Volkswagen Financial Services

Transcription

1 Volkswagen International Investor Conference Teach in: 10 March 2004 Dr Jens Neumann Mr Hans Dieter Pötsch Members of Group Board of Management Page 1

2 Volkswagen worldwide North American Region Mexico USA Canada Brasil Argentina Great Britain South American Region Ireland Belgium France Portugal Spain Italy Austria VW FS AG Subsidiaries and Branches Sweden Netherlands Germany Russia Poland Czech Republic Turkey Slovak Republic China Taiwan Japan Thailand Singapore Australia Page 2

3 History of Europcar VW Leasing founded VWFS AG founded as a separate company Insurance Brokerage VVD Billion assets Foundation of VW Finance (forerunner of VW Bank) Direct Banking: Now Germany s 2nd biggest Direct Bank Fleet Management Start of noncaptive Fleet Management Provisional License awarded in China Page 3

4 Volkswagen Group Group Structure VOLKSWAGEN GROUP UNIT/ SEGMENT BUSINESS LINE PRODUCT LINE/ BUSINESS FIELD FINANCIAL SERVICES UNIT AUTOMOTIVE UNIT Volkswagen brand group Audi brand group Commercial Vehicles Remaining companies Europcar Dealer and customer financing Rental business Leasing Insurance Fleet business Page 4

5 VW Mission PROFITABILITY SALES SUPPORT Revenue potential along the automotive-related value chain Production Realisation of adequate return Importer/ dealer Leasing Credit Insurance Buy/ usage Service Spare parts Creation of Customer retention Permanent access to transparent customer (e.g. credit card systems) Generating profit out of the asset customer data Protection of market position Protect sales channel VW Leasing biggest retail customer and operates without discount Europcar Fleet Group supplements branded fleet strategy with pan-european multibrand customers Conversion of of customer data into revenues requires expansion of of FS FS beyond Group products Expansion into non-automotive FS FS business Page 5

6 Increases Brand Loyalty Significantly PROFITABILITY SALES SUPPORT Brand loyalty FS captive customers Non-FS captive customers 75% 60% 60% 25% Germany USA Average customer buys up up to to automobiles in in his/her life, i.e. i.e. purchasing power equals 10x automobile price Page 6 Source: VWFS AG Internal Estimate

7 Profitability along the European Automotive Value Chain PROFITABILITY SALES SUPPORT Estimated split of profitability through a car s lifetime Areas of FS and distribution involvement Manufacturer Systems and modules suppliers Component specialists 7% Standard parts supplier 8% Raw material providers 16% 2% 5% 62% 5% New car retailing 9% 15% 12% 4% 17% Leasing/Financing business Insurance business Used car retailing Car rental business Service and parts business Source: Company data, CSFB estimates, Automotive News Almost 2/3 of of profits on on car sales is is realised post-purchase, mainly in in financing, insurance and service/parts Page 7

8 Volkswagen Business Areas and Products Fleet customers Private customers Corporate customers Fleet Leasing Fleet-Management e.g. Maintenance/ wear&tear Tyre replacement Accident managem. Fleet analysis/ -consultancy Service Providing/ Outsourcing Driver-Direct- Communication Hotline International coordination = automotive related FS-products = non automotive related FS-products Page 8 Classic Car Loan (Hire purchase) Credit cards Wholesale financing AutoCredit Fixed term deposits (Hire purchase) Overnight money Product-Leasing Car leasing (Contract hire) Savings plans Working capital loans Revolving credit ADAC Europcar Insurance Car Used car guarantee Extended warranty Protection/Liability Residual debt Unemployment Savings certificate Telephone-/Online banking Mutual funds/ fund based pension scheme Mortgage service Direct loans Online current account Personal and property insurance Securities brokerage Investment loans Dealer business Account (Online-account) Insurance factory personal

9 and ADAC From March 2004 Volkswagen Bank is working together with ADAC to offer financing for private sales of used vehicles. Largest driver club in Germany. We are targeting around 150,000 contracts over the next 5 years, around 1.2bn in loans. Excellent opportunity to enter a new segment of private to private used car sales. Page 9

10 Breakdown of Assets VOLKSWAGEN GROUP 52 billion assets (as of 31 December 2003) FINANCIAL SERVICES UNIT 1) North America South America AG Reporting Group 2) Europcar Group 15 bn assets 1 bn assets 33 bn assets 3 bn assets 1) Residual values taken by captives 2) Residual values taken by third parties (i.e. dealers) Page 10

11 Key Figures 2003 Volkswagen Group Automotive Million Sales Revenue 87,153 86,948 76,730 72,489 10,423 9,459 12% 11% Gross Profit of Automotive Unit 9,399 12,760 8,549 11, Gross Profit of Unit 1,261 1, ,560 1,484 10,660 13,998 8,250 11,712 2,410 2,286 23% 16% Operating Profit 1,780 4, , % 15% Profit Before Tax 1,529 3, , % 19% Profit After Tax 1,118 2, , % 22% Residual values taken by captives Residual values taken by third parties, e.g. Dealers Page 11

12 Volkswagen Key Figures for Years 2002 / % Change No. of contracts 5.4mn 5.7mn 5.5% Penetration 35.7% 35.6% Retail + Leasing receivables 30.6bn 32.4bn 5.9% Wholesale Receivables 6.8bn 6.9bn 1.5% Direct Bank Deposits 5.6bn 6.8bn 21.4% Employees % Total Assets 49.3bn 52.1bn 7.6% Equity (IAS) 3.8bn 3.9bn 2.6% Profit before tax (IAS) 739mn 911mn 22.7% Cost - income ratio 55% 54% Page 12

13 Volkswagen Key Figures for VWFS World Europcar VWFS AG No. of contracts 5.7mn 4.0mn Penetration 35.6% 31.9% Retail + Leasing receivables 32.4bn 23.8bn Wholesale Receivables 6.9bn 4.9bn Direct Bank Deposits 6.8bn 6.8bn Employees Total Assets 52.1bn 2.5bn 32.6bn Equity (IAS) 3.9bn 2.6bn Profit before tax (IAS) 911mn 72mn 565mn Cost - income ratio 63% 57% Page 13

14 Pre-tax Return on Equity VWFS World 23.8% 19.6% VWFS AG 21.3% 18.5% Pre-tax Return on Equity: (Profit Before Tax as a Percentage of Average Capital & Reserves) Page 14

15 Credit Quality VWFS AG Retail Loss Ratio 0.56% 0.55% 0.60% Wholesale Loss Ratio 0.06% 0.49% 0.30% NAR / SAR FS Retail Loss Ratio 0.53% 0.63% 0.66% Wholesale Loss Ratio 0.11% 0.20% 0.45% Note: Loss Ratio: Utilisation of provisions + direct write-offs Average total receivables of the preceding four quarters Page 15

16 Independent Funding Base Funding rationale: VWFS Asset- based funding requirements Risk Basis: Customers Ability to Pay VW AG Funding requirements covered by cash flow Risk Basis: Automotive Industry Funding of VW FS AG assets: 31 Dec Dec 03 Intercompany loans 24% 12% Liabilities from Direct Banking 16% 19% Drawn bank lines 22% 10% Capital markets 20% 42% Page 16

17 Diversified Access to the Capital Markets 12.5bn Multi-Currency 12.5bn CP Multi-Currency CP Programme Programme Issuers: Issuers: AG AG AG AG Bank Bank GmbH GmbH Leasing Leasing GmbH* GmbH* Coordination Coordination Centre Centre Volkswagen Volkswagen N.V./S.A. N.V./S.A. N.V.* N.V.* JPY60bn Commercial JPY60bn Commercial Paper Paper Programme Issuer: Issuer: Finance Finance Japan Japan K.K. K.K. * * Winner of the Samurai Deal of the Year Award (Issued by International Financing Review and Finance Asia) 18bn Debt 18bn Issuance Debt Issuance Programme Programme Issuers: Issuers: AG AG Bank Bank GmbH, GmbH, Leasing Leasing GmbH* GmbH* N.V.* N.V.* AUD1bn Debt AUD1bn Instrument Debt Instrument Programme Programme Issuer: Issuer: Australia Australia Limited Limited * * PLN1bn Debt PLN1bn Instrument Debt Instrument Issuance Programme Issuance Programme Issuers: Issuers: Bank Bank Polska Polska S.A.* S.A.* Volkswagen Volkswagen Poznan Poznan Sp.z** Sp.z** Motor Motor Polska Polska Sp.z** Sp.z** Leasing Leasing Polska Polska Sp.z* Sp.z* Coordination Coordination Center Center Volkswagen Volkswagen N.V./ N.V./ S.A. S.A. $4bn $4 bncommercial bn Paper Commercial Paper Programme Programme Issuer: Issuer: of of Amercia Amercia * CP and MTNs / Debt Instruments are guaranteed by Volkswagen AG ** Debt Instruments are guaranteed by Volkswagen AG Page 17

18 Ratings Volkswagen AG and S&P short-term long-term A-1 A A-1 A + Moody s short-term long-term P-1 A 2 P-1 A 1 Volkswagen Bank GmbH: Outlook Stable S&P Rating downgrade on 19 February 2004 Outlook stable to negative Moody s downgrade on 17 December 2003 Downgrade A1 to A2 Page 18

19 China s Automotive Market Volkswagen leading the way Page 19

20 Outlook Expansion within established markets Expansion in product range Multi - brand approach Geographical expansion Page 20

21 Volkswagen International Investor Conference Teach in: 10 March 2004 Dr Jens Neumann Mr Hans Dieter Pötsch Members of Group Board of Management Page 21