Volkswagen Achieving Global Success Locally Americas Investor and Analyst Conference

Transcription

1 Volkswagen Achieving Global Success Locally Americas Investor and Analyst Conference Hans Dieter Pötsch Member of the Board of Management, Finance and Controlling, Volkswagen AG Chattanooga, 26 September 2011

2 Disclaimer This presentation contains forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as expects, anticipates, intends, plans, believes, seeks, estimates, will or words with similar meaning. These statements are based on assumptions relating to the development of the economies of individual countries, and in particular of the automotive industry, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given involve a degree of risk, and the actual developments may differ from those forecast. Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or China, will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese rinminbi and Czech koruna. If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements. We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superceded. This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities. 2

3 Economic Volatility and the Related Uncertainty have Steadily Increased Creating Challenges for the Future Global Macroeconomic Indicators Index 2005 = 100 Start of Consolidation Boom Downturn/Recession Future Orientated Key Challenges for the Automotive Sector Government debt crisis and the banking sector situation may spill over into the consumer sector Rising inflation and costs Growing trade barriers and increased state support reducing the level playing field Growth in new regions and global interconnectivity Volatile exchange rate developments More stringent regulatory environment Source: ifo World Economic Survey 3

4 Volkswagen Group is Well on the Way to Becoming the Leading Automotive Group Globally 2010 Medium term Strategy 2018 All building blocks in place Execution of strategy The global automotive leader Strong brand portfolio Platform leverage Advanced technology Efficiency leadership Position of financial strength Excellent management model Very well positioned to capture market share globally Leverage of modular toolkits Benefit from technology evolution Attractive growth Higher profitability Extensive brand and product portfolio Global footprint with BRIC focus Unrivalled distribution Best-in-class manufacturing Technology and quality leader Creation of sustainable value Strong foundation Capitalise on strategy implementation Global economic and environmental leadership 4

5 Volkswagen Group Strategy 2018 Sustainable Growth Combined with Sustainable Profitability 6 Potential upside Product portfolio extension North American expansion and market recovery Commercial vehicle strategy and market recovery Financial Services: strengthen the automotive value chain 5 Synergy potential Leveraging best practices across the Group Purchasing, production, and distribution benefits 1 Growth market focus Increased market penetration Emerging markets expansion Balanced global footprint Leading in customer satisfaction and quality Volkswagen Group profit Top employer before tax margin > 8% Volumes > 10 million units p.a. 2 4 Operating profit measures Strong cost control Process/product optimization Regional scale effects Source: Volkswagen Group Note: All stated Volkswagen Group figures represent financial targets for 2018, excluding Porsche 2 Modular toolkit strategy Reduction in investment, development and unit costs Scale and efficiency effects Increased production flexibility Reduced time to market 3 Capital discipline > 16% RoI target in automotive business 20% RoE 1 goal in Financial Services Around 6% automotive capex in PPE/sales 1 Pretax 2 Including China 5

6 Substantial Growth Opportunities Market growth (million units) % +40% +15% +94% North America Western Europe Eastern Europe (incl. Russia) -8% Japan +70% +137% +68% Total South America 1 +34% India China (incl. HK) 1 Includes Central America and Caribbean 2 Includes Turkey Source: IHS Global Insight (data status: August 11), rounded Rest of world 2 Note: Market = Cars and LCVs = IHS forecast from 02/2010 6

7 Strong Profitability in China Expanding Local Capacity and Model Portfolio Expanding activities to South and Western China Operating profit (proportionate): 1.9bn in 2010 ( 1.2bn in H1 2011) Investments : 14bn, fully self funded Local production of US Passat Market Development headquarters [Units m.] existing vehicle plant new vehicle plant/ expanding capacity +69% There of: 000 units: 1,480 1 Total Deliveries Jan-August Volkswagen Audi Skoda All figures shown are rounded, so minor discrepancies may arise from addition of these amounts. Source: Volkswagen Group China 7

8 Creating Profitable Growth through Targeted Models, Locally Sourced and Locally Produced Deliveries 2010: Group: 360, 000 Thereof Volkswagen: 257,000; Audi 102,000 Deliveries Jan-Aug 2011: Group: 285,000 Thereof Volkswagen: 208,000; Audi 75,000 Silao Plant (SOP 2013) Puebla Plant New Jetta Herndon Headquarters Chattanooga Plant Volkswagen Group of America Deliveries in m units Market share in %: 2007: : : Target > VW 0.1 Audi VW 0.1 Audi VW 0.2 Audi Target

9 Localisation Strategy for Improved Market Penetration and Profitability New US Passat from Chattanooga Improved market and financial performance European Passat US Passat Key success factors for the US Passat Positioning in the segment sweet spot to reach volume and market share targets perfect combination of vehicle package and price for the North American market Reducing exchange rate risk through natural hedging and lowering component costs through localisation to improve financial performance 9

10 Broad Product and Segment Highlights Opportunity to Capture Profitable Growth in New Segments (World 2011) Hatchback Saloon Estate MPV SUV Coupé Convertible Roadster City Van Pick-Up E D C 1 B 1 1 A A0 A % stake since 7 December 2009 Source: Volkswagen Group Product to be launched in

11 Importance of Small Vehicles in Emerging Markets Forecast Volume Growth in A000/A00 Segment by Major Regions (000) Total World 6,012 7,896 9,127 7,000 6,000 5,000 4,000 3,000 2,000 1, , China , ,009 1,528 1,081 1,415 1,573 1, Source: Global Insight (June 2011) Russia + Central & Eastern Europe Japan Latin America China India Western Europe Western Europe is the biggest market in the A00 segment India and Latin America have the largest growth potential amongst the A00 markets 11

12 Significant Opportunity in A00 Hatchback Segment in EU5 Western Europe 2010 Spain 40, % UK 197, % Other markets 290, % France 274, % Italy 396, % Germany 208, % Launch in Western Europe, followed by world-wide regionally adapted derivatives Huge potential for emerging markets growth High conquest rate Solid profitability Derivatives for other Group brands 2010: Approximately 79% of the volume in the Western European A00 segment was sold in the EU5 countries Source: MISV April, 14th

13 Increasing Returns through Improved Operating Margins and Strong Capital Discipline 1 Increasing Return on Investment through: High volumes Product cost and productivity optimization measures Strong sales performance Capital discipline (capex target ~6%) Operating profit in m Return on Investment 5,194 5,428 6,189 Return on Investment 2018 Target: > 16% H1: 5,485 1,166 1, Note: Including proportionate inclusion of the Chinese joint ventures (including the respective sales and component companies) and allocation of consolidation adjustments between the Automotive and Financial Services divisions. 1 Automotive Division 2 Adjusted. The return on investment after tax (RoI) is unchanged as against the previous year. 13

14 MQB Toolkit: Driving Forward Significant Economies of Scale in Unit Cost and Investment Start: 2012 MQB 1 A3 Golf Škoda Octavia SEAT Leon Reduction Targets for MQB Unit costs ~ 20% One-off expenditure ~ 20% Engineered hours per vehicle ~ 30% Significant weight and emission reduction Toolkit affords Flexibility in length, height, width Significant economies of scale Regional variations Opportunity for low volume niche models Alternative powertrain concepts 1 MQB: Modularer Querbaukasten/ modular transversal toolkit 14

15 Standard Layout Reduces Investment and Drives Up Production Efficiency Chattanooga Optimised Layout Reduced time for sourcing decisions Inter-company competition drives up operating best practice Increased flexibility between plants FAW-VW - Foshan SVW - Yizheng 15

16 Global Sourcing Decentralised Team under Global Leadership Driving Efficiencies North America Head Office and Europe China Structure Head Office South America South Africa Regional Responsibility Location Responsibility 16

17 Tighter Emission Targets Driving Up R&D Expense and Capex Regional Differences Add to Complexity EuropeM: gco2/km gco2/km ChinaM: l/km l/km USAF: IndiaM: mpg CAFE mpg GHG2 2020* 35 mpg CAFE gco2/km 2020* 123 gco2/km JapanM: km/l km/l 2020* 20.3 km/l South-KoreaM: gco2/km Source: Based on Fuel efficiency and CO2-regulations per country M=Massbased, F=Footprintbased, *=Draft, 1=Corporate Average Fuel Economy, 2=Greenhouse Gas-Regulation 17

18 Driving the Future On the Way to E-Mobility /2015 Hybrid VW Touareg Audi Q5 VW Jetta Audi A6 VW XL1 VW Passat Audi A4 Porsche* Cayenne S Porsche Panamera S hybrid Porsche 918 Spyder Audi A8 Audi Q7 E-vehicles Audi R8 e-tron VW up! blue-e-motion VW Golf blue-e-motion * 49.9% stake since Dec 2009 VW Caddy blue-e-motion 18

19 Volkswagen Financial Services: Successful, Diversified and Automotive Division Independent Funding Structure Deposits 1/3 1/3 ABS Internationalisation 1/3 New Markets Growth Markets Capital market Funding Financial Services License in India Bank License in Russia Fleet Business in UK, France, Italy, Spain, Sweden, Czech Republic, Brazil Liabilities to affiliated companies 10.5 bn (12%) Others 5.4 bn (6%) Customer deposits 20.1 bn (23%) Equiy 9.5 bn (11%) Asset Backed Securitization 11.5 bn (13%) Bonds issued 18.6 bn (21%) Commercial Paper 3.8 bn (4%) Liabilities to financial instritutions 8.7 bn (10%) South Korea Portugal Expansion along the Automotive Value Chain Extended Warranty Product from Volkswagen Versicherung AG GO40 Growth Plan Product Initiatives New Mobility Concepts Short and Long Term Rental Solutions Environmentally responsible Fleet Management 19

20 Integrated Automotive Group with Porsche Multi-Stage Transaction To Ensure Stable Rating Transaction steps Phase Signing of implementation and loan agreements; partial transfer of PAG Phase / 2011 Capital raising and acquisition of PHS Timeline Signing of comprehensive agreement Resolution of risk of Porsche SE s option portfolio of shares in Volkswagen Restructuring of financing of Porsche SE and Porsche AG Signing and notarisation of detailed implementation agreements Acquisition of a 49.9% stake in Porsche Zwischenholding GmbH by Volkswagen Capital increase at Volkswagen (preferred shares) Acquisition of Porsche Holding Salzburg Capital increase at Porsche SE (ordinary and preferred shares) As of comprehensive agreement: Phase onwards Integration Merger with Porsche SE in st Put PSE Exercise of put/call option for Porsche AG st Call VW nd Call VW nd Put PSE Alternatives 1 On September 8, 2011, Volkswagen announced: Merger of Volkswagen Aktiengesellschaft and Porsche Automobil Holding SE no longer expected within the time frame laid down in the Comprehensive Agreement 20

21 MAN Transaction On Track for Settlement in 2011 Before the increase in MAN shares Voting rights: 29.9% 1 Voting rights: 71.81% Capital: 28.67% 1 Capital: 49.29% Regarding antitrust law MAN has to be treated as third party 1 as of 5 May, 2011 Voting rights: 17.37% Capital: 13.35% Volkswagen and Scania are privileged by antitrust law Tender Offer Result as of July 4, m Ordinary Shares and 164, 613 Preference Shares tendered After regulatory approvals Volkswagen will hold 55.9% of voting rights and 53.71% of the total capital of MAN Remaining approvals, and Settlement, expected in H

22 Volkswagen Group Deliveries to Customers by Brand 1 January to August 2011 vs units January to August % January to August ,000 5,399 5,000 4,730 4,000 3, % 3,338 2,977 2,000 1,000 0 Volkswagen Group* 1 incl. Scania (Q1+Q2) Volkswagen Passenger Cars 17.4% % 2.3% 30.6% 27.2% 42.3% Audi Škoda Seat Bentley Commercial Vehicles Scania 22

23 Outlook 2011 Deliveries to customers 1 million vehicles Deliveries to customers are expected to increase versus 2010 Sales revenue is expected to be significantly higher than the previous year Sales revenue billion Operating profit billion Modular toolkit system will have an increasingly positive effect on the Group s cost structure Continuing volatility in interest and exchange rate trends and commodities prices will weaken the positive volume effect Operating profit in 2011 is expected to be significantly higher than in incl. Trucks & Busses (until February 2009) 23

24 GDP and Car Market Forecast 2012 * - Lower Growth Rate Forecast - but Still Growing GDP % 2012 Forecast as of 01 / / / 11 Car Market 2012 Forecast as of 12 / / / 11 Europe Europe China China Brazil Brazil Russia Russia North America North America Global Global *Source: IHS Global Insight 24

25 Balanced Production and Deliveries Segment Exposure also Improving Regional derivatives closer to customer needs High localisation rate Minimising import tariffs through localisation Reducing currency exposure Western Europe Central & Eastern Europe North America Asia-Pacific South America Rest of World 17% 30% 9% 12% 14% Deliveries Production Segments 8% 2% % 15% 6% 12% 17% 2% 4% 1% 12% 27% % 42% 3% 8% 30% 16% 12% 12% % 39% 2010 Station wagon Hatchback Sedan SUV Other 35% 8% 6% 6% 12% 35% 25

26 2011 vs 2007: What has Changed in the Volkswagen Group? Improved Balance in Global Sales Global production footprint Newest Technology for our customers Increased global market share Young model range Growing in new markets Disciplined inventory control Best practice through PHS purchase Russia, India, China and the US added More flexible and efficient production; turntable concept enhanced Rolled out MLB toolkit; MQB from 2012 Flexible labour force and use of time accounts Proven innovation track record (TSI, DSG) Full spectrum of fuel and powertrain technologies Environmentally friendly products (BlueMotion) Extended Brand Portfolio Robust financial situation Better Cooperation within Organisation 9 brands under one roof Excellent progress at operating level with Porsche High synergy potential with Scania and MAN Excellent Liquidity in the Automotive Division Stable Rating with improved Outlook Innovative, well financed and geographically Diversified Financial Services portfolio Industry leading brand management model led by experienced team Enhanced Group co-ordination through Wolfsburg Process Standardisation in all functions 26

27 Volkswagen Group is Well on the Way to Becoming the Leading Automotive Group Globally 2010 Medium term Strategy 2018 All building blocks in place Execution of strategy The global automotive leader Strong brand portfolio Platform leverage Advanced technology Efficiency leadership Position of financial strength Excellent management model Very well positioned to capture market share globally Leverage of modular toolkits Benefit from technology evolution Attractive growth Higher profitability Extensive brand and product portfolio Global footprint with BRIC focus Unrivalled distribution Best-in-class manufacturing Technology and quality leader Creation of Sustainable Value Strong foundation Capitalise on strategy implementation Global economic and environmental leadership 27

28 Volkswagen Achieving Global Success Locally Americas Investor and Analyst Conference Hans Dieter Pötsch Member of the Board of Management, Finance and Controlling, Volkswagen AG Chattanooga, 26 September