october 28, 2021 - Volkswagen

Volkswagen Group’s Q3 result down year-on-year due to semiconductor bottlenecks – profitability target for 2021 confirmed

Operating profit before special items in Q3 down 12.1 percent to EUR 2.8 billion compared with the pandemic-related weak prior-year figure, due to supply issues; operating return on sales at 4.9 percent, down from 5.4 percent
Volume brand group posts operating losses in Q3, China business disproportionately affected by the semiconductor situation despite strong demand
Automotive Division’s adjusted net cash flow in Q3 slightly positive at EUR 33 million and robust at EUR 12.4 billion after nine months
Operating profit before special items still solid through September at EUR 14.2 billion due to the strong first half; operating return on sales of 7.6 percent
Group confirms profitability target of 6.0 – 7.5 percent for 2021
Group CEO Diess: “The results of the third quarter show once again that we must now systematically drive forward the improvement in productivity in the volume sector. We are determined to maintain our strong position against established and new competitors and to vigorously implement the transformation toward climate-neutral, digital mobility with our NEW #auto strategy.”

Wolfsburg, October 28, 2021 – The global semiconductor bottlenecks particularly impacted on the business performance of the #Volkswagen Group in the third quarter. Operating profit before special items came to EUR 2.8 (3.2) billion in the period from July to September, a drop compared with the first two quarters of this year and the pandemicrelated weak prior-year period. The operating return on sales before special items declined to 4.9 (5.4) percent in the third quarter. The volume brands were affected most in this period, recording operating losses in spite of having full order books. Owing to the semiconductor shortage, the high level of customer demand in China could also not be met. In the first nine months of the year, the Group’s brands lifted deliveries to customers by 6.9 percent to 7.0 (6.5) million vehicles. Sales revenue saw a more significant increase, rising by 20.0 percent in the same period to EUR 187 (155) billion. Due to the strong first
half, operating profit before special items, which stood at EUR 14.2 (2.4) billion after nine months, remained at a solid level and exceeded the pandemic-related weak prior-year figure. The operating return on sales was 7.6 (1.5) percent. The #automotive Division achieved an adjusted net cash flow of EUR 12.4 (4.5) billion by the end of September, thus contributing substantially to the financing of the Group’s transformation. Despite the impact on working capital caused by the semiconductor shortage, adjusted net cash flow for the third quarter was slightly positive at EUR 33 million. Net liquidity in the #automotive Division fell by EUR 9.4 billion compared with the first six months to a still robust level of EUR 25.6 billion. Here, the Navistar transaction completed by July had a perceptible effect of around EUR 6 billion. In addition, a dividend of EUR 2.4 billion was distributed to #Volkswagen shareholders in the third quarter. The #Volkswagen Group confirmed its outlook for the operating return on sales for full year 2021 of 6.0 to 7.5 percent.

Herbert Diess, CEO of the #Volkswagen Group: “The results of the third quarter show once again that we must now systematically drive forward the improvement in productivity in the volume sector. We are determined to maintain our strong position against established and new competitors and to vigorously implement the transformation toward climate-neutral, digital mobility with our NEW #auto strategy.”

The #Volkswagen Group presented its NEW #auto strategy in July based on a combination of the strong volume, premium and sport brand groups and on global technology platforms. The strategy’s goal is to achieve Group-wide economies of scale and leverage synergies by 2030. The plans include rolling out a Group-wide mechatronics platform, a standardized operating system and a unified battery cell and also establishing a mobility platform. The latter shall be expedited through the planned transaction with Europcar announced on July 28. The transformation is to be financed with a wide-ranging set of measures to reduce fixed and material costs, to improve productivity in production and working capital. Among other things, the main site in Wolfsburg will be prepared for the changed competitive situation by establishing the #Volkswagen brand’s forward-looking Trinity project there and a new technical development accompanied by a modernization of the plant.

Arno Antlitz, CFO of the #Volkswagen Group: “Following a record result in the first half of the year, the semiconductor bottlenecks in the third quarter made it abundantly clear to us that we are not yet resilient enough to fluctuations in capacity utilization. This clearly shows that we must continue to work resolutely on improving our cost structures and productivity in all areas. In order to be able to implement our NEW #auto strategy as planned and finance our transformation towards e-mobility and digitalization on our own, we need to make decisive improvements.”

Further information in the press release to download

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Press release

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