Summary of business development and economic position

The Board of Management of Volkswagen AG considers business development and the economic position to have been positive overall.

In spite of the challenges presented by the diesel issue and public discussion pertaining to diesel vehicles, the persistently difficult market conditions and the new WLTP test procedure, we slightly lifted our deliveries to customers to 10.8 million vehicles, thus achieving a new sales record. We saw growth in Europe, South America and the Asia-Pacific region. The Group’s sales revenue rose by 2.7%, within the expected range. Operating profit before special items amounted to €17.1 billion; at 7.3% the operating return on sales before special items was within the range forecast at the beginning of the year of 6.5–7.5%. Due to special items resulting from the diesel issue, the operating return on sales of 5.9% was moderately below the forecast range, as recently projected.

Our efforts to ensure the Company’s future viability are reflected in research and development costs; at 6.8% the R&D ratio in the Automotive Division was within the expected range.

At 6.6%, the Automotive Division’s ratio of capex to sales revenue was also within the forecast range as well. As expected, the Automotive Division’s net cash flow considerably exceeded the comparable prior-year figure, but was negative at €−0.3 billion. This was particularly due to higher-than-expected cash outflows attributable to the diesel issue, owing to fines resulting from the administrative fine order issued by the public prosecutor's offices in Braunschweig and Munich II. In combination with the acquisition of MAN shares tendered, this resulted in a year-on-year decline in net liquidity, which stood at €19.4 billion.

The return on investment (ROI) in the Automotive Division of 11.0% was lower than in 2017 but exceeded the minimum required rate of return on invested capital.

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FORECAST VERSUS ACTUAL FIGURES

 

 

Actual 20171

 

Original forecast for 2018

 

Adjusted forecast for 2018

 

Actual 2018

1

Adjusted; see disclosures about the application of new International Financial Reporting Standards.

 

 

 

 

 

 

 

 

 

Deliveries to customers

 

10.7 million

 

moderate increase

 

moderate increase

 

10.8 million

Volkswagen Group

 

 

 

 

 

 

 

 

Sales revenue

 

€229.6 billion

 

increase of up to 5%

 

increase of up to 5%

 

€235.8 billion

Operating return on sales before special items

 

7.4%

 

6.5–7.5%

 

6.5–7.5%

 

7.3%

Operating return on sales

 

6.0%

 

6.5–7.5%

 

moderately below 6.5%

 

5.9%

Operating result before special items

 

€17.0 billion

 

within the forecast range

 

within the forecast range

 

€17.1 billion

Operating result

 

€13.8 billion

 

within the forecast range

 

within the forecast range

 

€13.9 billion

Passenger Cars Business Area

 

 

 

 

 

 

 

 

Sales revenue

 

€157.3 billion

 

increase of up to 5%

 

increase of up to 5%

 

€160.8 billion

Operating return on sales before special items

 

8.0%

 

6.5–7.5%

 

6.5–7.5%

 

7.7%

Operating return on sales

 

5.9%

 

6.5–7.5%

 

moderately below 6.5%

 

5.7%

Operating result before special items

 

€12.5 billion

 

within the forecast range

 

within the forecast range

 

€12.4 billion

Operating result

 

€9.3 billion

 

within the forecast range

 

within the forecast range

 

€9.2 billion

Commercial Vehicles Business Area

 

 

 

 

 

 

 

 

Sales revenue

 

€35.2 billion

 

increase of up to 5%

 

increase of up to 5%

 

€36.7 billion

Operating return on sales

 

5.4%

 

5.0–6.0%

 

5.0–6.0%

 

5.4%

Operating result

 

€1.9 billion

 

within the forecast range

 

within the forecast range

 

€2.0 billion

Power Engineering Business Area

 

 

 

 

 

 

 

 

Sales revenue

 

€3.3 billion

 

increase of up to 5%

 

increase of up to 5%

 

€3.6 billion

Operating result

 

€−0.1 billion

 

lower loss

 

around the prior-year level

 

€−0.1 billion

Financial Services Division

 

 

 

 

 

 

 

 

Sales revenue

 

€33.7 billion

 

increase of up to 5%

 

increase of up to 5%

 

€34.8 billion

Operating result

 

€2.7 billion

 

at prior-year level

 

at prior-year level

 

€2.8 billion

R&D ratio in the Automotive Division

 

6.7%

 

6.5–7.0%

 

6.5–7.0%

 

6.8%

Capex/sales revenue in the Automotive Division

 

6.5%

 

6.5–7.0%

 

6.5–7.0%

 

6.6%

Net cash flow in the Automotive Division

 

€−6.0 billion

 

significant increase, positive

 

significant increase, positive

 

€−0.3 billion

Net liquidity in the Automotive Division

 

€22.4 billion

 

moderate increase

 

moderate decline

 

€19.4 billion

Return on investment (ROI) in the Automotive Division

 

12.1%

 

slight increase, >9%

 

slight decline, >9%

 

11.0%