Volkswagen Group reports solid H1 result

The Volkswagen Group maintained its trajectory in the first six months of fiscal year 2013, despite the challenging economic situation – particularly in Europe – and intense competition. Including China, deliveries increased by 5.4 percent to 4.8 million vehicles worldwide. The Group’s share of the passenger car market rose year-on-year to 12.7 percent (12.4 percent). “We made considerable progress following a subdued start to the year, and can report a solid result in what was a difficult market environment”, said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg on Wednesday. The Volkswagen Group also confirmed its outlook for full-year 2013.

Sales revenue in the first six months was up on the prior-year figure, at €98.7 billion (€95.4 billion). Operating profit amounted to €5.8 billion (€6.5 billion). Consolidated operating profit does not include the €2.4 billion (€1.8 billion) share of the operating profit of the Chinese joint ventures. These companies are included using the equity method and are therefore reflected in the financial result. Profit before tax was €6.6 billion (€10.1 billion). The prior-year figure had been positively influenced by the remeasurement of the Porsche options (€2.6 billion). Profit after tax was €4.8 billion (€8.8 billion).

CFO Hans Dieter Pötsch was guardedly confident, despite the fragile economic environment: “The global economic situation means that it is all the more important for us not to ease up on our efforts to make the Volkswagen Group even more robust and flexible. At the same time, we will further strengthen our solid financial position for the long-term in order to continue our global growth path and ensure that our strategy is implemented systematically.”

High net liquidity in the Automotive Division

At €11.3 billion, net liquidity in the Automotive Division at the end of June was €0.7 billion higher than at year-end 2012. Investments in property, plant and equipment in the Automotive Division rose to €3.9 billion (€3.4 billion). The Volkswagen Group again maintained its investment discipline with a ratio of investments in property, plant and equipment (capex) to sales revenue in the Automotive Division of 4.5 percent (4.0 percent). Investments related primarily to production facilities and the models to be launched in 2013 and 2014, as well as the ecological focus of the model range.

Brands and Business Fields

Worldwide unit sales by the Volkswagen Group rose by 4.9 percent year-on-year in the first half of the year to 4.9 million vehicles.

The Volkswagen Passenger Cars brand sold around 2.4 million cars in the first six months, 1.7 percent fewer than in the first half of 2012 (2.4 million). The brand’s operating profit was €1.5 billion (€2.3 billion), and was weighed down by a deterioration in volumes and mix, as well as upfront expenditures for new technologies.

Unit sales by the Audi brand rose by 2.1 percent year-on-year to 692,000 vehicles (678,000); the FAW-Volkswagen Chinese joint venture sold a further 197,000 Audi vehicles. Audi reported an operating profit of €2.6 billion (€2.9 billion), despite higher upfront expenditures for new products, technologies and the expansion of global production structures.

ŠKODA’s sales declined by 11.1 percent to 362,000 vehicles (408,000). Negative volume, mix and exchange rate effects as well as launch costs for the new products saw its operating profit decline as against the first half of 2012 to €243 million (€449 million).

SEAT sold 244,000 vehicles (218,000) worldwide, 12.1 percent more than in the previous year. Demand increased for the new Leon and the new Toledo. The operating loss improved slightly to €40 million (€42 million).

Bentley delivered 4,200 vehicles (4,800). Its operating profit was on a level with the previous year at €58 million (€57 million).

Sports car manufacturer Porsche sold 78,000 vehicles and generated an impressive operating profit of €1.3 billion in the first half of the year.

Volkswagen Commercial Vehicles delivered 220,000 vehicles (228,000) and recorded an operating profit of €246 million (€242 million).

Scania lifted its sales to 38,000 trucks and buses (32,000). Increased pressure on margins saw its operating profit decline to €464 million (€477 million).

MAN sold 65,000 trucks and buses (68,000) and reported an operating loss of €124 million (previous year: operating profit of €355 million). Lower volumes, the declining after-sales business and the recognition of project-specific contingency reserves in the Power Engineering area were negative factors.

Volkswagen Financial Services generated an operating profit of €696 million (€663 million).

Winterkorn: “Diversity and international focus are increasingly bearing fruit.”

“The Volkswagen Group’s twelve strong brands cover almost the entire mobility chain. Our vehicles are produced at 100 plants around the world and are sold in over 150 countries. This diversity and our international focus are increasingly bearing fruit”, said Winterkorn. He is confident that the Volkswagen Group will outperform the market as a whole in a challenging environment. “As before, the Volkswagen Group is standing by its goals for the current fiscal year”, said Winterkorn. Deliveries to customers are expected to increase year-on-year. However, the Group is not completely immune to the intense competition and the impact this is having on its business. The modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on the Group’s cost structure. The Volkswagen Group’s 2013 sales revenue is expected to exceed the prior-year figure. Given the ongoing uncertainty in the economic environment, the Group’s operating profit goal is to match the prior-year level in 2013.

The complete Half-Yearly Financial Report is published here.