Porsche 2005 Annual Report Download - page 28

As a result of a better model mix,
Porsche is increasing its profit from vehicle
sales more dramatically than its turnover.
New Records Set
In 2005/06 the Porsche Group once again concluded a fiscal
year with record results in key financial areas. Unit sales, sales
revenues and earnings all improved yet again in comparison with
the previous year. As a consequence, the consolidated balance
sheet total rose by 4.919 billion Euro to 14.629 billion Euro.
In terms of the effects on the income statement, the following
figures only contain activities from continuing operations.
Capital expenditures on intangible assets, property, plant and
equipment and leased assets totaled 959.3 million Euro, following
914.3 million Euro in the previous year. Of this sum, 551.9 million
Euro was spent on vehicles leased by our financial services
entities, compared with 543.6 million Euro in the previous year.
A figure of 3.123 billion Euro was invested for the 21.2 percent
equity investment in Volkswagen AG. Porsche also concluded
share price hedges that relate to the purchase of a further 3.9
percent of the ordinary shares in Volkswagen AG. Amortization
and depreciation fell from 490.8 million Euro to 488.8 million
Euro in the reporting year.
As of the balance sheet date, July 31, 2006, the Porsche Group’s
fixed assets amounted to 5.681 billion Euro, compared with
2.428 billion Euro in the previous year. The share of fixed assets
in the balance sheet total amounted to 38.8 percent (previous
year: 25.0 percent). The share of the Porsche Group’s fixed
assets covered by equity was 95 percent; the equivalent figure
in the previous year was 141 percent. The main reason for this
is the aforementioned purchase of the equity investment in
Volkswagen AG.
Inventories increased from 571.8 million Euro to 594.1 million
Euro. Trade receivables accounted for 205.0 million Euro; in
the previous year this figure was 307.7 million Euro. The rise in
receivables from financial services from 1.567 billion Euro to
1.684 billion Euro reflects the expansion of this business segment.
Other receivables and assets amounted to 1.574 billion Euro
(previous year: 1.024 billion Euro) and contain financial instru-
ments, for the most part comprising currency, interest rate and
share price hedges to a value of 1.294 billion Euro.
The share price hedges serve on the one hand to secure the
acquisition of further shares in Volkswagen AG, and on the
other hand to obtain short-term liquidity. Deferred tax assets
amounted to 141.3 million Euro after 184.8 million Euro in the
previous year.
Further Increase in Liquidity
Cash and cash equivalents amounted to 4.750 billion Euro
(prior year: 3.626 billion Euro). Net liquidity, i.e. cash and
cash equivalents less financial debts but excluding financial
services transactions, only fell to 1.881 billion Euro despite
the acquisition of the equity investment in Volkswagen AG
(previous year: 2.355 billion Euro). The extended cash flow
rose to 2.101 billion Euro (previous year: 1.332 billion Euro).
The cash outflow from investing activities of continuing operations
totaled 3.609 billion Euro (prior year: 683.1 million Euro).
Significantly Higher Equity
The Porsche Group’s equity went up by 1.956 billion Euro
to 5.376 billion Euro in the reporting year. The equity ratio
rose to 36.8 percent after 35.2 percent in the previous year.
This reflects the issue of a hybrid bond with a nominal volume
of one billion US dollars that is allocable to equity.
Pension provisions together with other provisions amounted
to 2.300 billion Euro in the reporting year (previous year:
2.123 billion Euro). All known risks were taken into consider-
ation. At 181.8 million Euro, deferred tax liabilities are almost
unchanged on the level of the previous year of 180.3 million
Euro. Trade payables increased to 482.8 million Euro (previous
year: 443.0 million Euro). Other liabilities totaled 1.290 billion
Euro (previous year: 287.7 million Euro). The principal reason
for the large increase is the rise in the amount of financial
instruments used.
Financial liabilities in the reporting year totaled 4.760 billion
Euro (previous year: 3.092 billion Euro), and thus reflects the
expansion in financial services business activity and the issue
of new bonds. For the refinancing of this financial services
business, asset-backed structures in specific countries were
mainly used, their volume amounting to 1.799 billion Euro.
Loans for Maintenance of Liquidity
Of the financial liabilities, more than 2.651 billion Euro related
to bonds. Porsche International Financing plc, Dublin, issued a
new bond in the reporting year. This is a Euro bond with a nominal
volume of two billion Euro, split into two tranches with a nominal
volume of one billion Euro each and terms of five and ten years.
26 Finances