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Volkswagen Group delivers solid nine-month results in a challenging environment; disruptions in production and higher product costs impact third quarter

Sales revenue growth of 16 percent year-to-date to 235.1 billion euros

Volkswagen Group achieved strong deliveries and sales revenue growth in the first nine months of FY 2023. Deliveries increased by 11 percent year-on-year to 6.7 million vehicles (Q3 2023: 2.3 million vehicles; +7.0 percent). Sales revenue grew by 16 percent to 235.1 billion euros (Q3 2023: 78.8 billion euros; +12 percent). The order bank at the end of the third quarter of 2023 remained at a high level of 1.4 million vehicles in Western Europe alone. Net liquidity in the Automotive Division remained very solid at 36.7 billion euros.

Arno Antlitz, CFO & COO of Volkswagen Group: “Overall, we are on a robust course and have again increased sales volumes and revenues in the third quarter. However, we cannot be satisfied with our profitability, which in the third quarter fell short of our ambitious targets. We are now concentrating on the systemic implementation of the 10-point plan and our cross-brand performance programs.”

Robust results in the first nine months of 2023

The Group’s operating profit decreased by 7 percent to 16.2 billion euros with an operating return on sales of 6.9 percent (Operating profit Q3 2023: 5 billion euros, +17 percent; Operating return on sales Q3 2023: 6.2 percent). This development was mainly attributable to negative valuation effects, mainly from commodity hedging outside hedge accounting, amounting to -2.5 billion euros (2022: +0.8 billion euros). Adjusted for the corresponding valuation effects, the Group’s operating profit increased by 2 billion euros to 18.7 billion euros in the first nine months of 2023. At 8.0 percent, the corresponding Operating return on sales was almost on a par with the previous year.

In the third quarter, a significant volume increase in Passenger Cars, among other things, had a positive effect. However, this was offset by costs related to the production disruption of a supplier resulting from the floods in Slovenia and higher product costs, which affected the brand group Core specifically.

Net cash flow of 4.9 billion euros in the first nine months, including 2.5 billion euros in the third quarter alone, was only slightly lower than last year despite bottlenecks in the logistics chains. Additional burdens of 1.5 billion euros in the third quarter occurred from tax repayments for previous assessment periods.

Financial outlook for fiscal 2023 updated

Volkswagen AG updated its outlook for fiscal year 2023 on 20 October 2023. The company continues to anticipate that deliveries to customers will stand between 9 and 9.5 million vehicles. Volkswagen continues to expect Group sales revenue to be 10 to 15 percent higher than the prior-year figure.

The further development of the commodity markets remains unpredictable. With regard to the effects of the fair value remeasurement of hedging transactions outside hedge accounting on operating result, from today’s perspective the company does no longer expect to be able to compensate for the effects of EUR -2.5 billion accounted for in the first nine months by the end of the year. As a result, the company now expects operating result for the full year 2023 to be around the level of the previous year before special items, which was around EUR 22.5 billion (previously: operating return on sales between 7.5 and 8.5 percent). This forecast includes the effects of the fair value remeasurement of hedging instruments accumulated in the first nine months of the year.

Volkswagen AG continues to anticipate a significant to strong year-on-year increase in net cash flow of the Automotive Division. Net liquidity in the Automotive Division is still expected to be between EUR 35 billion and EUR 40 billion.

Electrification strategy moves forward

Deliveries of battery electric vehicles (BEV) increased by 45 percent to 531,500 vehicles in the first nine months of the year. Their share of total deliveries increased to 7.9 percent in the first nine months and represent a 9.0 percent share in the third quarter. This means that the targeted annual range of between 8 and 10 percent of total deliveries remains firmly in sight. From January to September, Europe remained the main BEV growth driver, with an increase of 61 percent to 341,100 vehicles. In the U.S., BEV deliveries rose by 74 percent to 50,300 units, and in China, they exceeded the previous year’s level with an increase of 4 percent to 117,100 units.

IONWAY, a joint venture between Volkswagen-owned battery maker PowerCo and Belgian materials technology group Umicore, has announced the location for its cathode material manufacturing plant: Nysa, in Poland. IONWAY is the first partnership of its kind, producing regional, transparent, and sustainable battery materials. By the end of the decade, the partners aim to produce cathode and precursor materials for 160 gigawatt hours of cell capacity per year. This corresponds to an annual production capacity sufficient for around 2.2 million fully electric vehicles. The cathode materials required by the PowerCo cell factory in Salzgitter at the start of production in 2025 will be secured by Umicore’s existing production capacities in Nysa.

Competitive product portfolio

The all-electric ID.701, which has been available to order for a few weeks now, was voted “German Car of the Year 2024” by a jury of German and international motor journalists. This award also confirms the performance of the Volkswagen Group’s modular e-drive system (MEB).

In September, Volkswagen unveiled the new generation of the Tiguan02, one of the most successful Volkswagen models of the present day. The third generation of the best-selling SUV will roll off the production line in Wolfsburg starting in Fall 2023 and go on sale in the first quarter of 2024.

Simultaneously, Volkswagen has launched pre-sales of the upgraded ID.4 and ID.5. The two electric VW models come with major product upgrades, including a new infotainment system and a new electric drive with improved performance and greater range.

Audi launched several models in its Q8 family in the third quarter. The SQ8 e-tron03 is on the market as the new top model of the all-electric SUV and crossover. This is contrasted by the new Q804 und the new SQ805. The SUV coupés with their modern, powerful TDI and TFSI units made their debut in September 2023.

Porsche increased the hybrid range of the Cayenne series, the brand’s best-selling model, to a total of three models06,07,08 in September 2023. These new models are part of the third generation of the successful SUV, which has been fundamentally enhanced through far-reaching measures to the power train, design and equipment.

Group makes decisive progress with plant allocation plan

Volkswagen Group has finalized the cornerstones of the production plans for its sites in Wolfsburg, Hanover, Osnabrück, Zwickau, Ingolstadt and Neckarsulm, as well as plants in Września and Poznań, Poland and Brussels, Belgium, early and in advance of the end of the planning round. With this, these sites get a basic utilization and an economic perspective for the coming years. In the next step, the budgets required for this will be defined and allocated during the planning round. The cornerstones are strategic product planning, sales and earnings planning, and the resulting capacity utilization of the plants.

Group-wide performance programs aim to strengthen competitiveness of all brands

In addition, all the Group’s brands have launched ambitious performance programs. With these programs, the Group aims to secure a long-term operating return on sales of over 10 percent. Over the next few weeks, the development potential of the brands will be identified and implemented swiftly. The performance programs are being implemented on an ongoing basis to enable all brands and brand groups to respond specifically to market changes and make them more resilient to external influences on earnings.

Sustainability: Responsible Raw Materials Report published and Green Bonds issued

Transparency in supply chains is an important tool for greater sustainability in vehicle production. In July 2023, Volkswagen Group published its third Responsible Raw Materials Report, reporting in detail on progress made in transparency and risk mitigation in raw materials supply chains. The focus was on employing measures to comply with human rights-informed due diligence requirements and empower closer cooperation with battery suppliers and their suppliers.

In the third quarter of 2023, Volkswagen Group issued its first Green Hybrid Bond with a volume of 1.75 billion euro. Volkswagen Leasing GmbH also placed its first Green Bond with a volume of 2 billion euros on the marked based on the Green Finance Framework.

Brand Group results

Core (Volkswagen, Volkswagen Commercial Vehicles, Škoda, SEAT/CUPRA)

Sales revenues in the brand group Core increased by 24 percent to 101 billion euros in the first nine months (Q3 2022: 32.3 billion euros; +13.9 percent). Operating profit of 5 billion euros grew by 34 percent year-on-year (Q3 2023: 1.2 billion euros, +11.7 percent). Despite stable prices, the strong sales increase in the third quarter was not fully reflected in operating profit due to higher product costs and a less favorable mix, resulting in a weaker operating return on sales of 4.9 percent. Among other things, this was due to a negative impact on earnings because of interruptions to production by a supplier resulting from the floods in Slovenia in the third quarter.

The negative effects were particularly evident in the Volkswagen brand’s operating return on sales of 3.4 percent in the first nine months (2022: 4.7 percent). However, Škoda’s 6.4 percent (2022: 5.6 percent), SEAT/CUPRA’s 4.6 percent (2022: -0.1 percent) and Volkswagen Commercial Vehicles’ 6.0 percent (2022: 4.5 percent) saw improvements in profitability, in some cases significantly, compared to the prior-year quarter.

Progressive (Audi, Lamborghini, Bentley, Ducati)

The brand group Progressive increased its sales revenue by 13 percent year-to-date to 50 billion euros (Q3 2023: 16.2 billion euros, +10.3 percent). Operating return on sales reached 9.1 percent (Q3 2023: 7.4 percent). Operating profit after three quarters was 4.6 billion euros (2022: 6 billion euros), with most of the decline attributable to negative valuation effect, particularly from commodity hedges amounting to 0.9 billion euros. The underlying operating return on sales in the first nine months was 10.9 percent (2022: 12.8 percent).

Sport Luxury (Porsche)

In the brand group Sport Luxury, Porsche’s operating return on sales in the Automotive Division remained at a high level overall in the first nine months at 18.8 percent (Q3 2023: 18.0 percent). Operating profit increased by 9 percent (Q3 2023: +7.7 percent) due to higher vehicle sales and positive product mix and price effects. Net cash flow in the Automotive Division reached 3.4 billion euros.

Trucks (MAN, Scania, Navistar, Volkswagen Truck & Bus)

TRATON increased its sales revenue in the vehicle and services business by 19 percent to 33 billion euros (Q3 2023: 11 billion euros, +6.4 percent). Sales growth was driven by strong volumes, a positive price/mix ratio and growth in vehicle services. Operating profit in the vehicle and services business improved significantly to 2.7 billion euros (Q3 2023: 0.9 billion euros). Operating return on sales in the vehicle and services business increased to 8.0 percent in the first nine months (Q3 2023: 7.8 percent). The main effects behind this were an improved fixed cost absorption resulting from higher volumes and positive price/mix effects, which offset higher input costs.

Financial Services

In the Financial Services Division, sales revenues increased by 8 percent year-to-date to 37.6 billion euros (Q3 2023: 13.4 billion euros). Operating profit decreased by 40 percent to 2.5 billion euros (Q3 2023: 0.8 billion euros). The decline was mainly the result of higher interest expenses and adverse exchange rate trends.


CARIAD improved sales revenue by 29 percent in the first nine months (Q3 2023: +24 percent). Negative operating profit was impacted by increased efforts to secure upcoming software launches. Negative operating cash flow of approximately 2.5 billion euros was partially offset by an intercompany tax refund of 1 billion euros.

Key figures Volkswagen Group

Q3Q1 – 3
Volume Data2 in thousands
Deliveries to customers (units)2,3442,181+ 7.46,7166,056+ 10.9
Vehicle sales (units)2,3142,236+ 3.56,7626,243+ 8.3
Production (units)2,1732,237–2.86,8646,397+ 7.3
Employees (on Sept. 30, 2023/Dec. 31, 2022)680.3675.8+ 0.7
Financial Data (IFRSs), € million
Sales revenue78,84570,673+ 11.6235,102202,885+ 15.9
Operating result before special items4,8944,260+ 14.916,24117,439–6.9
Operating return on sales before special items (%)
Special itemsx0–360x
Operating result4,8944,260+ 14.916,24117,079–4.9
Operating return on sales (%)
Earnings before tax5,8012,937+ 97.517,70016,992+ 4.2
Return on sales before tax (%)
Earnings after tax4,3472,135x12,86812,789+ 0.6
Automotive Division3
Total research and development costs5,3664,538+ 18.315,57213,826+ 12.6
R&D ratio (%)
Cash flows from operating activities7,9968,652–7.621,73322,256–2.4
Cash flows from investing activities attributable to operating activities45,5285,369+ 3.016,79516,679+ 0.7
of which: capex3,0983,089+ 0.38,7187,177+ 21.5
capex/sales revenue (%)
Net cash flow2,4683,284–24.84,9385,576–11.5
Net liquidity at Sept. 3036,71231,553+ 16.3

Prior-year figures adjusted (see disclosures on IFRS 17).
Volume data including the unconsolidated Chinese joint ventures. These companies are accounted for using the equity method. Prior-year deliveries have been updated to reflect subsequent statistical trends.
Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
4 Excluding acquisition and disposal of equity investments: Q3 €5,630 (5,356) million, Q1 – 3 €16,284 (14,050) million.

Key figures by brand group and business field from January 1 to September 30

Vehicle salesSales revenueOperating result
Thousand vehicles/€ million20232022202320221202320221
Core brand group3,5752,957101,06081,3564,9853,720
Progressive brand group94576650,39044,5614,5956,282
Sport Luxury brand group225022127,78524,4655,2324,748
TRATON Commercial Vehicles25021833,34927,9642,662954
MAN Energy Solutions2,8762,517292210
Equity-accounted companies in China32,1502,339
Volkswagen Financial Services37,59532,7282,5354,381
Volkswagen Group before special items16,24117,439
Special items0–360
Volkswagen Group6,7626,243235,102202,88516,24117,079
Automotive Division56,7626,243195,060168,19113,22612,908
of which: Passenger Cars Business Area6,5126,025158,835137,71110,27611,746
Commercial Vehicles Business Area25021833,34927,9642,661956
Power Engineering Business Area2,8762,517289207
Financial Services Division40,04234,6933,0154,171

Prior-year figures adjusted (see disclosures on IFRS 17).
Including Porsche Financial Services: sales revenue €30,132 (26,750) million, operating result €5,501 (5,049) million.
The sales revenue and operating result of the equity-accounted companies in China are not included in the consolidated figures; the share of the operating result generated by these companies amounted to €1,880 (2,558) million.
In the operating result, mainly intragroup items recognized in profit or loss, in particular from the elimination of intercompany profits; the figure includes depreciation and amortization of identifiable assets as part of purchase price allocation, as well as companies not allocated to the brands.
Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.

SOURCE: Volkswagen Group

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