Audi 2008 Annual Report Download - page 177

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The Audi Group also sells vehicles of the Bentley, SEAT, Škoda, VW Passenger Car and VW
Commercial Vehicle brands through the sales subsidiaries VOLKSWAGEN GROUP ITALIA S.P.A.
(Verona, Italy), Audi Volkswagen Korea Ltd. (Seoul, South Korea) and Audi Volkswagen Middle
East FZE (Dubai, United Arab Emirates). Revenue from sales of these vehicle brands in the past
fiscal year was below that of the previous year’s high level.
As a consequence of the increased business volume, the cost of sales for the Audi Group rose
by 1.3 percent in the period under review to EUR 28,848 (28,478) million. Further productivity
gains, improved processes and optimized material costs were the main reasons for the dispro-
portionately low increase in cost of sales relative to revenue strained by an unfavorable
exchange rate.
Overall, the Audi Group enjoyed a notable increase in gross profit of 4.1 percent to an excellent
EUR 5,348 (5,139) million.
The rise in distribution costs to EUR 3,240 (2,737) million was mainly due to the activities
necessitated by the large number of new products and product improvements appearing on
the market, and to the increased cost related to covering sales risks. The rise in administrative
expenses to EUR 302 (266) million was largely attributable to the first-time consolidation
of the companies AUDI BRUSSELS S.A./N.V. (Brussels, Belgium), Audi Zentrum Hamburg GmbH
(Hamburg) and Audi Zentrum Berlin-Charlottenburg GmbH & Co. KG (Berlin) in the 2008 fiscal
year. The rise in the other operating result of EUR 966 (569) million stemmed predominantly
from higher earnings from the settlement of currency hedging transactions.
The Audi Group thus improved its operating profit for the past fiscal year overall by 2.5 percent
to EUR 2,772 (2,705) million. This highly pleasing development amid such difficult times serves
as further proof that the Company is fundamentally sound and competitive. It also confirms the
resounding success of its strategy of sustainable, profitable growth.
The financial result rose to EUR 405 (210) million in the period under review. This increase is
attributable in the first instance to higher interest income and to an improved investment
result.
DEVELOPMENT OF PROFIT BEFORE TAX AND RETURN ON SALES BEFORE TAX
200720062005
3,000
2,000
1,000
0
Profit before tax
(EUR million)
Return on sales before tax
(%)
3,177
9.3
2,915
8.7
1,946
6.2
1,310
4.9
2008
Overall, the Audi Group was able to improve its profit before tax by an impressive 9.0 percent
to EUR 3,177 (2,915) million. Its profit after tax was also noticeably up by 30.4 percent to
EUR 2,207 (1,692) in the period under review.
KEY EARNINGS DATA
% 2008 2007
Operating return on sales 8.1 8.0
Return on sales before tax 9.3 8.7
Equity return after tax 23.3 21.7
Return on investment 19.8 18.6
The extremely successful business performance is also reflected in all key return ratios for the
2008 fiscal year. The operating return on sales improved from 8.0 percent to 8.1 percent and
the return on sales before tax from 8.7 percent to 9.3 percent.