The Key to Mobility. Creating Value with Financial Services. Fixed Income Investor Update - December Volkswagen Financial Services AG

Transcription

1 The Key to Mobility Creating Value with Financial Services Fixed Income Investor Update - December 2010 Bernd Bode Head of Group Treasury and Investor Relations Volkswagen Financial Services Nils Allnoch Treasury / Debt Capital Markets Volkswagen Financial Services AG

2 Speakers Alexander Hunger Senior Investor Relations Officer Volkswagen AG Kai Otto Head of Capital Markets & Asset Management Volkswagen AG Bernd Bode Head of Group Treasury and Investor Relations Volkswagen Financial Services Nils Allnoch Treasury / Debt Capital Markets Volkswagen Financial Services AG 2

3 Volkswagen Financial Services: Company Overview Creating value Our Business Model Preparing for the Future Our Strategy 2018 Financials Funding 3

4 Volkswagen Financial Services AG: Coordinating the worldwide financial services activities of the Volkswagen Group Automotive Division Financial Services Division Volkswagen Financial Services Europe / Asia-Pacific / South America Financial Services USA / Canada / Spain / Argentina Remaining companies Scania Financial Services Volkswagen Financial Services AG is responsible for coordinating the worldwide financial services activities of the Volkswagen Group (excl. Scania Financial Services) 4

5 Volkswagen Financial Services AG at a glance (06/30/2010) Worldwide presence Company figures Total assets Equity Direct Bank deposits Employees Receivables Operating Profit 63.7 bn 6.8 bn 18.8 bn 6, bn 362 mn Volkswagen Financial Services AG is affiliated with companies in 38 countries through shareholdings and service agreements Leasing 13.7 bn Wholesale 8.5 bn Receivables Credit 29.2 bn 5

6 The Whole Range of Services Under One Roof Bank Direct Bank Leasing Insurance Services Retail Finance Deposit Accounts Finance Lease Automotive Fleet Management Dealer Finance Instalment Loans Operating Lease Payment Protection Fuel Factoring Investment Products Industry Tyre 6

7 Volkswagen Financial Services: Company Overview Creating value Our Business Model Preparing for the Future Our Strategy 2018 Financials Funding 7

8 Creating Value Our business model interfaces Customers, Automotive Brands and Dealers Dealers Automotive Brands Customers 8

9 Integrating Automotive and Financial Services: Improving Customer Loyalty and maximizing Profit Potential Automotive Mobility Research & Development Procurement Production Sales After Sales Total Mobility Financial Mobility New Mobility Dealer Financing Credit / Leasing Insurance Services 9

10 Financial Services Impact on Automotive Business holding period Change to competitor New vehicle VW Group Cash payers 7.4 years Cash payers 37% 63% Captive customers 5.5 years Captive customers 31% 69% Increased Rate of Vehicle Turnover Captive Customers Have a Higher Brand Loyalty Source: VW Group internal data EU

11 Volkswagen Financial Services: Company Overview Creating value Our Business Model Preparing for the Future Our Strategy 2018 Financials Funding 11

12 Strategy 2018 Volkswagen Financial Services: VISION The best automotive financial services group in the world. BRAND GUIDELINE STRATEGIC GOALS Customers To be the most attractive supporter of sales for the brands To be the quality leader in business with customers and dealers Employees We are a top team! getting things done The key to mobility. customer - focused Pioneering FS product brands follow the brand guidelines of the respective automotive brand Profitability 20% ROE 1) with 50% CIR Volume Comprehensive support for the automotive product flows To cover at least every 2nd new car from the VW Group with one or more FS products To become market leader for financial services products for young used cars of the VW Group 1) excl. LeasePlan, factoring, employee leasing; based on the necessary capital to run the business (today 8%) 12

13 VW FS has a Diversified Portfolio in Brand and Product Offer Market Brands Captive Product Bank Direct Banking Leasing Insurance Services Volume Volume Volume Premium Luxury ( ) ( ) Luxury ( ) ( ) Luxury ( ) ( ) LCV = active product offer = no product offer ( ) = on request 13

14 Retail Finance: Packages as Comprehensive Mobility Solutions Innovative mobility packages addressing customer relevant topics e.g. the TEAM Edition at Football Championship, fuel efficiency,... All-inclusive mobility packages offer - an attractive vehicle, - a financing or lease offer including auto insurance, - an extended warranty, - up to four years of comprehensive maintenance and inspection. Product packages... - offer customers comprehensive mobility based on calculable monthly costs, - help to avoid discussions about price and discounts, - lead to positive effects on volumes and prices, - protect residual values. Product launch in the German core market lead to an increase of ~ 20% in new contract volume 14

15 Retail Finance: Comprehensive Mobility Solutions Globally Australia Spain Turkey India Italy Poland Netherlands UK International campaigns: finance, insurance and services (2008 / 2010) 15

16 Automotive Growth Markets by 2018 Market growth (million units) Total +50% 95,4 79,7 63, % +10% 12,7 18,0 19,7 15,0 15,0 16, North America Westeuropa +58% South America +115% 2,8 3,6 6, Eastern Europe +78% +0,1% 13,0 18,4 23,1 4,6 4,8 4, Japan +137% China 2,1 3,2 4,9 +47% ,0 9,5 11,6 India Rest of World Source: Global Insight forecast for passenger cars and light commercial vehicles as at June

17 Tapping our worldwide Growth Potential: Developing New Markets and improving Market Positioning Norway FS Business EU4 Fleet Business Baltic States FS Business Switzerland Fleet Business Russia FS Business South Korea FS Business Mexico Insurance Business Middle East / North Africa Insurance Business India FS Business China FS Business Argentina Insurance Business South Africa FS Business Australia FS Business Market Study Start/ Market Entry Expansion 17

18 Volkswagen Financial Services: Company Overview Creating value Our Business Model Preparing for the Future Our Strategy 2018 Financials Funding 18

19 Volkswagen Financial Services AG: Stable portfolio growth Existing Contracts ('000) + 0.5% 4,188 4, % 4, % 5, , % 5, , % + 0.3% 6,028 6, ,621 1,580 1,504 1,552 1,708 1,772 1,823 1,890 2,317 2,390 2,806 2, ,092 1,101 1, /2010 Leasing Financing Insurance Services 19

20 Credit Risk: Losses under control / covered by provisions 2.4% 2.2% 2.1% 0.5% 0.5% 0.6% 0.6% 0.6% 0.3% 0.4% 0.7% 0.8% 0.8% 0.8% 0.5% Total Provision Ratio Total Provision Ratio according to IAS 39 revised = total provisions in proportion to the total receivables volume at reporting date Ø Dynamic Loss-Ratio Retail financing Leasing Corporate financing Dynamic Loss Ratio = utilization of provisions including direct write-offs relative to the average volume of receivables (last four quarters) 20

21 Key Data Volkswagen Financial Services AG (IFRS) H 1 Portfolio ( 000) 4,567 5,299 5,793 6,028 6,044 Retail + Leasing receivables ( mn) 30,021 34,523 36,825 40,538 42,892 Wholesale receivables ( mn) 6,989 9,360 9,584 8,391 8,505 Direct bank deposits ( mn) 8,827 9,620 12,835 18,309 18,811 Employees 5,022 6,138 6,639 6,775 6,639 IFRS profit before tax ( mn)

22 Strategic Focus Offer of innovative products for brand and local market requirements Exploitation of further growth potential in mature European markets based upon our innovative products and customised services through all steps of our value chain Growth in emerging markets in Eastern Europe, Russia, Asia and Latin America together with Volkswagen Group brands Further reduce risk exposure through customer segment- and regional diversification Ongoing diversification in worldwide refinancing 22

23 Outlook 2011 Growth potential continues to exist, Margin pressure likely to return, Risk Costs will improve, Refinancing situation normalized at competitive costs, Focus on Strategy 2018 implementation. 23

24 Speakers Alexander Hunger Senior Investor Relations Officer Volkswagen AG Kai Otto Head of Capital Markets & Asset Management Volkswagen AG Bernd Bode Head of Group Treasury and Investor Relations Volkswagen Financial Services Nils Allnoch Treasury / Debt Capital Markets Volkswagen Financial Services AG 24

25 Volkswagen Financial Services: Company Overview Creating value Our Business Model Preparing for the Future Our Strategy 2018 Financials Funding 25

26 Refinancing Strategy The strategic vision for 2018 Deposits ABS 1 / 3 1 / 3 1 / 3 Capital Market Diversification is the key factor 26

27 Capital Markets within Volkswagen Financial Services worldwide VCI $ 5bn CP Program (in progress) 10bn CP Program (VW Group) 25bn Debt Issuance Program (VW Group) VCCI 25bn Debt Issuance Program (VW Group) CAD CP and Debt Issuance Program VW FS Group 10bn CP Program 18bn Debt Issuance Program VW Bank 2.5bn CP Program 10bn Debt Issuance Program VW Bank Polska VW Leasing Polska PLN 3bn Debt Instrument Issuance Program VW FS Japan JPY 60bn ECP Program VW Leasing MXN 15bn Dual Program VW Bank MXN 10bn Dual Program (in progress) VDF Turkey Feasibility study VW FS India Feasibility study VW Finance (China) Feasibility study Banco VW Brazil Feasibility study VW FS Australia AUD 2bn Debt Issuance Program 27

28 ABS within Volkswagen Financial Services worldwide VCI / VCCI Separate ABS expertise in the USA and Canada DFM DFM in the Netherlands VW FS UK ABCP-Conduit, Driver UK Program VW Bank France Feasibility Study VW Finance Spain Current ABS-project VW Bank / VW Leasing Driver- & VCL-Program VW Leasing Polska Current ABS-project VW Bank Italy Feasibility Study VW FS Japan Ltd ABCP Conduit in Japan, Second deal in progress VW FS China Feasibility Study Banco VW Brazil Current ABS-project 28

29 Refinancing Profile total 63.7 bn others 3.8 bn 6% equity 6.8 bn 11% bonds issued 14.0 bn 22% Deposits asset backed securitization 5.7 bn 9% 1 / 3 1 / 3 1 / 3 ABS Capital Market customer deposits 18.8 bn 29% liabilities to financial institutions 7.0 bn 11% liabilities to affiliated companies 4.9 bn 8% commercial paper 2.7 bn 4% as of 06/30/2010 Increase of direct-bank deposits independent from Automotive business Step-by-step increase of ABS capabilities established programs, new markets & asset classes Independence from Automotive funding tap further Automotive liquidity in an opportunistic manner only Further diversification of investor base unsecured issues / secured transactions 29

30 Recent Deals Capital Market VW FS AG: 01/10 1.0bn due 07/14 VW Bank GmbH: 06/10 1.0bn due 06/13 VW Bank GmbH: 10/10 0.5bn due 04/12 Asset-Backed Securities VCL- Master 1.2 bn (February 2010) Driver- 7 Germany 0.5 bn (April 2010) VCL- 12 Germany 0.5 bn (September 2010) Deposits Development January to June 2010: +0.5bn Percentage Overnight (06/30/10): approx. 71% 30

31 Development of Customer Deposits billion H Retail Customer Wholesale Customer 31

32 Rating History Moody s S&P Development of credit ratings (S&P) Toyota Aa2 AA Honda A1 A+ VW Bank GmbH A2 A- VW AG/ FS AG A3 A- BMW A3 A- Daimler A3 BBB+ Banque PSA Baa1 BBB RCI Banque Baa2 BBB FMCC Ba2 B+ AAA AA , ,5 AA AA- A+ 17 A16,5 A-16 BBB+ 15,5 BBB15 BBB- 14,5 BB+ 14 BB13,5 BB-13 B+ 12,5 B 12 B-11,5 CCC ,5 Jan. 08 Mrz. 08 Mai. 08 Nov. 08 Jan. 09 Mrz. 09 Mrz. 09 Jul. 09 Sep. 09 Nov. 09 Mai. 10 Aug. 10 Okt. 10 Toyota (AA) Honda (A+) VW Bank (A-) VW AG/ FS AG (A-) BMW (A-) Daimler (BBB+) Banque PSA (BBB) RCI Banque (BBB) FMCC (B+) Volkswagen Financial Services AG has a solid and stable rating history Data Source: Reuters 32

33 Thank you! 33

34 Contacts Bernd Bode Head of Group Treasury and Investor Relations Volkswagen Financial Services Tel.: Nils Allnoch Treasury / Debt Capital Markets Volkswagen Financial Services AG Tel.: nils.allnoch@vwfs.com Interim Report of Volkswagen Financial Services AG: 34

35 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 renminbi 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. 35