News Column

Half year results show continuing profitable growth for Audi

August 4, 2014

ENP Newswire - 04 August 2014

Release date- 01082014 - Ingolstadt, - Despite challenging conditions and a record investment programme, Audi delivered a convincing performance in the first half of 2014 with solid key figures.

In the period from January to June, the carmaker based in Ingolstadt, Germany, set a new record with deliveries of 869,355 Audi vehicles, 83,761 of which were destined for the UK - another unprecedented half-year performance for the national importer.

The Audi Group posted first-half revenue of EUR 26.7 billion and operating profit of EUR 2.7 billion. In the first six months of this year, the company achieved an operating return on sales of 10.0 percent and was thus at the upper end of its strategic target corridor of eight to ten percent.

At the half-year press conference in Munich, CFO Axel Strotbek stated: 'Despite major challenges, Audi is systematically continuing along its path of high-quality growth.' Audi appeals to customers with its attractive model portfolio. The company therefore expects to deliver significantly more than 1.6 million cars of the brand with the Four Rings this year, once again breaking the prior-year record.

Between January and June, the Audi Group delivered 869,355 cars bearing the Four Rings, an increase of 11.4 percent (H1 2013: 780,467). The company sold 50 percent more A3 family models than in the first half of last year, and at the same time, the large A6, A7, Q7 and A8 models together recorded an increase in unit sales of 10.1 percent.

Due to the growth in vehicle deliveries, revenue increased despite negative currency effects by 5.8 percent to EUR 26,690 million (H1 2013: EUR 25,234). As a result of the volume growth as well as higher research and development expenditure for groundbreaking technologies and new products, the Audi Group's cost of sales in the first six months of this year increased by 8.3 percent to EUR 21,870 million (H1 2013: EUR 20,190). At the same time, distribution costs rose to EUR 2,419 million (H1 2013:EUR 2,284). The company achieved an operating profit for the first half of 2014 of EUR 2,671 million (H1 2013: EUR 2,644).

The operating return on sales for the first six months was 10.0 percent (H1 2013: 10.5), and was thus at the upper end of the strategic target corridor of eight to ten percent. The Audi Group posted a profit before income taxes of EUR 3,102 million for the first half of this year (H1 2013:EUR 2,974), equivalent to a return on sales of 11.6 percent (H1 2013: 11.8). Profit after income taxes amounted to EUR 2,323 million (H1 2013: EUR 2,178).

EUR 22 billion product offensive

Axel Strotbek, CFO of AUDI AG, stated: 'We are currently making substantial advance expenditure that will pay off in the medium and long term.' This is why Audi approved the biggest investment program in the company's history at the end of last year. By 2018, a total of approximately EUR 22 billion will flow into new models, technologies and the continuously expanding worldwide production network. From January to June 2014, Audi invested EUR 1,552 million in its business operations (H1 2013: EUR 1,240), 25 percent more than in the same period in the previous year.

Despite increased advance expenditure, Audi completely financed all its investments out of its cash flow from operating activities, which increased in the first six months of the year to EUR 3,712 million (H1 2013: EUR 3,236).

Net liquidity of EUR 15,324 million as at June 30, 2014 was significantly higher than a year earlier (June 30, 2013: EUR 13,536).

In 2014, the Audi Group intends to grow in all regions of the world and to strengthen its leading position in both Europe and in China. Depending on the economic conditions, the brand with the Four Rings expects to post revenue growth in full-year 2014.

The systematic expansion of international production structures, increasing advance expenditure for new models and technologies - in particular to fulfil increasingly strict CO2 regulations around the globe - will at first have a negative impact on earnings this year. At the same time, the positive development of unit sales and revenue and the continuous improvements in productivity and processes initiated in the past will provide positive impetus for the development of operating profit. In total, the Ingolstadt-based company anticipates an operating return on sales within the strategic target corridor of eight to ten percent.

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Source: ENP Newswire

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