AVTOVAZ Group’s revenue reached 176.5 B-RUB in 2015, that is 8% less than in 2014 despite the Russian PC market’s decrease by 36%.
The LADA brand has increased its market share from 16.4% in 2014 to 17.9% in 2015. LADA domestic retail sales amounted to 269K units in 2015. AVTOVAZ’s production volume of LADA, Renault, Nissan and Datsun brands including CKD kits in 2015 amounted to 468.5K units, 19% less than in 2014.
The strategic investment of AVTOVAZ Group in 2015 resulted in the successful launch of 2 new generation models – Vesta and XRAY. Only 2 months after the official start of sales, the LADA Vesta has already become one of top 10 best-selling passenger cars in Russia.
AVTOVAZ Group’s operating loss before impairment and restructuring costs amounted to 24.7 B-RUR vs 10 B-RUR in 2014. The total operating loss of the Group made 66.8 B-RUR with a negative free cash-flow of 27.9 B-RUR. The loss was mainly driven by the ongoing fall of the automobile market and the increase of material costs.
Impairment provisions and restructuring costs impacted the financial result with a 42.1 B-RUR charge. Impairment is required under IFRS and does not affect cash flows. The main reason for such impairment is the forecast of a further decline of the Russian automotive market 1.3M units in 2016, whereas AVTOVAZ’s total production capacity of its 2 plants in Togliatti and Izhevsk is 1.1M vehicles per year.
AVTOVAZ Group intensifies anti-crisis actions aimed to improve its financial results in 2016:
- Optimization prices based on market situation and competition
- Development of the product portfolio
- Increase of fleet sales
- Renewal of the spare parts and the aftersales policy
- Intensification of export
- Optimization of the company footprint
- Intensification of the supply base restructuring through supplier consolidation and insourcing (incl. localization)
- Introduction of a 4-day working week from February, 15th for the whole work force including the management
- Restructuring of subsidiaries.
- Optimization of administration expenses
- Minimization of indirect expenses
- Optimization of working capital
