Targets for value-based management
Based on long-term interest rates derived from the capital market and the target capital structure (fair value of equity to debt = 2:1), the minimum required rate of return on invested capital defined for the Automotive Division remains unchanged at 9%.
In spite of the adverse effects of the special items on earnings, we exceeded the minimum rate of return on invested capital in the reporting period, with a return on investment (ROI) of 11.0 (12.1)% (see also chapter “RoI and value contribution”). Invested capital will continue to increase further in 2019 as a result of investments in new models, in the development of alternative drives and modular toolkits and in future technologies. Invested capital will also rise as a consequence of the change in the accounting for leases (IFRS 16) that entered into force in January 2019. The return on investment (ROI) in the Automotive Division will probably exceed our minimum required rate of return on invested capital and be slightly higher than in the previous year.