#Finance

Volkswagen Group delivered on its NEW AUTO Strategy last year, laying the basis for future profitable growth and improving the resilience of its business model in a difficult environment. Volkswagen last year reached the turnaround in key regions of the world, successfully ramped up e-mobility, built up software capabilities and raised efficiency.

The Volkswagen Group proved the robustness of its business model in 2021. The company increased its overall resilience and improved its capabilities to cope with constraints. Overhead costs were successfully reduced, capex discipline was high and the break-even was lowered. At the same time Volkswagen drove its transformation to NEW AUTO forward. A solid profit was achieved despite strong headwinds from semiconductor shortages that led to a decrease in vehicle sales of around 600,000 units compared to 2020. This was 2.4 million fewer units than 2019. Although sales volumes were down 6 percent on prior year, sales revenue increased by 12 percent to EUR 250.2 billion. Operating profit before special items almost doubled compared to 2020 and reached a solid level of EUR 20.0 billion. The operating return on sales before special items also climbed to 8.0 percent after 4.8 percent in prior year. Key to this financial performance was a better mix and favorable pricing. The Automotive Division generated a strong net cash flow of EUR 8.6 billion, a 35 percent year-on-year increase. The Automotive Division’s net liquidity remained almost unchanged compared to the end of 2020, at EUR 26.7 billion. However, this corresponds to an increase of more than EUR 5 billion since the end of 2019, despite the multitude of transformational steps that have been taken in this timeframe, including the acquisition of Navistar. The Board of Management and Supervisory Board are proposing a dividend of EUR 7.50 per ordinary share and EUR 7.56 per preferred share, an increase of 56 percent compared to EUR 4.80 or EUR 4.86, respectively, in the preceding year. This equals to a payout ratio of 25.4 percent. Earnings per ordinary share amounted to EUR 29.59 (16.60) and earnings per preferred share were at EUR 29.65 (16.66).

Volkswagen drove forward its transformation into a sustainable, software-centric mobility group in the year now ended and approximately doubled its BEV deliveries year-on-year to 452,900 units. These now account for 5.1 percent of total deliveries, up from 2.5 percent in the previous year. The Group is the European market leader for battery-electric vehicles by a large margin and achieved the second-largest share of the key US market with about 7.5 percent. In China, 92,700 BEVs were delivered, more than four times the figure for 2020. Sales of plug-in hybrids worldwide also rose significantly to 309,500 units (+61 percent). In total, the Group delivered 8,882,000 vehicles to customers around the world. As forecast, the global semiconductor shortage led to a slight decrease of 4.5 percent versus 2020 despite high customer demand and full order books.

The Volkswagen Group, together with its partners Attestor Limited and Pon Holdings B.V., has reached an important milestone in the planned acquisition of Europcar: The French financial market regulator Autorité des marchés financiers (AMF) today approved the takeover offer of Green Mobility Holding S.A. for the shares of Europcar Mobility Group.

The global semiconductor bottlenecks particularly impacted on the business performance of the Volkswagen Group in the third quarter. Operating profit before special items came to EUR 2.8 (3.2) billion in the period from July to September, a drop compared with the first two quarters of this year and the pandemic-related weak prior-year period. The operating return on sales before special items declined to 4.9 (5.4) percent in the third quarter. The volume brands were affected most in this period, recording operating losses in spite of having full order books. Owing to the semiconductor shortage, the high level of customer demand in China could also not be met. In the first nine months of the year, the Group’s brands lifted deliveries to customers by 6.9 percent to 7.0 (6.5) million vehicles. Sales revenue saw a more significant increase, rising by 20.0 percent in the same period to EUR 187 (155) billion. Due to the strong first half, operating profit before special items, which stood at EUR 14.2 (2.4) billion after nine months, remained at a solid level and exceeded the pandemic-related weak prior-year figure. The operating return on sales was 7.6 (1.5) percent. The Automotive Division achieved an adjusted net cash flow of EUR 12.4 (4.5) billion by the end of September, thus contributing substantially to the financing of the Group’s transformation. Despite the impact on working capital caused by the semiconductor shortage, adjusted net cash flow for the third quarter was slightly positive at EUR 33 million. Net liquidity in the Automotive Division fell by EUR 9.4 billion compared with the first six months to a still robust level of EUR 25.6 billion. Here, the Navistar transaction completed by July had a perceptible effect of around EUR 6 billion. In addition, a dividend of EUR 2.4 billion was distributed to Volkswagen shareholders in the third quarter. The Volkswagen Group confirmed its outlook for the operating return on sales for full year 2021 of 6.0 to 7.5 percent.

The Volkswagen Group successfully continued its global electric offensive in the third quarter of 2021. Despite a shortage of semiconductors, 122,100 BEVs were delivered to customers from July to September, an increase of 109 percent compared with the prior-year quarter. Particularly the market ramp-up in China accelerated significantly in Q3, where 28,900 BEVs were delivered, compared with 18,300 in the first half of the year. The BEV share of total deliveries rose to more than 6 percent in Q3. A total of 293,100 BEVs were delivered worldwide by the end of September, more than twice as many as in the prior-year period (+138 percent). There also continued to be strong demand for vehicles with a plug-in hybrid drive (PHEVs). A total of 246.000 PHEVs were delivered in the first nine months, more than twice as many as in the prior-year period (+133 percent).

The Volkswagen Group continued its positive business performance and posted a record result despite challenging conditions in the first half of 2021. This positive development was driven in particular by the premium brands Audi and Porsche and by Volkswagen Financial Services. The impacts of the Covid-19 pandemic and global shortage of semiconductors were successfully contained. There was high customer demand for the Group’s attractive model range as markets continued to recover. As a result, deliveries increased by 27.9 percent to 5.0 (3.9) million vehicles over the weaker prior-year period, which was impacted by the pandemic. Sales revenue even rose more strongly by 34.9 percent to EUR 129.7 (96.1) billion. The operating result was EUR 11.4 (first half of 2020 before special items: EUR –0.8) billion, far exceeding the previous record of EUR 10.0 billion (before special items) from the pre-crisis year 2019. The operating return on sales was therefore at a strong 8.8 (first half of 2020 before special items: –0.8) percent. The higher earnings were mainly due to increased vehicle sales, improvements in the product mix and prices as well as positive effects from the valuation of raw material hedges. One-off restructuring expenses of EUR 0.7 billion had a negative impact. Work on ongoing fixed cost programs was vigorously pursued. The Automotive Division generated a very high adjusted net cash flow of EUR 12.3 (–2.3) billion and thus again demonstrated the great efficiency of its business model. The Division’s net liquidity rose further to a very solid level of EUR 35.0 billion. The acquisition of Navistar and its financial impact are not included in the figures. As a result of the extremely good business performance in the first half of the year, the Volkswagen Group has raised the outlook for its operating return on sales for full year 2021 by 0.5 percent to 6.0 to 7.5 percent.

The Annual General Meeting of Volkswagen Aktiengesellschaft took place today online for the second time due to the Covid-19 pandemic. The shareholders voted by a majority of 99.99 percent to approve the recommendation of the Board of Management and the Supervisory Board to pay the same dividend as in the previous two years of 4.80 EUR per ordinary share and 4.86 EUR per preferred share for fiscal year 2020. As in fiscal years 2018 and 2019, approximately 2.4 billion EUR will therefore be distributed to shareholders. The resolution on the formal approval of the actions of the members of the Board of Management and the Supervisory Board who held office in 2020 was passed.

The Volkswagen Group considers itself well equipped for a zero-emission and autonomous future of mobility. “With our NEW AUTO strategy, we will reinvent Volkswagen by 2030," said CEO Herbert Diess at the virtual Annual General Meeting of the Volkswagen Group. "The cars on our roads will be sustainable, safe, smart and ultimately autonomous within the next ten years. Individual mobility has a bright future. With our strong brands and global technology platforms, we have a clear plan to play a leading role in the new world of mobility, too.”

The positive business development of the Volkswagen Group in the second half of 2020 continued in the first quarter of this year. This resulted in strong financial performance with significant improvements over the weaker prior-year period that was impacted by the pandemic. Some key figures even came in above pre-crisis levels from the first quarter of 2019. Successful management of the Covid-19 pandemic and semiconductor shortages, along with recovery in the markets, were key to this positive development. As a result, sales revenue increased by 13.3 percent to a high level of EUR 62.4 billion. Operating profit soared compared to the prior-year level to 4.8 (0.9) billion. The higher earnings were mainly due to increased unit sales, improvements in the product mix, positive effects from the valuation of raw material hedges and initial success from the fixed cost reduction program. One-off restructuring expenses of EUR 0.4 billion had a negative impact. The Automotive Division underscored the robustness of its business model with a high adjusted net cash flow of EUR 5.5 (–1.5) billion. The Division’s net liquidity rose to a very solid level of EUR 29.6 billion. The Volkswagen Group raised the outlook for its operating margin for full year 2021 to 5.5 to 7.0 percent. It was previously 5.0 to 6.5 percent.