Audi 2015 Annual Report Download - page 169

FINANCIAL PERFORMANCE INDICATORS
FINANCIAL POSITION
>> 169
FINANCIAL POSITION
/PRINCIPLES AND GOALS OF
FINANCIAL MANAGEMENT
The Audi Group is integrated into the financial management
of the Volkswagen Group, which concerns itself with such
matters as liquidity management and the management of
exchange rate and commodity price risks. The management of
financial risks within the Audi Group is organizationally a mat-
ter for the Treasury area, which handles these centrally for all
Audi Group companies on the basis of internal guidelines and
risk parameters.
The overriding financial goal is to ensure the solvency and
financing of the Audi Group at all times, while at the same
time achieving a suitable return on the investment of surplus
liquidity. To that end, payment streams are identified in a multi-
stage liquidity planning process and consolidated at Audi Group
level. The main companies of the Audi Group are included in
the cash pooling of the Volkswagen Group. This permits the
efficient handling of intragroup and external transactions,
and also reduces transaction costs for the Audi Group.
As a globally active company, the Audi Group also manages
exchange rate and commodity price risks. Exchange rate risks
are minimized by natural hedging, along with foreign currency
hedging transactions with matching currencies and maturities.
The goal here is to hedge planned payment streams in particu-
lar from investment, production and sales planning. In the
area of commodity price risks, the Audi Group pursues the goal
of achieving price stability for product costing purposes by
concluding long-term agreements and hedging transactions
that involve derivative financial instruments, as well as by
making use of synergies with the Volkswagen Group.
Credit and country risks are managed centrally by Volkswagen
Group Treasury. A diversification strategy is applied and con-
tracting partners are evaluated to counter the risk of losses or
defaults.
Through its partnership with Volkswagen Financial Services AG,
Braunschweig, the Audi Group enables its customers to make
use of borrowing and leasing arrangements. The Audi Group
consequently sets up hedging arrangements with the retailer
or partner company to guard against fluctuations in residual
values.
Further information can be found in the “Report on
risks and opportunities” on pages 189 ff. as well as
in the Notes under item 36 “Management of finan-
cial risks” on pages 267 ff.
/FINANCIAL SITUATION
Cash flow from operating activities of the Audi Group amounted
to EUR 7,203 (7,421) million in the past fiscal year.
The cash outflow for investing activities attributable to operat-
ing activities came to EUR 5,576 (4,450) million for the 2015
fiscal year.
The greater part of this amount, or EUR 3,534 (2,979) million,
was for investments in property, plant and equipment, invest-
ment property and other intangible assets (excluding capital-
ized development costs). This investment spending was in
particular for the expansion of our manufacturing structures
and the product range. The investment priorities for the 2015
fiscal year were the new model versions of the Audi A4 and
Audi Q7 as well as the construction of the new production sites
in Brazil and Mexico. The ratio of capex (investments in proper-
ty, plant and equipment, investment property and other intan-
gible assets, without capitalized development costs) in the
2015 fiscal year was 6.0 (5.5) percent.
In addition, investing activities in the past fiscal year included
capitalized development costs of EUR 1,262 (1,311) million.