Škoda tripled profit in 2010

Škoda Auto registered record sales in 2010 and a strong start to 2011; it plans to double sales by 2018 based on emerging markets

Škoda board chairman Winfried Vahland said that growth in demand in emerging markets will provide a “strong tailwind.” foto: © CZECH POSITIONČeská pozice

Škoda Auto

Czech-based carmaker Škoda Auto reported that its net profit after income tax reached €349 million in 2010, up from €110 million in the previous year. Approximately half of the profit will go to Volkswagen, the carmaker’s German parent company.

Sales revenue rose 22.4 percent to €8.692 billion, based on record sales of 762,600 vehicles in 2010. The operating profit was more than doubled to €447 million compared to the previous year. Net liquidity improved more than 50 percent, reaching €1.605 billion. Profit before tax amounted to €418 million, the company announced.

Škoda recorded 48 percent growth in Asian markets. In the Czech Republic, Škoda expanded its leadership position to a market share of more than 34 percent. In Eastern Europe, the sales increase amounted to 22 percent, the company said. A slight decline was recorded in the sales in Western Europe due to the end of government incentives.

‘We do not want to be satisfied with what we have achieved, and we will shift into a higher gear.’

The company said it wants to double its sales to at least 1.5 million units by 2018. “We do not want to be satisfied with what we have achieved, and we will shift into a higher gear. Škoda has great potential and is on the verge of a growth spurt. That applies equally to our activities in the markets and to the expansion of the model range,” Škoda’s board of directors chairman Winfried Vahland said in a press release.

Škoda plans to develop its market share in China, Russia, and India. “We’re charging ahead in all regions and want to participate intensively in the upswing in the booming regions of the automobile industry,” Vahland said. “We have good years ahead of us in the automobile industry — that provides us with additional tailwind.”

So far for 2011, reported sales went up 24.6 percent to 132,100 vehicles in the first two months of 2011, compared to the same period last year. “We will resolutely expand our position in the markets and expect a continuation of the growth course this year. To do so, we plan to increase the production at Škoda locations, both in our home market of the Czech Republic as well as outside of Europe,” Vahland said. “The year 2011 is — exactly 20 years after the entry of Volkswagen — a year of setting the course and setting out to new horizons for Škoda.”

In 2011, the new City Car will be launched in the market in an effort to tap new market segments. “This car is our answer to the increasingly strong demand for small cars with low fuel consumption and affordable costs of operation and offers a new sales potential in Europe for us,” Vahland said.

Škoda Auto has long been the largest exporter in the Czech Republic, with some 90 percent of its production being sold abroad. In addition to the Czech Republic, Škoda cars are made in Ukraine, India, Bosnia–Herzegovina, Kazakhstan, China and Russia, according to the company website.

  2010200920010/2009 (%)
Škoda financial results
Deliveries to Škoda customersvehicles tsd.762.6684.211.5
Sales totalvehicles tsd.584.8551.66
Production totalvehicles tsd.583.3522.511.6
Number of employeespersons24,71424,948-0.9
SalesEUR millions8,6927,10022.4
Gross profitEUR millions1,21681649
Operating profitEUR millions447203120.2
Profit before income taxEUR millions418157166.2
Profit after income taxEUR millions349110217.3
Investment (including capitalised development costs)EUR millions52844319.2
Cash flow from operating activitiesEUR millions1,11095815.9
Net liquidityEUR millions1,6051,06251.1
 Source: Škoda Auto