Volkswagen (VOW) Q2 2024 earnings summary

Executive summary

• Delivered solid underlying financial results in H1 2024 despite a challenging geopolitical and economic environment, with intensified global competition and significant restructuring activities.

• Advanced the Top 10 Program, comprehensive restructuring, and product offensive with over 30 new model launches in 2024, including BEVs and hybrids.

• Accelerated execution of the In China for China strategy and established key software partnerships, notably with XPENG and Rivian.

• Major restructuring in Passenger Cars and a €1 billion investment in Rivian marked significant strategic moves.

• Net income after tax dropped to €7.3 billion, down €1.2 billion year-over-year.

Financial highlights

• H1 2024 sales revenue rose 1.6% year-over-year to €158.8 billion; reported operating margin at 6.3%.

• Excluding non-recurring items, underlying return on sales was 7.1% in H1 and 7.6% in Q2.

• Net cash flow in Q2 was €2.9 billion, nearly offsetting Q1 outflows; automotive net liquidity at €31.3 billion.

• Operating result for H1 was €10.1 billion, down 11.4% year-over-year; net income: €7.3 billion.

• Automotive investment ratio increased to 13.4% in H1 2024.

Outlook and guidance

• Full-year 2024 guidance: sales revenue to advance up to 5%, operating margin between 6.5%-7%, and automotive net cash flow €2.5-4.5 billion.

• Net liquidity targeted at €37-39 billion; investment ratio expected at 13.5%-14.5%.

• Expecting to reach lower end of guidance ranges due to non-recurring effects and market headwinds.

• Q4 anticipated to be the strongest quarter, with Q3 typically weakest due to plant holidays and restructuring provisions.

• Non-recurring expenses of -€2.6 billion are included in the outlook.