VW H1 results 'exceed expectations'
For the first half of 2010, the group reported a 16% rise in deliveries to 3.6 (3.1) million vehicles, increasing global market share to 11.7% (11.6%). Operating profit (excluding joint ventures in China) rose to €2.8 billion (€1.2 billion) on the back of a 20.7% increase in sales revenue to €61.8 billion (€51.2 billion). Net profit rose to €1.8 billion (€0.5 billion).
Volkswagen CEO Dr Martin Winterkorn said: 'First-half earnings were clearly in excess of our expectations. We were able to expand our position in the international automotive markets even further.'
He added: 'We shall systematically extend our competitive position on the way to becoming the world's leading automaker by selectively expanding our extensive range of new, environmentally friendly vehicle models.'
CFO Hans Dieter Pötsch added: 'High demand for Group models in Western Europe, China, and North and South America was a key reason for our strong result, along with the boost provided by lower product costs and positive exchange rate effects. This has allowed us to improve our financial strength even further. Our goal is now to systematically continue this profitable growth path.'
The Volkswagen Passenger Cars brand sold 1.9 million vehicles in the reporting period (1.7 million), a year-on-year increase of 17.5%. Operating profit improved substantially to €1.0 billion (€0.2 billion). The Polo, New Beetle, Tiguan and Touareg models, the Golf derivatives, and the Jetta and Passat versions available in China experienced particularly strong demand.
At 660,000 (567,000) vehicles, unit sales by the Audi brand (including Lamborghini) were up 16.4% year-on-year. Operating profit rose by 61.6% to €1.3 billion (€0.8 billion). Among others, the Audi Q5, Audi Q7 and the new Audi A5 Sportback and Audi A8 models recorded strong growth rates.
Skoda recorded unit sales growth of 13.7%, to 298,000 (262,000) vehicles. As a result, operating profit climbed €92 million to €227 million. In addition to volume increases, VW said the rise was driven by cost reductions and more favorable exchange rates.
The recovery in the Spanish automotive market had a positive effect on unit sales by the SEAT brand, which rose by 17.7 percent in the reporting period to 186,000 (158,000) vehicles. The operating loss amounted to €-157 million (€-159 million).
Unit sales by the Bentley brand rose thanks to a slight improvement in the luxury segment, with the operating loss narrowing by €5 million to €-109 million.
Volkswagen Commercial Vehicles benefited from increased demand in the commercial vehicles business; sales amounted to 159,000 (135,000) units, 18.3% more than in the prior-year period. Its operating profit amounted to €118 million (€463 million). The figure for the prior-year period includes the proceeds of €0.6 billion from the sale of the Brazilian commercial vehicles business. Adjusted for this item, operating profit rose significantly.
Unit sales by the Scania brand increased by 37.0% in the reporting period to 28,000 (21,000) vehicles. At €577 million (€48 million), operating profit was up on the figure for the previous year, which was impacted by the difficult operating environment.
Volkswagen Financial Services again made a significant contribution to the Volkswagen Group's profit: at €362 million (€321 million), its operating profit exceeded the prior-year level by €41 million.
Looking to the full year, although VW acknowledged that 2010 will remain challenging it predicted that deliveries to customers will be significantly higher than in 2009, due among other factors to the positive business growth in China. It also said that while sales revenue and earnings would be more challenged in H2, they wouldl be significantly higher than last year's figures.