Volkswagen : Konzern Präsentation - Investoren & Analysten Webcast und Telefonkonferenz - Halbjahresfinanzbericht 2020

Live INVESTOR and ANALYST Audio Webcast and Conference Call

July 30th, 2020

Half-Yearly Financial Report

JANUARY - JUNE 2020

Disclaimer

The following presentations contain forward-looking statements and information on the business development of the Volkswagen Group. These statements may be spoken or written and can be recognized by terms such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "will" or words with similar meaning. These statements are based on assumptions, 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. These assumptions relate in particular to the development of the economies of individual countries and markets, the regulatory framework and the development of the automotive industry. Therefore the estimates given involve a degree of risk, and the actual developments may differ from those forecast. The Volkswagen Group currently faces additional risks and uncertainty related to pending claims and investigations in a number of jurisdictions in connection with findings of irregularities relating to exhaust emissions from diesel engines in certain Volkswagen Group vehicles. The degree to which the Volkswagen Group may be negatively affected by these ongoing claims and investigations remains uncertain.

The outbreak of COVID-19 (commonly referred to as coronavirus) has negatively impacted and may continue to impact economic and social conditions in some of Volkswagen's primary markets, including China and Europe, as public, private, and government entities implement containment and quarantine measures. The continued spread of COVID-19 may cause shortages of necessary materials and parts from suppliers directly or indirectly affected by the outbreak and may cause operational disruptions and interruptions at Volkswagen's production facilities, leading to significant production downtimes

A negative development relating to ongoing claims or investigations, the continuation of COVID-19, an unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially Germany) or in the USA, Brazil or China, and trade disputes among major trading partners 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 in particular relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi and Czech koruna.

If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements.

We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be superseded. This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.

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Analyst and Investor Conference H1 2020

Frank Witter	Dr. Christian Dahlheim	Helen Beckermann
Chief Financial Officer	Director Group Sales	Head of Group Investor Relations
Volkswagen AG	Volkswagen AG	Volkswagen AG

3

Revised Dividend Proposal: Prudent Approach in light of circumstances

€			6.50	6.56
4.80	4.86				4.80	4.86
Pay-out ratio	20.4%	20.4%	24.5%	24.5%	18.1%	18.1%
					Ords	Prefs		Ords	Prefs
		Ords	Prefs
		Dividend 2019		Dividend 2020		Dividend 2020
			proposal as of February	revised proposal as of July

Carry over of remaining net retained profit of 855 million Euro to 2021

Volkswagen AG still fully committed to the strategic target of a 30% payout ratio!

4

Financial Highlights January - June 2020

Volkswagen Group's business strongly impacted by Covid-19 pandemic in first half of 2020; countermeasures implemented worldwide

Deliveries to Volkswagen Group customers down 27.4% at 3.9 (5.4) million vehicles; declines in all regions, passenger car market share increased

Group sales revenue decreases by 23.2% to €96.1 billion

Operating result before special items falls to EUR -0.8 (10.0) billion; demand-related fall in volumes; Fair value valuations on derivatives outside Hedge accounting and currency effects have a negative impact of € 0.9 billion, the contribution of AID into the autonomous driving joint venture with Ford leads to a non-cash gain of EUR 0.8 billion

Operating result of €-1.5 billion down €10.5 billion on prior-year figure; negative special items of €-0.7(-1.0) billion relating to diesel issue

Earnings before tax decrease to €-1.4 (9.6) billion

Automotive Division's net cash flow at €-4.8 (5.6) billion; capex ratio is 5.4 (4.9)% only due to falling revenues

Net liquidity in the Automotive Division at €18.7 billion; successful placement of hybrid notes strengthens capital base

Annual General Meeting will take place on September 30, 2020; dividend proposal amended, remaining net retained profits will be carried forward to next year's accounts

5

Volkswagen Group - Deliveries to Customers by Brands 1)

(January to June 2020 vs. 2019)

[thsd. units]

-27.4%	January - June 2019	January - June 2020

5,500	5,365
5,000		Volume				Premium			Sport & Luxury			Truck & Bus
	-28.9%				-22.0%			-11.9%			-37.0%
4,500
4,000	3,893
3,500	-26.7%
3,000	2,998
2,500	2,199
2,000
1,500	-31.3%					-22.0%
					906
1,000			-38.5%	-37.0%	-22.1%	-12.4%	+2.6%	-34.1%	-40.9%
	621	427					707
500	314	193	260	164
			5	4	133	117	5	5	72	47	52	30
0
					Commercial
					Vehicles

1) Volkswagen Group excl. Ducati

6

Development World Car Market vs. Volkswagen Group Car Deliveries to Customers by Regions 1)

(Growth y-o-y, January to June 2020 vs. 2019)

Car Market	VW Group
-25.2%	-26.1%
North America (incl. LCV)

Car Market	VW Group

Car Market	VW Group
-40.2%	-37.5%
Western Europe

Car Market	VW Group

Car Market	VW Group
-25.3%	-26.2%
Central & Eastern Europe

Car Market	VW Group

-40.8%

-33.9%

-28.1%-26.7%

-23.4%

-16.8%

South America (incl. LCV)				World 2)				Asia Pacific

1) Volkswagen Group Passenger Cars excl. Volkswagen Commercial Vehicles 2) incl. LCV in North America & South America

7

Development World Car Market vs. Volkswagen Group Car Deliveries to Customers 1)

(Growth y-o-y, January to June 2020 vs. 2019)

Car Market

VW Group

-4.4%

-10.0%

-17.2%

-16.6%

-28.1%-26.7%	-25.8%

-34.1%

-37.4%-37.7%

-43.6%

-48.0%

-19.8%

-32.1%

HY1

Jan

Feb

Mar

Apr

May

Jun

1) Volkswagen Group Passenger Cars excl. Volkswagen Commercial Vehicles, incl. LCV in North America & South America

8

We are entering a new era of electro mobility

9

Volkswagen Group - Analysis of Operating Profit 1)

(January to June 2020)

[€ billion]
12
10	9.0	1.0
8
6			10.0	-9.6
4
2
0					-1.5		2.1
					-0.4
-2
	Jan-June	Special Items	Jan-June	Volume/	Exchange	Product Costs	Fixed Costs
	2019		2019	Mix/ Prices	Rates /
	incl. Special		excl. Special		Derivatives
	Items		Items		Passenger Cars*/**

-1.3	0.0	-0.2	-0.8
	-0.7
				-1.5
Commercial	Power	Financial	Jan-June	Special Items	Jan-June
Vehicles**	Engineering**	Services	2020 excl.		2020 incl.
		Division	Special Items		Special Items

1) All figures shown are rounded, minor discrepancies may arise from addition of these amounts. *) without FS ** ) including PPA

10

Volkswagen Group - Analysis by Business Line 1)

(January to June 2020)

thousand vehicles / € million / percentage

Vehicle sales	Sales revenue	Operating profit	Operating margin
2020	2019	2020	2019	2020	2019	2020	2019

Volkswagen Passenger Cars	1,134	1,886		28,580	44,146		- 1.491	2,286		- 5.2%	5.2%
Audi	416	632		20,476	28,761		- 643	2,300		- 3.1%	8.0%
ŠKODA	372	560		7,546	10,154		228	824		3.0%	8.1%
SEAT	197	370		3,749	6,266		- 271	216		- 7.2%	3.4%
Bentley	5	5		860	835		- 99	57		- 11.6%	6.8%
Porsche Automotive 2)	116	136		11,192	12,212		1,143	2,117		10.2%	17.3%
Volkswagen Commercial Vehicles	157	256		4,238	6,489		- 334	506		- 7.9%	7.8%
Scania 3)	31	52		5,269	7,115		221	828		4.2%	11.6%
MAN Commercial Vehicles	47	72		4,669	6,283		- 423	248		- 9.1%	4.0%
Power Engineering	-	-		1,850	1,864		21	42		1.1%	2.3%
VW China 4)	1,422	1,789		-	-		-	-		-	-
Other 5)	- 160	- 418		- 10.361	- 16.919		- 312	- 727		-	-
Volkswagen Financial Services	-	-		18,063	17,992		1,155	1,281		-	-
Volkswagen Group before Special Items	-	-		-	-		- 803	9,979		- 0.8%	8.0%
Special Items		-	-		-	-		- 687	- 981		-	-
Volkswagen Group	3,736	5,339		96,131	125,197		- 1.490	8,997		- 1.5%	7.2%
Automotive Division 6)	3,736	5,339		77,015	106,126		- 2.738	7,589		-	-
of which: Passenger Cars	3,658	5,215		65,312	90,942		- 2.350	6,693		-	-
of which: Commercial Vehicles	78	124		9,854	13,320		- 295	959		-	-
of which: Power Engineering	-	-		1,850	1,864		- 93	- 63		-	-
Financial Services Division	-	-		19,115	19,071		1,248	1,409		-	-

1. All figures shown are rounded, minor discrepancies may arise from addition of these amounts. 2) Porsche (Automotive and Financial Services): sales revenue € 12,421 (13,405) million, operating profit € 1,233 (2,209 ) million. 3) Scania (Automotive and Financial Services): sales revenue € 5,488 (7,336) million, operating profit € 266 (895) million. 4) The sales revenue and operating profits of the joint venture companies in China are not included in the figures for the Group. These Chinese companies are accounted for using the equity method and recorded a proportionate operating profit of € 1,404 (2,103) million. 5) In operating profit mainly intragroup items recognized in profit or loss, in particular from the elimination of intercompany profits; the figure includes depreciation and amortization of identifiable assets as part of purchase price allocation for Scania, Porsche Holding Salzburg, MAN and Porsche. 6) Including allocation of consolidation adjustments between the Automotive and Financial

Services divisions.

11

Automotive Division - Net Cash Flow 1)

(January to June 2020)

[€ billion]

0
									-2.3
-2			-4.8			0.9
-4					1.6
-6
H1/2019	5.6		0.9	0.5		6.9
		Net Cash flow including	Diesel outflow	Aquisition and disposal		Net Cash flow
		Diesel payments and		of equity investments	underlying business
			M&A

1) Including allocation of consolidation adjustments between Automotive and Financial Services divisions.

12

Automotive Division - Net Cash Flow Development 1) 2)

(January to June 2020)

[€ billion]

4
3
2	3.0
1	-4.1
0
-1
-2			-3.0		-3.9		-4.8
-3
-4				0.2		-0.9
-5
H1/2019	13.5	-5.2	-2.3	0.1	6.1	-0.5	5.6
	Cash flow from	Capex	Capitalized	Other	Net cash flow before	Acquisition	Net Cash flow
	operating activities		development		equity	and disposal
			costs		investments	of equity
						investments

1) All figures shown are rounded, minor discrepancies may arise from addition of these amounts. 2) Including allocation of consolidation adjustments between Automotive and Financial Services divisions.

13

Automotive Division - Analysis of Net Liquidity 1)

(January to June 2020)

[€ billion]

25

20

15

10

5

0

H1/2019

-1.6
						1.5
			-0.9					-3.8									-0.5
								3.0
													-0.3

21.3	Net Cash flow (€ -4.8 bn)	18.7

Clean Net Cash flow before

Diesel and M&A (€ -2.3 bn)

19.4	-0.9	-0.5	1.1	5.8	-5.5	0.0	-3.6	15.9
12/2019	Diesel Outflow	M&A	China	Operating	Leasing Payment /	Hybrid Bond	Other	06/2020
			Dividend	Business	Change in Liabilities

1) All figures shown are rounded, minor discrepancies may arise from addition of these amounts.

14

Volkswagen Group - Outlook for 2020 1)

Deliveries to

customers

(million vehicles)

Sales revenue

(€ billion)

Operating return on

sales

(%)

+1.3%

10.8 11.0

2018 2019

+7.1%

235.8 252.6

2018 2019

7.3 1)	7.6 1)
2018	2019

significantly below prior year

2020

significantly below prior year

2020

Operating result (before and including Special Items)

severely below prior year

However, positive

2020

1. Before Special Items.

15