Volkswagen | $VOW (+0,6%) Q3'24 Earnings Highlights

🔹 Operating Profit: €2.86B (Est. €3.89B) 🔴; DOWN -42% YoY

🔹 Revenue: €78.48B (Est. €76.66B) 🟢; DOWN -0.5% YoY

🔹 Operating Margin: 3.6%; Lowest since the pandemic

🔹 Vehicle Deliveries Guidance: 9M units (Est. 9.17M) 🔴

🔹 Vehicle Sales: DOWN -8.3% YoY

Outlook:

🔸FY Auto Cash Flow Forecast: About €2B (Est. €3.05B)

🔸 VW reiterated its FY'24 guidance of a 5.6% profit margin and €320B in annual sales, unchanged from earlier forecasts despite challenges.

🔸 Management warned that interest rate cuts by central banks will continue to reduce interest income in Q4.

🔸 VW expects higher restructuring expenses and seasonal cost increases in Q4, with labor disputes adding further uncertainty.

Key Strategic Developments:

🔸 Restructuring & Plant Closures: VW announced plans to shut down at least three factories in Germany and reduce staffing at remaining plants, laying off tens of thousands of workers.

🔸 Planned Wage Reductions: Aims to cut wages for 140,000 workers by 10% amid negotiations with labor leaders.

🔸 End of Employment Protection Agreement: VW plans to terminate the 1994 labor agreement in Germany, intensifying labor disputes.

🔸 JV with Rivian: VW confirmed that its joint venture with Rivian remains on track.

Segment Insights:

🔹 China Business Income: €378M; Halved YoY, marking the steepest drop this year

🔹 China remains a key pressure point as income falls to multi-year lows

🔹 Core VW Brand: Operating Margin of 2% for the first 9 months of the year

🔹 Struggles persist with low returns, exacerbated by delays in EV launches