Global auto maker Volkswagen AG (VWAGY:OTC Pink) today reported a summary of operating and financial highlights for FY/20 ended December 31, 2020. The company additionally stated that due to its big e-mobility push it expects that in FY21 it will delivers more that 450,000 electric vehicles (EVs), more than twice as many units that it delivered in 2020.
Ralf Brandstätter, CEO of the Volkswagen Passenger Cars brand, remarked, "With the additional models, the company is now rapidly increasing volumes of electric vehicles and scaling up MEB use around the world...Volkswagen is planning to deliver a total of some 300,000 MEB-based vehicles to customers this year as well as around 150,000 hybrids."
Volkswagen stated that in 2020, a year that was overshadowed by coronavirus issues, it was still able to spend approximately 2.7 billion euros on developing and advancing future technologies.
The company advised that its ACCELERATE strategy will reach its first major milestone in 2021 with the projected doubling of EV sales to be achieved in 2021.
The company stated that 2021 looks to be a solid year and that it estimates that FY/21 deliveries, sales revenue and profit will increase year-over-year versus FY/20. The firm added that its target for operating return on sales is between 3-4%.
Volkswagen also laid out its plans for its implementing its business model 2.0 strategy by the summer of 2021 and advised that it is testing subscription models and additional optional functions on demand starting with six cities in Germany. The new pilot projects will feature use-based billing and navigation services. The company indicated that these functions along with other enhancements show potential to generate hundreds of millions of euros in additional revenues in the coming years.
CEO Brandstätter stated, "After a challenging first half of the year, we fought back with strict cost discipline and a strong sales performance. Volkswagen posted an operating profit of EUR 454 million before special items and so even operated profitably in the crisis year 2020."
"Even in the exceptionally challenging times of the pandemic, we were able to make substantial investments in the future...This will enable us to continue to step on the gas in 2021 with our new ACCELERATE strategy," Brandstätter added.
The company reported that in its efforts to mitigate the negative effects of the coronavirus pandemic on its operations, last year it implemented a large number of cost-reductions, cutting annual fixed costs by around 1 billion euros.
The company stated that the cost reductions strongly benefitted Q3/20 and Q4/20 operating profit levels and indicated that in Q4/20 it recorded operating profit of 1.4 billion euros, which it said was significantly above the Q4/19 level. The firm pointed out also that it reduced net inventories by 10% compared to the previous year.
Volkswagen reported that FY/20 sales revenue was 71.1 billion euros, compared to 88.4 billion euros in FY/19. The firm listed that it delivered a total of 5.3 million vehicles in FY/20, versus 6.3 million in FY/19 and noted that though volumes decreased it was able to sustain and in some cases expand its market share in all key major world markets.
Volkswagen's CFO Alexander Seitz commented, "In 2020, which was an exceptional year, safeguarding our financial freedom was a critical success factor. We carefully scrutinized all our projects and made a rigorous list of priorities. The strong performance in the second half of the year shows that we implemented the right measures."
Volkswagen AG (VOWG:DAX) has a market capitalization of around 150 billion euros with approximately 501.3 million shares outstanding. VWAGY U.S.-ADR shares opened nearly 7% higher today at $34.965 (+$2.215, +6.76%) over yesterday's $32.75 closing price and reached a new 52-week high this morning of $48.72. The stock traded today between $34.46 and $48.72 per share and closed for trading at $42.33 (+$9.58, +29.25%).
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