Volkswagen Group Posts 2019 Profit Despite Diesel Charges

Posted on 28 February 2020 by Ken Zino

AutoInformed.com - VW Diesel ScandalIn a surprising development to AutoInformed, Volkswagen Group today said full-year operating profits year-over-year increased 22% to 16.9 billion euro ($18.5 billion) because of sales of higher-margin vehicles and lower diesel fines and settlements with charges of $2.54 billion, down from $3.53 billion last year.

As a result, Volkswagen recommended a dividend increase to 6.50 euro ($7.18) per ordinary share, up from 4.80 euro ($5.30) and 6.56 euro ($7.24) per preferred share, up from 4.86 euro ($5.37) in 2018.

The earnings announcement on Friday came with an agreement to pay 830 million euro ($912 million) in damages to hundreds of thousands of customers whose diesel cars were outfitted with software that illegally falsified emissions readings.

The settlement was between Germany’s consumer protection group (VZBV) and Volkswagen. The offer amounts to roughly 15% of the purchase price of a car from between 1,350 euro to 6,257 euro ($1,485-$6,882).

The 260,000 customers who had sued Volkswagen in Germany can accept the offer or sue for more on their own. Back in 2015, the US Environmental Protection Agency discovered cheating software that turned emissions controls off once the car had passed emissions tests. To date, VW has paid out more than 30 billion euro ($33 billion) in fines, settlements and recalls.

During 2019, group sales increased by EURO 16.8 billion to EURO 252.6 billion and operating profit before special items rose to EURO 19.3 (17.1 in 2018) billion. At 7.6% (7.3), the operating return on sales before special items barely beat the forecasted range for 2019. Operating profit also improved to EURO 17.0 billion (13.9b 2018).

Negative special items in connection with diesel decreased to EURO 2.3 (3.2) billion. In the Automotive Division, net cash flow increased to EURO 10.8 (-0.3) billion, with net liquidity reaching EURO 21.3 (19.4) billion. Board of Management and Supervisory Board propose an increase of the dividend to EURO 6.50 (4.80) per ordinary share and EURO 6.56 (4.86) per preferred share. This would raise the payout ratio to 24.5% (20.4).

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About Ken Zino

Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
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One Response to Volkswagen Group Posts 2019 Profit Despite Diesel Charges

  1. Pingback: Porsche Proposes 41% Dividend Rise at May Annual Meeting | AutoInformed

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