Volkswagen the new Touareg. The past fiscal year has brought the Volkswagen Group a good deal closer to implementing its “Strategy 2018”, as well as being the most successful year in its history. Courtesy of Volkswagen

Wolfsburg, Germany - March 10, 2011

Following the most successful year in its history, the Volkswagen Group aims to continue its sustained growth path in 2011 and the following years and to further expand its market position.

Volkswagen Annual Press Conference 2011 Courtesy of Volkswagen

“Our new models, environmentally friendly technologies and modular toolkits are now laying the best possible foundations for profitable growth”, said Prof. Dr. Martin Winterkorn, CEO of Volkswagen Aktiengesellschaft, on Thursday during the presentation of the Company’s 2010 financial results in Wolfsburg.

The Volkswagen Group Courtesy of Volkswagen

“Our multibrand group has the technological expertise, the necessary financial strength and the right team. These allowed us to move into the fast lane in 2010 – and that is where we intend to stay in the current year”, he continued.

Volkswagen the Fox Courtesy of Volkswagen

The past fiscal year has brought the Volkswagen Group a good deal closer to implementing its “Strategy 2018”, as well as being the most successful year in its history.

Volkswagen Polo Courtesy of Volkswagen

The Group’s unit sales, market share, image ratings, earnings and financial strength all improved.

Volkswagen the Golf GTI Courtesy of Volkswagen

“This is further impressive proof of our Group’s robustness and competitiveness. We significantly increased our profitability, which shows that our decision to continue our policy of disciplined cost and investment management was the right one”, said CFO Hans Dieter Pötsch.


Group figures for 2010


The Volkswagen Group’s sales revenue increased by 20.6 percent in the past fiscal year to €126.9 billion (previous year: €105.2 billion).

Volkswagen the New Beetle Courtesy of Volkswagen

Roughly €19.8 billion of this revenue growth of €21.7 billion was attributable to the Automotive Division.

Volkswagen the New Beetle Cabriolet Courtesy of Volkswagen

Consolidated operating profit rose to a record €7.1 billion, up €5.3 billion on 2009.

Volkswagen the Scirocco Courtesy of Volkswagen

Volume, mix and price effects were the strongest drivers (€4.6 billion).

Volkswagen the new Jetta Courtesy of Volkswagen

To this were added positive exchange rate effects (€1 billion) and increased earnings contributions by Scania (€1.1 billion) and the Volkswagen Financial Services (€0.3 billion).

Volkswagen the new Eos Courtesy of Volkswagen

In addition, product cost savings of €1.6 billion had a positive effect; the amount originally planned was €1 billion.

Volkswagen the Tiguan Courtesy of Volkswagen

“This shows how systematically we are working on our cost structures and how we are continuously optimizing our processes”, said Pötsch.

Volkswagen the new Touran Courtesy of Volkswagen

Operating profit was impacted by higher fixed costs of €2.8 billion.
Chief among these were start-up costs for new facilities and upfront expenditures for new products, underpinning the successful implementation of the Strategy 2018.

Volkswagen the Passat CC Courtesy of Volkswagen

The return on investment – the Automotive Division’s core financial management instrument – rose significantly year-on-year to 13.5 percent (3.8 percent).
Not only is this above the strong figures for 2007 and 2008, it also significantly exceeds the internal minimum required rate of return of 9 percent.

Volkswagen the new Passat Estate Courtesy of Volkswagen

The Financial Services Division improved its return on equity from 7.9 percent to 12.9 percent.

Volkswagen the new Sharan Courtesy of Volkswagen

The consolidated operating profit does not include the €1.9 billion (€0.8 billion) proportional share of the operating profit recorded by the Chinese joint ventures.

Volkswagen the new Touareg Courtesy of Volkswagen

These companies are consolidated using the equity method and are therefore reflected in the Group’s financial result.

Volkswagen the Phaeton. The Phaeton is in every respect an extraordinary class of car. Built virtually by hand at the Transparent Factory in Dresden, it features the finest materials, innovative technologies, outstanding design and extraordinary levels of comfort. Courtesy of Volkswagen

The earnings generated by Volkswagen’s equity interest in Porsche Zwischenholding GmbH and the effects from the measurement of the put/call rights in the latter company at the reporting date also had a positive influence on the financial result.

Volkswagen the Phaeton. The lines of the Phaeton are extraordinarily clear and striking: It is without doubt different from any vehicle before. This exclusive quality is further reflected in the interior. The driver and passengers can look forward to a unique harmony of function and design, all directed to just one goal: to make a journey in the Phaeton as pleasurable an experience as possible. Courtesy of Volkswagen

All in all, the Volkswagen Group’s profit before tax last year rose by €7.7 billion to €9.0 billion.
At €7.2 billion (€0.9 billion), the after-tax profit is also a record.

Volkswagen the Phaeton. All the four engine variants for the Phaeton have one thing in common: exemplary performance combined with optimum quietness. And in terms of safety, too, the Phaeton leaves no desire unfulfilled: alongside all the familiar driver assistance systems, the use of a total of 16 different metals and special plastics, as well as a unique active head restraint system, delivers unmatched levels of safety. Courtesy of Volkswagen

The Board of Management and Supervisory Board will propose to the Annual General Meeting in Hamburg on May 3 to pay an increased dividend of €2.20 (€1.60) per ordinary share and €2.26 (€1.66) per preferred share from Volkswagen AG’s net income of €1.5 billion (€1.1 billion).

Volkswagen the Amarok. Its name means "Wolf" in the Inuit language. And like that animal, the Amarok feels at home in the wild: this pickup from Volkswagen Commercial Vehicles satisfies the toughest off-road mobility demands. Courtesy of Volkswagen

The sharp rise in consolidated profit was accompanied by another clear improvement in the Group’s financial strength.
Net liquidity in the Automotive Division rose by a further substantial €8 billion year-on-year to €18.6 billion.

Volkswagen the Amarok. Comfort on a par with that of a passenger car: the interior of the Amarok offers comfortable seats, plenty of head and legroom, a low interior noise level and a generous amount of stowage space. Courtesy of Volkswagen

Positive contributory factors included the capital increase implemented last spring as a step towards creating the integrated automotive group with Porsche on the one hand, and the Group’s strong business performance and strict cost discipline on the other.

Volkswagen the Multivan. The Multivan Startline, the Multivan Comfortline and the Multivan Highline offer you different options to fulfill your personal idea of freedom and mobility. Courtesy of Volkswagen

“Our strong liquidity position is proof of our Company’s financial solidity and stability. At the same time, it continues to give us the necessary financial flexibility for our investments and to implement our Strategy 2018”, said Pötsch.

Volkswagen the Transporter Courtesy of Volkswagen

Volkswagen invested approximately €5.7 billion in the Automotive Division in 2010, on a par with the figure for the previous year.
The ratio of capital expenditure to sales revenue fell by 1.2 percentage points to 5.0 percent due to the sharp rise in sales revenue.

Volkswagen the Crafter Courtesy of Volkswagen

“Our disciplined cost management does not hurt our products”, underscored Pötsch.
“It is only possible thanks to the systematic modularization of our vehicle concepts. This leads to significant savings in both unit costs and one-time expenses. We will continue to invest prudently in new production facilities and in the ecological focus of our model range”, the CFO continued.

Volkswagen the Crafter Bus. Room for an entire football team and its most loyal fans. The “Hannover” Crafter Bus offers room for 13, 16 or 19 passengers. The players can expect every comfort. Courtesy of Volkswagen

All in all, Volkswagen is planning to invest €53.5 billion in the Automotive Division in the period up to 2015, plus an additional €10.6 billion in China.


Markets


The sharp rise in consolidated profit was accompanied by a further tangible increase in the Volkswagen Group’s market position.

Black Amber - Limited edition Scania V8 series Courtesy of Volkswagen / Scania

The Group benefited above average from the strong recovery in the global automobile markets thanks to its broad-based product portfolio and strong global presence.

Audi A6 Courtesy of Volkswagen / Audi

Whereas global unit sales in the automotive industry rose by 11.4 percent to 58.7 million, the Volkswagen Group lifted deliveries to customers by 13.7 percent to 7.2 million vehicles, beating the 7 million vehicles mark for the first time.

Audi TT Coupé Courtesy of Volkswagen / Audi

The chief growth market remained the Asia-Pacific region, and within it the Chinese market in particular.
Volkswagen again extended its leading position in China, growing by 37.4 percent to nearly 2 million vehicles.
Equally, the Group clearly increased its presence on a large number of other markets.

Audi A8 L with forward-looking LTE-Connectivity-Technology. Courtesy of Volkswagen / Audi

South America saw extremely encouraging growth in delivery figures (up 9.9 percent to 908,000), as did the USA (up 20.9 percent to 360,000).

Bentley Continental GT Speed Courtesy of Volkswagen / Bentley

The European business recorded a slight overall increase of 3.1 percent to 3.6 million vehicles in what was a difficult market environment.

Lamborghini Gallardo LP 570-4 Spyder Performante Courtesy of Volkswagen / Lamborghini

In Germany, the Volkswagen Group delivered 1.0 million vehicles last year, 16.7 percent fewer than in 2009.
Nevertheless, the company outperformed the overall market, which declined by 23.4 percent due to the expiration of the government scrapping premium.

Bugatti Veyron Courtesy of Volkswagen / Bugatti

Thanks to these encouraging sales figures, the Volkswagen Group’s global share of the passenger car market rose from 11.2 percent to 11.4 percent.


Brands and business fields


The Volkswagen Group’s biggest competitive advantage in 2010, as in the past, was its broad line-up with nine brands.
This positioning has proved its worth in the economic recovery as well.
Nearly all Group brands recorded higher unit sales, sales revenue and earnings in fiscal year 2010 – and in some cases the increases were extremely pronounced.

Bugatti Veyron Courtesy of Volkswagen / Bugatti

The Volkswagen Passenger Cars brand saw extremely dynamic growth, especially in Russia, China and the USA.

Deliveries rose by almost 14 percent, exceeding the 4.5 million vehicles mark for the first time.
A large number of product launches generated positive momentum, culminating in the presentation of the new Passat in the fall of 2010.

At €2.2 billion (previous year: €561 million), the operating profit for the Volkswagen Passenger Cars brand almost quadrupled in the past year.
This reflects both the high level of market acceptance for the products and Volkswagen’s successful cost and process optimization.

The same also applies to the premium brand, Audi.
2010 was the best-selling and most profitable year in Audi’s history, with approximately 1.1 million deliveries (up 15 percent).
The brand’s operating profit more than doubled, to €3.3 billion.

In addition, Audi’s new products again set key trends for the industry and the company extended its portfolio to a new market segment with the launch of the Audi A1.

The key figures for Lamborghini are included in the figures for the Audi brand.

Škoda also saw an extremely positive fiscal year in 2010.
Demand for the Czech models was particularly strong on the new growth markets of China, Russia and India.
Deliveries totaled 763,000 vehicles (up 11.5 percent), the eighth record figure in a row.

Škoda more than doubled its operating profit year-on-year to €447 million (€203 million).

The SEAT brand experienced a slight recovery in the past year.
Deliveries rose to 340,000 vehicles (up 0.8 percent).
The operating loss narrowed by €28 million to €311 million.
The strong sales figures for the new Leon and Altea models had a positive effect.

SEAT is still suffering from the decline in demand on the Spanish passenger car market, although last year it succeeded in regaining the market lead there after 31 years.

Although conditions in the luxury segment remained difficult in 2010, Bentley was able to lift deliveries by approximately 11 percent to 5,117 vehicles.
The operating loss widened by €51 million to €245 million due to changes in the market and product mix as well as upfront expenditures for new products.

Volkswagen Commercial Vehicles was back on its clear growth path last year.
Deliveries increased by more than 20 percent to 436,000 thousand vehicles.

South America was the main growth driver.
Operating profit declined by €81 million to €232 million.
However, adjusted for the proceeds of approximately €600 million from the sale of the Brazilian commercial No. 100/2011 Page 5 vehicles business to MAN, which were contained in the prior-year figure, operating profit was significantly higher than in 2009.

Scania recorded clear growth on the back of the strong market recovery following a very difficult year for commercial vehicles in 2009, due to the financial crisis.
Deliveries amounted to 63,700 vehicles, an increase of 46.7 percent.
Operating profit increased more than fivefold, to €1.3 billion.

Volkswagen Financial Services generated an operating profit of €932 million (€606 million) in fiscal year 2010, again making a significant contribution to the Volkswagen Group’s profit.

More than 2.7 million new finance, leasing and insurance contracts were signed by the Division worldwide, an increase of 7.6 percent compared with the previous year.


Strategy and outlook


In fiscal year 2010, the Volkswagen Group systematically continued implementing its “Strategy 2018”, which aims to increase unit sales to more than 10 million vehicles by 2018 and to lift the Group’s profit before tax to over 8 percent.

In the process, the Group will also create more than 50,000 additional jobs worldwide in the period up to 2018.

The core elements of the “Strategy 2018” include selectively expanding the brand and product portfolio and further boosting the Group’s global presence.

In addition, Volkswagen aims to occupy the pole positions in the sector for quality, customer satisfaction and employer attractiveness.

Further milestones on the way to achieving the integrated automotive group with Porsche, such as Volkswagen’s successful capital increase, were reached on schedule in 2010.

Moreover, operational-level cooperation with Porsche was intensified considerably in the past year.
Additional key steps are planned for the current year.

In connection with this, Volkswagen acquired the automobile trading business of Porsche Holding Salzburg (PHS) effective March 1.

PHS is one of the most successful and most profitable automotive trading companies in Europe and will further strengthen the Volkswagen Group’s sales activities.

In addition, Volkswagen will continue to extend its e-mobility activities in 2011.
Among other things, it plans to set up an E-mobility Campus in Wolfsburg, investing €80 million here in the coming years in order to bundle the Group’s expertise in this field at headquarters.
This underscores Volkswagen’s ambitions to be the leader from an ecological perspective, too.

At the level of its operating business, the Volkswagen Group expects the positive trend seen in the previous fiscal year to continue in 2011.

At approximately 1.2 million vehicles worldwide, global deliveries in the first two months were up 17.5 percent.
This means that the Group’s growth again outperformed the market.

“We are highly satisfied with our current business performance and expect a strong first quarter on all fronts”, said Winterkorn.

For the year as a whole, the Board of Management is forecasting a further improvement in deliveries, sales revenue and operating profit, and hence renewed record figures – despite a potential decrease in positive volume effects due to ongoing volatility in interest and exchange rates, and uncertainty on the commodities markets.

In the medium to long term, the Board of Management expects that the Volkswagen Group will be able to leverage its competitive advantages to an even greater extent.

“Our brands already offer mobility solutions to meet every need and in every vehicle class, all around the globe. This diversity is our strength. In addition, we will systematically extend our technological leadership”, emphasized Winterkorn.
“The Volkswagen Group will also grow at a qualitative level in the coming years. We combine volume growth, the highest possible product quality, and customer and employee satisfaction with sound finances and steady increases in profitability. This means we are now more convinced than ever before that we can reach our strategic goals”,
the CEO summed up.


Source: Volkswagen Group

http://www.volkswagenag.com/vwag/vwcorp/content/en/press.html  



Prof. Dr. Martin Winterkorn

Chairman of the Board of Management of Volkswagen AG,
Member of the Board of Management with responsibility for “Group Research and Development”,
Chairman of the Board of Management for the Volkswagen brand since 1 January 2007

Prof. Dr. Martin Winterkorn Courtesy of Volkswagen AG

Dr. Martin Winterkorn was born in 1947 in Leonberg.
After receiving his doctorate from the Max Planck Institute for Metal Research and spending the first few years of his professional career at Robert Bosch GmbH, Winterkorn joined AUDI AG in 1981, where in 1990 he took over as head of Audi Quality Assurance.

In 1996 he became member of the Board of Management for “Technical Development” for the Volkswagen brand.

In 2002 Winterkorn was appointed Chairman of the Board of Management of AUDI AG, and has been Chairman of the Supervisory Board of AUDI AG since 2007.

He is an honorary professor of the Budapest University for Technology and Economics and the Technical University in Dresden and also received an honorary professorship from Tongji University in Shanghai.


Source: Volkswagen

http://www.volkswagen.com/  



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