AUDI AG After Three Quarters: Key Financials Impacted By Extraordinary Factors

source: Audi AG

  • WLTP changeover and numerous model changes: 8.3% operating return on sales before special items for the first three quarters, 6.5% after special items
  • Special item affecting earnings of €800 million fine imposed by Munich II Public Prosecutor’s Office in the third quarter
  • Interim CEO Bram Schot: “We are meeting enormous challenges and expect fluctuations to decrease as of November”
  • CFO Alexander Seitz: “We anticipate positive earnings effects of €1 billion already in the first year of the Audi Transformation Plan”
  • High self-financing strength: significant increase in net cash flow to €3.1 billion

The third quarter of this year featured numerous adverse factors for the Audi Group: As expected, restrictions in the sales portfolio caused by the changeover to WLTP had an increasingly negative effect. At the same time, the densely packed program of phase-outs and ramp-ups in connection with the broadest model initiative in Audi’s history reached its peak with high ramp-up costs in the second half of the year. As a result of an administrative order issued by the Munich II Public Prosecutor’s Office imposing a fine in connection with the diesel issue, AUDI AG reports special items of €800 million at the end of the third quarter. At €44.3 billion, the Audi Group’s revenue for the period from January through September reached the previous year’s level. After special items, operating profit for the first nine months amounted to €2.9 billion; adjusted for special items, it was €3.7 billion and thus moderately below the prior-year figure. This results in an operating return on sales before special items of 8.3 percent. The successful joint venture business in China is not included in this figure and is shown in the significantly increased financial result.

“The current situation is an enormous challenge for Audi. We are resolutely tackling the numerous negative factors and systematically counteracting them,” says Bram Schot, temporary Chairman of the Board of Management of AUDI AG. “We are working hard to ensure that we can put further model variants back into the range so that we can offer our customers an appropriate lineup in all model series again by the end of the year. In addition, our model initiative will now successively reach the showrooms in more and more markets. We therefore expect that the current fluctuations in our business will noticeably balance out again as of November.”