Volkswagen Group Confirms 2012 Goals

-Sales revenue up 24.0 percent to €144.2 billion (€116.3 billion) in the first nine months
-Operating profit of €8.8 billion (€9.0 billion)
-Consolidated profit rises to €20.2 billion (€13.6 billion)
-Global market share of passenger car market improves to 12.6 percent (12.3 percent)


Wolfsburg, - The Volkswagen Group maintained its positive trajectory in the first nine months of 2012 despite difficult conditions. “Although the times aren’t easy, it’s up to us to systematically continue along our chosen path – the right path. We therefore remain committed to our ambitious goals for 2012, despite growing headwinds”, said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, at the presentation of the Interim Report on Wednesday.

The Volkswagen Group increased its sales revenue to €144.2 billion in the first nine months, up 24.0 percent on the prior period from January to September 2011 (€116.3 billion). This was due mainly to higher volumes and in particular the consolidation of MAN and Porsche. Despite the more difficult environment, operating profit was on a level with the previous year at €8.8 billion (€9.0 billion). At 6.1 percent (7.7 percent), the operating return on sales after nine months was negatively impacted by write-downs relating to purchase price allocation for MAN and Porsche in particular. The consolidated operating profit for the first three quarters does not include the €2.8 billion (€1.9 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. The updated measurement of the put/call rights relating to Porsche, as well as the remeasurement of the existing stake held at the contribution date also had a clearly positive effect on the financial result. As a result, profit before tax after nine months amounted to €23.0 billion (€16.6 billion) – an increase of 38.0 percent as against the prior-year period. The figure after tax improved by 47.7 percent to €20.2 billion (€13.6 billion).

CFO Hans Dieter Pötsch was satisfied with business developments in light of the uncertain economic environment. “We have always said that the second half of the year would be more difficult, so our performance is in line with expectations. We have achieved a robust result.” He is confident that the Volkswagen Group will master the challenges that lie ahead of it. “We have a broad global positioning and our strong financial basis is practically unrivalled”, said Pötsch. “Our relative strength compared with the competition shows that we are on the right path.”

Automotive Division net liquidity

Net liquidity in the Automotive Division following the full integration of Porsche, the acquisition of motorcycle manufacturer Ducati and the increased stake in MAN SE amounted to €9.2 billion as of the end of September 2012 (end of December 2011: €17.0 billion). Investments in property, plant and equipment in the Automotive Division rose by €1.7 billion to €6.0 billion. Nevertheless, the Volkswagen Group maintained its investment discipline. The ratio of investments in property, plant and equipment (capex) to sales revenue in the Automotive Division amounted to 4.6 percent (4.1 percent). Investments related primarily to production facilities, the switch to the Modular Transverse Toolkit, new products and the ecological alignment of the model range. “Our disciplined cost and investment management and the continuous optimization of our processes remain core components of our strategy”, said Pötsch.

Brands and Business Fields

Continuing strong demand for Group vehicles in almost all important markets around the world saw unit sales by the Volkswagen Group rise 12.5 percent to approximately 7.0 million vehicles (6.2 million) in the first nine months. Including Porsche, the Group’s share of the global passenger car market increased to 12.6 percent as against 12.3 percent in the prior-year period.

The Volkswagen Passenger Cars brand sold 3.6 million vehicles (3.3 million) in the first three quarters. This corresponds to an increase of 9.7 percent compared with the prior-year period. The Passat for the US market, as well as the Touareg, Tiguan, Golf Cabriolet and Fox models recorded high growth rates. There was also strong demand for the new up! and Beetle models. Operating profit amounted to €2.9 billion (€3.3 billion) and reflects in particular upfront expenditures for the Modular Transverse Toolkit alongside startup costs for the new Golf.

Ingolstadt-based premium car manufacturer Audi recorded unit sales of 1.0 million vehicles. A further 247,000 Audi vehicles were sold by the Chinese joint venture FAW-Volkswagen. The Audi A8, Audi A7 Sportback, Audi A6, Audi Q7 and Audi Q5 models recorded the highest growth rates. Demand for the new Audi A1 Sportback and Audi Q3 models was also strong. Higher volumes (vehicles and vehicle parts), more favorable exchange rates and product cost optimization measures saw operating profit rise to €4.2 billion (€4.0 billion).

ŠKODA posted a 7.9 percent year-on-year increase in unit sales to 551,000 vehicles (511,000). Demand increased for the Octavia, Roomster and Yeti models, as well as for the Rapid in India. Operating profit was on a level with the previous year at €567 million (€575 million).

SEAT sold 315,000 vehicles (267,000) worldwide. This corresponds to an increase of 18.3 percent and includes the Q3 manufactured for Audi. The strong decline in the Southern European markets had a negative impact. Germany and the United Kingdom exceeded their prior-year sales figures. The brand’s operating loss narrowed by €6 million to €95 million.

Luxury carmaker Bentley increased sales by 29.4 percent to 7,000 vehicles (5,000). Operating profit amounted to €73 million, €79 million higher than in the previous year.

Porsche’s figures were included in the Volkswagen Group’s data in August and September 2012 for the first time. The brand recorded unit sales of 22,000 vehicles and an operating profit of €389 million.

In the period from January to September, Volkswagen Commercial Vehicles sold 330,000 vehicles (328,000) and generated an operating profit of €300 million (€328 million). Unit sales by Swedish commercial vehicles manufacturer Scania declined by 20.5 percent to 47,000 vehicles (59,000). The brand’s operating profit amounted to €688 million (€1.1 billion). Commercial vehicles, engines and power engineering equipment manufacturer MAN sold 101,000 vehicles. Its operating profit was €515 million.

Volkswagen Financial Services generated an operating profit of €988 million (€876 million) in the first three quarters of 2012, exceeding the prior-year figure by 12.9 percent on the back of volume and currency-related factors.

Winterkorn: “We are committed to our ambitious goals for 2012.”

“The Volkswagen Group is well positioned thanks to its twelve strong brands, young and attractive product portfolio, growing presence in all major regions of the world and flexible production. All of these factors also represent the basis for our commitment to our ambitious goals for 2012”, stressed Winterkorn. The attractiveness of the Group has been further boosted by the integration of Porsche, with its offering of exclusive sports cars. The Volkswagen Group’s brands will again launch fascinating new models in the remaining months of 2012 to help expand their strong position in the global markets. As a result, Volkswagen expects to increase deliveries to customers year-on-year.

The Volkswagen Group also reiterated its goal to beat the prior-year sales revenue. This will be helped in part by the consolidation of MAN SE as of November 9, 2011, which is not expected to make a positive contribution to earnings because of the write-downs required for purchase price allocation. The increase in sales revenue from the consolidation in full of Porsche as of August 1, 2012 will be relatively slight due to consolidation effects. The high initial write-downs from purchase price allocation are expected to largely offset Porsche’s contribution to earnings in operating profit for the fiscal year.

The goal for operating profit remains to match the 2011 level.

The complete interim report is published on our website at:
http://www.volkswagenag.com/ir/Q3_2012_e.pdf