Volkswagen Ag · XETR:VOW
Volkswagen — FY2023 Earnings Presentation
56 slides from Volkswagen's earnings presentation, Mar 13, 2024
Slide 1: Annual Media, Analyst and Investor Conference 2024
Volkswagen AG Annual Media, Analyst and Investor Conference 2024 March 13, 2024
Slide 2: Disclaimer
Disclaimer The following presentations as well as remarks/comments and explanations in this context contain forward-looking statements on the business development of the Volkswagen Group. These statements are based on assumptions relating to the development of the economic, political and legal envir
Slide 3: It all starts with a great team
IT ALL STARTS WITH A GREAT TEAM 3
Slide 4: Input Brands and Regions
VOLKSWAGEN GROUP Input Brands and Regions te Ce MB beaten BP
Slide 5: Stringent execution of TOP 10 2023
Stringent execution of TOP 10 2023 PLANNING ROUND PRODUCTS CHINA NAR CARIAD 01 02 03 04 05 Strategic capital New product strategy Target picture 2030 Growth plan NAR Realistic portfolio plan allocation Design identities VCTC Anhui Establish Scout Motors Restructuring CARIAD Performance Programs Qual
Slide 6: Great Brands
VOLKSWAGEN GROUP
Slide 7: Successful product launches in 2023
Successful product launches in 2023 ID. Buzz Bentayga ID.4 NAR Amarok Touareg PA Superb Q6 Tavendor Tiguan 911 Dakar Q8 e-tron SB Panamera ID.3 PA Revuelto ID.7 Polo Track Skoda Enyaq Passat Cayenne PA Atlas PA 7
Slide 8: Volkswagen Group deliveries up to 9.24m vehicles in 2023
Volkswagen Group deliveries up to 9.24m vehicles in 2023 Deliveries [‘000 units / per month] 2022 2023 Global deliveries BEV deliveries Growth in all regions; Q4 +14% YoY increased by worldwide market share FY23 +12% YoY +35% YoY in 2023 increased to 11.1% 8
Slide 9: 2023 BEV deliveries up by 35% to 771k vehicles
2023 BEV deliveries up by 35% to 771k vehicles Quarterly Development Continued increase in BEV share BEV Deliveries [‘000 units] BEV share [%] 2023 BEV Share [%] 10% 9 to 11% 9% 8% 240 7% 210 8.3% 206 181 6.9% 141 149 5.1% 118 122 108 99 60 58 33 30 Q1 Q2 Q3 Q4 2021 2022 2023 2024e 2021 2022 2023 9
Slide 10: Financial Overview 2023
Financial Overview 2023 Strong financials; delivering on full year guidance € 322.3bn € 22.6bn 7.0% Group revenue Group operating profit1 Group Return on Sales1 €25.8bn excl. FV of derivatives2 8.0% excl. FV of derivatives2 € 10.7bn € 40.3bn Automotive net cash flow Automotive net industrial liquidi
Slide 11: Financial Overview 2023
Financial Overview 2023 Strong financials translating into appropriate participation of shareholders € 17.9bn € 31.98 € 9.06 Net income Earnings per share Dividend proposal1 (Preferred share) (Preferred share) 1. Dividend proposal of € 9.06 per preferred share and € 9.00 per ordinary share subject t
Slide 12: Achievements in line with our promise at 2023 Group CMD
Achievements in line with ‘our promise’ at 2023 Group CMD NEW TEAM TECHNOLOGY AT SCALE 01 02 ✓ TOP 10 Programs ✓ First PPE models ✓ Executive Board strengthened ✓ CARIAD restructuring ✓ Removal of MSCI red-flag ✓ True software experts ✓ New battery strategy 12
Slide 13: Achievements in line with our promise at 2023 Group CMD
Achievements in line with ‘our promise’ at 2023 Group CMD UNLEASHED BRANDS REGIONAL LEADERSHIP 03 04 ✓ Increasing product momentum ✓ CHN: New target picture ✓ ICE/BEV mix adaptable ✓ NAR: Stronger localization ✓ Target pictures for Audi & VW ✓ EUR: Capacity adjustments 13
Slide 14: Achievements in line with our promise at 2023 Group CMD
Achievements in line with ‘our promise’ at 2023 Group CMD NEW STEERING MODEL FINANCIAL TARGETS 05 06 ✓ Performance programs ✓ Robust 2023 financial results ✓ Efficient capital allocation ✓ Confident outlook for 2024 ✓ Management incentivization ✓ Participation for shareholders 14
Slide 15: Volkswagen at mid-point of its transformation path
Volkswagen at mid-point of its transformation path NEW TEAM TECHNOLOGY AT SCALE UNLEASHED BRANDS 01 02 03 REGIONAL LEADERSHIP NEW STEERING MODEL FINANCIAL TARGETS 04 05 06 15
Slide 16: Financial Overview
Financial Overview Robust performance in demanding market environment Vehicle Sales Sales Revenue Operating Result and Margin1 [m vehicles] [€ bn] [€ bn] Margin [%] Fair value of derivatives outside hedge accounting2 +15% 322.3 8.1% 7.0% 279.1 flat 22.5 22.6 1.8 +10% 9.4 8.5 +18% 20.7 25.8 (7.4%) (
Slide 17: Financial Overview
Financial Overview Increase of Profit after Tax supported by lower tax rate1 Profit before Tax Profit after Tax Earnings per preferred share [€ bn] [€ bn] [€] +8% +5% 32.0 23.2 29.7 22.1 +13% 17.9 15.9 Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec 2022 2023 2022 2023 2022 2023 Note: Previous year
Slide 18: Automotive Net Cash Flow and Net Liquidity
Automotive Net Cash Flow and Net Liquidity Cash flow supported by operating business and significant Working Capital release Rep. Net Cash Flow [CCR]1, 2 'Clean' Net Cash Flow1, 3 Net Liquidity1 [€ bn] [€ bn] [€ bn] +48% -6% 13.5 43.0 40.3 +123% Special PAG 6.5 IPO dividend 10.7 9.1 4.8 36.5 29% 57%
Slide 19: Automotive Net Liquidity
Automotive Net Liquidity Sound financial position despite dividend of € ~11bn thanks to strong operating business Reported Net Cash Flow (€ 10.7bn)1 Clean NCF (€ 13.5bn) 2.3 -0.7 -2.1 11.2 -10.9 43.0 1.0 -3.5 40.3 thereof € +2.1bn thereof € 4.4bn regular working capital dividend and € 6.5bn (net2) i
Slide 20: Operating Result by Division
Operating Result by Division Passenger Cars stable despite € -3.2bn hedging effects; Commercial Vehicles doubled margin Automotive Division Financial Services Division Passenger Cars1, 2 Commercial Vehicles3 Financial Services Operating Result [€ bn] Operating Result [€ bn] Operating Result [€ bn] M
Slide 21: Operating Result Passenger Cars
Operating Result Passenger Cars Robust performance impacted by significant swing in derivatives Operating Result before special items Operating Result [€ bn] Margin [%] -2% -4.8 15.0 14.7 9.5 -2.6 15.0 -2.4 14.7 Thereof: Volume & other: +7.0 Mix: +0.5 Price: +2.0 7.9% 6.7% Jan-Dec Jan-Dec Jan-Dec V
Slide 22: Overview FY 2023 Brand Groups
Overview FY 2023 Brand Groups Group results driven by strong performance across all Brand Groups Core Progressive3 Sport Luxury Sales Revenue [€ bn] 137.8 (+21%) 69.9 (+13%) 37.3 (+8%) Operating Result1 [€ bn] 7.3 (+80%) 6.3 (-18%) 6.9 (+8%) 7.7 underlying (+17%) Operating Margin [%] 5.3 (+1.7ppts)
Slide 23: Overview FY 2023 Technology Platforms
Overview FY 2023 Technology Platforms Continued investment in transformation Software Battery Sales Revenue [€ bn] 1.1 (+35%) - (-) Operating Result1 [€ bn] -2.4 (+16%) -0.4 (+245%) Operating Margin [%] - (-) - (-) Net Cash Flow [€ bn] -3.0 (+7%) -0.8 (-14%) -4.0 underlying Delta to previous year fi
Slide 24: Brand Group Trucks – TRATON
Brand Group Trucks – TRATON 1 Commercial Vehicles Vehicle sales increased by 11% due to improved supply chains and continued high customer demand Sales Revenue [€ bn] 45.7 (+16%) Revenue growth driven by higher volume, positive market/product Operating Result1 [€ bn] 3.7 (+135%) mix, better unit pri
Slide 25: Volkswagen Group Mobility
Volkswagen Group Mobility Mobility Financial Services Devision Contract volume on previous year level Stable credit loss ratio Contracts [‘000 units] 22,275 (+1%) Normalization of Operating Result1 [€ bn] 3.8 (-33%) used car prices and operating result Credit Loss Ratio [%] 0.3 (flat) Return on Equi
Slide 26: China Joint Ventures: Proportionate Operating Result
China Joint Ventures: Proportionate Operating Result Strong finish in a very competitive environment ∑ 3,280 Key Takeaways ∑ 3,026 722 ICE market leadership ∑ 2,621 strengthened, BEV sales Q4 1,064 momentum accelerating 741 1,156 Operating results holding up Q3 690 well in challenging competitive 72
Slide 27: Strong commitment to attractive shareholder returns
Strong commitment to attractive shareholder returns Regular dividend per preferred share [€] Payout ratio [as % of Group net income attributable to Volkswagen AG shareholders] 12 29% 29% 28% Dividends paid for period 11 2021-2023 totaling 25% 10 9 20% 8.76 9.06 ∑ € 22bn 8 18% 7.56 up from 7 ∑ € 18bn
Slide 28: Volkswagen Group Outlook for 2024
Volkswagen Group Outlook for 2024 Underlying passenger car / LV market assumptions and key drivers for Volkswagen Group GLOBAL ~ +3% MARKET ~ +4% MARKET ~ +4% MARKET ~ +2% GROUP gain share GROUP keep share GROUP give share North America Europe China Significant costs for new model launches Volume in
Slide 29: Volkswagen Group Outlook for 2024
Volkswagen Group Outlook for 2024 Actual Outlook 2023 2024 1. R&D & Capex combined I 2. Including about € 4bn budgeted for M&A. 29
Slide 30: Platforms fostering group-wide cooperation
Platforms fostering group-wide cooperation developed ¥/ Platforms provide Brand groups to offer Group sets frame leading technology superior products & for interplay at competitive terms deliver scale benefits 30
Slide 31: Automotive Investment Ratio
Automotive Investment Ratio Spend levels peaking given product launches, battery / software and final phase of ICE invest R&D / Capex – Absolute and Ratio (Automotive Division) [€ bn] Target: CAPEX R&D € 170bn invest decided for next planning ∑ 13.6% ∑ 13.5% 13.5% - 14.5% round (2025-29) (€ 31.6bn)
Slide 32: Overhead Cost Program
Overhead Cost Program Increasing contribution from overhead cost program, especially from passenger cars Group overhead cost1 Group overhead cost 1 [as % of Automotive revenue] TRATON [in €bn] Power Engineering1 [in €bn] Passenger Cars [in €bn] 19.5% 17.2% 15.9% 41.4 42.6 40.0 1.2 1.2 5.2 1.0 6.6 6.
Slide 33: Overall Ambition
Overall Ambition Leading the Transformation with Integrity and based on our Values Strong brands BEV Financial strength Software ESG / Integrity AI / mobility services 33
Slide 34: TOP 10 Program 2024
TOP 10 Program 2024 01 02 03 04 05 Performance Products Regions Digitalization Software 06 07 08 09 10 Architectures Battery Mobility Sustainability Team & Solutions Organization 34
Slide 35: Accelerating momentum of new model launches
Accelerating momentum of new model launches Increased First models on PPE Model launches competitiveness Porsche Macan electric > 30 in 2024 via new products Audi Q6 e-tron & > 25 in 2025 Audi A6 e-tron: Concept car Macan Turbo Electric: Electric power consumption combined (WLTP) 20.7 – 18.8 kWh/100
Slide 36: Key levers for next strategic phase
Key levers for next strategic phase Product Performance Strategic Capital Management Strategy Programs Allocation incentivization Strong Disciplined Reduced Entrepreneur- momentum cost work investments ship Operating Profit Margin Investment Cash Flow 36
Slide 37: It's all about execution
VOLKSWAGEN GROUP IT'S ALL ABOUT EXECUTION
Slide 38: China CMD as next building block
China CMD as next building block 38
Slide 39: Backup
VOLKSWAGEN oe
Slide 40: Brand Group Core
Brand Group Core Vehicle Sales [‘000 units] Sales Revenue [€ bn] Key Takeaways +19% +21% Results driven by volume and 4,826 138 price, partially offset by product 4,069 114 and fixed costs increases Significant impact on ICE Jan-Dec Jan-Dec Jan-Dec Jan-Dec production from Slovenia flooding 2022 2023
Slide 41: Brand Group Progressive
Brand Group Progressive Vehicle Sales [‘000 units] Sales Revenue [€ bn] Key Takeaways +20% +13% Operating result supported 1,282 70 by volume but held back by lower 1,070 62 residual values and product costs Fair value of derivatives outside Jan-Dec Jan-Dec Jan-Dec Jan-Dec hedge accounting of € -1.4
Slide 42: Brand Group Sport Luxury
Brand Group Sport Luxury Vehicle Sales [‘000 units] Sales Revenue [€ bn] Key Takeaways +6% +8% Increased sales and unchanged 314 334 37 strong demand at good mix & 35 pricing with more balanced global sales footprint Jan-Dec Jan-Dec Jan-Dec Jan-Dec Upfront costs for upcoming 2022 2023 2022 2023 prod
Slide 43: Brand Group Trucks – TRATON
Brand Group Trucks – TRATON 1 Vehicle Sales [‘000 units] Sales Revenue [€ bn] Key Takeaways +11% +16% Vehicle sales increased by 11% 339 46 due to improved supply chains and 306 40 continued high customer demand Revenue growth driven by higher Jan-Dec Jan-Dec Jan-Dec Jan-Dec volume, positive market/
Slide 44: Software – CARIAD
Software – CARIAD Contracted Licenses [‘000 units] Sales Revenue [€ bn] Key Takeaways +29% +35% Negative operating result driven by 1.1 accelerated efforts to secure 18,390 0.8 14,211 upcoming software launches Total Total Operating Cash flow of 31 Dec 31 Dec Jan-Dec Jan-Dec ~ € -4bn partially offse
Slide 45: Battery Business
Battery Business Operating Result [€ bn] Key Takeaways Three sites for cell factories decided and already in ramp-up: Salzgitter, Valencia and St. Thomas in Canada -0.1 “Gamechanger technology”: Dry Coating to save ~30% energy, -0.4 ~15% floor space required and millions of Euros production costs Ja
Slide 46: Volkswagen Group Mobility
Volkswagen Group Mobility Contracts [‘000 units] Credit Loss Ratio [%] Key Takeaways Financing Leasing Insurance/Services Contract volume on +1% previous year level 21,976 22,275 = 0.32 0.32 Stable credit loss ratio 0.0 31 Dec 31 Dec Jan-Dec Jan-Dec Normalization of 2022 2023 2022 2023 used car pric
Slide 47: Capital Allocation Automotive Division FY2023
Capital Allocation Automotive Division FY20231 Balancing investments in transformation and shareholder interests [in % of total1] M&A 4% Research & Returns to shareholders Development (Cash) Focused financial steering (regular & special dividend²) of the transformation 27% 42% € 52bn Safeguarding an
Slide 48: Our path along our sustainability commitment
Our path along our sustainability commitment 2023 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1) Association Climate Review 1) First Green Hybrid Bond issued Volkswagen Group 2023 published 2) VWFS Green Finance Framework Sustainability Report 2) ISS ESG Rating: published 2022 published Volkswag
Slide 49: Underlying Operating Result
Underlying Operating Result Underlying Operating Result1 [€ bn] Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 1.3 7.1 1.2 6.8 0.7 7.1 5.6 6.3 5.1 5.7 4.9 0.0 4.9 Reported operating profit 1 4.0 Fair value of derivatives outside hedge accounting -1.1 Underlying operating profit 1 Deliveries [‘000] 2,206 2,
Slide 50: Solid Financial Foundation of Automotive Division
Solid Financial Foundation of Automotive Division Resilience further enhanced Balance Sheet Automotive Division [€ bn / in %] 31 December 31 December 31 December 2021 20221 2023 350 301 306 300 272 Other liabilities 250 131 Provisions for pensions 138 200 122 Equity (and equity ratio) 150 27 29 41 1
Slide 51: Volkswagen Group FY 2023 – Analysis by Brand and Business Field
Volkswagen Group FY 2023 – Analysis by Brand and Business Field 1. Previous year adjusted (IFRS 17) I 2. Porsche (including Financial Services): sales revenue € 40,530 (37,637) million, operating result € 7,284 (6,772) million I 3. The sales revenue and operating result of the equity-accounted compa
Slide 52: Volkswagen Group Q4 – Analysis by Brand and Business Field
Volkswagen Group Q4 – Analysis by Brand and Business Field 1. Previous year adjusted (IFRS 17) I 2. Porsche (including Financial Services): sales revenue € 10,398 (10,887) million, operating result € 1,783 (1,723) million I 3. The sales revenue and operating result of the equity-accounted companies
Slide 53: Volkswagen Group Q3 – Analysis by Brand and Business Field
Volkswagen Group Q3 – Analysis by Brand and Business Field 1. Previous year adjusted (IFRS 17) I 2. Porsche (including Financial Services): sales revenue € 9,701 (8,828) million, operating result € 1,649 (1,569) million I 3. The sales revenue and operating result of the equity-accounted companies in
Slide 54: Volkswagen Group Q2 – Analysis by Brand and Business Field
Volkswagen Group Q2 – Analysis by Brand and Business Field 1. Previous year adjusted (IFRS 17) I 2. Porsche (including Financial Services): sales revenue € 10,529 (9,879) million, operating result € 2,012 (2,013) million I 3. The sales revenue and operating result of the equity-accounted companies i
Slide 55: Volkswagen Group Q1 – Analysis by Brand and Business Field
Volkswagen Group Q1 – Analysis by Brand and Business Field 1. Previous year adjusted (IFRS 17) I 2. Porsche (including Financial Services): sales revenue € 10,097 (8,043) million, operating result € 1,840 (1,467) million I 3. The sales revenue and operating result of the equity-accounted companies i
Slide 56: Volkswagen Group
VOLKSWAGEN GROUP