Volkswagen Group Closes 2019 Books

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Ford CEO Jim Hackett (l) and Volkswagen AG CEO Dr. Herbert Diess on JV announcement.

The Volkswagen Group brought fiscal year 2019 to conclusion with improved financial results in almost all brands. At €88.4 billion, the Volkswagen Passenger Cars brand’s sales revenue in 2019 was 4.5% higher than in the previous year. Operating profit before special items increased to €3.8 (3.2) billion. Improvements in the mix and price compensated for lower sales of Volkswagen Passenger Cars models and for launch costs and negative exchange rate effects. The operating return on sales before special items increased to 4.3% (3.8%). The diesel emissions cheating scandal saw special items of €-1.9 (-1.9) billion.

The Audi brand’s sales revenue declined to €55.7 (59.2) billion in fiscal year 2019. The reason for this was the Group’s internal relocation of the multi-brand sales companies. Operating profit (previous year’s figure excludes special items) amounted to €4.5 (4.7) billion. Mix and product cost improvements offset negative effects from model start-ups and phase-outs, higher upfront expenditure for new products and technologies, an unfavorable exchange rate trend and personnel cost increases. The operating return on sales (previous year’s figure excludes special items) was 8.1 (7.9)%. The financial key performance indicators for the Lamborghini and Ducati brands are included in the financial figures for the Audi brand.

Sales revenue at the ŠKODA brand increased by 14.5% in 2019 to €19.8 billion, partly due to initial consolidation following the assumption of regional responsibility for India.

Operating profit improved by €0.3 billion to €1.7 billion. Volume increases, mix optimisations and pricing measures more than compensated for negative effects resulting from cost increases and higher upfront expenditure for new products. The operating return on sales stood at 8.4%, compared to 8.0% in the previous year.

SEAT continued its upward trend in the reporting year: Sales revenue was €11.5 billion, exceeding the previous year’s record figure by 12.7%. Operating profit rose to €445 (254) million, which was also a new record. Particularly volume and mix effects had a positive impact. The SEAT brand’s operating return on sales improved to 3.9 (2.5)%.

The Bentley brand generated sales revenue of €2.1 billion in 2019, exceeding the equivalent prior-year figure by 35.1%. Operating profit improved to €65 (-288) million driven by higher volumes, as well as by cost savings in connection with the ongoing efficiency program together with mix effects and exchange rate trends. The brand’s operating return on sales increased to 3.1 (-18.6)%.

Porsche Automotive sales revenue increased by 10.1% to €26.1 (23.7) billion in fiscal year 2019. Operating profit before special items improved by 2.4% year-on-year to €4.2 billion. Volume and mix improvements as well as product cost optimization compensated for negative exchange rate effects and cost increases. The operating return on sales before special items was 16.2 (17.4)%. The diesel issue gave rise to special items of €–0.5 billion in the reporting period.

Sales revenue by Volkswagen Commercial Vehicles in fiscal year 2019 was almost on a level with the previous year, at €11.5 (11.9) billion. In particular, increased fixed and development costs for new products reduced operating profit to €510 (780) million. Improved product costs had a positive effect. The operating return on sales was 4.4 (6.6)%.

Scania Vehicles and Services generated sales revenue of €13.9 (13.0) billion in fiscal year 2019. Operating profit increased by 24.8% to €1.5 billion. In addition to higher vehicles sales and a stronger genuine parts and service business, improvements in the mix as well as exchange rate effects had a positive impact on profit. The operating return on sales was 10.8 (9.3)% in the reporting year.

Driven by higher volumes, sales revenue at MAN Commercial Vehicles climbed to €12.7 billion in 2019, exceeding the prior-year figure by 4.6%. Operating profit was up on the prior-year period at €402 (332) million, which was negatively impacted by expenses incurred in connection with the restructuring of activities in India. The brand’s operating return on sales was 3.2 (2.7)%.

The sales revenue of Volkswagen Financial Services in the reporting year amounted to €38.0 billion, an increase of 15.8% on the previous year. Operating profit rose by 13.3% and hit a new record of €3.0 billion. The increase was mainly attributable to business growth.

Frank Witter, Group Board of Management Member for Finance and IT, said, “The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group. Currently, it is almost impossible to make a reliable forecast. We are making full use of all measures in task force mode to support our employees and their families and to stabilize our business.”

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