Volkswagen in Wolfsburg
The group will increase its net profit to almost 16 billion euros in 2023.
(Photo: Bloomberg)
Despite the war in Ukraine and the energy crisis, Europe’s largest carmaker Volkswagen is more optimistic about the coming fiscal year. For 2023, the group is forecasting a return on sales of between 7.5 and 8.5 percent. At the lower end of the range, that’s half a percentage point more than forecast for last year.
Sales are expected to increase by between ten and 15 percent, as VW announced on Friday. For deliveries, the target for 2023 is 9.5 million vehicles. In the previous year, VW had brought just under 8.3 million cars to customers.
The Wolfsburg company increased its net profit by around three percent to 15.8 billion euros last year.
The shareholders should benefit from this. Instead of EUR 7.50 per ordinary and EUR 7.56 per preferred share as in the previous year, EUR 8.70 and EUR 8.76 respectively are to flow to the shareholders, including the largest holding company Porsche SE of the Porsche and Piëch families, the state of Lower Saxony and the emirate Qatar.
The VW share was coveted in view of the news: After the figures became known, their price jumped by more than ten percent, close to the EUR 142 mark, after they had closed yesterday at EUR 128.62.
“Today’s results are further proof of the solid financial basis on which we are consistently implementing our strategy,” explained CFO Arno Antlitz.
Volkswagen published the first key data from its balance sheet in early February. Accordingly, the inflow of cash last year almost halved from 8.6 to five billion euros because many cars had to be produced in stock due to a lack of semiconductors. The funds tied up were significantly higher than expected.
For this year, the people of Lower Saxony are assuming that the trend will be reversed, as stocks are decreasing and production is running smoothly again. Because of the uncertain economy, however, customers are now staying away, which poses new problems for the group.
Supervisory Board: Decision on two plants in America pending
The Volkswagen supervisory board met on Friday to approve the five-year plan for investments and the occupancy of the plants. CEO Oliver Blume had already presented large parts of this to the committee in mid-February. The Handelsblatt reported.
As reported from corporate circles, it was also about larger investments in North America and China. The decision about a new battery cell plant in North America, which is said to be built in Canada, is likely to be particularly capital-intensive.
In addition, a production plant for the new Scout brand is on the agenda of the control committee, in which electric pickups and SUVs are to roll off the assembly line. But the decisions aren’t finalized yet. Volkswagen acquired the Scout brand when it took over US truck manufacturer Navistars. The brand is considered an icon for pickups in America.
At a conference call with journalists on Friday afternoon, Chief Financial Officer Arno Antlitz said: Volkswagen is counting on “tailwind” from the Inflation Reduction Act, America’s billion-euro subsidy program for climate-friendly technologies. “This gives us even more support in our strategy to localize production.”
He did not comment on the deliberations of the supervisory board on a battery cell factory in North America. However, Antlitz indicated that the group would need fewer than six battery cell factories in the future to achieve a production capacity of 240 GWh, which Volkswagen is aiming for in Europe by 2030.
So far, Volkswagen has been set to build six battery cell factories in Europe by the end of the decade. A first is already being built in Salzgitter, Lower Saxony, a second is to be built in Spain near Valencia, and another location in Eastern Europe is planned.
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