Å kodaAuto ANNUAL REPORT 2006 - Skoda Auto

Financial Situation of Individual
Group Companies
This part of the Annual Report comments
on the financial performance figures of the
parent company, Škoda Auto, and its
subsidiaries. These figures are in
accordance with International Financial
Reporting Standards.
Škoda Auto
Like the previous year, 2006 was one
of the most successful years in the
Company’s over 100-year history –
both in terms of sales and production
indicators and in terms of financial
performance. Sales revenues were up by
over 6.7% to reach a record level of
CZK 189.8 billion. The operating result
reached a level of CZK 13.8 billion and
profit before income tax rose 43.6%
year-on-year. Growth in cash flow
resulted in improved net liquidity. In view
of the fact that the parent company
accounts for approximately 90% of the
Group’s overall results, there is a large
degree of correlation between its
financial performance and that of the
Group as a whole.
Balance Sheet and Financing
The total assets figure, CZK 97.4 billion,
was up 16% compared to its level as of
31 December 2005 (CZK 84 billion). Fixed
assets fell from CZK 55.0 billion to
CZK 53.7 billion. Inventories expanded
slightly (+5.5% year-on-year) due to
increased production volumes in existing
models and commencement of
production of the new Škoda Roomster.
Loans to Volkswagen Group companies
grew by CZK 12.8 billion (+113.8%).
Receivables shrank slightly (-3.1%) as
a result of increased use of factoring.
Shareholders’ equity developed in line
with the Company’s overall performance
during the year. Compared to the previous
year, shareholders’ equity increased by
CZK 11.5 billion (+24.8%). Overall,
current liabilities grew by CZK 4.2 billion
year-on-year (+16.3%), while non-current
liabilities declined (by CZK 2.3 billion, or
-19.6%) compared to the previous period.
An increase in overall spending on
tangible and intangible fixed assets was
CZK 8.2 billion in 2006. Total capital
spending was CZK 0.4 billion (-4.7%) less
than in the previous period, due to the
cyclical nature of the Company’s business,
as new products enter production. Like in
the previous year, cash flow from operating
activities (CZK 24.2 billion) was sufficient
to cover overall capital expenditures. The
net liquidity liquidity indicator stood at
CZK 19.4 billion.
Profits
Compared to the previous year, sales
revenues were up CZK 12.0 billion (+6.7%)
to reach CZK 189.8 billion. The biggest
contributors to this record-breaking rise in
revenues were increased demand for
vehicles with more features and increased
sales of genuine parts. Sales revenues can
be broken down as follows: vehicles,
89.8%; genuine parts and accessories,
5.9%; components deliveries, 3.2%; and
other goods and services accounted for
the remaining 1.1%.
Higher sales volume and a worldwide
growth in raw materials prices had an
impact on the overall level of costs of
products, goods, and services sold.
Compared to the previous year they
increased by 5.4%. Thanks to optimising
measures taken in the production
function, the ratio of production costs to
overall sales revenues was reduced by
1.2%. Distribution expenses were up 5.3%
from the previous year, driven in
particular by increased marketing support
and advertising costs. Administrative
expenses saw a moderate decline
(-5.0% year-on-year).
As a result, the operating result grew by
37.7%, or CZK 3.8 billion. The financial
result, too, continued to move in
a positive direction. Primarily as a result
of lower interest costs, the loss was
CZK 348 million (–61.7%) lower than the
previous year’s figure. After deduction of
income tax due and deferred totalling
CZK 2.7 billion, the profit after income
tax came to CZK 10.9 billion (2005:
CZK 7.4 billion), an improvement of 47.8%.
Net liquidity of Škoda Auto, 2004–2006 (CZK millions)
20,000
Profit before/after income tax-to-sales ratio
of Škoda Auto, 2004–2006 (%)
8
16,000
12,000
8,000
4,000
6
4
2
0
2004 2005 2006
0
2004 2005 2006
Profit before income tax-to-sales ratio
Profit after income tax-to-sales ratio
26