The Volkswagen passenger car brand has translated positive sales for the first half of 2021 with an operating profit of €1,8 billion (approximately R31,2 billion) being confirmed. Based on previous year’s results, the brand confirms a marked increase in deliveries, sales revenue and earnings.
Volkswagen says that thanks to efficient crisis management, strict cost discipline and systematic implementation of its “accelerate” strategy, its first half of this year was a successful one. Ongoing issues such as the COVID-19 pandemic and semiconductor shortage persist but the number of vehicles delivered worldwide rose to around 2,7 million units; 500 000 more than in the previous year.
Market share was also expanded in nearly all regions. Sales revenue climbed by 42 per cent year-on-year to €40,7 billion (R706 billion) on the back of significant growth in sales volume (H1 2020; €28,6 billion – approximately R496 billion). Earnings improved by €3,3 billion (R57 billion) year-on-year to around €1,8 billion (approximately R31,2 billion, giving an operating return on sales of 4,4 per cent.
Volkswagen CFO Alexander Seitz: “We succeeded in further reducing our fixed cost ratio. Our strict cost discipline, the good progress we have made in implementing our strategic realignment in North and South America, results-oriented management of the markets and significant volume growth are giving a boost to our financial figures.
“This shows that we are well on the way to achieving our goal of an operating net cash flow of between €1 and 2 billion in 2023.
“Although there are signs that the supply bottlenecks for semiconductors are beginning to ease, we expect a very challenging third quarter from a supply perspective. Nevertheless, we are confirming our outlook for the year as a whole. We anticipate a significant year-on-year increase in deliveries and sales revenue in 2021 and still aim to post an operating return on sales in the target corridor between three and four per cent. We are sticking to our target margin of 6 per cent by 2023 and aim to position the brand for sustainable profitability.”
