Volkswagen Group makes successful start to 2012

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  • Sales revenue rises 26.3 percent to €47.3 billion (€37.5 billion) in first quarter
  • Operating profit up 10.2 percent to €3.2 billion (€2.9 billion)
  • Global market share of passenger car market improves to 12.2 percent (11.9 percent)
  • Automotive Division net liquidity at €15.8 billion

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Wolfsburg, 26 April 2012 - The Volkswagen Group has continued its run of successes in the first quarter of fiscal year 2012. “With the first quarter we have had a clearly good start to the year”, said Prof. Dr. Martin Winterkorn, Chairman of Volkswagen Aktiengesellschaft’s Board of Management, during the presentation of the Company’s financial results for the first three months of 2012 in Wolfsburg on Thursday. “Our results once again show that we are on the right track.”

The Volkswagen Group increased its sales revenue by 26.3 percent in the first three months of the year to €47.3 billion (€37.5 billion). Operating profit rose by 10.2 percent to €3.2 billion (€2.9 billion) and the operating return on sales was 6.8 percent (7.8 percent). The Group’s margin was down year-on-year primarily because of negative effects from the charges relating to the purchase price allocation for MAN and Porsche Holding Salzburg.

The consolidated operating profit does not include the €848 million (€557 million) share of the operating profit of the Chinese joint ventures. These companies are accounted for using the equity method and are therefore reflected in the financial result, which rose to €1.1 billion (€–0.7 billion). This was lifted by the strong business performance of the Chinese joint ventures as well as the improvement in the profit recorded by Porsche Zwischenholding GmbH. The updated measurement of the put/call rights relating to Porsche Zwischenholding GmbH at the reporting date also had a positive effect on the financial result. Profit before tax almost doubled to €4.3 billion (€2.2 billion). Profit after tax improved by 86.1 percent to €3.2 billion (€1.7 billion).

The Group’s performance in the first three months of the year was encouraging, according to CFO Hans Dieter Pötsch. "In light of the ongoing difficult environment, we can be satisfied with the Group’s good performance", said Pötsch, adding: "Our financial strength and soundness is and will remain the basis for our continued healthy growth."

Automotive Division net liquidity

Net liquidity in the Automotive Division was €15.8 billion in the first quarter of 2012, as against €17.0 billion at the end of December 2011. This figure includes cash outflows of €1.4 billion over the first three months of the year from the increase in the equity interest in MAN SE, the Munich-based manufacturer of commercial vehicles, engines and power engineering equipment, to 70.89 percent of the voting rights as of March 31, 2012.

At €1.7 billion, investments in property, plant and equipment in the Automotive Division in the first quarter exceeded the prior-year figure (€0.9 billion). Nevertheless, the Volkswagen Group maintained its strict investment discipline. The ratio of investments in property, plant and equipment (capex) to sales revenue in the Automotive Division amounted to 4.0 percent (2.8 percent). Investments related primarily to production facilities, the switch to the Modular Transverse Toolkit, new products and the ecological alignment of the model range. "In all of our investment decisions, we will continue to ensure that our upfront expenditures are focused on safeguarding the future of our Company and generating adequate returns", said Pötsch.

Brands and Business Fields

The Volkswagen Group further expanded its strong position in the global markets in the first three months of the year, outperforming the market in all regions. Total Group unit sales increased by 11.3 percent to 2.3 million vehicles in the first three months of the year. The Group’s share of the global passenger car market climbed to 12.2 percent (11.9 percent).

The Volkswagen Passenger Cars brand sold 1.2 million vehicles (1.1 million) worldwide. This corresponds to an increase of 9.3 percent compared with the prior-year period. There was increased demand for the Tiguan, Passat, Touareg and Sharan models. The up!, Beetle and CC models were also highly popular. Operating profit improved slightly, up 5.3 percent to €1.1 billion (€1.1 billion), despite upfront expenditures for the Modular Transverse Toolkit.

Ingolstadt-based premium car manufacturer Audi sold 340,000 vehicles worldwide in the first quarter of 2012, and the Chinese joint venture FAW Volkswagen sold a further 77,000 Audi vehicles. The Chinese joint venture’s sales were included in the prior-year figure (374,000 vehicles). Worldwide, the Audi A6, Audi A7 Sportback and Audi A8 models recorded the highest growth rates. Growth in demand for the new Audi A1 Sportback and Audi Q3 models was also extremely positive. Operating profit rose by 26.6 percent to €1.4 billion (€1.1 billion).

ŠKODA also continued its run of successes, selling 206,000 vehicles (181,000) in the year to date. This corresponds to an increase of 13.9 percent compared with the first quarter of 2011. Demand for the Fabia saloon, Yeti and Octavia models, as well as for the Rapid in India, was encouraging. First-quarter operating profit rose by 11.8 percent to €209 million (€187 million).

Unit sales of SEAT increased by 6.7 percent year-on-year to 99,000 vehicles worldwide (93,000), although demand for vehicles in the still declining Spanish passenger car market was again lower in the reporting period than in the previous year. The operating loss widened by €17 million to €29 million due to increased fixed costs and sales support.

Luxury carmaker Bentley continued to benefit from growing demand, selling around 2,000 vehicles (1,000) in the reporting period. Operating profit rose by €40 million to €15 million.

Volkswagen Commercial Vehicles increased its sales by 9.8 percent to 119,000 vehicles (108,000). Positive volume and mix effects saw operating profit grow by 34.1 percent to €124 million (€92 million).

Swedish truck manufacturer Scania sold 16,000 vehicles (19,000) in the first three months of the year. The 14.8 percent decline is primarily attributable to reduced demand in the Europe/Remaining markets region. Operating profit amounted to €262 million, €115 million lower than in the prior-year period.

Commercial vehicle, engine and power engineering equipment manufacturer MAN sold 35,000 commercial vehicles in the first quarter of 2012. Its operating profit amounted to €223 million.

Volkswagen Financial Services generated an operating profit of €311 million in the period from January to March, exceeding the prior-year figure by €25 million on the back of volume and currency-related factors.

Winterkorn: "The Volkswagen Group can approach the coming months with confidence"

Despite the economic uncertainties, Europe’s largest automobile manufacturer is confident about the year ahead. The 2012 automotive year is set to be a very demanding one for the Group. "Nevertheless, I’m still convinced that the Volkswagen Group can approach the coming months with confidence", emphasized Winterkorn. One reason for this is the 40 new models, successors and enhancements that the Group will launch this year including among them the recently announced Audi A3. "As a result, we again expect to increase deliveries to customers year-on-year", said Winterkorn.

Volkswagen reiterated its forecast that sales revenue will exceed the prior-year figure. This will also be a result of the consolidation of MAN SE as of November 9, 2011; the earnings contribution by MAN will be limited because of the charges that will be required for purchase price allocation. The goal for operating profit of the Volkswagen Group is to match the 2011 level.

The complete interim report is published on our website at:

http://www.volkswagenag.com/ir/Q1_2012_e.pdf

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