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

The operating result after tax of the Automotive Division, including the proportionate operating result of the Chinese joint ventures, was €−203 (11,734) million in fiscal year 2015. The year-on-year decrease was primarily due to negative special items as a result of the diesel issue. In addition, profit was negatively impacted by declining vehicle volumes, higher depreciation and amortization charges due to the high volume of capital expenditures, higher research and development costs, and market support measures linked to the emissions issue. Optimized product costs, improvements in the mix and more favorable exchange rates had an offsetting effect. Effects on earnings and assets from purchase price allocation are not taken into account as they cannot be influenced operationally by management.

Invested capital rose to €84,289 (78,889) million, primarily due to increased investments in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs (capex), and higher capitalized development costs.

The return on investment (ROI) is the return on invested capital for a particular period based on the operating result after tax. It was down significantly year-on-year, mainly as a result of the negative special items in operating result, and at −0.2 (14.9)% did not meet our minimum required rate of return of 9%.

At €5,732 (6,074) million, the opportunity cost of capital (invested capital multiplied by cost of capital) was down on the prior-year level due to decreased cost of capital. Operating result after tax was negatively impacted by special items and led to a value contribution of €−5,935 (5,660) million after the opportunity cost of 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: www.volkswagenag.com/ir