Despite seeing operating profit fall just under 19% in the quarter ended 30 September 2012, Volkswagen has retained its forecast of matching 2011’s operating earnings level and a year-on-year rise in revenue, the latter being helped by the MAN (November 2011) and Porsche (August 2012) consolidations.
Matching the 2011 operating earnings level will require a year-on-year gain in Q4, as the January-September 2012 result totalled €8,835m (US$11.5bn), 1.6% down from the €8,977m reported in the same period of the previous year. VW has noted that, overall, positive effects from its model range and strong market position will be offset in part by “increasingly stiff competition in a challenging market environment, especially in certain European countries.” However, it added that “disciplined cost and investment management and the continuous optimisation of our processes remain core components of our Strategy 2018.”
With regard to the Porsche consolidation as from 1 August 2012, VW has noted that the attributable revenue increase is expected to be low “due to consolidation effects” and that the high initial depreciation and amortisation expense from purchase price allocation is expected to largely offset Porsche’s contribution to operating profit in the fiscal year.
Vehicle deliveries to customers in Q3 2012 totalled 2,303,000, versus 2,042,000 in Q3 2011, a rise of 12.8%, with sales growth of 14.6% outside of Germany significantly outpacing that in the domestic market (1.6%). Deliveries in the first nine months of 2012 were 6,855,000, versus 6,170,000, a gain of 11.1%.
Group revenue in the quarter ended 30 September 2012 was €48,848m, a rise of 26.8% from the €38,512m reported in Q3 2011, with unit sales rising 12.9% to 2,333,000, from 2,067,000. The Q3 result took year-to-date revenue to €144,226m, 24.0% ahead of the 2011 total of €116,279m, with vehicle sales of 6,978,000, versus 6,200,000. Automotive Division revenue alone in the latest nine-month period was €129,573m, versus €103,550m in the first three quarters of 2011, a rise of 25.1%, the group balance being accounted for by the Financial Services Division. The revenue increase was driven by volume-related and exchange rate factors as well as model mix improvements. Porsche Holding Salzburg was consolidated within the Automotive Division, commencing March 2011, MAN SE from November 2011 and Porsche AG from 1 August 2012.
Group operating profit in the latest quarter was €2,343m (margin of 4.8%), compared with €2,891m (7.5%) in Q3 2011. This near-19% decline in earnings left profit in the first nine months of 2012 at €8,835m (6.1%), versus €8,977m (7.7%) in the same period of 2011. The Automotive Division reported January-September 2012 operating income of €7,728m, 3.8% below the 2011 total of €8,032m.
Net profit attributable to Volkswagen shareholders in the July-September 2012 quarter was €11,289m, up 60.4% from €7,039m in Q3 2011, taking the latest year-to-date total to €20,062m (9M 2011: €13,306m). The company noted: “Effects from the updated measurement of options relating to Porsche Zweite Zwischenholding GmbH and the remeasurement of the existing shares held in the amount of €12.3bn did not have any impact on the tax expense.”
The Automotive Division’s cash flow from operating activities in Q3 2012 was €5,183m, up 30.0% from €3,986m in Q3 2011, taking the year-to-date total to €11,935m, a fall of 3.9% from 2011’s €12,418m.
Net liquidity in the Automotive Division was €9,215m as of 30 September 2012, compared with €21,161m at the same date in the previous year.
Volkswagen Passenger Cars reported unit sales of 3,638,000 in the January-September 2012 period (9M 2011: 3,317,000). Resulting revenue (sales to third parties) was €58,793m, versus €53,966m in 2011, while operating earnings declined to €2,857m from €3,256m. The company noted that earnings were negatively impacted by upfront expenditures for the Modular Transverse Toolkit and start-up costs for the new Golf.
Audi had latest nine-month revenue of €26,033m (€22,294m) and operating earnings of €4,203m (€3,960m), while Skoda reported unit sales of 551,000 (511,000), revenue of €4,139m (€4,630m) and earnings of €567m (€575m).
In contrast to positive earnings results at these divisions, SEAT again reported a further loss in the latest nine-month period – of €95m, albeit down from a loss in the equivalent period of 2011 of €101m. SEAT sold 315,000 vehicles in January-September 2012, up from the 2011 total of 267,000, generating third-party revenue of €2,089m (€2,551m).
Bentley reported 9M 2012 revenue of €967m, versus €732m in 2011, while the loss of €6m seen in the 2011 period was replaced by a profit of €73m in the first nine months of 2012.
Porsche’s contributions to revenue and earnings in the latest year-to-date period were €2,025m and €389m, respectively.
Volkswagen Commercial Vehicles reported unit sales of 330,000 in the year-to-date 2012 period, a slight fall from the total of 328,000 in 2011, generating revenue of €3,774m (€3,939m) and operating income of €300m (€328m).
Scania generated revenue of €6,724m in the first three quarters of 2012, down from €7,421m previously, and earnings declined to €688m from €1,071m. MAN contributed revenue of €11,684m in the latest nine-month period, with earnings of €515m.
Martin Winterkorn, Chairman of the Board of Management of Volkswagen, commented: “Although the times aren’t easy, it’s up to us to systematically continue along our chosen path – the right path. We therefore remain committed to our ambitious goals for 2012, despite growing headwinds.” Chief Financial Officer Hans Dieter Pötsch added: “We have always said that the second half of the year would be more difficult, so our performance is in line with expectations. We have achieved a robust result … We have a broad global positioning and our strong financial basis is practically unrivalled. Our relative strength compared with the competition shows that we are on the right path.”
