Volkswagen Group Continues Success Story

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The Volkswagen Group is again reporting significant progress: deliveries, sales revenue and earnings all rose substantially in the first nine months of 2007. “We have become better, more productive and more profitable”, said Hans Dieter Pötsch, Volkswagen AG’s CFO, commenting on the publication of the figures. “All brands contributed to this success.”

The Volkswagen Group set a new record in the first nine months, with 4.6 million vehicles sold worldwide. This represents an increase of 8.2 percent. “Customers find our cars compelling”, said Pötsch, “and the response to the new models we have presented has been consistently positive.” Sales revenue grew by 5.1 percent to €81.0 billion. At €4.3 billion, operating profit was up significantly year-on-year. The Group’s profit before tax increased by €3.8 billion in the first three quarters to €4.7 billion. Profit after tax more than doubled to €2.9 billion.

“The strong sales figures and the improved cost structures are strengthening our earnings power and competitiveness in the long term. We are therefore well on the way to reaching our targets”, said Pötsch. For the first time, the Volkswagen Group will sell more than six million vehicles this year. The Board of Management continues to forecast that 2007 operating profit will substantially exceed the previous year’s operating profit before special items. “In fiscal year 2007, we will achieve the goal of generating profit before tax of at least €5.1 billion that we originally set for 2008”, said Pötsch.

All of the Group’s brands recorded an improvement in operating profit in the first nine months. The Volkswagen Passenger Cars brand more than doubled its profit, increasing operating profit by €754 million to €1.4 billion. This reflected in particular the strong sales growth and optimized costs. At €1.8 billion, Audi’s operating profit increased substantially by €633 million year-on-year. Lamborghini continued its buoyant development in the reporting period. The Škoda brand was also successful, improving profit before tax by €144 million to €526 million. Thanks to the measures introduced to improve earnings performance, SEAT significantly reduced its loss by €109 million year-on-year, recording an operating loss of €12 million. The Bentley brand generated an operating profit of €107 million in the first nine months, a year-on-year increase of €62 million. The operating profit reported by Volkswagen Commercial Vehicles also improved further by €88 million to €148 million. The Financial Services Division again made a significant contribution to the Volkswagen Group’s earnings. Its operating profit rose by €20 million to €747 million.

The good results and the disciplined management of costs and investments led to a further improvement in net liquidity in the Automotive Division, which now amounts to €13.9 billion. Despite the development of new models, the ratio of investments in property, plant and equipment to sales revenue (capex ratio) remained at a low 3.6 percent in the first nine months.

CFO Pötsch: “We have demonstrably made significant progress and will continue our successful strategy. We have outstanding vehicles, motivated employees, a strong market position and a sound financial basis.”

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