Frank Witter
Chief Financial Officer
Investor Roadshow with Evercore ISI, New York and Boston, 30 November 2 December 2016
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 relating to the development of the economies of individual
countries, and in particular of the automotive industry, 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. 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 of Volkswagen Group members 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.
Consequently, a negative impact relating to ongoing claims or investigations, any 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, 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 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 Such statements are valid on the date of publication and can be superseded.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.
2
TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
3
4
M. Mller, CEO, June 16th 2016
5
6
7
8
9
Actual
10
11
TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
Sales revenue Operating profit Profit before tax2) Profit after tax2)
million million million million
(+ 10.5%)
(-2%)
11,2671)
160,263 159,932 10,1971)
8,6472) 8,159
5,915
7.0%
5,142
3,990
6.4% 5.1%
5.4%
3.2%
12,000
9,321
10,000 +2.3%
7,758 7,940
8,000
6,000
+0.6% +1.9% +3.9%
4,000
2,340 2,353 2,390 2,435 2,251 2,337
2,000
Development World Car Market vs. Volkswagen Group Car Deliveries to Customers1)
(Growth y-o-y in deliveries to customers, January to October 2016 vs. 2015)
bf
4,000
+4.2%
+6.7%
+1.8%
2,000 1,497 1,560 +3.3% +9.6% -1.6% +5.0%
880 939
339 346 192 198 357 391
84 83 63 66
Volkswagen 2)
Group
1) Incl. all brands of Volkswagen Group (Passenger Cars and Commercial Vehicles); +2.3% excl. Volkswagen Commercial Vehicles, Scania and MAN Commercial Vehicles.
2) MAN Commercial Vehicles incl. MAN Latin America Trucks and Busses GVW > 5t 15
TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
6,000
+2.7% +8.9%
4,000 3,502
3,215
2,902 2,981
+6.5% -1.4% -27.7% -9.3%
2,000
540 774 762
507 484 350 381 345
Volkswagen Western Central & North America South America Asia Pacific Rest of World
Group Europe Eastern Europe
1) Incl. all brands of Volkswagen Group (Passenger Cars and Commercial Vehicles); +2.3% excl. Volkswagen Commercial Vehicles, Scania and MAN.
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
12.0
-1.1 0.3 0.0 0.2
0.8 -1.2 2.1
10.0 -2.6
8.0
6.9
6.0 11.3
10.2
4.0 8.6
2.0 3.3
0.0
Jan Sept Special Jan Sept Volume/ Exchange Product Fixed Commercial Power Financial Jan Sept Special Jan Sept
2015 Items 2015 Mix/ Prices rates costs costs Vehicles Engineering Services 2016 Items 2016
after before Division before after
Special Items Special Items Passenger Cars Special Items Special Items
1) All figures shown are rounded, minor discrepancies may arise from addition of these amounts.
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
are accounted for using the equity method and recorded an operating profit (proportionate) of 3,594 million (3,777 million). 4) Mainly intragroup items, in particular from elimination of intercompany profits; incl. depreciation and amortization
of identifiable assets as part of the PPA for Scania, Porsche Holding Salzburg, MAN and Porsche. 5) Including allocation of consolidation adjustments between Automotive and Financial Services divisions.
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
billion
20
15
-7.8
(5.7%)
10
17.0
- 4.2
0.2 2.3
5
7.5
5.2
0
20153) 18.5 -7.3 (5.3%4)) -3.3 0.4 8.3 3.0 11.2
Cash flow Capex Capitalized Other Net cash flow Acquisition Net cash flow
from operating development costs before equity and disposal
activities 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. 3) prior- year figures adjusted 4) Capital expenditure for property, plant and equipment in% of Automotive sales revenue. 20
TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
billion
35
2.3
30 3.0
2.2
25 -0.5 -0.1 -0.3
20
15 31.1
24.5
10 31 December
2015
5
0
Dividend
31.12.2015 Equity capital Distributions Proceeds from sale Dividend Other cash flow 30.09.2016
pay-out to
increase to hybrid of interest in FAW / SVW
Volkswagen AG
Volkswagen FS investors LeasePlan
shareholders
20 17.7 Borrowings2)
Committed Lines 1.9
15 Uncommitted Lines 9.9
Supranationals, development banks, government, other 15.8
Direct Banking Deposits 31.5
10
Total Amount 151.5
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
- 2.0%
10,137
Deliveries to
customers
9,931 Deliveries to customers
(000 vehicles) slightly above prior year
+ 5.4%
213.3
202.5
Sales revenue
( billion)
Sales revenue
may reach prior year level
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
Private Plaintiffs represented by the Plaintiffs Steering Committee to resolve civil claims
Which engines? 2.0L TDI Diesel engines approx. 475,000 (thereof 460,000 Volkswagen and 15,000 Audi vehicles)
Granted Final Volkswagen establishes a maximum funding pool of $10.033bn for vehicles currently in use and
Approval on October eligible for :
25, 2016 Buyback/Lease terminations; OR
Emissions modifications (if approved by regulators)
+ Cash payments for affected customers
Pay $2.7bn over 3 years to an environmental trust to remediate excess NOx emissions
Invest $2bn over 10 years in Zero emission infrastructure, access and awareness initiatives
States resolution Agreement with 44 states, the District of Columbia and Puerto Rico to resolve existing and
potential state consumer protection claims regarding both 2.0L and 3.0L engines (approx $603m)
Regarding the 3.0l TDI engines, the Court set the next status hearing for December 16.
The Court has filed its order granting preliminary approval to the settlement with VW-branded franchise dealers on October 18.
The Court will hold a fairness hearing to consider granting final approval on January 18, 2017
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TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
EA189 2.0 l (EU5): ~ 5.2m units EA189 1.2 l (EU5): ~ 0.3m units EA189 1.6 l (EU5): ~ 3m units
Software fix only Software fix only Soft- and Hardware fix required
Working time ca 30 min. Working time ca 30 min. Working time < 1h
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Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
+30% Kodiaq Q5
SUV Ateca Q2 Atlas Entry SUV
Bentayga Tiguan
+9%
Sedan
Sedan
+15%
Hatchback
+11%
Pick-Up Panamera Phideon Magotan Voyage
A6L e-tron
+4%
MPV
+13% Hatchback
Transporter
+14%
Micro Van Rapid (IND) up!
Gol Golf
-6% A3 Leon
Estate
+20% Other
City Van
Coupe +15% Cayman
911 A5
million Beetle Amarok Saveiro Boxster
0 10 20
1) Source: IHS 2)final figures 27
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
High product complexity (similar to premium segment) is weakening ability to compete in volume segment
Product portfolio is lagging behind international trends and requirements of local customers
High level of vertical integration / need for investment in fields without differentiation from competitors
28
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Volkswagen brand has important qualities that enable it to take the lead
in the volume segment
Globally acknowledged and established brand and strong customer loyalty
29
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
30
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
31
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
32
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
>700 million
lower initial investment
33
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
MQB
Currently Incl. global MQB
13 PQx
New toolkit MEB enables cost and concept leadership for electric vehicles
(MEB)
Conventional toolkit Using MQB for second product life cycle minimises the expenditure necessary for the transformation
(MQB) (no further changes to platform basis necessary)
Old platforms Avoiding expenses for maintaining and upgrading vehicles by discontinuing eleven of the PQ platforms
(PQx)
34
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
35
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Market-oriented pricing
Jetta Passat
36
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
37
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Enthusiastic Secure
customers earnings power
We are putting the future
into series production
as the global leader
Volkswagen for e-mobility.
We drive our customers TRANSFORM
Moving and society forwards
People with passion and innovation. 2025+
Forward We use our strengths
to shape the transformation
together. A strong
team that gets Sustainable
things moving mobility
39
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
40
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Head NAR
F V E B P S GS
G2 Compact G4 e-Mobility
Head CHN
GS,
F V E G1-3 G4 Project EBO*
New organisation model implemented in all product lines New organisation model implemented for the regions
*) EBO = Budget Car Organisation
41
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
42
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Emission
regulations
Combined R&D know-how for
competitive product development
Connectivity &
digitalization
Additional value through customer
services
After sales and
new business
opportunities
43
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
44
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Build profitable volume base Improved portfolio for market E-Mobility rollout
Deep roots and strong market position combined with further growth
potential continues robust performance in China
Deliveries to customers strong Jan-September 2016 Strong operational & financial track record
(thousand units) (in bn)
2015 2016 + 11.3% 5.2
5.2 (3.8 in Q3) Proportionate
3,218
2,890 4.3 4.5 Operating Profit
3.7 3.63.6*
2.8 3.0
2.6
1,356 1.9 2.0
1,147
898 956 845 907 1.2 Dividends paid to
0.8
Volkswagen AG
* Dividend declared
Q1 Q2 Q3 Jan-Oct 2010 2011 2012 2013 2014 2015 2016
Implementation of locally produced NEVs 10 additional SUVs within the next 3-4 years
Phase 1
Phase 2
Phase 3
A6 L e-tron Phideon
PHEV
Pure Electric
further Plug- Vehicles based on Electric toolkit
in Hybrids current toolkits (MEB)
46
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
30.09.2016: 162.7 bn
1) excluding financial service activities of Scania, Porsche AG and Porsche Holding Salzburg; including MAN Financial Services
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Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
(PC+LDT)
Digitalization
250 lifecycles
230
US baseline: 219
210
190
China baseline: 185 SUV
E-mobility
trend
170
China 2015: 167
150
130 US 2025:107
EU baseline: 142 Automated Shift in
110
driving priorities
EU 2020: 95
90
2000 2005 2010 2015 2020 2025
48
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
49
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
Digitalization
Sustainability
Connectivity
Strategy
Smart mobility 2025
E-mobility
Autonomous driving
50
Volkswagen Brand
Volkswagen going forward Group Volkswagen Truck & Bus Regions / FS Trends
Strategy 2025+
51
Together, we will create
a new Volkswagen
and play a key role in designing
the mobility world
of tomorrow M. Mller, CEO, June 16th 2016
52
Investor Relations Team
53
Events 2017
14. March 2017 Annual Media Conference, Investor and Analyst Conference 2017
3. May 2017 Interim Report January - March 2017, Investor and Analyst Conference Call
27. July 2017 Half-Yearly Financial Report 2017, Investor and Analyst Conference Call
27. October 2017 Interim Report January - September 2017, Investor and Analyst Conference Call
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Volkswagen Group
Appendix
55
Rating Volkswagen Group
Aaa AAA
Aa1 AA+
Aa2 AA
Investment
A1 A+
VW FS AG (N)
A2 A
A3 Volkswagen AG (N)
A- Volkswagen Bank GmbH (N)
Baa1 BBB+ Volkswagen AG (N), VW FS AG (N)
Baa2 BBB
Baa3 BBB-
Ba1 BB+
Subinvestment
Ba2 BB
grade
Ba3 BB-
B1 B+
B2 B
--- B-- - -
Outlook -> (P)ositive, (S)table, (N)egative, RfD = Ratings under review for Downgrade, RfU = Ratings under review for Upgrade as of: end August 2016
56
Automotive Division Research and Development Costs
(January to September 2016 vs. 2015)
million
2015 2016
12,000
10,000
3,292 4,222
8,000 33.1% 2,381 41.7%
2,538
6,000
10,129
9,941
9,030 8,445
4,000
2,000
0
Total of which amortization Recognized Total of which amortization Recognized
R&D costs capitalized in the income R&D costs capitalized in the income
statement statement
57
TOGETHER Strategy 2025 Financials Outlook 2016 Diesel Status Volkswagen going forward
58
Special Items: Diesel related and other
(In bn) Diesel Other Total
59
Modular toolkits Brand responsibilities
60
We have defined central fields of action for each phase
Major
Leap to the top of
transformation
electric mobility
Radical restructuring 3
2
1
Assert a global brand position Top of Volume First choice for the aspiring Leading digital ecosystem in the mobility sector
SUV as launch pad for emotionalization and middle class Business model for
earnings power Leader in transformation of the car industry Autonomous driving
Basis for market leadership in electric mobility Secure earnings from classic product portfolio Profitable coverage of new fields of mobility
Create basis for market leadership in First manufacturer with 1 million electric vehicles Emission-free driving
connectivity Cost leadership in electric mobility Global and tailored vehicle portfolio
Europe/China: secure market leadership Leading digital ecosystem in the automotive sector
Turnaround NAR Establish basis for autonomous mobility and future
Successful in economy regions/markets business models
(SAM, RUS, IND) Profitable in NAR
Direct customer relationship, new sales and Growth and profitability in economy segment
distribution concept Operational excellence throughout the entire value
Implement Future Pact chain
Redirect resources
Decentralize organisation and make it more agile
Concentrate on value creation in all business
areas
New corporate culture, anchor entrepreneurial
2015 thinking
2020 2025 2030
Diesel crisis Leading and profitable Global leader in e-mobility Global leader
2% RoS* volume manufacturer 6% RoS** in auto-mobility
4% RoS** >6% RoS**
*) before special items **) Operating return based on adjusted sales revenue (without turnover from multi brand sales companies)
61
The SUV offensive has a global impact: Investment channeled into
high earnings and high growth segments
Small SUV T-Roc Compact SUV Compact SUV
62
Volkswagen brand is planning an industry-leading ecosystem
Platform
Apps/ Services
63
Volkswagen Atlas
64
Volkswagen I.D
65
Audi Q5
Audi A5
Audi Q5
66
Porsche
Porsche718
718 Boxster
Boxster
67
KODA KODIAQ
68
SEAT
SEAT Ateca
ATECA
69
Bentley Bentayga
Bentley Bentayga
Bentley
Bentley Bentayga
Bentayga
70
Lamborghini Centenario
Lamborghini Centenario
Lamborghini
71
Bugatti Chiron
Bugatti Chiron
72
Volkswagen Crafter
Volkswagen Crafter
VW NFZ Crafter
73
MAN TGX
MAN TGX
74
Scania R500 4x2
Scania
75
Volkswagen Group
Frank Witter
Chief Financial Officer
Investor Roadshow with Evercore ISI, New York and Boston, 30 November 2 December 2016