Without making a fuss, Volkswagen Group's 2021 financial report is released

2021 has passed, and the global auto market has shown good vitality under the impact of the epidemic. Yesterday, Jianghujun participated in the Volkswagen Group's 2021 financial report conference, and through official statistics, volkswagen group is still an unassuming existence.

Despite the chip shortage, the Volkswagen Group's overall sales last year decreased by about 600,000 units from the 2020 fiscal year, down 6% year-on-year and 2.4 million units from the 2019 fiscal year, but sales revenue increased by 12% year-on-year to 250.2 billion euros. Operating profit, excluding expenditure on special projects, nearly doubled from the previous year to €20 billion. The return on operating sales, which is not included in special project expenses, was 8%, well above the 4.8% in fiscal 2020. This performance was achieved thanks to the Group's broader product portfolio and pricing advantages.

Net cash flow from the automotive business increased significantly to EUR 8.6 billion, up 35% year-on-year, and net current assets of EUR 26.7 billion, essentially unchanged from the end of 2020. However, this figure means that since the end of 2019, the Group's net liquid assets have increased by more than €5 billion despite numerous transformational measures, including the acquisition of Navistar. The Management Committee and the Supervisory Board proposed to increase the dividend per share of common stock to 7.5 euros and the dividend per share of preferred shares to 7.56 euros, an increase of 56% compared to 4.8 euros or 4.86 euros in the previous fiscal year, equivalent to a payout ratio of 25.4%. Earnings per share per common stock increased from €16.60 in the previous fiscal year to €29.59 and earnings per preferred share increased from €16.66 to €29.65.

In 2021, the Volkswagen Group will enhance the robustness of the Group's overall business by achieving higher profit margins, reducing indirect costs and break-even points, and complying with capital expenditure discipline. Strong performance and stable cash flow were harvested. Among them, it is worth mentioning that the Group has continued to accelerate its electrification offensive, delivering a total of 452,900 pure electric vehicles worldwide, and the number has nearly doubled. The Volkswagen Group is the European market leader in pure electric vehicles, with a market share of about 25 percent; ranks second in the U.S. market with a market share of about 7.5 percent; and delivers a total of 92,700 pure electric vehicles in China, more than four times the number of deliveries in fiscal year 2020.

The key factors are nothing more than a richer product portfolio and pricing advantages. Based on this, although overall sales decreased by approximately 2.4 million units compared to FY2019, the Volkswagen Group achieved sales revenue growth of 12.3% year-on-year to EUR 250.2 billion (EUR 222.9 billion in FY2020) and achieved solid profits and margins. Operating profit excluding special project expenses increased to EUR 20 billion, nearly doubling from EUR 10.6 billion in FY2020, implying an increase in return on operating sales not included in special project expenses to 8% (4.8% in FY2020). Volkswagen Group's pretax profit increased by 72.5 percent year-on-year to EUR 20.1 billion (FY2020: EUR 11.7 billion) and return on pretax operating sales increased to 8% (FY2020: 5.2%) Profit after tax increased by 74.8% year-on-year to EUR 15.4 billion (FY2020: EUR 8.8 billion).

In North America, the Volkswagen brand resumed profitability in three markets: Canada, the United States and Mexico. Five new SUV models, including the all-electric ID.4, are in high demand, with cumulative sales accounting for more than 75% (375,030 units) of the Group's total sales in the U.S. market. The upcoming pure electric ID.Buzz1 will be the key to building emotional resonance between the Group and consumers in the U.S. market.

The Volkswagen brand has also successfully turned things around in South America. The Group has continuously launched Taos, Nivus and other models in a customer-oriented manner, laying a solid foundation for achieving profitability and positive cash flow.

In Europe, the Volkswagen Group is a pioneer in the introduction of electrification, and the industry's largest electrification offensive has begun to pay off in the early stages, and the Group's investment has begun to pay off. In 2021, the Group leads the European market, with one in every four electric vehicles coming from the Volkswagen Group. Preliminary data shows that the Group has exceeded its VEHICLE CO2 emission targets for the European Union, which includes Norway and Iceland.

As the world's most important growth market, the Volkswagen Group has always maintained excellent profit margins and market leadership. The group has a 16% market share in China, nearly double that of its second-largest competitor. The Volkswagen brand, the most successful brand, has an 11% market share, and Porsche, Bentley and Lamborghini have all set new sales records. In 2021, the shortage of chip supply caused the Group to be unable to meet the needs of the market, and overall sales were affected.

Successful electrification offensive: Pure electric vehicle sales ranked first in europe and second in the US market, and sales in the Chinese market increased by more than 4 times in 2020.

In 2021, the Volkswagen Group further accelerated its electrification offensive, delivering a total of 450,000 pure electric vehicles, an increase of nearly double. In the field of pure electric vehicles, the Group's sales volume ranks first in the European market and second in the United States market. In both markets, the Group's share of the pure electric vehicle segment is higher than its share in the overall automotive market. Last year, the Group delivered a total of 93,000 pure electric vehicles in the Chinese market, more than 4 times that of 2020. The Group has also launched new sales methods for young consumers, including the opening of 120 city showrooms in domestic shopping malls, laying the foundation for the Group to achieve the annual goal of more than doubling sales in the world's largest single market.

2022 is still a challenging year for all walks of life, and if the COVID-19 pandemic does not break out on a large scale and the gap between intermediate products and commodities is alleviated, volkswagen Group expects vehicle deliveries to grow by 5% to 10% year-on-year in 2022. In FY2022, the Group will continue to be affected by the structural shortage of chips, and chip supply is expected to improve in the second half of 2022 compared to the first half of the year.

The Volkswagen Group expects sales revenue to increase by 8% to 13% year-on-year in 2022. In terms of operating profit, the Group's return on operating sales is expected to be between 7% and 8.5%.

In 2022, the R&D expense ratio of the automotive business is expected to be about 7%, and the ratio of capital expenditure to sales revenue is expected to be about 5.5%. The company expects cash expenditure due to diesel engine emissions events to increase, and cash expenditure due to mergers and acquisitions will be in line with the previous fiscal year. The Group's net cash flow is also expected to be in the same range as in the previous fiscal year, including cash expenditures related to the EU's antitrust litigation against Scania. Net current assets in the automotive business are expected to increase by 15% year-on-year. The return on investment is expected to be between 12% and 15%.

It is worth noting that the actual business performance of the Volkswagen Group will depend on how the situation in Ukraine develops further, in particular its impact on the global economy and the Group's supply chain. In preparing this outlook document, the latest developments in the situation in Ukraine could adversely affect the Volkswagen Group's business and could lead to supply chain bottlenecks. At this stage, given the future development of the event and the uncertainty and unpredictability of the related impact, the Volkswagen Group is not yet in a position to make a definitive assessment of the extent to which it will be affecting global economic and industry growth in fiscal 2022.