Return on investment (ROI) and value contribution in the reporting period

At €11,740 (7,450) million, the operating result after tax in the Automotive Division, including the proportionate operating result of the equity-accounted Chinese joint ventures, exceeded the previous year’s figure, which had been more severely impacted by the Covid-19 pandemic and its negative effects. The increase resulted primarily from favorable price positioning, positive effects from the fair value measurement of derivatives to which hedge accounting is not applied and positive mix effects. Negative special items due to the diesel issue were lower than in the previous year. Contrary effects resulted from factors such as limited vehicle availability due to the semiconductor shortage, increased provisioning in the reporting year in connection with the EU antitrust proceedings against Scania and one-off expenses for restructuring measures in the Commercial Vehicles Business Area. The effect of purchase price allocation on earnings and assets is not taken into account as this cannot be influenced by management in the course of business operations.

At €113,386 (114,907) million, invested capital in the reporting year was on a level with the previous year.

The return on investment (ROI) is the return on invested capital for a particular period based on the operating result after tax. The ROI improved due to the higher operating result and, at 10.4 (6.5)%, exceeded our minimum required rate of return of 9%.

At €6,984 (7,504) million, the opportunity cost of capital (invested capital multiplied by cost of capital) was slightly below the prior-year figure. After deduction of the opportunity cost of invested capital, the operating result after tax – which had clearly improved despite still being affected by the Covid-19 pandemic and particularly the shortages in the supply of semiconductors – led to a positive value contribution of €4,756 (−54) million.

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: www.volkswagenag.com/ en/InvestorRelations/news-and-publications/More_Publications.html.