The Volkswagen Group improved its earnings strength again in 2014 and continued along its qualitative growth path despite economic challenges. With sales revenue of EUR 202.5 billion (previous year: EUR 197.0 billion) and an operating profit of EUR 12.7 billion (EUR 11.7 billion), the Group generated new record highs. This was announced by Volkswagen Aktiengesellschaft Friday on conclusion of the Supervisory Board meeting.
The operating margin improved to 6.3 percent (5.9 percent), reaching the upper end of the forecast range of 5.5 percent to 6.5 percent. The Group’s profit before tax increased to EUR 14.8 billion (EUR 12.4 billion), while the return on sales before tax rose from 6.3 percent to 7.3 percent. The equity-accounted profit of the Chinese joint ventures exceeded the high prior-year figure. The activities of the Chinese joint ventures have always been accounted for in the financial result using the equity method and are therefore not included in the Group’s sales revenue and operating profit.
“We can look back on the past fiscal year with satisfaction: despite the difficult economic environment, we achieved our goals for 2014," said Prof. Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg on Friday. "At the same time, our forward-looking efficiency program “Future Tracks” has laid the groundwork that will enable us to continue our successful trajectory with all our strength.
Profit after tax came in at EUR 11.1 billion (EUR 9.1 billion). Net cash flow in the Automotive Division increased by EUR 1.7 billion to EUR 6.1 billion thanks to the business model.
Net liquidity in the Automotive Division rose to EUR 17.6 billion (EUR 16.9 billion) as of year end
2014.
In light of the successful fiscal year, the Board of Management and the Supervisory Board will be proposing to the Annual General Meeting to increase the dividend by 20 percent to EUR 4.80 (EUR 4.00) per ordinary share and EUR 4.86 (EUR 4.06) per preferred share. This would result in a distribution ratio of 21.2 percent (20.6 percent). The medium-term distribution target is 30 percent.
The Board of Management expects Group deliveries to increase moderately in full-year 2015 and, depending on economic conditions, Group sales revenue to increase by up to 4 percent year-on-year. In terms of the Group's Operating profit, Volkswagen is forecasting an operating return on sales of between 5.5 percent and 6.5 percent in light of the
economic environment.
“Given the subdued growth prospects in regions outside China, there is no guarantee that 2015 will be a successful year – either for the industry or for the Volkswagen Group," said Chief Financial Officer Hans Dieter Pötsch. "Continuing political uncertainty, strong currency fluctuations and tough environments in markets such as Russia and Brazil present major challenges for the Volkswagen Group this year as well. In light of this, the scenarios underlying our forecast are based on conservative assumptions. Nevertheless, our goal is not only to increase our volumes, but also to lift sales revenue and earnings again. The continuing high liquidity and our robust financial position give us the necessary flexibility to successfully implement our Strategy 2018.”