Summary
- Q2 cash flow sank 71%
- Shares down 3.6%, bottom of Germany’s blue-chip index
- VW sees deliveries between 9-9.5 mln this year
- Outlook contrasts with European rivals
BERLIN, July 27 (Reuters) – Volkswagen (VOWG_p.DE) said on Thursday it will aim to improve its cash flow in the second half as the German carmaker hikes prices and cuts costs, even after it lowered its 2023 outlook for deliveries.
The company’s shares were down 3.5% at 0805 GMT, the biggest faller on Germany’s blue-chip DAX 30 (.GDAXI) index.
Volkswagen said it now expects to deliver between 9 million and 9.5 million vehicles this year, versus an earlier target of about 9.5 million, citing uncertain economic times.
Its financial targets for 2023 remained unchanged, the carmaker added, indicating it would compensate for lower deliveries with higher pricing and efficiency gains in production.
Supply of key components such as semiconductors had improved but transport and logistics delays weighed on the first half, Volkswagen said.
Still, it expected significantly shorter waiting times in the second half and said demand was stable with order books full at 1.65 million vehicles.
VW’s outlook was in contrast to European rivals.
Mercedes-Benz (MBGn.DE) raised its group earnings outlook for the full year while French car maker Renault (RENA.PA) reported strong margins boosted by higher prices for new cars and by cost reductions. Stellantis’ results on Wednesday beat expectations.
Worldwide, the Volkswagen Group delivered 2.3 million vehicles in the period from April to June, 18% more than in the same period last year.
“In the first half of the year, we achieved solid financial results and took major steps to improve our competitiveness. The focus for the second half is now on strengthening net cash flow,” said Chief Financial Officer Arno Antlitz.
The carmaker still aims to hit full-year net cash flow of between 6 billion euros ($6.66 billion) and 8 billion euros, it said it has taken measures to ensure it meets the lower end of the range after reporting a muted 2.5 billion euros in the first half.
It sank in the second quarter more than 71% to 226 million euro.
The core brands of Volkswagen Passenger Cars, VW Commercial Vehicles, Seat, Skoda and Cupra achieved an operating margin of 5.5% in the first half.
Audi, Lamborghini, Bentley and Ducati reaped a 10% operating margin.
All the group’s brands are undergoing so-called performance programmes to improve efficiency, with Volkswagen Passenger Cars alone promising 10 billion euros($11.09 billion) in efficiency gains by 2026.
These should begin to show in the second half of the year, Volkswagen said.
Volkswagen also said on Thursday it had sold its Russian operations for 125 million euros.
In May, Volkswagen said it had sold its shares in Volkswagen Group Rus to Art-Finance, which is supported by autodealer group Avilon. The deal included VW’s Kaluga factory, which has annual production capacity of 225,000 vehicles.
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