Summary of business development and economic position

The Board of Management of Volkswagen AG considers business development and the economic position to have been strained. Especially the irregularities in the software used in certain diesel engines posed major challenges for the Company. In addition, the increasingly difficult conditions in the Brazilian, Chinese and Russian vehicle markets led to a decline in deliveries to customers compared with the previous year. Contrary to our original forecast, deliveries of 9.9 million vehicles (−2.0%) failed to exceed the 2014 level. Group sales revenue increased year-on-year, as forecasted, and was above the expected range – due to exchange rate effects, among other factors. In particular, the provisions recognized in connection with the diesel issue weighed on the Group’s operating result and operating return on sales; both figures were down significantly on the previous year and the forecast ranges. Excluding special items, the Group’s operating result was on a level with 2014, at €12.8 billion. The operating return on sales before special items was in the expected range, at 6.0%.

Sales revenue of the business areas was also up on the respective prior-year figure. While special items resulted in the operating result and the operating return on sales of the Passenger Cars Business Area falling short of the forecast ranges, the Commercial Vehicles/Power Engineering Business Area confirmed the forecast, despite special items from restructuring measures. The Financial Services Division’s operating result exceeded the previous year’s figure.

Although at 6.9% the ratio of capex to sales revenue in the Automotive Division was higher than in 2014, it was within the expected range. The Automotive Division’s net cash flow exceeded the prior year’s figure because of the sale of the shares in Suzuki. In addition, the successful placement of dual-tranche hybrid notes strengthened our capital base. The Automotive Division’s net liquidity was €6.9 billion higher at the end of the reporting period than at the end of December 2014. The decline in the operating result attributable to special items led to a significant decrease in the Automotive Division’s return on investment (ROI), which fell short of the minimum required rate of return on invested capital.

Volkswagen does not tolerate any infringements of rules or laws. The trust of our customers and the public is, and will remain, our most important asset. We will do everything within our power to prevent incidents of these kinds from reoccurring and commit ourselves fully to winning back all of the trust. Through our technologies, vehicles and services, we will contribute to shaping the future of mobility with courage and conviction.

The following table shows an overview of the targets set for the reporting period and the figures actually achieved.