Value contribution and return on investment in the current fiscal year

Porsche has been consolidated since the contribution in full of Dr. Ing. h.c. F. Porsche AG to the Volkswagen Group on August 1, 2012. In accordance with the internal management of the brands and companies in the Automotive Division, the Porsche Automotive subgroup was incorporated into the core operating business based on uniform definitions of value-based management. Effects on assets and earnings from purchase price allocation are not taken into account as this is beyond what is feasible from an operational management perspective.

The operating profit after tax of the Automotive Division, including the share of operating profit for the Chinese joint ventures, was €10,911 million (€9,375 million) in fiscal year 2012. The year-on-year increase was due in particular to higher volumes, optimized product costs and positive exchange rate effects, as well as the inclusion of MAN (as of November 9, 2011) and Porsche (as of August 1, 2012).

Invested capital rose to €65,749 million (previous year: €52,881 million), mainly due to the full effect of the consolidation of Porsche Holding Salzburg and MAN in 2011, the consolidation of Porsche in 2012, as well as higher investments in property, plant, and equipment. Multiplied by the cost of capital, which also increased as against 2011, the cost of invested capital was therefore up on the prior-year level at €5,128 million (€3,702 million). The increase in operating profit after tax resulted in a clearly positive value contribution of €5,783 million (€5,673 million).

The return on investment is the return on invested capital for a particular period based on the operating profit after tax. At 16.6%, this was down on the prior-year figure (17.7%) due to the increase in invested capital.

More information on value-based management is contained in our publication entitled “Financial Control System of the Volkswagen Group”, which can be downloaded from our Investor Relations website.

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VALUE CONTRIBUTION BY THE AUTOMOTIVE DIVISION1
€ million		2012		20112
1 Including proportionate inclusion of the Chinese joint ventures (including the relevant sales and component companies) and allocation of consolidation adjustments between the Automotive and Financial Services divisions. 2 Adjusted
Operating profit (starting point)		9,923		9,973
Plus earnings effects of purchase price allocation for Scania Vehicles & Services, the automobile trading business of Porsche Holding Salzburg (as from March 1, 2011), MAN Commercial Vehicles and MAN Power Engineering (as from November 9, 2011), and Porsche Automotive (as from August 1, 2012)		1,985		804
Plus share of operating profit of the Chinese joint ventures		3,678		2,616
Tax expense		–4,676		–4,018
Operating profit after tax		10,911		9,375
Invested capital (average)		65,749		52,881
Return on investment (ROI) in %		16.6		17.7
Cost of capital in %		7.8		7.0
Cost of invested capital		5,128		3,702
Value contribution		5,783		5,673