Audi 2006 Annual Report Download - page 159

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The underlying economic situation and the market context remain challenging for the Audi
Group. It will consequently take quite some effort to extend the consistently positive run of
results over recent years. These past successes set the yardstick for the company very high.
The management is nevertheless convinced that Audi will yet again be able to present a
positive overall record of its business activities for the 2007 financial year.
Anticipated development in vehicle sales
Upholding sales growth remains an important objective of the Audi Group in 2007. It aims to
maintain the sustained positive trend of recent years during the current financial year. The
objective for worldwide vehicle sales is therefore to establish another new record. Alongside
the existing product range, a large number of new models and derivative versions will help
by increasing the choice for customers in the premium segment, as well as enhancing the
brand’s appeal.
The company’s established markets, Germany and Western Europe, will remain the pil-
lars of its success. Thanks to the impressive string of new models that it has unveiled, the
Audi Group has already performed the groundwork for successfully tackling the market
conditions, which could in some cases be problematic.
In the Eastern European region, the successful growth of recent years is expected to be
maintained.
Audi believes it is moreover equipped to withstand the intensive competition in the USA
in 2007. On the one hand the Audi Q7 will now be available for the full twelve months, fol-
lowing its launch last year. On the other hand additional attractive models will be appearing
on the North American market. In parallel, the company will be working intensively on en-
hancing its brand image and on optimising the dealer network in that region. The growth
rate is likewise to be maintained unabated in the Asia-Pacific region. The Audi Group has
particularly high expectations of China, where it hopes to build on its market lead. Unit sales
there are expected to rise yet again in 2007. The company moreover anticipates a positive
overall development in unit sales in the other countries of that region.
Anticipated financial performance
In line with the higher unit sales anticipated, the revenue of the Audi Group is likely to ex-
ceed the 2006 level in the 2007 financial year. The regional distribution of the sales trend
forecast will approximately mirror growth in unit sales.
Despite higher capital investments on extensions to the model and engine range and on
the further expansion of the worldwide dealer and service network, the key earnings data for
2007 will remain at the outstanding level of the previous year.
Thanks to the positive impact of our continuous process improvement and productivity
enhancement programmes, the company can even expect to better the previous year’s earn-
ings.
Anticipated financial position
The priority aim for 2007 remains to finance growth from the positive cash flow generated.
Once again, no external sources of financing will be used. The intra-group cash pool is able
to guarantee the liquidity required by all group companies.
The cash flow from operating activities will probably match the high level of 2006.
Against the backdrop of the model initiative’s longer-term perspective, higher cash outflows
for investing activities are expected for the 2007 financial year. The cash outflow for financ-
ing activities will probably be up on the level of the 2006 financial year due to the higher
profit transfer to Volkswagen AG.
The net liquidity of the Audi Group will continue to develop positively as planned up until
the end of 2007, despite higher capital investments.
A
nticipated development of
the Audi Group