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After significant adverse factors in 2018 financial year: Audi accelerates its realignment
- Operating profit before special items falls to €4.7 billion; Operating return on sales before special items of 7.9 percent
- Financial base confirmed: €2.1 billion net cash flow; €20.4 billion net liquidity
- Board of Management to reveal new strategy at 2019 Annual General Meeting
- CEO Bram Schot: “Making Audi efficient, agile and stress resistant again”
- CFO Alexander Seitz: “Increasing the target for the Audi Transformation Plan to about €15 billion, to generate the cash flow to finance electric mobility”
- New long-term target corridor for operating return on sales of 9 to 11 percent after deconsolidation of multi-brand import companies
- Transition year 2019 with electrification initiative and multiple challenges
Audi restart: Against the background of the transformation of the automotive industry, the Four Rings want to make use of available potential with a new, focused strategy. Audi is thus also drawing conclusions from its unsatisfactory performance in 2018. Impacted primarily by the changeover to WLTP, operating profit before special items amounted to €4.7 billion. The corresponding return on sales was 7.9 percent and thus not within the target corridor. With the inclusion of negative special items of €1.2 billion from the diesel crisis, operating profit amounted to €3.5 billion, equivalent to a return on sales of 6.0 percent. With the successful Audi Transformation Plan, the premium manufacturer was able to offset some of the high financial burdens. In the context of deconsolidating multi-brand import companies at the beginning of 2019, the company increased its long-term strategic target corridor for operating return on sales to nine to eleven percent. The current financial year will be dominated by Audi’s electrification initiative. Due to numerous challenges, 2019 is expected to be a transition year for the company with an operating return on sales forecasted at between 7.0 and 8.5 percent, which is still below the new long-term target corridor. Deliveries of the brand with the Four Rings are expected to increase moderately. The company anticipates financial burdens above all from managing the WLTP transition, high ramp-up costs, enormous advance expenditure for electric mobility and the increasingly difficult macroeconomic environment.