Volkswagen acquired Porsche Holding Salzburg’s trading business effective March 1, 2011. After completing the mandatory public offer to acquire the shares of MAN SE, Volkswagen held 55.90% of the voting rights and 53.71% of the share capital of the company as of November 9, 2011. MAN has therefore been consolidated in the Group since this date. In accordance with the internal management of the brands and companies in the Automotive Division, the automobile trading business of Porsche Holding Salzburg and the MAN Commercial Vehicles and MAN Power Engineering subgroups were incorporated into the core operating business based on uniform definitions of value-based management. Effects on assets and earnings from the purchase price allocation are not taken into account as this is beyond what is feasible from an operational management perspective.
The operating profit after tax of the Automotive Division, including the share of operating profit for the Chinese joint ventures, was €9,342 million in 2011 (€5,859 million). This significant year-on-year improvement is primarily attributable to volume increases, mix improvements and product cost optimization measures.
Invested capital rose to €52,863 million (previous year: €43,525 million), mainly as a result of the inclusion of the new companies. Multiplied by the cost of capital, which also increased as against 2010, this gives a cost of invested capital of €3,700 million. The increase in operating profit after tax resulted in a clearly positive value contribution of €5,641 million (€3,117 million).
The return on investment is the return on invested capital for a particular period based on the operating profit after tax. This improved significantly year-on-year to 17.7% (13.5%) for the reasons already mentioned.
More information on value-based management is contained in our publication entitled “Financial Control System of the Volkswagen Group”, which can be downloaded from our Investor Relations website.
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VALUE CONTRIBUTION BY THE AUTOMOTIVE DIVISION* |
| |||||
---|---|---|---|---|---|---|
€ million |
2011 |
2010 | ||||
| ||||||
Operating profit (starting point) |
9,973 |
6,189 | ||||
Plus earnings effects of purchase price allocation for Scania Vehicles & Services, the automobile trading business of Porsche Holding Salzburg (as from March 1, 2011) and MAN Commercial Vehicles and MAN Power Engineering (as from November 9, 2011) |
757 |
273 | ||||
Plus share of operating profit of the Chinese joint ventures |
2,616 |
1,907 | ||||
Tax expense |
–4,004 |
–2,511 | ||||
Operating profit after tax |
9,342 |
5,859 | ||||
Invested capital (average) |
52,863 |
43,525 | ||||
Return on investment (ROI) in % |
17.7 |
13.5 | ||||
Cost of capital in % |
7.0 |
6.3 | ||||
Cost of invested capital |
3,700 |
2,742 | ||||
Value contribution |
5,641 |
3,117 |