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Volkswagen Increases Operating Profit by 15% in the First 9 Months

October 31st, 2008
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The Volkswagen Group increased its deliveries, sales revenue and profit in the first nine months of the current fiscal year despite the adverse macroeconomic environment and the worsening financial crisis. Operating profit improved significantly by 15% to €4.9 billion. At €3.7 billion, Europe's largest automobile manufacturer exceeded its prior-year profit after tax by 28.5%. "Volkswagen has performed well so far in a difficult environment. With its young and environmentally friendly model range, flexible production, solid finances and an outstanding team, the Group's foundations are sound", said Prof. Dr. Martin Winterkorn, Chairman of Volkswagen Aktiengesellschaft's Board of Management today at the presentation of the Company's financial results for the first nine months.

Sales revenue climbed by 5.5% to €85.4 billion in the period from January to September. The Volkswagen Group increased deliveries to 4.8 million vehicles, beating the previous year's figure by 3.9%. Its share of the passenger car market worldwide rose to 10.1% (9.6%).

The Volkswagen Passenger Cars brand increased its operating profit by 37% to €1.9 billion. Volume increases and product cost optimization measures more than offset the impact of the unfavourable exchange rates. Equally, improvements in unit sales and product costs at Audi led to a rise in operating profit to €2.1 billion (€1.8 billion). The  figures for the Lamborghini brand contained in this also recorded positive growth. Škoda generated an operating profit of €455 million (€526 million). The negative exchange rate situation for the Czech koruna again impacted earnings. Driven by higher unit sales of 10.5% and productivity increases and cost optimization, Volkswagen Commercial Vehicles almost doubled its operating profit to €283 million (€148 million). SEAT recorded an operating loss of €30 million (€-12 million). The critical situation in the Spanish passenger car market in particular made itself felt here. The Bentley brand generated an operating profit of €82 million (€107 million). With a stable operating profit of €744 million, the Volkswagen Financial Services Division again made a significant contribution to the Group's profit.

Scania was consolidated for the first time as the Group's ninth brand. On July 22, 2008, Volkswagen increased its share of Scania's voting rights to 68.6%.

Even after the acquisition of the Scania shares, the Automotive Division's net liquidity remained at a high level as of the end of September, at €11.8 billion. As a result of investments in new production facilities, and in particular in models to be launched in 2008 and 2009, the ratio of investments in property, plant and equipment (capex) to sales revenue rose to 4.9% (3.6%).

For the current year, the Board of Management continues to expect that deliveries, sales revenue and operating profit will exceed the previous year's figures. "We are confirming our forecast for 2008, despite the dramatic deterioration in global economic conditions and the automotive industry environment in recent months", emphasised CFO Hans Dieter Pötsch. The Volkswagen Group is set to benefit in the current environment from its high cost and investment discipline, as well as its solid liquidity position and conservative refinancing policy.


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