Volkswagen Brand

Financial Results January to June 2020

Wolfsburg | July 31, 2020

ID.CROZZ: The vehicle is a concept car

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The following presentations contain forward-looking statements and information on the business development of the Volkswagen Brand. 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 Brand 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 Brand vehicles. The degree to which the Volkswagen Brand may be negatively affected by these ongoing claims and investigations remains uncertain.

The recent 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.

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2

Conference Call on the results January - June 2020

Alexander Seitz

Jürgen Stackmann

Thomas Küter

Member of the Volkswagen Brand

Member of the Volkswagen Brand

Head of Investor Relations

Board of Management for

Board of Management for Sales,

Volkswagen Brand

Controlling and Accounting

Marketing and After Sales

3

COVID-19 with severe impacts on operating performance of the Volkswagen brand from January to June 2020

1.1 million vehicles

-40%

2019

2020

€ 28.6 billion

-35%

€ -16bn

2019

2020

  • -1.5 billion

5.2%

2019 2020

SALES1)

SALES REVENUE

OPERATING PROFIT

before special items

% Return on sales

1) These figures do not include sales of our Chinese joint ventures.

4

ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

Massive impact of Corona crisis on total markets…

World

-26.7%

… but we gained market shares in SAM + CN, stable elsewhere

39,867

-28.4%

28,563

North America VW MS

Europe

VW MS

2,998

-25.2%

VW MS

-38.1%

China incl. HK

2,198

-23.0%

South America

VW MS

-40.8%

Total market

VW

Total market

VW

01-06

Deliveries

01-06

Deliveries

2019

2019

2020

2020

units in thousand

Total market passenger cars / Deliveries to Customer | Jan - June 2020 (Year to Date)

5

Regions show different speeds of recovery

Sales in China

Sales in Europe

Deliveries to

Deliveries to

customers

customers

medium recovery

fast recovery

back to 100%

Jan F M A M J J A S O N DezJan F M A M J J A S O N Dez

Sales in North America

Sales in South America

Deliveries to

slow recovery

Deliveries to

slow recovery

customers

customers

back to 100%

Jan

F

M

A

M

J

J

A

S

O

N

Dez

Jan

F

M

A

M

J

J

A

S

O

N

Dez

6

Deliveries to customer show strong signs of recovery in June & July

North America

-26

-21

-48

-42

April

May

June

July1)

SouthAmerica

-28

-20

-81

-74

April

May

June

July1)

China incl. HK

Europe

2

2

-7

-30

-2

-57

-76

-6

April

May

June

July1)

April May

June

July1)

World

-6

-18

-38

-30

April

May

June

July1)

Deliveries to customer in % | April - July1) 2020 vs. April - July 2019

1) Expectation

7

Positive press feedback on the ID.3 after media event

VW ID.3 (2020):

Neuvorstellung -

Marktstart - Preise - Info

VW ID.3 FULL REVIEW

Driving the new

Volkswagen EV ID.3

8

Der neue König unter den

Elektroautos??

Game changing Volkswagen ID.3

ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 order take on target. Fast conversion of pre-bookers to first mover customers

37,000

YTD conversion

of 41%

> 15,000

ID.3 Pre-Booker First Mover Customer

9

ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 distributed via the agency model in GER & AUT - enabling omni- channel sales

Agent

Online

Offline

Info

Consulting

Configuration

Dealer selection Offer

Deal

Handover

Info

Consulting

Configuration Test Drive Dealer selection Offer

Deal

Handover

10

ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

Rapidly growing BEV/ PHEV portfolio - journey "to zero" has kicked off

Q3

Q4

2020

2021

1) The vehicle is a near-production prototype

11

  1. ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0
  2. ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

Exciting new launches to push brand communication & sales - 2nd half- year

Extended launch through Corona

Q1

Q2

Q3

Q4

2021

2020

1) The vehicle is a near-production prototype

12

  1. ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0
  2. ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

Temporary production and dealer shutdowns led to a huge earnings drop, however, the monthly trend is clearly heading towards break-even

OPERATING PROFIT

€ million

1,365

2019

2020

921

481

-1,972

Q1Q2

SALES VOLUME

910

-16%

765

976

-62%

369

('000 unit)

13

Volume losses due to COVID-19 are the main reason for the negative earnings development

OPERATING PROFIT

€ billion

2.3

-4.0

H1 2019

Volume /

Mix / Prices

-3.8

Mainly

measures to

-1.5

reduce CO2 +

-2.1

Emissions

0.4

-0.2

-0.6

Product Costs

Fixed Costs,

H1 2020

Special Items

H1 2020

others

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

14

T-Roc R NEDC fuel consumption, l/100 km: urban 9.5-9.1 /extra-urban6.6-6.5 / combined 7.7-7.5; combined CO emissions, g/km: 176-171; efficiency class: D

We have pushed the brakes on expenditures except for our strategic priorities

  • billion/ % percentage of sales revenue

1.3

1.3

0.5-0.5

39%1)

4.5%

Total R&D Costs

H1 2020

of which capitalized

amortization

Recognized in the income statement

H1 2019: 1.6

0.5

-0.5

1.6

1) Capitalization ratio

15

We have intensively challenged our investment needs but kept the focus on our transformation towards electrification and digitalization

  • million/ % percentage of sales revenue

-5%

1,7361,651

3.9%5.8%

Capex

Capex

H1 2019

H1 2020

Efficiency measures

Capital discipline

Complexity reduction

Strategic target:

4-5%

Intra-Group synergies

MQB/MEB/VW.OS

16

ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

Cash flow development reflects the negative earnings development but proactive management of stocks provided some relief

€ billion

€ billion

-11%

-3.7

-5.6

10.6

9.8

9.4

-1.9

Net cash flow

Net cash flow

30.06.2019

31.03.2020

30.06.2020

Special Items mainly

underlying business

Diesel and M&A

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

17

Our countermeasures to limit the negative impacts of Corona

Close alignment of sales and

Strong focus on liquidity +

Rigourous cost reductions

Steering of crisis response

production planning

Working Capital

and spending freeze

measures in the regions

management +

prioritizing Investments

18

ID.3 Pro Performance, 150 kW / combined power consumption in kWh/100 km: 16.9 - 15.4 (WLTP); 15.4 - 14.5 (NEDC); combined CO2 emissions in g/km: 0

ID.3 Pro S, 150 kW / combined power consumption in kWh/100 km: 17.7 - 15.9 (WLTP); 14.1 - 13.5 (NEDC); combined CO2 emissions in g/km: 0

Pushing for as much recovery as possible

The positive aspects of the first half 2020:

  • Successful crisis management in one of the worst economic situations in recent history
  • Significant recovery in monthly development of sales volumes and financial performance
  • Clear reduction of fixed costs, R&D spending and investments
  • Net-inventoriessignificantly reduced against prior year

Outlook 2020

Target 2025

Sales revenue

Significantly below prior year

tbd

Operating result

Operating result severely below prior year

> 6 %

before special items

However, positive

19

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Volkswagen AG published this content on 31 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2020 09:16:06 UTC