Audi steered a steady course through a challenging 2019 financial year. The car manufacturer systematically reduced its WLTP inventories and achieved slightly higher deliveries for the Audi brand than in the previous year in a highly competitive environment. Revenue of €55.7 billion reflects the high demand for SUVs and top-end models. Operating profit and operating return on sales reached €4.5 billion and 8.1 percent. The Audi Transformation Plan (ATP) contributed €2.5 billion in the 2019 financial year. Significantly strengthened spending and investment discipline are reflected by the improved return on investment (12.7 percent). Audi is pushing ahead with its electrification initiative with numerous electric models this year. The company is intensifying the synergies with the Volkswagen Group now also in software development. Against the backdrop of the spread of the coronavirus and the unclear effects on the economy, the manufacturer sees major challenges in the year 2020 and is focusing on the health of employees worldwide and on the liquidity and stability of the business.
In view of the spread of the coronavirus and in order to minimize the risk of infection for employees, contractors and guests, the Audi Group is not holding an annual press conference this year. “We are in an exceptional situation for which there are no tried-and-tested solutions or simple recipes. We are focusing on protecting our employees, contractors and guests and making the right business decisions in this volatile environment,” says Audi CEO Bram Schot. The company is shutting down its plants in Ingolstadt, Neckarsulm, Belgium, Mexico and Hungary in a controlled manner by the end of this week.
With regard to the 2019 financial year, Audi CEO Bram Schot says, “We can be satisfied; Audi is competitive. In a very challenging environment, we focused on our strengths and stabilized our business. Our operating return on sales was above 7 percent in each quarter of 2019 and was within our forecast corridor for the full year.” The company successively reduced its WLTP inventories from the previous year and successfully launched the next stage of its product initiative in the markets.
Deliveries by the core Audi brand gained considerable momentum, especially in the fourth quarter. In a declining overall market, the Four Rings ended the year with an increase in deliveries of 1.8 percent to 1,845,573 vehicles (2018: 1,812,485). Top-end models and SUVs, such as the all-electric Audi e-tron and the new Audi Q8, were very well received by customers.
Against this backdrop, the Audi Group’s revenue adjusted for the effects of deconsolidating the multi-brand importers in 2018 was above the prior-year level at €55,680 million (2018: €53,617 million*). Thanks to its strong product mix, the Audi core brand increased its revenue to €39,467 million (2018: €37,259 million).
Operating profit amounted to €4,509 million (2018: €3,529 million), whereby the previous year’s figure was reduced by €1,176 million due to special items related to the diesel issue. Operating return on sales was 8.1 percent (2018: 6.6 percent*). This was driven by the improved Audi product mix, the increased operating profit of Lamborghini and successfully implemented ATP measures totaling €2.5 billion. The program for improved earnings that was implemented in 2018 is expected to free up a total of €15 billion for future investments by 2022. Since the start of the program, the ATP has already generated an accumulated €4.4 billion and measures have already been identified for 80 percent of the overall target. The ATP is thus making a decisive contribution to improving the quality of earnings.
The financial result amounted to €713 million (2018: €831 million). The prior-year figure was boosted by a one-off effect from the sale of an equity interest in the context of our business in China. At €5,223 million, profit before tax increased by 19.8 percent (2018: €4,361 million).
In recognition of their commitment in the year 2019, Audi employees will participate in the company’s earnings. For a skilled worker at the German plants, the Audi profit-sharing bonus for 2019 amounts to €3,880 (2018: €3,630). Profit-sharing arrangements also exist at Audi’s subsidiaries.
With a net cash flow of €3,160 million (2018: €2,080 million*), which is actually slightly above the forecast corridor stated in the 2018 Annual Report, the Audi Group once again confirms its high self-financing capability.
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