Porsche 2006 Annual Report Download - page 20

18 Management Report
12.4 percent to a bottom line of 10,805 vehicles.
Unit sales of the Boxster series dropped 10.8
percent to 9,957 units. Porsche’s policy not to
grant ex works discounts remains in force. Instead,
vehicles are redirected to the up-and-coming regions
of Asia where they are sold for a higher profit. As
a result, the share of the North American region in
total Porsche sales dropped by 34.4 percent com-
pared to the 38.7 percent recorded the year before.
In Germany, the automobile industry struggled with
the effects of the increase of VAT in 2007. Porsche
nevertheless succeeded in raising unit sales by
2.8 percent in the 2006/07 fiscal year to 14,314
(previous year: 13,921) vehicles. Growth driver here
was the 911, which recorded an increase of 14.8
percent to 7,304 vehicles. The Cayenne vehicles
also did well despite the model change, staying
1.9 percent under the prior-year figure at 3,443
units. This shows just how strong the appeal of the
new generation with reduced consumption engines
is on the customers. The Boxster series achieved
3,564 units, a drop of 11.0 percent.
Sales Revenue Growth Outpaces Unit Sales
In the reporting year, sales in the Porsche Group
rose 3.4 percent to 7.368 billion Euro. In the pre-
vious year, sales – adjusted for the sale of CTS
Car Top Systems GmbH – stood at 7.1 billion Euro.
Compared to the 0.7 percent increase in unit
sales, this figure shows how the product mix has
continued to improve.
Once again, the majority of group sales were recor-
ded in the vehicles division where sales amounted
to 6.97 billion Euro, representing growth of 3.4 per-
cent. The financial services entities recorded sales
of 402.6 million Euro, mainly from leases, loans and
credit cards. Porsche AG accounted for 6.17 billion
Euro of total sales.
Production in Full Swing
A total of 101,844 vehicles were produced, almost
matching the prior-year figure of 102,602. With
a year-on-year increase of 6.7 percent, 38,959
911 vehicles left the Stuttgart-Zuffenhausen plant.
Due to the high demand for the 911, the vehicles in
the Boxster series were assembled exclusively in
Finland; a total of 26,712 units were produced com-
pared to 30,680 the previous year. The Porsche
plant in Leipzig manufactured 36,169 Cayennes, an
increase of three percent. In addition, four racing
cars in the LMP2 class were produced.
Substantial Increase in Development Expenditures
Spending on internal developments was up on the
previous fiscal year increasing by a three-digit million
sum. After the market launches of the second gen-
eration of the sporty all-terrain Cayenne and the new
sports cars in the 911 series, the Turbo, the GT3
and the Targa development work was downsized in
these areas. On the other hand expenditure was
still needed on new model variants such as the 911
Turbo Cabriolet, the 911 GT2 and the Cayenne GTS.
However, in the 2006/07 fiscal year spending was
particularly high on the development of the new,
four-door Gran Turismo Panamera. This fourth
Porsche series will be launched on the world markets
in 2009. Expenditure on the hybrid drive, which
has been brought forward and accelerated in light
of the intense climate discussion, was a significant
cost factor. This especially environmentally-friendly
hybrid drive will be fitted in the Cayenne and
Panamera series.
New Jobs Created
The Porsche Group once again created jobs in
the reporting year. As of the balance sheet date,
July 31, 2007, the Group headcount stood at
11,571, a year-on-year increase of 1.6 percent.
Many of the new jobs in the Group were created
in research and development and at the Leipzig
plant. On a standalone basis, the headcount of
Porsche AG totaled 8,229 employees as of the
cut-off date (8,257 in the previous year).
Porsche Drives Home Record Result
In the past fiscal year, the Group's pre-tax result
had risen to an extremely high figure of 2.110
billion Euro due to the investment in Volkswagen AG.
In the reporting year, Porsche once again succeeded
in raising the Group’s pre-tax result to 5.857 billion
Euro. Again, the disproportionately large increase is
attributable to non-recurring effects in connection
with the investment in Volkswagen.
The development of the operating result from Por-
sche’s vehicle division was also highly satisfactory.
At the same time, however, several factors weighed
heavily on the result; these include the increased
spending on the development of the four-door Gran
Turismo Panamera and the development of an en-
vironmentally-friendly hybrid drive to be fitted in the
Cayenne and Panamera series. In the wake of the
significantly higher Group result, expenses for ad-
ministration and personnel also rose. Costs were
also incurred for the mandatory bid to Volkswagen