Annual Press Conference 2010: Audi Group: Strong key earnings data in a difficult market environment worldwide

- 2009 fiscal year: total of 949,729 Audi brand vehicles delivered, revenue €29.8 billion, profit before tax €1,928 million, return on sales before tax 6.5 percent

INGOLSTADT, Germany, Mar 9, 2010  -  The Audi Group ended the 2009 fiscal year with a clearly positive operating profit and only a slight downturn in vehicle deliveries, despite the major effects of the global financial and economic crisis: “The operating profit of €1.6 billion shows that we are among the best in the industry, even under difficult conditions. Our policy of consistently improving our productivity and investing massively in the typical Audi values of design, sportiness, quality and efficiency over the past few years is now paying dividends,” said Rupert Stadler, Chairman of the Board of Management of AUDI AG.

“We will increase our market share again in the current year with attractive, efficient models, drawing considerably closer to our goal of becoming the world market leader in the premium segment,” added Stadler.

Due to the difficult situation in automotive markets worldwide, deliveries of the Audi brand fell by 5.4 percent in the past year to 949,729 cars. As a result primarily of the drop in deliveries but also of exchange-rate burdens, revenue for the 2009 fiscal year reached €29,840 (34,196)* million – a decrease of 12.7 percent. The operating profit was down 42.1 percent at €1,604 (2,772) million.

Profit before tax was 39.3 percent below the record figure of the previous year at €1,928 (3,177) million. Profit after tax amounted to €1,347 (2,207) million, representing a fall of 38.9 percent on the prior-year figure.

Despite the difficult economic situation, the return on investment reached an impressive level of 11.5 (19.8) percent. The return on sales before tax was 6.5 (9.3) percent. “These figures mean the Audi Group is one of the most profitable players in the international automotive industry, which is particularly revealing in a crisis year such as 2009,” emphasized Axel Strotbek, Member of the Board of Management for Finance and Organization at AUDI AG.

“Our farsighted, circumspect approach enabled us to navigate the crisis successfully and finance all our investments from cash flow from operating activities. With a positive net cash flow of over €2.3 billion, we also generated a healthy surplus, which in fact significantly exceeds the previous year’s outstanding figure,” emphasized Strotbek. “We succeeded in carrying out all product investments as planned, and have thus laid sound foundations for the future growth of the Company,” he continued.

Net liquidity climbed by 14.8 percent to around €10.7 (9.3) billion. The key to success in such difficult times is the attractive model range, with a large number of new products launched over the past year: The new models unveiled included the R8 V10 sports car, the A4 allroad quattro, the A5 Cabriolet and the A5 Sportback.

Record results for deliveries in 38 markets
Audi delivered 949,729 (1,003,469) cars to customers worldwide in the past year. Sales were thus 5.4 percent down on the record level of the previous year. Deliveries achieved a particularly positive trend in the Asia/Pacific sales region, above all in China. Although deliveries in Western Europe (including Germany) fell, the brand with the four rings still bucked the trend by increasing its market share in the premium segment.

In Germany, 228,844 (258,111, down 11.3 percent) Audi cars were delivered to customers.

In Western Europe (including Germany) Audi performed better than the market as a whole with 588,309 (666,984, down 11.8 percent) deliveries to customers, taking the lead in the field of premium-segment competitors. In Great Britain, the largest market in the region after Germany, deliveries fell to 90,513 cars (101,522, down 10.8 percent). In neighboring France, deliveries slipped to 48,010 vehicles (51,200, down 6.2 percent). And in Italy, Audi sold 57,204 cars (62,053, down 7.8 percent).

The biggest single export market in 2009 was again China (including Hong Kong), with 158,941 cars delivered (119,598, up 32.9 percent). This total meant that the brand with the four rings easily defended its position as market leader in the premium segment in 2009.

The market performance in India, where Audi started up CKD assembly operations in September 2007, was also very positive. Vehicle deliveries there rose by 57.9 percent to 1,658 (1,050) cars. The Ingolstadt company currently builds the A4 and A6 models at the Aurangabad plant, with assembly of the highly successful Q5 starting there in June. Audi is systematically expanding the sales and dealer network in the region and will be increasing the number of dealers from the current 12 to 16 by the end of the year.

In the United States, the number of vehicles delivered to customers fell to 82,716 (87,760, down 5.7 percent) cars in a sharply contracting market. By contrast, the brand’s share of the premium market (import high group) grew to 8.3 (7.1) percent.

The subsidiary Lamborghini was hit hard by the crisis. The number of cars delivered in the past fiscal year was down 37.7 percent on the previous year to 1,515 (2,430).

Advancing with foresight: production adjusted in line with demand
The Audi Group responded to the crisis with foresight and scaled back production output in the past year. 932,260 cars (including Lamborghini) left the production halls in 2009, 9.4 percent fewer than in the previous year (1,029,041).

Between 2010 and 2012, the Audi Group is planning to invest around €5.5 billion, mainly in new products and efficiency technologies. The model initiative will continue unabated and without any cutbacks over the next few years. “The particular focus of our attention is on the efficiency of our models, alongside the aspects of sportiness, quality and design,” explained Rupert Stadler. The brand with the four rings already has a range of 39 model and engine versions with CO2 emissions of less than 140 g/km (225.31 g/mile). There are even 13 models and engine versions achieving emissions below 120 g/km (193.12 g/mile). A typical example is the Audi A4 2.0 TDI e with consumption of 4.6 liters of diesel per 100 kilometers (51.13 US mpg) and emissions of just 119 grams of CO2 per kilometer (191.51 g/mile).

Diesel technology will also remain a vital cornerstone of Audi's efficiency strategy, alongside the development of electric and hybrid vehicles. “Our new A8 3.0 TDI quattro is an impressive example of the potential of the diesel engine, with consumption of only 6.6 liters per 100 kilometers (35.64 US mpg),” said Stadler. The front-wheel-drive version that is to follow will be better still, needing just six liters of diesel per 100 kilometers (39.2 US mpg). That equates to CO2 emissions of 159 grams per kilometer (255.89 g/mile). The brand’s new flagship model thus leads the field of competitors and even performs better than hybrid models in the luxury category.

Highest employee profit share in the industry
AUDI AG is again paying a profit share averaging €2,300 per employee this year, despite the economic crisis. This is the highest employee profit share in the automotive industry. “This year we will be making a special payment of €1,200 per employee on top of the profit share. This one-off bonus is our way of acknowledging the exceptional performance of our employees in a crisis-ridden 2009,” commented Dr. Werner Widuckel, Member of the Board of Management for Human Resources at AUDI AG.

The number of employees within the Audi Group increased to an average of 58,011 (57,822) over the year. Of this total, 44,344 (44,098) were employed at AUDI AG, of which 31,409 (31,358) worked at Ingolstadt and 12,935 (12,740) at Neckarsulm.

Outlook for 2010: deliveries of over one million vehicles to customers; revenue and operating profit up on previous year
Audi, too, felt the fallout from the financial and economic crisis in the past year but steered a relatively steady course through the crisis, as the figures for the past fiscal year show. “The worst of the crisis appears to be behind us, but we are not yet able to give the all-clear for 2010,” explained Stadler. “We need to remain vigilant so that we can respond swiftly and flexibly to any difficulties,” he emphasized.

The brand with the four rings made a positive start to 2010: In January and February of the current year, Audi sold around 153,700 cars worldwide – 28.7 percent more than in the corresponding prior-year period. Over the same two months, the brand increased its vehicle deliveries in Western Europe (excluding Germany) by 17.7 percent to 58,722 cars, a total which made it the market leader in the premium segment. In Great Britain deliveries were up 32.6 percent to 11,989, in Spain up 20.5 percent to 7,032 and in Italy up 13.2 percent to 10,105 cars.
The Audi brand likewise experienced a vigorous upswing in the United States. Deliveries of vehicles there soared year on year by 35.7 percent to 12,726.

“We are well on the way to delivering over one million Audi cars to customers once more in the current year, taking us back up to where we were in the record year of 2008,” stressed Stadler. “We aim to start growing again through the new models and have set ourselves the target for 2010 of bettering the revenue and operating profit of 2009,” he added.

Attractive, efficient new products are the key to success. “We currently have the most extensive model range of any premium manufacturer – from the small A1 to the range-topping A8,” said Stadler. Audi aims to use the Audi A1 to tap into a new target group that operates in an urban environment. “The response to the first premium car in the small car segment at the Geneva Motor Show was overwhelming. We therefore believe we have every prospect of selling between 80,000 and 100,000 of this new car line in its first full year in production,” said Stadler. Audi will also move into a highly promising new niche when it unveils the A7 Sportback in the fall.

* Prior-year figures are in parentheses