Volkswagen AG (condensed, <br>according to German Commercial Code)

 

In fiscal year 2007, Volkswagen AG's sales rose by 4.1% year-on-year to €55.2 billion. This increase was primarily due to stronger vehicle sales worldwide. The proportion of sales revenue generated outside Germany amounted to 61.5% (60.4%). The cost of sales fell by 1.1% compared with the previous year, which had recorded an increase due to restructuring measures. At €1.6 billion, gross profit was up significantly on 2006. Selling, general and administrative expenses declined by 2.9%. As a consequence, the ratio of selling, general and administrative expenses to sales fell. In addition to positive exchange rate effects relating to deliveries of goods and services, cost allocations to affiliated companies and to third parties caused the other operating result to increase by 11.3% to €1.3 billion. The financial result decreased by 6.2% to €3.8 billion. Higher income from investments and profit and loss transfer agreements as well as lower write-downs of financial assets were offset by lower other investment income. Gains on the sales of investments had a positive effect on the financial result in the previous year.

 

 

 

 

* Including write-downs of financial assets.

 

 

 

 

Volkswagen AG's result from ordinary activities rose to €2.8 billion in 2007 (€45 million). After deducting income taxes, net income amounted to €1.5 billion, an increase of 54.0% year-on-year.

 

 

 

During the reporting period, Volkswagen AG's net assets increased by 6.2% to €48.4 billion. Investments in tangible assets were 17.9% higher than the low figure of the previous year. Investments were made primarily in new products and the construction of a third production line at the Wolfsburg plant. Financial investments decreased by 12.2% year-on-year. In 2006, the reorganization of our foreign shareholdings had increased the carrying amount of these investments. In total, fixed assets grew by 14.8% compared with December 31, 2006 to €27.1 billion.

 

Current assets decreased by 3.0% to €21.4 billion. Increased receivables and inventories were offset by lower cash due to debt repayments.

 

Due to the positive price performance of Volkswagen shares, many employees took advantage of the opportunity to convert their previously subscribed bonds into ordinary shares in the reporting period. Together with the higher net retained profits, this increased equity (including special tax-allowable reserves) by 11.3% to €11.5 billion. As a consequence, the equity ratio rose to 23.7% (22.7%). At the balance sheet date, provisions increased by 13.2% year-on-year to €21.3 billion. Liabilities fell by 5.0% to €15.6 billion, of which €11.0 billion (€12.0 billion) was interest-bearing.

 

 

€720 million of the net income for the year was appropriated to other revenue reserves in accordance with section 58(2) of the Aktiengesetz (AktG – German Stock Corporation Act). The Board of Management and Supervisory Board are proposing to the Annual General Meeting to pay a dividend of €720 million from net retained profits, i.e. €1.80 per ordinary share and €1.86 per preferred share.

 

 

 

 

 

 

 

* Including expenses for severance payments and partial retirement arrangements.

 

 

 

Volkswagen AG sold 2,365,617 vehicles to the dealer organization in 2007. This was 4.3% more than in the previous year. The percentage of vehicles sold outside Germany increased to 69.5% (66.5%).

 

 

 

Volkswagen AG's vehicle production plants (Emden, Hanover and Wolfsburg), including Auto5000 GmbH, which manufactures vehicles at the Wolfsburg plant, increased their output by 12.9% to a total of 1,075,997 vehicles. This was primarily due to the increased number of Golf saloon and Passat saloon models produced. The launch of the Tiguan in late 2007 was also a major contributory factor to this increase. Average daily production at Volkswagen AG increased by 1.6% to 4,473 units.

 

 

 

At December 31, 2007, a total of 90,468 people were employed at the sites of Volkswagen AG, excluding staff employed at subsidiaries. This included 4,434 apprentices. 5,135 employees were in the passive phase of their early retirement. The workforce was 3.8% smaller than during the previous year.

 

The percentage of female employees was 13.2% (13.3%) of the total headcount. The Company employed 2,303 part-time workers (2.5%). The percentage of foreign employees was 6.3% (6.4%). A total of 66.5% (64.9%) of employees held a vocational qualification in an area relevant to Volkswagen, while 11.2% (11.1%) were graduates. The average age of Volkswagen employees in the reporting period was 42.0 years.

 

 

 

Volkswagen AG's research and development costs according to the German Commercial Code rose by 9.1% year-on-year to €2.3 billion. On December 31, 2007, 8,561 people were employed in this area.

 

 

The purchasing volume across the six Volkswagen AG sites in Germany amounted to €19.6 billion in 2007, of which 75.0% (71.9%) was sourced from German suppliers. Of the total purchasing volume, €16.4 billion was spent on production materials and €3.2 billion on capital goods and services.

 

 

 

 

 

Share of environmental protection areas as percent

 

 

 

 

Investments for environmental protection consist of both product-related as well as production-related measures. The investments in product-related measures relate mainly to the reduction of exhaust emissions. Expenditures on water pollution control, waste management and air pollution control are the main focus of the investments for environmental protection in production.

 

Operating costs relating to environmental protection are broken down into expenditures for the operation of environmental protection equipment and expenditures not relating to such equipment. They relate mainly to production-related measures. Operating costs relating to environmental protection increased by 4.1% to €177 million in the reporting period.

 

 

 

The business development of Volkswagen AG is exposed to essentially the same risks as the Volkswagen Group. These risks are explained in the Risk Report.

 

 

 

Risks for Volkswagen AG arising from the use of financial instruments are the same as those to which the Volkswagen Group is exposed. An explanation of these risks can be found in the Risk Report. 

 

 

 

The Annual Financial Statements of Volkswagen AG (in accordance with the HGB) can be found here. They can also be accessed from the electronic companies register at https://www.unternehmensregister.de