Volkswagen AG — Earnings Release 2006

Feb 20, 2007

News Details

Ad-hoc | 20 February 2007 12:50

Volkswagen AG: Volkswagen’s Board of Management finalizes consolidated financial statements

VOLKSWAGEN AG / Final Results

Ad hoc announcement according to § 15 WpHG transmitted by DGAP - a company
of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Volkswagen's Board of Management finalizes consolidated financial

statements:

• Volkswagen Group continues positive earnings trend in 2006 thanks to

the market success of our products and improvements in our cost

structures; good basis created for achieving medium-term targets

• Operating profit before special items improves by more than 50 percent

to EUR 4.4 billion

• Income statement affected by special items of EUR –2.4 billion, in

particular restructuring expenses in the Automotive Division, a

corporation tax credit and the sale of Europcar

• Board of Management proposes a dividend increase

• Deliveries to customers increase by 9.4 percent to 5.7 million

vehicles; market share in Western Europe reaches 19.9 percent

(2005: 18.9 percent)

• Volkswagen Group equity ratio improves to 19.7 percent (2005:

17.8 percent); Automotive Division equity ratio rises to

28.8 percent (2005: 25.3 percent)

• Automotive Division cash flows from operating activities increase

by 44.8 percent to EUR 11.7 billion

• Automotive Division investments in property, plant and equipment fall

by 15.6 percent to EUR 3.6 billion, reducing ratio of investments in

property, plant and equipment (capex) to sales revenue to 3.8 percent

(2005: 5.0 percent)

• Automotive Division net liquidity increases to EUR 7.1 billion

(2005: EUR 0.7 billion)

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January-December 2006 2005*) +/- (%)

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Volkswagen Group (IFRSs):

Deliveries to customers ´000 units 5,734 5,243 + 9.4

Vehicle sales ´000 units 5,720 5,193 + 10.2

Production ´000 units 5,660 5,219 + 8.4

Employees Dec. 31 324,875 344,902 - 5.8

Continuing operations:

Sales revenue EUR million 104,875 93,996 + 11.6

Operating profit

before special items             EUR million   4,383    2,889  + 51.7

Special items EUR million -2,374 -351 x

Operating profit

after special items              EUR million   2,009    2,538  - 20.8

Profit before tax from

continuing operations            EUR million   1,793    1,621  + 10.6

Profit from continuing operations EUR million 1,955 1,050 + 86.2

Profit from discontinued

operations**) EUR million 795 70 x

Profit after tax EUR million 2,750 1,120 x

Minority interests EUR million 1 0 x

Profit attributable to

shareholders of Volkswagen AG EUR million 2,749 1,120 x

Earnings per share (basic)

• Ordinary shares EUR 7.07 2.90 x

of which from continuing operations EUR 5.03 2.71 + 85.6

• Preferred shares EUR 7.13 2.96 x

of which from continuing operations EUR 5.07 2.77 + 83.0

Automotive Division (including allocation of consolidation adjustments

between the Automotive and Financial Services divisions):

Cash flows from operating activities EUR million 11,745 8,112 + 44.8

Cash flows from investing activities EUR million 6,114 5,721 + 6.9

• of which investments in property,

plant and equipment EUR million 3,644 4,316 - 15.6

Net liquidity at December 31 EUR million 7,133 706 x

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Volkswagen AG (German Commercial Code):

Net income EUR million 945 741 + 27.5

Dividend proposal:

Dividend - per ordinary share EUR 1.25 1.15

     - per preferred share       EUR            1.31     1.21

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*) Financial data restated:

 1. Deconsolidation of Europcar group (IFRS 5).

 2. Expected return on plan assets (IAS 19) reclassified to

    financial result.

**) Net gain on disposal of the Europcar group and the Europcar´s

 current profit after tax for January to May 2006/January to

 December 2005.

The Volkswagen Group is in a good competitive position thanks to its

attractive model range. The large number of new vehicles that we will

launch in 2007, in existing and new segments, will extend our product

portfolio and further improve our competitive position. We are therefore

expecting a slight increase in deliveries to customers in 2007 compared

with the previous year. The Volkswagen Group’s 2007 sales revenue will

consequently increase year-on-year. We will continue to vigorously drive

forward the activities to improve cost structures and processes in 2007.

This, along with the steps we undertook in 2006, will lead to a

sustainable improvement in our competitiveness.

The operating profit for 2007 is expected to be above the 2006 operating

profit before special items.

The Annual Press Conference and the International Investor Conference

will be held on March 9, 2007 in Wolfsburg.

Wolfsburg, February 20, 2007

Volkswagen AG – The Board of Management

This report contains forward-looking statements on the business

development of the Volkswagen Group. 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 entail 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 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.

DGAP 20.02.2007

Language: English
Issuer: VOLKSWAGEN AG
Brieffach 1970
38436 Wolfsburg Deutschland
Phone: +49 (0)5361 9 - 49840
Fax: +49 (0)5361 9 - 30411
E-mail: gillian.karran@volkswagen.de
WWW: www.volkswagen-ir.de
ISIN: DE0007664005
WKN: 766400
Indices: DAX, Euro Stoxx 50
Listed: Amtlicher Markt in Berlin-Bremen, Frankfurt (Prime Standard),
Hannover, Düsseldorf, Stuttgart, München, Hamburg,
Luxembourg, SWX; Terminbörse EUREX; Foreign Exchange(s)
London, Tokyo

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