Volkswagen sees VW brand operating return on sales at lower end of range
In the first three quarters of the current fiscal year 2018, the Volkswagen Passenger Cars brand continued to develop well in a challenging market environment. Following the first nine months of the year, the deliveries and sales revenue of the Volkswagen Group's lead brand remain above the prior-year level. With 4.6 million vehicles handed over to customers, these were the most successful first nine months that the brand has ever experienced. Driven by higher sales and an improved product mix, the Volkswagen brand was able to boost sales revenue by 7.3 percent to EURO$62.5 billion. At EURO$2.3 billion, the operating profit before special items was slightly below the prior-year level as a result of factors including the expected impact of the WLTP changeover and higher distribution expenses in connection with the environmental incentive. Operating return on sales was 3.7 percent, compared with the figure of 4.3 percent for the prior-year period. The diesel issue gave rise to special items of EURO$-1.6 billion. For the year as a whole, the Volkswagen brand expects positive cash flow from operations before special effects. The brand also confirms its return target and continues to expect an operating return before special effects of 4 to 5 percent for the current fiscal year. However, in view of the negative impact of the WLTP changeover, higher distribution expenses and investments made in new products - especially for the implementation of the electric offensive, the operating return will probably be at the lower end of the corridor stated.