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Volkswagen Group returns to profitability: New record for sales revenue and operating result in 2016

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28.02.2017
  • Group sales revenue exceeds Company’s expectations, increasing by EUR 4.0 billion to EUR 217.3 billion
  • Group’s operating result before special items reaches EUR 14.6 billion
  • Operating return on sales also up
  • Negative special items arising from known risks totaling EUR 7.5 billion, incl. EUR 6.4 billion from the diesel issue
  • Net liquidity in the Automotive Division at EUR 27.2 billion
  • Dividend proposal: EUR 2.00 per ordinary share and EUR 2.06 per preferred share

Wolfsburg, February 28, 2017 — The Volkswagen Group is making good progress with overcoming the diesel crisis. In 2016, the Company’s operating business presented a very robust performance even though earnings were impacted once again by negative special items. Before special items, the Group exceeded its original forecasts. Sales revenue in fiscal year 2016 rose by EUR 4.0 billion to EUR 217.3 billion. At EUR 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 percent); the operating return on sales rose to 6.7 (6.0) percent.

Furthermore, the realignment of the Group that was initiated already produces tangible results. «While the past fiscal year posed major challenges for us, despite the crisis the Group’s operating business gave its best-ever performance,» CEO Matthias Müller said today 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 multibrand 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 therefore reached not only its targets for 2016 but also a new record, helped in particular 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 percent), 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 EUR 7.3 billion and EUR 5.4 billion respectively, were again in strongly positive territory. And the financial situation remains robust. Amounting to EUR 27.2 billion at year-end, net liquidity in the Automotive Division was up EUR 2.7 billion on the prior-year figure. The lion’s share (EUR 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.»

CEO 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 EUR 2.00 (previous year: EUR 0.11) per ordinary share and EUR 2.06 (previous year: EUR 0.17) per preferred share at the Annual General Meeting on May 10, 2017.

January December

2016

2015

%

Volkswagen Group, volume data1

Deliveries to customers

(thousand units)

10 297

9931

+3,7

Vehicle sales

(thousand units)

10 391

10 010

+3,8

Production

(thousand units)

10 405

10 017

+3,9

Employees at December 31

626 715

610 076

+2,7

Volkswagen Group (IFRSs)

Total sales revenue

€ million

217 267

213 292

+1,9

Operating profit before special items

€ million

14 623

12 824

+14,0

as a percentage of sales revenue

6,7

6,0

Special items

€ million

–7520

–16 893

+55,5

Operating profit

€ million

7103

–4069

x

as a percentage of sales revenue

3,3

–1,9

Profit before tax

€ million

7292

–1301

x

Profit after tax

€ million

5379

–1361

x

Profit attributable to Volkswagen AG shareholders

€ million

5144

–1582

x

Earnings per share (basic)

- Ordinary shares

10,24

–3,20

x

- Preferred shares

10,30

–3,09

x

Automotive Division²

Cash flows from operating activities

€ million

20 271

23 796

–14,8

Cash flows from investing activities

attributable to operating activities3

€ million

15 941

14 909

+6,9

- of which: capex

€ million

12 795

12 738

+0,4

Net liquidity at December 31

€ million

27 180

24 522

+10,8

Volkswagen AG (basis: HGB)

Net profit/Net loss

€ million

2799

–5515

x

Dividend proposal

– per ordinary share

2,00

0,11

x

– per preferred share

2,06

0,17

x


1) Volume data including the unconsolidated Chinese joint ventures.
2) Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
3) Excluding acquisition and disposal of equity investments: EUR 18,224 (2015: 17,270) million.

Prospects for 2017

The Volkswagen Group 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.

Volkswagen believes that deliveries to customers of the Volkswagen Group in 2017 will moderately exceed the prior-year volume amid persistently challenging market conditions. Challenges will arise particularly from the economic situation, intense competition in the market, volatile exchange rates and the consequences of the diesel issue.

The sales revenues of the Volkswagen Group and of the Passenger Cars and Commercial Vehicles Business Areas is expected to grow by up to 4 percent year-on-year in 2017. In terms of the Group’s operating result, Volkswagen anticipates an operating return on sales of between 6.0 and 7.0 percent in 2017.

The Annual Media and Investor Conference will take place on March 14, 2017.


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