Volkswagen Reports Strong Q1 Results On Higher Sales In Europe And North America

Volkswagen AG (NYSE: VWAGY) reported Q1 2023 sales revenue increased 22% Y/Y to €76 billion, led by improved sales volumes in Europe and North America and higher pricing.
Volkswagen delivered 2.04 million vehicles in Q1 globally, a 7.5% increase year-on-year.
Before valuation effects from commodity hedging, operating profit rose 35% Y/Y to €7.1 billion, with margins coming in at 9.3% (vs. 8.3% a year ago). Including commodity hedging valuation impact, operating profit declined to €5.7 billion (from €8.3 billion in the prior year), but exceeded the Refinitiv SmartEstimate of €5.48 billion, per Reuters.
The Automotive Division reported a net cash flow of €2.2 billion in Q1 2023, higher than €1.5 billion a year ago. Net liquidity in the business fell to €38.4 billion on payment of the special dividend related to the Porsche AG IPO.
Return on sales stood at 7.5%, with an underlying return on sales of 9.3% in Q1.
The company plans to invest €1 billion to open an innovation center in China for boosting foothold in the Chinese market (deliveries down 14.5% Y/Y in Q1).
2023 Outlook Reiterated: Volkswagen expects sales revenue of €307 billion to €321 billion (+10% to 15% Y/Y), vehicle deliveries of 9.5 million, return on sales of 7.5% to 8.5%, Automotive net cash flow of €6 billion to €8 billion.
"Volkswagen Group has made an encouraging start to 2023 with strong growth in revenues and operating profit before negative valuation effects from commodity hedging transactions. Based on this solid performance and an order book of 1.8 million vehicles at the end of Q1, we confirm our financial outlook for 2023," said Arno Antlitz, CFO.
Also Read: Rivian And Volkswagen ID.4 Owners: Your EVs Are Now Eligible For Federal Tax Credits
Price Action: VWAGY shares traded higher by 0.30% at $16.64 on the last check Thursday.

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