Volkswagen Group has beat analyst estimates to post operating profit up 16.6% to EUR3.3bn in the first three months of the year. The strong result was helped by currency effects, cost-cutting measures and higher car demand in Europe.
Volkswagen Group also posted Q1 sales revenue up 10.3% to EUR52.7bn.
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Global demand for VW Group passenger cars was up 3.7% in the first quarter of 2015; however, market trends varied from region to region. The overall markets in Asia- Pacific, North America, Western Europe and Central Europe saw growth, while a significant year-on-year decline in market volumes was recorded in Eastern Europe and South America.
“We expect trends in the passenger car markets in the individual regions to remain mixed. This environment demands our utmost flexibility and financial strength so that we can safeguard the group’s success in the long term and achieve the goals of our Strategy 2018,” said Chief Financial Officer Hans Dieter Pötsch.
The Volkswagen Group’s profit before tax amounted to EUR4bn (versus EUR3.4bn in Q1 2014). The return on sales before tax rose to 7.5% (7.0% last year) in the period from January to March. Profit after tax was EUR 2.9bn (EUR 2.5bn last year).
“We have always emphasised that 2015 will be a challenging year for the automotive industry as a whole, and also for us. Nevertheless, our key figures forthe first quarter show that the Volkswagen Group remains on course, despite the headwinds. The key focus for the entire workforce is on ensuring that 2015 will be another successful year,” said CEO Martin Winterkorn. The VW Group’s stated objective is to increase its volumes, sales revenue and operating profit in full-year 2015.
The big gain to operating profit is a sign that VW’s cost-cutting course is bringing results. Volkswagen says the measures have saved the company more than EUR100m in the last quarter.
The positive financial results for VW come in the immediate aftermath of Ferdinand Piech’s forced exit as VW Group Supervisory Board Chairman after an internal power struggle.
See also: GERMANY: Volkswagen eyes higher efficiency gains
