The Volkswagen Group financial figures for the first nine months
of the year appear unfazed by the events of ‘Diesel’ gate in the USA and
Europe.
The latest figures
give a bell-weather to the company’s performace as it weathers the storm created
by Dieselgate.
The Group generated an operating profit before special items of €11.3
(10.2) billion in the first nine months of the year, representing an increase
of 10.5 per cent.
The sales revenue of €159.9 billion was on a level with the previous year
and the operating return on sales before special items amounted to 7.0 (6.4)
per cent. However, earnings in the third quarter were impacted by further
provisions recognised in connection with the diesel issue of €0.4 billion. For
the period January to September, operating profit after special items amounted
to €8.6 (3.3) billion. Profit after tax was €5.9 (4.0) billion.
"The figures for the first three quarters
show the operational strength of the alliance of brands in the Volkswagen
Group," claimed Matthias Müller, chairman of the Board of Management of
Volkswagen Aktiengesellschaft, commenting on the quarterly report.
"This is a robust base on which we intend
to push forward with our planned transformation from car manufacturer to
provider of sustainable mobility. In 'TOGETHER – Strategy 2025', we have laid
out a compelling plan for this transition. As our future program and the latest
quarterly results prove, the Volkswagen Group remains fully operational in
spite of the present pressures," he added.
Chief financial officer Frank Witter also
emphasised how the Group's solid financial position is a vitally important
factor in its continuing success: "Despite major challenges and the
negative impact of the diesel issue, the Volkswagen Group remains on a solid
financial footing."
As Witter added: "Our net liquidity gives
us the financial stability to actively shape the future of mobility while
coping simultaneously with the financial repercussions of the diesel issue and
the investments and outlay required for CO2 compliance and new technologies." The
impact of the diesel issue, in particular, required a systematic, disciplined
approach to investments and costs, he continued, "But further significant
improvements in productivity and profitability are needed across the whole
Group. The Volkswagen brand's 'pact for the future' is of crucial importance
for the future of the entire Group."
The Group's operating profit and sales revenue
exclude the activities of the Chinese joint ventures, which are accounted for
in the financial result using the equity method. The share of operating profit
attributable to the Chinese joint ventures to the end of September 2016
remained stable at €3.6 (3.8) billion.
Net
liquidity in the Group's Automotive Division increased to €31.1 billion at the
end of September (compared to €24.5 billion at the end of December 2015). The
Automotive Division's investments in property, plant and equipment, investment
property and intangible assets, excluding capitalised development costs (capex)
rose from €7.3 billion to €7.8 billion in the first three quarters. The ratio
of capex to sales revenue in the Automotive Division amounted to 5.7 per cent.
Brand-by-brand
performance
Volkswagen Passenger Cars brand's unit sales of 3.2 (3.3) million vehicles in the
first nine months of 2016 fell short of the prior-year level. Operating profit
before special items decreased to €1.2 (2.2) billion. The decrease is primarily
attributable to volume, mix and exchange rate effects as well as higher
marketing costs as a consequence of the emissions issue. By contrast, cost
savings had a positive effect.
Audi increased its unit
sales by 0.7 per cent year-on-year in the reporting period to 1.2 million
vehicles worldwide. The Chinese joint venture FAW-Volkswagen sold a further
411,000 Audi vehicles. At €3.9 (4.0) billion, operating profit before special
items reached the 2015 level. In addition to exchange rate effects and intense
competition, the expansion of the model and technology portfolio and the international
production network had a negative impact on earnings.
ŠKODA sold 606,000 vehicles in the first three quarters of this
year, once again more than a year earlier. Operating profit improved by 28.1
per cent to €940 million mainly on the back of positive volume and mix effects
as well as optimised product costs.
SEAT unit sales, despite
the modifications at the Martorell plant, reached 400,000 vehicles in the
reporting period and were at the prior-year level. At €137 million, operating
profit was €125 million higher than in 2015, with cost reductions and mix
improvements more than compensating for negative exchange rate effects.
Bentley increased its unit
sales by 6.1 per cent year-on-year between January and September 2016,
primarily due to the popularity of the new Bentayga. Positive effects from
exchange rates and cost-cutting measures, allowed operating profit to be on a
level with the previous year at €54 (57) million in spite of changed market
conditions.
Porsche brand lifted vehicle sales
by 5 per cent year-on-year in the first three quarters of 2016 to 177,000 units
worldwide. Operating profit climbed 12.2 per cent to €2.9 billion. Here too,
the rise was mainly attributable to volume, mix and exchange rate effects.
Volkswagen Commercial Vehicles sold 342,000 vehicles worldwide in the first nine months
of 2016. At €8.0 billion, sales revenue rose 6.7 per cent over the prior-year
period. Operating profit rose by €79 million to €392 million, as a result of
higher volumes and mix effects as well as optimised product costs.
Scania scored sales of 60,000
trucks and buses in the first three quarters of 2016. Higher sales figures in
Europe offset the decline in demand in Turkey, South America and Russia. At
Scania, operating profit before special items amounted to €802 (748) million.
MAN Commercial Vehicles sold 74,000 units in the period from January to September
of this year. Operating profit before special items rose to €204 (52) million.
Volume effects and improved margins in Europe as well as the structural
improvements introduced had a positive effect.
MAN Power Engineering's sales revenue decreased by 6.9 per cent year-on-year to
€2.6 billion in the first nine months of 2016. This reduced the operating
profit by €51 million to €176 million.
Finally,
Volkswagen Financial Services sales
were 11.1 per cent higher than in the previous year. The number of financing,
leasing, service and insurance contracts signed in the reporting period rose by
14.6% to 4.9million. The total number of contracts was 15.8 million as of
September 30, 2016, surpassing the 2015 year-end figure by 7.8 per cent.
Further
outlook for the Group
The
company expects that, on the whole, deliveries to customers of the Volkswagen
Group in 2016 will be slightly higher than in the previous year amid
persistently challenging market conditions, with a growing volume in China.
Depending on the economic conditions, exchange
rate developments and the diesel issue, the Group expects its sales revenue in
2016 to match the prior-year level. In terms of the Group's operating profit
before special items, it is anticipated that the full-year operating return on
sales will be at the upper end of the forecast range of 5.0 – 6.0 per cent.
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