Skoda Auto 's growth strategy fetches record-breaking results

At its annual press conference held in Mladá Boleslav, Skoda Auto announced its financial results according to International Financial Reporting Standards (IFRS).

The Skoda Auto consolidated unit (hereinafter referred to as the Skoda Auto Group) is made up of the parent company SKODA AUTO a.s. and its fully consolidated subsidiaries, i.e., SkodaAuto Deutschland GmbH, SKODA AUTO Slovensko, s.r.o., Skoda Auto Polska S.A. and Skoda Auto India Private Ltd. Volkswagen Rus, a joint-venture with Volkswagen and EBRD, has also been integrated to the consolidated unit.

The expansion policy of the Skoda Auto Group was a success in 2007. Despite stagnation in Western Europe, the brand has managed to increase its sales volumes and seal its firm position in the Central European region. Besides that, Skoda continued expanding into new markets, entered its hundredth market shortly before year-end, saw its best-ever sales figures and, as a result, achieved record-breaking financial results. The Skoda Auto Group's revenues grew by 9.0% to CZK 222.0 billion; at CZK 19.8 billion, the operating profit grew by 35.5% year on year; the consolidated pre-tax profit totalled CZK 19.9 billion (+39.9% year on year); growing by 29.5%, net liquidity as at 31 December, 2007 was CZK 27.4 billion.

Commenting on the record results achieved in 2007, Holger Kintscher, Skoda Auto Board Member responsible for finance, said: “The year 2007 was not an easy one in terms of external economic conditions. We had to put up with a number of negative factors, particularly the continuing appreciation of the Czech crown against the euro, growing salaries, as well as changes in the commodity markets, primarily steel and synthetic materials. We are, therefore, very pleased that the Skoda Auto Group has managed to achieve the best results in its entire history.“

Skoda Auto exported vehicles, spare parts and other components including accessories worth CZK 184.9 billion in 2007, a 7.5% share*/ of the Czech Republic's total exports. As a result, Skoda Auto has defended its position as the country's leading exporter.

Altogether 29,141 employees helped to achieve the Skoda Auto Group's excellent results. The number of full-time employees of the parent company grew by 2.3 % to 23,559; the number of agency-provided staff grew by 13.2 % to 4,194. As of year-end, the Company's subsidiaries employed 1,388 people including agency-provided staff (+47.3% year on year).

Commenting on the Skoda Auto Group' success and outlining the Company's future, Chairman of the Board Reinhard Jung said: “The key milestone of 2007 was the launch of the new-generation Fabia that received a very positive acceptance by our customers. For the first time ever, we produced and sold over 600,000 vehicles, and entering the Australian market means that the number of countries where we sell our vehicles has reached the magical 100. The financial results prove that our strategy based on high quality of products, services and processes and personal motivation of all our employees is wise. 2008 will be the year of the new-generation Superb, the flagship of the Skoda brand. The new model is a generously-sized vehicle that offers a number of unique technological solutions and delivers excellent value for money proposition.“

The Company delivered a total of 630,032 vehicles to its customers in 2007. The Skoda Octavia has defended its position as the best-selling model (237,422 vehicles, +18.,1% year on year). Despite the generation swap and the resulting availability constraints, the Skoda Fabia scored very good results as well. (232,890 vehicles). The Roomster continues to be very well received (62,527), while the Skoda Superb became the vehicle of choice for 20,530 customers.

Despite stagnation in West European markets, the Skoda Auto Group increased its market share in Western Europe by 8.9% to 2.2% - the Company sold a total of 327,222 vehicles in its strongest market. Sales in Eastern Europe grew by 33.9 % (95,032 vehicles) and the Asia/Pacific region grew by 78.7 % (65,295 vehicles). Growing by 1.2% (142,483 vehicles), the Skoda Auto Group has sealed its firm position in Central Europe. As in the previous year, the highest sales were achieved in Germany (112,452 vehicles, +8.2%). With 66,806 vehicles (+2.5%), Skoda has also comfortably defended its market-leading position in the Czech Republic.

The Skoda brand received a number of awards in 2007. One of the most prestigious is the Bild am Sonntag Golden Steering Wheel award for the new addition to the Company's portfolio, the new-generation Skoda Fabia.