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Volkswagen Group Achieves Key Milestones in 2012


Volkswagen Group Achieves Key Milestones in 2012

Targets for Numerous Strategic Projects Met in 2012; Sales Revenue Grows by 20.9 Percent to EUR 192.7 Billion; Good Start to the Year -- Deliveries up 8.3 Percent in the First Two Months; Winterkorn: "Volkswagen Is Approaching the Coming Months With the Necessary Realism and Great Vigilance."

WOLFSBURG, GERMANY -- (Marketwire) -- 03/14/13 -- The Volkswagen Group successfully mastered the challenges posed by a difficult market environment in 2012, again posting record vehicle sales, sales revenue and earnings. "Volkswagen is feeling the headwinds -- especially in Europe. Nevertheless we remain guardedly confident," said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, on Thursday during the presentation of the Company's 2012 financial results.

The Volkswagen Group not only turned in a compelling operational performance in the past fiscal year -- it also met its targets for major strategic projects: The Porsche brand has been wholly owned by Volkswagen since August 1, 2012 and Ducati, a legendary motorcycle brand, has now joined the Group family. A leading mobility group needs a strong commercial vehicles business -- and the alliance between MAN, Scania and Volkswagen Commercial Vehicles means that the groundwork for this has been laid. The launch of the Modular Transverse Toolkit in 2012 ushered in a new era in passenger cars. In addition, Volkswagen became the first carmaker to commit to the CO2 target of 95g/km by 2020.

CFO Hans Dieter Poetsch was also satisfied with 2012. "We continued our successful course and further strengthened our market position thanks to our high profitability," said Poetsch. "Our growing presence in all key markets, our outstanding brand portfolio, our attractive product range and our broad financial services offering combined with our sound finances and forward-looking management are contributing to the systematic implementation of our Strategy 2018."

Group figures for 2012

The Volkswagen Group's sales revenue increased by 20.9 percent in fiscal year 2012 to EUR 192.7 billion (previous year: EUR 159.3 billion). Consolidated operating profit rose slightly to a record EUR 11.5 billion (EUR 11.3 billion). The consolidated operating profit doe s not include the EUR 3.7 billion (EUR 2.6 billion) proportional share of the operating profit recorded by the Chinese joint ventures. These companies are included in the consolidated financial statements using the equity method and are therefore reflected in the Group's financial result, which rose by EUR 6.3 billion last year to EUR 14 billion. The improvement in the financial result is primarily attributable to noncash effects of EUR 12.3 billion from the final valuation of the put/call rights relating to Porsche as of July 31, 2012, as well as from the remeasurement of the existing shares of Porsche held at the contribution date. All in all, the Volkswagen Group's profit before tax last year rose by approximately EUR 6.6 billion to EUR 25.5 billion. Profit after tax amounted to EUR 21.9 billion (EUR 15.8 billion).

In view of the Company's continued success, the Board of Management and the Supervisory Board will be proposing to the Annual General Meeting on April 25, 2013 to increase the dividend to EUR 3.50 (EUR 3.00) per ordinary share and EUR 3.56 (EUR 3.06) per preferred share.

At 16.6 percent, the return on investment for the Automotive Division was down slightly on the previous year (17.7 percent), primarily as a result of the increase in invested capital, but was still significantly above its minimum required rate of return of 9 percent. The return on equity in the Financial Services Division declined slightly to 13.1 percent (14.0 percent). "We aim to safeguard the quality of our earnings for the long term. In this context, we will take care to further increase profitability in all regions and to establish ourselves on new growth markets," said Poetsch.

Net liquidity in the Automotive Division remained sound at EUR 10.6 billion at the end of December 2012 (year-end 2011: EUR 17.0 billion). This gives the Group the necessary financial stability and flexibility to systematically implement its Strategy 2018. Reasons for the decline include the contribution in full of Porsche's automotive business, the acquisition of Ducati and the increased stake in MAN SE. The ratio of capital expenditure to sales revenue rose slightly (0.4 percentage points) to 5.9 percent. In addition to its production facilities, Volkswagen invested primarily in the expansion and ecological focus of its model range, and in the modularization of its vehicle concepts.

Brands and business fields

Despite the tough environment, the Volkswagen Group outperformed the market in 2012, growing in almost all key regions. Deliveries climbed 12.2 percent to 9.3 million vehicles. This saw the Group's global share of the passenger car market rise to 12.8 percent (12.3 percent).

The Volkswagen Passenger Cars brand delivered 5.7 million vehicles to customers, an increase of 12.7 percent compared with the previous year. The brand's operating profit amounted to EUR 3.6 billion (EUR 3.8 billion), down 4.1 percent year-on-year. This was due in part to upfront expenditures for the Modular Transverse Toolkit and startup costs for the new Golf.

2012 was another record year for the Audi brand, which delivered 1.5 million (1.3 million) vehicles. Operating profit rose slightly by 0.6 percent to EUR 5.4 billion (EUR 5.3 billion) and the brand's operating return on sales was 11.0 percent (12.1 percent).

SKODA's sales increased by 6.8 percent to 939,000 (879,000) vehicles. At EUR 712 million (EUR 743 million), operating profit was down slightly on the prior-year figure due to market factors.

Deliveries by the SEAT brand declined by 8.3 percent in 2012 to 321,000 (350,000) cars. The operating loss was cut by EUR 69 million to EUR 156 million.

Bentley delivered 8,510 (7,003) vehicles, 21.5 percent more than in 2011. Its operating profit climbed to EUR 100 million (EUR 8 million).

Sports car manufacturer Porsche sold 60,000 vehicles and generated an operating profit of EUR 946 million in the five months of its full consolidation in the Volkswagen Group (from August 1, 2012).

Volkswagen Commercial Vehicles delivered 550,000 (529,000) units, an increase of 4.1 percent. Operating profit declined by 6.1 percent to EUR 421 million (EUR 449 million).

Scania recorded a 15.9 percent decline in deliveries to 67,000 (80,000) trucks and buses. Its operating profit declined from EUR 1.4 billion to EUR 930 million. MAN delivered 134,000 trucks and buses and reported an operating profit of EUR 808 million.

Volkswagen Financial Services generated an operating profit of EUR 1.4 billion (EUR 1.2 billion) in 2012. The division signed 3.8 million new finance, leasing and service/insurance contracts around the world, 21.0 percent more than in the previous year.

Outlook

Volkswagen is starting 2013 from a position of strength, despite tougher competition and difficult economic conditions. Excluding MAN and Scania, 1.4 million vehicles were delivered worldwide in the first two months of the year. At 8.3 percent, the Group grew more strongly than the market. "Volkswagen has everything it needs to continue its successful trajectory of recent years even under different circumstances," said Winterkorn, adding: "We want to lead the Volkswagen Group to the top of the automotive industry by 2018 -- profitably, sustainably and permanen tly." In 2013, the Volkswagen Group's brands will launch a large number of fascinating new models and so help further expand its strong position on the global markets.

Winterkorn was guardedly confident that the Group will outperform the market as a whole and deliveries to customers will increase. However, Volkswagen is not completely immune to the intense competition and the impact this has on business. The modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on the Group's cost structure. The Volkswagen Group's 2013 sales revenue is expected to exceed the prior-year figure.

Given the ongoing uncertainty in the economic environment, the goal for operating profit is to match the prior-year level in 2013. Positive effects from its attractive model range and strong market position will be curbed by increasingly stiff competition in a challenging market environment. Disciplined cost and investment management and the continuous optimization of Volkswagen's processes remain an integral part of the Strategy 2018.

Further information on the Annual Media Conference and Investor Conference can be accessed at www.volkswagen-media-services.com and www.volkswagenag.com/ir.

Volkswagen Group Communications Christine Ritz Head of Group Investor Relations/Spokesperson for Finance Phone: +49 (0) 53 61 / 9-4 98 40 Fax: +49 (0) 53 61 / 9-3 04 11 E-mail: christine.ritz@volkswagen.de

Marco Dalan Spokesperson for Finance Phone: +49 (0) 53 61 / 9-7 11 21 Fax: +49 (0) 53 61 / 9-7 94 44 E-mail: marco.dalan@volkswagen.de www.volkswagen-media-services.com www.volkswagenag.com

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