Month: July 2020

“The Volkswagen Group is now consolidating all its strength. We are positioning ourselves competitively throughout the Volkswagen Group and lifting Group synergies and economies of scale to a new level,” says Markus Duesmann, Chairman of the Board of Management of AUDI AG at this year’s Audi Annual General Meeting.

The Volkswagen Group and AUDI AG have been intensifying their cooperation for many years now, for example, with shared production plants or jointly developed and used platforms and modules for conventional and battery-powered vehicles. Future-oriented foundations for competition-differentiating synergies have recently been laid with joint software development in the Car.Software-Organization and by bringing together the development of autonomous driving in the joint venture between the former Audi subsidiary Autonomous Intelligent Driving GmbH and ARGO AI. The Volkswagen Group intends to meet the challenges of the transformation even more effectively with optimized positioning and effective structures.

Against this background, the Audi Annual General Meeting will vote on the transfer of the Audi shares of the remaining shareholders to Volkswagen AG. Volkswagen AG already holds 99.64 percent of the share capital of AUDI AG. As the principal shareholder of AUDI AG, Volkswagen AG had previously submitted a transfer request on February 28, 2020 and specified the details of that transfer request on June 16, 2020. As consideration for the transfer of the shares, Volkswagen AG set the cash compensation at €1,551.53 per Audi share. In the relevant three-month period before the announcement of the squeeze-out request, the average share price was €813.15. This means that the fixed cash compensation is approximately 90 percent above that average price. The appropriateness of the cash compensation was reviewed and comprehensively confirmed by the independent, court-selected and court-appointed auditing firm Baker Tilly.

“Market capitalization of €66.7 billion shows the earnings power and thus substance behind the brands of the Audi Group, the product portfolio and the company as a whole,” says Arno Antlitz, Board of Management Member for Finance and Legal Affairs of AUDI AG during the Annual General Meeting. “These are very good preconditions for us to master the transformation over the long term.”

Against the background of the economic impact of the corona pandemic, Audi reports falling deliveries and revenue and an operating loss for the first half of the year. Net liquidity remains at the very high level of €19.9 billion (end of December 2019: €21.8 billion). As part of its responsible corona crisis management, the company had placed a strong focus on optimizing short-term costs and investment at an early stage. The goal is to steer Audi tactically and flexibly through the current crisis without compromising its future viability. At the same time, Audi has kept important core processes stable, in the areas of technical development and production, for example. “Despite the crisis, we are not making any compromises on the typical Audi product substance and thus on our future competitiveness. We are systematically focusing on synergies within the Volkswagen Group. Because this is the only way we can achieve our strategic goals,” states Antlitz.

“For us, the current crisis is also an opportunity for change, for which we have actively decided. We now have the opportunity to go new ways and to prove our Vorsprung once again,” says Markus Duesmann.

The planned squeeze-out also strengthens Audi’s role within the Volkswagen Group and is intended to recharge the Vorsprung durch Technik mission statement. Markus Duesmann, as an engineer and CEO of Audi, has taken over responsibility for Group research and development. In this position, he is also in charge of Group software development. Under his leadership, the newly founded Car.Software-Organization, which will be based at the IN Campus in Ingolstadt, is to increase the proportion of in-house software development at the Volkswagen Group from 10 percent today to 60 percent by 2025.

With the project incubator, Artemis, Audi is accelerating the development of highly efficient electric models. An extensive automotive ecosystem and a business model that spans the entire service life of a vehicle are to define the future of the luxury class and the premium positioning of Audi. The Artemis team will benefit from high Group synergies and “draw on the full potential of technologies from Audi and the entire Volkswagen Group,” as Duesmann says. Audi will present its first vision in 2021, and the first electric series-production model from the Artemis project is to complement the Audi portfolio as early as 2024.

Against the background of the ongoing corona pandemic, the 131st Annual General Meeting of AUDI AG is being held virtually for the first time in order to protect shareholders. In advance of the meeting, the shareholders were able to submit their questions online and exercise their voting rights online via the shareholder portal.

Link to the speeches 

“The effects of the corona pandemic are also reflected in our key financial figures. We responded quickly to the corona pandemic and optimized our short-term expenditure without compromising our long-term product plans. We are starting the second half of the year with robust liquidity,” says Arno Antlitz, Member of the Board of Management of AUDI AG for Finance and Legal Affairs. A worldwide decline in demand and interruptions in the supply chain led to global production suspensions and short-time working at Audi’s German plants. All Audi plants have been producing again since end-June.

In the first half of the year, the Audi Group’s revenue fell to €20,476 million as a result of lower unit sales (2019: €28,761 million). The good revenue development of the all-electric Audi e-tron had a positive effect: By the middle of the year, 16,898 Audi e-tron cars had been delivered to customers (2019: 9,444). This makes the Audi e-tron the global market leader among all-electric vehicles from German premium manufacturers. Since May 2020, the Four Rings also gradually launch the Audi e-tron Sportback.

The markets present a mixed picture: In Europe (minus 29 percent) and in the USA (minus 22 percent) the deliveries of the Audi brand were still significantly negative in June. In China, a significant recovery in demand has been apparent since March. The Four Rings achieved record figures there in May and June. Cumulative sales in our most important single market are still slightly down on the prior-year period, by 3 percent. Key growth drivers in China in the first half of the year were the new Audi A6 L, Audi Q2 L and Audi Q5 L.

In the first half of the year, the Audi Group’s revenue fell to €20,476 million as a result of lower unit sales (2019: €28,761 million). The good revenue development of the all-electric Audi e-tron had a positive effect: By the middle of the year, 16,898 Audi e-tron cars had been delivered to customers (2019: 9,444). This makes the Audi e-tron the global market leader among all-electric vehicles from German premium manufacturers. In May 2020, the Four Rings also gradually launched the Audi e-tron Sportback.

Against the backdrop of the difficult market situation caused by the pandemic, the operating loss was €750 million (2019: operating profit of €2,300 million) and the operating return on sales was minus 3.7 percent (2019: plus 8.0 percent). Extensive measures on the cost side only partially offset the declining volume. The remeasurement of hedging transactions also had a negative impact on the development of earnings. Adjusted for special items of €108 million in connection with the diesel issue, the operating loss amounted to €643 million (2019: operating profit of €2,300 million). The adjusted operating return on sales was minus 3.1 percent (2019: plus 8.0 percent). The sale of Autonomous Intelligent Driving GmbH within the Volkswagen Group had a positive effect on operating profit.

For the reporting period, the Audi Group’s profit before taxes amounted to €86 million (2019: €2,580 million). This includes financial income of €836 million (2019: €280 million). A major reason for the increase is the higher income from investments as a result of the intra-Group sale of Audi Electronics Venture GmbH.

Despite a difficult market environment, the Audi Group’s net cash flow and net liquidity remained strong: The net cash flow amounted to €1,953 million, especially against the background of the sales of a company (2019: €2,253 million). Net liquidity remains at the high level of €19,875 million (end of December 2019: €21,754 million). In the context of the corona pandemic, Audi has set up a liquidity task force to systematically reduce cash outflows and help to secure Audi’s long-term ability to act. All non-product-related costs and investments are systematically scrutinized. Thanks to its strengthened investment discipline, the Audi Group has achieved a ratio of capital expenditure to revenue of 2.4 percent (2019: 3.0 percent).

“Despite initial positive signals from the markets, the year 2020 remains extremely challenging. We are steering through the Corona crisis in a highly concentrated manner and with the necessary flexibility. Although we have thoroughly reviewed our short-term expenditure in recent weeks, we are keeping a close eye on our long-term projects and are implementing them consistently,” says Arno Antlitz. “Our strategic decisions define the agenda for the coming years. At the heart of this is the electrification and digitalization of our model range.” One example is Artemis. This new unit will accelerate the development of additional electric models. In addition, Markus Duesmann, Chairman of the Board of Management of AUDI AG, is taking charge of software in the Volkswagen Group Board of Management as part of his responsibility for research and development, and will therefore manage the new Car.Software-Organization unit within the Volkswagen Group.

For the year 2020 as a whole, the company assumes that demand in global car markets will be significantly lower against the backdrop of the ongoing corona pandemic. The Audi Group therefore expects deliveries of the Audi brand and revenue to be significantly lower than in 2019. The result of operations is also expected to be substantially down on the previous year, but clearly positive. Net cash flow is expected to be below the prior-year level.

Download Audi’s Half Year Financial Report:
http://www.audi.com/halbjahresfinanzbericht2020

Selected key figures for the Audi Group

Audi brand deliveries to customers

OLED light sources are panel radiators – unlike point light sources such as LEDs using semiconductor crystals. The benefits of OLEDs: Their light is extremely homogeneous. It is infinitely dimmable and achieves very high contrast. It can be split into segments. These segments are individually controllable and can develop diverse levels of brightness, with minimal gaps between the segments. The lighting unit does not require any reflectors, optical fibers or similar optics. This makes OLED units very efficient, lightweight and flat, which considerably increases design freedom.

An OLED lighting element is just one millimeter thin, while conventional LED solutions require much greater installed depths of 20 to 30 millimeters. The energy requirement of an OLED is once again significantly lower than that of LED optics if the latter are to achieve similar homogeneity. Audi’s OLED technology made its production debut in the taillight of the Audi TT RS ^{in 2016. Up to now, Audi models using OLED lighting technology have had up to four individually controllable, complex lighting segments that could be used for an individual, defined lighting design.}

After a break of more than five months, Formula E is returning to the race track. A lot will be different when the 24 drivers from around the world meet in Berlin for the showdown of the sixth season, which begins next week: A strict hygiene concept must be adhered to, the number of team members has been significantly reduced, no fans nor sponsors are allowed on the runway of the former Tempelhof airport in the south of the German capital, press conferences will be held virtually, and the podium ceremony reduced to a minimum. 

In terms of racing, the nine days in Berlin pack a punch: A maximum of 180 points – including those for the fastest time in qualifying, pole position and the fastest race lap – can be scored by any of the 24 drivers. With just 38 points separating the front runner from the tenth-placed driver, it is clear that the championship is still completely open. “I am pretty sure that in the end, the final championship positions will look completely different to what they do now,” says Team Principal Allan McNish. “This six-pack in Berlin reminds me a little of a restart following a caution period in the last race of the season, with only a few more laps to go in the last race of the season.” 

As an additional challenge, Formula E will stage its three double-headers in Berlin on three different track layouts: The familiar circuit from recent years will only be used on August 8 and 9. For the opening rounds on August 5 and 6, this layout will be driven in the opposite direction, and for the final races on August 12 and 13, the circuit will be completely redesigned. As usual in Formula E, the teams only received their data last week so that there won’t be a lot of time to intensively prepare for the three track variants.

Lucas di Grassi is fired up for the restart of the season. “The break also had some positive aspects, because I had a lot of time with my son and my family. I also did a lot of sports, ate a healthy diet and spent many days with the data of the first rounds of the season – but at some point, you’ve had your fill of it and finally want to race again,” says the Brazilian. Although di Grassi clinched just one podium in the first five races, he shows fighting spirit: “We’re going to Berlin to claim the title – that’s clearly my goal.” 

Berlin has always been a good venue for the most successful Formula E driver with 31 podiums under his belt: di Grassi has stood on the podium in Germany’s capital city five times so far – more often than any other driver – and scored victory last year. “We’ve had many sweet moments in Berlin before and of course that gives you a positive feeling,” says di Grassi. “Even so, it’s a totally different game this time: new track layouts, no fans and guests, many races within a short space of time – the question of who will best cope with this will also be crucial.” 

While Lucas di Grassi is traveling to Berlin with the experience of 63 races, the tally of his new teammate, René Rast, reflects just one: in 2016 as a guest entrant for a different team and on a completely different track in downtown Berlin. Consequently, the past few weeks were extremely busy for the two-time DTM champion. “I did everything I could: in addition to testing, I analyzed data for hours on end, watched videos and spent an enormous amount of time with the engineers,” says Rast. “It’s difficult to express expectations for my debut with Audi, but one thing is clear: I’d like to arrive in Berlin perfectly prepared and deliver a good result.”

Alongside Formula E, René Rast is racing in the DTM, where he is defending his title with Audi. This means that between August 1 and 23, the German will be competing in twelve races in two completely different cars – here in the fully-electric Audi e-tron FE06 single-seater and there in the Audi RS 5 DTM touring car with four cylinders and 580 hp. “These are two totally different worlds with completely different challenges for any race driver. But, the six Formula E races in such short succession are ideal for a fast learning curve …”

The races in Berlin will be held as three double-header events on August 5 and 6, 8 and 9, 12 and 13, each starting at 7 PM CEST. As usual, each race will last for 45 minutes plus one lap. All international channels including the broadcast schedule can be found online at www.fiaformulae.com.

In addition to the Audi Sport ABT Schaeffler factory team, the Envision Virgin Racing customer team will go on the hunt for points with the e-tron FEO6 developed by Audi and technology partner Schaeffler. Sam Bird and Robin Frijns sit in the seventh spot of the teams’ classification after the first five races.

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