Matthias Rietschel | Reuters
The results are a marked improvement over the same period last year, when demand was ravaged at the height of the Covid-19 pandemic.
German automaker reported first-half operating profit before special items to 11.4 billion euros ($ 13.5 billion), beating pre-pandemic levels amid increased demand of premium cars in Europe and the Americas, while deliveries of electric vehicles nearly tripled.
As a result, Volkswagen raised its profit margin target for the second time in three months. The company now expects an operating return on sales of between 6% and 7.5%, when it had previously projected 5.5% to 7%.
“The record first half result is clear proof of the strength of our brands and the attractiveness of their products,” CEO Herbert Diess said in a statement.
“The premium segment performed particularly well with double-digit returns, as did financial services. Our electric offensive is accelerating.
However, the group lowered its forecast for deliveries in 2021, in a context of “difficult market conditions”.
“The challenges will arise in particular from the economic situation, increasing intensity of competition, volatility in commodity and foreign exchange markets, securing supply chains and more stringent emissions requirements.” , he said in the results report. Like many major automakers, Volkswagen suffers from a global semiconductor shortage.
“We have production bottlenecks for the next two, three weeks, and then we believe things will improve,” he told CNBC’s “Squawk Box Europe”.
“So we will see a deterioration in the numbers in the third quarter, then a recovery in the fourth quarter. “
Diess suggested that the rebound in demand would be enough to offset the various challenges to the outlook in 2022.
“We can’t really say for sure how Covid is going to return to several of our markets, but our order intake is really high, sales of electric vehicles are strong, premium brands are doing very well and we have a very good backlog. orders, ”he said. noted.
“If we don’t see a big setback from Covid, we should continue to grow in the first quarter of 2022.”
Here are the quarterly highlights:
- Second quarter deliveries amounted to 2.55 million vehicles, compared to 1.89 million in the first half of 2020.
- The group’s quarterly turnover amounted to 67.29 billion euros, compared to 41.08 billion euros for the same period last year.
- Operating profit before exceptional items amounted to 6.55 billion euros, compared to -2.39 billion euros last year.
Half of Volkswagen’s sales are expected to be battery electric vehicles by 2030, the German automaker said in a recent strategy update, while nearly 100% of its new vehicles in major markets are expected to be zero-emission vehicles by 2040.
These targets are part of Volkswagen’s larger goal to be fully carbon neutral by 2050, and Volkswagen has earmarked € 73 billion for the development of future technologies between 2021 and 2025, or around 50% of total investments. of the company.
Volkswagen shares are up more than 34% since the start of the year.