DGAP-News: AUDI AG / Key word(s): Quarterly / Interim Statement
Audi Group: Third Quarter Report 2016
28.10.2016 / 10:33
The issuer is solely responsible for the content of this announcement.
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ECONOMIC ENVIRONMENT
The first nine months of 2016 brought moderate growth in the global
economy. However, economic activity in most industrial nations and also in
a large number of emerging economies was slightly lower than in the
previous year. In Western Europe the economy continued to recover. Economic
development in Central Europe also made positive progress. This contrasted
with the economic situation in Eastern Europe, with the region suffering in
particular from a further decline in economic output in Russia. The
referendum held in the United Kingdom in June 2016, in which a majority
voted for a withdrawal from the European Union (EU), led to political and
economic uncertainty in Europe. This also resulted temporarily in increased
volatility on financial markets worldwide. The U.S. economy continued to
grow over the first nine months, thanks to a robust labor market and a
continuing positive mood among consumers. However, the pace of growth
weakened as a result of the decline in investing activities. Brazil's
economy remained in recession, overshadowed by political uncertainty. In
China, the economy slowed down as expected in the first three quarters of
2016, above all as a result of economic structural change. All the same,
the Chinese economy still achieved a high rate of expansion in worldwide
terms.
Global demand for cars rose further up to the end of September.
Registrations of new cars increased in Western Europe, Central Europe,
North America and the Asia-Pacific region. In contrast, passenger car sales
in Eastern Europe and South America declined. The German passenger car
market achieved a 6.1 percent rise in new cars registered. Higher demand
from both private and business customers had a positive impact. Western
European export markets also performed well. Sales of passenger cars were
up 7.5 percent, in particular due to the healthy economic environment
overall. In contrast, registrations of new passenger cars in Russia dropped
-15.2 percent as a result of the continuing difficult economic and
political situation. In the United States, sales of passenger cars and
light commercial vehicles remained flat at the previous year's high level.
The robust U.S. labor market, low fuel prices and attractive financing
terms had a positive impact. However, demand weakened as the year
progressed, with growing signs of market saturation. In Brazil, the
continuing recession led to a -22.5 percent decline in registrations of new
passenger cars and light commercial vehicles. China was again the main
driver of worldwide demand for cars, delivering growth of 15.7 percent. In
particular the tax breaks for vehicles with a displacement of up to 1.6
liters together with high demand for SUV models were behind the positive
development.
The established motorcycle markets in the displacement segment above 500 cc
enjoyed a 1.2 percent rise in demand from January through September. The
rate of growth has slowed over the year to date. In Western Europe, almost
all motor-cycle markets benefited from the improved economic situation. On
the other hand, registrations of new motorcycles in the United States and
Japan were down on the prior-year level.
EXCEPTIONAL EVENTS
Fuel consumption and CO2 emission figures as well as the efficiency classes
can be found at the end of this report.
DIESEL ISSUE
In June 2016, Volkswagen publicly announced that Volkswagen AG, Volkswagen
Group of America, Inc. and certain affiliates including AUDI AG had reached
settlement agreements in the USA related to the four-cylinder TDI engine
issue with the U.S. Department of Justice on behalf of the U.S.
Environmental Protection Agency (EPA), the California Air Resources Board
(CARB) and the California Attorney General; private plaintiffs represented
by a Plaintiffs' Steering Committee (PSC) in the Multi-District Litigation
pending in California and the U.S. Federal Trade Commission (FTC). The
settlement agreements will resolve certain civil claims made in relation to
affected diesel vehicles with 2.0 l TDI engines from the Volkswagen
Passenger Cars and Audi brands in the USA. On October 25, 2016, the court
granted final approval of the settlement agreements. This final approval
order remains subject to appeal. More information about the settlement and
the customer program can be found under www.vwcourtsettlement.com.
Volkswagen also reached separate settlement agreements with the attorneys
general of 44 US states, the District of Columbia and Puerto Rico, to
resolve their existing or potential consumer protection and unfair trade
practices claims - in connection with both 2.0 l TDI and 3.0 l TDI vehicles
in the USA.
The settlements do not resolve all claims.
In Canada, Environment and Climate Change Canada, a department of the
Government of Canada responsible for coordinating environmental policies,
is monitoring the EPA and CARB proceedings in the USA as part of its
pending criminal investigation. Investigations by other Canadian regulators
are ongoing. 33 class actions seeking compensation for consumers were filed
in Canada against Volkswagen Group companies. The majority of these actions
purport to represent a national class of 2.0 l and 3.0 l diesel customers.
On the basis of existing contractual agreements with Volkswagen AG,
Wolfsburg, there are presently no direct effects on profit arising for the
Audi Group related to the four-cylinder TDI engine issue.
AUDI AG has concluded an agreement with Volkswagen AG on the V6 3.0 TDI
engine issue in the event that the U.S. authorities, U.S. courts and
potential out-of-court settlements do not differentiate between the
four-cylinder TDI engine issue for which Volkswagen AG is accountable and
the V6 3.0 TDI engine issue of AUDI AG, and that joint and several
liability thus arises.
In that eventuality, costs for legal risks will be passed on to AUDI AG
according to a causation-based cost allocation.
In connection with the V6 3.0 TDI engine issue we adjusted the risk
provisioning in the third quarter of 2016 by EUR 620 million in the form of
provisions for technical measures, legal risks and sales measures. For the
period from January through September 2016 the correspondent special items
aggregate to EUR -752 million. Special items that can only be planned and
managed to a limited extent are being incorporated separately into our
business planning process during the year. It cannot be ruled out that
risks may be assessed differently in the future.
The attorneys general of thirteen US states (Alabama, Maryland,
Massachusetts, Missouri, New Hampshire, New Jersey, New Mexico, New York,
Ohio, Pennsylvania, Tennessee, Texas and Vermont) and some municipalities
have filed suits in state and federal courts - and the state of Washington
has asserted a penalty claim through administrative proceedings - against
Volkswagen AG, Volkswagen Group of America, Inc. and certain affiliates
partly including AUDI AG seeking civil penalties and injunctive relief for
alleged violations of environmental laws. AUDI AG is named in each of the
above-referenced proceedings except for Texas. Alabama, Maryland,
Massachusetts, Missouri, New Hampshire, New York, Pennsylvania, Tennessee,
Texas and Washington participated in the state settlements described above
with respect to consumer protection and unfair trade practices claims, but
those settlements did not include claims for environmental penalties. In
particular, nine states (Delaware, Maine, Minnesota, Missouri, Montana,
Ohio, Oregon, Wisconsin and Wyoming) have entered into agreements to toll
the statute of limitations for their potential environmental claims through
the end of 2016. Of those states, Wyoming has expressed its intention to
file suit asserting environmental claims by November 1, 2016. Another state
(Connecticut) has expressed its intention to participate in environmental
settlement discussions without filing suit.
Detailed information on the diesel issue and on the declaration of the
incumbent members of the Board of Management issued in this connection is
provided in the Combined Management Report of the 2015 Annual Report in the
section "Exceptional Events" on pages 147 f. There are no indications that
the information presented there is no longer applicable, even on the basis
of new findings from the still ongoing investigation by the law firm Jones
Day that have come to light since the publication date.
OPENING OF THE MEXICO PLANT
At the end of September we opened our first own automotive plant on the
North American continent in San José Chiapa (Mexico). In all, the Audi
Group has invested over one billion euros in the production site, which is
building the new-generation Audi Q5 for the world market. The annual
production capacity is 150,000 premium SUVs. A total of 4,200 local jobs
will also be created there.
PRODUCTION 1) 2)
1) This figure includes Audi models made by the associated company
FAW-Volkswagen Automotive Company, Ltd., Changchun (China).
2) Figures for the prior-year period have been marginally adjusted, along
with the counting method for the Aurangabad (India) site.
Fuel consumption and CO2 emission figures as well as the efficiency classes
can be found at the end of this report.
From January through September 2016, the Audi Group produced 1,445,824
(1,362,706) cars worldwide. This figure includes 411,814 (350,329) Audi
vehicles manufactured by the associated company FAW-Volkswagen Automotive
Company, Ltd., Changchun (China). In the first three quarters, the Audi
Group built a total of 1,443,097 (1,359,795) cars of the Audi brand and
2,727 (2,911) supercars of the Lamborghini brand. 50,655 (46,147)
motorcycles of the Ducati brand were produced in the same period.
In the first nine months of 2016, a total of 460,388 (430,420) cars came
off the assembly line at our Group headquarters in Ingolstadt and 202,853
(208,874) at our site in Neckarsulm.
In the same period, the Audi Group manufactured 93,011 (122,219) cars of
the TT car line and A3 family at AUDI HUNGARIA MOTOR Kft. in Győr
(Hungary). The fall in output is attributable, among other factors, to
conversions being carried out to pre-pare for production of the newly
designed A3 models.
In addition we produced 84,002 (87,035) vehicles of the Audi A1 car line at
AUDI BRUSSELS S.A./N.V., Brussels (Belgium).
AUDI DO BRASIL INDUSTRIA E COMERCIO DE VEICULOS LTDA., São Paulo,
manufactured a total of 5,817 (122) of the Audi A3 Sedan and Audi Q3 at the
Brazilian plant in São José dos Pinhais, near Curitiba.
At our newest production site in San José Chiapa (Mexico), we have built
843 (22) of the second-generation Audi Q5 in the year to date at AUDI
MÉXICO S.A. de C.V.
From January through September 2016, 103,851 (100,941) of the Audi Q3 and
75,547 (59,833) of the Audi Q7 left the production line at the two
Volkswagen Group sites in Martorell (Spain) and Bratislava (Slovakia).
At the same time, 4,971 vehicles of the Audi A3, A4, A6, Q3, Q5 and Q7
lines were built in Aurangabad (India) - another Volkswagen Group site. In
the prior-year period, parts and components had been delivered from other
sites for the production of a total of 8,089 cars.
In China, FAW-Volkswagen Automotive Company, Ltd. produced 352,065
(311,502) cars of the Audi A4 L, A6 L, Q3 and Q5 models at its company
headquarters in Changchun as well as 59,749 (38,827) vehicles of the A3
family in the southern Chinese city of Foshan.
The Audi Group produced a total of 460,613 (419,103) cars worldwide in the
third quarter of 2016. This figure includes 131,647 (104,165) Audi vehicles
manufactured by the associated company FAW-Volkswagen Automotive Company,
Ltd., Changchun (China). The core brand Audi accounted for 459,834
(418,355) units. Over the same period the Lamborghini brand built 779 (748)
supercars. 7,541 (9,192) motorcycles of the Ducati brand were manufactured
from July through September 2016.
Car production by model 1) 2)
1-9/2016 1-9/2015
Audi A1 19,621 25,260
Audi A1 Sportback 64,381 61,775
Audi Q2 2,503 -
Audi A3 12,290 15,124
Audi A3 Sportback 158,116 142,348
Audi A3 Sedan 97,586 101,592
Audi A3 Cabriolet 12,058 14,182
Audi Q3 174,450 149,426
Audi TT Coupé 17,111 22,273
Audi TT Roadster 4,445 6,236
Audi A4 Sedan 171,655 152,388
Audi A4 Avant 100,456 69,156
Audi A4 allroad quattro 11,142 13,088
Audi A5 Sportback 26,195 34,312
Audi A5 Coupé 10,802 15,305
Audi A5 Cabriolet 10,662 11,341
Audi Q5 218,309 204,025
Audi A6 Sedan 157,996 160,883
Audi A6 Avant 47,016 45,435
Audi A6 allroad quattro 8,184 9,391
Audi A7 Sportback 21,694 22,640
Audi Q7 76,266 59,833
Audi A8 17,627 22,484
Audi R8 Coupé 2,254 950
Audi R8 Spyder 278 348
Audi brand 1,443,097 1,359,795
Lamborghini Huracán 1,852 2,096
Lamborghini Aventador 875 815
Lamborghini brand 2,727 2,911
Automotive segment 1,445,824 1,362,706
1) This figure includes 411,814 (350,329) Audi models manufactured by the
associated company FAW-Volkswagen Automotive Company, Ltd., Changchun
(China).
2) The prior-year figures have been marginally adjusted.
Car engine production
1-9/2016 1-9/2015
AUDI HUNGARIA MOTOR Kft. 1,477,286 1,554,559
Automobili Lamborghini S.p.A. 897 823
Car engine production 1,478,183 1,555,382
The Audi Group produced 1,478,183 (1,555,382) engines in the Automotive
segment from January through September 2016.
Motorcycle production
1-9/2016 1-9/2015
Scrambler 16,237 16,990
Naked/Sport Cruiser
(Diavel, Monster, Streetfighter) 16,029 12,108
Dual/Hyper
(Hypermotard, Multistrada) 12,592 9,543
Sport (Superbike) 5,797 7,506
Ducati brand 50,655 46,147
Motorcycles segment 50,655 46,147
Worldwide, the Ducati brand produced 50,655 (46,147) motorcycles in the
first nine months of 2016. Of this total, 42,017 (36,554) bikes were
produced at the company headquarters in Bologna (Italy). Over the same
period, Ducati manufactured 7,970 (8,910) motorcycles at the Amphur
Pluakdaeng plant (Thailand). 668 (683) bikes were produced in Manaus
(Brazil) on a contract manufacturing basis.
DELIVERIES 1) 2)
1) This figure includes Audi models built locally by FAW-Volkswagen
Automotive Company, Ltd., Changchun (China).
2) The prior-year figures have been marginally adjusted.
Fuel consumption and CO2 emission figures as well as the efficiency classes
can be found at the end of this report.
In the first nine months of 2016, the Audi Group delivered 1,578,579
(1,517,364) cars to customers worldwide - an increase of 4.0 percent on the
previous year, despite the challenging environment that we encountered in
individual markets. This figure includes 402,960 (368,297) Audi models
built locally by FAW-Volkswagen Automotive Company, Ltd., Changchun
(China). The core brand Audi increased its volume of deliveries by 4.5
percent from January through September 2016 to 1,408,783 (1,347,883) cars.
Over the same period the Lamborghini brand raised the number of vehicles it
delivered to customers to 2,867 (2,696) supercars. The deliveries figure
furthermore included a total of 166,929 (166,785) cars of other Volkswagen
Group brands. The Ducati brand delivered a total of 46,646 (46,130)
motorcycles to customers in the first three quarters of 2016.
In our home market Germany, we increased deliveries of the Audi brand to
customers by 10.8 percent in the first nine months of 2016 to 230,890
(208,367) vehicles. We registered a 5.5 percent rise to 385,273 (365,020)
in car deliveries of the brand with the Four Rings in other Western
European countries. In the United Kingdom - our largest European export
market - we handed 139,039 (133,570) cars over to customers. In France, we
delivered 47,296 (44,403) cars of the Audi brand to customers. We
registered an especially positive development in demand in Italy and Spain,
with deliveries up 13.9 percent and 14.2 percent respectively.
In the Central and Eastern Europe region, we handed over a total of 40,925
(39,264) Audi vehicles to customers from January through September 2016.
The pleasing growth in deliveries in most Central European countries
compensated for the persistently weak volume development in Russia.
Over the same period, 186,837 (177,817) customers in North America chose a
model of the brand with the Four Rings - a 5.1 percent rise. In the United
States, we delivered 152,179 (147,403) Audi vehicles to customers.
Deliveries in Canada, too, made very good progress and increased by 15.9
percent.
In the first nine months of 2016, we handed over a total of 17,480 (20,351)
Audi vehicles to their new owners in South America. The year-on-year
decline is essentially due to weaker demand for cars in Brazil.
In the Asia-Pacific region, we delivered a total of 509,870 (495,068)
models of the Audi brand from January through September 2016. In our
largest market China, we increased the volume of deliveries to 440,233
(414,410) cars.
The Audi Group delivered a total of 498,962 (492,793) cars to customers
worldwide in the third quarter of 2016. This figure includes 137,250
(124,553) Audi models built locally by FAW-Volkswagen Automotive Company,
Ltd., Changchun (China). The core brand Audi delivered a total of 455,613
(445,611) vehicles. In the same period, customers took receipt of 42,495
(46,368) cars of other Volkswagen Group brands. The Lamborghini brand
delivered 854 (814) supercars between July and September 2016. In addition,
the Ducati brand handed 11,849 (13,459) motorcycles over to customers
worldwide in the third quarter of 2016.
Car deliveries to customers by model 1) 2)
1-9/2016 1-9/2015
Audi A1 21,455 25,427
Audi A1 Sportback 66,442 58,932
Audi A3 13,329 15,066
Audi A3 Sportback 149,726 145,014
Audi A3 Sedan 105,347 104,542
Audi A3 Cabriolet 11,986 16,537
Audi Q3 172,227 149,444
Audi TT Coupé 19,371 18,596
Audi TT Roadster 5,486 4,180
Audi A4 Sedan 169,236 154,119
Audi A4 Avant 85,560 69,426
Audi A4 allroad quattro 9,797 13,166
Audi A5 Sportback 29,972 34,155
Audi A5 Coupé 11,913 16,040
Audi A5 Cabriolet 12,068 11,315
Audi Q5 203,904 195,215
Audi A6 Sedan 153,452 166,156
Audi A6 Avant 44,968 43,187
Audi A6 allroad quattro 8,211 8,617
Audi A7 Sportback 19,140 21,515
Audi Q7 74,295 52,177
Audi A8 17,701 23,326
Audi R8 Coupé 2,013 1,166
Audi R8 Spyder 217 565
Internal vehicles before market introduction 967 -
Audi brand 1,408,783 1,347,883
Lamborghini Huracán 1,953 1,909
Lamborghini Aventador 914 787
Lamborghini brand 2,867 2,696
Other Volkswagen Group brands 166,929 166,785
Automotive segment 1,578,579 1,517,364
1) This figure includes 402,960 (368,297) Audi models built locally by
FAW-Volkswagen Automotive Company, Ltd., Changchun (China).
2) The prior-year figures have been marginally adjusted.
Motorcycle deliveries to customers 1)
1-9/2016 1-9/2015
Scrambler 13,197 13,561
Naked/Sport Cruiser
(Diavel, Monster, Streetfighter) 15,421 15,149
Dual/Hyper
(Hypermotard, Multistrada) 11,531 9,946
Sport (Superbike) 6,497 7,474
Ducati brand 46,646 46,130
Motorcycles segment 46,646 46,130
1) The prior-year figures have been marginally adjusted.
Worldwide, the Ducati brand delivered 46,646 (46,130) motorcycles to
customers in the first nine months of 2016. The motorcycle manufacturer
recorded a positive development in deliveries especially in its home market
Italy. This was in contrast to a largely market-led decline in the volume
of deliveries in the United States.
PRODUCT PORTFOLIO
Fuel consumption and CO2 emission figures as well as the efficiency classes
can be found at the end of this report.
In the shape of the new Audi Q2 we have added a compact SUV to our product
portfolio and thus branched out into a new market segment. This latest
addition to our Q family stands out with its progressive design and high
functionality. The high-level Singleframe grille, the large air inlets on
the front end and the accentuated wheel arches give our Q2 a powerful
appearance. Furthermore, the new SUV comes optionally with an array of
infotainment and assistance systems. The very low center of gravity for an
SUV plus the standard-fit progressive steering and the optional adaptive
dampers make for good driving dynamics. The new Audi Q2 has been available
to order since July 2016 and deliveries will commence towards the end of
2016, initially to customers in Europe.
Our new Audi A4 allroad quattro has been available at dealers in Europe
since summer 2016. With quattro drive as standard, increased ground
clearance, a wide array of driver assistance and safety systems plus many
optional infotainment features, the midsize model combines various off-road
qualities with impressive ride comfort. In addition, the new and efficient
quattro drive with ultra technology made its debut in the gasoline engine
version.
Following the unveiling of the Audi S4 Sedan, we also presented the Audi S4
Avant at the 2016 Geneva Motor Show.
The new Audi RS Q3 performance - the top model of our Q3 model line - has
been on sale in a large number of markets since April 2016. The
"performance" part of its name denotes both increased power and the
exclusive equipment items available for the exterior and interior.
A gradual market roll-out for the models of our revised Audi A3 family has
been taking place since July 2016. Our successful model can be equipped
optionally with a wide array of driver assistance systems. In addition, the
engine range has been extensively revised and the headlights as well as the
rear lights have been redesigned. For example, our new Audi A3 models can
now for the first time be supplied with Matrix LED headlights.
The Audi Q7 e-tron quattro - the world's first plug-in hybrid model with
six-cylinder TDI engine and quattro drive - has been on sale in most
European markets since mid-2016. The new model combines advantages of
electric drive with those of the internal combustion engine. The Audi Q7
e-tron quattro permits zero-emission electric driving for up to 56
kilometers, while enabling the customer to continue to benefit from a high
operating range.
Multiple new features make their debut in the Audi SQ7, the first S model
in our Q7 car line. Its newly developed engine uses an electrically powered
compressor, which is the key to dynamic starting performance. One of the
options for the SQ7 is electromechanical active roll stabilization. It
reduces the vehicle's lateral inclination, thus permitting greater lateral
acceleration and therefore faster cornering. The SQ7 went on sale in Europe
in spring 2016, with the first cars now being distributed to dealers.
The first customers have been taking receipt of our new Audi R8 Spyder
since the end of October 2016. The sports car combines impressive
performance with the attraction of open-top driving.
The new Audi TT RS Coupé and new TT RS Roadster offer impressive road
performance and a special engine sound experience. These two models are the
first to be equipped optionally with the efficient, visually impressive
rear lights in Matrix OLED technology and feature the Audi virtual cockpit
with a 12.3 inch screen as standard. The new Audi TT RS Coupé is appearing
on the European market from November 2016 initially as a limited special
edition.
Following on from the presentation of the Audi A5 Coupé and S5 Coupé in
June 2016, the Audi A5 Sportback and S5 Sportback made their international
debuts at the end of September 2016. The new models from the second
generation of our A5 car line offer a sharper appearance as well as a
variety of infotainment and driver assistance systems. The range of
equipment options includes the Audi virtual cockpit and Audi connect, for
example. In addition, customers who choose MMI navigation plus gain access
to the wide-ranging Audi connect services over the LTE network for three
years free of charge. The A5 models also feature a completely new chassis
and a high-performance powertrain. Deliveries of the Audi A5 Coupé in
Europe commence from November 2016, with the A5 Sportback due to follow at
the start of 2017.
At the end of September 2016, we presented the second generation of our
Audi Q5 to the public. Alongside a comprehensive range of infotainment and
assistance systems, three of the five new and efficient engine versions
come with quattro drive with ultra technology as standard from their market
introduction in Europe. Their efficiency is also enhanced by the improved
aerodynamics and a reduced unladen weight of up to 90 kilograms compared
with the predecessor model depending on engine version. The new Audi Q5
will be shipped to the first dealers at the start of 2017.
The Audi RS 3 Sedan, the most dynamic model in our revised A3 car line and
the first compact Audi sedan with the RS label, also made its debut in
September 2016. With a powerful engine, quattro permanent all-wheel drive
and numerous optional assistance systems such as traffic jam assist and
emergency assist, the new model combines innovation and performance with
the design of a sedan. The RS 3 Sedan will go on sale from summer 2017
initially in the United States and China, then later also in Europe.
Following the unveiling of the Lamborghini Centenario Coupé at the start of
2016, Lamborghini presented the open version of the special series - the
Centenario Roadster - in August 2016. Only 20 vehicles will be built of
each of the Coupé and Roadster versions, for delivery from 2017. A
particularly striking feature of the new models is the actively
self-steering rear wheels for added agility and stability. What is more,
the monocoque and body are made entirely from carbon fiber. Lamborghini
also presented the Aventador Miura Homage in June 2016. To mark the 50th
anniversary of the Miura - the precursor of all Lamborghini V12 supercars -
50 units of this special series of the Aventador Coupé are being built.
Another model making its first appearance at the start of the year was the
special series Huracán LP 610-4 Avio, which is available in a limited
edition of 250 vehicles and has been delivered since summer 2016.
Since the start of the year the Ducati brand has brought the two latest
versions of the Scrambler model series onto the market, the Scrambler
Sixty2 and the Scrambler Flat Track Pro. In addition, the new models
XDiavel and XDiavel S as well as the Multistrada 1200 Enduro have been
available to customers since the first quarter of 2016, enabling Ducati to
serve two entirely new segments. The Multistrada 1200 Pikes Peak, the
Hypermotard 939 and 939 SP as well as the Hyperstrada 939 and the 959
Panigale are now also available in new model versions. The 1299 Panigale S
Anniversario - a numbered limited run of just 500 bikes - has also
gradually been appearing at dealers since July 2016.
FINANCIAL PERFORMANCE INDICATORS 1)
1) The prior-year figures for the cash flow statement have been adjusted.
Fuel consumption and CO2 emission figures as well as the efficiency classes
can be found at the end of this report.
The Audi Group generated revenue of EUR 44,017 (43,695) million for the
first nine months of 2016. The unfavorable currency environment compared
with the prior-year period - in particular due to the devaluation of the
pound sterling - was largely counterbalanced by the healthy development in
other automotive business. The other automotive business includes, for
example, increased revenue from deliveries of parts sets for local
production in China. In the Automotive segment, revenue amounted to EUR
43,404 (43,120) million. Particularly the high demand for our new models
Audi A4 and Audi Q7 as well as growth in the Western Europe region had a
positive impact on revenue performance. However, this was offset by adverse
currency effects together with challenging conditions in individual vehicle
segments and markets. In the Motorcycles segment, we increased revenue to
EUR 612 (575) million.
Operating profit of the Audi Group
EUR million 1- 9/2016 1- 9/2015
Operating profit before
special items 3,918 4,024
Special items -885 -
of which Takata -133 -
of which V6 3.0 TDI diesel issue -752 -
Operating profit 3,033 4,024
Key earnings figures of the Audi Group
in % 1- 9/2016 1- 9/2015
Operating return on sales before special items 8.9 9.2
Operating return on sales 6.9 9.2
Automotive segment 6.9 9.2
Motorcycles segment 7.3 7.0
adjusted for PPA effects 1) 10.1 10.0
Return on sales before tax 6.5 9.7
1) Effects of purchase price allocation
The operating activities of the Audi Group are reflected in the operating
profit before special items of EUR 3,918 (4,024) million. The operating
return on sales before special items reached 8.9 (9.2) percent in the first
three quarters of 2016. Impacted by special items amounting to EUR -885
million, the operating profit for the Audi Group totaled EUR 3,033 (4,024)
million. This represents an operating return on sales of 6.9 (9.2) percent.
Special items are certain matters, reflected in the financial statements,
where we consider that their separate disclosure permits a more accurate
assessment of the economic performance of the Audi Group. As previously
presented in the 2016 Interim Financial Report, special items amounting to
EUR -133 million relate to recalls already instructed for vehicles that are
equipped with airbags from the Japanese manufacturer Takata. Further
special items result from the V6 3.0 TDI diesel issue. In this connection
we adjusted the risk provisioning in the form of provisions for technical
measures, legal risks and sales measures in the third quarter. From January
through September, the special items representing these measures therefore
amount to EUR -752 million. It cannot be ruled out that risks may be
assessed differently in the future.
Matters that are not attributable to operating activities are continually
evaluated in technical, legal and accounting terms and incorporated
separately into our in-year corporate planning in terms of special items,
which can only be planned and controlled to a limited extent.
In the Automotive segment, taking account of the special items, we achieved
an operating profit of EUR 2,989 (3,984) million. The operating return on
sales reached 6.9 (9.2) percent. The profit performance was positively
influenced above all by volume growth along with process and cost
optimization measures. Alongside the special items, operating profit was
affected above all by negative currency effects and intense competition. In
addition, the expansion of our model and technology portfolio and of our
international manufacturing structures is reflected in higher depreciation
and amortization. In the Motorcycles segment, we increased the operating
profit to EUR 44 (40) million and the operating return on sales to 7.3
(7.0) percent. Adjusted for the effects of purchase price allocation, we
achieved an operating profit of EUR 62 (57) million and an operating return
on sales of 10.1 (10.0) percent.
The financial result of the Audi Group for the first nine months of 2016
totaled EUR -194 (225) million. The decrease compared with the previous
year is attributable among other things to higher expenditures from the
measurement of long-term provisions due to changes in interest rates. The
financial result also includes the result from investments accounted for
using the equity method amounting to EUR 240 (337) million - of which
EUR 292 (331) million originates from the result from the measurement of
investments in FAW-Volkswagen Automotive Company, Ltd., Changchun (China).
In addition, the other financial result includes financial compensation
amounting to EUR 251 (356) million agreed between AUDI AG and Volkswagen
AG, Wolfsburg, to reflect the economic performance of the respective brands
within FAW-Volkswagen Automotive Company, Ltd.
In the first three quarters of 2016, the Audi Group achieved a profit
before tax of EUR 2,839 (4,249) million, representing a return on sales
before tax of 6.5 (9.7) percent. The profit after tax was EUR 2,158 (3,284)
million.
The above factors also had a material effect on our business development in
the third quarter of 2016. The Audi Group thus generated revenue amounting
to EUR 13,883 (13,911) million from July through September 2016. EUR 13,756
(13,773) million of this amount is attributable to the Automotive segment.
The Motorcycles segment achieved revenue of EUR 127 (138) million.
In the third quarter of 2016, the Audi Group generated an operating profit
before special items of EUR 1,252 (1,110) million, representing an
operating return on sales before special items of 9.0 (8.0) percent. The
Audi Group's operating profit came to EUR 632 (1,110) million, while the
operating return on sales was 4.6 (8.0) percent. The decline is
substantially attributable to special items relating to the V6 3.0 TDI
diesel issue amounting to EUR -620 million.
The Automotive segment earned an operating profit of EUR 646 (1,116)
million. Seasonal factors meant that our Motorcycles segment posted a
quarterly operating profit of EUR -14 (-6) million.
The financial result of the Audi Group for the third quarter of 2016 rose
to EUR 17 (-11) million.
From July through September 2016, the Audi Group posted a profit before tax
of EUR 649 (1,099) million; the return on sales before tax came to 4.7
(7.9) percent. The profit after tax was EUR 476 (856) million.
The balance sheet total of the Audi Group increased to EUR 62,409 million
as of September 30, 2016, compared with EUR 56,763 million as of December
31, 2015.
The non-current assets of the Audi Group totaled EUR 27,844 (25,963)
million, while current assets amounted to EUR 34,564 (30,800) million.
The equity of the Audi Group rose to EUR 24,663 million as of September 30,
2016, compared with EUR 21,779 million as of December 31, 2015. This
represents an equity ratio of 39.5 (38.4) percent.
As of the same date, the non-current liabilities of the Audi Group amounted
to EUR 15,410 (13,431) million. Current liabilities increased to EUR 22,336
million as of September 30, 2016, as against EUR 21,554 million as of
December 31, 2015.
The Audi Group achieved a cash flow from operating activities of EUR 6,890
(4,967) million in the first nine months of 2016. This positive development
was driven by lower aperiodic tax payments among other factors. There were
in addition to other factors temporary improvements to working capital as a
result of in-year payment effects. Despite extensive investing activities,
the net cash flow therefore increased to EUR 3,086 (2,061) million. The net
liquidity of the Audi Group amounted to EUR 18,160 million as of September
30, 2016, compared with EUR 16,897 million as of September 30, 2015.
The first three quarters of 2016 saw no changes to the group of
consolidated companies with a material impact on the presentation of the
net worth, financial position and financial performance.
WORKFORCE
AUDI AG is hiring around 1,200 experts this year for the future fields of
electric mobility and digitalization. In addition, for the first time more
than 800 young people commenced dual training at the Ingolstadt and
Neckarsulm sites in September.
PERSONNEL CHANGES
On September 26, 2016, Dr. Stefan Knirsch stepped down as Member of the
Board of Management for Technical Development of AUDI AG with immediate
effect and left the Company in agreement with the Supervisory Board.
REPORT ON EXPECTED DEVELOPMENTS, RISKS AND OPPORTUNITIES
Report on expected developments
For 2016 as a whole, the Audi Group currently anticipates that global
economic growth will be slightly below the previous year. In the 2015
Annual Report we were still expecting slightly stronger growth than in the
previous year. There are risks to economic development from potential
turbulence on the financial markets in individual countries. In addition,
geopolitical tensions and conflicts continue to weigh on the growth
prospects. For industrialized nations, we expect the positive economic
development to continue. However, the pace of growth is likely to weaken
somewhat, among other reasons following the Brexit vote. In the emerging
economies, GDP growth rates are expected to be on a par with the prior-year
level. However, Asia's emerging economies are likely to enjoy comparatively
stronger growth.
In our assessment, worldwide demand for cars will continue to rise in 2016
as a whole. While we anticipate an increase in new registrations in Western
and Central Europe, North America and the Asia-Pacific region, sales of
passenger cars in Eastern Europe and South America will decline.
In the established motorcycle markets in the displacement segment above 500
cc, the Audi Group currently expects new registrations for 2016 overall to
be slightly up on the previous year's level.
Overall, the Board of Management considers the Audi Group to be well
equipped to handle present and future challenges, despite the effects it
currently has to absorb from special items. The forecasts for the key
performance indicators for the 2016 fiscal year, which are presented in
detail in the 2015 Audi Annual Report on pages 187 ff., were to some extent
adjusted with the publication of the 2016 Interim Financial Report. These
assessments largely remain valid.
Mainly due to a change in currency rate assumptions, we currently expect
revenue to be at the previous year level. In the 2015 Annual Report we were
assuming a moderate increase. For the operating activities of the Audi
Group reflected in the operating return on sales before special items, we
still expect a value within our strategic target corridor of 8 to 10
percent. We currently expect a value considerably below the strategic
target corridor for the operating return on sales, adversely affected by
the special items which can only be planned and managed to a limited
extent. For the 2016 Interim Financial Report, the Audi Group was still
assuming a figure slightly below the abovementioned target corridor. For
the return on investment (ROI), which is also adversely affected by special
items, we currently expect a value below 16 percent, but still
significantly above the minimum rate of return of 9 percent. In the 2015
Annual Report, we assumed a ROI between 16 and 18 percent.
Report on risks and opportunities
The central task of risk management is to systematically render risks
transparent and improve their controllability, while also providing the
impetus to generate or exploit opportunities. The priority is to increase
the value of the Company.
The function of the risk and opportunity management system as well as the
opportunities and risks to which the Audi Group is subject are described in
detail in the 2015 Annual Report on pages 189 to 201. That publication also
contains statements on risks associated with the diesel issue, which remain
valid. The risk provisioning undertaken up until now in the form of
provisions for the V6 3.0 TDI is based on current knowledge. Due to the
uncertainties inevitably associated with the ongoing negotiations, it
cannot be ruled out that risks may be assessed differently in the future.
Equally, there continue to be risks for the Audi Group in connection with
the recall for airbags supplied by Takata. The Audi Group, in partnership
with various traffic safety agencies, is currently investigating the
effects of potentially defective Takata airbags. Recalls have already been
ordered by the authorities in the United States, Canada, Japan and South
Korea. We have created provisions for these based on current findings.
However, it still cannot be ruled out that there will be a widening of the
recall that will also involve vehicles of the Audi Group. The technical
investigations and official consultations are ongoing.
EVENTS OCCURRING SUBSEQUENT TO THE BALANCE SHEET DATE
There were no reportable events of material significance after September
30, 2016.
FUEL CONSUMPTION AND EMISSION FIGURES AS WELL AS EFFICIENCY CLASSES
The fuel consumption and emission figures as well as the efficiency classes
of the passenger cars mentioned in the document are given below.
Fuel consumption in l/100 km (combined): 16.0 - 1.6
Hybrid electric vehicles: power consumption in kWh/100 km (combined): 19.0
- 11.4
Hybrid gas vehicles: fuel consumption (CNG) in kg/100 km (combined): 3.6 -
3.3
CO2 emissions in g/km (combined): 370 - 36
Efficiency classes: G - A+
Fuel consumption, CO2 emission figures and efficiency classes given in
ranges depend on the tires/wheels used.
Further information on official fuel consumption figures and the official
specific CO2 emissions of new passenger cars can be found in the "Guide on
the fuel economy, CO2 emissions and power consumption of all new passenger
car models," which is available free of charge at all sales dealerships and
from DAT Deutsche Automobil Treuhand GmbH, Hellmuth-Hirth-Str. 1, 73760
Ostfildern-Scharnhausen, Germany (www.dat.de).
DISCLAIMER
This Third Quarter Report contains forward-looking statements relating to
anticipated developments. These statements are based upon current
assessments and are by their very nature subject to risks and
uncertainties. Actual outcomes may differ from those predicted in these
statements.
Contact:
anton.poll@audi.de
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Language: English
Company: AUDI AG
Auto-Union-Straße 1
85045 Ingolstadt
Germany
Phone: +49 (0)841 89-0
Fax: +49 (0)841 89-32524
E-mail: anton.poll@audi.de
Internet: www.audi.de
ISIN: DE0006757008
WKN: 675700
Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (General
Standard), Hamburg, Munich, Stuttgart; Regulated
Unofficial Market in Tradegate Exchange
End of News DGAP News Service
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515577 28.10.2016
DGAP-News: Audi Group: Third Quarter Report 2016
| Source: EQS Group AG