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 diesel issue, which continues to keep us very busy, and the persistently challenging market conditions, we increased our deliveries to customers in 2017 as forecast. At 10.7 million vehicles we lifted deliveries to customers by 4.3% , achieving a new record. We saw growth in Europe, North and South America and the Asia-Pacific region. The higher volume was a significant factor in the 6.2% increase in the Group’s sales revenue and thus confirmed the current forecast. As a consequence, operating profit before special items rose to €17.0 billion and the operating return on sales before special items, at 7.4%, was moderately higher than the range forecast at the beginning of the year of 6.0–7.0%. After deducting special items resulting exclusively from the diesel issue, the operating return on sales of 6.0% was at the lower end of this scale, as recently projected.

Research and development costs underscore the efforts made to ensure the Company’s future viability; at 6.7%, the R&D ratio in the Automotive Division was inside the expected range.

The Automotive Division’s ratio of capex to sales revenue was reduced to 6.4%, which put it within the forecast range as well. Owing to high cash outflows attributable to the diesel issue, the Automotive Division’s net cash flow was negative, as anticipated. The Automotive Division’s net liquidity fell as a result, but was still a robust €22.4 billion at the end of the reporting period.

On the back of the increase in earnings, the return on investment (ROI) in the Automotive Division improved markedly to 12.1%, thus exceeding the minimum required rate of return on invested capital.

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FORECAST VERSUS ACTUAL FIGURES

 

 

Actual 2016

 

Original forecast for 2017

 

Adjusted forecast for 2017

 

Actual 2017

 

 

 

 

 

 

 

 

 

Deliveries to customers

 

10.3 million

 

moderate increase

 

moderate increase

 

10.7 million

Volkswagen Group

 

 

 

 

 

 

 

 

Sales revenue

 

€217.3 billion

 

increase of up to 4%

 

>4%

 

€230.7 billion

Operating return on sales before special items

 

6.7%

 

6.0–7.0%

 

moderately above 7.0%

 

7.4%

Operating return on sales

 

3.3%

 

6.0–7.0%

 

~6.0%

 

6.0%

Operating result before special items

 

€14.6 billion

 

within the forecast range

 

within the forecast range

 

€17.0 billion

Operating result

 

€7.1 billion

 

within the forecast range

 

within the forecast range

 

€13.8 billion

Passenger Cars Business Area

 

 

 

 

 

 

 

 

Sales revenue

 

€150.3 billion

 

increase of up to 4%

 

>4%

 

€158.5 billion

Operating return on sales before special items

 

7.4%

 

6.5–7.5%

 

moderately above 7.5%

 

7.9%

Operating return on sales

 

2.8%

 

6.5–7.5%

 

slightly below 6.5%

 

5.9%

Operating result before special items

 

€11.1 billion

 

within the forecast range

 

within the forecast range

 

€12.5 billion

Operating result

 

€4.2 billion

 

within the forecast range

 

within the forecast range

 

€9.3 billion

Commercial Vehicles Business Area

 

 

 

 

 

 

 

 

Sales revenue

 

€32.1 billion

 

increase of up to 4%

 

>4%

 

€35.2 billion

Operating return on sales

 

2.2%

 

3.0–5.0%

 

moderately above 5.0%

 

5.4%

Operating result

 

€0.7 billion

 

within the forecast range

 

within the forecast range

 

€1.9 billion

Power Engineering Business Area

 

 

 

 

 

 

 

 

Sales revenue

 

€3.6 billion

 

significant decline

 

significant decline

 

€3.3 billion

Operating result

 

€−0.2 billion

 

lower loss

 

lower loss

 

€−0.1 billion

Financial Services Division

 

 

 

 

 

 

 

 

Sales revenue

 

€31.3 billion

 

at prior-year level

 

noticeable increase

 

€33.7 billion

Operating result

 

€2.4 billion

 

at prior-year level

 

noticeable increase

 

€2.7 billion

R&D ratio in the Automotive Division

 

7.3%

 

6.0–7.0%

 

6.0–7.0%

 

6.7%

Capex/sales revenue in the Automotive Division

 

6.9%

 

6.0–7.0%

 

6.0–7.0%

 

6.4%

Net cash flow in the Automotive Division

 

€4.3 billion

 

significant decline, negative

 

significant decline, negative

 

€−6.0 billion

Net liquidity in the Automotive Division

 

€27.2 billion

 

significant decline

 

significant decline

 

€22.4 billion

Return on investment (ROI) in the Automotive Division

 

8.2%

 

noticeable increase, > 9%

 

noticeable increase, > 9%

 

12.1%