16.1.2003
Adam Opel AG reports substantial improvement in operating results for 2002
Adam Opel AG today reported a 66 percent improvement in its operating result for the fiscal year 2002. As compared to the year prior, the company was able to narrow its loss to 227 million Euro (2001: 674 million Euro). Thus Opel is ahead of schedule with its multifaceted Olympia restructuring program, which envisions a return to profitability by the end of 2003.
Primary factors contributing to the better results were improved efficiencies together with structural, personnel and structural cost reductions. Lower warranty costs in line with markedly improved product quality and a better model mix also contributed to the stronger results. In relation to sales, this resulted in a 2.4 percent improvement in gross profits.
Opel again made a high level of investments for product development during the business year just ended. In total, the company invested 1.8 billion Euro. In so doing, the company continued its model offensive which provides for investments to the year 2006 totaling 10 billion Euro and a complete overhaul of its model range.
As of December 31, 2002 Opel had a cash flow of 448 million Euro (2001: 352 million Euro) and satisfactory liquidity of 518 million Euro. In addition, the company retired all of its debt and thus was debt-free at the start of 2003. Opel's shareholder equity totaled 1.78 billion Euro (2001: 2.34 billion Euro), which can be described as exceptionally solid resources.
As in 2001, results from Opel's domestic businesses were presented according to U.S. GAAP and included the results of Opel Bank. With a profit transfer of 225 million Euro to the parent company (2001: 260 million Euro), financial services operations once again made an important contribution to the overall result. One-time proceeds from the bank's dividend payment for the years 1998 to 2000 amounting to a pre-tax 449 million Euro were booked in 2001. Results for 2002 reflect the negative impact of one-time expenditures to cover the cost of capacity adjustments, socially responsible workforce reductions, for the dealer network restructuring and for costs associated with changes in the product program totaling 548 million Euro. In addition, provisions totaling 68 million Euro, as accounted for under U.S. GAAP principles, were taken to cover the cost of disposing of old vehicles. Taken together, they resulted in a total one-time negative impact of 616 million Euro. Overall, a net loss of 345 million Euro resulted (2001: +87 million Euro). Adjusted for one-time items, the company achieved an after-tax profit of 35 million Euro (2001: -244 million Euro).
Opel's sales revenues totaled 14.9 billion Euro in 2002 (2001: 16.0 billion Euro). This was due to a decline in sales experienced mainly during the first half of the year in Germany and in central and western Europe. This trend reversed during the second half of the year, especially in view of the introduction in Europe of the new Opel Vectra. In Europe as a whole, 163,000 new car purchasers chose the Vectra. With 339,000 new passenger cars registered in Germany, Opel's market share in the country amounted to 10.4 percent and in Europe, with 1.5 million new registrations (Opel and Vauxhall, passenger cars and light commercial vehicles), market share totaled 8.8 percent.
For the current fiscal year, Opel affirms its forecast for a return to profitability by the end of the year. Both the Vectra GTS version and the production of the new Signum model, begun at the beginning of this year in Rüsselsheim, in combination with the pending introduction of the innovative Meriva mini-van and a diesel offensive with four new engines, should make for an increase in market share.