Volkswagen's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

Founded in 1937 and based in Wolfsburg, Volkswagen is an American company operating in the automotive sector. It is one of the world's leading car manufacturers and the largest in Europe. The group markets several types of vehicles through twelve brands from seven European countries. During 2020, the company's business was affected by the Covid-19 health crisis. However, it proved resilient and managed to limit the impact of the pandemic on its annual results.

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Volkswagen's market cap, dividends, sales and earnings in 2020
Image copyright: Keita Kuroki - Flickr

Overall performance in 2020

For the full twelve months of the 2020 financial year, the Volkswagen Group's turnover reached EUR 222.9 billion. This represents a decline of 11.8% compared to 2019. This decline in turnover is due in particular to the impact of the coronavirus health crisis on the company's business in this year.

For the year 2020, the automotive giant posted an operating profit (excluding exceptional items) of €10 billion, compared with €19.3 billion in 2019. It is down by almost 50% year-on-year. This decline is mainly due to the Covid-19 pandemic. The group's net profit for the year under review came to EUR 8.8 billion. 8.8 billion for the year under review, a decline of 37% compared to its level (at the end of 2019).

Excluding exceptional items, notably dieselgate-related penalties, the operating margin was 4.8% in 2020, down from 7.6% a year earlier. In addition, the Automotive Division recorded a solid performance in terms of free cash flow. This indicator reached 6.4 billion euros.

However, it fell by 41.3% over the one-year period. It should also be noted that the carmaker paid out a total of 687 million euros in the first nine months of the 2020 financial year to carry out the procedures relating to the scandal involving rigged diesel engines.

Net cash increased by 25.9% year-on-year to €26.8 billion at the end of 2020.

 

Strong business rebound in the last two quarters of 2020

The Volkswagen Group achieved a solid performance in the third and fourth quarters of 2020. Already in the second quarter, the company took steps to ensure an improvement in business for the remainder of the year.

During Q2-2020, the carmaker employed urgent measures to offset the impact of the health crisis. In particular, it has placed a strict and continuous focus on costs. In addition, the German company engaged in the implementation of measures to manage the plant, and to control stocks.

As a result, these various measures have had a positive impact on the group's results from May onwards. In the fourth quarter of 2020, the automotive giant achieved a good performance by recording an operating profit of 1.4 billion euros.

As a reminder, Volkswagen had posted a loss (before tax) of 2 billion euros in Q2-2020. In the first quarter, it had recorded a profit of 0.7 billion euros. In contrast to the previous year, the company had a difficult H1-2020 due to the Covid-19 health crisis. In H1-2019, the manufacturer posted a profit (before tax) of €9.6 billion.

 

Annual review of vehicle sales

Like other car manufacturers, the Volkswagen Group saw its sales affected by the Covid-19 health crisis in 2020. They fell sharply in the spring. As a result, the company posted a loss of €1.4 billion in H1-2020. In contrast, the second half of the year was marked by a strong rebound in orders.

This is illustrated in particular by the great dynamism observed in the fourth quarter of 2020. During this period, the number of vehicles delivered was higher than in Q3-2020. In addition, for the full year under review, the group's twelve brands achieved sales of 9.3 million cars.

This figure is 15.2% lower than the previous year. The share of electrified vehicles jumped significantly. Sales of fully electric cars increased by 200%. Sales of hybrid models grew by 175% in the year 2020.   

Despite these remarkable increases, the German carmaker failed to meet the carbon emission targets set for its fleet by the European CAFE standard.

 

Vehicle sales performance by region

The Chinese market was the most dynamic for the Volkswagen Group in 2020. In particular, it contributed to the company's sales performance in the year under review. This is illustrated in particular by the strong recovery in this market from Q2-2020.

In the Asia-Pacific region, the German company sold 4.1 million vehicles in 2020, down 10.9%. This figure takes into account the results of JVs. In addition, car sales were lower in Europe.

In this region, the group sold 3.93 million vehicles, a drop of 19.1%. In North America, it sold 744,000 units (down 22.1%) for the full year 2020. In South America, car sales fell by 22.4% to 471,000 units sold. In the latter region, the car giant's market shares showed a significant increase.

 

Volkswagen dividend and market capitalisation in 2020

For 21 years, Volkswagen has always paid a dividend to its shareholders. The amount of the dividend has remained unchanged for the past five years. For the financial year 2020, the company has distributed a dividend of 4.86 euros per share.

Furthermore, the Volkswagen Group has a strong presence in the equity markets. The company is listed on the Frankfurt DAX 30. Since its IPO, it has been one of the most sought-after stocks. In 2020, the company's market capitalisation was estimated at 91 billion euros.

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