Letter to our Shareholders
“The positive price performance indicates that investors believe our restructuring efforts are successful, and that we’re moving in the right direction.”
2006 was an encouraging and gratifying year for a number of reasons: the development of the Volkswagen AG share price was more than satisfactory, with ordinary shares rising by 93% and preferred shares by 74% – clearly outperforming the DAX, which only grew by 22%. At €4.4 billion, the Group’s operating profit before special items was impressive. This is why we want to increase the dividend to €1.25 for ordinary and €1.31 for preferred shares.
It’s well known that the stock exchange is where the future is traded, so the positive price performance indicates that investors believe our restructuring efforts are successful, and that we’re moving in the right direction.
The tremendous potential of our Group lies in the value of its brands. That’s why we need strong, independent brands with a profile of their own that’s tailored to their target groups. They must be able to operate autonomously and have meaningful responsibility for their own performance. To achieve this, we have optimized the Group structures, dissolved the brand groups and returned complete independence and responsibility for their entire business to the brands. One consequence of this is that, starting in fiscal year 2007, we will report the key financial indicators separately for each of the brands. This will considerably increase the financial market transparency of the Volkswagen brand in particular.
To make the Volkswagen brand fit for the future, we need a healthy economic foundation. That’s why it’s so important for us to continue pushing ahead with “ForMotionplus” and to further extend the productivity improvements already underway at our plants. The collective wage agreement signed for Volkswagen AG’s six traditional sites in October last year was a major step on the road towards greater competitiveness. This means that Volkswagen’s labor costs are now back to comparable industry levels.
Our customers, employees and shareholders also believe that business success must be sustainable rather than merely short-term. That’s why the motto for the 2006 Annual Report is “sustainability”, and that’s also why we are working hard on developing vehicle concepts for a sustainable future.
We are absolutely convinced that our reorientation creates the optimum conditions for achieving all of our goals: attractive, high-quality products for our customers, secure jobs for our employees and profitable growth for our shareholders.
Yours sincerely,
Prof. Dr. rer. nat. Martin Winterkorn