Audi 2013 Annual Report Download - page 156

BASIS OF THE AUDI GROUP
MANAGEMENT SYSTEM
MANAGEMENT REPORT
153
A
Over the course of the year, the budget is monitored and
checked on a monthly basis to assess the level of target
achievement. Here, target/actual and prior-year comparisons,
deviation analyses and, if necessary, action plans are used as
instruments of control to reinforce the budgeted objectives.
Detailed advance estimates are drawn up on a rolling basis for
the respective next three-month period and also for the full year,
taking into account current risks and opportunities. Manage-
ment over the course of the year is thus all about continuously
adapting to internal and external circumstances. At the same
time, the current forecast serves as the basis for the next
medium-term and budget planning.
/ PRIORITY KEY FIGURES OF GROUP MANAGEMENT
Management of the Audi Group adopts a value-oriented corpo-
rate steering approach and, taking the goals of the strategy as
the starting point, is based principally on the following priority
key figures:
> Deliveries to customers
> Revenue
> Operating profit
> Operating return on sales
> Return on investment (ROI)
> Net cash flow
> Ratio of investments in property, plant and equipment
The handover of a new vehicle to the final customer is defined
as a delivery to customer; we use this as a non-financial key
figure for management purposes. This key figure reflects cus-
tomer demand for our products. Increasing the deliveries to
customers is closely related to the strategic goal of continuous
growth to more than 2.0 million Audi vehicles delivered. Steady
demand for our products safeguards sales and production, and
therefore capacity utilization at our locations.
The priority key figures of a financial nature include revenue,
which is a financial reflection of our market success. Our fun-
damental entrepreneurial activity and therefore the economic
performance of the core business area is shown in operating
profit, which is the balance of revenue and resources deployed,
along with the other operating result. We also define the oper-
ating return on sales, expressing the ratio between the oper-
ating profit generated and revenue, as a priority key figure.
Return on investment (ROI) is used as an instrument of internal
management for evaluating various investment projects in
terms of their return on the capital employed, depending on
their nature and scale. We obtain this indicator by placing oper-
ating profit after tax in relation to average invested assets.
Net cash flow shows the cash inflow from operating activities
less investment spending from business operations, without
consideration of cash deposits and changes in participations,
and serves as an indicator of our Company’s economic stability
and level of self-financing.
The ratio of investments in property, plant and equipment
indicates the innovative strength of the Audi Group. It
measures the investment volume in property, plant and
equipment against revenue. Investment spending in essence
comprises the financial resources for updating and expanding
the product range, for developing environmentally friendly
engines and for increasing capacity, as well as for improving
the Audi Group’s production processes.
For further information and explanations on
“Deliveries and distribution” and on the
“Financial performance indicators,” please refer to
pages 168 ff. and 173 ff. respectively.
On pages 180 ff. we describe other non-financial key
figures as well as goals and measures in the area of
“Corporate Responsibility.”