Our roadmap to profitable growth Hans Dieter Pötsch, Member of the Board of Management Volkswagen Aktiengesellschaft

Transcription

1 Our roadmap to profitable growth Hans Dieter Pötsch, Member of the Board of Management Volkswagen Aktiengesellschaft 7 th German Corporate Conference, Frankfurt/Main, 22 January 2008

2 Increasing ROI: our roadmap to profitable growth Growth Opportunities Higher Volumes Products & Innovation Continuous Cost Improvement Increasing ROI Financial Discipline Greater Capital Efficiency 2

3 Leveraging world wide growth opportunities Growth Opportunities Expand in growth markets Gain share in North America Integrate Financial Services Higher Volumes Products & Innovation Continuous Cost Improvement Increasing ROI Financial Discipline Greater Capital Efficiency 3

4 All time high in unit sales with all brands growing Deliveries to Customers units 7,000 6, % 5,733 6,189 January December 2006 January December ,000 4, % 3,396 3,663 3,000 2,000 1, % % % % % Volkswagen Volkswagen Audi Škoda Seat Bentley Commercial Group Passenger Car Vehicles 4

5 All time high in unit sales with a strong European base Deliveries to Customers units 7,000 6,000 5, % 6,189 January December 2006 January December , % 4,000 3,668 3,760 3,000 2,000 1, % % % ,052 0 Volkswagen Europe / North America South America/ Asia Pacific Group Remaining markets South Africa 5

6 Growing importance of Emerging Markets Sales in million units ( ) USA/CDN Western Europe Eastern Europe and Russia 6.7 Japan China Established Markets Emerging Markets Left: 2006 Right: SAM and Mexico Africa India ASEAN 6,6 8,6 Rest of World Source: POLK 6

7 Russia manufacturing: gateway to the east Cars by Segment million units A00 B A A % CAGR for total car market 120% cumulative growth Volkswagen plant in Kaluga Production ramping up Aiming at 10% share by 2010 Initial product design aimed at A and A0 notchback segments Avoiding import duties of 25% on completed cars Agreement cuts duties on imported components from 14.5% to 3% for 8 years 7

8 India production: full steam ahead Cars by Segment Million units DELHI NEPAL CHINA BHUTAN 0.56 Mumbai Aurangabad 0.41 Pune B A A0 A % CAGR for total car market 228% cumulative growth Initial product design aimed at A0 notchback & hatchback segments Local assembly since 2001 at Aurangabad Full scale production 2010 at Pune High local content needed to achieve economic results 8

9 Impressive product pipeline for fast-growing China Cars by Segment Million units 3.53 Volkswagen Sagitar % share in world s fastest growing market new models designed for the local market being introduced Cutting costs Improving consumer satisfaction B A A0 A % CAGR for total car market 166% cumulative growth

10 Dedicated plan for profitable growth in the United States Sell 800,000 Volkswagen cars to loyal customers in 2018 VW Organization Dealer Network Local Production Brand Strategy Product Strategy Establish efficient and competitive organization Increase efficiency of of dealer network Manufacture US specific products locally Unique Positioning of of Brands Offer competitive product range with high quality 10

11 Financial Services to support growth in key markets India USA Total Cars Financed FS Penetration FS Setup Total Cars Financed FS Penetration FS Setup Maturity of the market ~80% none Russia Total Cars Financed FS Penetration none FS Setup ~90% ~70% China Total Cars Financed FS Penetration 100% own operation finance leasing FS Setup ~25% ~1% 100% own operation for finance Cooperation in retailfin ~15% ~15% 100% own operation financeonly Volkswagen Group sales 11

12 Winning customers with innovative high quality products Growth Opportunities Products & Innovation Higher Volumes Market Segmentation Sustainability Innovation & Technology Continuous Cost Improvement Increasing ROI Financial Discipline Greater Capital Efficiency 12

13 Only segment innovators to succeed in fragmented markets Segments cover total market 2006 >30 Segments cover total market A00 Price Driving fun / individuality CABRIO-B CABRIO-A COUPÉ/CABRIO-D A0-3T A-3T SPORT-B C A-4T/-4/5T A0/A-5T G KOMBI-A KOMBI-B KOMBI-C MPV Prestige D Fragmentation A/B- Segment Price A00/A0-3TÜR. Driving fun / individuality CAB./ROADSTER-A0/A A-3TÜR. A0/A/B-SPORT B-LIM A-5TÜR. A0-5TÜR.-LOW A/B-4/5TÜR. HOCHDACH-A KOMBI-B-HIGH A0-5TÜR.-HIGH KOMBI-B MPV-A0/A-LOW KOMBI-A VAN-A-TG RHT-A MPV-A MPV-B-6+SEATS MPV-B-5SEATS COUPÉ-B ROADSTER-B CABRIOLET-B C-LIM KOMBI-C-HIGH KOMBI-C-LOW OFFROAD-C OFFROAD-B OFFROAD-A MPV-C PICK-UP CABRIO/ROADSTER-C/D COUPÉ-D D-LIM Cabrios & Coupés Prestige Offroad Vehicles Usability/ Applicability Usability/ Applicability 13

14 Heading towards a fully-fledged product portfolio Product portfolio Western Europe Hatchback Notchback Estate MPV Van SUV Coupé Cabrio Roadster E D C B A A0 A00 New segments

15 Covering new segments will only be possible by modularization Development from platform strategies to modular tool kits Body Platform Module Module Before Today Future D C B A A0 A00 Synergies E D C B A A0 A00 Synergies E D C B A A0 A00 Synergies 20% Body 50% Modules 60% Platform 50% 20% 15

16 Audi A4 16

17 Tiguan 17

18 Up! -family 18

19 Ensuring sustainable mobility with new powertrains and fuels Renewable Electricity Hydrogen (Regenerative) Electrotraction Fuel Cell SunFuel CCS Natural Gas SynFuel Hybrid Oil Diesel Fuel Gasoline TDI /TSI DSG 19

20 Higher performance with lower fuel consumption New Generation of Engines - TSI Highest dynamics under reduced fuel consumption Downsizing Concept Twin Charger Fuel Consumption NEDZ [l/100km] Golf TSI 90 KW Competitors Golf GT/TSI-TC Golf GTI/TSI Engine Power [kw] 20

21 DSG brings more responsiveness and lower consumption Rel. Fuel Consumption (%) / 7-speed direct shift gearbox Consumption lower than manual gearbox Shorter shift times without interruption in power flow Maximum shifting comfort 80 Automatic 4-speed 6-speed DSG (6-speed) Manual DSG (7-speed) 21

22 BlueMotion environmentally friendly technologies Most ecological car in a series Polo BlueMotion: 17% lower CO 2 and fuel consumption Golf BlueMotion introduced in mid-2007 Volkswagen Polo BlueMotion Fuel Consumption NEFZ [ /100 km] Fuel Consumption A0/A00 class Competitors Polo BlueMotion Lupo 3L TDI Engine Output [kw] 22

23 Transition to ethical 2nd generation biofuels 1 st Generation Biodiesel (Rapeseed) Ethanol (Wheat, Sugar Beet) 2 nd Generation (SunFuel ) Biomass to Liquid (Choren) Cellulose Ethanol (Iogen) High CO 2 Avoidance Potential No Interference in the Food Chain High Hectare Yields 23

24 Roadmap to profitable growth Growth Opportunities Higher Volumes Products & Innovation Continuous Cost Improvement Increasing ROI Financial Discipline Optimal top-line growth Sustainable profit growth Capital discipline Cash flow generation Outlook Greater Capital Efficiency 24

25 Key drivers to optimise revenue growth Automotive Division Revenues ( bn) Key Drivers Volume growth paced to optimise ROI Extension of product portfolio Expansion in new markets Penetrating new segments, filling in product gaps in mature markets Continuous innovations that attract and excite the consumer at acceptable retail price m 07 25

26 Key drivers to optimise profit growth Automotive Division Operating Profit ( bn) Key Drivers Strong cost control Process optimisation Increased productivity Product optimisation Increased capacity utilization Regional scale effects 03* 04* 05* * Figures are before special items 06* 9m 07 26

27 Capital discipline supporting profitable growth Investments in Property, Plant & Equipment Automotive Division bn in % of sales revenue % % Ø6.0% 5.0% 3.8% <5.0%

28 Net cash flow and net liquidity highly satisfactory Automotive Division bn Net cash flow Net liquidity Key Drivers Continuing cost control Improving profit situation Optimized working capital Ongoing investment discipline m 07 28

29 RoI on the way to double-digit returns RoI % - Automotive Division Approx. Cost of Capital 9.0 Target : double-digit returns ,2) 1) 2007 Company profit recovers Positive net cash flow (Automotive Division) VW Group: Profit before tax at least 5.1 bn RoI = approx. Cost of Capital Foundations for the future are laid. 1) before special items; 2) restated. 29

30 Outlook Volkswagen Group 1) in million Sales revenue 88,963 93, ,875 >104,875 Operating profit 2,037 2,889 4,383 >4,383 Profit before tax from continuing operations 1,088 1,621 1,793 1) Restated; 2) before special items. 2) 2) 2) at least 5,100 The Volkswagen Group s sales revenue in 2007 will be higher than in the previous year. Our optimized cost structures together with improved unit sales will strengthen 3) our competitiveness and earnings power in the long term. As a result, we continue to forecast that the Volkswagen Group s 2007 operating profit will substantially exceed the previous year s operating profit before special items. In fiscal year 2007 we will achieve the goal of generating a profit before tax of at least 3) 5.1 billion that we originally set for ) Statements as of Interim Report Q1-Q

31 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. 31

32 Our roadmap to profitable growth Hans Dieter Pötsch, Member of the Board of Management Volkswagen Aktiengesellschaft 7 th German Corporate Conference, Frankfurt/Main, 22 January 2008

33 APPENDIX

34 Phaeton 34

35 Audi A3 Cabrio 35

36 Škoda Fabia Combi Audi TT Roadster 36

37 SEAT Altea freetrack Seat Altea XL 37

38 Bentley Continental GT Speed Bentley Brooklands 38

39 Lamborghini Reventón 39

40 Volkswagen Caddy Maxi 40