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MarketScreener Homepage  >  Equities  >  Xetra  >  Volkswagen AG    VOW3   DE0007664039

VOLKSWAGEN AG

(VOW3)
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Volkswagen : 'Extremely damaging' no deal in Brexit trade talks would cut Bentley's profits

10/20/2020 | 07:49am EST
FILE PHOTO: Chairman and CEO of Bentley Motors Adrian Hallmark poses at their manufacturing facility in Crewe

(Reuters) - Failure to strike a Brexit trade deal with the EU would be "extremely damaging" and cut profits by up to a quarter at carmaker Bentley, its boss told Reuters, as the government urges firms to plan for potential disruption.

Britain said on Monday there was still no basis for talks with Brussels to resume, just over two months before free and unfettered trade is due to end, leading to possible tariffs, customs checks and long delays for imports and exports.

The Volkswagen-owned luxury brand has spent millions to prepare, including stockpiling, switching ports and a provisional air freight contract, but warned on failure to find an agreement.

"It would be extremely damaging," Chief Executive Adrian Hallmark told Reuters on Tuesday.

"If you took the duties on components, 45% of the bits we buy in, and the 10% tariff on cars, worst-case scenario, it would take out a significant percentage of our profits," he said. "(It) would probably cost us 20% to 25%."

After a 288 million euro (263 million pound) operating loss in 2018, the firm returned to the black in 2019 with a 65 million euro profit following a turnaround plan with record sales of 11,006 vehicles.

Disruption between Britain, the world's sixth-biggest economy, and the EU, the largest trading bloc, would come on top of the hit caused by COVID-19, which prompted Bentley to stop production between mid-March and early May.

Output has neared full capacity since mid-September, as distancing measures in the factory are enforced, and the firm has seen a strong bounceback in major markets such as China.

"In August, September, October, we've been running at about 20-25% above the pre-crisis planned level of orders ... in China," said Hallmark.

There have been smaller increases in Europe and the U.S. and flat levels in Britain, South Asia and the Middle East.

"They didn't close China down," he said. "The coronavirus didn't suppress economic activity anywhere near as much as we put the brakes on and the fundamentals have been strong."

(Reporting by Costas Pitas; editing by Stephen Addison)

By Costas Pitas


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRITISH POUND (EUR/GBP) -0.36% 0.9021 Delayed Quote.6.36%
VOLKSWAGEN AG 0.71% 147.58 Delayed Quote.-16.72%
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Financials
Sales 2020 218 B 264 B 264 B
Net income 2020 4 297 M 5 205 M 5 205 M
Net cash 2020 23 411 M 28 356 M 28 356 M
P/E ratio 2020 17,3x
Yield 2020 1,91%
Capitalization 77 776 M 93 967 M 94 203 M
EV / Sales 2020 0,25x
EV / Sales 2021 0,21x
Nbr of Employees 664 196
Free-Float 57,0%
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Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 170,57 €
Last Close Price 146,78 €
Spread / Highest target 68,3%
Spread / Average Target 16,2%
Spread / Lowest Target -5,98%
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Managers
NameTitle
Herbert Diess Chairman-Management Board
Hans Dieter Pötsch Chairman-Supervisory Board
Frank Witter Head-Finance & Information Technology
Peter Mosch Deputy Chairman
Bernd Osterloh Member-Supervisory Board
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