Volkswagen Group has posted operating profit up 40% to EUR4.37bn in the first quarter, helped by a strong turnaround for the Volkswagen brand, despite the ‘dieselgate’ crisis.
VW said the robust results were due to volume- and mix-related factors, positive exchange rate effects and product cost optimisation, as well as particularly the improvement in the Volkswagen brand’s earnings, which rose to around EUR0.9bn (versus EUR73m Q1 last year).
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The cost and mix improvement was underlined by the fact that the positive results came in spite of slightly lower deliveries to customers (2.495m vehicles in Q1 2017 versus 2.508m in 2016 Q1).
“Our quarterly figures were positively impacted by the strong performance of the group brands, the launch of new, compelling products and solid earnings in Western Europe,” said Matthias Müller, VW Group CEO. “Our efforts to improve efficiency and productivity across all areas of the Company are also paying off,” he said. “We are encouraged by the strong results presented today. They strengthen our resolve to continue our chosen path with TOGETHER – Strategy 2025.”
VW Group posted an operating return on sales of 7.8% in Q1 versus 6.1% in the prior-year quarter.
Volkswagen Group generated profit before tax of EUR 4.6bn (EUR3.2bn last year) and the pre-tax operating return on sales increased from 6.3% to 8.2%. Consolidated profit after tax for the first three months was EUR3.4bn (EUR2.4bn in Q1 2016).
Outlook for full-year 2017 confirmed
Volkswagen Group confirmed its outlook for 2017 and expects sales revenue for the full year to grow by up to 4% year-on-year. In terms of the group’s operating profit, an operating return on sales of between 6% and 7% is forecast for 2017. However, VW warned that challenges will arise ‘particularly from the economic situation, intense competition in the market, exchange rate volatility and the diesel issue’.
