Audi 2013 Annual Report Download - page 198

REPORT ON EXPECTED DEVELOPMENTS, RISKS AND OPPORTUNITIES
REPORT ON EXPECTED DEVELOPMENTS
MANAGEMENT REPORT
195
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In our highest-volume sales market, our growth strategy centers
on widening the product range, going into local production
with more models – such as the A3 Sportback and A3 Sedan –
and expanding our dealer network. In Japan too, we expect to
see a further clear rise in deliveries of the Audi brand in the
current fiscal year, despite the expected contraction of the
overall car market.
Audi already offers a broad and attractive product portfolio,
ranging from the A1 premium compact car, through the SUV
family – Q3, Q5 and Q7 – to the R8 supercar. To further increase
brand appeal and customer delight, we intend to gradually
expand the model program in the future, thus providing for a
further sales boost.
The full availability of the A3 Sedan and the recent launch of
the A3 Cabriolet should provide an added stimulus to demand
for the models of the A3 family. Furthermore, two models with
alternative drive concepts are joining our A3 premium compact
car line in the current fiscal year – the A3 Sportback e-tron and
g-tron. The improved version of our Audi A8 luxury sedan went
on sale at the end of 2013. In addition, the A1 car line will be
supplemented this year with the arrival of the sporty S1 and
S1 Sportback models. We also expect to see the third genera-
tion of the Audi TT Coupé provide an extra growth stimulus; it
will be appearing on markets from the second half of 2014.
The Lamborghini brand is preparing for rising demand in par-
ticular from the market introduction of the Huracán. We also
expect to see the Ducati brand significantly increase its deliver-
ies of motorcycles in 2014.
// ANTICIPATED FINANCIAL PERFORMANCE
Based on our current estimates and depending on economic
conditions, we expect a slight increase in revenue for the Audi
Group to more than EUR 50 billion in 2014. The systematic
expansion of our international manufacturing structures, the
increasing input needed for new products and technologies – in
particular to comply with tougher CO2 requirements worldwide –
and mix effects will initially have a negative impact on profit in
the current fiscal year. At the same time, the positive trend in
deliveries and revenue, ongoing productivity and process im-
provements already implemented and our efficient corporate
structures will impact our operating profit positively. Overall,
we expect an operating return on sales within our strategic
target corridor of 8 to 10 percent. Despite increasing product
and structural investments, we expect a return on investment
(ROI) of over 18 percent in 2014.
// ANTICIPATED FINANCIAL POSITION
The Audi Group again intends to finance its planned corporate
growth entirely from internally generated cash flow in 2014.
The cash flow from operating activities is likely to reach a simi-
larly high level to that of 2013. Despite increasing product and
structural investments, net cash flow is expected to be signifi-
cantly over EUR 2 billion, thus emphasizing the consistent
financial strength of the Audi Group.
// CAPITAL INVESTMENTS
The focus of the Audi Group’s mid-range investment plan is on
maintaining the model initiative and, in particular, on expanding
the worldwide development and manufacturing structures. In
addition, the Company is concentrating on technological inno-
vations, for example to steadily improve automotive efficiency,
as well as on the development of alternative drive concepts. The
purpose of all investment measures is to sustainably strengthen
the market position of the Audi Group.
The Audi Group plans to make total capital investments of
around EUR 22 billion over the period 2014 through 2018. Of
this, investments in property, plant and equipment will total
EUR 16 billion. With this investment program, the largest in
the history of the Company, we will be establishing the basis
for future growth. The ratio of investments in property, plant
and equipment should be between 5.0 and 5.5 percent in 2014.
Anticipated development in the priority key figures of the Audi Group
Forecast 2014
Deliveries to customers clear increase
Revenue slight increase
Operating profit/operating return on sales within the strategic target corridor of 8 to 10 percent
Return on investment (ROI) over 18 percent
Net cash flow significantly over EUR 2 billion
Ratio of investments in property, plant and equipment 5.0 to 5.5 percent