Amid challenges and crises, Audi Group posts good Q1 results

MANILA: Despite the ongoing semiconductor supply constraints, the crisis in Ukraine, and renewed lockdowns in China, the Audi Group has posted good financial results for the first three months of the year. As a result, the company's financial basis for its shift to e-mobility and digitization has been reinforced further. The Bentley brand is also consolidated under the Audi Group for the first time. The company's revenue climbed by 2%. Operating profit for the first three months of the year increased to €3.5 billion, backed by strong price position, a strict approach to fixed costs, and help from the valuation of raw material hedges. Despite geopolitical issues arising from the current conflict in Ukraine and a tight supply situation, the Audi Group is sticking to its fiscal year 2022 forecast, expecting to sell 1.8 million to 1.9 million units across its multiple brands and achieve an operating margin of 9% to 11%.

In a statement, Audi AG Board of Management for Finance and Legal Affairs Member Jurgen Rittersberger said, “The Audi Group and its brands Audi, Lamborghini, Ducati, and Bentley are decisively responding to current challenges. The keys to this include synergies across the group, our disciplined approach to fixed costs, and our strong brand positioning. The key financial figures for the first quarter confirm that we are on the right course.”

The brand group sold 390,826 units in the first quarter, even as it is unable to fully meet the ongoing strong demand for Audi brand vehicles due to supply bottlenecks and recurrent COVID-19 lockdowns in China. As a result, the brand sold 385,084 units, which is less than the 462,828 units delivered in the above-average same quarter last year. However, Audi saw a 66.2% increase in battery electric vehicle (BEV) deliveries, moving 24,236 units.

The Audi urbansphere, which was unveiled last April, offers a fresh insight into the future of electric luxury mobility. As a mobile lounge and workplace with full privacy and a broad range of high-tech features, the concept car represents a sophisticated third living area. The Audi urbansphere, like the Audi skysphere and Audi grandsphere studies, is developed for Level 4 automated driving, a technology Audi is developing CARIAD, the Volkswagen Group's software company.

Lamborghini and Ducati both increased deliveries by 4.8% and 5.1%, respectively. Bentley, the brand group's newest member, sold 3,203 units.

The Audi Group boosted its revenue to €14.282 million after consolidating the Bentley brand for the first time and maintaining a strong price position. Operating profit in the first quarter hit a new high of €3.468 million. The operating return on sales was 24.3%. The group's solid brand positioning and continued cost discipline are reflected in this operational profit achievement. Another major earnings driver was the exceptionally high profit of €1.2 billion from valuation effects of raw material hedges, particularly on nickel and aluminum. Nonetheless, even without this effect, the operating margin would have been in the double digits.

The Audi Group considers ESG as a strategic field in its Vorsprung 2030 strategy, including ESG criteria into all corporate and product decisions. Audi is proactively reporting in compliance with the new EU taxonomy regulation for increased comparability and transparency. Revenue from EU taxonomies accounted for 11.3% of the Audi Group's overall revenue in the first quarter.

With revenues of €592 million, an operating profit of €178 million, and a 30% operating return on sales, the Lamborghini brand had its best quarter ever. Meanwhile, the Bentley brand generated €813 million in revenue and €170 million in operating profit. It had a 20.9% operating return on sales. Ducati was able to improve revenues by 14% in a challenging situation. Operating profit and operating return on sales were €25 million and 10.7%, respectively.

The Audi Group's €430-million financial result includes an improved result from its operations in China.

The Audi Group's net cash flow increased to €1.638 million, proving its exceptional capacity to fund its own operations. The incredibly high number for the prior year was partly due to delayed payments from the high-volume fourth quarter of 2020. In the first quarter of 2022, net cash flow shows less positive impacts from working capital and disinvestments in connection with the Volkswagen Group's disposal of national sales companies.

Photos from Audi Group

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