London, 15 March 2024, (Oilandgaspress): – Volkswagen Group achieved robust financial results in a challenging environment in 2023. Thanks to progress in electrification and a flexible product strategy, the Group successfully is able to meet customers’ needs worldwide. At the same time, 2023 was a year of restructuring for Volkswagen Group. In many areas of the TOP-10 program, the Group has made progress faster than originally planned. With more than 30 new products, 2024 will be the year of world premieres, with highlights including the high-performance all-electric vehicles based on the new PPE premium platform. Volkswagen Group is therefore confident about the current year and an accelerated ramp-up from 2025 onwards. The overarching Group goal remains sustainable, value- In 2023, Volkswagen Group achieved robust results in a challenging environment and proved that the Group delivers reliably with its strong brands. Deliveries increased 12 percent to 9.24 million vehicles, with all regions contributing to this increase. With sales revenue of EUR 322.3 billion, an operating profit of EUR 22.6 billion and a profit after tax of EUR 17.9 billion, Volkswagen Group demonstrated the resilience of its business model. The operating return on sales before special items amounted to 7.0 percent, despite considerable headwinds from the valuation of commodity derivatives, which had a positive impact on the operating profit in the previous year. Adjusted for these valuation effects, the operating profit reached EUR 25.8 billion, which corresponds to a margin of 8 percent. The Automotive Division’s net cash flow rose to EUR 10.7 billion. With net liquidity in the Automotive Division of EUR 40.3 billion at the end of the year, the Group is in a very robust financial position. Earnings per preferred share increased by EUR 2.26 to EUR 31.98 (+8 percent).
To note, Volkswagen Group had already published the Group’s key figures for the past financial year and an outlook for 2024 on March 1, 2024.
The Board of Management and Supervisory Board are proposing a dividend of EUR 9.00 per ordinary share and EUR 9.06 per preferred share to the Annual General Meeting, representing an increase of EUR 0.30 per ordinary and preferred share, respectively, compared to the previous year’s figures. The payout ratio corresponds to 28 percent.
Share of electric vehicles in deliveries continuously increased
Electrification gained significant traction in the past year. Across all quarters, the share of battery-electric vehicles in deliveries rose successively, peaking at around 10 percent in the fourth quarter. In the full year, the BEV share reached 8.3 percent – a new record. In absolute figures, Volkswagen Group delivered 771,100 battery electric vehicles last year, which corresponds to an increase of 35 percent compared to 2022, driven by growth in all regions. The Group has, once again, confirmed its leading position in this segment in Europe.
All brand groups contribute to the development of the operating profit
In the Passenger Cars segment, all brand groups achieved good results in 2023. Not only was sales growth strong, but operating profit before special items adjusted for the effects of commodity hedging also increased across all brands.
The operating return on sales of the Brand Group Core (Volkswagen, Volkswagen Commercial Vehicles, Škoda, SEAT/CUPRA) rose to 5.3 percent (3.6 percent), which is primarily attributable to the strong increase in sales revenue of 21 percent to EUR 137.8 billion. With this operating profit, the Brand Group Core has taken an important first step towards its strategic return target of 8 percent.
Sales revenue of the Brand Group Progressive (Audi, Lamborghini, Bentley, Ducati) rose to EUR 69.9 billion (+13 percent) in 2023. The operating profit decreased to EUR 6.3 billion. Before valuation effects in particular from commodity hedging, operating profit improved to EUR 7.7 billion. The operating return on sales amounted to 9.0 percent (12.3 percent). Adjusted for valuation effects of EUR -1.4 billion, it rose to 11.0 percent (10.6 percent).
Brand Group Sport Luxury (Porsche) continued its successful track record. Its sales revenue increased to EUR 37.3 billion (EUR 34.6 billion), while the operating return on sales remained at the previous year’s level of 18.6 percent despite the headwinds from increased costs for product launches and higher production costs.
The Financial Services Division’s operating profit contributed EUR 3.8 billion to the Group result but was around a third below the previous year’s high level. This is due to the expected normalization of used car prices. In 2021 and 2022, the residual values of used cars rose to unprecedented levels due to the semiconductor-related shortages of new vehicles. The group recognized early on that this level would not be sustainable and planned accordingly.
Brand Group Trucks (TRATON: MAN, Scania, Navistar, Volkswagen Truck & Bus) increased sales to EUR 45.7 billion (EUR 39.5 billion) due to higher volumes, a positive market and product mix, better unit prices and growth in the vehicle service business. The TRATON Group significantly improved its operating margin to 8.1 percent (4 percent) with an operating profit of EUR 3.7 billion (EUR 1.6 billion).
At CARIAD, revenue from contract licenses rose by around 30 percent to EUR 1.1 billion, as the software is being used in increasingly more Group vehicles, as planned. Due to the business model, this division recorded an operating loss of EUR 2.4 billion, as CARIAD makes significant advance payments for future software architectures, which are remunerated via license payments. In operational terms, the Group in the software area has focused on launching important products such as the Porsche Macan Electric and the Audi Q6 e-tron this year.
The development of the battery business is also continuing to make progress. However, higher investments and the costs of setting up teams in various countries led to an operating loss of EUR 0.4 billion and a net cash outflow of EUR 0.8 billion. This relates to investments in the Group’s battery activities, which are essential for the successful ramp-up of electric vehicle production.
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