Volkswagen Group is
making progress despite the diesel crisis with sales revenue exceeding expectations,
increasing by €4.0 billion to €217.3 billion. Group's operating result before
special items reached €14.6 billion.
At €7.1 billion, the Group's operating result,
which had slipped into the red in the previous year due to the diesel issue,
was back in strongly positive territory. Before special items, the Group's
operating result reached a new record and at EUR 14.6 billion was substantially
higher than the prior-year figure (up 14 per cent); the operating return on
sales rose to 6.7 (6) per cent.
"While the past fiscal year posed major
challenges for us, despite the crisis the Group's operating business gave its
best-ever performance," chief executive Matthias Müller said in Wolfsburg.
"As the figures show, Volkswagen is very solidly positioned in both
operational and financial terms. This makes us optimistic about the
future."
He went on, "The Group's new structure
with more decentralized responsibility will strengthen our brands and regions
and increase our proximity to customers. We will become faster and more focused
and efficient. This will enable us to make much more focused use of the
strengths of our multi-brand group and its potential for synergies."
In spite of further challenges resulting from
the diesel issue and the persistently difficult conditions in vehicle markets
such as Brazil and Russia, the Group delivered 10.3 million vehicles to
customers worldwide in the past fiscal year.
The Group reached its targets for 2016 but a new
record, helped by increases in Western and Central European markets and in the
Asia-Pacific region. Improvements in the mix and the vigorous financial
services business were the main contributing factors to the increase in the
Group's sales revenue (up 1.9 per cent), more than offsetting negative exchange
rate effects and declining unit sales in individual regions.
Profit attributable to the Chinese joint
ventures was down slightly in the reporting period, as expected. The business
of the Chinese joint ventures is not included in the Group's sales revenue and
operating profit because it is accounted for in the financial result using the
equity method.
In 2016, the Group's earnings before and after
tax, amounting to €7.3 billion and €5.4 billion respectively, were again in
strongly positive territory. The Group claims its financial situation remains “robust”.
Amounting to €.2 billion at year-end, net liquidity in the Automotive Division
was up €2.7 billion on the prior-year figure. The lion's share (€6.4 billion)
of the special items arising from known risks in the reporting period was
attributable to the diesel issue, especially for hedging of legal risks.
"In spite of the charges and the
challenges arising from the diesel crisis, we can be satisfied on the whole
with the Group's business development and economic position," said chief
financial officer Frank Witter, commenting on the annual financial statements.
"I am confident that the Volkswagen Group will overcome the present
challenges. We must use great discipline to achieve the set targets in all
divisions, in order to return to the path of success in the coming years."
Müller underlined that with its future
program TOGETHER – Strategy 2025 the Group attached great importance to its
responsibility in relation to the environment, safety and society.
"The commitment and considerable
technical expertise of our staff are the basis for successfully shaping the
transformation into a leading international provider of sustainable
mobility," Müller said.
The Board of Management and Supervisory Board
will propose to pay a dividend of €2.00 (previous year: €0.11) per ordinary
share and €2.06 (previous year: €0.17) per preferred share at the Annual
General Meeting on 10 May 10 2017.
Cash flows from operating activities stood at
€20,271 million compared with €23,796 million. Cash flows from investing
activities and attributable to operating activities were €15,941 million
compared with €14,909 million. The net liquidity as at December 31 2016 was € 27,180
million compared with €24,522 million.
As for the prospects for 2017, the company
says it expects the global economy to record slightly higher growth in 2017
than in the previous year. The Group anticipates the strongest rates of
expansion in Asia's emerging economies.
It expects trends in the passenger car markets
in the individual regions to be mixed in 2017. Overall, growth in global demand
for new vehicles will probably be slower than in the reporting period.
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