Volkswagen:Quarterly Results/2024 Q2: Difference between revisions

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 == Earnings Call Summary ==
+=== Q2 results ===
+* CFO Arno Antlitz said Q2 results were impacted by non-operating items in total of €900 million. Adjusting for this, underlying margin stood at 7.6%. "The reported margin of roughly 6% is below our ambition and clearly below what we can deliver based on our strong products and also our global footprint," he said.
+* Antlitz said the weak performance of Brand Group Core's operating result signals the need for improvement in cost-reduction. "And secondly, the clear need for a step-up in cost reduction and productivity improvement efforts at Brand Volkswagen including our component business specifically in the German plant and operation in the course of the current efficiency program," he said.
+=== Outlook ===
+* Antlitz said they continue to expect an improvement in underlying performance in H2 in order to achieve their outlook.
+* Their outlook is build on an order bank of 900,000 cars in Europe and an order intake which is above the prior year level.
+* They expect the market to remain highly competitive and broader costs to be a tailwind in H2.
+* '''As a result of the recently announced Porsche supply chain issues, they expect a range to the lower end of the guided KPIs.'''
+* '''Antlitz pointed out that Q3 is usually a weak quarter due to plant holidays, hence Q4 is expected to be by far the strongest quarter.'''
+* '''Antlitz said volume price mix should be stable in H2 (small positive on volume while mix and pricing being challenging but they are in good position there).'''
+* They expect a small positive from valuation effects in H2.
+* They expect broad costs to be a small positive  in H2. But they expect fixed cost growth rate in H2 to be lower-than H1 (but this was before the Brussels effect).
+* They expect first benefits from severance costs to kick in in H2.
+=== Strategies ===
+* Blume said their main area of action is cost cutting.
+* Performance programs have started showing first results, Blume said.
+* Blume said the cooperation with Xpeng is fully on track. That project advances are faster than initially planned.
+* Investments in Rivian is well-sought to reduce investments in CARIAD, Blume said.
+* Blume said investments in Powcore are flexible i.e depends on demand for batteries.
+* After the planning round of €170 billion (€165 billion taking into account Rivian JV), investments will reduce due to strategic decisions they have taken, Blume noted.
+* '''In response to Tim Rokossa of Deutsche Bank who asked whether the cost cuts like those implemented at Brussels plant are the beginning, Blume said they have already done a lot of capacity adjustments eg reduction in technical capacity by 25% in some plants, that they will continue to plan plant allocations such as factory costs, supply chain costs and labor costs and that all these are part of the performance programs over all brands.'''
+* '''Blume said that the performance programs are to compensate expected headwinds and one-time effects in the restructuring of the group but over time, they will contribute to positive momentum development (Q&A).'''
+* '''BEVs are profit dilutive but they will compensate with scale effects (sharing of platforms across brands) and moving to LFP batteries which are cheap. They also expect raw materials to be cheaper. Additionally, they are now in second-generation BEVs which have better tech than the first-generations.'''
+* Antlitz said the huge benefits from Rivian JV will come from 2029 and beyond.
+=== EU CO2 compliance plan for 2025 ===
+* Blume said they still have gaps to close with regard to the EU CO2 compliance plan for 2025 but progress is promising.
+* They are betting mainly on new model launches in 2025 which Blume says have received positive feedback.
+* Blume pointed out that they will find a way to compensate for the penalties in case they miss the target.
+* Blume signaled that they will consider pooling but only after working on increasing the share of BEVs. "There clearly again, we want to avoid penalties. And so first of all we have big potential with all our groups and the new models we are bringing to the market. We want to help ourselves and only secondly, we will balance other measures like pooling emissions but always leveraging expenditures on the one hand side and benefits on the other side. And therefore, we work firstly on our own issues. And then at the end we will think about if it's necessary to take other measures," he said.
+=== Audi supply chain issues ===
+* Blume said Audi continued to be held back by supply chain issues in Q2.
+=== Market ===
+* Oliver Blume said the environment is challenging that we are faced with geopolitical and economic crisis.
+* Blume noted that competition has intensified significantly that new competitors with high level of innovation and cost advantages are entering the market.
+* Blume said they had a global automotive market share of 11% in H1 with growth in Western Europe being stable and growth in North America and South America expanding significantly.
+* There are signs of recovery in electric segment across all the markets, Oliver Blume said. Global BEV deliveries were on prior level in Q2 after a slight decline in Q2.
+* Volkswagen Group BEV order intake in Western Europe more than doubled in Q2 and H1, Blume said.
+* Blume said the order intake in Western Europe is mainly driven by their product moment (new and attractive BEVs).
+=== Model launches in 2024 ===
+* Blume said more than half of the product launches in 2024 have already been launched and feedback from customers has been great while reactions from automotive press has been strong.
+* Blume said they successfully launched the new Volkswagen ID UNYX developed in China for China and feedback on it has been overwhelming, especially from the target group of young users.
+* Deliveries of the Q6 e-tron started a few weeks ago while deliveries of the EV Macan will start in September.
+=== BEVs ===
+* Blume said they expect a BEV share of 9% to 10% at the end of 2024 and they are now at 8%.
 == Management and analysts expectations ==