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Volkswagen increases sales revenue and profit

Group sales revenue up by 6.9 percent to EUR 186.6 billion

In the first nine months of the current financial year, the Volkswagen Group continued to perform well in a difficult market environment. Between January and September sales revenue grew by 6.9 percent year-on-year to EUR 186.6 (174.6) billion. Operating profit before special items increased significantly by 11.2 percent to EUR 14.8 (13.3) billion, mainly due to improvements in the mix and in the fair value on de-rivatives. The operating return on sales before special items stood at 7.9 (7.6) percent. Special items, which were due to legal risks in connection with the diesel issue, amounted to EUR -1.3 (-2.4) billion after nine months. Operating profit (after special items) improved by 24.5 percent to EUR 13.5 (10.9) billion, bringing the operating return on sales up to 7.3 (6.2) percent. Profit before tax rose by 16.9 percent to EUR 14.6 billion.

“The Volkswagen Group achieves a good performance amid a challenging market environment. The performance in the first nine months of the financial year makes us optimistic that we will achieve our full-year targets for 2019,” said Frank Witter, Member of the Board of Management of Volkswagen AG responsible for Finance and IT. “Continuous improvement in our profitability is key to mastering our ongoing transformation on our own. We will continue to work systematically towards this goal.”

Outlook for sales revenue and operating return on sales confirmed

Despite the gain in market share, the Volkswagen Group anticipates that vehicle markets will contract faster than previously anticipated in many regions of the world. In view of this situation, Volkswagen now expects deliveries to customers in 2019 to be on a level with the previous year. Up to now, a slight increase had been expected. The Group nevertheless confirms its forecasts for sales revenue and profit: the Volkswagen Group’s sales revenue will exceed the prior-year figure by as much as 5 percent. In terms of the Group’s operating profit before special items, an operating return on sales of between 6.5 and 7.5 percent is predicted. Including special items, the Group projects an operating return on sales at the lower end of the range announced.

Net liquidity in the Automotive Division affected by transition to IFRS 16

Net liquidity in the Automotive Division stood at EUR 19.8 billion at the end of September, despite the negative impact of the initial application of the accounting standard IFRS 16 that amounted to EUR 5.3 billion. At the end of December 2018, net liquidity amounted to EUR 19.4 billion. Automotive Division’s net cash flow is at EUR 8.6 billion, thus EUR 5.1 billion higher than the low fig-ure for the prior-year period. Amounting to EUR 10.7 billion for the first nine months, research and development costs were up 8.6 percent on the prior-year period, giving an R&D ratio of 6.8 (6.6) percent. Capex in the Automotive Division amounted to EUR 8.2 (7.9) billion. The ratio of capex to sales revenue in the Automotive Division therefore fell slightly to 5.2 (5.3) percent.

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SOURCE: Volkswagen

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