Volkswagen Ag · XETR:VOW
Volkswagen — Q3 2022 Earnings Presentation
43 slides from Volkswagen's earnings presentation, Oct 28, 2022
Slide 1: Leading the Transformation
Leading the Transformation Investor, Analyst and Media Call Q3 2022 October 28, 2022
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: Investor, Analyst and Media Call Q3 2022 presenters
Investor, Analyst and Media Call Q3 2022 Oliver Blume Arno Antlitz Rolf Woller Sebastian Rudolph Chief Executive Chief Financial Officer & Head of Group Head of Group Officer Chief Operating Officer Treasury & Investor Relations Communications Volkswagen AG Volkswagen AG Volkswagen AG Volkswagen AG
Slide 4: Agenda
Agenda CEO Agenda Highlights Financials CFO Agenda 4
Slide 5: Volkswagen AG – Financial Highlights: Jan-Sept 2022
Volkswagen AG – Financial Highlights: Jan-Sept 2022 Year-to-date Operating Result Q3 Operating Result and and Margin1 Margin2 €17.5bn / 8.6% €4.3bn / 6% China recovery in Q3 Successful Porsche IPO Largest IPO ever carried 26% increase in vehicle out in Europe in terms of deliveries market capitaliza
Slide 6: Oliver Blume's personal five principles to lead the Volkswagen Group
Oliver Blume’s personal five principles to lead the Volkswagen Group 1 BRANDS 2 PRODUCTS 3 PEOPLE 4 ENTREPRENEURSHIP 5 SUSTAINABILITY 6
Slide 7: Challenges
CHALLENGES 7
Slide 8: Top Volkswagen Group Program
TOP 10 Volkswagen Group Program 1 PLANNING ROUND 6 SSP STRATEGY / TECHNOLOGY 2 PRODUCTS 7 BATTERY / CHARGING / ENERGY 3 CHINA 8 MOBILITY SOLUTIONS 4 NORTH AMERICA 9 SUSTAINABILITY 5 CARIAD 10 CAPITAL MARKET 8
Slide 9: Agenda
Agenda CEO Agenda Highlights Financials CFO Agenda 9
Slide 10: Key Highlights 9M/Q3 2022
Key Highlights 9M/Q3 2022 A6 Avant e-tron ID. Buzz Taycan GTS Enyaq Coupé RS Sport Turismo ID.5 Pro • Solid 9 months results; RoS on track for full year guidance; continued robustness despite mounting headwinds from higher material costs incl. energy costs 9 months Revenues up around 9% despite de
Slide 11: Deliveries in 2022 improving further towards end of Q3
Deliveries in 2022 improving further towards end of Q3 Deliveries Volkswagen Group Key Takeaways [‘000 units / per month] 2021 • Semiconductor shortage, Covid-19 and Ukraine-Russia 2022 conflict impacts deliveries of first nine months 1,000 900 • BEV share is increasing 800 • End of Q3 is showing de
Slide 12: Agenda
Agenda CEO Agenda Highlights Financials CFO Agenda 12
Slide 13: Solid figures despite lower sales are testimony to our robust business model
Solid figures despite lower Sales are Testimony to our robust Business Model January to September 2019 vs. 2021 vs. 2022 Vehicle Sales Sales Revenue Operating Result and Margin 1 [m vehicles] [€ bn] [€ bn] Margin [%] +9% 7.9% 7.6% 8.6% 203.0 186.6 186.6 17.5 14.8 14.2 -22% 7.984 6.466 6.243 Jan - Se
Slide 14: Automotive Net Cash in Q3 impacted by changes in inventories
Automotive Net Cash in Q3 impacted by Changes in Inventories in Preparation for higher Sales in Q4; Automotive Net Liquidity remains solid (1/2) January to September 2019 vs. 2021 vs. 2022 Reported Net Cash Flow 1 'Clean' Net Cash Flow 1, 2 Net Liquidity 1 [€ bn] [€ bn] [€ bn] 31.6 25.6 19.8 12.4 10
Slide 15: Automotive Net Liquidity remains solid (2/2)
Automotive Net Liquidity remains solid (2/2) [€ bn] Reported Net Cash flow (€ 5.6bn) Clean Net Cash flow (€ 9.2bn) -1.0 2.0 -2.6 1.1 31.6 -3.8 7.2 1.9 26.7 thereof € -6.8bn increase in inventories 31 Dec 2021 Operating Dividend of Diesel M&A Hybrid Capital Dividend to Other 30 Sep 2022 Business chin
Slide 16: Solid Margins in Passenger Cars and Financial Services Division
Solid Margins in Passenger Cars and Financial Services Division January to September 2019 vs. 2021 vs. 2022 Automotive Division Financial Services Division Passenger Cars 1, 2 Commercial Vehicles 3 Financial Services Operating Result [€ bn] Operating Result [€ bn] Operating Result [€ bn] Margin [%]
Slide 17: Operating Result Passenger Cars – EBIT Bridge
Operating Result Passenger Cars (before special items) – EBIT Bridge January to September 2021 vs. 2022 Operating Result [€ bn] [€ bn] incl. Margin [%] -0.3 7.5% 8.8% -3.7 12.1 8.2 -1.8 12.1 9.7 9.7 Thereof in Q3: 1 Russia -0.6 Volume -2.6 Porsche IPO -0.4 Mix +6.3 Price +4.5 Jan - Sep Jan - Sep Jan
Slide 18: Volume Brand Group Performance
Volume Brand Group Performance January to September 2021 vs. 2022 Key Takeaways Volume Brand Group 1 • VW Brand: 4.7% 9 months margin, Q3 at 3.2% margin seasonally weak; burdened by material costs. Positive contribution from price and mix as Vehicle Sales [‘000 units] Sales Revenue [€ m] well as imp
Slide 19: Premium Brand Group Performance
Premium Brand Group Performance January to September 2021 vs. 2022 Key Takeaways Premium Brand Group 1, 2 • Premium Brand Group well under way; Lamborghini and Bentley performed strong Vehicle Sales [‘000 units] Sales Revenue [€ m] • Audi Brand: 12.8% 9 months margin, operating profit continued to b
Slide 20: Sport & Luxury Brand Group Performance
Sport & Luxury Brand Group Performance January to September 2021 vs. 2022 Key Takeaways Sport & Luxury Brand Group 1 • Porsche’s operating margin advanced to 19.4% on higher volume, improved pricing and better product mix as well as positive FX effects Vehicle Sales [‘000 units] Sales Revenue [€ m]
Slide 21: Software – CARIAD
Software – CARIAD January to September 2021 vs. 2022 Key Takeaways CARIAD • Sales Revenue improved by 65% driven by license revenues with brand groups Contracted Licenses [‘000 units] Sales Revenue [€ m] • Operating Result impacted by higher development costs and personnel costs 13,056 422 • Net Cas
Slide 22: Commercial Vehicles – TRATON Operations
Commercial Vehicles – TRATON Operations January to September 2021 vs. 2022 Key Takeaways TRATON Operations 1 • Unit sales up 11%, supported by Navistar consolidation (-13% excl. Navistar 2) Vehicle Sales [‘000 units] Sales Revenue [€ m] • Results significantly affected by supply shortages and produc
Slide 23: Financial Services Division Performance
Financial Services Division Performance January to September 2021 vs. 2022 Key Takeaways Volkswagen Financial Services • Stable number of contracts and solid growth in leasing business despite supply constraints Contracts [in ‘000 units] Credit Loss Ratio [in %] • No significant increase in credit r
Slide 24: China Joint Ventures Proportionate Operating Result
China Joint Ventures Proportionate Operating Result 2020, 2021 and Q3 2022 Key Takeaways [€ m] • 9 months proportionate Operating FY 3,602 Result clearly above 2021 and close to Q3 2020 levels Q2 3,026 • Improvement in Q3 driven by chip Q1 availability, boost from government incentives & pent up sal
Slide 25: Volkswagen Group Outlook for 2022: Financial KPIs confirmed
Volkswagen Group Outlook for 2022: Financial KPIs confirmed 1 Actual Outlook 2020 2021 2022 1 Deliveries to customers Similar level as prior year m vehicles 9.3 8.9 Sales revenue 222.9 250.2 8% to 13% higher than the prior-year figure € bn Operating return on sales 2 In the range of 7.0% to 8.5% % 4
Slide 26: Agenda
Agenda CEO Agenda Highlights Financials CFO Agenda 26
Slide 27: Proof Points of our Strategy – CFO Perspective
Proof Points of our Strategy CFO Perspective Strategic CFO Targets CFO Focus Areas Focus on product transformation towards electric Focused financial steering of the transformation Digitalization: Advancing in software/services (allocation of resources to future topics) Group-wide cost & efficiency
Slide 28: BEV Sales and Share expected to rise further in Q4
BEV Sales and Share expected to rise further in Q4 Quarterly Development Outlook BEV Share [%]; BEV Deliveries [‘000 units] 8.3% 7-8% 6.8% 6.0% 6.2% 5.2% 5.1% 4.4% 2.5% 60 99 111 118 122 149 160 453 Q1 Q2 Q3 Q4 2021 2022e 2021 2022 ID. Buzz Pro: Power consumption in kWh/100 km: combined 21.7 – 20.6;
Slide 29: Financing the Transformation: Overhead Cost Program on Track
Financing the Transformation: Overhead Cost Program on Track; so far allowing for compensation of Fix Cost increase despite Inflation Headwinds1 Group-wide Overhead Cost Program (w/o R&D, CAPEX), Deliveries to customers Plant program [in m units] (Productivity & Overhead) 11 Passenger Cars 8.9 TRATO
Slide 30: Increase in R&D especially for Software compensated by CAPEX Discipline
Increase in R&D especially for Software compensated by CAPEX Discipline R&D / Capex – Absolute and Ratio (Automotive Division) Reducing complexity / [%, €] CAPEX R&D variances ∑ 13.3% ∑ 12.7% ∑ 12.5% ∑ ~13.5% 1 (€ 28.3bn) (€ 26.1bn) ∑ 11.4% (€ 21.0bn) (€ 17.3bn) Focus on synergies 6.6% 5.1% 4.3% 3.9
Slide 31: Financing the Transformation: Porsche IPO Proceeds
Financing the Transformation Strategic CFO Targets Porsche IPO Proceeds 1 [€ bn] SCHEMATIC Focused financial steering of the transformation 10.1 19.5 (allocation of resources to future topics) 9.4 9.9 0.6 4 Accelerating the -9.6 Transformation Safeguarding and 9.3 strengthening our financial foundat
Slide 32: Steering Matrix: Focus towards Brand Groups and Value Drivers
Steering Matrix We shift the Focus towards Brand Groups and Value Drivers SCHEMATIC Strong brands Volume Premium Sport Trucks Proof points as of 9M 2022: + • BEV sales significantly up Value drivers vs prior year • Product launch ID. Buzz BEV Hardware Software • Cariad: Horizon Robotics JV to streng
Slide 33: Leading the Transformation with Integrity and Based on our Values
Overall Ambition Leading the Transformation with Integrity and Based on our Values Strong brands Financial strength BEV ESG / Software Integrity AI / mobility services 33
Slide 34: Backup
VOLKSWAGEN 34
Slide 35: Financial Calendar
Financial Calendar Extraordinary General Meeting December 16, 2022 Dividend Entitlement Date December 16, 2022 First Ex-dividend Price Quotation December 19, 2022 Dividend Payment Date 1 January 9, 2023 Annual Press Conference March 14, 2023 1 subject to EGM approval 35
Slide 36: Analysis by Brand and Business Field Q1 2022
Volkswagen Group – Analysis by Brand and Business Field January to March 2022 (Q1) VEHICLE SALES (`000) SALES REVENUE (€ m) OPERATING RESULT (€ m) OPERATING MARGIN (%) Q1 2022 Q1 2021 Q1 2022 Q1 2021 Q1 2022 Q1 2021 Q1 2022 Q1 2021 Volume brand group 918 1,197 24,361 27,354 877 1,366 3.6 5.0 Volkswa
Slide 37: Analysis by Brand and Business Field Q2 2022
Volkswagen Group – Analysis by Brand and Business Field April to June 2022 (Q2) VEHICLE SALES (`000) SALES REVENUE (€ m) OPERATING RESULT (€ m) OPERATING MARGIN (%) Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Volume brand group 1,038 1,191 28,649 27,992 1,769 1,508 6.2 5.4 Volksw
Slide 38: Analysis by Brand and Business Field Q3 2022
Volkswagen Group – Analysis by Brand and Business Field July to September 2022 (Q3) VEHICLE SALES (`000) SALES REVENUE (€ m) OPERATING RESULT (€ m) OPERATING MARGIN (%) Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Volume brand group 1,001 783 28,346 19,531 1,074 -396 3.8 -2.0 Volk
Slide 39: Analysis by Brand and Business Field 9M 2022
Volkswagen Group – Analysis by Brand and Business Field January to September 2022 (9M) VEHICLE SALES (`000) SALES REVENUE (€ m) OPERATING RESULT (€ m) OPERATING MARGIN (%) 9M 2022 9M 2021 9M 2022 9M 2021 9M 2022 9M 2021 9M 2022 9M 2021 Volume brand group 2,957 3,171 81,356 74,876 3,720 2,478 4.6 3.3
Slide 40: Financial Strength of Automotive Division
Financial Strength of Automotive Division Resilience further enhanced Balance Sheet Automotive Division [€ bn] 31 Dec 2019 31 Dec 2021 30 September 2022 312.7 Equity and equity ratio 271.9 Provisions for pensions 246.8 147.8 Other liabilities 109.0 47% 92.8 40% 38% 40.8 26.6 40.6 Goodwill 1 [€ bn] 2
Slide 41: Automotive Division – Net Cash Flow January to September 2022
Automotive Division – Net Cash Flow 1 January to September 2022 [€ bn] 9.2 2.6 5.6 1.0 Reported net cash flow Diesel outflow Aquisition and disposal Clean net cash flow of equity investments 1 Including allocation of consolidation adjustments between Automotive and Financial Services divisions 41
Slide 42: Continued resilient Operating Performance
Continued resilient Operating Performance Development of Sales, Operating Result and Margin Underlying Operating Result 1, 2 [€ bn] Q1 2022 Q2 2022 Q3 2022 9M 2022 Reported operating profit 1 17.5 0.8 16.7 Fair value derivatives outside hedge accounting Underlying operating profit 1 8.5 3.2 7.1 5.3
Slide 43: What is in our Guidance?
What is in our Guidance? Elements already included in GUIDANCE for What is not covered by our GUIDANCE 2022 for the operating profit • A resurgence of the COVID-19-Pandemic situation • Favorable Price and Mix continue to support operating results • The guidance presented is also subject to the furth