Volkswagen AG: Final Results; Volkswagen's Board of Management Finalizes Consolidated Financial Statements
WOLFSBURG, Germany--Feb. 1, 20060, 2006--Volkswagen AG: (FWB:VOW) (LSE:VKW) (SWX:VOW)-- Volkswagen Group 2005 earnings improvement attributable primarily to ForMotion program, but earnings level still unsatisfactory
-- Volkswagen Passenger Car results only just above breakeven
-- Audi reports significant increase in earnings
-- Continued strong earnings at Financial Services Division
-- Board of Management proposes slight increase in dividend
-- Deliveries to customers increased by 3.2% to 5.24 million vehicles
-- Operating profit before special items at around EUR 3.1 billion (up 54.3% year-on-year), Automotive Division operating profit at around EUR 1.9 billion (up EUR 1.2 billion year-on-year)
-- At a positive EUR 2.4 billion, net cash flow in the Automotive Division continues to grow (up 30.3% year-on-year)
-- Automotive Division net liquidity improves to a positive EUR 0.7 billion (up EUR 2.6 billion year-on-year)
-- ForMotion program contributes EUR 3.5 billion to earnings improvement
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January-December 2005 2004*) +/- (%)
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Volkswagen Group (IFRSs):
Deliveries to customers '000 units 5,243 5,079 + 3.2
Production '000 units 5,219 5,093 + 2.5
Employees Dec. 31 344,902 342,502 + 0.7
Sales revenue EUR million 95,268 88,963 + 7.1
Operating profit
before special items EUR million 3,143 2,037 + 54.3
Special items EUR million 351 395 - 11.1
Operating profit
after special items EUR million 2,792 1,642 + 70.0
Profit before tax EUR million 1,722 1,088 + 58.2
Income tax expense EUR million 602 391 + 54.0
Profit after tax EUR million 1,120 697 + 60.7
Minority interests EUR million 0 4 x
Profit attributable to
shareholders of
Volkswagen AG EUR million 1,120 693 + 61.5
Earnings per share (basic)
- Ordinary shares EUR 2.90 1.79 + 62.0
- Preferred shares EUR 2.96 1.85 + 60.0
Automotive Division (including allocation of consolidation adjustments
between Automotive and Financial Services divisions):
Cash flows from
investing activities EUR million 5,721 7,046 - 18.8
Net cash flow EUR million 2,391 1,835 + 30.3
Net liquidity EUR million 706 - 1,912 x
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Volkswagen AG (German Commercial Code):
Profit after tax EUR million 741 505 + 46.6
Proposed dividend:
Dividend-per ordinary share EUR 1.15 1.05
-per preferred share EUR 1.21 1.11
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*) Presentation and measurement changes due to the amendments to IAS 19 and 32 resulted in the following restatements of prior-period amounts:
1. Actuarial gains and losses from pension liabilities are now recognized directly in equity; reversal of their recognition in profit and loss in the previous year increased 2004 earnings by EUR 22 million.
2. Minority interests in partnerships have been measured at fair value and reclassified as liabilities. This remeasurement reduced the 2004 financial result by EUR 33 million.
The Board of Management intends to exercise the authorization agreed by the Annual General Meeting of Volkswagen AG and to retire all of the 41.7 million treasury shares held by Volkswagen AG without a further resolution by the Annual General Meeting. At the next meeting of the Supervisory Board on February 24, 2006, the Board of Management will seek the consent of the Supervisory Board required to retire these shares.
In addition, the Volkswagen Group intends to repurchase bonds issued by the Automotive Division up to EUR 2 billion. Volkswagen has had ample cash reserves for some time, and its liquidity has recently been further reinforced by the increasingly positive net cash flow at the Automotive Division. In addition to the high cash reserves, the Group has confirmed and unconfirmed credit lines running into the tens of billions of euros. This is the background to the plans to optimize the Group's liquidity position and reduce its cost.
In order to improve the fully unsatisfactory level of profitability of the Volkswagen Passenger Car brand, the Board of Management of Volkswagen AG has prepared a thorough restructuring program. The key points of this program are:
-- productivity deficits, in particular in the car assembly plants, to be eliminated
-- a reorganisation of the component manufacturing business
-- more competitive labour costs
-- full capacity utilisation of the plants to be achieved, including by adjusting capacity
In the next three years up to 20,000 direct and indirect employees within the Volkswagen Passenger Car brand could be effected by this restructuring program.
Sales revenue of the Volkswagen Group will improve slightly in 2006 versus 2005. Above all the measures taken within the ForMotion plus program to reduce material costs and optimize the manufacturing process will contribute to an improvement in the operating result before special items in 2006 over 2005.
The Annual Press Conference on March 7, 2006 and the International Investor Conference on March 8, 2006 will be held in Wolfsburg.
ISIN: DE0007664005
WKN: 766400
indexes: DAX, Euro Stoxx 50
VOLKSWAGEN AG
Brieffach 1970
38436 Wolfsburg Deutschland
ISIN: DE0007664005
WKN: 766400
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Munchen, Hamburg, Dusseldorf, Luxembourg, SWX, Stuttgart;
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