Holden Drives On Past $A5 Billion Revenue In 2001

Friday, May 9, 2002

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Holden Drives On Past $A5 Billion Revenue In 2001

Holden has achieved more than $A5 billion in revenue for the first time, capitalising on its best Australian sales in 28 years and continued strong export performance during 2001.

Holden today reported $A285.0 million in net income after tax for the 2001 calendar year, representing a 20.2 per cent increase on its 2000 earnings of $A237.4 million.

Holden Chairman and Managing Director, Peter Hanenberger, said Holden had achieved $A5,573 million in revenue in 2001, increasing revenue by $A852 million or 18.1 per cent on 2000.

Mr. Hanenberger said market leadership in Australia and overseas success had provided a stable platform for the company's planned $A2 billion capital expenditure programme over the next five years.

He said 2001 earnings would enable Holden to maintain its aggressive plans for growth in the crucial areas of production, capital expenditure and research and development.

Holden allocated $A223.4 million in capital expenditure in 2001, up $A90.6 million or 68.2 per cent, and allocated $A190 million to research and development projects, up $A41 million or 27 per cent.

"The past year has been a milestone for Holden in a buoyant, competitive marketplace and provided solid foundations for our growth plan across the next decade," Mr. Hanenberger said.

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"We must continue to stretch in our business plan goals and our financial result in 2001 keeps us on the right path.

"Our capital expenditure and research and development programmes in 2001 were extensive and will further expand across the next few years, reflecting our desire to maintain market leadership and deliver innovative improvements for drivers.

"Holden has targeted $A2 billion in investment over the next five years - at Elizabeth in South Australia and Fishermans Bend in Victoria, to continue its transition towards being a truly global manufacturer.

"The automotive industry has evolved into a leading edge technology which demands the same level of the capital intensity as the previous era.

"Holden must make long-term capital commitments to Australia to retain its place in the global automotive marketplace.

"In doing so, Holden will aim to continue expanding its worldwide contribution by delivering niche vehicles to the General Motors family which attract and excite consumers.

"Holden's vision is to meaningfully participate in a number of international markets to strengthen our ability to compete at home. For Holden, it is no longer viable to rely on one market.

"The $A400 million high feature V6 engine plant being built at Fishermans Bend is an illustration of our commitment to develop, create and export world-leading products. With it, the plant will create new business for our supplier base."

Mr. Hanenberger said the 2001 financial result was a reflection of Holden sales outpacing the overall growth of a strong automotive market.

"Holden vehicle sales have risen 33.3 per cent in the past five years while the overall market has risen 18.9 per cent," he said.

"Increased market share is a reflection of Holden's improved ability to deliver exciting products that customers want, which is the fundamental measure of success.

"Holden has captured market leadership in two of the past three years with a broad range of exciting, appealing vehicles and our investment plans for 2002 - 2006 are designed to maintain this wide coverage.

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"Importantly, this means participating in segments in which Holden has not previously been a serious participant."

Mr. Hanenberger said Holden expected consumer and business confidence to remain strong throughout 2002 and into 2003.

"The strength in the economy is expected to be underpinned by a broad-based recovery in business investment, supported by consumer spending and exports," he said.

"This is a positive sign for the automotive industry which has clearly enjoyed the benefits of low cost of debt and strong confidence in the market during 2001 and 2002."

HOLDEN 2001 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Australian market share:

Holden achieved market leadership in Australia for the second time in three years and its highest sales since 1973. Holden's total market share of 21.4 per cent was 2.4 points higher than 2000 and its passenger share of 25.6 per cent was 3.5 points higher. Holden sold 165,577 cars during 2001, comprising 135,339 passenger and 30,238 light commercial vehicles.

Commodore held its title as Australia's most popular car for the sixth consecutive year with 85,422 units, representing 15.4 per cent of the total passenger market in its own right.

"Strong financial results must come from strong sales and there is no question that our sales performance in 2001 puts us in a robust position for future years," Mr. Hanenberger said.

"However, it is only through continued growth at a domestic and international level that we can sustain the capital expenditure needed to accelerate Holden into a legitimate global niche manufacturer achieving production of 180,000 cars a year."

Exports:

Holden achieved exports of $A1.16 billion in 2001, representing 20.8 per cent of Holden's total revenues.

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Vehicles and components earned $A856 million with 28,784 vehicles exported, including 20,931 vehicles to the Middle East where demand remained consistent despite fears following the September 11 terrorist attacks on the United States. Vehicle exports were up $A78 million or 9.7 per cent on 2000 results.

Engines and components earned $A243 million with 150,555 Family II four-cylinder engines exported, despite reduced demand from Korea. Engineering services earned $A60.6 million, providing specialist services to General Motors programmes in the Asia-Pacific region and Europe.

"We were pleased with our overall export performance given the difficulty with Daewoo, which is one of our largest customers. The difference in export revenues from 2000 is almost directly comparable to the fall in Daewoo engine orders," Mr. Hanenberger said.

"We have recently increased engine orders from Isuzu, to rise from 550 to 650 engines a day from June. We will also commence production of our new 2.4-litre engine in August."

Production:

The Elizabeth plant in South Australia produced a total of 132,390 vehicles during 2001, representing 594 vehicles per day. This was slightly lower than total production during 2000 but higher on a per-day basis, reflecting days lost to industrial disputes at suppliers.

Holden Engine Operations in Victoria produced 154,478 four-cylinder and 100,830 six-cylinder engines for total production of 255,308 equalling 1,141 engines a day.

"Our manufacturing and assembly facilities enhanced their credentials during 2001 as being among the most versatile automotive operations in the world," Mr. Hanenberger said.

"Our engine operations produced no fewer than 94 four-cylinder variants and assembled the ECOTEC and supercharged six-cylinder variants in 2001 while Elizabeth was responsible for 19 domestic and 10 export variants.

"This is incredible capacity for small range orders and underlines our potential as a supplier of niche products throughout the General Motors family."

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Research and development:

Holden spent $A190 million on research and development related activities during 2001, up 27 per cent from $A149 million in 2000.

The programme included development costs for Holden's new Cross8 sports performance vehicle, to be released next year; development of Holden's all-wheel-drive platform to be used for Cross8 and other vehicles; work on forward models including the VY and VE Commodore, engine development and various safety projects to introduce new technology in future Holdens.

Government charges:

Holden paid $A190.3 million in Federal and State charges during 2001, comprising company tax, payroll taxes and fringe benefits tax. The company has contributed a total of $A1,014.6 million in Federal and State charges in the past five years.

Holden financial history:

Calendar Year Ended
AUD $ Millions 2001 2000 1999 1998*
Sales revenue 5,573 4,721 4,906 3,787
Operating profit after income tax 285 237 135 166
Capital expenditure 223 133 90 117
Export revenue 1,160 1,305 973 583
* 1998 included the full impact of Holden Engine Operations acquired December 1, 1997

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Contact: Aalbert van Ham (09) 978 3619 (direct telephone line)
E-mail: aalbert.vanham.co.nz

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