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Q2 revenue grew by 15.2% y/y to 80.059 billion euros versus analysts estimate of 80.25 billion euros(+15.4% y/y).
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Unadjusted operating margin for H1 was 8.9%, above the guidance range of 7.5-8.5%.
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Operating margin for Q2 which includes a -2.5 billion non-cash commodity hedging effect, was 7% versus 7.3% estimate.
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Operating profit for Q2 was 5.6 billion euros below analysts estimate of 5.9 billion euros.
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Volkswagen’s net cash flow declined by 72% y/y to 226 million euros during the quarter. In H1, net cash flow declined by 8% to 2.5 billion euros due to continuing bottlenecks in the logistics chains.
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Volkswagen maintained its revenue and operating margin outlook for 2023. It expects revenue to grow by 10% to 15% y/y in 2023 and operating margin to be 7.5%-8.5%.
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The group expects full-year net cash flow of EUR 6-8 billion “and has taken decisive measures to ensure that the lower end of this range is met.”
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However, Volkswagen adapted its deliveries outlook for 2023 from around 9.5 million to 9 to 9.5 million. It said it will compensate for this with higher pricing and increase in production efficiency in H2.
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Volkswagen noted that there were notable signs of recovery in China deliveries towards the end of the reporting period and that the group continues to see soid demand in general.
“We have strategically realigned and restructured the Volkswagen Group, with a clear plan and measurable milestones. In the first half of the year, the Volkswagen Group delivered reliably with very solid results. Sales in North America are picking up, we are strengthening our position in China through technological partnerships and on top of that the trend for fully electric vehicles is moving in the right direction. What is important to us is long-term, sustainable growth, with a focus on value over volume,” CEO Oliver Blume said.
"The focus for the second half is now on strengthening net cash flow. With the launch of performance programs at all brands and our strategic decisions in China, we will improve the competitive position of the Volkswagen Group even further,” CFO Arno Antlitz said.
“As anticipated, supply chain disruptions have continued to ease in H1 2023, with pressure shifting from semiconductor shortages to transportation and logistics delays. H2 should be supported by lower raw material costs and gradually easing logistical bottlenecks,” the press statement stated.
My take:
I think the results are sub-par. Investors may not like the results given that its European competitors reported better results/raised guidance. Mercedez raised its profit outlook while Stellantis and Renault posted better-than expected margins.
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