Audi, a subsidiary of Volkswagen $VOW (+2%) is currently detaining vehicles at US ports. The reason for this is the uncertainty about possible new car tariffs as part of an ongoing investigation by the US trade authority. This measure primarily affects models from Europe, which may soon become more expensive to import. Audi is monitoring developments closely and intends to make appropriate decisions depending on the outcome.

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- 14 positive surprises

- Three negative surprises

- Dividend increases

- Dividend decreases

- Overview of all DAX stocks

Link:

https://shorturl.at/Tdnfw

$ALV (+0.22%)
$MUV2 (+0.88%)
$RHM (+2.78%)
$MBG (+0.91%)
$SAP (+0.17%)
$BMW (+0.79%)
$AIR (-0.21%)
$VOW (+2%)
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$SIE (-0.49%)
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$DTE (+0.41%)
$IFX (-0.08%)

Decline at Tesla: Sales figures in Europe fall by almost half

Tesla can currently only dream of the once flourishing sales figures for electric vehicles in Europe. $TSLA (+0.29%) can only dream of at the moment. Instead, they are experiencing a dramatic decline of almost 50 percent. In the first two months of 2025, the electric car manufacturer sold just 19,046 vehicles, which corresponds to a meagre market share of 1.1 percent. This is a sharp contrast to the positive trends in the e-car market, because while Tesla is struggling, other manufacturers are experiencing growth.

In Germany, the decline is particularly clear: Tesla's new registrations fell by an impressive 76 percent in February compared to the previous year. In January, there was already a decline of 59 percent. The Tesla factory in Brandenburg does not seem to offer enough incentive to convince the German market. The company is also suffering from damage to its image, which is being exacerbated by Elon Musk's controversial role in US politics. Many German companies are withdrawing from Tesla as a provider of company vehicles, and some drivers are showing their distance from Musk with stickers on their cars.

In contrast, other e-vehicles are showing that things can be done differently: their sales figures rose by 28.4 percent in February. Hybrid vehicles dominate with 35.2 percent of new registrations, followed by petrol cars (29.1 percent) and battery electric vehicles (15.2 percent).

Porsche SE lowers dividend and insists on savings program at VW and Porsche

Porsche SE $P911 (-0.29%)the main shareholder of Volkswagen $VOW (+2%) and Porsche, has cut its dividend. This is due to lower inflows from its main investments, which is forcing those responsible to call for savings programs. A dividend of just 1.91 euros per preference share will be paid out for the past financial year, compared to 2.56 euros in the previous year. The decline is due to an expected lower dividend inflow from Volkswagen, which is putting pressure on Porsche SE's financial position.

In addition, Porsche SE had to recognize high impairment losses on its investments in VW and Porsche, which led to a consolidated accounting loss of 20 billion euros. Net debt is estimated at between 4.9 and 5.4 billion euros for 2025. CEO Hans Dieter Pötsch is aiming for earnings after tax of between 2.4 and 4.4 billion euros in 2025.

VW and Porsche have invested heavily in cost-cutting programs in response to the challenges in the automotive industry. Pötsch emphasizes the "consistent implementation" of these measures. However, rumors of possible sales of VW shares were firmly denied by Porsche SE. The holding company plans to diversify in the long term and now manages 18 companies in its portfolio.

Sources:

https://www.n-tv.de/wirtschaft/Verkaufszahlen-bei-Tesla-in-Europa-schrumpfen-deutlich-article25653641.html

https://www.n-tv.de/wirtschaft/Porsche-SE-senkt-Dividende-und-pocht-auf-Sparprogramm-bei-Autobauern-VW-und-Porsche-article25657595.html

#vw
$VOW (+2%)

Disclaimer: This article does not constitute investment, tax or legal advice, but reflects my personal opinion only. The information contained herein is based on publicly available sources that I believe to be reliable, but I do not guarantee the accuracy, completeness or timeliness of the information. Financial and corporate data may change at any time. Readers should conduct their own research and seek professional advice when making investment decisions. I accept no liability for any financial loss or other damage arising from the use of or reliance on this article. Financial and market data may change at any time.

Hi folks,

The last posts in short format were well received, thanks for the great feedback.

Today's post will once again focus on a well-known German company - but this time it's Volkswagen. A brand that everyone should perhaps have heard of. Today I would like to give my opinion on Volkswagen's annual report and the general situation surrounding the strongly expansion-driven market in China.

But where does Volkswagen currently stand?

Volkswagen AG is one of the world's leading car manufacturers with a significant presence in the Chinese market. China plays a central role in the Group's global performance and future growth strategy. The dynamics of this important market and the financial health of Volkswagen are essential cornerstones of the German automotive industry and have a significant impact on the 2 prominent business segments of the VW Group. The "Automobiles" business segment is just as intertwined with the performance in the Chinese market as the second business segment of Financial Services, which essentially deals with various financing issues for the first business segment. In general, Volkswagen is home to well-known brands such as VW, of course, and AUDI in the higher-priced segment, but also strong brands such as Bentley and Lamborghini in the luxury segment. So while the luxury brands tend to appeal to a clientele with sports cars, high horsepower figures and driving aesthetics, the commercial vehicle segment around Scania and MAN tends to serve the transport industry, among others. I therefore believe that the Volkswagen Group is broadly positioned here (see (1), (12)).

A few days ago, Volkswagen published its financial results for 2024 and specified its current role and strategic orientation in China, so what figures did Volkswagen publish?

In the 2024 financial year, the Volkswagen Group achieved global sales of 324.7 billion euros, a slight increase compared to the 322.3 billion euros in 2023 (see (1), (2)). This growth is primarily due to the positive development in the Financial Services segment. By contrast, the automotive business recorded a slight decline in revenue, which is mainly due to lower sales volumes (see (2), (3)). This illustrates that the challenges in 2024 were primarily in the area of vehicle production and sales. The Group's operating result amounted to EUR 19.1 billion in 2024, a decrease of 15% compared to the previous year's EUR 22.5 billion (see (1)). The operating margin was 5.9% (see ibid.). This decline in earnings is mainly due to a significant increase in fixed costs, which includes extraordinary expenses of EUR 2.6 billion net for restructuring measures (cf. ibid.). These investments in the future direction of the company and the adjustment to changing market conditions have therefore had a short-term impact on profitability. Net cash flow in the Automotive Division amounted to EUR 5.0 billion in 2024, which is significantly lower than the figure of EUR 10.7 billion in 2023. This significant decline in net cash flow currently represents a rather negative development in the VW Group's liquidity environment. The associated net liquidity in the Automotive Division amounted to €36.1 billion at the end of 2024 (see ibid.). The Volkswagen Group's global vehicle sales amounted to 9.0 million units in 2024, a decrease of 3.5% compared to the 9.4 million units in 2023. The 9.5% decline in deliveries in China to 2.9 million vehicles is particularly noteworthy. The development in China therefore had a significant impact on the Group's global decline in sales (see (3), (4), (5)). Overview of a few figures for the 2024 financial year compared to 2023:

• Sales increased slightly: +0.7% to € 324.7 billion
• Operating result fell significantly: -15.1% to € 19.1 billion
• Operating margin under pressure: decline from 7.0% to 5.9
• Net cash flow in the Automotive Division halved: From €10.7 billion to €5.0 billion
• Global vehicle sales down: -4.3% to 9.0 million units 🚙
• China the problem child? Vehicle deliveries there down -9.4% to 2.9 million units 🇨🇳

How could things look for Volkswagen in China?

In 2024, Volkswagen recorded a decline in sales of 9.5% to 10% in China (cf. ibid., cf. (9)), which led to a decline in market share of 2 percentage points ((2), (3)).

This decline occurred in a market environment characterized by intense competition and price wars, in which over 120 competitors operate (see (1), (6), (7)).

In this situation, in my opinion, Volkswagen is apparently pursuing a strategy of prioritizing profitability and not gaining market share at all costs (see (7), (8), (9)). However, local brands such as BYD dominated the Chinese market in 2024 and sold significantly more vehicles than the Volkswagen Group (see (8), (9), (10)). The strength of local competition therefore represents a significant challenge for Volkswagen. Volkswagen is pursuing the "In China for China" strategy (see (1), (10), (11)) in order to meet these challenges and exploit the opportunities in the Chinese market.

This strategy emphasizes the localization of products and technologies in order to meet the specific needs and preferences of Chinese customers (see (8)).

A deep understanding of local preferences and the development of technologies tailored to them could be crucial for success in this market. Partnerships and collaborations are an important part of this strategy. For example, Volkswagen has agreed a strategic collaboration with XPeng to build a super-fast charging network in 420 cities in China with over 20,000 charging points (see (1), (13), (14)). The expansion of the charging infrastructure is a key factor in promoting electromobility and improving the customer experience. There is also a strategic cooperation agreement with the FAW Group, under which eleven new models are to be launched on the market from 2026, including ten NEVs (New Energy Vehicles) (see (1), (10), (13)). These include a mix of battery electric vehicles (BEVs), plug-in hybrids (PHEVs) and vehicles with range extenders (EREVs) , demonstrating a flexible approach in the field of new energies. Among other things, the Jetta brand will launch its first electric model, which is aimed at the growing segment of entry-level electric vehicles (cf. ibid., cf. (5)).

In the field of electrification, Volkswagen is pursuing the ambitious goal of offering at least 30 fully electric models across all brands in China by 2030 (cf. (1), (6), (9), among others). An important step here is the development of the China Electronic Architecture (CEA) for the local production of Volkswagen brand electric vehicles from 2026 in cooperation with Cariad China and XPeng (see (9), (14)).

The development of local technology capabilities is crucial for faster innovation and cost efficiency. In addition, Volkswagen plans to gradually hybridize its models with combustion engines and convert them into an electrified fleet (see (9)).

The competitive landscape in China is characterized by strong competition from local EV manufacturers such as BYD, Nio and up-and-coming "smart EV" brands (cf. ibid.). These competitors are often characterized by a high speed of innovation and rapid adaptation to evolving consumer preferences, especially in terms of advanced technology and connectivity (see (10), (13), (14)). The comparatively slower decision-making processes and earlier challenges in software development (e.g. CARIAD) could be a disadvantage for Volkswagen (cf. ibid.). In addition, brand relevance is becoming less important in smaller cities, which could force Volkswagen to focus on other competitive factors (cf. e.g. (1), (13)).

Despite these challenges, there are also opportunities for Volkswagen in the Chinese market. The strong position in the segment of vehicles with combustion engines continues to generate revenue and can finance the transformation to electromobility (see (1), (2), (6)). The consistent focus on the needs of Chinese consumers through the "In China for China" strategy and local research and development efforts may be promising (cf. ibid.).

Partnerships with local technology companies such as XPeng and Horizon Robotics can accelerate development in key areas such as charging infrastructure and autonomous driving. In addition, an extensive product offensive with around 40 new models is planned between 2025 and 2027, with a strong focus on NEVs (cf. (5), (6), (9)).

Outlook for 2025 on the Chinese market:

Volkswagen mMn expects a further decline in market share in China in 2025, before stabilizing during the year and aiming for a turnaround in 2026 (cf. (1), (3), (6)). The company plans to stabilize its position by the end of 2025 and reverse the downward trend in 2026 through new initiatives, an improved cost base, technology and infotainment systems. The planned product offensive should take full effect in 2026 and 2027 . Worldwide, Volkswagen expects "strong growth" in sales of battery electric vehicles (BEVs) in 2025 and a global market share of 10% to 14% in this segment (see (1), (6)).

Volkswagen's financial performance in 2024 shows a slight increase in sales but a significant decline in profits, partly due to challenges in the Chinese market and restructuring costs. The company faces intense competition in China from local EV manufacturers and changing consumer preferences for technologically advanced vehicles. Volkswagen's "In China for China" strategy, the focus on electrification and local partnerships as well as the planned product offensive are key initiatives to address these challenges and regain market share. The outlook for the Chinese market in 2025 points to short-term challenges, but the long-term potential of Volkswagen's strategic initiatives remains (see (1), (5), (13)).

Are you invested in Volkswagen? What do you think of this whole "In China for China" approach?

👍 - am invested in Volkswagen

🚀 - no thanks you

Your Bass-T

SOURCES

(1) https://www.volkswagen-group.com/en/financial-reports-18134#2024

(2) https://www.volkswagen-group.com/en/investors-15766

(3)https://www.vwfs-overseas.com/Investor-Relations.html

(4)https://www.yicaiglobal.com/news/volkswagen-expects-its-china-market-share-to-keep-shrinking-in-2025

(5)https://www.automotivelogistics.media/ev-and-battery/vw-looks-at-digital-architecture-for-rapid-local-ev-roll-out-in-china/46582.article

(6)https://www.shine.cn/biz/auto/2503175817/

(7)https://www.morningstar.com/news/dow-jones/202501143153/volkswagen-car-deliveries-fall-as-challenges-in-china-continue-update

(8)https://www.canalys.com/insights/changing-consumer-preferences-intelligent-vehicles

(9)https://www.just-auto.com/news/volkswagen-sales-revenue-2024/

(10)https://www.trendforce.com/presscenter/news/20250225-12486.html

(11)https://volkswagengroupchina.com.cn/en/news/Detail?ArticleID=1E17A7AF20174FF5A3B55AD1707D38A3

(12)https://de.marketscreener.com/kurs/aktie/VOLKSWAGEN-AG-436737/

(13)https://www.businessinsider.de/wirtschaft/byd-volkswagen-wird-vom-konkurrenten-in-china-ueberholt/

(14)https://german.xinhuanet.com/20250108/03d74ea691ff4153946c485aa0481281/c.html

At 53 billion euros, the 40 DAX companies are likely to pay out almost one billion euros more this year than a year ago - more than ever before.

The reason for the strong development is high consolidated profits and unexpectedly rising dividends at a good dozen companies, including $ALV (+0.22%) Allianz, $MUV2 (+0.88%) Munich Re and $RHM (+2.78%) Rheinmetall.

At 109 billion euros net profit, the DAX companies are likely to have earned as much in 2024 as in the previous year, according to Handelsblatt calculations. Slump in earnings for the three car manufacturers $BMW (+0.79%) BMW, $MBG (+0.91%) Mercedes and $VOW (+2%) VW will be offset by companies in other sectors, in particular the major insurers Allianz, Munich Re and $HNR1 (+1.07%) Hannover Re, but also $DTE (+0.41%) Deutsche Telekom, $HEN (+1.15%) Henkel and $EOAN (+0.98%) Eon.

More than a dozen DAX companies have announced higher dividends than the market had previously expected. For example $ALV (+0.22%) 15.40 euros per share after 13.80 euros in the previous year. Analysts had forecast just under 15 euros. The insurer is thus distributing just under six billion euros. This is a record in the German corporate landscape.

The biggest jump is at $MUV2 (+0.88%) Munich Re: The reinsurer is increasing its dividend by five euros per share to 20 euros.

The two healthcare specialists $FRE (+0.6%) Fresenius and $FME (+1.4%) Fresenius Medical Care, the brand manufacturer $HEN (+1.15%) Henkel, the automotive supplier $BTR Continental, the $CBK (+0.52%) Commerzbank, $RHM (+2.78%) Rheinmetall and $HNR1 (+1.07%) Hannover Re have raised their dividends, in some cases significantly more than expected. This is also due to rising profits, which justify a higher profit share for shareholders.

The largest dividend payers in the DAX are

• $ALV (+0.22%)
• 
  $DTE (+0.41%)
• 
  $MBG (+0.91%)
• 
  $SIE (-0.49%)
• 
  $VOW (+2%)

Like the car manufacturers, a number of companies in the DAX remain below the usual international payout ratios, including the family-run groups $BEI (+3.47%) Beiersdorf and $MRK (+0.59%) Merck. They pass on less than 30 percent of their profits. This leaves enough of a buffer so that dividends do not have to be reduced immediately in more difficult times.

Germany's most valuable group, $SAP (+0.17%) SAP, with a payout ratio of 85%, is pushing the limit: net profit of 3.1 billion euros in the past year compares with a total dividend payout of 2.7 billion euros. However, the profit was burdened by a one-off effect.

So far, a total of 20 companies have increased their dividends, with only $BAS (+0.42%) BASF and the three car manufacturers. Four companies have yet to do so: $RWE (+1.42%) RWE, $SY1 (+0.47%) Symrise and $VNA (+2.45%) Vonovia are likely to increase their dividends, while analysts expect $PAH3 (+0.68%) analysts expect a reduction at Porsche Holding.

Source (excerpt) & chart: Handelsblatt, 15.03.25

Today, Volkswagen ($VOW (+2%) ) also held its investor and analyst conference today. I would like to summarize an insight from the meeting for you.

Oliver Blume looked back on a year 2024 that was characterized by strategic decisions in a rapidly changing environment. Despite weak demand in Europe, rising trade barriers, challenging industrial conditions in Germany and strong price competition in China, the Volkswagen Group the Volkswagen Group was not discouraged. On the contrary, it has pursued a determined course and pushed ahead with the transformation along the TOP 10 program.

One important point was the comprehensive model offensive with over 30 new models from Volkswagen, Skoda, Cupra, Audi and Porsche. The design was sharpened, the brand identities emphasized and the quality of products and services measurably improved. quality of products and services was measurably improvedwhich was reflected in the positive feedback from customers and the trade press.

In China a new strategy has been implemented, which relies on strong regional technology partners (such as Xiaopeng), an innovation center in Hefei, accelerated development times, revised cost structures and a product strategy tailored to Chinese customers. Blume emphasized that, unlike many other manufacturers in China, Volkswagen continues to be profitable which makes it possible to invest in new models and technologies.

North America remains a key market for the Group's growth strategy. Investments and strategic partnerships are intended to drive growth in new market segments. The revitalization of the Scout brand for pickups and robust SUVs with flexible drive options met with great interest, with almost 80,000 pre-orders already received.

In the area of software important milestones were also reached. Software activities were realigned and the team strengthened with new partners: Xiaopeng for China and Rivian for other regions are to develop the electronic architectures and software solutions of the future. CARIAD will focus on the further development of central digital services, autonomous driving, infotainment, cloud services and data processing. Responsibility and control over the software will lie more strongly with the brands.

Another important success was the future package for Volkswagenwhich forms the basis for an economically successful future for the German sites. The key points are the reduction of overcapacities in Germany, the reduction of labor costs, the increase in productivity and competitive plant costs.

Despite these challenges and restructuring measures, the Group was able to generate Group sales of almost 325 billion euros and an operating result of 19.5 billion euros. were achieved. Blume emphasized the resilience and the will to shape of the company. Based on these results, a dividend of Annual General Meeting a dividend of 6.36 euros per preference share which corresponds to a payout ratio of 30% of net profit.

Arno Antlitz presented the financial details for 2024 and the outlook for 2025. vehicle sales amounted to 9 million units, a decrease of 3% compared to the previous year. The turnover increased slightly by 1% to around 325 billion euros. The operating result fell by 15 % to 19.1 billion euros, which corresponds to an operating margin of 5.9%. corresponds to an operating margin of 5.9 %. The result was burdened by costs for new products, increased fixed costs and restructuring expenses of around 3 billion euros.

The net cash flow in the Automotive Division exceeded expectations and amounted to 5 billion euros. The net liquidity remained at a solid level of 36.1 billion euros.

For the year 2025 Antlitz expects a significant tailwind from the renewed model portfolio and a slightly positive volume trend outside China. The implementation of the future package for Volkswagen and continued cost discipline should have a positive impact. However, the expansion of BEV volumesvolumes, particularly in Europe, as well as start-up costs for new models and battery activities will have a negative impact on earnings. Overall, a sales growth of up to 5 % is expected, with an operating return on sales of between 5.5% and 6.5with the first quarter expected to be lower-margin. The investment ratio in the automotive sector should be between 12% and 13%, and the net cash flow is expected to be in the range of EUR 2 to 5 billion. This outlook does not take into account the potential impact of customs duties, changes in CO2 regulations or further restructuring measures.

In the subsequent Q&A, the analysts asked various questions, which I would like to summarize thematically here:

Strategy and execution: Tim Rokossa from Deutsche Bank asked whether execution was now the main priority after products, partners and costs. Oliver Blume emphasized that after 2.5 challenging years and extensive restructuring, the focus is now on accelerating the implementation is now the focus. The programs are on schedule and in many cases faster than expected.

Cash flow and margins: Rokossa asked about free cash flow and the stronger start to the year. Arno Antlitz explained that the 2025 free cash flow will be reduced by restructuring expenses of 2 billion euros and continued high investments. In addition, the lower result of the Chinese joint ventures would have an impact on the dividend and therefore on cash flow. The stronger start to the year is due to a significant increase in the share of BEV which is reducing margins in the short term. Mike Tyndall from HSBC asked about the further burdens the BEV mix that are limiting operating profit growth. Antlitz referred to higher depreciation due to the investments made.

CO2 regulation: George Galliers-Pratt from Goldman Sachs addressed the European CO2 regulation regulation. Oliver Blume was positive about a possible adjustment that could bring more flexibility for 2025. Further discussions on more flexibility are also underway for the 2030 and 2035 targets.

Investments and capital allocation: Patrick Hummel from UBS discussed the reduction of the 5-year investment plan and and possible higher distributions in the future. Arno Antlitz emphasized that the initial focus was on achieving the targets set, in particular the reduction of R&D and investment expenditure to 10% by 2027. A possible increase in the payout ratio could be discussed in one to two years.

China strategy: Several analysts asked about the China strategy. Blume reiterated the "in China, for China" strategy and the successful cooperation with local partners. Antlitz explained that conscious decisions are being made in China between margin and market share and that a further decline in market share is expected in 2025 before the company intends to attack again with new products from 2026.

Software and partnerships: Horst Schneider from Bank of America inquired about the progress of the progress of the software partnerships with Rivian and Xiaopeng. Blume was satisfied with the progress. The first Volkswagen models are to be launched on the market with Xiaopeng in 2026 and work is being carried out jointly on a Volkswagen China platform. Rivian is on schedule, with the first vehicles for winter tests in 2025/2626.

CARIAD and PowerCo: Harald Hendrikse from Bank of America asked about the outlook for outlook for the losses of CARIAD and PowerCo and when they might reach the break-even point. Arno Antlitz promised to provide more detailed information on this at the next event in Frankfurt.

My impression from the analysts' conference is that Volkswagen AG is undergoing a challenging transformation process process, but solid results for 2024 were able to present. The strategic decisions seem to be bearing fruit, even though the challenges in the global market continue to exist. The focus for 2025 is clearly on cost efficiency, the successful launch of new models and strengthening our presence in China and North America.

Overall, the management appeared focused and determinedto achieve the targets set. The coming quarters will show to what extent the ambitious plans can be implemented.

Good morning ,

$VOW (+2%) was able to minimize a few losses. I am now back in the green. What do you think - hold or sell?

Biontech $BNTX (+2.19%) has high hopes for its new drug candidate BNT327, which is being developed for the treatment of advanced cancer. This innovative approach aims to combat the tumor-related effects that weaken the body's own immune system. The acquisition of the Chinese company Biotheus secured Biontech the worldwide rights to this promising drug. But while the future looks promising, the Mainz-based company is facing a significant net loss of around 700 million euros in 2024. This continues the decline that began with the declining business around the Covid-19 vaccine. In 2022, Biontech was still able to record a profit of around 9.4 billion euros, but in 2023 this fell dramatically to only around 930 million euros. This is a clear indication that the company is in a transition phase and needs to develop new strategies to get back on the road to success.

In Germany, Volkswagen $VOW (+2%) is providing positive news for its employees: they can look forward to uncapped bonuses this year! Despite an ongoing austerity program and an agreement with IG Metall, which temporarily suspends profit sharing from 2026, the bonus for 2024 remains unaffected. Head of the Works Council Daniela Cavallo announced at the last works meeting that the bonus will continue to be paid in full. However, the exact amount of the bonus is still unclear, as it depends on the previous year's profit, which is to be published on March 11. Volkswagen has revised its profit forecast for 2024 downwards several times in recent months and now expects an operating profit of 18 billion euros. Despite the uncertainties and challenges, the company remains committed not only to supporting its employees, but also to keeping their motivation high.

Sources:

https://www.spiegel.de/wirtschaft/biontech-teure-entwicklung-von-krebsmedikamenten-fuehrt-zu-stellenabbau-a-23a1a698-7b5c-465d-bd3f-01032ea3288d

https://www.spiegel.de/wirtschaft/volkswagen-vw-mitarbeiter-duerfen-mit-praemien-in-voller-hoehe-rechnen-a-51abf27a-b728-4a48-8cc1-7c4c04c2ffd4

...while vehicle sales fall by 2.3 percent to 9.03 million models. Chief Human Resources Officer Gunnar Kilian announces further sausage variants after new products such as the hot dog sausage contributed to the success. (no satire) $VOW (+2%)