Volkswagen AG — Earnings Release 2004

Oct 28, 2004

News Details

Ad-hoc | 28 October 2004 11:04

Volkswagen AG: Interim Report January-September 2004

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ Interim Report January-September 2004 – Volkswagen confirms its forecast of an operating profit before special items of EUR 1.9 billion for full-year 2004 – ForMotion program contributes more than EUR 850 million by September 2004; full-year effect expected to be well over EUR 1.0 billion – Net cash flow in the Automotive Division improves considerably year-on-year in the first nine months of 2004 to a positive EUR 1,079 million – With a ratio of investments in property, plant and equipment to sales revenue (capex/sales ratio) in the Automotive Division of 6.4 %, Volkswagen is in line with medium-term goals – January-September 2004 sales revenue up 5.1 % year-on-year – At EUR 1,466 million, operating profit before special items for the first nine months of 2004 down 20.7 % year-on-year due to adverse exchange rates and difficult markets, and down 28.2 % year-on-year after special items at EUR 1,242 million – Group products successful: – Golf in pole position for Western European registration statistics – Good start to sales of the new Audi A3 Sportback – Audi A8 the Western European market leader for 8 and 12 cylinder luxury limousines – Caddy leads its segment in Germany with the most registrations – New Golf GTI, Audi A4, SEAT Toledo and Skoda Octavia Combi debut at Paris Motor Show – Financial Services Division starts operating in China January-September 2004 2003 +/- (%) ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­- Volkswagen Group: Deliveries to customers ‘000 units 3,747 3,711 + 1.0 Vehicle sales ‘000 units 3,832 3,705 + 3.4 Production ‘000 units 3,865 3,742 + 3.3 Sales revenue EUR millions 67,396 64,112 + 5.1 Operating profit before special items EUR millions 1,466 1,850 – 20.7 Special items EUR millions 224 120 + 86.7 Operating profit after special items EUR millions 1,242 1,730 – 28.2 Profit before tax EUR millions 765 1,378 – 44.5 Profit after tax EUR millions 459 813 – 43.6 Automotive Division: Cash flows from operating activities EUR millions 6,359 5,243 + 21.3 Cash flows from investing activities EUR millions 5,280 6,315 – 16.4 ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­- Economic conditions have proved to be difficult so far in 2004. This is particularly due to persistently high oil prices and the ongoing adverse exchange rate situation for an automobile manufacturer generating a high proportion of its value added in Europe. Although we expect slight volume growth in the global automobile market for the year as a whole, given surplus capacity worldwide this will only be achieved via intense competition in terms of price and conditions. Despite this challenging environment, we are continuing our successful global model initiative to secure a leading position in all key vehicle segments. We are well on the way to achieving this goal with the Skoda Octavia, Audi A6, Audi A3 Sportback, SEAT Altea and Caddy Life models launched this year, as well as the planned launch of new Golf GTI, Audi A4, SEAT Toledo and Skoda Octavia Combi models. Deliveries to Volkswagen Group customers will probably be slightly over the previous year, but fall short of our original expectations. Our ForMotion program made a contribution to earnings at Group level of over EUR 850 million in the first nine months of the year. For the year as a whole, we expect additional savings from sustained cost-cutting measures, combined with a restriction on capital expenditure and improvements in sales performance, to increase the amount to well over EUR 1.0 billion. However, this will be partly offset by upfront expenditures, special product-related measures, structural and process changes linked to ForMotion; these special items will reduce earnings by up to EUR 400 million. Taking into account these unchanged unfavorable conditions, we continue to expect a full-year 2004 operating profit of EUR 1.9 billion before special items. Wolfsburg, October 28, 2004 Volkswagen AG The Board of Management (The full interim report is available at ” http://www.volkswagen-ir.de “.) end of ad-hoc-announcement (c)DGAP 28.10.2004 ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ WKN: 766400; ISIN: DE0007664005; Index: DAX, Euro Stoxx 50 Listed: Amtlicher Markt in Berlin-Bremen, Düsseldorf, Frankfurt (Prime Standard), Hamburg, Hannover, München und Stuttgart; EUREX; Amsterdam, Antwerpen, Brüssel, London, Luxemburg, Paris, Schweizer Börse (Hauptsegment), Wien, Tokio, Madrid, Barcelona, Bilbao, Valencia und Mailand 281104 Okt 04