Audi 2014 Annual Report Download - page 193

REPORT ON EXPECTED DEVELOPMENTS, RISKS AND OPPORTUNITIES
REPORT ON EXPECTED DEVELOPMENTS
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We expect a significant increase in deliveries for the
Lamborghini brand. The full availability of the new
Lamborghini Huracán in particular will have a positive impact
on sales. We also expect to see a clear increase in deliveries
of motorcycles by the Ducati brand.
// ANTICIPATED FINANCIAL PERFORMANCE
In our current assessment, the increased vehicle sales that we
are targeting will produce a moderate rise in revenue for the
Audi Group, depending on the economic environment. In addi-
tion, the Company again expects an operating return on sales
within the strategic target corridor of 8 to 10 percent. There
should be a positive impetus in particular from the increased
sales volume and revenue, as well as from our ongoing structural
and process improvements. Conversely, the systematic expan-
sion of our international manufacturing structures, for instance
in Mexico and Brazil, initially represents a drain on profit.
Furthermore, the Company will again make substantial upfront
expenditures for new models and pioneering technologies in the
2015 fiscal year, in particular to meet the tougher CO2 require-
ments being introduced worldwide. Despite rising product and
structural investments, we envisage a return on investment (ROI)
in excess of 18 percent, which will thus clearly exceed our mini-
mum rate of return of 9 percent.
// ANTICIPATED FINANCIAL POSITION
The Audi Group once again intends to finance its planned cor-
porate growth entirely from internally generated cash flow in
2015. We aim to keep the net cash flow above EUR 2 billion.
As a result of investing activities requiring increasing cash
outflows to continue the long-term model and technology
drive and the expansion of international plant structures, the
net cash flow is unlikely to match the high prior-year figure of
EUR 2,970 million.
// CAPITAL INVESTMENTS
The focus of the Audi Group’s medium-term investment
plans is on the customer-driven broadening of the model
range and the expansion of the manufacturing structures
that this necessitates. Furthermore, the Audi Group aims to
sustainably underpin its “Vorsprung durch Technik” through
technological innovations, for example in the areas of alter-
native drives and digitization. All investment measures share
the common objective of strengthening the Audi Group’s
market position through a forward-looking model, technology
and brand strategy.
Overall, the Company plans to invest a total of more than
EUR 24 billion from 2015 through 2019 in the biggest in-
vestment program in its history. Investments in property,
plant and equipment over this period will reach EUR 17
billion. The ratio of investments in property, plant and
equipment in 2015 should consequently be moderately higher
than the strategic target corridor of 5.0 to 5.5 percent.
Anticipated development in the key performance indicators of the Audi Group
Forecast 2015
Delivieries of cars of the Audi brand to customers significant increase
Revenue moderate increase
Operating profit/operating return on sales within the strategic target corridor of 8 to 10 percent
Return on investment (ROI) with more than 18 percent significantly above the
minimum rate of return of 9 percent
Net cash flow more than EUR 2 billion and below previous year’s level
Ratio of investments in property, plant and equipment moderately above the strategic target corridor of 5.0 to 5.5 percent