SEAT underwent a major undertaking last year on the road to reaching sustainable profitability. The company closed 2015 with a profit after-tax of 6 million euros, compared to a 66 million euro loss in 2014. Growth in sales and a product mix with a higher contribution margin were the two main driving forces behind the change. SEAT posted a turnover of 8.3 billion euros, 11% more than the previous year. This was the company’s best ever result and double the revenue in 2009. Average earnings per vehicle increased by 3.5%.
“SEAT’s progress in 2015 was twofold – not only did we obtain a positive result for the first time since 2008, but we achieved it during a year of major challenges. We are implementing the right strategy that enables us to face the challenge of sustaining long-term profitability with optimism. We have a brilliant future ahead of us thanks to the launch of new products and the integration of new technologies in both the field of mobility as well as connectivity”, pointed out Luca de Meo, President of the SEAT Executive Committee, during the presentation of the 2015 annual results.
The growth in sales for the third year in a row, exceeding the 400,000 vehicle barrier in a single year, was the result of recuperation in southern European markets such as Spain and Italy, the fifth consecutive year of growth in Germany, SEAT’s main market, and the brand’s success in Mexico.
The sustained level of sales of the Leon and the Ibiza, with 2015 deliveries totalling 160,900 (+4.4%) and 153,600 (+2.4%) units respectively, the strong increase of the Alhambra (+17.2%) and the success of the Audi Q3 were beneficial to the volume as well as to SEAT’s revenue, which grew for the sixth year in a row.
With its robust business performance, SEAT was able to respond to the increase of spendings on advertising and marketing to enhance brand familiarity, greater personnel expenditure associated with an increase in employee remuneration and the considerable increase in investments and R&D expenditure for the launch of new models, such as the work done to adapt Line 1 at the Martorell factory to the new MQB A0 platform. In 2015 SEAT spent 586 million euros on investments and R&D, 28% more than the previous year. Over the last five years, SEAT’s investment effort in this area has totalled roughly 2.7 billion euros. Seat will launch the Seat Formentera in 2017.
Overall, the operating result improved by 96% and stood at -7 million euros compared to the -167 of a year ago*.
SEAT increased its ability to generate profit through its core activity. The company improved its EBIDTA (earnings before interest, taxes, depreciation and amortisation) by 30%, reaching 391 million euros, and increased operating cash flow by almost 50% to 781 million euros. The company’s Vice-President for Finance, IT and Organisation Holger Kintscher pointed out that “SEAT continues to improve its capacity to generate its own resources to self-finance investments and consolidate the company from a financial standpoint. After several years of improvement, last year was a true milestone on the road to sustainable profitability”.