2001 Annual Repor t
Key Figures
Audi Group 1
Production
Cars Engines
Vehicle sales Audi Germany Outside Germany
Cars
Lamborghini Other Volkswagen Group brands
31 Dec. 2001
31 Dec. 2000
Change in %
727,033 1,225,448
650,850 1,187,666
11.7 3.2
991,444 726,134 254,866 471,268
919,621 653,404 239,644 413,760
7.8 11.1 6.4 13.9
297
296
0.3
265,013
265,921
–0.3
Employees
Average
51,141
49,396
3.5
Revenue
EUR million
22,032
19,952
10.4
Profit before tax
EUR million
1,322
986
34.1
Net profit
EUR million
769
734
4.8
Rate of return before tax
Percent
6.0
4.9
Capital investments Capitalised development costs
EUR million
2,151 726
2,422 445
–11.2 63.1
Depreciation
EUR million
1,435
1,199
19.6
Cash flow from operating activities
EUR million
2,452
2,094
17.1
Balance sheet total
EUR million
11,256
10,368
8.6
Equity ratio
Percent
38.6
36.8
1
Figures for 2001 calculated for the first time according to International Accounting Standards (IAS); prior-year figures reconciled with IAS for purposes of comparison
EmoFacts
Can business data arouse emotions?
Pretty pictures or bare figures? Sentiments or sums? In browsing through this Annual Report, you will see that both are important to us. Because we are proud of our company. With markets generally on the downturn, 2001 was nevertheless a good year for Audi. We managed to be more successful than in the previous year, and are thus able to look to the future with optimism. So, let’s talk about figures.
Is it possible to boost profits in this day and age? The Audi financial data speaks for itself. The company’s key figures have been improving steadily for a number of years, and we were able to extend this positive trend in 2001. A development that motivates us to keep up the good work.
Can you take a racing car out on the open road? We have proven ourselves through competitive sport: with FSI® technology, for instance. This principle, which helped Audi secure the top two places at Le Mans in 2001, will find its way into production models in 2002. Further evidence of our technological expertise.
Can you transform colleagues into specialists? Our employees are our most vital asset. The IT qualification scheme, among other measures, has ensured that all our employees are familiar with state-of-the-art information technology and will remain abreast of developments in this field. Whether in e-business, e-commerce, Internet or intranet technology, Audi employees know the ropes better than most.
Are we right to feel more optimistic than others? We are enjoying growth in all key markets. Despite the generally weak performance of our sales markets, we yet again achieved record-breaking unit sales – this means eight years of sustained growth. Whether in the USA, Europe or Asia, we think our figures make an interesting topic for discussion.
Can you make a perfect car even better? We have succeeded in selling over 700,000 vehicles for the first time in the company’s history. Proof that the market acknowledges and rewards innovative technologies and systematic efforts to refine successful models.
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Foreword Report of the Supervisory Board
Emotions or Facts? EmoFacts!
4 6
Products
10
Technology and Environmental Protection Motor Sport FSI® Multi Media Interface e-business e-procurement Environmental Protection
28 29 30 32 33 34
Employees
38
Markets and Customers Marketing and Service Market News Sports and Cultural Sponsorship
44 46 50
Group Companies
54
Management Report of the Audi Group and AUDI AG
58
Audi Group Finances Audi Shares Primary Accounting Basis Financial Performance Balance Sheet Ratios Income Statement Balance Sheet Development of Equity Cash Flow Statement Notes Development of Fixed Assets Notes to the Income Statement Notes to the Balance Sheet Other Particulars Segment Reports Statement of Interests Independent Auditor´s Report 10-Year Overview
66 67 68 70 72 73 74 75 76 76 83 89 102 108 111 112 113
Audi is an internationally renowned manufacturer of high-quality cars. Our success has been achieved through creativity, commitment and the ability to generate enthusiasm.
The wishes and emotions of our customers are the guiding principle behind our every action. We strive to lead the way in the field of innovation. We aim to establish new standards to substantiate our brand claim of “Vorsprung durch Technik”.
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Foreword
Members of the Board of Management
Dr. rer. pol. Jochem Heizmann, Production
Dr. jur. Georg Flandorfer, Marketing and Sales
Dr. h. c. Andreas Schleef, Human Resources
Dipl.-Ing. Erich Schmitt, Purchasing
Dr.-Ing. Werner Mischke, Technical Development
Dipl.-Ing. Dipl.-Wirtsch.-Ing. Peter Abele, Finance and Organisation
Dr.-Ing. Franz-Josef Paefgen, Chairman of the Board of Management
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The Audi Group was subjected to various stresses and strains in the course of 2001. We have nevertheless been able to conclude yet another financial year with considerable success, adding to our impressive succession of record-breaking years. All of the company’s key figures once again revealed an improvement on the previous year: vehicle sales by the Audi Group almost reached the one million mark, revenue totalled EUR 22 billion and profit before tax EUR 1.3 billion; with a workforce averaging some 51,000, we built more than 727,000 vehicles worldwide. An extensive range of attractive, innovative vehicles and high standards of quality and reliability have helped strengthen the appeal and reputation of the Audi brand among our customers. Audi has succeeded in boosting its vehicle sales even in markets that were recessive or stagnating as a whole, and has thus further strengthened its market position. Such growth, which defies the general trend, has moreover been forthcoming in Europe, the USA and Asia. Particularly at times when the economic and competitive situation is strained, such success serves as an encouragement and a challenge to us to promote the cause of innovation and customer orientation. We reshaped our company’s portfolio in 2001 by adding various remarkable new products. The Audi A2 1.2 TDI, which needs less than three litres of fuel per 100 kilometres under standard conditions, is the only five-door member of this ultra-low-consumption category, and moreover the most agile. The smallest Audi model is of pre-eminent importance to our brand: this high-tech vehicle represents the very essence of one of our unique selling propositions – the expertise in lightweight design that we have refined over many years. At the other end of our product range, we brought the Audi A8 with twelve-cylinder engine onto the market last year; this is the most powerful member of the exclusive club of twelve-cylinder saloons. The defining event at our subsidiary Lamborghini in 2001 was the appearance of the new Murciélago. The first model to have been created by the company since it became part of Audi means that our group can also lay claim to building the fastest production sports car around. The example of our success in China irrefutably demonstrates the value of long-term strategies: after more than ten years of systematic collaboration with Chinese partners, this highly dynamic market is already the sixth-largest Audi export market. With its products, image and innovative workforce, the Audi Group has every prospect of maintaining a secure foothold on the narrow path that leads to success, however difficult the wider context may be. My sincere thanks are due to all those who have been, and will continue to be, behind this success. Ingolstadt, February 22, 2002 Dr.-Ing. Franz-Josef Paefgen
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Report of the Supervisory Board
Audi ended the 2001 financial year with considerable success and once again saw its key figures improve. The Supervisory Board would like to thank all employees, the employees’ elected representatives and the Board of Management for the effort and dedication that made this success possible. As in previous years, the Supervisory Board was informed in depth about the company’s situation, its business progress and developments on its markets at quarterly meetings and by means of detailed quarterly reports. Each meeting of the Supervisory Board was preceded by consultations between the members of the presiding committee. The Supervisory Board monitored and advised the company’s management and also supported it extensively outside the context of the four Supervisory Board meetings. The Board of Management kept the Supervisory Board informed about the current and future model range and about forthcoming developments. Following detailed consultations, the financial, personnel and investment plans of the Audi Group for the years 2002 to 2006 were approved by the Supervisory Board. PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft has audited the Consolidated Financial Statements of the Audi Group and the Annual Financial Statements of AUDI AG for the 2001 financial year. Both sets of accounts, together with the combined Management Report for the Audi Group and AUDI AG, have received the unqualified certification of the auditors. The subsequent examination by the Supervisory Board revealed no cause for objections. The Supervisory Board has ratified both sets of accounts and the Management Report, which are thus established in accordance with § 172 of German Stock Corporation Law. At its meeting on November 23, 2001 the Supervisory Board of VOLKSWAGEN AG passed a resolution to reorganise the passenger car operations of the Volkswagen Group into the brand groups “Volkswagen” and “Audi” with effect from January 1, 2002. The Audi Brand Group comprises the Audi, SEAT and Lamborghini brands. AUDI AG is responsible for the business management and worldwide performance of the aforementioned three brands. To accompany this reorganisation, there have been changes within the Board of Management of AUDI AG based on resolutions passed by the Supervisory Board of AUDI AG on November 23, 2001 and February 22, 2002. By agreement with the Supervisory Board, Dr. FranzJosef Paefgen, Chairman of the Board of Management of AUDI AG, is surrendering office with effect from February 28, 2002 and will be taking on new roles within
Dr. Bernd Pischetsrieder, Chairman of the Supervisory Board
the Volkswagen Group from March 1, 2002: in addition to assuming the role of Chairman of Rolls-Royce and Bentley Motor Cars Ltd., Dr. Paefgen will be in charge of group research activities and the motor sport activities of all Volkswagen Group brands. He will in addition become General Manager of VOLKSWAGEN AG with power of attorney. The Supervisory Board would like to express its sincere thanks to Dr. Paefgen and its deep appreciation for all that he has done for Audi over a period of more than 21 years, including serving as its Board Chairman since 1997. The Supervisory Board has appointed Dr. Martin Winterkorn, Member of the Board of Management of VOLKSWAGEN AG, as the Chairman of the Board of Management of AUDI AG with effect from March 1, 2002. Dr. Winterkorn previously worked at AUDI AG from 1981 to 1993. He will remain a VOLKSWAGEN AG board member in his new capacity. Dr. h. c. Andreas Schleef, Member of the Board of Management of AUDI AG for Human Resources, will take charge of the SEAT brand from March 7, 2002 in the capacity of Chairman of the Board of Management of SEAT S.A. His resonsibility, for the Human Resources Division at AUDI AG will end on June 30, 2002. Dr. h. c. Schleef will in his capacity as Chairman of the Board of Management of SEAT S.A. remain a member of the Board of Management of AUDI AG. The Supervisory Board has appointed Dr. Horst Neumann as the new Board Member of AUDI AG with responsibility for
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Supervisory Board 1 Position at January 1, 2002 Dr. Bernd Pischetsrieder
Chairman 2 Shareholders’ representative
Xaver Meier
Deputy Chairman 2 Employees’ representative
Bruno Adelt
Shareholders’ representative
Senator h.c. Helmut Aurenz
Shareholders’ representative
Dr. Robert Büchelhofer
Shareholders’ representative 2
Helmut Dotzauer
Employees’ representative
Heinz Eyer
Employees’ representative
Dr. rer. pol. Thomas R. Fischer
Shareholders’ representative
Wolfgang Förster
Employees’ representative
Dr. h.c. Peter Hartz
Shareholders’ representative
Dr. jur. Claus Helbig
Shareholders’ representative
Johann Horn
Employees’ representative
Berthold Huber
Employees’ representative 2
Peter Mosch
Employees’ representative
Dr. jur. Jens Neumann
Shareholders’ representative
Richard Polzmacher
Employees’ representative
Norbert Rank
Employees’ representative
Dr. rer. pol. Axel Freiherr von Ruedorffer
Shareholders’ representative
Max Wäcker
Employees’ representative
Dr. rer. nat. Martin Winterkorn
Shareholders’ representative
Dr. rer. pol. Carl H. Hahn
Honorary Chairman
1
The profession and company of the members of the Supervisory Board, together with other non-executive directorships, are indicated in the Notes to the Financial Statements of AUDI AG.
2
Member of the presiding committee and the negotiating committee.
Board on June 30, 2001. Peter Mosch was appointed as supplementary member from July 1, 2001. The Supervisory Board would like to thank Dr. Henkel and Mr. Kniselies for their work. Dr. Robert Büchelhofer retired as Chairman of the Supervisory Board with effect from December 31, 2001, but remains a member of the Supervisory Board and presiding committee. The Supervisory Board would like to thank Dr. Büchelhofer for his foresight and considerable commitment as chairman of this body. Dr. Ferdinand Piëch retired from the Supervisory Board with effect from December 31, 2001 after nine years, including over three years as its chairman. The members of the Supervisory Board are deeply grateful and indebted to Dr. Piëch for all the work he has performed on this committee. The Local Court of Ingolstadt, upon the application of the Board of Management of AUDI AG, appointed Dr. Bernd Pischetsrieder, Member of the Board of Management of VOLKSWAGEN AG, his successor, with effect from January 1, 2002. He was elected Chairman of the Supervisory Board by its members. Dr. Martin Winterkorn has surrendered office as a member of the Supervisory Board of AUDI AG with effect from February 28, 2002. The Board of Management of AUDI AG has filed an application with the Local Court of Ingolstadt to appoint Dr. Franz-Josef Paefgen as supplementary member of the Supervisory Board of AUDI AG with effect from March 1, 2002. A former member of the company management, Philipp Wesp, died on June 21, 2001. As member of the Board of Management of AUDI NSU AUTO UNION AG from 1949 to 1971, Mr. Wesp made a significant contribution towards the company’s development thanks to his foresight and outstanding personal dedication. We will honour his memory. Growing competition and the difficult economic context mean that the Audi Group will face new challenges in the 2002 financial year. In an effort to rise successfully to these challenges, the Supervisory Board will continue to provide constructive advice and support for the company’s management.
Ingolstadt, February 22, 2002 Human Resources with effect from July 1, 2002. There have been the following changes on the Supervisory Board of AUDI AG: Dr. Hans-Olaf Henkel surrendered office with effect from April 3, 2001. The Annual General Meeting of AUDI AG on June 28, 2001 elected Dr. Martin Winterkorn as his successor. Norbert Kniselies left the Supervisory
Dr. Bernd Pischetsrieder Chairman of the Supervisory Board
EUR million
1,322
986 861 839
569 441
301
1995
1996
Profit before tax
1997
(1)
according to IAS
1998
1999
2000 (1)
2001 (1)
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Products
The thrill of driving – the Audi A2
For distances short and long Low fuel consumption, ample space, ergonomic seats and agile response: the Audi A2 unites our entire breadth of experience in lightweight aluminium design in a progressive vehicle concept. Numerous awards serve to confirm that the Audi A2 has redefined the standard in its segment. It is not merely an ideal city car, but also offers superb comfort, agility and driving enjoyment on long journeys. The top environmentalist In addition to the Audi A2 1.4 petrol and diesel versions, the model range was extended last year with the addition of the first five-door, three-litre car in the world: the Audi A2 1.2 TDI. With an engine weighing only 100 kilograms, it is one of the lightest passenger-car diesel units around. The three-litre version of the Audi A2 has demonstrated in many tests that its standard consumption figure of 2.99 litres of diesel can actually be significantly undercut if it is consciously driven with an eye to economy. It is no surprise to learn that it topped the list of pro-environmental cars compiled by Verkehrsclub Deutschland.
Brimming with bright ideas The Audi A2 is full of intelligent ideas: the oil and windscreen washer fluid can be routinely checked and topped up via a service module without opening the engine compartment lid. The multibox system developed specially for the Audi A2 creates additional storage space. The optional Open Sky System, which affords a much more generous view of the sky than conventional sunroofs, is unprecedented. The Audi A2 can be given a deluxe or sporty accent with numerous other equipment options such as automatic air conditioning with sun sensor, high-quality leather equipment and exclusive cast aluminium wheels. The range of refreshing interior colours lends it a very youthful, dynamic note.
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Premium in the compact class – the Audi A3
Quality on a grand scale The Audi A3 has established itself as a premium product at the upper end of the compact class since its appearance on the market in 1996. The fabrics, colours and materials bring the quality of the larger Audi models into this vehicle segment. The Audi A3 is distinguished as much by driving fun and dynamism as by its awardwinning design. Driving with due respect for the environment High-torque, quiet-running engines make every kilometre a sheer pleasure. Pleasure without compunction, in fact, because consumption-cutting technology was the key principle in the development of these engines. The Audi A3’s engines cover a wide performance and torque spectrum: there is a total of 15 engine and drivetrain versions to choose from, from the entry-level 75 kW, 1.6 litre engine to the 132 kW 1.8 litre turbo petrol version. The 74 kW A3 1.9 TDI was a new addition in autumn 2001: this front-wheel-drive Audi A3 with four-cylinder diesel engine accelerates from 0 to 100 km/h in eleven seconds, but is still consistently economical.
Audi A3 to order Customers can order their Audi A3 with three or five doors, entirely as they prefer. The differentiated equipment packages of the Attraction, Ambition and Ambiente models cover a broad range of customer requirements. There is in addition an extensive choice of individual optional extras. Other equipment items available from quattro GmbH ensure that every customer can express his or her personal style in the Audi A3. The Audi A3 also lends substance to its premium credentials in the field of cutting-edge electronics: for instance with the optional Audi telematics communication system and the navigation system Plus with fiveinch screen.
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Products
Always a step ahead – the Audi A4
Much admired – the Audi A4 saloon The sports driving characteristics and exclusive equipment of the Audi A4 saloon have captivated many of the experts: since its market launch it has won virtually all key comparative tests, and quite a few international awards. In November 2001, for instance, it received the coveted Golden Steering Wheel for the midsize car category. The engine range has now been extended to five petrol and four diesel versions: the high-performance, consumption-optimised engines can be combined with five and six-speed gearboxes, and with the multitronic continuously variable automatic transmission for frontwheel-drive versions or tiptronic for four-wheel-drive versions. The Audi A4 thus covers every conceivable set of demands.
Aluminium also for engine and suspension The latest-generation Audi A4 yet again breaks the mould with pioneering technology and advanced styling. Having previously used aluminium predominantly in body construction, we have systematically refined its use for the Audi A4’s engine and suspension. This transfer of expertise has led to the development of two fundamentally new petrol engines with aluminium housings, and a lightweight aluminium suspension layout that assures precision-control handling thanks to its outstanding traction and superb agility.
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The new Audi A4 Avant continues the trend Since making its début in 1996, the Audi A4 Avant has literally defined a new segment and prompted numerous imitations. Its high waistline and restrained wedge shape helped this lifestyle estate car to pioneer the design trend in the 1990s. The new Audi A4 Avant, with refined styling and technical innovations, was unveiled at the 2001 Frankfurt Motor Show: this model is also characterised by an unequivocal commitment to purist clarity and avowed sportiness.
Even more versatile The new Audi A4 Avant is a veritable quick-change artist: asymmetrically divided folding rear seats, an easy-to-remove holder containing the luggage cover and net partition, and an additional storage compartment beneath the load-area floor assure maximum variability. When the load-area floor is folded up, it reveals a permanently installed plastic tray that is ideal for transporting dirty or wet items.
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Products
A new form of dynamism and comfor t – the Audi A6
Confidently progressive styling Since last year, all A6 models have sported the active, dynamic front end design that was previously reserved for the eight-cylinder versions: the striking double grille with aluminium surround and the redesigned clear-glass headlights emphasise its progressive styling. It is also worth viewing the Audi A6 as it speeds away into the distance: the design of its rear lights and the modified bumpers accentuate the formal idiom of the Audi brand. A dream team on tour A long-awaited dream team is now available for the Audi A6: the 114 kW, 2.5 litre V6 TDI – a distinctly economical diesel engine – is now available in conjunction with the multitronic continuously variable automatic transmission, which offers clearly superior fuel economy to conventional fixed-ratio automatic transmissions.
This combination of engine and transmission is doubly beneficial: in view of its performance and standard of comfort, the overall fuel consumption of 6.9 litres per 100 kilometres (according to 1999/100/EC) is truly sensational. Safety can also be visually attractive Safety is a priority on the Audi A6 too: the SIDEGUARD head-level airbag system and the front and side airbags for driver and front passenger are standard equipment. New, uprated servo-assisted brakes are supported by a hydraulic brake assist system. Meticulous attention has been paid to every last detail of the interior, which is notable for its harmonious combination of functionality and form. Readily accessible controls, finely coordinated colours and high-grade materials create a pleasant ambience.
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The best of two worlds – the Audi allroad quattro
At home on any road Striking bumpers and the visible underbody guard dominate the distinctive appearance of the Audi allroad quattro, which cuts an equally good figure on or off the road. With its four-position air suspension, it can adapt flexibly to any conditions and is thus ideally equipped for handling rough terrain. This ideal touring and leisure vehicle with five comfortable seats does not shy away from heavy loads either: a payload of 630 kilograms is permitted. Full speed ahead A particularly high-torque 2.7 litre V6 engine developing 184 kW, with two turbochargers and five-valve technology, produces tremendous power that is brought safely
onto the road via the quattro drive. Even at lower revs, this engine urges the Audi allroad quattro forcefully on. Those who prefer a diesel can opt for the 2.5 litre V6 TDI with an output of 132 kW, ample for propelling this allterrain vehicle along on surprisingly little fuel. Different in every respect Not just the driveline and suspension of the Audi allroad quattro have been entirely rethought, specially contoured seats provide secure support for the driver when crossing difficult terrain. The distinctive interior with exclusive design elements lends the Audi allroad quattro a very special flair.
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Products
Elegance, dynamism and athleticism – the Audi A8
Timeless elegance The harmonious shape of the Audi A8 embodies a superlative simplicity of memorable but unpretentious elegance. Its striking profile and the flared wheel arches create a powerful silhouette. The Audi A8 is no slave to fleeting fashions: it has an engaging, timeless elegance, making it a true classic among luxury saloon cars. Steadily growing model range Ever since the market launch of the Audi A8, the model range has been gradually broadened. It now spans petrol
and diesel engines with outputs from 132 to 309 kW. Depending on engine version there is a choice between a five or six-speed manual gearbox and automatic transmission for added driving convenience. The most powerful turbodiesel unit is the V8 TDI with a displacement of 3.3 litres and developing 480 Nm torque. This phenomenally dynamic diesel version with common rail direct fuel injection achieves outstanding performance and fuel economy. Best of all, permanent four-wheel drive and the five-speed tiptronic are included as standard on this model.
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Light and nimble Anyone who believes luxury saloon cars are always heavy, lumbering objects should take a closer look at the Audi A8: the Audi Space Frame body is made entirely from aluminium, and for all its superior safety and ride comfort it weighs less than an equivalent conventional steel structure. This is obviously reflected in its lower fuel consumption. The Audi A8 2.5 TDI, for instance, achieves a range of over 1,000 kilometres (according to MVEG standard) on a single 90-litre tank of fuel.
Spaciousness of the highest calibre The Audi A8 is a vehicle for people who need plenty of room. The long-wheelbase version of this luxury saloon perfects this concept of spaciousness. The Audi A8 L 6.0 quattro sets new standards in many different respects: the world’s most powerful twelvecylinder engine in a production saloon develops 309 kW and, in conjunction with the energetic athleticism of quattro drive, satisfies supreme standards of dynamism and ride comfort. The Audi flagship model thus represents a unique product in the luxury saloon segment.
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Products
For people with passion – the Audi TT
Knowing what really matters Concentrating on the fundamentals without losing sight of the details: people who possess this quality will be fascinated by the Audi TT. Its simple, charged design and the meticulously functional interior equipment follow the principle of purism and clarity. The shape of the circle – brilliantly simple and self-contained – serves as a leitmotiv for the Audi TT. The materials on the interior are perfectly matched up: cool aluminium combined with exclusive cloths or leather. Every detail is perfectly in place on the Audi TT.
“S line” in the Audi TT Coupé 1.8 T quattro A special sports edition of the most powerful version of the Audi TT Coupé, which has an output of 165 kW, was introduced for a limited period last year. The “S line” sports package further enhances an already overtly sporty specification: firmer sports suspension, 18-inch cast aluminium wheels and xenon headlights with titanium-coloured headlight surrounds. The Audi TT Coupé was the first model to incorporate quattro GmbH’s new “S line” concept, a sports-oriented way of customising soon also to be found on other models.
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Roll on, summer! Summer cannot come soon enough for the Audi TT Roadster. Whether with the fabric hood or hardtop, just a few easy adjustments are needed to let the daylight, air and sun come flooding in. The attractively designed, electrically retractable glass wind deflector, which can be ordered as an optional extra, excludes any undesirable air turbulence. The matt aluminium rollover protection hoops are particularly eye-catching features of the TT Roadster: as well as providing a visual accent, they boost the vehicle’s safety even further.
In addition to the 132 and 165 kW versions, the Audi TT Roadster was launched last year with a 110 kW engine. The harmonious torque pattern of this engine also produces the pulling power that makes roadster driving such fun.
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Products
Exploring the limits – the S models
Vehicles for connoisseurs Superior performance, sports handling and uncompromising agility coupled with unrestricted everyday suitability – these requirements are met by the top athletes in the Audi model range, identified by the “S” emblem. The S models are also distinguished by their typical design elements: dual exhaust pipes, aluminium door mirror casings and the Avus design of cast aluminium wheels. The outward appearance of these athletes is deliberately restrained. But the connoisseur knows what that subtle “S” on the tail and radiator grille holds in store when it comes to driving enjoyment and dynamism.
Superlative drive – the Audi S6 In the case of the Audi S6, “S” stands for superlative and a very distinctive form of sportiness. This is the only S model currently to be available in both a saloon and Avant version, in each case with aluminium suspension, quattro drive and five-speed tiptronic. The 4.2 litre V8 engine with an output of 250 kW possesses enormous refinement and reserve power, enabling the driver to remain in full command, even in critical situations.
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Luxurious sports appeal – the Audi S8 The interior equipment of the Audi S8 is comparable to the aura of an exclusive club. High-quality materials, harmonious colours and excellent high-tech equipment: the S8 has everything that can be expected of a premiumclass vehicle. The S8 is the only vehicle in its segment that can be supplied with a choice of automatic transmission or six-speed manual gearbox, and its body is entirely of aluminium. In conjunction with quattro drive, this deluxe saloon provides dynamic driving to a very high standard of safety.
Impressive power pack – the Audi S3 The performance of the Audi S3 made a significant leap last year: with 165 kW now at its disposal, it sprints from 0 to 100 km/h in only 6.6 seconds and on to a top speed of 243 km/h. The 1.8 litre turbo engine achieves a substantial 280 Nm of torque as low down as 2200 rpm. With manual six-speed gearbox and permanent fourwheel drive as standard, the Audi S3 is not just highly mobile – it takes all road conditions safely in its stride.
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Products
Power, purism, perfection – the Lamborghini Murciélago
The name of a true thoroughbred Murciélago was the name of a bull whose life was spared by a Spanish torero in 1879, thanks to the qualities it had demonstrated in an unremitting duel. The enraptured crowd at the bullfight had demanded that it be allowed to live, so impressed were they by the animal’s courage and fighting spirit. Unbridled strength, impressive agility and sharp responses were the characteristics which distinguished the bull – all qualities which are moreover shared by the new Lamborghini Murciélago.
Sheer power, in a perfect package Lamborghini’s brief to its designers was simple: “We’ll build the engine, you design its packaging”. The resulting tailor-made suit of carbon fibre and steel surrounding the Murciélago’s 426 kW V12 engine and cabin issues a clear message. With the powerful curve spanning from nose to tail and enhancing the body’s wedge shape, it leaves the onlooker in no doubt as to the sheer dynamism that resides within the Murciélago.
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The athletic body is supported by a high-strength space frame that imparts the necessary torsional rigidity, even at 330 km/h. The Murciélago’s visual appeal depends on the very absence of trappings and trimmings: the aerodynamic design, inspired by aircraft construction techniques, elevates purism to the status of a principle. Time to breathe deeply Even a Lamborghini needs to breathe deeply when its engine is delivering maximum output. Instead of destroying the body design with outsize cooling apertures, the engineers at Sant’Agata Bolognese chose a more intelligent, aesthetically appealing solution: two trapezoidal wings at each side open automatically whenever the engine management system indicates that extra air is needed to cope with the extremely high operating and ambient temperatures.
Driving machine with superlative technology Lamborghini’s acknowledged expertise in electronic engine management, the perfectly tuned suspension, the low level of noise inside the car and the priority given to ergonomics in the development process have ensured that the Murciélago is no rough-and-ready piece of sports equipment, but a fascinating high-performance sports car that is pleasant to drive. Its impressive traction and even superior handling characteristics to its predecessor make it veritably cling to the road on even the tightest of bends. One thing, however, remains unchanged: that incomparable tingle that the driver feels when the sheer power of the twelve-cylinder engine’s acceleration presses him forcefully back into his seat.
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Products
Our stars at the Frankfur t Motor Show
Taking stock of present and future At the 2001 Frankfurt Motor Show, Audi exhibited the models that symbolise the group’s present and future: three vehicles of the Audi brand – the Audi A4 Avant, the Audi A4 Cabriolet and the Avantissimo design study – together with the new Lamborghini Murciélago were the highlights at Germany’s largest automotive exhibition. Whereas the first specimens of the Audi A4 Avant and the Lamborghini Murciélago were shipped to customers at the end of 2001, the new Audi A4 Cabriolet was exclusively for admiring gazes and advance orders. It will be appearing on the roads from April 2002, perfectly timed for the start of the open-air season. Driving the Avantissimo, on the other hand – an Avant model for the luxury class – will for the time being remain wishful thinking. This study provided an insight into the technical and design scope of the Audi brand.
To savour and enjoy – the Audi A4 Cabriolet The show car version of the new Cabriolet made its first public appearance at Frankfurt. In the space of just nine years, its predecessor had acquired formidable cult status as the embodiment of classic elegance. It is evident at first glance that the successor need fear no comparison. Its fresh design is typical of Audi: the flat front end, the restrained wedge shape and the strikingly contoured rear end clearly convey sports character and dynamism. The Cabriolet’s creators have incorporated a large number of successful Audi developments, such as the lightweight aluminium suspension, the choice of two high-performance V6 engines developing 125 kW and 162 kW, and the multitronic continuously variable automatic transmission. The result is a unique driving experience in the cabriolet segment.
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A vehicle of superlatives – the Avantissimo What’s in a name? The Avantissimo is a car of superlatives that pampers its occupants with sheer luxury and a truly lavish amount of space. Over a length of 5.06 metres and a width of 1.91 metres, the Avantissimo houses refined technical features aplenty, as well as an immense amount of space that can be further increased by remote control: at the push of a button, the rear bumper opens out to allow a 75 cm long load platform to be extended. At the same time the rear seats are folded down automatically, creating a continuous surface of unprecedented dimensions.
One other revealing example of the concept car’s new technical features is the MMI (Multi Media Interface). This Audi development uses a simple, easy-to-use control instead of a confusing array of switches, for all information and communication media integrated into the vehicle. A glance inside the Avantissimo’s engine compartment reinforces the impression of superlatives: it houses a 316 kW, 4.2 litre V8 biturbo engine based on the version that brought Audi success at Le Mans.
quattro vehicles
202,760 200,648
168,831
117,239
81,310
1997
Production of quattro vehicles
1998
1999
2000
2001
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Motor Sport
Motor spor t achievements – a legacy for production
There’s no stopping Audi The Audi Sport team repeated the tremendous feats of the previous year in the 2001 racing season: Audi won eight out of ten races in the American Le Mans Series, and it was almost a matter of course that it won the manufacturer, team and driver trophies. The classic endurance races at Le Mans, Sebring and Road Atlanta that are a particular challenge to both man and machine saw the Infineon Audi R8 triumph over the competition, as in the previous year. These successes were overshadowed by the tragic death of the driver Michele Alboreto: during testing on the Lausitzring circuit on April 25, his car swerved following a blow-out and rolled over. After much reflection, we
decided to continue with the season’s races as planned – we believe that this is what Michele Alboreto would have wanted. Le Mans – the dress rehearsal In technical terms, the two works cars participating in the Le Mans 24 Hours were something very special: for the first time, they were powered by a V8 biturbo engine using the Audi FSI® petrol direct injection principle. FSI® emerged from the rigours of this race with flying colours. This technology has already been brought to production maturity for use in passenger-car petrol engines: the first Audi models with FSI® engines will appear on the market in 2002.
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FSI®
The age of FSI ® has dawned.
Homogeneous-charge operation
Stratified-charge operation
FSI® – the revolution in spark-ignition technology What is so special about FSI®? Compared with conventional indirect injection, this technique boosts power output and torque and assures a more agile response by the engine. But what about fuel consumption? It is lower – by up to 15 percent, because an FSI® engine is significantly more efficient. This quantum leap in engine development has been made possible by exploiting two different charge statuses in the engine’s combustion chamber, according to demand: depending on the driving situation, the injection switches between homogeneous-charge operation and stratified-charge operation. Homogeneous-charge operation = more power If the engine is operated at full throttle, an even, ignitable fuel-air mixture is spread throughout the entire combustion chamber. The fuel is injected directly into the cylinder during the compression phase, cooling the
cylinder’s walls. This prevents undesirable spontaneous ignition of the mixture, or “knocking”, and permits an optimum combustion process at a higher compression ratio. The force acting on the crankshaft via the pistons is greater, boosting torque and power. Stratified-charge operation = lower consumption Full power is nevertheless only rarely needed. If the throttle is opened less, the engine runs in the stratifiedcharge mode. The air entering via the intake manifold and the quantity of fuel injected are regulated in a swirling motion such that a layer of ignitable mixture is only formed around the spark plug. The mixture in the remainder of the combustion chamber is extremely lean, with a high air content. This acts like an insulating layer during the combustion process, reduces heat dissipation via the engine block and enhances the engine’s efficiency, thus reducing fuel consumption.
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Multi Media Interface
Electronics mean progress – if they are easy to operate.
Interacting elements The significance of electronics in the automotive sector has soared in recent years. In addition to the engine, there are countless safety, comfort, convenience and communication systems that need to be networked in a vehicle. Examples include the Electronic Stability Program ESP, navigation systems, telematics services and the advance of Internet-based services in the car. These functions must be networked reliably and flawlessly if the high expectations of our customers are to be met. The growing complexity of component parts and the way they interact call for computer-aided systems, the performance of which is continuing to rise exponentially. The car of the future will communicate more and more
with the world around it – for instance in guiding the driver reliably to his destination, without traffic congestion and along the fastest route, in supplying useful information on the car’s current location, or in making remote diagnosis possible and providing other services. Electronics – the invisible helper Electronic elements in the car govern a wide range of functions autonomously, for example in the engine management system or for automatic gearshifts. The driver generally wishes to operate entertainment and information devices such as the radio, navigation system, telematics, CD and telephone directly, though in view of the number of control elements present this is not always straightforward or clear.
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The customer will only benefit, however, if the electronic functions in the car relieve the workload, allowing them to concentrate fully on the traffic, rather than constituting an added distraction. MMI – harnessing the deluge of information Audi has found a brilliantly simple way of doing this: the Multi Media Interface, or MMI for short. It combines two display elements in the driver’s direct field of view with suitably designed control elements located between the gear lever and centre armrest. The MMI makes it possible to operate all information and entertainment functions according to a consistent principle: the main functions – such as the radio – are selected directly via eight permanently assigned keys.
There are four further function keys around a central control button. The graphic representation on the screen shows four stylised keys around a central menu, reflecting this arrangement. The option that is displayed on the virtual key on the screen is selected by physically pressing a key. The central button controls the central menu. Whichever device the customer wishes to operate, they always follow this simple principle and can reliably handle all integrated functions without having to take their eyes off the traffic. Technology means progress, but only if it is easy to operate – like the Multi Media Interface.
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e-business
New technologies: “e-business project”
www.Internet-on-the-move.com The spread of Internet technology has made it possible to transfer data and information between a large number of recipients with a speed and efficiency that were not previously thought possible. More and more people are using this medium: studies indicate that the Internet is growing in leaps and bounds. In 2002, some 70 percent of Audi customers will have Internet access. Strategic approach in the customer’s interests Audi has been considering how best to exploit Internet technology since the mid-1990s. One of the first successful applications was the Audi Car Configurator, which customers could use to put together the car of their dreams online, down to even minor details. Internal procedures and business relations with other companies as well as communication with customers can be handled more swiftly, purposefully and effectively, thanks to the Internet. Audi has consequently drawn up a comprehensive e-business strategy. The “e-business project” was officially launched in April 2001. The “e-business project” e-business at Audi – for us, this means exploiting the scope of Internet technology wisely. We have defined several areas of action in this respect: “business-tobusiness” (B2B), “business-to-consumer” (B2C), “businessto-employee” (B2E) and “Telematics”. These areas of action provide the framework for currently 20 individual projects involving over 80 measures that encompass the entire company, transcending the dividing lines between individual divisions. These projects and measures are part of a strategy that sees Internet technology not as an end in itself, but as a means of continuing to demonstrate our market lead in the future. In addition to measures of a longer-term nature to optimise processes, products and structures, a further objective is to exploit short-term results. Several areas are affected by this, including “e-procurement” – in other words, the procurement of goods and services via the Internet. By setting priorities, we are able to recoup the costs of the Audi e-business project as swiftly as possible.
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e-procurement
e-procurement: a modern technique for modern times
“e-procurement”? e-procurement means using the Internet as the medium via which the entire procurement process is handled, in order to render partnership with our suppliers much more transparent and efficient, thereby cutting costs. The process begins with inviting bids. We provide our suppliers with invitation documents and other data online which they can process directly in digital form. The advantage is that our partners can prepare their bids much more swiftly, and the cost component of the entire process chain is reduced. Internet platform as a pivotal point The supplier marketplace “www.vwgroupsupply.com” established jointly with the Volkswagen Group serves as a comprehensive information platform between our purchasing department and supplier companies. The processes of the bidding, negotiating and ordering
phases can be handled efficiently via this Internet portal. Suppliers can register in the supplier database integrated into the marketplace’s portal, establish contact with the AUDI AG buyers online and obtain the key data and information from AUDI AG swiftly and economically. Many applications of the supplier marketplace, such as interactive negotiations, are now routine aspects of purchasing. Over 280 negotiations worth in excess of one billion euros have been conducted online since summer 2000 – and this figure is set to rise. Order submitted – now what? However, the electronic partnership does not end when a supplier is awarded a contract – it extends over the entire life-cycle of a component. Within the scope of “e-supply chain management”, for example, the flows of materials for major components are steered electronically along the entire supply chain.
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Environmental Protection
Protecting the environment is naturally par t of our corporate policy. Pioneering environmental management There is already a lengthy tradition of environmental management at Audi: we have installed and validated an environmental management system in accordance with the EU Eco-Audit and Management Scheme at Györ, Ingolstadt and Neckarsulm. The Neckarsulm site was successfully accredited for the second time in midSeptember 2001. Audi has been participating in the Environmental Pact for Bavaria since 1995, a project carried out jointly by the Bavarian government and Bavarian industry. The Environmental Pact II for Bavaria was launched in October 2000, in the context of which Audi has participated in a pilot project on Integrated Product Policy (IPP). The objective of IPP is to observe the environmental impact of a product throughout its entire life-cycle, in other words from the recovery of its raw materials to its scrapping.
Protecting vehicles and environment To ensure that new vehicles reach the customer without even the slightest scratch, they must be protected against damage and environmental factors during transit. Audi is the first car manufacturer in the world to use a purpose-developed technique for this. Instead of the conventional wax coating or a manually affixed film, a liquid film is sprayed onto the paintwork by robots. The film can simply be pulled off before the vehicle is handed over to the customer. The environment benefits, too, because the waterbased system renders it unnecessary to use solvents, which are indispensable for applying and removing wax coatings. Solvent emissions from the preservative transit coatings can thus be cut by around 95 percent. This also avoids the time-consuming, labour-intensive procedure of applying conventional film. All Audi A3 and
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Audi TT cars have been coated with liquid film since mid-2001. Closed circuit at refuelling systems The hydrocarbon emissions occurring during the addition of petrol on the assembly lines could previously merely be led off due to the extremely long lines used. They were then discharged into the atmosphere elsewhere. Newly developed refuelling systems at the Audi Ingolstadt plant ensure that these emissions no longer need be released into the atmosphere. The systems draw the environmentally harmful fumes into an activated charcoal filter. From there, they are desorbed and liquefied. The liquid petrol recovered in this way is simply returned to the refuelling system. This is classic recycling, because with an efficiency of 98 percent it means that there are virtually no losses in the refuelling process.
Environment-friendly corrosion protection for aluminium Car bodies have to be cleaned, pickled and given corrosion protection before painting. Zinc phosphating is the state of the art here: the material is initially scoured off, then incorporated into the subsequently applied zinc phosphate coating so that scarcely any waste sludge occurs. This does not work on aluminium bodies, with the result that the conventional phosphating process would generate much more sludge containing heavy metals. Audi has therefore helped to develop a pretreatment system that affords the same level of corrosion protection without producing sludge for disposal.
Average in thousands
51.1 49.4
45.8
41.0
37.8
1997
Employees (Audi Group)
1998
1999
2000
2001
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Employees
“IT knowledge is as fundamental as reading, writing and arithmetic.” IT knowledge as a competitive factor Modern information technology (IT), in particular the Internet, has long since permeated the everyday lives of our employees. In working life, too, virtually every business, development and production process is computeraided as a matter of course. This innovative technology is characterised by a breathtaking pace of development. Information technology will continue to increase in importance. We are therefore working to implement the Audi e-business project systematically. Employees and users need to keep their knowledge of how to handle IT up to date. Such knowledge has developed into a key competitive factor. Audi launched the largest company-wide training campaign in its history in the form of the IT qualifications scheme. The aim was to make all employees capable of using information technology systematically and expertly, in as short a time as possible – irrespective of their task and position in the hierarchy. We were in particular able to meet this aim thanks to the good response from our employees to the IT qualifications scheme. Basic IT expertise through e-learning The speed of the learning processes was of decisive importance: in view of the rapid pace at which information technology develops, only swift implementation of the training measures would achieve the desired effect. Suitably training every employee throughout the company within the space of just a few months was a challenge that could only be tackled with the modern approach of e-learning. The entire training process therefore took place online, using specially developed, web-based training programs that could be accessed via the Audi intranet. Flexible learning Individually tailored content was vital to such a selfstudy learning process, in view of the different levels of prior knowledge. Online self-tests enabled students to establish how much they already knew, and which topics they actually needed to learn more about.
Structure of personnel costs (Audi Group) Total, EUR million
2,541.7
2,660.3
55.9 %
Wages and salaries (compensation for services)
56.3%
Mandatory social security contributions
14.0 %
13.9 %
10.3%
10.4 %
Mandatory benefits and payments for hours not worked Pension contributions Other welfare and supplementary contributions
5.0%
5.1 %
14.4%
14.7 %
2000
2001
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Qualification structure of blue-collar workers (AUDI AG)
Qualification structure of white-collar staff (AUDI AG)
Average in thousands
Average in thousands
Blue-collar workers 26.0
27.9
29.3
31.7
32.0
White-collar staff
8.4
9.0
9.6
10.2
10.7
of which skilled workers
17.6
18.9
20.9
21.2
of which university graduates
3.1
3.4
3.7
3.9
4.3
1997
1998
1999
2000
2001
16.0
30
10 7.5
20 5 10 2.5 0
1997
1998
Blue-collar workers
1999
2000
2001
of which skilled workers
0
White-collar staff
of which university graduates
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Employees
The topics taught included hardware and software basics, how to use various Office programs in practice, IT security aspects, the scope of e-business and e-commerce, and above all how to use intranet and Internet technology in practice. The necessity of always being able to handle information technology expertly does not start and end with the working day. Nor does the desire for flexible learning arrangements. For many Audi employees, the opportu-
nity to learn at home, maybe together with the family, at their own PC was a welcome alternative. They were able to order the necessary CD-ROMs free of charge over the intranet and also use them at home. Every employee successfully completing the learning process was presented with the Audi IT Card, which confirms that the company-wide minimum standard of skills has been attained.
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Ready for the future The intranet in particular has become a vitally important everyday tool for many employees as it provides access to a wide range of internal information. This applies to all areas of the company, including production. Every group on the production line was equipped with its own networked PC in time for the IT training campaign, in order to provide the necessary structures and resources for this learning process, as well as for
all future internally organised learning processes. A further important objective of the IT training campaign was to familiarise all employees with forms of e-learning so as to enable them to keep updating their knowledge in future.
Cars
726,134
653,404
634,708
599,509
546,436
1997
Audi vehicle sales
1998
1999
2000
2001
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Marketing and Service
Experiencing Vorsprung durch Technik
A feast for the senses The highlight of the automotive calendar in 2001 was without doubt the Frankfurt Motor Show (IAA), at which Audi captured the public’s attention with a sensational array of new products and an entirely new exhibition concept. Huge moving screens measuring up to eight by six metres created a constantly shifting spatial effect. The attractions at Frankfurt were not only visual in nature: visitors were also able to try out the exhibit of the Multi Media Interface MMI, and experience at first hand the scope for networking the car with the Internet.
Always on the move Audi is noted not just for visionary design and pioneering technology, but also for outstanding service. With its mobility guarantee, Audi has long been setting the standard for the competition to emulate. In addition to key components such as a loan car in the event of a breakdown, hotel accommodation and vehicle repatriation, we also offer solutions to problems that are not attributable to the vehicle: assistance when taken ill while travelling and an interest-free loan if financial emergencies are encountered abroad are examples of a comprehensive package of services available to both new car customers and owners of used cars. The only condition is that the vehicle must be serviced by an authorised Audi dealer as specified.
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Encounter Audi! New representative centres of the brand, known as Audi Forums, opened in a number of other cities in 2001. Whether in Berlin, London, Madrid, Munich, New York or at the company’s headquarters in Ingolstadt, Audi Forums are meeting places the world over. As well as having expert staff to advise our customers, the forums serve as venues for events of all kinds, such as exhibitions, concerts, talks and congresses.
“The Fan” impresses juries at Cannes and New York It all started with a commercial for the multitronic, but soon became a veritable cult. The now legendary commercial “The Fan” has not only become synonymous with the automatic transmission it was promoting; it has also captured prestigious international awards in the Silver Lion at Cannes and the “Grand Prix” at the Cresta Awards in New York. As well as captivating the jurors, the commercial unleashed a run on the “Fan” dolls of which there are now over half a million accompanying drivers worldwide.
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Market News
Audi records growth in all major markets.
Sixth record year in succession Audi sold more vehicles in 2001 than ever before. Our customers took receipt of a total of 991,444 cars, of which 726,134 were of the Audi brand, 297 were Lamborghinis and 265,013 were of other Volkswagen Group brands delivered via our Italian distributor AUTOGERMA S.p.A. One of the highlights of 2001 was the launch of the new Audi A4 Avant. By the end of the year, 76,330 customers had already decided to buy the world’s most successful lifestyle estate car. This figure however was bettered by the A4 saloon: with 216,243 units sold, this was the top-selling Audi model of 2001. Although Germany remains our most important sales market, the proportion of vehicles destined for other markets is steadily growing: around 65 percent of our vehicles were sold to customers outside Germany last year.
USA With 17.2 million newly registered vehicles, the car market in the USA remained almost at the previous year’s level in 2001. This is attributable above all to the sales promotion measures implemented by many car manufacturers after September 11. The luxury car segment experienced slight growth of 1.1 percent. Audi was once again able to better its best-ever figure from the preceding year, achieving record-breaking unit sales for the seventh year in succession. The USA thus remained the largest Audi export market. The new Audi A4 was launched in autumn 2001. Despite the difficult overall economic situation, this model also met with a very positive response here. The sports positioning of the Audi brand, bolstered by winning the American Le Mans Series again, was further strengthened in North America by the appearance of the Audi S6 Avant.
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Europe Despite the overall weakness of the economy, we were able to increase our market share in Germany. Over seven percent of vehicles registered as new in Germany now sport the four-ring badge. Our largest European export markets are Great Britain, Italy, Spain and France. Of these, Great Britain is pre-eminent: unit sales there rose by over 24 percent last year. The high point of our sales activities in Great Britain was the opening of the new Audi Forum in London – an exclusive realm of discovery located directly on Piccadilly. The second-largest export market was Italy, where the Audi A4 Avant immediately took over its predecessor’s established position. Although the Italian market as a whole remained flat, our unit sales there rose by a good 14 percent. High demand for TDI and S models played a key role in this achievement.
Our French market was dominated by the Le Mans 24 Hours in 2001, with Audi repeating the feat of capturing first and second places. This success is also reflected in the sales figures: sales in France grew by almost ten percent to a new record level. An excellent communication strategy is a vital factor in the intensely competitive car market: winning the Silver Lion at Cannes with an S3 commercial filmed in Spain revealed that we are on the right track. The new A4 was able to build on the success of its predecessor model in Spain, enabling Audi to retain its market lead in the premium segment. Audi enjoyed particularly high growth last year in Greece, a market of more modest proportions. Sales of our vehicles there rose by 35.1 percent to a record total of 5,086. The opening of four new, exclusive Audi outlets in Athens and Thessaloniki will help us to continue providing our customers with the best possible standard of service.
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Market News
Asia Audi achieved a new sales record in China in 2001, successfully maintaining its market lead in the premium segment. The systematic expansion of our exclusive dealer network provided a basis on which to boost vehicle sales by almost 70 percent compared with the previous year. The Audi dealer network of 51 dealers is now regarded as the benchmark in China’s car trade. In building the Audi A6 ourselves in China, we have become the only manufacturer to adapt a current model specifically to the Chinese market. The unveiling of the Audi A8 L 6.0 quattro at the Changchun International Motor Show (in Jilin Province) in August 2001 represented an important landmark in the development of import business. Over 40 orders for this exclusive luxury vehicle had been received by the end of the year. 2001 saw rapid progress with brand segregation and the repositioning of Audi as a premium brand in Japan. The Audi sales network was extended from just four exclusive dealerships at the start of the year to 70 at the end of the year, with conversion work in progress at a further 20 exclusive dealers. Despite the lingering recession in Japan, sales rose year on year by more than
16 percent. The Audi A4, which enjoyed a successful launch in June, elicited a resoundingly positive response in the trade press and was voted “Imported Car of the Year”. We also significantly intensified our activities in the Australian market last year. Our presence in this intensely competitive market was strengthened through the establishment of a 50:50 joint venture under the name of Audi Australia Pty. Ltd. With 3,504 vehicles sold, the previous year’s result in Australia was clearly exceeded.
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Major markets
Audi, worldwide Germany USA Great Britain Italy Spain France China Belgium Switzerland Austria Netherlands Brazil Sweden South Africa Japan Lamborghini, worldwide 1
Foreign brands only
Unit sales 2001
Year-on-year percentage change
726,134 254,866 83,283 54,140 47,006 42,118 40,521 29,370 20,028 18,548 16,924 12,753 12,456 11,214 8,757 8,127
11.1 6.4 3.6 24.1 14.6 9.6 9.9 68.3 9.4 13.6 13.2 –3.5 31.3 –9.9 27.3 16.6
297
0.3
Market share in 2001 in %
7.5 0.5 2.2 1.9 3.3 1.8 4.2 3.9 6.0 5.6 2.1 1.0 4.1 3.6 3.21
Year-on-year percentage change, overall market
–1.1 –1.3 10.7 –0.5 4.6 5.7 11.2 –5.2 0.2 –4.1 –11.3 12.3 –15.1 7.1 2.6 1
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Sports and Cultural Sponsorship
Spor ts sponsorship: Audi promotes top performance.
Sporting excitement in the snow Whether in the field of car manufacturing or winter sport, technical perfection and supreme sporting achievement call for dedication: Audi is not merely partner to the German Skiing Federation and all its national teams, but is also one of the key sponsors of the Skiing World Cup, and in particular principal sponsor of the legendary Hahnenkamm race on Kitzbühel’s “Streif”. Audi is likewise involved in the highlight of the Nordic calendar, the Four Hills Tournament for ski jumpers and accompanied the German team on the way to its historic success. In 2002, Sven Hannawald became the first ski jumper in the tournament’s history to win all four individual competitions. As well as benefiting from the use of vehicles with quattro drive, these winter sports athletes are able to exploit our technical expertise in another way: the skiers once again made use of the Audi high-performance wind tunnel in 2001 in fine-tuning their aerodynamics.
Audi and equestrianism – partners out of conviction Technology, dynamism, aesthetic appeal, high performance – concepts that apply in equal measure to Audi and equestrianism. AUDI AG broadened its long-standing, successful involvement in show-jumping in 2001: the newly established “Audi quattro Team” also highlights our sponsorship philosophy of supporting up-andcoming talents, as well as top sports personalities within a team. The “Audi quattro Team” consists of three budding show-jumpers who are being prepared for success in major international tournaments by the multiple Olympic medallist and world champion Ludger Beerbaum. Golf – passion and flair Golf is a sport that appeals to people who have a passion for technical perfection, a penchant for sport and a clear sense of individual style. Audi has been supporting this elegant sport for over a decade. The Audi quattro Cup, the Audi Ladies Cup and the Audi Junior Challenge have proven extremely successful. Involving over 200 tournaments in Germany, the 2001 Audi quattro Cup was one of the largest and most popular amateur tournament series.
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Audi demonstrating its cultural commitment through diverse activities. Innovation and excellence – at the Salzburg Festival and elsewhere Worldwide renown and unsurpassed excellence: the Salzburg Festival’s blend of the traditional and the modern explains its special status among international music festivals. AUDI AG attaches considerable importance to this innovative direction which is why it has extended its involvement as principal sponsor, which dates back to 1995, by a further three years. In 2001 we supported the production of the opera “Jenufa” by Leoš Janáček. “Le nozze di Figaro” was another of the operas performed in Salzburg – and elsewhere: a concerto performance of this Mozart opera was brought to Ingolstadt for the Summer Concerts between Danube and Altmühl. The Summer Concerts festival has been organised jointly by AUDI AG and the Bavarian broadcasting corporation Bayerischer Rundfunk since 1990, and already enjoys a long-standing reputation throughout Europe as one of the most successful festivals of music in Germany. One of the highlights of 2001 was the opening concert featuring the world-famous violinist AnneSophie Mutter and the Vienna Philharmonic.
Cars
619,030
557,777
1997
Production
1998
727,033
650,850 626,059
1999
2000
2001
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Group Companies
Group companies
Audi Hungaria steps up production The Hungarian engine and vehicle manufacturer AUDI HUNGARIA MOTOR Kft. makes a significant contribution towards enhancing the international competitiveness of the Audi Group through its top-quality high-tech products. In the 2001 financial year, Audi Hungaria was able to increase its production output of engines yet again, and maintained vehicle production at the previous year’s high level. The production volume of 1,220,217 engines exceeded the prior-year figure by 15 percent. This total was made up of 931,230 four-cylinder engines, 273,309 sixcylinder engines and 15,678 eight-cylinder engines. The high growth particularly for the four-cylinder engines is attributable to considerable demand for the successful four-cylinder diesel version with pump-injector technology. Production of this engine version was stepped up by two and a half times, to 303,367 units. A key new product that helped boost the production total for sixcylinder engines is the 3.0 litre V6 engine. It is currently available in the Audi A4 and Audi A6. In addition to manufacturing the engines that power Audi models,
Audi Hungaria supplied 554,997 engines to other companies within the Volkswagen Group. The company also built 22,078 of the Audi TT Coupé and 17,271 of the Audi TT Roadster in the financial year. The Györ plant in addition built 9,862 of the Audi A3 and 6,085 of the Audi S3; Audi Hungaria has been assembling these two models since March 2001. The Hungarian subsidiary achieved three production landmarks in the year under review: in November, the one millionth six-cylinder engine and the five millionth engine in total left the production line. The one hundred thousandth Audi TT Coupé was completed in July. AUDI HUNGARIA MOTOR Kft. invested a total of EUR 184 million in property, plant and equipment in 2001. The objective of this investment activity was to boost production capacity for engines, extend manufacturing penetration and improve the plant’s infrastructure. A further investment project which represents a milestone in the history of the Hungarian subsidiary was moreover completed: after only around one and a half years in construction, the new engine development centre was completed and officially opened in June 2001.
Principal companies within the Audi Group
AUDI Aktiengesellschaft
AUDI HUNGARIA MOTOR Kft.
COSWORTH TECHNOLOGY LIMITED
Automobili Lamborghini S.p.A.
Automobili Lamborghini Holding S.p.A.
Motori Marini Lamborghini S.p.A.
AUDI DO BRASIL E CIA.
Lamborghini ArtiMarca S.p.A.
quattro GmbH
AUTOGERMA S.p.A.
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Audi Hungaria has thus been able to add productionflanking, near-series engine development to its range of business activities. This includes development modifications to engines and series support services, as well as model updating and globalisation of the entire range of engines built at Györ and fitted in vehicles of the Audi, SEAT, Škoda and Volkswagen Passenger Car brands. The new building complex houses the engineering centre, engine test rigs and workshops. In completing the project, Audi Hungaria has created 200 more jobs offering long-term security for highly qualified design engineers, AUDI HUNGARIA MOTOR Kft. 1 Revenue Profit before tax Investments in property, plant and equipment 2 Employees Production Engines Four-cylinder Six-cylinder Eight-cylinder Cars Audi TT Coupé Audi TT Roadster Audi A3 and S3 1
2
development engineers, production planners and IT specialists. AUDI HUNGARIA MOTOR Kft. employed an average of 4,857 people during the year. Revenue for AUDI HUNGARIA MOTOR Kft. in the past financial year was slightly up on the prior year, at EUR 3,470 million. This development was not reflected in the profit before tax of EUR 251 million, due to the start-up costs for the extended engine production range, an altered model mix in vehicle production and the steady increase in capacity utilisation of the new development centre.
EUR million EUR million EUR million Average Units
Units
2001 3,470 251 184 4,857
2000 3,403 301 254 4,470
Percent +2.0 –16.6 –27.6 +8.7
1,220,217 931,230 273,309 15,678 55,296 22,078 17,271 15,947
1,060,828 790,148 251,644 19,036 56,776 31,064 25,712 –
+15.0 +17.9 +8.6 –17.6 –2.6 –28.9 –32.8 –
Figures for 2001 calculated for the first time according to International Accounting Standards (IAS); prior-year figures reconciled with IAS for purposes of comparison Including intangible assets
Expansion at COSWORTH TECHNOLOGY LIMITED COSWORTH TECHNOLOGY LIMITED was able to expand its business operations again in the 2001 financial year. Thanks to higher unit sales, revenue rose to EUR 123 (106) million. The profit before tax amounted to EUR –13 (–11) million. Thanks to its outstanding expertise, COSWORTH TECHNOLOGY LIMITED is able to supply efficient solutions to a wide variety of driveline problems for its partners worldwide in the car industry. This company, which has been part of the Audi Group since 1998, acquired an excellent reputation in race engine technology back in the 1960s. Today, the range of products and services it offers comprises all-in and partial solutions for the development, engineering and production of high-performance and specialty engines. Thanks to its wealth of development expertise and the highly flexible organisational structures at its production plants, it is able to produce customer-oriented solutions even in very small batches. The fully owned subsidiary COSWORTH
TECHNOLOGY, INC. in Novi, USA, in addition develops vehicle information, engine management and diagnostic systems. COSWORTH TECHNOLOGY LIMITED operates at three sites in England: the engine plant at Wellingborough stepped up its production output in 2001 to 4,951 (4,576) assembled engines. In addition to manufacturing complete engines, it also machines engine components such as cylinder heads and engine blocks. The ultramodern foundry in Worcester has likewise expanded: as part of investment measures, production of aluminium engine blocks using Cosworth’s patented casting method was stepped up considerably. Record totals of 108,651 cylinder heads and 110,536 engine blocks were manufactured. At the company’s headquarters in Northampton, development work continued on various products, including extremely low-emission, quiet-running naturally aspirated four-cylinder engines. In the field of V12 engine development, Cosworth’s engineers produced a concept
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Group Companies
engine which combines various innovative technologies with compact design and extremely economical fuel consumption. Like all companies in the Audi Group, COSWORTH TECHNOLOGY LIMITED treats environmental protection as a high priority: the Northampton and Worcester sites were accredited according to the new Eco-Management and Audit Scheme (EMAS 2001) in May 2001. WellingCOSWORTH TECHNOLOGY LIMITED 1 Revenue Profit before tax Investments in property, plant and equipment 2 Employees Production 1
2
Lamborghini Group 1 Revenue Profit before tax Investments in property, plant and equipment 2 Employees Production
2
EUR million EUR million EUR million Average Engines
2001 123 –13 17 748 4,951
2000 106 –11 13 742 4,576
Percent +16.0 –18.2 +30.8 +0.8 +8.2
Figures for 2001 calculated for the first time according to International Accounting Standards (IAS); prior-year figures reconciled with IAS for purposes of comparison Including intangible assets
Dawning of a new era at Lamborghini The unveiling of the Lamborghini Murciélago signals the dawning of a new era at Automobili Lamborghini S.p.A. in Sant’Agata Bolognese. The Murciélago represents the first market launch of a Lamborghini super sports car to have been developed since the acquisition of the Lamborghini Group by the Audi Group in 1998. The Murciélago moreover represents the first component in a new product strategy. The next step will be to launch a smaller model that can be built on a much larger scale and that is designed to reach a wider customer segment. This new emphasis goes hand in hand with the now completed restructuring of the Lamborghini dealer network, as well as with other measures designed to improve service and direct communication with customers, and further strengthen the Lamborghini brand.
1
borough is to follow in 2002. COSWORTH TECHNOLOGY LIMITED is thus the first company in Great Britain to have passed an audit conducted in accordance with these stringent environmental protection requirements. The number of employees remained virtually the same as in the previous year: COSWORTH TECHNOLOGY LIMITED employed an average total of 748 (742) people in the period under review.
Figures for 2001 calculated for the first time according to International Accounting Standards (IAS); prior-year figures reconciled with IAS for purposes of comparison Including intangible assets
The special status of the Lamborghini Group within the Audi Group is also reflected by the fact that investment over the five-year period up to 2003 will top EUR 100 million, with product development the priority. Part of this investment drive has already been completed: the new development centre was opened in 2000. The new customer centre with showroom, museum and boutique, as well as new administrative offices, followed in September 2001. Automobili Lamborghini S.p.A. supplied a total of 297 (296) sports cars to customers in the year under review. The USA and Germany were the most important markets. The revenue of all companies in the Lamborghini Group totalled EUR 65 (61) million. The profit before tax rose to EUR 54 (51) million. This figure includes income from investments amounting to EUR 81 (65) million. The employee total has risen slightly: an average of 482 (425) people were employed by Lamborghini throughout the year.
EUR million EUR million EUR million Average Cars Engines
2001 65 54 38 482 280 280
2000 61 51 22 425 291 291
Percent +6.6 +5.9 +72.7 +13.4 –3.8 –3.8
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AUTOGERMA S.p.A. successful in Italy The Verona-based AUTOGERMA S.p.A, which has been a subsidiary of Lamborghini Holding S.p.A. since 2000, is the general importer in Italy for Audi and all other brands of the Volkswagen Group. Despite the generally difficult market context, Autogerma enjoyed a very successful financial year, in which it generated revenue of EUR 4,791 (4,475) million and posted a profit before tax of EUR 88 (70) million.
AUTOGERMA S.p.A.1 Revenue Profit before tax Investments in property, plant and equipment 2 Employees Vehicle sales Audi Seat Škoda Volkswagen Passenger Cars Volkswagen Commercial Vehicles 1
2
Important developments in 2001 included further specialisation of the dealer network in Italy. The number of dealers which sell only one Volkswagen Group brand increased. The total number of exclusive Audi dealers, which sell only the Audi brand, had already reached 48 by the end of the year. Progress was likewise made with regard to internal brand specialisation within Autogerma’s divisions. The number of employees as an average for the year rose to 666 (628).
EUR million EUR million EUR million Average Cars
2001 4,791 88 7 666 312,019 47,006 40,019 28,643 190,451 5,900
2000 4,475 70 4 628 306,941 41,020 41,057 23,005 194,249 7,610
Percent +7.1 +25.7 +58.4 +6.1 +1.7 +14.6 –2.5 +24.5 –2.0 –22.5
Figures for 2001 calculated for the first time according to International Accounting Standards (IAS); prior-year figures reconciled with IAS for purposes of comparison Including intangible assets
Special products for individualists – from quattro GmbH quattro GmbH, established in 1983 in Neckarsulm, complements the range of products supplied ex factory by AUDI AG with independent product lines geared towards individuality, sports appeal and exclusivity. Customers have the opportunity to customise their Audi vehicle in a wide variety of ways. quattro GmbH in addition supplies an extensive range of vehicle accessories and lifestyle articles. quattro GmbH assumed its new role as a manufacturer of high-performance vehicles with the Audi RS 4. The RS 4 is the first independent vehicle to be created by the company, and developed and built in conjunction with AUDI AG. It impressively demonstrates quattro GmbH’s far-reaching technological expertise. The success story of the RS 4, which began in 2000, continued in 2001: by the time this model went out of production in August, a total of more than 3,500 had been built in the financial year. Consequently, over 6,000 of the Audi RS 4 were sold in the space of just 14 months.
With its own development, production, sales and marketing operations, quattro GmbH exploits new markets and thus targets new areas of business. This resulted in growth in all divisions of quattro GmbH which also boosted revenue compared with the previous year to EUR 99 (66) million. The company’s profit before tax totalled EUR 39 (19) million. On the basis of the existing profit transfer agreement, the profit of this fully owned subsidiary was passed on to AUDI AG.
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Management Report of the Audi Group and AUDI AG
General economy and the sector
Global economy in recession The global economy has been experiencing a period of weakness since 2001. The expansion of the US economy, which had been the powerhouse of the global economy in the second half of the 1990s, ground to a halt in the course of 2001. The slowdown in the US economy, which had started mid-way through 2000, accelerated in the first half of 2001 and was further aggravated by the terrorist attacks of September 11, which dealt a serious blow to consumer confidence and investment activity in industry. Under the influence of the US economy, the fall in growth in other industrial and developing nations likewise became more pronounced as the year progressed. The economy in Western Europe experienced a noticeable slowdown in the first half of the year. The economic climate in Central and Eastern European countries also increasingly deteriorated. The performance of the Japanese economy was particularly poor. This was accompanied by a weakening of growth in developing countries in Asia, with their exports slumping as a consequence of falling demand for information technology products. In Latin America, high and further increasing budget deficits undermined the confidence of international capital providers, and indirectly the economy. Only a small number of regions, including China, recorded significant economic growth in 2001.
Brazil, the largest car market in South America, was able to maintain its positive track record in 2001. On the other hand registrations of new cars in Argentina, which has been in deep recession for a number of years, were halved. New-car registrations in Japan were slightly up on the previous year’s level, at just under 4.3 million.
The worldwide car market The performance of the car sector in 2001 was slightly better than might have been expected in the light of global economic weakness. The total of slightly under 37 million cars registered as new was only around one percent down on the figure for the previous year. In Western Europe, approximately half a percent more new vehicles – 14.9 million in total – took to the roads than in 2000. All major car markets apart from Germany and Italy, in other words France, Great Britain and Spain, recorded a rise in registrations of new cars. The car market in Great Britain in particular expanded by more than ten percent, as a result of which it supplanted Italy as the hitherto second-largest in Europe. All other predominantly minor markets, with the exception of Switzerland and Luxembourg, contracted. In the USA, the car market shrank by almost five percent to 8.4 million units. American manufacturers in particular resorted to high discounts and zero-interest credit to support sales in an effort to avoid an even more pronounced slump following the events of last September.
Development of major car markets
The car market in Germany Registrations of new cars in Germany reached 3.34 million in the year under review, representing a fall of around one percent on 2000. The trend towards diesel engines further gathered momentum: their share of cars registered for the first time yet again rose significantly, to almost 35 percent. As one year earlier, imported makes accounted for around one-third of new car sales. French brands proved particularly popular, accounting for rather more than ten percent of the total car market and enjoying a clear lead over Japanese and Italian imports. Car production in Germany rose by around three percent to 5.3 million units. Worldwide production output by German car manufacturers reached 9.2 million cars, almost four percent more than in 2000. Exports of cars likewise rose by around five percent: 3.6 million were sold to customers outside Germany. This represents a share of 68.7 percent (previous year: 67.3 percent) of domestic production.
New registrations in million units 37.4
34.6
36.7
37.3
36.9
1997
1998
1999
2000
2001
15
10
05
Western Europe
North America
Japan
Other
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Situation of the company
Changeover to International Accounting Standards The consolidated financial statements of AUDI AG have been prepared on the basis of the International Accounting Standards (IAS) and their interpretation by the Standing Interpretations Committee (SIC) for the first time for the 2001 financial year. The figures for the previous year have been reconciled with IAS to provide scope for comparison. Moreover the accounts for 2001 have, for the first time, been drawn up in euros. The consolidated financial statements are in agreement with the requirements of EU Directive 83/349/EEC. AUDI AG is exempt from the requirement to prepare consolidated financial statements in accordance with German accounting standards, as the conditions pursuant to § 292 a of German Commercial Code are met. The separate financial statements of AUDI AG have been prepared as before in accordance with the requirements of German commercial law. Growth in revenue and result The rise in vehicle sales by the Audi Group in the 2001 financial year meant that revenue was boosted by 10.4 percent to EUR 22,032 (19,952) million. 68.0 (66.1) percent of this revenue was generated outside Germany. The gross operating profit, in other words the difference between revenue and cost of sales, rose to EUR 2,670 (2,347) million. The profit before tax rose to EUR 1,322 (986) million. The pre-tax rate of return accordingly rose to 6.0 (4.9) percent. A sum of EUR 560 million was allocated to other revenue reserves from the consolidated net profit for the year of EUR 769 million. AUDI AG recorded an increase in revenue to EUR 17,724 (16,094) million. The company achieved a profit before tax of EUR 732 (512) million; this represented a rate of return of 4.1 (3.2) percent. On the basis of the profit transfer agreement with the parent company, AUDI AG transferred EUR 209 (90) million to VOLKSWAGEN AG. Those with small shareholdings in AUDI AG participate in the company’s earnings in the form of a compensatory payment made instead of a dividend payment. The level of this payment corresponds to the dividend that is paid on one VOLKSWAGEN AG individual share certificate for the 2001 financial year. This dividend payment will be determined by the Annual General Meeting of VOLKSWAGEN AG on April 16, 2002 and subsequently announced in the Federal Official Gazette.
Rise in production As a result of high demand, production of cars was likewise stepped up significantly to 726,753 (650,559) Audi and 280 (291) Lamborghini vehicles. This includes 34,990 (22,800) completely knocked down (CKD) cars delivered to Audi partners outside Germany. Production of vehicles Audi A2 Audi A3 Audi A4 Audi Cabriolet Audi RS 4 Audi TT Coupé Audi TT Roadster Audi A6 Audi allroad quattro Audi A8 Total, Audi brand Lamborghini Diablo Lamborghini Murciélago Total, Lamborghini brand Total, group
2001 49,369 131,082 305,081 184 3,513 22,078 17,271 166,472 19,995 11,708 726,753 215 65 280 727,033
2000 32,164 136,141 227,028 2,311 2,530 31,064 25,712 169,276 11,439 12,894 650,559 291 – 291 650,850
At the Ingolstadt plant, production of cars rose by 15.7 percent to 420,216 (363,169) units, above all as a result of the higher production volume of the Audi A4. As well as the Audi A4, most Audi A3 models are built there. The Neckarsulm plant produced 247,544 (225,773) of the Audi A2, Audi A6, Audi allroad quattro and Audi A8. quattro GmbH in addition built 3,513 (2,530) of the Audi RS 4 at the same location until it went out of production in August of the year under review. AUDI HUNGARIA MOTOR Kft., based in Györ, Hungary, built the Audi TT Coupé and Audi TT Roadster sports car models and in addition assembled a number of Audi A3 and Audi S3 cars on behalf of AUDI AG. A total of 55,296 (56,776) Audi vehicles left the production lines at Audi Hungaria. Production of the new Audi A4 Cabriolet has commenced at the Rheine-based company Wilhelm Karmann GmbH, which also built its predecessor for AUDI AG. As a result of a model changeover Automobili Lamborghini S.p.A., of Sant’Agata Bolognese, terminated production of the Diablo. The follow-up model, the Murciélago, has been in production since June 2001. The proportion of Audi vehicles supplied with a TDI engine continued to rise in 2001, reaching 44.2 (40.1) percent. Around 27.9 (30.8) percent of all Audi models were produced with quattro permanent four-wheel drive.
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Management Report of the Audi Group and AUDI AG
Compared with the previous year, engine production by the Audi Group in 2001 also rose by 3.2 percent to 1,225,448 (1,187,666) units. AUDI HUNGARIA MOTOR Kft., the most important engine supplier in the Audi Group, increased its production volume by 15.0 percent compared with the previous year, to 1,220,217 (1,060,828) four, six and eight-cylinder engines. COSWORTH TECHNOLOGY LIMITED built 4,951 (4,576) complete engines, and Automobili Lamborghini S.p.A. 280 (291) high-performance engines. 45.3 (49.5) percent of all engines produced by Audi Group companies were supplied to other companies within the Volkswagen Group. Bucking the trend with higher unit sales Audi vehicle sales worldwide contrasted with the downward trend on most sales markets. A new record total of 726,134 (653,404) Audi vehicles was achieved and the prior-year figure bettered by 11.1 percent. 64.9 (63.3) percent of vehicles were delivered to Audi customers outside Germany. Vehicle sales Audi A2 Audi A3 Audi A4 including RS 4 Audi Cabriolet Audi TT Coupé Audi TT Roadster Audi A6 Audi allroad quattro Audi A8 Total, Audi brand Lamborghini Diablo Lamborghini Murciélago Total, Lamborghini brand Other Volkswagen Group brands Total, group
2001 52,380 144,949 292,573 184 24,264 19,549 160,498 19,828 11,909 726,134 238 59 297
2000 20,168 147,581 229,529 3,020 32,039 24,143 175,357 8,213 13,354 653,404 296 – 296
New models and study vehicles The A4 model line, which is of prime importance to the results and financial position of the Audi Group, was extended in September 2001 with the market launch of the new Audi A4 Avant. Furthermore, sales of the first five-door, three-litre car in the world, the Audi A2 1.2 TDI, and the twelvecylinder Audi A8 6.0 L quattro saloon commenced in June of the year under review. The study version of the new Audi A4 Cabriolet and the “Avantissimo” design and market study, which has been much praised by the public and trade press alike, were exhibited at the Frankfurt Motor Show (IAA). Investment The Audi Group invested a total of EUR 2,151 (2,422) million in the 2001 financial year. EUR 2,127 (2,387) million of this amount – including capitalised development costs totalling EUR 726 (445) million – was invested in property, plant and equipment and intangible assets. Cash flow from operating activities totalled EUR 2,452 (2,094) million and covered 115 (88) percent of spending on property, plant and equipment and intangible assets. Investment by AUDI AG in the period under review totalled EUR 1,296 (1,875) million, with property, plant and equipment and intangible assets accounting for EUR 1,228 (1,315) million of this sum. Investment within the Audi Group EUR million
2,422
2,094
2,151
2,452
2,500
2,000
1,500
265,013 991,444
265,921 919,621
297 (296) customers took receipt of a new Lamborghini. The Italian subsidiary AUTOGERMA S.p.A in addition supplied 265,013 (265,921) vehicles of the Seat, Škoda, Volkswagen Passenger Car and Volkswagen Commercial Vehicle brands to customers.
1,000
500
2000 Investment
2001
Cash flow from operating activities
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Slight increase in employee total Along with the rise in production and vehicle sales, the average number of employees within the Audi Group went up to 51,141 (49,396). 6,767 (6,278) were employed at locations outside Germany. AUDI AG employed an average of 44,374 (43,118) people: 30,490 (29,497) at Ingolstadt and 13,884 (13,621) at Neckarsulm. The total number of employees at AUDI HUNGARIA MOTOR Kft. was more than the average for 2000, at 4,857 (4,470). The average figure for workers and staff at COSWORTH TECHNOLOGY LIMITED remained virtually unchanged at 748 (742). The average workforce of the Lamborghini Group expanded to 482 (445), and AUTOGERMA S.p.A. employed 666 (628) people in total. Further module in measures to provide for old age A company agreement on the basis of which provisions for old age at Audi are switched to a modular system was concluded in the financial year. In connection with this agreement, assets have been transferred to the trustee Volkswagen Pension Trust e.V. and invested on the capital market. From 2002, Audi employees have the option of converting part of their pay into a contribution towards a monthly pension payment for which they become eligible upon receiving a statutory pension. “The Future of Audi – Prospects for Company and Workforce” A further company agreement going by this name was concluded in 2001. Key objectives include enhancing the competitiveness of Audi, assuring continuing growth for the company and safeguarding jobs in the long term. Higher purchasing volume The purchasing volume of the Audi Group for the financial year totalled EUR 12.4 (10.8) billion. EUR 9.6 (9.1) billion of this amount was spent on direct materials, and EUR 2.8 (1.7) billion on investment goods, services and operating materials. Research and development spending In the year under review, research and development expenditure amounted to EUR 684 (792) million for the Audi Group, including depreciation on capitalised development costs of EUR 273 (247) million. EUR 1,050 (952) million was spent on research and development at AUDI AG.
AUDI HUNGARIA MOTOR Kft. AUDI HUNGARIA MOTOR Kft., based in Györ, Hungary, produces an extensive range of engines and has in addition been producing Audi vehicles since 1996. The 2001 financial year saw a further increase in engine production and extensive investment measures. 1,220,217 (1,060,828) engines were produced in 2001: 931,230 (790,148) four-cylinder, 273,309 (251,644) six-cylinder and 15,678 (19,036) eight-cylinder engines. The high growth for four-cylinder engines has been prompted by vigorous demand for pump-injector diesel engines. In addition to supplying AUDI AG, Audi Hungaria delivered 554,997 (530,752) engines to other companies in the Volkswagen Group. Production output of the Audi TT fell, reflecting the stage this model has now reached in its life-cycle. Assembly of the Audi A3 and Audi S3, which commenced in the year under review, nearly compensated for this drop. 22,078 (31,064) of the Audi TT Coupé and 17,271 (25,712) of the Audi TT Roadster were built. Furthermore 9,862 (0) of the Audi A3 and 6,085 (0) of the Audi S3 were assembled on behalf of AUDI AG. Investment in property, plant and equipment totalled EUR 184 (254) million in 2001. The investment measures concentrated on increasing engine production capacity and improving the plant’s infrastructure. The new engine development centre was in addition opened in June 2001. Its activities include productionflanking, near-series development modifications to engines, and production support and model updating measures for the entire range of engines made in Györ. AUDI HUNGARIA MOTOR Kft. boosted its revenue to EUR 3,470 (3,403) million in the year under review. As expected, the profit before tax of EUR 251 (301) million was down on the equivalent figure for the previous year. This fall is due above all to the start-up costs for the extended engine production range and the change in the model mix in vehicle production. COSWORTH TECHNOLOGY LIMITED The British engine manufacturer is based in Northampton and has operations at two other locations in England, as well as the subsidiary COSWORTH TECHNOLOGY INC. in Novi, USA. Cosworth Technology supplies all-in and partial solutions for the development, engineering and production of high-performance and specialty engines, as well as vehicle information and diagnostic systems. COSWORTH TECHNOLOGY LIMITED recorded revenue of EUR 123 (106) million in 2001, and a profit before tax of EUR –13 (–11) million.
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Management Report of the Audi Group and AUDI AG
Production of complete engines was boosted by around eight percent, to 4,951 (4,576) units. In addition to manufacturing these engines, large numbers of engine parts and components such as cylinder heads and engine blocks are machined at the Wellingborough plant. The plants at Worcester and Wellingborough were accredited according to the new Eco-Management and Audit Scheme (EMAS 2001) in May 2001. COSWORTH TECHNOLOGY LIMITED is thus the first company in Great Britain to have met the stringent requirements of these new directives. Lamborghini Group The Lamborghini Group, of Sant’Agata Bolognese, Italy, comprises four companies: Lamborghini Holding S.p.A., the vehicle manufacturer Automobili Lamborghini S.p.A., the power boat engines manufacturer Motori Marini Lamborghini S.p.A. and Lamborghini ArtiMarca S.p.A., which sells Lamborghini car accessories and lifestyle articles. The revenue of the Lamborghini Group in the financial year totalled EUR 65 (61) million, and profit before tax totalled EUR 54 (51) million. The earnings figure includes investment income of EUR 81 (56) million. Considerable progress was made with capital investments in an extended product range and in the infrastructure in 2001: with the new development centre having already opened in 2000, the customer centre with showroom, the museum and boutique, as well as new administrative offices, opened in 2001. The Lamborghini Murciélago made its début at the Frankfurt Motor Show; this is the first Lamborghini to have been developed in entirety by Automobili Lamborghini S.p.A. since it became part of Audi.
2001 Revenue Profit before tax Investment in property, plant and equipment Employees
EUR million EUR million EUR million Average
AUTOGERMA S.p.A. AUTOGERMA S.p.A., based in Verona, Italy, is a fully owned subsidiary of Automobili Lamborghini Holding S.p.A. The company imports vehicles of the Audi, SEAT, Škoda, Volkswagen Commercial Vehicle and Volkswagen Passenger Car brands. Autogerma in addition has a highly advanced central parts store supplying around 800 clients in Italy, as well as the general importers in some 15 countries in Eastern Europe, the Near East and North Africa. AUTOGERMA S.p.A. concluded the 2001 financial year with very good figures: revenue was up 7.1 percent on the previous year, to EUR 4,791 (4,475) million. A profit before tax of EUR 88 (70) million was recorded. Its business expansion is also reflected in vehicle sales, which rose to 314,108 (308,187). The most significant developments in the year under review concerned the continuing brand segregation of dealerships in Italy, especially at the SEAT and Audi brands. This brand specialisation is also being reflected in the organisational structures of AUTOGERMA S.p.A. quattro GmbH The Neckarsulm-based company quattro GmbH complements the AUDI AG vehicle range with its independent product lines. Its range concentrates on customised production Audi models, together with lifestyle articles and accessories. quattro GmbH in addition manufactured the Audi RS 4 until August 2001, a model which it created and developed in conjunction with AUDI AG. In the year under review, 3,513 (2,530) of this model line left the production halls. Thanks to the outstanding success of the Audi RS 4, this fully-owned subsidiary of AUDI AG was able to boost its revenue by 48.8 percent in the financial year, to EUR 99 (66) million. The profit before tax likewise rose to EUR 39 (19) million. In line with the profit transfer agreement, this was transferred in full to AUDI AG. AUDI COSWORTH HUNGARIA TECHNOLOGY MOTOR Kft. LIMITED 3,470 123 251 –13 184 4,857
17 748
Lamborghini Group
AUTOGERMA S.p.A.
65 54
4,791 88
38 482
7 666
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Risk repor t
Risk management based on corporate governance principles Under German corporate governance legislation (KonTraG), AUDI AG is obliged to set up a risk management system. It must be organised in such a way that risks which could have a significant effect on the company’s financial performance and financial position and pose a threat to the company’s survival are identified at an early stage. There exists such a risk management system within the Audi Group; it includes all consolidated subsidiaries and is constantly being refined. Spheres of responsibility, together with reporting and record-keeping obligations, are clearly defined in each of the company’s individual divisions. Risks that could endanger the very substance of the group are systematically monitored, their likelihood estimated and the impact of their materialisation evaluated in some cases in quantitative terms. This ensures that the risk management system is viable at all times. Risks from the amendment of the Block Exemption for motor vehicles The “Motor Vehicles Block Exemption Regulation”, which is valid in its current form until September 30, 2002, grants car manufacturers certain exemptions to the requirements of competition law within the European Union. In particular it makes it possible to sell and service cars via exclusive brand dealers, which can be obliged to uphold high standards of sales and servicing. As at the start of 2002, the outcome of the discussion to review the arrangements is still uncertain. In its deliberations to date, the European Commission has above all raised the criticism that the existing regulation has severely hindered independent competition. The Commission has so far only made its views public once, at the end of 2000; the official publication of the draft for the new Block Exemption Regulation is scheduled for February 2002. The impact of anticipated changes is currently based on the results of independent appraisals commissioned by the European Commission. Findings from bilateral talks between the pressure groups concerned and the European Commission, and among the individual pressure groups, have in addition been taken into account. The overall pattern emerging from the details that have become known would appear to indicate that the Block Exemption Regulation for cars is to be retained in a modified form. However, the after-sales area in particular could be subjected to extensive changes. These
could range from the segregation of sales and service activities in purely legal terms to the complete abandonment of quantitative selection in service. This would affect dealers and manufacturers in equal measure: on the one hand brand dealers would be exposed to dramatically more intense competition with independent workshops, and on the other hand dealers would face a sharp rise in the cost of providing service support, with less scope for assuring consistent standards of quality. The separation of sales and service activities would moreover fundamentally undermine an important means of generating customer loyalty. The European Commission also criticises the current restrictions on the selling of multiple brands by a car dealer. The European Commission is expected to arrive at a definitive decision by summer 2002. The Audi Group has investigated various scenarios well in advance, in order to be prepared for the anticipated changes. Appropriate sales strategies have been drawn up on this basis. These will enable Audi to respond promptly and fittingly as soon as the new legal position becomes clear. Risks from the EU Directive on end-of-life vehicles The EU framework directive on end-of-life vehicles which took effect in October 2000 obliges car manufacturers and importers to accept back, at their own expense, any vehicles registered after July 1, 2002 and to ensure that they are reprocessed in an environmentally acceptable manner. From 2007, this regulation will apply to all end-of-life vehicles. The directive must be incorporated into national law by EU member states. The respective draft legislation was ratified by the upper house of the German parliament, the Bundesrat, in December 2001. It is to be passed by the lower house, the Bundestag, by April 2002. In addition to the obligation to accept returned vehicles, the draft legislation envisages strict new rules on the recycling of scrap vehicles. From 2006, at least 85 percent of the average weight of a vehicle that has been handed back must be re-used (reprocessing quota) and at least 80 percent must be returned to the materials cycle (recycling quota). From 2015, the reprocessing quota will rise to 95 percent and the recycling quota to 85 percent. Adequate provision has been made in the annual accounts for the costs that the Audi Group would incur as a result of the obligation to accept back, reprocess and recycle vehicles.
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Management Report of the Audi Group and AUDI AG
Price, foreign currency and liquidity risks Price and foreign currency risks to which the Audi Group is exposed as a result of its international business operations are excluded or limited by the conclusion of appropriate hedging transactions. Such transactions relate to the hedging of payments in foreign currency arising from operations, for example for goods and services. Derivative financial instruments are concluded via VOLKSWAGEN AG with top-grade national and international banks whose creditworthiness is regularly examined by leading rating agencies. Any liquidity risks are minimised by a liquidity projection for a fixed time horizon. Overall situation of the company On the basis of all particulars and circumstances known to us at present, there are currently no risks to the Audi Group which would have such a significant effect on its financial performance and financial position that they could endanger the company’s survival for the foreseeable future.
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Outlook
Subdued economic outlook Following the unexpectedly sharp drop-off in global economic activity in 2001, there are increasing signs that the low point in the economic situation could be passed in the course of 2002. Various leading indicators at the start of the year are nevertheless still producing a contradictory picture. Sustained growth stimuli are initially expected in the USA from mid-way through 2002; this could then have a positive effect on the economy in Europe and Asia. There is likely to be a slight acceleration in growth in Germany in the second half of the year, though the average for 2002 will be scarcely higher than in 2001. The average rise in gross domestic product throughout the European Monetary Union is forecast to outstrip the rate of increase in Germany, but will still be significantly down on the figure for 2001. No recovery is expected in Japan even in the medium term. Car sector subdued The general weakness of the economy is having an impact on the car industry: car sales worldwide are expected to fall in 2002. The registration figures particularly in the USA are set for a downturn, as substantial sales promotion measures in the final quarter of 2001 meant that many purchases originally planned for 2002 were brought forward. The sales figures in Western Europe and Japan will likewise fall, if not to the same degree as in the United States. In Germany, experts anticipate that registrations of new vehicles will fall for the third year in succession. Exports of cars by German manufacturers will moreover decrease for the reasons outlined above. High demand from abroad has served to counterbalance the effects of the ailing domestic economy in previous years. In view of the sound financial situation of the Audi Group, together with its attractive model range and the pioneering work it has already performed in the field of technical development, we are confident that the 2002 financial year will likewise be a successful one. To what extent this will actually prove to be the case will depend essentially on economic developments in Germany and our principal export markets. New “Audi Brand Group” On the basis of a decision taken in November 2001, various structural changes within the Audi Group took effect at the beginning of 2002. These changes are related to the division of car activities in the Volkswagen Group into the two brand groups “Volkswagen” and “Audi”.
The Audi Brand Group which came into being on January 1, 2002 comprises the Audi, SEAT and Lamborghini brands. Audi is to assume responsibility for the business management of this group, though the individual structures and processes remain to be finalised. Each of the three aforementioned brands will retain its distinctive character and will maintain independent market operations. Changes in company management There will be changes at board level to accompany the restructuring and the creation of the Audi Brand Group: by agreement with the Supervisory Board, Dr. FranzJosef Paefgen, Chairman of the Board of Management of AUDI AG, is surrendering office with effect from February 28, 2002 and will be taking on new roles within the Volkswagen Group. Dr. Martin Winterkorn will take his place as Chairman of the Board of Management of AUDI AG with effect from March 1, 2002. Dr. Winterkorn previously worked at AUDI AG from 1981 to 1993, latterly as Head of Quality Assurance, before moving to VOLKSWAGEN AG. Dr. h. c. Andreas Schleef, Member of the Board of Management of AUDI AG for Human Resources, will initially in addition take charge of the SEAT brand from March 7, 2002, in the capacity of Chairman of the Board at SEAT. New models in 2002 The Audi A4 Cabriolet will be the next member of the A4 model family to appear on the market when it goes on sale in spring 2002. The second half of the year will see the market launch of the new Audi A8, which will have an allaluminium body like the current model, and will set new standards in the luxury car class. quattro GmbH is expected to launch the new Audi RS 6 in March. Investment spending to remain high In its plans for the five-year period up to 2006, the Audi Group envisages investing over eight billion euros in property, plant and equipment. It will use these funds principally for new products and the structural expansion of its plants. The objective is to maintain the competitiveness of the Audi brand in the long term.
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Audi Shares
Audi shares
Audi share price trend Stock markets in 2001 were dominated by the worldwide slackening of the economy and the resulting large number of companies experiencing crises. “New economy” companies in particular were severely affected. The terrorist attacks in the United States on September 11, 2001 in addition prompted a temporary downturn on stock markets. The leading share indices nevertheless recovered as the year continued, and by the end of December were for the most part higher than before these acts of terror. The events of September 11 have, however, dampened hopes of a rapid economic recovery. The German Share Index (DAX) fell from 6,289.82 points at the start of 2001 to 5,160.10, a drop of 18 percent. The CDAX Automobile, which reflects the performance of the shares of quoted German car manufacturers, started the year on 335.7 points and closed at 379.5 points at the end of December 2001. Audi shares succeeded in clearly outperforming the trend in the second half of 2001. Although the price dipped temporarily in September, the general trend was clearly upwards. Whereas the share price remained within a range of EUR 55 to 80 in the first half of the year, in the final quarter it rose sharply to an all-time high of EUR 165. The closing price of Audi shares at the end of December was at EUR 160. Profit transfer and compensatory payment for shareholders There exists a control and profit transfer agreement with VOLKSWAGEN AG, which controls just over 99 percent of the share capital of AUDI AG. This agreement specifies that profit shall be distributed to AUDI AG shareholders in the form of a compensatory payment instead of a dividend payment. The compensatory payment is equivalent to the dividend paid on one VOLKSWAGEN AG individual share certificate for the same financial year. The dividend payable for the 2001 financial year will be determined by the Annual General Meeting of VOLKSWAGEN AG on April 16, 2002.
Audi share price (Munich Stock Exchange) ISIN: DE0006757008, WKN: 675700 EUR Highest Lowest Year-end price
2001 165.00 54.00 160.00
2000 82.20 47.50 59.59
Audi share price trend EUR 160
140
120
100
80
60
40 1997
1998 Highest
1999 Year-end price
2000
2001
Lowest
Ratios per Audi share EUR Net profit Cash flow from operating activities Equity
2001 17.89 57.02 100.98
2000 17.07 48.69 88.76
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Primary Accounting Basis
Primary accounting basis
Changeover to International Accounting Standards The consolidated financial statements of AUDI AG have been prepared on the basis of the International Accounting Standards (IAS) and the interpretations of the Standing Interpretations Committee (SIC) for the first time for the 2001 financial year. Our reports as at January 1, 2000 have been drawn up retrospectively according to IAS, to permit comparison of the 2001 financial year with the previous year’s figures. The consolidated financial statements are in agreement with EU Directive 83/349/EEC. The conditions pursuant to § 292 a of German Commercial Code are met, with the result that AUDI AG is exempt from the requirement to prepare consolidated financial statements in accordance with German accounting standards. In addition to the changeover to IAS, the 2001 consolidated financial statements are for the first time denominated exclusively in euros.
Fundamental changes as a result of IAS The changeover to IAS has resulted in several fundamental modifications in the structure of the consolidated financial statements and the way individual items are measured. The most significant changes are explained briefly below: According to IAS 38, development costs are recognised in part as an asset and reported under intangible assets. Capitalised development costs in the financial year in question amounted to EUR 726 (previous year: 445) million gross, and the depreciation on capitalised development costs to EUR 273 (247) million. The depreciation method for property, plant and equipment was switched retrospectively from the diminishing-balance method to the straight-line method, from the time of acquisition or production; special depreciation for tax purposes is not permitted according to IAS. IAS 12 specifies that deferred tax must be reported on both the assets side and the equity and liabilities side of the balance sheet. Deferred tax assets comprise future tax benefits. These may arise as a result of loss carryforwards to be realised in the future, or from temporary differences between the valuations in the consolidated financial statements and the tax balance sheet. Deferred tax liabilities reflect future tax burdens. Deferred tax assets amounted to EUR 122 (129) million, and deferred tax liabilities to EUR 726 (555) million. In accordance with IAS 19, provisions for pensions were calculated according to the benefit/years of service method, taking into account future pay and pension increases, instead of by the discount value method. On January 1, 2001, we in addition developed the direct commitment by AUDI AG to pay retirement benefits into a pension fund model. According to IAS 19, the balance of the fund is to be offset against the recognised retirement benefit obligations. Provisions for pensions, taking into account the balance of the fund, amounted to EUR 1,357 (1,295) million.
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Financial Performance
Financial performance
Improvement in revenue and result Despite difficult economic conditions, we set new records for revenue and result in 2001. Revenue rose by 10.4 percent to EUR 22,032 (19,952) million in 2001, primarily as a result of the good sales performance in key export markets. This figure also includes the revenue of the Italian-based trading company AUTOGERMA S.p.A., which sells vehicles of other Volkswagen Group brands as well as Audi cars. The Audi A4 and Audi A6 remain the pillars of the company’s success. These two models brought in revenue of EUR 6,708 (4,757) million and EUR 4,997 (4,982) million respectively. The cost of sales rose at a slightly lower rate than revenue, by ten percent to EUR 19,362 (17,605) million. The gross margin, in other words the difference between revenue and cost of sales, has thus risen by 13.8 percent. As well as the cost of materials and production, the cost of sales includes anticipated warranty
costs for the vehicles sold in the financial year in question. The average total employees of the Audi Group was up slightly on 2000, to 51,141 (49,396). Personnel costs rose by 4.7 percent to EUR 2,660 (2,542) million. Distribution costs increased by 6.3 percent to EUR 1,237 (1,164) million, and general administrative costs by 28.3 percent to EUR 212 (165) million. The rise in distribution costs is attributable inter alia to the rise in foreign demand for Audi vehicles, which resulted in higher shipping and freight costs. The general administrative costs rose for a variety of reasons, including software updating measures (SAP launch). The other operating result amounting to EUR 199 (28) million, comprises above all income from the liquidation of provisions and income and expenses in connection with exchange-rate changes. Expenses arising from the obligation to take back older scrap vehicles are reported under other operating expenses for 2000;
Development of profit before tax and rate of return before tax
Key earnings data in percent Rate of return before tax Rate of return after tax Equity return after tax Return on employed capital before tax Return on employed capital after tax Capital turnover
1,500 1,322
986 1,000
6.0 4.9 500
0
2000 Profit before tax in EUR million Rate of return before tax in percent
2001
2001 6.0 3.5 18.9
2000 4.9 3.7 21.2
12.8
10.5
7.9 2.0
8.1 1.9
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this item was included in the extraordinary result in the accounts based on German Commercial Code for 2000. The operating result rose by 35.8 percent to EUR 1,421 (1,047) million. The IAS finance result consists principally of the investment result, interest on securities, the result for factoring transactions and the compounding of provisions, in particular of provisions for pensions. According to IAS, both marketable securities and investment securities must be recognised at their fair value on the balance sheet date. This adjustment resulted in an expense of EUR 7 (24) million. The finance result as a whole fell by 63.6 percent compared with the previous year, to EUR –99 (–61) million. The key factors affecting the finance result were lower net interest and also the effects of the compounding of provisions. The effect of the investment result was positive.
Added value Revenue + Other income – Expenses prepaid Added value Distribution Employees Creditors (interest) State Transfer of profits to VOLKSWAGEN AG Net profit remaining
The profit before tax rose by 34.1 percent to EUR 1,322 (986) million, and the corresponding rate of return from 4.8 percent to 6.0 percent. The net profit likewise rose by 4.8 percent to EUR 769 million. On the basis of the control and profit transfer agreement, AUDI AG transferred a sum of EUR 209 (90) million to VOLKSWAGEN AG. The balance of net profit of EUR 560 (644) million was allocated in full to the other revenue reserves.
2001 EUR mill. 22,032 687 18,465 4,254
2000 EUR mill. 19,952 640 16,815 3,777
2001 Percent
2000 Percent
100.0
100.0
2,660 256 569 209 560
2,542 238 263 90 644
62.5 6.0 13.4 4.9 13.2
67.3 6.3 7.0 2.4 17.0
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Balance sheet ratios
Balance sheet ratios
A healthy financial basis for the future The balance sheet total for the Audi Group rose by 8.6 percent in 2001 to EUR 11,256 million. On the assets side, fixed assets rose by 9.1 percent to EUR 7,624 (6,988) million. All capitalised development costs, which are not limited to the 2001 financial year, accounted for EUR 1,796 (1,343) million of this total. Fixed assets as a proportion of total assets rose to 67.7 (67.4 percent). Real investments in 2001 focused on measures in connection with the development and production of derivative versions of the Audi A4. Current assets rose compared with the previous year to EUR 3,510 (3,250) million. Inventories increased slightly to EUR 1,463 (1,450) million. Raw materials and consumables used accounted for EUR 303 (286) million of this total. On the equity and liabilities side, equity rose to EUR 4,342 (3,817) million, mainly as a result of the positive development in earnings. The equity ratio rose to
38.6 (36.8) percent. The revenue reserves also include, for the first time, a reserve for cash flow hedges for risks and opportunities arising from foreign exchange contracts. These had a negative effect on the equity of the Audi Group in 2001 to the tune of EUR 36 million. Borrowings rose compared with the previous year to EUR 6,913 (6,551) million, representing a 61.4 (63.2) percent share of the balance sheet total. Retirement benefit obligations are calculated by netting the present value of benefit entitlements acquired pro rata against the plan assets of the pension fund. There were no gains or losses as a result of changes to actuarial assumptions. In the context of the retirement benefit scheme, based on the internal pension fund model which has been applicable for AUDI AG since January 1, 2001, the remuneration-based annual cost of commitments is invested in funds on a fiduciary basis by Volkswagen Pension Trust e.V. This offers AUDI AG employees the
Balance sheet structure
Equity and liabilities
Assets
EUR million 11,256
11,256
10,368
10,368
4,342
3,817
Equity
1,274
Long-term borrowings
831
Medium-term borrowings
3,792
3,891
Short-term borrowings
726
555
Deferred tax liabilities
7,624
Fixed assets
6,988 1,435
961
1,463 Inventories
1,450
Receivables and liquid assets
1,801
Deferred tax assets
129 2000
2,047
122 2001
2001
2000
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opportunity to increase their benefit entitlements, while providing a high risk cover. The anticipated income from the plan assets according to IAS 19 totalled EUR 2.3 million for the past financial year. Deferred tax liabilities rose from EUR 555 to 726 million.
A financially strong basis for the future Audi consolidated its basis for future success through extensive investment measures in 2001. The investment resources, which for the greater part were channelled into product development activities, were financed in full from cash flow from operating activities. The net cash flow, which in contrast to cash flow from operating activities also includes spending on investment measures, totalled EUR 365 (–445) million. Net liquidity at the end of the 2001 financial year amounted to EUR 1,093 million, an increase of EUR 267 million on the previous year. The detailed cash flow statement is shown on page 75. Cash flow in EUR million Cash flow from operating activities Investing activities Net cash flow Net liquidity
2001
2000
2,452 2,087 365 1,093
2,094 2,538 –445 827
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Income Statement
Income statement of the Audi Group for the 2001 financial year EUR ’000 Revenue Cost of sales Gross profit Distribution costs General administrative costs Other operating income Other operating expenses Operating result Investment result Net interest Other financial results Result from ordinary activities Income tax expense Net profit EUR Earnings per share Diluted earnings per share
Notes 1 2 3 4 5 6 7 8 9 10 Notes 11 11
2001 22,032,300 19,361,838 2,670,462 1,236,540 211,571 529,664 330,742 1,421,273 +91,078 –62,203 –128,290 1,321,858 552,505 769,353 2001 17.89 17.89
2000 19,952,273 17,605,482 2,346,791 1,163,546 164,900 455,491 427,208 1,046,628 +75,440 –22,838 –113,359 985,871 252,073 733,798 2000 17.07 17.07
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Balance Sheet
Balance sheet of the Audi Group at December 31, 2001
ASSETS in EUR ’000 Fixed assets Intangible assets Property, plant and equipment Investments Rented lessor’s assets Current assets Inventories Trade receivables Other receivables and assets Securities Cash Deferred tax assets Prepaid expenses
EQUITY AND LIABILITIES in EUR ’000 Equity Issued capital of AUDI AG Capital reserves Revenue reserves Provisions Trade payables Other liabilities Short-term debt Long-term debt Deferred tax liabilities Deferred income
Notes
31 Dec. 2001
31 Dec. 2000
12 13 14 15
2,095,181 5,307,092 206,889 14,958 7,624,120
1,683,075 5,079,295 226,016 – 6,988,386
16 17 17 18 19
1,462,869 437,378 465,180 670,934 462,140 3,498,501 121,904 11,050 11,255,575
1,450,168 354,466 521,400 840,974 75,518 3,242,526 129,375 7,521 10,367,808
Notes
31 Dec. 2001
31 Dec. 2000
21 22 23
110,080 56,730 4,175,517 4,342,327 3,361,227 1,366,913 1,441,948 12,564 1,251 726,009 3,336 11,255,575
110,080 56,730 3,649,810 3,816,620 3,153,775 1,479,098 1,337,386 19,876 2,101 554,662 4,290 10,367,808
20
24 25 25 26 26 27
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Development of Equity
Development of equity
EUR ’000 Position at 1 Jan. 2000 Currency adjustments Consolidated income Transfer of profit Other changes Position at 31 Dec. 2000 Currency adjustments Consolidated income Transfer of profit Other changes Position at 31 Dec. 2001 1
Issued capital
Capital reserves
110,080 – – – – 110,080 – – – – 110,080
56,730 – – – – 56,730 – – – – 56,730
The other changes in the reserve for cash-flow hedges result in an amount of EUR 56,928 thousand booked to income (EUR –24,895 thousand).
Equity is explained in further detail under items 21, 22 and 23.
Revenue reserves Legal Currency Reserve for and other exchange cash-flow revenue reserve hedges reserves 2,965,465 5,685 –12,062 356 –709 – 733,798 – – –89,987 – – – – 47,264 1 3,609,632 4,976 35,202 –832 2,436 – 769,353 – – –209,000 – – – – –36,250 1 4,169,153 7,412 –1,048
Total
3,125,898 –353 733,798 –89,987 47,264 3,816,620 1,604 769,353 –209,000 –36,250 4,342,327
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Cash Flow Statement
Cash flow statement of the Audi Group from January 1 to December 31, 2001 EUR ’000 Net profit before profit transfer and taxation Tax payments Depreciation on capitalised development costs Depreciation on property, plant and equipment and on intangible assets Depreciation on investments Depreciation on rented lessor’s assets Change in provision Result from asset disposals Other non-cash expenses/income Change in inventories Change in receivables Change in liabilities Cash flow from operating activities Additions for development costs recognised as assets Investments in property, plant and equipment (including other intangible assets) Acquisition of affiliated and associated companies Investments in other financial assets Investments in rented lessor’s assets Income from asset disposals Investing activities Net cash flow Change in marketable securities Investing activities including investments in securities Profit transfer to VOLKSWAGEN AG Change in cash pool liabilities Change in debt Financing activities Change in cash from exchange-rate changes Change in cash Cash at start of period Cash at end of period EUR ’000 Cash Marketable securities Gross liquidity Cash pool liabilities Net liquidity The cash flow statement prepared in accordance with IAS 7 explains the streams of payments for both the 2001 financial year and the previous year, categorised according to cash inflows and outflows from current business operations, from investing activities and from financing activities. Effects of changes to the group and to foreign exchange rates on payments are shown separately. The increase in cash flow from operating activities to EUR 2,452 million (EUR 2,094 million) results principally from the higher profit before tax and lower tax payments.
Notes
12 12, 13 14 14 24
16 17 25 12 12, 13 14 14 15
18
18
2001 1,321,858 –283,343 272,826
2000 985,871 –438,356 246,863
1,161,290 61 431 220,449 18,074 –45,182 –12,701 –26,692 –175,276 2,451,795 –725,580
952,316 45 – 126,676 13,374 –161,526 –117,761 –92,737 +578,821 2,093,586 –444,972
–1,401,243 –15,086 –8,754 –150 64,141 –2,086,672 365,123 170,040 –1,916,632 –89,987 –50,384 –8,162 –148,533 –8 386,622 75,518 462,140 2001 462,140 670,934 1,133,074 39,576 1,093,498
–1,598,406 –501,402 –8,096 – 14,761 –2,538,115 –444,529 169,858 –2,368,257 –113,507 –77,032 10,004 –180,535 –28 –455,234 530,752 75,518 2000 75,518 840,974 916,492 89,960 826,532
Investment in property, plant and equipment and in development activities are slightly up on the previous year. The purchase price for AUTOGERMA S.p.A. in the 2000 financial year was taken into account in the item “Acquisition of affiliated companies and investments”. Means of payment comprise liquid funds, which include cash, cheques and balances with banks, and financial resources due at any time via cash pooling arrangements.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Notes to the consolidated financial statements of the Audi Group for the 2001 financial year Fixed assets EUR ’000
Gross carrying values Cost of purchase/ cost of sales 1 Jan. 2001
Changes in consolidated companies
Foreign currency changes
Additions
Transfers
Disposals
Cost of purchase/ cost of sales 31 Dec. 2001
– –
–3 –
18,711 –
722 –
18,647 –
72,742 365,874
–
–
586,170
–240,695
–
823,394
–
–
139,410
240,695
133,568
1,648,434
2,317,649
–
–3
744,291
722
152,215
2,910,444
2,499,963 3,171,318
– –
643 1,502
124,613 132,004
75,350 138,627
24,221 113,795
2,676,348 3,329,656
4,761,240
–
41
515,585
118,681
107,774
5,287,773
557,321
–
94
610,330
–350,163
5,039
812,543
10,989,842
–
2,280
1,382,532
–17,505
160,805 13,289
– –
75 –
9,582 7,977
– –
6,119 21,266
164,343 –
33,549
–
–
5,504
–
–
39,053
19 14,492 3,932
– – –
– – –
– – 777
– – –
8 14,492 1,111
11 – 3,598
226,086
–
75
23,840
–
42,996
207,005
– 13,533,577
– –
– 2,352
150 2,150,813
16,783 –
Intangible assets Concessions, industrial property rights and similar rights and values, as well as licences thereto 71,959 Goodwill 365,874 Capitalised development costs, products currently in development 477,919 Capitalised development costs, products currently in use 1,401,897
Property, plant and equipment Land, land rights and buildings, including buildings on land owned by others and leased buildings Plant and machinery Other fixtures and fittings, tools and equipment and leased fixtures and fittings, tools and equipment Advances received and construction in progress
Investments Investments in affiliated companies Loans to affiliated companies Investments in associated companies Loans to companies linked through participation Securities Other loans
Rented lessor’s assets Total fixed assets
250,829 12,106,320
6 16,927 446,046 15,240,696
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Allowances Cumulative depreciation
Carrying values
Changes in consolidated companies
Foreign currency changes
Depreciation for current year
Transfers
Disposals
Write-ups
1 Jan. 2001
Cumulative depreciation 31 Dec. 2001
31 Dec. 2001
31 Dec. 2000
38,008 60,104
– –
– –
15,630 44,426
– –
18,625 –
– –
35,013 104,530
37,729 261,344
33,951 305,770
–
–
–
–
–
–
–
–
823,394
477,919
536,462
–
–
272,826
–
133,568
–
675,720
972,714
865,435
634,574
–
–
332,882
–
152,193
–
815,263
2,095,181
1,683,075
1,029,733 1,790,896
– –
64 538
105,049 307,701
–1,583 84
15,494 97,589
– –
1,117,769 2,001,630
1,558,579 1,328,026
1,470,230 1,380,422
3,089,204
–
6
688,484
–39
98,540
–
3,679,115
1,608,658
1,672,036
714
–
–
–
–
–
–
714
811,829
556,607
5,910,547
–
608
1,101,234
–1,538
211,623
–
6,799,228
5,307,092
5,079,295
– –
– –
– –
– –
– –
– –
– –
– –
164,343 –
160,805 13,289
–
–
–
–
–
–
–
–
39,053
33,549
– – 70
– – –
– – –
– – 61
– – –
– – 15
– – –
– – 116
11 – 3,482
19 14,492 3,862
70
–
–
61
–
15
–
116
206,889
226,016
– 6,545,191
– –
– 608
431 1,434,608
1,538 –
– 363,831
– –
1,969 7,616,576
14,958 7,624,120
– 6,988,386
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Notes to the Consolidated Financial Statements of the Audi Group for the 2000 financial year Fixed assets EUR ’000
Gross carrying values Cost of purchase/ cost of sales 1 Jan. 2000
Changes in consolidated companies
Foreign currency changes
Additions
Transfers
Disposals
Cost of purchase/ cost of sales 31 Dec. 2000
6,585 –
– –
13,558 287,485
1,038 –
824 –
71,959 365,874
–
–
286,135
–331,212
–
477,919
–
–
158,837
331,212
253,879
1,401,897
1,818,714
6,585
–
746,015
1,038
254,703
2,317,649
2,161,976 2,856,876
40,223 –
–175 –417
164,492 255,164
137,965 207,281
4,518 147,586
2,499,963 3,171,318
4,020,519
31,100
–67
726,523
130,950
147,785
4,761,240
592,527
5,437
18
438,669
–477,234
2,096
557,321
9,631,898
76,760
–641
1,584,848
–1,038
153,716 6,347
– –
–16 –
7,105 7,422
– –
– 480
160,805 13,289
33,555
–
–
–
–
6
33,549
28 – 4,604
– 19,778 –
– – –
– – 674
– – –
9 5,286 1,346
19 14,492 3,932
198,250
19,778
–16
15,201
–
7,127
226,086
11,648,862
103,123
–657
2,346,064
–
Intangible assets Concessions, industrial property rights and similar rights and values, as well as licences thereto 51,602 Goodwill 78,389 Capitalised development costs, products currently in development 522,996 Capitalised development costs, products currently in use 1,165,727
Property, plant and equipment Land, land rights and buildings, including buildings on land owned by others and leased buildings Plant and machinery Other fixtures and fittings, tools and equipment and leased fixtures and fittings, tools and equipment Advances received and construction in progress
Investments Investments in affiliated companies Loans to affiliated companies Investments in associated companies Loans to companies linked through participation Securities Other loans
Total fixed assets
301,985 10,989,842
563,815 13,533,577
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Allowances Cumulative depreciation
Carrying values
Changes in consolidated companies
Foreign currency changes
Depreciation for current year
Transfers
Disposals
Write-ups
1 Jan. 2000
Cumulative depreciation 31 Dec. 2000
31 Dec. 2000
1 Jan. 2000
21,552 15,678
5,318 –
– –
13,130 44,426
– –
732 –
1,260 –
38,008 60,104
33,951 305,770
30,050 62,711
–
–
–
–
–
–
–
–
477,919
522,996
543,478
–
–
246,863
–
253,879
–
536,462
865,435
622,249
580,708
5,318
–
304,419
–
254,611
1,260
634,574
1,683,075
1,238,006
930,425 1,649,505
4,993 –
–33 –219
95,462 280,781
512 288
1,626 139,459
– –
1,029,733 1,790,896
1,470,230 1,380,422
1,231,551 1,207,371
2,694,614
16,571
–61
518,352
–288
139,984
–
3,089,204
1,672,036
1,325,905
1,061
–
–
165
–512
–
–
714
556,607
591,466
5,275,605
21,564
–313
894,760
–
281,069
–
5,910,547
5,079,295
4,356,293
_ –
– –
– –
– –
– –
– –
– –
– –
160,805 13,289
153,716 6,347
–
–
–
–
–
–
–
–
33,549
33,555
_ – 25
– – –
– – –
– – 45
– – –
– – –
– – –
– – 70
19 14,492 3,862
28 – 4,579
25
–
–
45
–
–
–
70
226,016
198,225
5,856,338
26,882
–313
1,199,224
–
535,680
1,260
6,545,191
6,988,386
5,792,524
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Notes to the consolidated financial statements of the Audi Group for the 2001 financial year General information AUDI AG has the legal form of a German share-issuing company (Aktiengesellschaft). Its registered office is in Ettinger Strasse, Ingolstadt, and it is entered in Commercial Register HR B 1 in Ingolstadt. 99 percent of the share capital of AUDI AG is held by VOLKSWAGEN AG, Wolfsburg, with which a control and profit transfer agreement exists. The consolidated financial statements of the Audi Group are included in the consolidated financial statements of the Volkswagen Group, which are deposited with the Local Court of Wolfsburg. The object of the company is the development, production and sale of motor vehicles, other vehicles and engines of all kinds, together with their accessories, as well as machinery, tools and other technical articles. Primary accounting basis AUDI AG has prepared its consolidated financial statements on the basis of the International Accounting Standards (IAS) and the interpretations of the Standing Interpretations Committee (SIC) for the first time for 2001. All IAS, the implementation of which was mandatory for the 2001 financial year, have been applied in these consolidated financial statements. The prior-year figures have been calculated according to the same principles. IAS 12 “Taxes on Income” and IAS 39 “Financial Instruments” have in addition already been applied. From 2001, IAS 40 “Investment Property” will likewise apply. The consolidated financial statements thus provide a true and fair view of the financial performance and financial position of the Audi Group. The income statement has been drawn up according to the internationally practised function of expense method. The consolidated financial statements have been prepared in euros for the first time. All figures used for purposes of comparison have been translated at the official exchange rates. The conditions pursuant to § 292 a of German Commercial Code for exemption from the requirement to prepare consolidated financial statements in accordance with German accounting standards are thus met. The assessment of these conditions is based on German Accounting Standard No. 1 (DRS 1), published by the German Council for Standardisation.
Progression from German Commercial Code to IAS accounting The differences in accounting policy between the firsttime application of IAS and the former preparation of consolidated financial statements of AUDI AG in accordance with German commercial law relate to the following cases: – Rented property, plant and equipment are recognised as assets and the resulting liabilities simultaneously recognised as liabilities, provided the economic interest in the property, plant and equipment can be attributed to the companies of the Audi Group pursuant to IAS 17. – The straight-line method of depreciation is applied instead of the diminishing balance method; multilevel depreciation is no longer practised. Depreciation is measured on the basis of useful life expectancy. Special depreciation for tax purposes and simplifications are not permitted in the IAS financial statements. – Goodwill arising from the consolidation of capital is reported as an asset according to IAS 22 and depreciated over its useful life. – Provisions are only formed where commitments to third parties exist. The following accounting policies which differ from German Commercial Code are moreover applied: – Development costs are carried as intangible assets in accordance with IAS 38, provided that the production of the developed products is likely to bring economic benefit to the Audi Group. – Provisions for pensions are determined pursuant to IAS 19 according to the benefit/years of service method, taking into account future pay and pension increases. Actuarial gains and losses are only shown in the balance sheet and booked to income where they exceed ten percent of the higher of retirement benefit obligations or the fair value of the plan assets on the reporting date. – Medium-term and long-term provisions are reported at their present value. – Derivative financial instruments are reported at their fair value in accordance with IAS 39, even if this is higher than the cost of purchase. The opportunities and risks from the measurement of financial instruments used as cash-flow hedges are deferred via a separate equity reserve with no effect on income. The results from the settlement of these contracts are not included in other operating income or expenses until they fall due.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
On the other hand, the opportunities and risks from the measurement of derivative financial instruments used as a hedge for items on the balance sheet (fairvalue hedges) are recognised immediately. – Securities are reported at their fair value, even if this is higher than the cost of purchase. – Deferred tax is determined according to the balance sheet liability method, and deferred tax assets are also created for loss carryforwards. The first-time application of the specifications of the International Accounting Standards Board (IASB) is based on SIC 8. The adjustment of accounting policies to IAS at January 1, 2000 was correspondingly performed with no effect on net income, with gains or losses booked to the revenue reserves, as if the accounts had always been prepared in accordance with the specifications of the IASB. Progression of equity from German Commercial Code to IAS: EUR million Equity acc. to German Commercial Code at 31 Dec. 1999 Reversal of special items Reversal of provisions for expenses Measurement of retirement benefit and similar obligations Capitalisation of development costs Inventory valuation Modified depreciation of investments in property, plant and equipment Reporting of deferred tax Miscellaneous Equity acc. to IAS at 1 Jan. 2000
1,424 18 117 –172 1,145 3 967 –569 193 3,126
Consolidated companies In addition to AUDI AG, the consolidated financial statements include all key companies where AUDI AG directly or indirectly has scope for determining the financial and business policy in such a way that group companies benefit from the activities of the companies in question (subsidiaries). Consolidation begins at that point in time from which the Audi Group acquires the opportunity for control, and ends when that opportunity ceases to be available. All consolidated subsidiaries are included in the consolidated financial statements on the basis of financial statements prepared and audited in accordance with uniform accounting and consolidation principles.
The group did not change in the 2001 financial year. The Audi Group includes AUDI AG and the companies AUDI HUNGARIA MOTOR Kft., COSWORTH TECHNOLOGY LIMITED, four companies of the Lamborghini Group, AUTOGERMA S.p.A. and AUDI DO BRASIL E CIA. Audi Japan K.K. is included in the financial statements of VOLKSWAGEN AG as the latter company holds a majority of the voting rights on the board of control. Five foreign and eleven domestic companies are in addition not consolidated. These companies are of only minor importance for the financial performance and financial position of the group. Subsidiaries and investments are always reported at their cost of purchase, as no active market exists for these companies and no fair value can reliably be determined with a justifiable amount of effort. These subsidiaries are substantially dormant companies or companies with only limited business operations. A list of companies in which interests are held can be found in the Annex to the Notes. Consolidation principles The assets and liabilities of the companies included in the consolidated financial statements are measured in accordance with the standard accounting policies of the Audi Group. Capital consolidation is performed by offsetting the cost of purchase of an investment against the pro rata remeasured equity of the subsidiary. Receivables and liabilities between consolidated companies are offset, and expenditure and income eliminated. Intra-group profits have been eliminated from group inventories and fixed assets. Consolidation processes affecting income are subject to deferrals of income taxes, with deferred tax assets and liabilities offset where the term and tax creditor coincide. The same consolidation principles were applied in the financial statements for both 2000 and 2001.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Foreign currency translation The currency of the Audi Group is the euro. The concept of the “functional currency” is applied when translating foreign currency. According to this principle, foreign companies belonging to the Audi Group are foreign entities whose financial statements are to be translated at the closing rate. Assets and liabilities, with the exception of equity, are translated at the closing rate. The effects of foreign currency translation are reported in the reserve for foreign currency translation. The items in the income statement are translated into euros using weighted average monthly rates. Foreign currency transactions are translated at the prevailing exchange rate on the date of the transaction. Monetary items in foreign currency are reported at the balance sheet date on the basis of the exchange rate on that date. Exchange differences are booked to the current-period result. As all consolidated subsidiaries have their registered offices in countries in which there is currently no hyperinflation, IAS 29 does not apply. AUDI HUNGARIA MOTOR Kft. prepares its annual financial statements in euros.
EUR 1 = Brazil (BRL) Great Britain (GBP)
Closing rate on balance sheet date 31 Dec. 01 31 Dec. 00 2.0469 1.8185 0.6091 0.6233
Average rate for income statement 2001 2000 2.1054 1.6901 0.6220 0.6094
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Notes to the consolidated income statement
1 Revenue
4 General administrative costs
Revenue is always recorded at the time of performance of the services or delivery of the goods or products, in other words upon passage of risk.
The general administrative costs include labour and materials costs, as well as depreciation for the administrative sector.
Group revenue according to products:
5 Other operating income
EUR ’000 Audi brand Audi A2 Audi A3/Audi TT Audi A4 Audi A6 Audi A8 Lamborghini brand Volkswagen Passenger Cars brand SEAT brand Škoda brand Total revenue for cars Volkswagen Commercial Vehicles brand Other sales Total revenue
2001
2000
603,574 3,246,132 6,707,809 4,997,423 582,350 55,652
441,846 3,652,656 4,756,867 4,982,166 634,607 52,993
2,551,304 368,478 303,101 19,415,823
2,428,803 420,562 219,452 17,589,952
93,827 2,522,650 22,032,300
115,636 2,246,685 19,952,273
Revenue is categorised according to production location for the purpose of segment reporting, along the same lines as those used for internal group steering and reporting. The other sales above all constitute goods and services supplied to affiliated companies and other sales to third parties. 2 Cost of sales The cost of sales comprises the costs incurred in generating revenue and cost prices in commercial transactions; these costs are recognised as they occur. Provisions for warranty costs are formed at the time of the sale of the products in question, and reported under this item. The cost of sales also includes development costs that cannot be recognised as assets. 3 Distribution costs Distribution costs substantially comprise expenses for marketing and sales promotion, advertising, public relations activities and outward freight.
EUR ’000 Costs passed on Income from the settlement of derivative currency hedging instruments (cash-flow hedges) Exchange-rate changes Income from the reversal of provisions Income from the sale of promotional materials Income from the reversal of accruals Claims for damages Income from asset disposals Income from the liquidation of allowances for liabilities and other assets Income from rented lessor’s assets Income from tenancy agreements Miscellaneous operating income Total other operating income
2001 191,411
2000 182,404
58,373 55,276
20,753 48,053
40,873
54,772
32,838
35,724
15,393 13,933
23,150 11,923
6,190
2,305
2,755
1,206
2,638
–
766
2,714
109,218
72,487
529,664
455,491
Income from exchange-rate changes substantially comprises gains resulting from exchange-rate movements between the dates of output and payment, and exchange-rate gains as a result of valuation at the average rate on the closing date. Exchange rate losses from these items are reported under other operating expenses (item 6). The overall item of currency hedging instruments is shown under Other particulars, item 2.1.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
7 Investment result
6 Other operating expenses EUR ’000 Exchange-rate changes Depreciation on goodwill Expenses from the settlement of derivative currency hedging instruments (cash-flow hedges) Losses on asset disposals Allowances for receivables Creation of reserves for commitments for end-of-life vehicles Miscellaneous operating expenses Total other operating expenses
2001 44,569 44,426
2000 47,217 44,426
40,599 24,264 18,425
97,222 15,679 7,643
–
88,693
158,459
126,328
330,742
427,208
The overall item of currency hedging instruments is shown under Other particulars, item 2.1. The expenses resulting from the first-time creation of a reserve for the commitment to take back and dispose of scrap vehicles on the basis of the EU Directive on end-of-life vehicles have been summarised under this item for 2000, as the overall financial risk from the receipt of vehicles registered before January 1, 2001, for which there will be no charge from 2007, had to be taken into account. From 2001, current expenses in fulfilment of this commitment will be booked to cost of sales.
EUR ’000 Income from profit transfer agreements Other income from investments of which from affiliated companies associated companies Total investment result
2001
2000
39,485
19,283
51,593
56,157
28,608 22,985 91,078
44,496 11,661 75,440
The income from profit transfer agreements is from quattro GmbH. The income from investments relates above all to a share in the profits of Volkswagen Transport GmbH & Co. OHG and FAW-Volkswagen Automotive Company, Ltd.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
9 Other financial result
8 Net interest EUR ’000 Result realised from the sale of marketable securities Proceeds from other securities and financial investments Adjustment of long-term and current investments and of long-term borrowings to market values Adjustment of other assets and liabilities to market values Result from the measurement of derivative hedging instruments at market value (fair-value hedges) Result from the settlement of derivative hedging instruments (fair-value hedges) Other interest and similar income of which from affiliated companies Other interest and similar expenses of which to affiliated companies Interest on leasing instalments due by the lessee Total net interest
2001
2000
4,823
–1,455
1,088
1,919
–6,794
–23,937
435
–277
–443
319
–3
–
56,358
103,818
25,639
19,460
116,195
102,551
115,568
80,097
1,472 –62,203
674 –22,838
Interest income and expenses are attributed on an accrual basis. The net interest includes expenses from the sale of receivables (factoring) to the Volkswagen Group company Coordination Center Volkswagen S.A., Brussels. The gains and losses from the sale of securities are also reported here. The expenses from adjustments to fair values for the 2000 financial year result in particular from the reduction in the value of marketable securities as a result of the distribution of dividends. The overall item of currency hedging instruments is shown under Other particulars, item 2.1.
EUR ’000 Compounding of provisions for pensions Compounding of other reserves Total other financial result
2001
2000
–84,886
–77,309
–43,404 –128,290
–36,050 –113,359
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
10 Income tax expense Income tax expense includes taxes passed on by VOLKSWAGEN AG on the basis of the single-entity relationship between the two companies for tax purposes, along with taxes owed by AUDI AG and its consolidated subsidiaries, as well as deferred tax. The changes to IAS 12, which became effective from January 1, 2001, had already been observed in the 2000 financial year. Current and deferred income taxes are measured at the composite tax rate. The tax reduction legislation which took effect in October 2000 was moreover taken into account in the measurement of deferred taxes. The legal change comprises the abolition of the imputation system for corporate income tax and the reduction in the corporate income tax rate from 40 percent for retained earnings and 30 percent for distributed earnings to a standard 25 percent from 2001 onwards. The income tax rate reduction was booked to the current-period result in the measurement of tax assets and liabilities. Composition of tax expenditure: EUR ’000 Current income tax expense of which for Germany Other countries Tax expense not related to the period Income from the reversal of tax provisions Deferred tax income/expense of which for Germany Other countries Total income tax expense
2001 350,980 313,930 37,050
2000 381,485 331,907 49,578
15,450
4,166
–4,184
–4,428
201,525 224,154 –22,629 552,505
–129,412 –111,372 –18,040 252,073
Of the current tax expense, an amount of EUR 314 million (EUR 332 million) was passed on by VOLKSWAGEN AG. Pursuant to IAS 12, deferred tax is determined according to the balance sheet liability method. This method specifies that tax deferrals are to be created for all temporary differences between the valuations in the tax balance sheet and the consolidated financial statements (temporary concept). Deferred tax from the carryforward of losses is in addition to be recorded.
Deferrals amounting to the anticipated tax burden or tax relief in subsequent financial years are created on the basis of the likely tax rate at the time of realisation. In accordance with IAS 12, the tax consequences of the distribution of profits are not recognised until the resolution on the appropriation of profits is passed. Deferred tax assets include future tax relief resulting from temporary differences between the carrying amounts in the consolidated balance sheet and the valuations in the tax balance sheet. Deferred tax assets on tax loss carryforwards that can be realised in the future are also recorded. Deferred tax assets and deferred tax liabilities are netted, provided there is identity of the tax creditors and maturities. An adjustment of value is performed for deferred tax assets which are unlikely to be realised. Actual and deferred taxes are measured at the future tax rate of 38.3 percent (51.6 percent). This represents the sum of the corporate income tax rate of 25 percent, the solidarity surcharge of 5.5 percent and the average trade earnings tax rate for the group. The national income tax rates applicable for foreign companies range from 30 percent to 40 percent. Where the income of subsidiaries is exempt from taxation as a result of special local fiscal arrangements and the tax effects after the ending of temporary tax exemption are not foreseeable, no deferred tax is carried. The realisation of tax loss carryforwards from previous years resulted in a reduction of EUR 10 million (EUR 8 million) in current income tax expense in 2001. There exist outstanding loss carryforwards totalling EUR 16 million (EUR 27 million). Loss carryforwards totalling EUR 16 million (EUR 10 million) can be used indefinitely. Deferred tax totalling EUR 3 million (EUR 24 million) relates to business transactions (cash-flow hedges) charged directly to equity. Tax-rate changes produced a small deferred income tax expense. There was deferred tax income of EUR 181 million resulting from the previous year.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
The following deferred tax assets and liabilities carried in the balance sheet are attributable to reporting and valuation differences in the individual balance sheet items:
EUR ’000 Intangible assets Property, plant and equipment Investments Inventories Receivables and other assets Other current assets Provisions for pensions Other provisions Liabilities Loss carryforwards Gross value of which long-term Offsetting measures Consolidation measures Carrying amount Progression from anticipated to actual income tax expense The actual tax burden of EUR 553 million is EUR 47 million higher than the anticipated tax burden of EUR 506 million.
Deferred tax assets 31 Dec. 01 31 Dec. 00 1,062 9,783 55,914 68,276 27,871 17 10,640 14,397 10,605 6,714 1,684 4,656 125,738 126,308 313,005 307,841 12,850 6,965 4,784 9,003 564,153 553,960 366,454 361,234 –450,308 –437,614 8,059 13,029 121,904 129,375
Deferred tax liabilities 31 Dec. 01 31 Dec. 00 657,496 513,422 438,662 446,063 250 – 1,408 1,796 5,789 26,332 264 222 – – 65,886 3,262 6,562 1,179 – – 1,176,317 992,276 1,000,604 847,733 –450,308 –437,614 – – 726,009 554,662
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
The difference between the anticipated and the actual tax burden can be explained as follows: EUR ’000 Accounting profit Anticipated income tax expense 38.3 % (51.6 %) Tax portion for: Divergent foreign tax burden Tax-exempt earnings Expenses not deductible for tax purposes Effects of loss carryforwards and tax credits Temporary differences and losses for which no deferred tax has been recorded Tax expense not related to the period Effects of tax-rate changes Other tax effects Actual income tax expense Effective tax rate in %
2001 1,321,858
2000 985,871
506,272
508,709
–92,495 –13,525
–171,336 –12,610
8,871 –
6,736 –19,283
42,015
64,570
15,450 65 85,852
4,166 –181,092 52,213
552,505 41.8
252,073 25.6
Profit transferred on the basis of a profit transfer agreement Pursuant to the profit transfer agreement with AUDI AG, an amount of EUR 209 million (EUR 90 million) was transferred to VOLKSWAGEN AG. Determination of accumulated profit: EUR ’000 Net profit Profit transfer Payment into the revenue reserves Accumulated profit
2001 769,353 209,000
2000 733,798 89,987
560,353 –
643,811 –
Income and expenses not related to the period Income totalling EUR 76 million (EUR 88 million), including income tax relief, is allocable to other financial years. On the other hand, the group incurred expenses relating to other periods totalling EUR 166 million (EUR 99 million). Both this income and these expenses are included for the most part in other operating income and expenses.
11 Earnings per share Basic earnings per share are calculated by dividing the consolidated net result by the weighted average number of shares in circulation during the financial year. Dilution of this key figure may occur as a result of “potential shares”, above all from share options and convertible bonds. In the case of Audi, the diluted earnings per share are the same as the basic earnings per share, as there were no potential shares in AUDI AG in existence at either December 31, 2000 or December 31, 2001. EUR ’000 Net profit Weighted average number of shares (basic and diluted totals are identical) Earnings per share in EUR
2001 769,353
2000 733,978
43,000,000 17.89
43,000,000 17.07
Outside shareholders in AUDI AG receive a compensatory payment for each individual share certificate instead of a dividend for the 2001 financial year. The level of this payment corresponds to the dividend that is paid on one VOLKSWAGEN AG individual share certificate. The dividend payment will be determined by the Annual General Meeting of VOLKSWAGEN AG on April 16, 2002.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Notes to the consolidated balance sheet
The depreciation plan is based principally on the following useful lives:
12 Intangible assets EUR ’000 Concessions, industrial property rights and similar rights and values, as well as licences thereto Goodwill Capitalised development costs of which for products currently in development for products currently in use
31 Dec. 01
31 Dec. 00 Useful life
37,729 261,344
33,951 305,770
823,394
477,919
972,714 2,095,181
865,435 1,683,075
Measurement principles Intangible assets acquired for consideration are reported at cost of purchase, taking account of ancillary costs and cost reductions, and depreciated on a scheduled straight-line basis over their economic life. Concessions, rights and licences relate to purchased computer software and subsidies to public utility companies. Goodwill from the consolidation of capital is depreciated on a scheduled straight-line basis over its useful life. Depreciation is reported as other operating expenses. Research costs are treated as current expenses in accordance with IAS 38. The development costs of products going into series production are capitalised, provided that the production of these products is likely to bring economic benefit to the Audi Group. If the conditions for capitalisation are not met, the expenses are booked to the current-period result in the year in which they occur. Capitalised development costs comprise all costs directly allocable to the development process, as well as an appropriate portion of the development-related overhead costs. Finance charges are not capitalised. Depreciation is performed on a straight-line basis from the start of production, over the anticipated production life of the developed products, which is generally between five and nine years.
Concessions, industrial property rights and similar rights and values of which software Goodwill from first-time consolidation Capitalised development costs
3 to 15 years 3 years 5 to 10 years 5 to 9 years
Non-scheduled depreciation is performed on intangible assets where the recoverable amount from the use of the asset in question has fallen below the carrying value. If the reasons for non-scheduled depreciation in previous years cease to apply, the corresponding amounts are written back. Research and development expenses: EUR ’000 Research costs and other non-capitalised development costs Depreciation of development costs Total research and development expenses
2001
2000
411,603
545,615
272,826
246,863
684,429
792,478
Spending on research and development activities in 2001 totalled EUR 1,137 million (EUR 991 million). Of this total, EUR 726 million (EUR 445 million) satisfy the criteria for capitalisation according to IAS.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
13 Property, plant and equipment EUR ’000 Land, land rights and buildings, including buildings on land owned by others of which leased buildings Plant and machinery Other fixtures and fittings, tools and equipment of which leased fixtures and fittings, tools and equipment Advances received and construction in progress
31 Dec. 01
31 Dec. 00
1,558,579
1,470,230
33,358 1,328,026
34,294 1,380,422
1,608,658
1,672,036
6,433
9,957
811,829 5,307,092
556,607 5,079,295
Measurement principles Property, plant and equipment are measured at cost of purchase or cost of sales, less scheduled straight-line depreciation according to the pro rata temporis method. The cost of purchase includes the purchase price, ancillary costs and cost reductions. Property, plant and equipment paid for in foreign currency is translated at the middle rate on the invoice date. In the case of self-constructed fixed assets, the cost of sales includes both the directly allocable cost of materials and cost of labour, and indirect materials and indirect labour, together with pro rata depreciation. Interest on borrowings is not included. The depreciation plan is based principally on the following useful lives:
Buildings Plant fixtures Plant and machinery Tools and equipment, including special tools
Useful life 25 to 50 years 10 to 18 years 6 to 12 years 3 to 15 years
Non-scheduled depreciation of property, plant and equipment pursuant to IAS 36 is performed where the recoverable amount from the use of the asset in question has fallen below the carrying value. If the reasons for non-scheduled depreciation in previous years cease to apply, the corresponding amounts are written back. There was no need for either depreciation or write-backs in the period under review. In accordance with IAS 17, property, plant and equipment used on the basis of lease agreements is capitalised if the conditions of a finance lease are met, in other words if the significant risks and opportunities which result from its use have passed to the lessee. Capitalisation is performed at the time of the agreement, at cost of purchase or cost of sales, or at the present value of the minimum lease payments if lower. The straight-line depreciation method is based on economic life, or on the term of the lease contract if shorter. Payment commitments from future lease instalments are recognised as a liability, except that future interest costs are not taken into account. Payments totalling EUR 52 million (EUR 41 million) for assets rented on the basis of operating lease agreements were recognised as an expense.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
14 Investments
EUR ’000 Investments in affiliated companies Loans to affiliated companies Investments in associated companies Loans to companies linked through participation Securities Other loans
The addition to investments in affiliated companies relates principally to the acquisition of the shares of Audi Australia Pty. Ltd. The disposal is the result of a capital reduction by Volkswagen Group Singapore Pte. Ltd. The increase in investments in associated companies is attributable to a capital increase by FAW-Volkswagen Automotive Company, Ltd. The disposal in loans to affiliated companies is the result of the transfer of employees’ time credits previously invested in funds by VOLKSWAGEN AG to Volkswagen Pension Trust e.V. for fiduciary administration. Measurement principles Shares in non-consolidated affiliated companies and investments in associated companies are always shown at their respective cost of purchase, as no active market exists for these companies and no fair value can reliably be determined with a justifiable amount of effort. The fair values of medium and long-term loans are determined by discounting at risk-adequate market rates, and deviate from the carrying amounts recognised at amortised cost. In the case of short-term items, the amortised cost corresponds to the fair value. Loans are measured at the amortised cost using the effective interest rate method. The fair values to be indicated in addition in the Notes are determined by discounting future streams of payments at the market rate. Investment securities are capitalised at fair value. Additions to investments in foreign currency are translated at the middle rate on the day of the transaction. Non-scheduled depreciation on investments is performed if the market or stock market value has fallen below the carrying value. If the reasons for non-scheduled depreciation in previous years cease to apply, the corresponding amounts are written back. There was no need for depreciation in the period under review.
Carrying values 31 Dec. 01 31 Dec. 00 164,343 160,805 – 13,289 39,053 33,549 11 19 – 14,492 3,482 3,862 206,889 226,016
Fair values 31 Dec. 01 164,343 – 39,053 11 – 2,958 206,365
31 Dec. 00 160,805 13,289 33,549 19 14,492 3,299 225,453
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
15 Rented lessor’s assets Carrying amounts 31 Dec. 01 31 Dec. 00 14,958 –
EUR ’000 Lessor’s assets Two buildings rented out in the long term are reported for the first time as lessor’s assets on the basis of the provisions of IAS 40. 16 Inventories EUR ’000 Raw material and consumables used Work in progress Finished goods and merchandise
31 Dec. 01 303,436
31 Dec. 00 286,043
284,381
289,574
875,052 1,462,869
874,551 1,450,168
Of total inventories, EUR 147,345 thousand (EUR 20,900 thousand) are reported at the lower net realisable value. The reduction in value totalled EUR 23,536 thousand (EUR 3,315 thousand). No write-back was performed in the financial year. There are no significant restrictions on ownership or disposal for the reported inventories. Measurement principles Raw materials and supplies used are measured at the updated average cost of purchase or at the lower replacement value. Materials invoiced in foreign currencies are valued on the day of the transaction using regularly adjusted fixed exchange rates. Incidental costs of purchase and purchase cost reductions are taken into account as appropriate. Work in progress and finished goods are valued at cost of sales or at the lower replacement value. The cost of sales includes direct materials and direct labour, as well as an appropriate portion of the indirect materials and indirect labour, production-related depreciation and the expenditure allocable to the products from the depreciation of capitalised developments in series production. Distribution costs, general administrative costs and interest on borrowings are not capitalised. Merchandise is valued at cost of purchase or at the lower replacement value.
Fair values 31 Dec. 01 14,958
31 Dec. 00 –
Provision has been made for all discernible storage and inventory risks by way of appropriate value adjustments. Individual downward valuation adjustments are made on all inventories as soon as the probable proceeds from their sale or use are lower than the carrying values of the inventories. The amount the inventories are expected to raise less the costs incurred up to their sale is taken as the lower replacement value.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
17 Receivables and other assets
EUR ’000 Trade receivables Receivables from affiliated companies Receivables from companies linked through participation Other assets Assets from derivative currency hedging instruments
Notes 17 a) and 17 b)
Time to maturity over 1 year 31 Dec. 01 31 Dec. 00 11,185 527
Carrying values 31 Dec. 01 437,378
31 Dec. 00 354,466
31
32
213,912
259,120
17 a)
– 68,220
– 31,473
46,650 203,247
52,095 208,063
17 c)
98 79,534
893 32,925
1,371 902,558
2,122 875,866
The fair value of trade receivables amounts to EUR 436,763 thousand (EUR 354,429 thousand). The other assets have a fair value of EUR 203,240 thousand (EUR 207,975 thousand). There are no significant restrictions on ownership or disposal for the reported receivables and other assets. Measurement principles Receivables and other assets are valued at the nominal amount or at the amortised cost. Provision is made for discernible one-off risks and general credit risks in the form of appropriate value adjustments. Receivables in foreign currencies are valued at the middle rate on the balance sheet date. Exchange-rate differences from the conversion of unhedged foreign-currency receivables and liabilities are carried as other operating income and expense. The fair value is determined by discounting the medium and long-term asset items at market rates. In the case of short-term items, the fair value corresponds to the amortised cost. a) Trade receivables that are included in other items:
EUR ’000 Receivables from affiliated companies companies linked through participation
Notes
Time to maturity Over 1 year 31 Dec. 01 31 Dec. 00 129,480 46,650 176,130
138,322 46,773 185,095
Carrying values 31 Dec. 01
31 Dec. 00
129,480 46,650 176,130
138,322 46,773 185,095
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
b) Derivative currency hedging instruments included in other items:
EUR ’000 Receivables from affiliated companies
Nominal values 31 Dec. 01 over 1 year
31 Dec. 00
over 1 year
922
1,097,499
238
Nominal values 31 Dec. 01 over 1 year 8,965 282 – – 8,965 282
31 Dec. 00 9,904 12,687 22,591
over 1 year 3,863 – 3,863
249,071
Market values 31 Dec. 01 31 Dec. 00 5,210
60,552
The assets from derivative currency hedging instruments relate exclusively to cash-flow hedges and are measured at market value. The overall item of currency hedging instruments is shown under Other particulars, item 2.1. c) Derivative currency hedging instruments:
EUR ’000 Foreign exchange contracts Currency swaps
Derivative currency hedging instruments are measured at market value. The overall item of currency hedging instruments is shown under Other particulars, item 2.1. 18 Securities Marketable securities comprise fixed-interest and variable-interest securities and shares. In view of the change in the market value of the securities, both income totalling EUR 2,591 thousand (EUR 2,713 thousand) and expenses totalling EUR 9,385 thousand (EUR 26,650 thousand) were summarised in the interest result. The rates of return ranged between 3.86 percent and 8.25 percent. Measurement principles Marketable securities are measured at market value, in other words at the stock market prices at the balance sheet date.
Market values 31 Dec. 01 31 Dec. 00 1,371 1,803 – 319 1,371 2,122
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
23 Revenue reserves
19 Cash EUR ’000 Balances with banks Cheques and cash in hand
31 Dec. 01 462,031 109 462,140
31 Dec. 00 75,007 511 75,518
The rates of return for overnight money ranged between 3.28 percent and 5.08 percent. Balances existed with various banks and in various currencies. Liquid funds that are due at any time were invested with affiliated companies via the cash pooling arrangements. Measurement principles Cash is measured at nominal value. Foreign notes and coins and bank balances in foreign currency are translated at the middle rate on the balance sheet date. 20 Deferred tax assets EUR ’000 Temporary differences between the valuations in the tax balance sheet and the consolidated financial statements
31 Dec. 01
31 Dec. 00
121,904
129,375
The deferred tax assets result from the future tax benefit explained in item 10. 21 Issued capital The issued capital totals EUR 110,080,000. Each share represents a mathematical share of EUR 2.56 in the share capital. It is divided into 43,000,000 bearer individual share certificates. 22 Capital reserves The capital reserves contain shareholder contributions from the issue of shares in the company. It remained unchanged at EUR 57 million on December 31, 2001.
EUR ’000 Legal reserve Reserve for cash-flow hedges Reserve for foreign exchange differences Other revenue reserves
31 Dec. 01 131
31 Dec. 00 131
–1,048
35,202
7,412 4,169,022 4,175,517
4,976 3,609,501 3,649,810
The opportunities and risks from foreign exchange contracts serving as hedges for future payments are deferred with no effect on income in the reserve for cash-flow hedges. When the cash-flow hedges fall due, the results from the settlement of the exchange-rate hedging contracts are reported under the other operating result. The consolidated net profit for the year of EUR 560,353 thousand (EUR 643,811 thousand) remaining after the transfer of profit to VOLKSWAGEN AG is allocated to the other revenue reserves.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
24 Provisions Terms of provisions:
EUR ’000 Provisions for pensions Tax provisions Other provisions Total
Notes
Provisions for pensions Provisions to cover pension obligations are created on the basis of plans to provide retirement, invalidity and surviving dependents’ benefits. They relate exclusively to benefit commitments for employees of AUDI AG and COSWORTH TECHNOLOGY LIMITED. The benefits generally depend on the length of service and remuneration of the employees. Within the Audi Group, a distinction is made between benefit systems based on provisions and those financed externally via Volkswagen Pension Trust e.V., as the retirement benefit scheme of AUDI AG was modified into an internal pension fund model on January 1, 2001. The model operates according to contributionbased retirement benefit commitments, which are classified as benefit commitments pursuant to IAS 19. The remuneration-based annual cost of commitments is invested in funds on a fiduciary basis by Volkswagen Pension Trust e.V. This model offers AUDI AG employees the opportunity to increase their benefit entitlements, while providing full risk cover. As the units administrated on a fiduciary basis satisfy the requirements of IAS 19 as assets, these funds were offset against the retirement benefit obligations derived from them. Obligations for retirement benefits are measured according to the benefit/years of service method pursuant to IAS 19. Here, the future commitments are measured on the basis of benefit entitlements acquired pro rata at the balance sheet date. For purposes of measurement, trend assumptions are used for the relevant quantities which affect the level of benefit.
Time to maturity Over 1 year 31 Dec. 01 31 Dec. 00 1,310,304 1,260,339 – – 835,229 700,755 2,145,533 1,961,094
Total 31 Dec. 01 1,356,804 14,121 1,990,302 3,361,227
31 Dec. 00 1,294,513 27,118 1,832,144 3,153,775
The calculation is based on the following individual actuarial assumptions: Percent Remuneration trend Retirement benefit trend Interest rate Fluctuation rate Expected return on plan assets
31 Dec. 01 3.0–3.5 1.5–4.0 5.7–6.0 1.4
31 Dec. 00 3.5–4.75 2.0–2.75 5.75–6.5 1.4
6.7–7.0
–
The biometric mortality was determined using the “1998 Reference Tables” by Dr. K. Heubeck. Progression from benefit/years of service to provisions for pensions to meet retirement benefit commitments recognised in the balance sheet: EUR ’000 Benefit/years of service of externally financed obligations Fair value of plan assets Surplus or deficit Benefit/years of service of non-externally financed obligations Unrecognised actuarial losses Unrecognised past service cost Provisions recognised in balance sheet
31 Dec. 01
31 Dec. 00
64,406 –46,290 18,116
– – –
1,387,277
1,310,151
–48,589
–15,638
–
–
1,356,804
1,294,513
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Actuarial gains and losses result from changes in the number of people participating in the pension scheme and from a deviation in the actual trends (e.g. increases in pay or retirement benefit) from the figures assumed for calculation purposes. Such gains and losses are only booked to income where they exceed ten percent of the higher of retirement benefit obligations or the fair value of the plan assets on the reporting date. In accordance with IAS 19, this residual amount is shown in the balance sheet on the basis of the future average remaining working life of the employees and offset against the result. Retirement benefit costs comprise the following: EUR ’000 Current service cost for services rendered by employees in the financial year Interest cost Expected return on plan assets Net actuarial losses recognised in year Past service cost Curtailment and settlement losses (gains) Currency differences from foreign schemes Retirement benefit costs
31 Dec. 01
31 Dec. 00
50,111 84,886
43,901 77,309
–2,257
–
48 –
– –
–
–
61 132,849
– 121,210
The interest element in pension costs is shown as interest expense in the other finance result. The actual loss from plan assets totalled EUR 1,231 thousand in the past financial year.
The provisions for pensions recorded in the balance sheet changed as follows: EUR ’000 Provisions for pensions at January 1 Retirement benefit cost Payment of retirement benefits from company assets Transfers received from affiliated companies Transfers to affiliated companies Contributions to the fund Currency differences Provisions for pensions at December 31
2001
2000
1,294,513 132,784
1,210,739 121,210
–42,673
–37,436
523
–
–846 –27,562 65
– – –
1,356,804
1,294,513
Tax provisions The tax provisions include obligations for ongoing taxes on income and for other taxes. The deferred tax liabilities are explained separately under items 10 and 27.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Other provisions
EUR ’000 Warranties Distribution costs Workforce costs EU directive on end-of-life vehicles Miscellaneous other provisions Total
1 Jan. 01 1,047,446 306,819 182,129 88,693 207,057 1,832,144
Consumed
Liquidated
540,277 244,040 16,759 – 169,489 970,565
15,978 10,784 3,241 – 10,870 40,873
Measurement principles In accordance with IAS 37, provisions are created where a current obligation to third parties existing as a result of a past event is likely to lead to future cash outflows and where the amount of the obligation can reliably be estimated. If the aforementioned criteria are not met, the obligations in question are reported under contingent liabilities. Pursuant to IAS 37, the other provisions for all discernible risks and contingent liabilities are reported at their probable cost and not offset against recourse entitlements. Provisions which do not lead to cash outflows in the subsequent year are measured at their discounted settlement value at the balance sheet date. Market rates are used as the discount rates. The settlement value also includes the cost increases to be taken into account at the balance sheet date, according to IAS 37. Provisions in foreign currency are translated at the closing rate. Pursuant to IAS 37, the provision for warranties covers all legal and statutory warranty commitments and goods and services provided to customers on a goodwill basis. The provisions are measured on the basis of anticipated amounts per vehicle, differentiated according to model and country or market area, and calculated using statistical findings. The provisions for distribution costs relate principally to bonus commitments to dealers, as well as cost sharing pledges to importers and dealers for the implementation of investment projects, and for training measures. Commitments to the workforce are substantially in respect of long-service awards, outstanding vacation, accumulated overtime, awards for suggested improvements, ex gratia payments and pre-retirement part-time arrangements.
Allocated/ new 625,969 325,264 35,914 – 139,045 1,126,192
Compounded 32,571 521 1,082 4,840 4,390 43,404
31 Dec. 01 1,149,731 377,780 199,125 93,533 170,133 1,990,302
The provision for costs arising from the obligation to dispose of scrap vehicles in accordance with the EU Directive on end-of-life vehicles covers the residual risk within the Audi Group, taking account of national differences in salvaging costs. The miscellaneous other provisions relate to a wide range of one-off risks.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
25 Liabilities
EUR ’000 Notes Trade payables Advances received for orders Liabilities 25 a) and to affiliated companies 25 c) Liabilities to companies linked through participation 25 c) Derivative financial instruments 25 b) Other liabilities of which taxes in respect of social insurance
31 Dec. 2001 Time to maturity up to 1 year 1,358,913
1–5 years 8,000
over 5 years –
1,366,913
4,628
–
–
4,628
–
5,378
711,845
70,148
155,300
937,293
40,924
847,227
2,484
–
–
2,484
–
131
463 483,201 49,654
– 13,872 –
– 7 –
463 497,080 49,654
– 44,355 –
343 484,307 88,235
84,266 2,561,534
4,087 92,020
2 155,307
88,355 2,808,861
8,606 100,027
92,844 2,816,484
Carrying values
The fair value of trade payables amounts to EUR 1,336,305 thousand (EUR 1,478,561 thousand). Liabilities to affiliated companies have a fair value of EUR 937,293 thousand (EUR 837,612 thousand). In the case of short-term items, the fair value corresponds to the amortised cost. No interest is calculated on the medium and longterm liabilities. The customary retention of title moreover applies for liabilities from deliveries of goods. Measurement principles Short-term liabilities are reported at the repayment or settlement value. Medium and long-term liabilities are carried in the balance sheet at amortised cost. The fair values to be indicated in addition are determined by discounting future streams of payments at the market rate. Liabilities in foreign currency are translated at their middle rate on the balance sheet date.
31 Dec. 2000 Time to maturity over 1 year 14,748
Carrying values 1,479,098
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
a) Negative market values of derivative currency hedging instruments:
EUR ’000 Liabilities to affiliated companies
Nominal values 31 Dec. 01 over 1 year 465,730 –
31 Dec. 00 135,038
over 1 year 249
Market values 31 Dec. 01 31 Dec. 00 8,259 4,959
31 Dec. 00 4,795 – 4,795
over 1 year – – –
Market values 31 Dec. 01 31 Dec. 00 20 343 443 – 463 343
Carrying values 31 Dec. 01 31 Dec. 00 235,666 401,500 2,485 131 238,151 401,631
Market values 31 Dec. 01 31 Dec. 00 235,666 401,500 2,485 131 238,151 401,631
The derivative currency hedging instruments reported under this item consist exclusively of cash-flow hedges; they are measured at their market values. The overall item of currency hedging instruments is shown under Other particulars, item 2.1. b) Derivative currency hedging instruments:
EUR ’000 Foreign exchange contracts Currency swaps
Nominal values 31 Dec. 01 over 1 year 1,560 93 25,230 – 26,790 93
Derivative currency hedging instruments (exclusively cash-flow hedges) are reported at market values. The overall item of currency hedging instruments is shown under Other particulars, item 2.1. c) Trade payables included in other items:
EUR ’000 Liabilities to affiliated companies Liabilities to companies linked through participation
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
26 Debt 31 Dec. 2001 EUR ’000 Liabilities from financial lease agreements
31 Dec. 2000
Up to 1 year
1–5 years
over 5 years
Carrying values
over 1 year
Carrying values
12,564
1,251
–
13,815
2,101
21,977
2002 13,502 –938 12,564
2003–2006 1,307 –56 1,251
from 2007 – – –
Total 14,809 –994 13,815
The following lease payments from financial lease agreements are due in the next few years: EUR ’000 Mature leasing payments Discounted amounts Present value The lease agreements are based on an interest rate of 6.5 percent p.a. in each case. Measurement principles Liabilities from financial lease agreements are carried at the present value of the leasing instalments. 27 Deferred tax liabilities Provided there is identity of the tax creditors and maturities, the tax assets and tax liabilities are netted. The deferred tax liabilities are explained in detail under item 10 of the Notes, Income tax expense.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Other par ticulars
1 Financial instruments Financial instruments refer to any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. They include both primary instruments and derivative instruments or obligations. Derivative financial instruments are used as a hedge for items on the balance sheet and for future payments. IAS 39 subdivides financial instruments into four categories: – Financial instruments held for trading – Held-to-maturity investments – Loans and receivables originated by the enterprise – Available-for-sale financial assets The financial instruments used within the Audi Group are generally classified as “available for sale” or “loans and receivables originated by the enterprise”. “Financial instruments held for trading” arise where external hedging transactions are concluded for relationships involving credit between group companies but are eliminated from the consolidated financial statements. No financial instruments in the category of “held-tomaturity investments” are in use. Where financial instruments are purchased or sold in the “customary” manner, they are recognised using settlement date accounting. Financial instruments are reported at amortised cost or at fair value. The amortised cost of a financial asset or financial liability is the amount at which the financial asset or liability was measured at initial recognition minus principal repayments, any non-scheduled depreciation for impairment or uncollectability, and the premium. The premium is distributed over the term of the financial asset or financial liability by means of the effective interest rate method. In the case of short-term receivables and liabilities, the amortised cost corresponds to the notional or repayment value. The fair value generally corresponds to the market or stock market value. If no active market exists, the fair value is determined by means of investment mathematics methods. Changes to the fair value are booked to the currentperiod result.
1.1 Primary financial instruments “Loans and receivables originated by the enterprise” are measured at amortised cost, using the effective interest method, if they have not arisen in connection with hedging transactions. These include in particular financial investments, trade accounts receivable and payable, and other short-term assets and liabilities. In the case of short-term receivables and liabilities, the amortised cost corresponds to the notional or repayment value. “Available-for-sale financial instruments” are always measured at their fair value. In the case of quoted financial instruments, the fair value corresponds to the market value on the balance sheet date. Available-for-sale financial instruments substantially comprise long-term and current investments. Investment holdings in subsidiaries and investments in associated companies are generally shown at their respective cost of purchase, as no active market exists for these companies and no fair value can reliably be determined with a justifiable amount of effort. Changes to the fair value are booked to the current-period result. 1.2 Derivative financial instruments Derivative financial instruments are used as a hedge for items on the balance sheet and for future payments. In the case of hedges for balance sheet items (fairvalue hedges), the gain or loss from the measurement of hedging instruments at the fair value is recognised immediately. The recognised carrying value of the hedged item is simultaneously adjusted by the gain or loss attributable to the hedged risk. The net interest for the previous year included income totalling EUR 319 thousand, and the net interest for the 2001 financial year expenses totalling EUR 443 thousand, as a result of changes in fair value. The effective portion of the changes in the market value of financial instruments serving as hedges for future payments (cash-flow hedges) is, on the other hand, allocated to a special reserve with no effect on income. The expense or income from settled cash-flow hedges is realised by liquidating the reserve with an effect on the current-period result at the same time that the hedged payment is made, and booked to the other operating result. On the other hand, any ineffective portions of the change in the market value of hedging instruments for future payments are immediately recognised.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
2 Hedging policy and risk management 2.1 Price and foreign exchange exposure In view of its international business activities, the Audi Group is exposed to price and exchange rate fluctuations. It is the company’s policy to exclude or limit these risks by concluding appropriate hedging transactions. The measures to hedge against foreign exchange exposure are coordinated regularly between AUDI AG and the group treasury of VOLKSWAGEN AG in accordance with the Volkswagen organisational guideline. On the basis of an agency contract, the group treasury of VOLKSWAGEN AG also handles foreign exchange hedging matters for the Audi Group and concludes transactions in the name and for the account of VOLKSWAGEN AG. These transactions relate to the hedging of payments in foreign currency arising from operations (e.g. for goods and services) and to the hedging at matching amounts and maturities of Volkswagen Group financing. Marketable derivative financial instruments (foreign exchange contracts) are used for this purpose. The hedging transactions performed for Audi by VOLKSWAGEN AG on the basis of the agency agreement are concluded with top-grade national and international banks whose creditworthiness is regularly examined by leading rating agencies. The results from foreign exchange hedging are credited or charged to the Audi Group each month on the basis of the proportion of the Volkswagen Group’s overall hedging volume. In accordance with the Volkswagen organisational guideline, AUDI AG is moreover authorised to conclude hedging transactions of its own to a limited extent, where this helps to simplify current operations. The volumes, currencies and maturities of these transactions are continuously coordinated with VOLKSWAGEN AG. The arrangements for the group-wide foreign exchange hedging policy are based on the “Minimum requirements for the performing of commercial acts by banks” issued by the Federal Banking Supervisory Office. Foreign exchange hedging contracts taken out to hedge against foreign exchange risks with a nominal volume of EUR 749.3 million (EUR 1,255.6 million) have a maturity of up to one year, transactions totalling EUR 1.3 million (EUR 4.3 million) have a longer term. The nominal volumes of the hedging transactions shown represent the total of all units of trading on which the transactions are based.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
EUR ’000 Foreign exchange contracts (cash-flow hedges) Purchased USD GBP JPY Other Total Sold USD GBP CAD Other Total Currency swaps (fair-value hedges) GBP Total portfolio
Nominal volume Time to maturity 31 Dec. 01 up to 1 year
Market values 31 Dec. 00
up to 1 year
31 Dec. 01
31 Dec. 00
40,777 6,635 3,938 2,416 53,766
40,067 6,142 3,938 2,322 52,469
45,159 5,017 1,436 2,487 54,099
40,832 5,017 1,436 2,464 49,749
1,468 146 –53 3 1,564
2,037 –68 –61 10 1,918
515,850 119,922 16,002 19,786 671,560
515,850 119,922 16,002 19,786 671,560
683,622 444,041 37,208 28,266 1,193,137
683,622 444,041 37,208 28,266 1,193,137
–3,699 –493 249 681 –3,262
33,986 17,376 1,583 2,190 55,135
25,230 750,556
25,230 749,259
12,687 1,259,923
12,687 1,255,573
–443 –2,141
319 57,372
A market risk exists if price changes on financial markets have a negative influence on the value of financial instruments. The market values shown in the table have been calculated on the basis of the market information available at the balance sheet date and represent the redemption (cash-in) values of the derivative financial instruments. The redemption values are calculated on the basis of quoted prices or standardised methods. 2.2 Interest rate risk An interest rate risk, in other words potential fluctuations in the value of financial instruments as a result of changes to market rates, can occur above all in the case of medium and long-term, fixed-interest receivables and liabilities. Fixed-interest loans total EUR 3 million on December 31, 2001 (EUR 3 million). In view of the low volume of these financial instruments, no interest-rate hedging contracts were taken out. 2.3 Liquidity risk A liquidity forecast based on a definite planning horizon and continuing credit facilities with various banks assure the adequate liquidity of the Audi Group at all times.
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
2.4 Credit risk The maximum theoretical credit risk from the primary financial instruments corresponds to the value of all receivables after netting against liabilities due to the same business partner. It is assumed that the actual risk is adequately covered by the estimated uncollectable portion of accounts receivable. The credit risk from derivative financial instruments does not exceed the balance of positive market values in the event of default by a counterparty of VOLKSWAGEN AG or the Audi Group companies. The actual credit risk is slight, as VOLKSWAGEN AG and AUDI AG only conclude contracts with top-class business partners and trading limits are defined for each business partner as a risk management measure. 3 Contingencies Contingencies are unrecognised contingent liabilities, the amount of which corresponds to the maximum possible claim at the balance sheet date. On December 31, 2001 there existed a contingent liability amounting to EUR 3 million (EUR 4 million) from the creation of comprehensive land charges for outside liabilities in connection with a warehouse. 4 Litigation settlements Neither AUDI AG nor any of its group companies are involved in ongoing or prospective legal or arbitration proceedings which could have a significant influence on their economic position or have had such an influence during the past two years. Appropriate provisions have moreover been created within each group company, or correspondingly adequate insurance benefits are anticipated, for possible financial charges resulting from other legal or arbitrational proceedings. Such charges are therefore unlikely to have any significant influence on the financial position.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
5 Other financial obligations
EUR million Ordering commitments for property, plant and equipment intangible assets Commitments from long-term rental and lease agreements
31 Dec. 2001 Due within 1 year
Due in 1–5 years
> 5 years
529 144
352 44
– –
881 188
294 121
841 179
18 691
22 418
4 4
44 1,113
23 438
43 1,063
The commitments from rental and lease agreements relate exclusively to rental agreements in which the companies of the Audi Group do not have an economic interest in the rented assets according to the criteria of IAS 17. 6 Discontinuing operations There are no plans to discontinue operations as defined by IAS 35. 7 Cost of materials EUR ’000 Raw materials and consumables used as well as purchased goods Purchased services
2001
2000
14,844,094 1,016,003 15,860,097
13,591,234 947,864 14,539,098
2001 2,147,772
2000 2,055,532
512,506
486,166
139,150 2,660,278
126,491 2,541,698
8 Personnel costs EUR ’000 Wages and salaries Social insurance and expenses for retirement benefits and maintenance payments of which in respect of retirement benefits
31 Dec. 2000 Due in over Total 1 year
Total
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
9 Total average employees for the year
Domestic group companies Foreign group companies Total of which apprentices
2001 44,374 6,767 51,141 1,578
2000 43,118 6,278 49,396 1,441
10 Relationships with related parties Related parties as defined in IAS 24 are – VOLKSWAGEN AG, which controls AUDI AG – Companies which are controlled directly or indirectly by AUDI AG but are not consolidated – Other consolidated and non-consolidated affiliated companies in the Volkswagen Group which supply goods and services to or purchase goods and services from companies of the Audi Group in the context of their business purpose – Members of the Board of Management or Supervisory Board – Companies in which a substantial interest in the voting power is owned by VOLKSWAGEN AG or by members of its management. All business with related parties has been conducted on the basis of international comparable uncontrolled price methods pursuant to IAS 24 and according to the terms that customarily apply to outside third parties. The goods and services procured from related parties include primarily supplies for production, as well as development, transport, financial and distribution services and, to a lesser extent, design, training and other services and supplies of spare parts. Business from related companies comprises for the most part sales of new and used cars, engines and components. Related parties controlled by companies of the Audi Group are listed in the statement of interests held together with details of the level of investment, equity and annual profit. Members of the Board of Management or Supervisory Board of AUDI AG also belong to the supervisory or management boards of other companies with which the Audi Group maintains business relations. All transactions with such companies are likewise conducted according to the terms that customarily apply to outside third parties.
As cash management within the Audi Group is centralised, the Audi Group also performs a “banking function” vis-à-vis non-consolidated group companies. The group companies invest their liquid funds with AUDI AG or raise liquid funds from it. Residual amounts are equalised via the cash pooling arrangements of VOLKSWAGEN AG. All transactions are handled on market terms.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Segment repor ts
The Audi Group is structured along the lines of the regional locations of its assets, into the following segments: Germany (AUDI AG), Hungary (AUDI HUNGARIA MOTOR Kft.), Great Britain (COSWORTH TECHNOLOGY LIMITED), Italy, and Brazil (AUDI DO BRASIL E CIA.). The assets in Italy are distributed between the Lamborghini Group (Italy), with the companies Automobili Lamborghini Holding S.p.A., Automobili Lamborghini S.p.A., Motori Marini Lamborghini S.p.A. and Lamborghini ArtiMarca S.p.A., and the Italian general importer AUTOGERMA S.p.A. (Italy). The subdivision of the group into five segments on the basis of the locations of assets reflects the arrangements for internal group steering and reporting.
The principal activities of AUDI AG and the Lamborghini Group are the development, production, assembly and sale of cars and engines. AUDI HUNGARIA MOTOR Kft. manufactures engines and cars. The Great Britain segment (COSWORTH TECHNOLOGY LIMITED) performs the development, production and assembly of engines and automotive components. AUTOGERMA S.p.A. imports and sells models of the Audi, SEAT, Škoda, Volkswagen Commercial Vehicles and Volkswagen Passenger Cars brands as well as spare parts. AUDI DO BRASIL E CIA. holds a dormant equity holding in the Curitiba Business Unit. Transactions between the segments are conducted on generally accepted market terms, in the way that is customary for transactions with outside third parties.
EUR million Germany Hungary Great Britain Italy Brazil Consolidation measures Audi Group
External revenue 2001 2000 16,133 14,505 986 841 58 72 4,855 4,534 – – – – 22,032 19,952
Internal revenue 2001 2000 1,591 1,589 2,484 2,562 65 35 – 1 – – –4,140 –4,187 – –
Total revenue 2001 2000 17,724 16,094 3,470 3,403 123 107 4,855 4,535 – – –4,140 –4,187 22,032 19,952
EUR million Germany Hungary Great Britain Italy Brazil Consolidation measures Audi Group
Profit before tax 2001 2000 1,044 695 251 301 –13 –11 42 45 – – –2 –44 1,322 986
Segment assets 31 Dec. 01 31 Dec. 00 9,950 9,118 1,882 1,621 118 127 1,154 1,144 213 212 –2,183 –1,983 11,134 10,239
Segment liabilities 31 Dec. 01 31 Dec. 00 5,910 5,541 396 387 49 50 651 572 1 – –834 –581 6,173 5,969
EUR million Germany Hungary Great Britain Italy Brazil Consolidation measures Audi Group 1 2
Investments in property, plant and equipment 1 2001 2000 2 1,881 1,750 184 254 17 13 45 370 – – – 2,127
– 2,387
Including intangible assets Including goodwill from the first-time consolidation of AUTOGERMA S.p.A.
Investments in financial assets
Depreciation
Non-cash expenses
2001 24 – – – –
2000 560 – – 20 –
2001 1,220 147 12 40 –
2000 1,017 116 12 38 –
2001 714 44 4 92 –
2000 876 79 35 151 –
– 24
–545 35
16 1,435
16 1,199
–204 650
–386 755
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
The locations of assets differ fundamentally from the locations of the most important sales markets. Pursuant to IAS 14.71, revenue is therefore broken down according to the geographical locations of customers.
Revenue Germany Europe excluding Germany North America Asia/Oceania Latin America Africa Total Details of the Supervisory Board and Board of Management The remuneration of members of the Board of Management of AUDI AG for the 2001 financial year came to EUR 6,106 thousand (EUR 6,346 thousand). In the context of the second and third tranches of the VOLKSWAGEN AG share options plan, the members of the Audi Board of Management purchased a total of 14,000 convertible bonds at a price of EUR 2.56 each, bearing the right to purchase 140,000 ordinary shares in VOLKSWAGEN AG. At December 31, 2001, the members of the Board of Management consequently hold entitlements to purchase 210,000 ordinary shares in VOLKSWAGEN AG. The initial conversion price of the third tranche, which reflects the price ratio of Volkswagen shares at the start of March 2001, was fixed at EUR 59.43 per Volkswagen ordinary share. The second tranche was offered in the 2000 financial year at EUR 41.82 per Volkswagen ordinary share. The conversion price rises by five percentage points per year after expiry of the qualifying period for the conversion rights. The qualifying period is 24 months and the conversion period three years. No personnel costs are booked in connection with the issuing of convertible bonds. The provisions for pensions for current members of the Board of Management rose by EUR 922 thousand in 2001, to EUR 9,198 thousand. Payments to former members of the Board of Management or their surviving dependants amount to EUR 835 thousand (EUR 909 thousand).
Share 2001 EUR mill. 7,051 10,734 2,814 1,151 124 158 22,032
Percent 32.0 48.7 12.8 5.2 0.6 0.7 100.0
Share 2000 EUR mill. 6,767 9,399 2,806 767 103 110 19,952
Percent 33.9 47.1 14.1 3.8 0.5 0.6 100.0
From the first tranche of the VOLKSWAGEN AG share options plan, former members of the Audi Board of Management hold 1,000 convertible bonds at a price of EUR 2.56 each, bearing the right to purchase a total of 10,000 ordinary shares in VOLKSWAGEN AG. Pension commitments to former members of the Board of Management and their surviving dependents are covered by provisions totalling EUR 13,704 thousand (EUR 11,573 thousand). The remuneration of the Supervisory Board of AUDI AG amounts to EUR 150 thousand (EUR 155 thousand). The members of the Board of Management and Supervisory Board, together with their membership of other supervisory boards and regulatory bodies – pursuant to §§ 285 Sentence 1, No. 10 of the German Commercial Code and 125 Para. 1, Sentence 3 of German Stock Corporation Law – are indicated in the Notes to the financial statements of AUDI AG.
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Notes
Events occurring after the balance sheet date No events which must be reported according to IAS 10 occurred after December 31, 2001. Approval of the annual financial statements for 2001 The annual financial statements for 2001 will be approved and released for publication by the Supervisory Board of AUDI AG on February 22, 2002. Ingolstadt, February 1, 2002 The Board of Management
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111
Statement of interests held by the Audi Group at December 31, 2001 Name and registered office of company I. Parent company AUDI AG, Ingolstadt II. Subsidiaries A. Fully consolidated companies: AUDI DO BRASIL E CIA., Curitiba (Brazil) AUDI HUNGARIA MOTOR Kft., Györ (Hungary) Automobili Lamborghini Holding S.p.A., Sant’Agata Bolognese (Italy) Automobili Lamborghini S.p.A., Sant’Agata Bolognese (Italy) Motori Marini Lamborghini S.p.A., Sant’Agata Bolognese (Italy) Lamborghini ArtiMarca S.p.A., Sant’Agata Bolognese (Italy) AUTOGERMA S.p.A., Verona (Italy) COSWORTH TECHNOLOGY LIMITED, Northampton (Great Britain) B. Non-consolidated companies: Audi Electronics Venture GmbH, Ingolstadt Audi Japan K.K., Tokyo (Japan) 3 Audi Synko GmbH, Ingolstadt Audi Vertriebsbetreuungsgesellschaft mbH, Ingolstadt AUTO UNION GmbH, Ingolstadt COSWORTH TECHNOLOGY, INC., Novi (USA) NSU GmbH, Neckarsulm quattro GmbH, Neckarsulm RACING TECHNOLOGY NORFOLK LIMITED, Norfolk (Great Britain) ZERAL Verwaltung GmbH & Co. Bissendorf KG, Munich Audi Zentrum Hannover GmbH, Hanover 5 AUDI SENNA Ltda., São Paulo (Brazil) Audi Australia Pty. Ltd., Homebush Bay (Australia) Volkswagen Group Singapore Pte. Ltd. (Singapore) 5 Audi Akademie, Gesellschaft für Personal- und Organisationsentwicklung mbH, Ingolstadt Design Center Europe S.L., Sitges (Spain) Fahr- und Sicherheitstraining FuS GmbH, Ingolstadt Volkswagen Transport GmbH & Co. OHG, Wolfsburg III. Associated companies August Horch Museum Zwickau GmbH, Zwickau LGI Logistikzentrum im Güterverkehrszentrum Ingolstadt Betreibergesellschaft, Ingolstadt 5 GIF Gewerbe- und Industriepark Bad Friedrichshall GmbH, Bad Friedrichshall 5 FAW-Volkswagen Automotive Company, Ltd., Changchun (China) 5 1
2 3 4 5
Based on the separate financial statements in accordance with the legal requirements in each specific country; net profit Before the transfer of profit (EUR 209 million) to VOLKSWAGEN AG The majority of voting rights is held by VOLKSWAGEN AG. Before the transfer of profit to AUDI AG 2000 financial year
The figures for foreign participations have been translated into euros at the mean of the buying and selling rate on the day of the transaction.
Capital share in percent
Equity 1 EUR ’000
Profit 1 EUR ’000
1,487,899
418,000 2
100.00 100.00
79,046 1,538,167
–86 277,105
100.00 100.00 100.00 100.00 100.00 100.00
556,918 –24,871 –1,218 2,579 155,835 70,808
–10,086 –49,404 –2,620 338 42,415 –10,003
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 95.00 77.00 51.00 50.00 49.00
502 51,292 7,807 1,389 354 3,135 327 100 5,935 26 1,340 16,182 26,768 17,827
44.50 33.33 27.45 19.00
234 5,746 61 511
–77 414 752 119,416
50.00
26
–
50.00
274
6
30.00 10.00
1,167 811,626
96 302,960
2 4,789 127 1,289 146 –390 104 24,940 4 236 1 –1,834 10,276 –1,151 60
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112
Independent Auditor´s Report
Independent auditor’s repor t
We have audited the consolidated financial statements of AUDI AG, Ingolstadt, comprising the Balance Sheet, Income Statement, Statement of Movements in Equity, Cash Flow Statement and Notes, for the financial year from January 1 to December 31, 2001. The preparation and content of the consolidated financial statements in accordance with the International Accounting Standards of the IASB (IAS) are the responsibility of the company’s Board of Management. Our responsibility is to express an opinion, based on our audit, on whether the consolidated financial statements are in accordance with IAS. We have conducted our audit of the consolidated financial statements in accordance with German auditing requirements and the generally accepted standards for the audit of financial statements promulgated by the German Institute of Auditors (Institut der Wirtschaftsprüfer in Deutschland e.V.). Those standards require that we plan and perform the audit such that misstatements materially affecting the consolidated financial statements are detected with reasonable assurance. The evidence supporting the amounts and details in the consolidated financial statements are examined on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by the Board of Management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, based on our audit, the consolidated financial statements give a true and fair view of the financial position, financial performance and cash flows of the group for the financial year in accordance with IAS.
Our audit, which according to German auditing requirements also included the group management report prepared by the Board of Management for the financial year from January 1 to December 31, 2001, has not led to any reservations. We believe that on the whole the group management report provides a suitable understanding of the group’s position and suitably presents the risks of future development. In addition, we confirm that the consolidated financial statements and the group management report for the business year from January 1 to December 31, 2001 satisfy the conditions required for the company’s exemption from its duty to prepare consolidated financial statements and the group management report in accordance with German accounting law. Hanover, February 1, 2002 PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft Gadesmann Independent auditor
Treffler Independent auditor
10-Year Overview 1
German Commercial Code
1992
1993
1994
1995
1996
1997
1998
1999
Cars
492,085
340,956
352,589
446,808
491,501
557,777
619,030
626,059
Engines
689,175
494,436
544,538
607,175
620,603
763,928
1,241,351
1,266,896
Vehicle sales
Cars
472,685
357,521
376,180
447,855
492,046
546,436
599,509
634,973
Audi
Cars
472,685
357,521
376,180
447,855
492,046
546,436
599,509
634,708
Germany
Cars
228,246
163,752
160,803
204,138
217,858
238,735
244,127
257,686
Outside Germany
Cars
244,439
193,769
215,377
243,717
274,188
307,701
355,382
377,287
Outside Germany
Percent
51.7
54.2
57.3
54.4
55.7
56.3
59.3
59.4
Market share, Germany
Percent
5.7
5.3
5.2
6.2
6.1
6.8
6.5
6.8
Lamborghini
Cars
–
–
–
–
–
–
–
265
Other Volkswagen Group brands
Cars
–
–
–
–
–
–
–
–
Production 2
Average
37,738
34,363
32,215
32,823
34,529
37,761
41,011
45,800
Revenue
EUR million
8,557
6,419
6,880
8,527
9,616
11,458
13,918
15,146
Cost of materials
EUR million
5,824
4,225
4,457
5,620
6,365
7,568
9,578
10,155
Personnel costs
EUR million
1,582
1,470
1,342
1,553
1,663
1,973
2,111
2,291
EUR
41,924
42,783
41,660
47,311
48,173
52,251
51,485
50,022
Depreciation
EUR million
491
421
467
529
455
556
885
945
Profit before tax
EUR million
260
–76
96
301
441
569
861
839
Net profit
EUR million
88
–46
11
57
154
188
237
324
Share price (year-end price) 3
EUR
20.45
21.47
24.03
24.29
48.06
70.81
75.16
61.20
Compensatory payment
EUR
0.10
0.10
0.15
0.31
0.46
0.61
0.77
0.77
Added value
EUR million
1,880
1,417
1,464
1,882
2,157
2,606
3,039
3,198
Capital investments
EUR million
484
401
769
442
739
1,006
1,620
1,516
Cash flow
EUR million
637
485
624
907
765
1,020
1,213
1,163
Fixed assets
EUR million
1,469
1,439
1,835
1,714
1,978
2,412
3,126
3,679
Current assets
EUR million
1,494
1,666
1,787
2,562
2,914
3,182
3,359
3,024
Equity
EUR million
830
778
910
926
1,014
1,109
1,231
1,441
Liabilities
EUR million
2,133
2,328
2,712
3,349
3,878
4,485
5,254
5,262
Balance sheet total
EUR million
2,962
3,106
3,622
4,275
4,892
5,594
6,485
6,703
Employees
Personnel costs per employee
1
Figures for 2001 calculated for the first time according to International Accounting Standards (IAS); prior-year figures reconciled with IAS for purposes of comparison
2
Excluding 4 (1993), 2,021 (1994) and 875 (1995) Avant RS 2
3
Figures for 1992–1998 adjusted at ratio of 1 :10 following introduction of individual share certificates; year-end price on Munich Stock Exchange
4
In accordance with the resolution to be passed by the Annual General Meeting of VOLKSWAGEN AG on April 16, 2002
10-Year Overview
IAS
2000
2001
Cars
650,850
727,033
Engines
1,187,666
1,225,448
Vehicle sales
Cars
919,621
991,444
Audi
Cars
653,404
726,134
Germany
Cars
239,644
254,866
Outside Germany
Cars
413,760
471,268
Outside Germany
Percent
63.3
64.9
Market share, Germany
Percent
6.9
7.5
Lamborghini
Cars
296
297
Other Volkswagen Group brands
Cars
265,921
265,013
Production
Average
49,396
51,141
Revenue
EUR million
19,952
22,032
Cost of materials
EUR million
14,539
15,860
Personnel costs
EUR million
2,542
2,660
EUR
51,456
52,018
Depreciation
EUR million
1,199
1,435
Profit before tax
EUR million
986
1,322
Net profit
EUR million
734
769
Share price (year-end price) 3
EUR
59.59
160.00
Compensatory payment
EUR
1.20
Added value
EUR million
3,777
4,254
Capital investments
EUR million
2,422
2,151
Cash flow from operating activities
EUR million
2,094
2,452
Fixed assets
EUR million
6,988
7,624
Current assets
EUR million
3,250
3,510
Equity
EUR million
3,817
4,342
Liabilities
EUR million
6,551
6,913
Balance sheet total
EUR million
10,368
11,256
Employees
Personnel costs per employee
X4
Important Dates in 2002
Impor tant Dates in 2002
Annual Press Conference
February 28, 2002
Customer Center at Audi Forum Ingolstadt
Annual General Meeting
June 27, 2002
Gemeinschaftszentrum BALLEI, Neckarsulm
Interim Report
August 6, 2002
