Volkswagen Group achieved robust financial results in 2023. This was driven by a strong fourth quarter, with sales revenue of EUR 87 billion and an increase in operating profit of more then a quarter compared to the previous year. During the year, the Group made further progress with the implementation of its strategy and systematically pushed ahead with its restructuring. The focus was on customer-oriented products and compelling design, in addition to the strengthening of the regions, particularly China and North America. By introducing performance programmes in all divisions, the Group has made notable strides towards a sustainable increase in profitability.
The Group’s sales revenue grew by 15 per cent to EUR 322.3 billion in 2023, driven by an increase in deliveries, an improved product mix and positive price effects. Deliveries of battery electric vehicles (BEV) increased by 35 per cent to 771,000 units, driven by growth in all regions. The share of BEVs rose continuously over the course of the year, reaching 8,3 per cent for 2023, compared to 6,9 per cent in the previous year. The total number of vehicles delivered grew by 12 per cent to 9.24 million. All regions contributed to this growth, with Europe (+20 per cent) and North America (+18 per cent) as the main drivers. In China, the Group’s largest single market, deliveries to customers grew by 2 per cent, despite a demanding market environment.
Oliver Blume, CEO Volkswagen Group, said: “2023 was an important year for the Volkswagen Group in terms of our realignment. Last year, we continued to implement our 10-point programme and the performance programmes. The clean-up work has been completed. The main course has been set for the restructuring of the Volkswagen Group. We can build on this in 2024 and have a solid basis for an accelerated ramp-up from 2025.”
At EUR 22.6 (22.5) billion, operating profit before special items remained at previous year’s level despite significant negative valuation effects, particularly from commodity hedging, amounting to EUR 3.2 billion. This corresponds to an operating return on sales before special items of 7.0 (8.1) per cent.
The Automotive Division’s net cash flow amounted to EUR 10.7 (4.8) billion. The increase is primarily due to growth in the operating business. The elimination of bottlenecks in the supply chain for finished vehicles also led to a sharp reduction in inventories of around EUR 5 billion by the end of the year.
At EUR 40.3 (43,0) billion, after dividend payments of around EUR 11 billion, the Automotive Division’s net liquidity remains at a robust level.
The Board of Management and Supervisory Board are proposing to the Annual General Meeting a dividend of EUR 9.00 per ordinary share and EUR 9.06 per preferred share, representing an increase of EUR 0.30 per ordinary and preferred share respectively compared to the previous year’s figures. The payout ratio corresponds to 28 per cent and is therefore slightly below the Group’s ambition of at least 30 per cent.
Arno Antlitz, CFO & COO Volkswagen Group: “The results for the 2023 financial year show that we have become even more robust. We have excellent products and have launched ambitious
Group-wide efficiency programmes. Therefore, we are confident about 2024, despite the muted economic outlook and intense competition. On that basis, we will consistently drive the transformation of the Volkswagen Group forward. We expect a tailwind from a large number of new product launches, a positive trend in product costs and continued cost discipline. Our flexibility is our strength: we are continuing to invest in the electrification and digitalisation of our product range, while simultaneously keeping our combustion vehicles competitive during the transition phase.”
The Volkswagen Group is continuing to invest particularly in the Chinese market, new products, its battery business, and its platforms for BEVs and combustion models. In 2024, the investment ratio will peak at an expected 13.5 to 14.5 per cent. In the following years, the Group anticipates the investment ratio to gradually approach the target level of 11 per cent by 2027. By better leveraging its synergies, the Group will be able to limit its upfront investments to EUR 170 billion in the upcoming five-year plan from 2025 to 2029.
Outlook 2024
The Volkswagen Group expects the sales revenue to exceed the previous year’s figure by up to 5 per cent. The operating return on sales is expected to range between 7.0 per cent and 7.5 per cent.
In the Automotive Division, the Group assumes an investment ratio of between 13.5 per cent and 14.5 per cent in 2024. The automotive net cash flow for 2024 is expected to be between EUR 4.5 and EUR 6.5 billion. This will include in particular investments for the future and cash outflows from mergers and acquisitions for the battery business, which are a vital pillar of the Volkswagen Group’s transformation. Net liquidity in the Automotive Division is expected to be between EUR 39 billion and EUR 41 billion in 2024. It remains the Group’s goal to continue its solid financing and liquidity policy.
Challenges will arise in particular from the economic situation, the increasing intensity of competition, volatile commodity, energy and foreign exchange markets, and more stringent emissions-related requirements.
Volkswagen Group
The Volkswagen Group is one of the world’s leading car makers, headquartered in Wolfsburg, Germany. It operates globally, with 114 production facilities in 19 European countries and 10 countries in the Americas, Asia and Africa. With around 684,000 employees worldwide. The Group’s vehicles are sold in over 150 countries.
With an unrivalled portfolio of strong global brands, leading technologies at scale, innovative ideas to tap into future profit pools and an entrepreneurial leadership team, the Volkswagen Group is committed to shaping the future of mobility through investments in electric and autonomous driving vehicles, digitalisation and sustainability.
In 2023, the total number of vehicles delivered to customers by the Group globally was 9.2 million (2022: 8.3 million). Group sales revenue in 2023 totaled EUR 322.3 billion (2022: EUR 279.1 billion). The operating result before special items in 2023 amounted to EUR 22.6 billion (2022: EUR 22.5 billion).
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