Volkswagen Group says it is making ‘good progress with overcoming the diesel crisis’, despite the adverse impact on its 2016 earnings caused by ‘special items’.
Before special items, the VW Group exceeded its original forecasts, it said. Sales revenue in fiscal year 2016 rose by EUR4.0bn (US$4.22bn) to EUR217.3bn. At EUR7.1bn, the Volkswagen Group says it is making ‘good progress with overcoming the diesel crisis’, despite the adverse impact on its 2016 earnings caused by ‘special items’. 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 EUR14.6bn, 14% ahead of 2015; the operating return on sales rose to 6.7 (6.0)%.
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“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. “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 decentralised 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 difficult conditions in vehicle markets such as Brazil and Russia, the group delivered 10.3m vehicles to customers worldwide in 2016. The group therefore hit a new record in 2016, 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%), 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, VW said. 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 EUR7.3bn and EUR5.4bn respectively. The financial situation for the remains robust. Amounting to EUR27.2bn at year-end, net liquidity in the Automotive Division was up EUR2.7bn on the prior-year figure. The lion’s share (EUR6.4bn) 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.”
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By GlobalDataCEO 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 EUR2.00 (previous year: EUR0.11) per ordinary share and EUR2.06 (previous year: EUR0.17) per preferred share at the Annual General Meeting on 10 May 2017.
Volkswagen Group, volume data
Deliveries to customers: 2016 – 10,297,000 units; 2015 – 9,931,000 units; change – 3.7%
Vehicle sales: 2016 – 10,391,000 units; 2015 – 10,010,000 units; change – 3.8%
Production: 2016 – 10,405,000 units; 2015 – 10,017,000 units; change – 3.9%
Employees at December 31: 2016 – 626,715,000 units; 2015 – 610,076,000 units; change – 2.7%
Volkswagen Group (IFRSs)
Total sales revenue: 2016 – EUR217,267m; 2015 – EUR213,292m; change – 1.9%
Operating profit before special items: 2016 – EUR14,623m; 2015 – EUR12,824m; change – 14%
as a percentage of sales revenue: 2016 – 6.7%6%
Special items: 2016 – EUR(-)7520m; 2015 – EUR(-)16893m; change – 55.5%
Operating profit: 2016 – EUR7,103m; 2015 – EUR(-)4069m
as a percentage of sales revenue: 2016 – 3.3%(-)1.9%
Profit before tax: 2016 – EUR7,292m; 2015 – EUR(-)1301m
Profit after tax: 2016 – EUR5,379m; 2015 – EUR(-)1361m
Profit attributable to Volkswagen AG shareholders: 2016 – EUR5,144m; 2015 – EUR(-)1582m
Earnings per share (basic)
Ordinary shares: 2016 – EUR10.24; 2015 – EUR (-) 3.20
Preferred shares: 2016 – EUR10.3; 2015 – EUR (-) 3.09
Automotive Division
Cash flows from operating activities: 2016 – EUR20,271m; 2015 – EUR23,796m; change – (-)14.8%
Cash flows from investing activities
attributable to operating activities: 2016 – EUR15,941m; 2015 – EUR14,909m; change – 6.9%
of which: capex: 2016 – EUR12,795m; 2015 – EUR12,738m; change – 0.4%
Net liquidity at December 31: 2016 – EUR27,180m; 2015 – EUR24,522m; change – 10.8%
Volkswagen AG (basis: HGB)
Net profit/Net loss: 2016 – EUR2,799m; 2015 – EUR(-)5515m
Dividend proposal
– per ordinary share: 2016 – EUR2; 2015 – EUR0.11
– per preferred share: 2016 – EUR2.06; 2015 – EUR0.17
