of sales rose more slowly by 15.1%, the gross margin improved from 12.9% in the previous year to 16.9%. At €7.1 billion (€1.9 billion), the Group’s operating profit in the reporting period was much higher than in the previous year. The operating return on sales increased to 5.6% (1.8%).

  Download

KEY FIGURES BY SEGMENT

 

 

 

 

€ million

 

Passenger Cars and Light Commercial Vehicles

 

Scania Vehicles and Services

 

Financial Services

 

Total segments

 

Reconciliation

 

Volkswagen Group

Sales revenue

 

111,218

 

8,179

 

14,069

 

133,466

 

–6,591

 

126,875

Segment profit or loss (operating profit or loss)

 

5,337

 

1,323

 

952

 

7,612

 

–471

 

7,141

as % of sales revenue

 

4.8

 

16.2

 

6.8

 

 

 

 

 

5.6

CONSOLIDATED PROFIT

The Volkswagen Group generated a record profit in fiscal year 2010. Profit before tax amounted to €9.0 billion (€1.3 billion). As a result, the return on sales before tax improved to 7.1% (1.2%). At €7.2 billion, the Volkswagen Group’s profit after tax exceeded the prior-year figure by €6.3 billion.

  Download

INCOME STATEMENT BY DIVISION

 

 

 

 

 

 

Volkswagen Group

 

Automotive*

 

Financial Services

€ million

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

*

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

Sales revenue

 

126,875

 

105,187

 

112,806

 

93,041

 

14,069

 

12,146

Cost of sales

 

–105,431

 

–91,608

 

–94,746

 

–82,068

 

–10,685

 

–9,540

Gross profit

 

21,444

 

13,579

 

18,060

 

10,973

 

3,384

 

2,606

Distribution expenses

 

–12,213

 

–10,537

 

–11,442

 

–10,002

 

–770

 

–535

Administrative expenses

 

–3,287

 

–2,739

 

–2,659

 

–2,259

 

–628

 

–480

Net other operating income

 

1,197

 

1,553

 

2,231

 

2,553

 

–1,034

 

–1,000

Operating profit

 

7,141

 

1,855

 

6,189

 

1,264

 

952

 

591

Share of profits and losses of equity-accounted investments

 

1,944

 

701

 

1,819

 

610

 

125

 

91

Other financial result

 

–91

 

–1,296

 

–131

 

–1,271

 

39

 

–25

Financial result

 

1,852

 

–595

 

1,689

 

–661

 

164

 

66

Profit before tax

 

8,994

 

1,261

 

7,878

 

603

 

1,116

 

657

Income tax expense

 

–1,767

 

–349

 

–1,456

 

–151

 

–312

 

–198

Profit after tax

 

7,226

 

911

 

6,422

 

452

 

804

 

459

Noncontrolling interests

 

392

 

–49

 

384

 

–40

 

8

 

–9

Profit attributable to shareholders of Volkswagen AG

 

6,835

 

960

 

6,038

 

492

 

797

 

468

RESULTS OF OPERATIONS IN THE AUTOMOTIVE DIVISION

The Automotive Division’s sales revenue amounted to €112.8 billion in the reporting period, 21.2% higher than in fiscal year 2009. The Scania Vehicles and Services segment accounted for €8.2 billion (€6.1 billion). In addition to increased volumes and exchange rate effects, model and country mix improvements had a positive effect. The positive development of our sales in the Chinese passenger car market is only reflected in the Group’s sales revenue mainly by deliveries of vehicle parts, as our Chinese joint ventures are accounted for using the equity method. The cost of sales increased more slowly than sales revenue by 15.4%, allowing the gross margin to improve to 16.0% (11.8%). At €18.1 billion (€11.0 billion), the Automotive Division’s gross profit was significantly higher than in the previous year.

Although distribution expenses rose by 14.4% due to volume-related factors, they declined as a proportion of sales revenue. Administrative expenses increased by €0.4 billion to €2.7 billion. At €2.2 billion, net other operating income was down €0.3 billion compared with the prior-year figure, which contained the proceeds of €0.6 billion from the sale of the Brazilian commercial vehicles business to the MAN Group.

The Automotive Division generated an operating profit of €6.2 billion in fiscal year 2010, up €4.9 billion year-on-year. The Scania Vehicles and Services segment accounted for €1.3 billion (€0.3 billion). In particular, higher volumes, exchange rate effects and improved product costs had a positive effect on operating profit. At 5.5% (1.4%), the ratio of operating profit to sales revenue was much higher than in the previous year. The extremely positive business performance of our Chinese joint ventures is not reflected in the Group’s operating profit, as these are accounted for using the equity method.

The financial result improved by €2.3 billion to €1.7 billion. The high finance costs were compensated by the improved income from equity-accounted investments, in particular the Chinese joint ventures. The updating of the underlying assumptions used in the valuation models for measuring the put/call rights relating to Porsche Zwischenholding GmbH also had a positive effect. By contrast, the measurement of derivative financial instruments for currency and commodity hedging as of the reporting date had a negative effect.

SEGMENT REPORTING – SHARE OF SALES REVENUE BY MARKET 2010
as percent
Segment reporting – share of sales revenue by market 2010 (bar chart)

RESULTS OF OPERATIONS IN THE FINANCIAL SERVICES DIVISI0N

The Financial Services Division generated sales revenue of €14.1 billion in fiscal year 2010, exceeding the prior-year figure by 15.8%. In addition to increased volumes, the rise was driven by higher proceeds from the marketing of pre-registered vehicles in the leasing business. Gross profit improved by 29.9% to €3.4 billion. Distribution and administrative expenses were higher in 2010 than in the previous year. This is due mainly to stricter regulatory requirements, volume effects from business expansion and the implementation of strategic and IT projects. At €–1.0 billion, net other operating income was on a level with 2009. Operating profit in fiscal 2010 increased by €361 million year-on-year to €952 million. This enabled the Financial Services Division to make another significant contribution to the Group’s operating profit. The return on equity before tax improved to 12.9% (7.9%).

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