FINANCIAL POSITION AND CASH AND CASH EQUIVALENTS IN THE GROUP
The Volkswagen Group’s financial position in fiscal year 2011 was affected by the acquisition of Porsche Holding Salzburg, the investment in SGL Carbon SE and the increase in its interest in the share capital of MAN SE. The following sections provide an overview of the Group’s liquidity development and outline the operational drivers by division.
The Volkswagen Group’s gross cash flow in the reporting period amounted to €18.9 billion, €3.3 billion more than in the previous year. Funds tied up in working capital increased by €6.3 billion to €10.4 billion in 2011. As a result, cash flows from operating activities declined to €8.5 billion (€11.5 billion).
The cash outflow from investing activities attributable to the Volkswagen Group’s operating activities rose by 72.5% to €16.0 billion in 2011. Investments in property, plant and equipment accounted for €8.1 billion of this figure and the acquisition and disposal of equity investments accounted for €6.4 billion. Net cash flow declined by €9.7 billion to €–7.5 billion.
Cash and cash equivalents in the Volkswagen Group as reported in the cash flow statement amounted to €16.5 billion as of December 31, 2011, and were therefore below the prior-year level. Gross liquidity rose by €1.0 billion to €28.7 billion. Net liquidity in the Group was €–64.9 billion (€–49.3 billion).
FINANCIAL POSITION IN THE AUTOMOTIVE DIVISION
Gross cash flow in the Automotive Division increased yearon-year to €15.4 billion (€12.4 billion) in fiscal year 2011 due to earnings-related factors. Despite the increased business volumes, strict working capital management led to the release of €1.7 billion (€1.6 billion). As a result, cash flows from operating activities rose significantly to €17.1 billion (€13.9 billion).
At €16.0 billion, the cash outflow from investing activities attributable to operating activities in fiscal year 2011 was €6.9 billion higher than in the previous year. Investments in property, plant and equipment amounted to €7.9 billion, €2.3 billion above the prior-year level. The significant growth in sales revenue meant that the ratio of investments in property, plant and equipment to sales revenue (capex) was only slightly above the previous year, at 5.6% (5.0%). We invested mainly in our production facilities and in models that we launched in 2011 or are planning to launch in 2012. These are primarily the up!, the Passat for the US market, the Audi Q3, as well as the successor models to the Golf, the Beetle, the Audi A3, the Audi A4 and the Audi A6. Other key areas were the ecological focus of the model range and the expansion of modular toolkits. At €1.7 billion, capitalized development costs were on a level with the previous year. Within investing activities attributable to operating activities, the acquisition of equity investments – including the acquisition of Porsche Holding Salzburg, the investment in SGL Carbon SE and the increased stake in MAN SE – led to a cash outflow of €6.6 billion. Due to the higher volume of equity investments, the Automotive Division’s net cash flow declined by €3.7 billion to €1.1 billion.
The Automotive Division recorded a cash outflow of €4.3 billion (€3.2 billion) from financing activities, mainly attributable to repayments of financial liabilities and dividend payments. Despite new equity investments, net liquidity in the Automotive Division remained high at the end of fiscal year 2011, at €17.0 billion (€18.6 billion).
Financial position in the Passenger Cars and Light Commercial Vehicles Business Area
Gross cash flow in the Passenger Cars and Light Commercial Vehicles Business Area amounted to €13.7 billion, 23.6% higher than the prior-year figure, mainly due to earnings-related factors. Despite the increase in volume, funds of €1.3 billion (€1.5 billion) were released from working capital. As a result, cash flows from operating activities rose by €2.5 billion to €15.1 billion. The cash outflow from investing activities attributable to operating activities amounted to €15.5 billion (€9.0 billion), including cash outflows for the acquisition of Porsche Holding Salzburg, the investment in S G L Carbon SE and the increased stake in MAN SE. Investments in property, plant and equipment rose by 37.6% year-on-year, while capitalized development costs were on a level with the previous year. Despite the higher volume of equity investments and investments in property, plant and equipment, net cash flow was only slightly negative, at €–0.5 billion.
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FINANCIAL POSITION IN THE PASSENGER CARS AND | ||||
|
€ million |
2011 |
2010 | ||
|---|---|---|---|---|
|
Gross cash flow |
13,733 |
11,110 | ||
|
Change in working capital |
1,326 |
1,477 | ||
|
Cash flows from operating activities |
15,060 |
12,587 | ||
|
Cash flows from investing activities attributable to operating activities |
–15,544 |
–9,009 | ||
|
Net cash flow |
–484 |
3,578 | ||
Financial position in the Trucks and Buses, Power Engineering Business Area
Gross cash flow in the Trucks and Buses, Power Engineering Business Area was €1.6 billion (€1.2 billion). Funds of €401 million (€99 million) were released from working capital; cash flows from operating activities increased to €2.0 billion (€1.3 billion). The cash outflow from investing activities attributable to operating activities, mainly investments in property, plant and equipment, amounted to €454 million (€86 million). Net cash flow improved by €0.3 billion to €1.6 billion.
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FINANCIAL POSITION IN THE TRUCKS AND BUSES, POWER ENGINEERING BUSINESS AREA | ||||
|
€ million |
2011 |
2010 | ||
|---|---|---|---|---|
|
Gross cash flow |
1,648 |
1,245 | ||
|
Change in working capital |
401 |
99 | ||
|
Cash flows from operating activities |
2,049 |
1,344 | ||
|
Cash flows from investing activities attributable to operating activities |
–454 |
–86 | ||
|
Net cash flow |
1,596 |
1,257 | ||
FINANCIAL POSITION IN THE FINANCIAL SERVICES DIVISION
The Financial Services Division’s gross cash flow was €3.5 billion in fiscal year 2011, 9.0% up on the prior-year figure due to earnings-related factors. Increased business activities and the resulting higher financial services receivables, as well as changes to leasing and rental assets saw funds tied up in working capital rise to €12.1 billion (€5.7 billion). At €4.0 million, the cash outflow from investing activities attributable to operating activities was below the prior-year level. Funds in the amount of €12.6 billion (€2.3 billion) – including from the issue of bonds – were added to finance the increased business volume. Gross liquidity in the Financial Services Division was €7.0 billion, €3.8 billion higher than in the previous year. Third-party borrowings increased to €88.8 billion (€71.2 billion), primarily as a result of the expansion of business activities and the inclusion of the financial service activities of Porsche Holding Salzburg and MAN. At the end of fiscal year 2011, the Financial Services Division’s negative net liquidity, which is common in the industry, amounted to €–81.8 billion (€–68.0 billion).
