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Half-Yearly

Financial Report
January - June

2015

1 U PDATED I N F OR M ATI ON
1 Key Facts
2 Key Events

6 I NTER IM M A N AG EM ENT
R EPORT

2 0 B R A N D S AN D
BUSI N ESS F I ELD S

25 I NTER IM CONSOLI DATED FI NA NC IA L


STATEMENTS (CON D ENSED)

6 Volkswagen Shares
7 Business Development
15 Results of Operations, Financial Position and Net Assets
19 Outlook

25
26
29
30
32
33

Income Statement
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to the Interim Consolidated
Financial Statements
50 Responsibility Statement
51 Review Report

Key Figures
V O L K S WA G E N G R O U P

Q2
1

Volume Data

Deliveries to customers ('000 units)


of which: in Germany
abroad

H1

2015

2014

2015

2014

2,552
353

2,623

2.7

5,039

5,066

0.5

337

+ 4.7

668

626

+ 6.7
1.5

2,198

2,286

3.8

4,371

4,440

Vehicle sales ('000 units)

2,483

2,645

6.1

5,090

5,207

2.2

of which: in Germany

343

339

+ 1.3

668

644

+ 3.8

2,140

2,306

7.2

4,422

4,563

3.1

2,593

2,669

2.8

5,314

5,234

+ 1.5

693

653

+ 6.1

1,395

1,314

+ 6.2

1,900

2,016

5.8

3,919

3,920

0.0

597.8

592.6

+ 0.9

273.9

271.0

+ 1.0

324.0

321.5

+ 0.8

abroad
Production ('000 units)
of which: in Germany
abroad
Employees ('000 on June 30, 2015/Dec. 31, 2014)
of which: in Germany
abroad

Q2

Financial Data (IFRSs), million

Sales revenue

H1

2015

2014

2015

2014

56,041

50,977

+ 9.9

108,776

98,808

+ 10.1

Operating profit before special items

3,662

3,330

+ 10.0

6,990

6,186

+ 13.0

Special items

170

170

Operating profit

3,492

3,330

+ 4.9

6,820

6,186

+ 10.3

6.3

6.3

16.4

7,664

7,777

7.0

7.9

as a percentage of sales revenue

6.2

6.5

3,696

4,420

6.6

8.7

Profit after tax

2,731

3,249

15.9

5,663

5,716

0.9

Profit attributable to Volkswagen AG shareholders

2,671

3,186

16.2

5,558

5,581

0.4

Cash flows from operating activities

4,147

1,848

7,766

3,347

Cash flows from investing activities attributable to operating


activities

3,668

3,312

+ 10.8

6,993

6,236

+ 12.1

EBITDA3

6,019

5,710

+ 5.4

11,859

10,953

+ 8.3

Cash flows from operating activities

6,861

6,137

+ 11.8

11,553

8,388

+ 37.7

Cash flows from investing activities attributable to operating


activities4

3,572

3,167

+ 12.8

6,761

5,469

+ 23.6

2,581

1,953

+ 32.1

4,652

3,578

+ 30.0

5.3

4.3

4.9

4.1

1,033

1,205

2,170

2,396

2.1

2.7

2.3

2.8

3,288

2,970

Profit before tax


as a percentage of sales revenue

1.5

Automotive Division2

of which: capex
as a percentage of sales revenue
capitalized development costs5
as a percentage of sales revenue
Net cash flow
Net liquidity at June 30

14.3
+ 10.7

9.4

4,791

2,919

+ 64.2

21,489

13,979

+ 53.7

1 Volume data including the unconsolidated Chinese joint ventures. These companies are accounted for using the equity method. All figures shown are rounded, so minor discrepancies
may arise from addition of these amounts. 2014 deliveries updated to reflect subsequent statistical trends.
2 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
3 Operating profit plus net depreciation/amortization and impairment losses/reversals of impairment losses on property, plant and equipment, capitalized development costs, lease assets,
goodwill and financial assets as reported in the cash flow statement.
4 Excluding acquisition and disposal of equity investments: Q2 3,518 million (3,147 million), H1 6,672 million (5,849 million).
5 See table on page 35.

U P D AT E D I N F O R M AT I O N

Key Facts

Key Facts
> Volkswagen Group deliveries to customers on a level with the previous year at 5.0 million
(5.1 million) vehicles; declines in Eastern Europe, South America and Asia Pacific higher
demand especially in Western Europe
> Group sales revenue up 10.1% on the prior-year figure at 108.8 billion; positive exchange
rate effects
> Operating profit up 0.6 billion to 6.8 billion in a regionally very mixed market
environment
> Special items relating to restructuring measures in the trucks business; operating profit
before special items at 7.0 billion (6.2 billion)
> Earnings before tax at 7.7 billion (7.8 billion); share of profits of the equity-accounted
Chinese joint ventures on a level with the previous year; fair value measurement effects
reduce financial result
> Cash flows from operating activities in the Automotive Division up 3.2 billion
year-on-year at 11.6 billion; ratio of capex to sales revenue is 4.9% (4.1%)
> Net liquidity in the Automotive Division at 21.5 billion; capital increase at Financial
Services Division reduces liquidity, successful placement of hybrid notes strengthens
Automotive Divisions capital base
> Enthusiastic reception by customers for Group models:
- Volkswagen Passenger Cars presents the new edition of the legendary Scirocco GTS and
the progressive C Coup GTE concept for the first time
- World premiere of the Audi Q7 e-tron the first plug-in hybrid featuring a petrol engine
and the quattro drive system
- KODA celebrates Chinese debut of its new Superb and Fabia models
- Debut appearance for Porsches new Boxster Spyder in New York
- Lamborghini celebrates its tenth anniversary in the Chinese market with the Aventador
LP 750-4 Superveloce and the Aventador LP 700-4 Pirelli Edition
- Volkswagen Commercial Vehicles unveils the sixth generation of the popular T model
series
- MANs powerful special-edition TGX D38 100 Years meets an enthusiastic reception

U P D AT E D I N F O R M AT I O N

Key Events

Key Events
2.2 l/100 km. The A6 L e-tron will be manufactured at the FAWVolkswagen joint ventures plant in Changchun. In addition to the
production models, Audi turned heads with the debut of the
prologue allroad concept. This five-door model recasts the standard
offroad elements in a new, sporty light and hints at the brands
design future. Its quattro plug-in hybrid drive develops an impressive 540 kW (734 PS) of system power output.
The KODA brand celebrated the Chinese debut of its Superb
and Fabia models at Auto Shanghai. The Superb is the Czech
brands flagship model and has been at the forefront of its model
range since 2001. For the Chinese market, this popular mid-range
saloon will be available in three engine variants ranging from
110 kW (150 PS) to 162 kW (220 PS). All models come with direct
shift gearboxes (DSG) as standard. The new Fabia marks the first
time that KODA has applied the brands new, modern design
language in a production model. Chinese customers have two
engine variants to choose from 66 kW (90 PS) and 81 kW (110 PS).
The SEAT brands 20V20 concept was aimed primarily at
younger show visitors. In particular, this powerful and dynamic SUV
combines sportiness with versatility, and illustrates the systematic
development of the Spanish brands widely acclaimed design
language. SEAT Connect Technology ensures that the vehicle is at
home in an interconnected world, with a specific focus on voice
command.
The Bentley brands EXP 10 Speed 6 concept marked its Asian
premiere in Shanghai following the models successful debut in
Geneva. The two-seat luxury sports car combines British design and
detailed handcrafting with advanced technology and superlative
performance. The show car shared the stage with the revamped
Continental GT and Flying Spur models, as well as the Continental GT3 motorsport version.
The highlight of the Porsche stand was the global debut of the
911 Carrera and Boxster Style Edition variants, which impressed
visitors with an attractive specification package and a wide range of
optical extras. The brands appearance was rounded off by the Asian
premiere of the Porsche 911 GT3 RS and the Porsche Targa 4 GTS.
Italian sports car manufacturer Lamborghini is celebrating its
tenth anniversary in the Chinese market in 2015. It marked the
occasion in Shanghai by unveiling the Aventador LP 750-4 Superveloce the brands fastest and most emotional model and the
Aventador LP 700-4 Pirelli Edition, which is fitted with exclusive
equipment and reflects the long-standing collaboration between
the automaker and the Italian tire producer.
Commercial vehicle brands Scania and MAN were also represented at Auto Shanghai; they presented powerful tractor units for
the particularly high mileages covered in the vast expanses of China.
Scanias 353 kW (480 PS) G 480 6x2 was on show, while MAN
displayed the TGX 28.480, also rated at 353 kW (480 PS).

M OTO R S H O W S A N D E V E N T S

The Volkswagen Group brands presented their new products at a


wide range of motor shows and events in the first half of 2015.
New York International Auto Show

The Volkswagen Passenger Cars brand unveiled four new variants


of its cult classic, the Beetle, at the New York International Auto
Show two coups and two cabriolets. The new Golf Alltrack also
marked its US debut.
Porsche kicked off the 2015 convertible season with the global
launch of the new Boxster Spyder. This purist sports car is the new
top-of-the-range model in the open-top two-seat Boxster range, and
it retains the unique character of the previous Spyder, which has
already attained cult status: its classic roadster top is opened and
closed by hand and the model is only available with manual
transmission.
Auto Shanghai 2015

Volkswagen Passenger Cars unveiled the new version of the legendary Scirocco GTS at Auto Shanghai 2015, marking its world premiere. The model was first launched in 1982 and was based on the
Golf GTI. The new model is powered by a 162 kW (220 PS) TSI engine
and, like its predecessor in 1982, is available with optional red
stripes extending from the bonnet, over the roof to the tailgate.
Another highlight of the stand was the C Coup GTE concept, which
was on show for the first time. Measuring in at over five meters long,
this saloon is designed for the Chinese market and combines
exclusivity with perfection and emotion, giving an insight into the
future design of sporty saloons. The C Coup GTE features an
innovative plug-in hybrid drive that generates system power output
of 180 kW (245 PS) and offers an impressive 500 Nm of torque. The
Volkswagen Passenger Cars brands appearance at the show was
rounded off by the world debut of the Gran Santana, a model
specially developed for the Chinese market, and a presentation of
the Golf GTI manufactured in Foshan, southern China.
The Audi brand celebrated the global debut of three new
models powered by innovative plug-in hybrid drives in Shanghai.
The Audi Q7 e-tron 2.0 TFSI quattro is the first plug-in hybrid
featuring a petrol engine and the quattro all-wheel drive system,
and was specially developed for the markets in China, Singapore
and Japan. The SUVs 270 kW (367 PS) output averages fuel consumption of just 2.5 l/100 km, with an overall range of 1,020 km.
The Q7 e-tron can cover up to 53 km in all-electric driving. Audi
also unveiled the A6 L e-tron, a spacious, environmentally friendly
and at the same time sporty model developed exclusively for the
Chinese market. Based on the long-wheelbase version of the A6,
this saloon features a plug-in hybrid drive generating system power
output of 180 kW (245 PS), with average fuel consumption of just

U P D AT E D I N F O R M AT I O N

Key Events

engines are fitted with a start-stop system as standard and fuel


consumption is reduced by an average of 15%. The new radio
navigation system is fitted with a proximity sensor and can be
connected to mobile online services.

Lake Wrthersee GTI festival

One of the main attractions for visitors to the annual meeting of GTI
enthusiasts at Lake Wrthersee in Austria was the productionbound Golf GTI Clubsport concept. The model was created especially to celebrate the GTIs 40th anniversary next year, and it
marked its world premiere in Austria. Packing 195 kW (265 PS) and
with a boost function that can temporarily push its output by a
further 10%, the GTI Clubsport 2016 is planned as the most powerful GTI ever to go into series production. The models customized
interior and specific bodywork features such as completely new
bumpers and an innovative roof spoiler round off its exclusive
appearance. A second world premiere was the unveiling of the Golf
GTE Sport, a concept car that brings Volkswagens GT tradition into
the world of tomorrow. The innovative concept has a carbon fiber
body and is fitted with a plug-in hybrid drive that generates 295 kW
(400 PS) and propels the car to a top speed of 280 km/h. Apprentices from Volkswagen and Wolfsburg-based Sitech Sitztechnik
collaborated to produce the Golf GTI Dark Shine, an impressive
demonstration of the high-quality and practical education within
the Group. The hand-painted car features a striking two-tone
exterior. The color scheme continues inside the cabin, including
the two bucket sports seats. The 2.0 TSI engine was custom
modified for this model and generates 290 kW (395 PS). The Golf
Estate Biturbo Edition and the KODA FUNstar show cars, which
were developed and presented by apprentices from Zwickau and
Mlad Boleslav respectively, were also presented at the GTI festival.
Other Group brands were also represented at Lake Wrthersee:
Audi presented its TT clubsport turbo concept which, with its pronounced wheel wells and powerful rear wing, offers a foretaste of
the new Audi TT RS. An electric turbocharger and 441 kW (600 PS)
of power catapult the muscular concept car from 0 to 100 km/h in
just 3.6 seconds.
The KODA brand presented the sporty KODA Octavia Combi
RD 230 and the KODA Fabia R5 rally car, among others. The SEAT
brand caused a sensation with the Leon ST CUPRA, the fastest
estate to complete the Nrnburgrings north loop.
The MAN brand catered for a specific kind of premiere. The
commercial vehicles manufacturer from Munich was represented
at the event for the first time and presented the special-edition
TGX D38 100 Years, a 412 kW (560 PS) tractor unit with a characteristic flaming lion painted on the cabin. MAN celebrated 100
years of commercial vehicle production this year.

Vienna Motor Symposium

At the 36th Vienna Motor Symposium, Volkswagen emphasized that


CO2 reduction, e-mobility and digitization are the key challenges in
the automotive industry. Volkswagens broad range of drive variants,
spanning petrol and diesel engines through natural gas and plug-in
hybrid drives down to pure-play electric traction and potentially
even fuel cells demonstrates the Groups enormous potential for
innovation. The optimization of the internal combustion engine
remains a key development area; high rpm diesel engines and a
new high-performance three-cylinder TSI engine are examples of
this. The laser roughening coating technique that Volkswagen
will use in future large-scale production contributes to reducing
friction in the engine and to boosting performance. The new
generation of the T series also saw the launch of a new 2.0 TDI
engine for light commercial vehicles, developed on the basis of the
Modular Diesel Toolkit (MDB). In addition, Volkswagen presented
the new 447 kW (608 PS) 6.0 liter W12 TSI engine in Vienna, one of
the worlds most sophisticated premium drive systems.
AWA R D S

The Volkswagen Passenger Cars brand was named best volume


manufacturer for the fourth consecutive time in this years
Schwacke MarkenMonitor. The brand performed particularly
well in the vehicle quality, image and model range attractiveness
categories. The KODA brand won first prize in the major importer
category. Schwacke MarkenMonitor is a dealer satisfaction survey
in which approximately 1,000 telephone interviews with German
car dealers are conducted and analyzed. The academic survey
focuses on the quality of cooperation between manufacturers and
dealers.
The Tiguan was named All-wheel drive car of the year in the
SUV under 30,000 category in the reader poll conducted by Auto
Bild Allrad magazine. The survey covered the complete range of
all-wheel drive models available in the German market.
The Audi brand received the 2015 L.E.A.D.E.R. Award in the
original equipment manufacturer (OEM) category. Leading European automotive industry magazine Automotive News Europe
and the Bilbao-based Automotive Intelligence Center award this
prize to European companies and organizations that make outstanding contributions to development, excellence and research in
the automotive industry. The jury highlighted Audis groundbreaking work in the development of lightweight construction and
piloted driving.
Automobile club Kraftfahrer-Schutz e.V. awarded the Energy
and Environment Prize to the Volkswagen Group in June. The prize
has been in existence for 35 years. The expert judges presented the
award to the Golf GTEs plug-in hybrid drive system and the Audi A3
e-tron for their low fuel consumption, compelling performance and
long range.

World premiere of the new T model series

The Volkswagen Commercial Vehicles brand unveiled a new version


of its successful model in April: the sixth generation of the
Transporter series was launched with a wide range of technical
innovations that ensure greater safety, comfort and an improved
driving experience together with lower fuel consumption and
emissions. The available driver assistance systems include the
Front Assist area monitoring system and Adaptive Cruise Control
(ACC), as well as City Emergency Braking, a combination of these
two systems. The adaptive Dynamic Cruise Control and an electrically operated tailgate add an extra level of comfort. The new

U P D AT E D I N F O R M AT I O N

Key Events

The Audi brands 2.5 liter TFSI engine was named International
Engine of the Year in the 2.0 to 2.5 liter category. This is the sixth
consecutive year that an Audi engine has won the award. The
international jury of 65 automotive journalists based their decision
on the engines reliability and excellent tuning.
The Volkswagen Commercial Vehicles brands Amarok was
named best pickup of the year for the fifth consecutive time in a
reader poll conducted by OFF ROAD magazine. Over 38,000
readers took part in the survey.
The KODA Superb received the top five-star rating in the Euro
NCAP crash test. This result underscores the KODA model ranges
high safety standards: all series currently in production were given
a five-star rating as part of their market launch. The Euro NCAP
assessment covers the categories adult and child occupant protection as well as pedestrian and safety assist technologies.
The Volkswagen Passenger Cars brands Das Auto.Magazin
won numerous prizes as part of the Best of Corporate Publishing
awards. The expert jury awarded a gold medal for the powerful
short documentary Wege zur Freiheit (Roads to Freedom)
about automotive designer Giorgetto Guigiaro, as well as for the
magazines mobile app, which in particular impressed the judges
with its cross-media content. The print version of the magazine and
the iPad app each received a silver medal in the Automobile and
Digital Media Mobile categories.

more than 20%. In addition, the use of rainwater and recycled


production water means that 20% less fresh water is used in production compared with conventional processes. The plant uses
solar panels and local hydroelectricity for power, making production carbon neutral.
Volkswagen is investing approximately half a billion euros in a
further body shell production facility at the Bratislava plant. The
new hall will be equipped with state-of-the-art joining technology
and the plan is to produce body shells for the Porsche Cayenne to
begin in 2017.
The Audi brand intends to cooperate with Baidu and Huawei to
give Chinese customers seamless and fast use of smartphones in
cars and to drive forward the networking of vehicles with their
surroundings and the Internet. The partnership with Baidu,
Chinas leading search engine provider, covers the integration of
smartphones for use in cars and the joint development of data,
calculation processes and functions for vehicle navigation. Audi and
Huawei, the worlds largest network provider, are jointly developing a China-specific LTE module for rapid data transfer.
In June, Volkswagen signed a cooperation agreement in the
area of e-mobility research with Chinese joint venture partner SAIC.
This covers expanding Chinese joint venture SVWs main production facility in Anting to locally develop and produce plug-in
hybrid and fully electric models.

AN NIVERSARI ES

C H A R T E R O N V O C AT I O N A L E D U C AT I O N A N D T R A I N I N G A D O P T E D

The KODA plant in Kvasiny celebrated the production of its


750,000th KODA Superb in April 2015. The KODA Superb has
been thrilling customers in Europe, China and other nonEuropean markets since 2001. The models third generation was
launched in June this year and is revolutionizing the KODA design
language, as well as adding new dimensions in comfort, spaciousness and technology. The new Superb features the Volkswagen
Groups MQB technology, innovative assistance systems for safety,
environmental care and comfort, a high-performance Euro 6
engine and KODAs trademark Simply Clever features.
In June 2015, the Audi brand celebrated 50 years of Audi model
production at the plant in Ingolstadt. Auto Union manufactured its
first four-cylinder, four-stroke model in 1965, laying the
foundations for the rebirth of the Audi brand. To mark the event,
Audi entered ten classic cars in the Danube Classic vintage rally
around Ingolstadt.

The Group Board of Management, the European Group Works


Council and the Global Works Council of Volkswagen AG adopted
the Volkswagen Group Charter on Vocational Education and Training in June 2015. Its objective is to ensure that apprentices throughout the Group have the opportunity to gain knowledge and expertise
at the same high standard.
The Charter covers basic issues such as the selection process
for apprentices, the duration and quality of vocational education
and training, and the teaching of educational content. It also sets
out policies concerning financial and nonfinancial support for
apprentices, their working time, breaks and annual leave, their
transition to post-apprenticeship employment and their representation. As a consequence, the different legal, social, economic
and cultural aspects in the various countries will also be addressed.
The Volkswagen Group is taking responsibility for social issues
and the future at its production locations worldwide through its
commitment to young peoples education and training. In addition,
excellent vocational education is the prerequisite for a highly
productive team, outstanding quality and top products.

C A PA C I T I E S A N D C A PA B I L I T I E S

Volkswagen opened a new vehicle plant in Changsha, southern


China, in May 2015. The plant has the capacity to produce a total of
300,000 Volkswagen Passenger Cars and KODA brand models per
year. The goal is for more than 4,000 jobs to be created at the plant,
with a further 4,000 at the adjacent supplier park. The plant is the
Shanghai-Volkswagen joint ventures first production facility to
receive the Triple-Star Green Building Design Award, Chinas
highest state award for environmentally friendly factory planning. A
dry painting system reduces water and energy consumption by

V O L K S WA G E N C R E AT E S A N I N T E G R AT E D
COMM E RC IA L V E H IC LE S G ROU P

Going forward, the Volkswagen Group will bundle the mid-sized


truck, heavy truck and bus businesses under Truck & Bus GmbH as
the holding company for commercial vehicle brands MAN and
Scania. The brands will continue to retain their independence.
Truck & Bus GmbH will manage the cooperation between the three

U P D AT E D I N F O R M AT I O N

Key Events

commercial vehicles businesses MAN Truck & Bus AG, MAN Latin
America Ltda. And Scania AB. The companys management will be
headed by Mr. Andreas Renschler, the member of the Group Board
of Management responsible for Commercial Vehicles. The CEOs of
the three commercial vehicles businesses, among others, will be
represented in the companys management. The objective is for
strategy, development, HR and purchasing to be agreed jointly
across the brands, allowing the full potential for synergies between
the brands to be leveraged. As a producer of light commercial
vehicles, Volkswagen Commercial Vehicles will also form part of the
integrated commercial vehicles group and will retain a close link
with the Volkswagen Passenger Cars brand.

S U P E R V I S O RY B O A R D M AT T E R S

On April 30, 2015 Dr. Louise Kiesling and Ms. Julia Kuhn-Pich
were appointed to the Supervisory Board of Volkswagen AG as
replacement shareholder representatives, effective the same day,
by the court on the application of the Board of Management of
Volkswagen AG in accordance with section 104 of the Aktiengesetz
(AktG German Stock Corporation Act). This was due to the
resignations of Prof. Dr. Ferdinand K. Pich and Ms. Ursula Pich
from the Supervisory Board on April 25, 2015.
The court appointed Mr. Uwe Hck, Chairman of the General
and Group Works Councils of Dr. Ing. h.c. F. Porsche AG, to the
Supervisory Board of Volkswagen AG as an employee representative,
effective July 1, 2015. He replaces Mr. Jrgen Dorn, who stepped
down as of June 30, 2015.

V I C TO RY AT L E M A N S F O R P O R S C H E A N D A U D I

Teams fielded by Group companies Porsche and Audi wowed the


more than 260,000 spectators at the legendary 24 Hours of Le
Mans race with a close duel, and went on to dominate the podium.
The Porsche teams took first and second place with the innovative
Porsche 919 Hybrid a double win for the brand. This was
Porsches 17th overall victory in the classic race. The Volkswagen
Groups triple success was rounded off by last years winner, Audi,
which took third place with the Audi R18.

AN N UAL GEN ERA L MEETI NG

The 55th Annual General Meeting of Volkswagen AG was held at the


Hanover Exhibition Grounds on May 5, 2015. With 91.93% of the
voting capital present, the ordinary shareholders of Volkswagen AG
approved the proposal by the Board of Management and the
Supervisory Board to distribute a dividend of 4.80 per ordinary
share and 4.86 per preferred share for fiscal year 2014. In
addition, they formally approved the actions of the Board of
Management and the Supervisory Board and the conclusion of an
intercompany agreement. Mr. Hussain Ali Al-Abdullas scheduled
term of office on the Supervisory Board of Volkswagen AG expired
at the end of the Annual General Meeting. The Annual General
Meeting elected Mr. Al-Abdulla to the Supervisory Board for a
further full term of office as a shareholder representative.
Mr. Ahmad Al-Sayed stepped down as a shareholder representative
on the Supervisory Board of Volkswagen AG as of the end of the
Annual General Meeting. The Annual General Meeting elected
Mr. Akbar Al Baker, Minister of State and Group Chief Executive of
Qatar Airways, to replace him for the remainder of his term of office.
In addition, the ordinary shareholders authorized the Board of
Management to issue a total of up to 70 million new non-voting
preferred bearer shares within the next five years. They also elected
PricewaterhouseCoopers AG Wirtschaftsprfungsgesellschaft, as
the auditors for the single-entity and consolidated financial statements for fiscal year 2015 and as the auditors to review the
condensed consolidated financial statements and interim management report for the first six months of 2015.

VFL WOLFSBU RG WINS THE 2015 DFB CUP

VfL Wolfsburg won the DFB Cup for the first time in the clubs
history on May 30, 2015 in front of a crowd of roughly 75,000 at
Berlins Olympic Stadium. The match was broadcast live in 149
countries around the world, with almost 12 million viewers in
Germany tuning in. The VfL Wolfsburg womens team had already
won the DFB Cup on May 1, 2015 for the second time following
their victory in 2013. This marked the first time in the competitions
history that the mens and womens teams from the same club won
the cup in the same season. Volkswagen congratulates the cup
winners and appreciates the intense national and international
media interest. VfL Wolfsburg-Fuball GmbH is a wholly owned
Volkswagen Group company. Volkswagens decades-long and
ongoing commitment is a hallmark of the partnership. For the
Group, VfL Wolfsburg is a global communications platform with
high strategic value. It also plays a key role in raising the profile of
Volkswagen AGs locations and the Wolfsburg region.

I NTER IM M ANAGE MENT R EP ORT

Volkswagen Shares

Volkswagen Shares
In the second quarter of 2015, prices in the international equity
markets were unable to match the increase seen in the first three
months of the year. The DAX also suffered from uncertainty, in
particular as a result of the escalating debt situation in Greece.
After a slight increase at the beginning of the second quarter,
the deteriorating situation in Greece and concerns about its effect
on the European economy were the main triggers for falling prices.
Healthy corporate results and expectations that the European
Central Bank would continue its bond-buying program and the US
Federal Reserve its loose monetary policy brought about a temporary recovery before the downward trend resumed in April. The DAX
moved sideways amid significant price swings in May. Investors
hopes of a more expansionary monetary policy by the Chinese
central bank and healthy labor market data from the USA supported
prices in an environment that continued to be dominated by
concerns over the situation in Greece. Prices declined in June amid
volatility brought about by increasing fears of bankruptcy in Greece
and growing uncertainty about whether it would remain in the
eurozone.
The DAX reached a new all-time high of 12,375 points on April
10, 2015 and closed the first half of 2015 at 10,945 points, up 11.6%
on the 2014 year-end level. The EURO STOXX Automobiles & Parts
stood at 585 points on June 30, 2015, up 22.2% compared with the
2014 closing price.
Volkswagen AGs preferred and ordinary share prices were
unable to escape the declining trend in the equity markets in the

second quarter of 2015. In addition, discussions about the composition of the Board of Management and the Supervisory Board, as
well as increasing concerns about slower growth in demand for
passenger cars due to the economic downturn in China influenced
market participants. As a result, both classes of shares were more
volatile than the market as a whole, trailing market growth.
Compared with the preferred shares, the price of ordinary shares
grew at a slightly faster pace in the second quarter.
Volkswagen AGs preferred shares recorded their highest daily
closing price in the period from January to June 2015 (255.20) on
March 16, 2015, and with it an all-time high. They reached their
lowest closing price of 176.30 on January 5, 2015. The preferred
shares ended the reporting period at 208.00; this was an increase
of 12.6% compared with the last closing price in 2014. Volkswagens ordinary shares also recorded their highest daily closing
price in the first six months of the year (247.55) on March 16,
2015. They hit their lowest closing price on January 5, 2015
(172.55). The ordinary shares recorded a daily closing price of
207.55 on June 30, 2015, up 15.2% on the closing price at the end
of 2014.
Information and explanations on earnings per share can
be found in the notes to the interim consolidated financial statements. Additional Volkswagen share data, plus corporate news,
reports and presentations can be downloaded from our website at
www.volkswagenag.com/ir.

SHARE PRICE DEVELOPMENT FROM DECEMBER 2013 TO JUNE 2015

Index based on month-end prices: December 31, 2013 = 100

Volkswagen ordinary shares


Volkswagen preferred shares
DAX
EURO STOXX Automobiles & Parts
150

125

100

75
75
D

I NTER IM M ANAGE MENT R EP ORT

Business Development

Business Development
Structural deficits and social conflict dominated the situation in
South Africa in the first half of 2015; nevertheless, economic
growth was slightly stronger than in previous quarters.
The US economy recorded solid growth on average in the
period from January to June 2015. The further decline in unemployment, positive consumer sentiment and the continuing very
loose monetary policy supported the economy. Mexico saw positive
economic growth at an almost constant growth rate.
The situation in Brazil remained tense in the first half of 2015.
The negative trend continued, in particular as a result of the countrys weak domestic demand and the low global commodity prices.
Economic output in Argentina also retreated in the reporting period
as the very high rate of inflation persisted.
The high growth rate recorded in the Chinese economy
weakened slightly in the first six months of 2015 due to economic
uncertainties. In Japan, economic output remained almost
unchanged compared with the prior-year quarter. The economies
in India and the ASEAN region registered stable growth.

GE N E RA L E CO N OMIC DEV ELOPME NT

The robust growth in the global economy lost momentum slightly in


the first half of 2015. While the economic upturn continued in
many industrialized nations, growth in some emerging economies
remained below average. Although the comparatively low energy
and raw materials prices had a negative impact on individual
countries economies, their effect on the global economy as a whole
was supportive.
In Western Europe, the economic recovery continued in the
reporting period. The northern European countries saw solid
growth and there were increasing signs that the recession is coming
to an end in most of the southern European countries.
The German economy continued to benefit from positive consumer sentiment and the strong labor market; the pace of growth
rose slightly over the course of the year.
Economic growth was also positive in Central Europe in the
first six months of 2015. The conflict between Russia and Ukraine
contributed substantially to the recessionary trend in both of these
economies and had a negative impact on the situation in Eastern
Europe overall. In addition, falling energy prices hit the oil
producing countries in this region in particular.

EXCHANGE RATE MOVEMENTS FROM DECEMBER 2013 TO JUNE 2015

Index based on month-end prices: December 31, 2013 = 100

EUR to USD
EUR to JPY
EUR to GBP
110

100

90
90

80
80

70
70
D

I NTER IM M ANAGE MENT R EP ORT

Business Development

first quarter of 2014 continued in the reporting period, although


the pace slowed. The lowest level of new registrations for a first halfyear period since 2006 was recorded, in particular due to the poor
state of the economy and a decline in real incomes.
Overall market volumes in the Asia-Pacific region recorded the
highest absolute increase in the first six months of 2015. This was
primarily attributable to the growth in demand for passenger cars
in China; however, this declined significantly over the reporting
period as a result of the economic slowdown, and even slid into
negative territory in June. The strong demand for attractively priced
entry-level models in the SUV segment continued and contributed
substantially to growth. In Japan, the declining trend in new passenger car registrations also continued in the second quarter of
2015. In addition to pull-forward effects from the consumption tax
increase on April 1, 2014, which had a positive impact in the previous year, the tax increase on mini vehicles (up to 660 cc) effective
April 1 had a negative effect on demand over the course of 2015.
The Indian passenger car market saw further growth. An improvement in consumer sentiment and lower interest rates and fuel
prices boosted the ongoing recovery process.
The number of passenger cars sold in the ASEAN region in the
period from January to June 2015 was below the prior-year figure.
This was mainly attributable to the passenger car market in
Indonesia, which saw a decline on the back of high inflation and
higher borrowing costs, among other factors.

T R E N D S I N T H E PA S S E N G E R C A R M A R K E T S

In the period from January to June 2015, global new passenger car
registrations were up 2.6% year-on-year, although demand varied
from region to region. The growth drivers were the Asia-Pacific
region, North America and Western Europe. In contrast, new passenger car registrations in Eastern Europe and South America
declined drastically in some areas compared with the prior-year
period.
The passenger car market in Western Europe benefited from
the improved macroeconomic environment, positive consumer
sentiment and lower fuel prices, and continued to recover in the
first half of 2015. In June, the number of new registrations
increased year-on-year for the 22nd time in a row. Demand for
passenger cars in Italy and Spain saw double-digit percentage
growth; however, market volumes were still down substantially on
pre-crisis levels in both countries. The Spanish market continued to
benefit from government stimulus measures. In the United
Kingdom and France, growth rates were more moderate in the year
to date.
In Germany, the number of new passenger car registrations in
the first six months of 2015 was higher than in the prior-year period.
Whereas private demand continued to decline, new business
vehicle registrations saw a significant increase.
The passenger car market as a whole in Central and Eastern
Europe declined sharply overall in the reporting period. Trends in
the individual markets were very mixed: while the EU markets in
Central Europe mainly recorded positive rates of change, there was
a slump in passenger car sales in the Eastern European markets.
This was primarily due to the drastic deterioration in market
conditions in Russia and Ukraine resulting from the difficult
economic and political situation in both countries.
The slight downward trend in the South African passenger car
market continued in the first half of 2015. This was largely attributable to the unfavorable economic conditions and weak consumer
confidence.
In North America, market growth in the period from January to
June 2015 continued with slightly declining momentum. Sales
figures for passenger cars and light commercial vehicles (up to 6.35
tonnes) in the USA reached their highest level for a first half-year
period in the past ten years. Growth was driven in particular by
models in the SUV and pickup segments. The increase was mainly
due to high consumer confidence, in addition to favorable credit
conditions and fuel prices and the low unemployment rate. Both the
Canadian and the Mexican automotive markets recorded new highs
in the reporting period.
In South America, the number of new passenger car registrations in the first half of 2015 was significantly below the prioryear period. Brazil recorded the lowest passenger car demand
volumes seen since 2007. In addition to the tax increase on industrial products at the beginning of 2015, this was mainly due to
overall economic decline and higher interest rates. The downward
trend in the Argentinian passenger car market which began in the

TR E N DS I N TH E M A R K ETS F OR COMM ERC IA L VE H I C LE S

Global demand for light commercial vehicles was slightly below the
prior-year level in the first half of 2015.
The economic stabilization in Western Europe made itself
felt: new vehicle registrations significantly exceeded the prior-year
figure.
In the Central and Eastern European markets, registrations
were down considerably year-on-year in the first six months of 2015.
Russia saw a significant drop in demand due to the political
tensions and their impact.
In North America, light commercial vehicles up to 6.35 tonnes
and passenger cars are reported as the light vehicle market.
In the period from January to June 2015, vehicle sales in South
America were down on the previous year due to the continuing
difficult economic conditions. In Brazil and Argentina, the regions
largest markets, sales of light commercial vehicles fell short of the
prior-year figure.
Vehicle sales in the Asia-Pacific region were down slightly yearon-year. In China, the dominant market for light commercial vehicles in the region, new registrations did not reach the prior-year
level. In the Indian market, demand grew moderately compared
with the previous year. Sales volumes in Japan were down significantly year-on-year in the period from January to June 2015 due to
the pull-forward effects of the consumption tax increase on April 1,
2014 in the first quarter of the previous year. In the first half of 2015,
sales in the ASEAN region were on a level with the previous year.

I NTER IM M ANAGE MENT R EP ORT

Business Development

In the period from January to June 2015, global demand for midsized and heavy trucks with a gross weight of more than six tonnes
was significantly down on the previous year.
In Western Europe, higher demand in the United Kingdom, the
Netherlands, Spain and Italy due for the most part to the low prioryear level resulted in an increase in registrations. Demand in
Germany, the largest market in Western Europe, was down slightly
on the prior-year period in the first six months of the year.
In the Central and Eastern European markets, registrations
were down sharply year-on-year. This was primarily due to the tense
and uncertain political situation, as well as currency weaknesses
and the difficult financing conditions in Russia.
Momentum in the construction and energy sector and favorable financing conditions led to higher registration volumes in
North America compared with the previous year.
In South America, the number of new vehicle registrations in
the first half of 2015 was significantly below the prior-year figure.
Vehicle sales in Brazil were down substantially on the previous year
as a result of declining economic output and the restrictive financing conditions. The ongoing high inflation and recession in Argentina also contributed to the decline in demand.
The number of trucks sold in the Asia-Pacific region (excluding
the Chinese market) increased significantly year-on-year. Demand
in the Indian market recorded a clear increase due to replacement
vehicles in the heavy truck segment, increased spending on infrastructure and a more favorable investment climate following the
change of government in May 2014. Registration volumes in the
worlds largest truck market, China, were significantly lower than
in the previous year. This was due to the pull-forward effects in 2014
from the introduction of the C4 emission standard and declining
investment growth in China.
Demand for buses, both globally and in the markets that are
relevant for the Volkswagen Group, was lower than in the previous
year in the period from January to June 2015.

decentralized availability. The shift away from oil-fired power plants


toward dual-fuel and gas-fired power plants continued. Order placements were delayed, in some cases significantly, due to continuing
muted economic growth in the key emerging markets and developing countries, as well as the increasingly difficult financing
conditions for customers. This affected major projects in particular.
The energy generation market proved stable overall compared with
the previous year.
The market for the construction of turbomachinery is mainly
dominated by contracts awarded in connection with global
investment projects in oil and chemical facilities. Project volumes
declined in the oil and gas industry due to the low oil prices, which
further increased competitive pressure. Demand for turbomachinery in the processing industry was at a low level overall between
January and June 2015, and here, too, competition increased.
Overall, the market for turbomachinery was at a low level, declining
again slightly compared with the previous year.
DEMA N D FOR FI NA NCIA L SERVIC ES

Global demand for automotive-related financial services remained


high in the first half of 2015.
Business with financial services products was buoyed by the
good overall market performance in Germany and the signs of
recovery in Western and Central Europe. These offset the negative
effects from lower unit sales volumes in Eastern Europe and South
America.
Demand for automotive-related financial services in the North
American region was up year-on-year, with leasing in particular
further increasing its share.
The South American automotive markets continued to decline,
with the downward trend also reflected in sales volumes for financial services products.
Demand for automotive-related financial services recorded
positive growth in the Asia-Pacific region, with year-on-year
increases in China despite the gloomier market conditions.
In the truck and bus business, demand for financial services
products rose year-on-year despite lower overall demand for vehicles in the relevant markets. The significant decline in truck and
bus unit sales in South America had a negative impact, particularly
in the core Brazilian market. However, this was more than offset by
positive business growth in Europe.

TRENDS I N TH E MARKETS FOR POWER ENGI NEERI NG

The markets for power engineering are subject to differing regional


and economic factors. Consequently, their business growth trends
are generally independent of each other.
In the first half of 2015, the marine market saw a continuation
of the muted order activity that was already noticeable during the
course of 2014. In some cases, the market segments developed at
different rates. While demand for liquid gas tankers and cruise
ships increased slightly, the situation for freight and container
ships remained tense. Demand for ships for offshore applications
also dropped as a result of the low oil prices. The overall marine
market declined significantly compared with the prior-year period.
In energy generation, demand for energy solutions remained
high, with a strong trend towards greater flexibility and

I NTER IM M ANAGE MENT R EP ORT

Business Development

Touran, Tiguan, Passat, Audi TT and Audi A6. The Golf was again the
most popular passenger car in Germany in terms of registrations in
the first half of 2015.
In the overall sharply declining passenger car markets in
Central and Eastern Europe, we sold 11.2% fewer vehicles between
January and June of this year than in the prior-year period. While
we recorded strong increases in demand in the Czech Republic,
Hungary and Romania, our sales figures in Russia and Ukraine
declined significantly as a result of the difficult economic and
political situation in the two countries. There was a positive trend in
demand for the Golf Sportsvan, KODA Rapid, KODA Octavia
Combi and SEAT Leon ST models. The Volkswagen Groups share of
the market in this region rose to 20.2% (17.3%).
In an overall declining market in South Africa, we handed over
fewer passenger cars to customers in the first six months of 2015
than in the previous year (12.3%).

V O L K SWA G E N G R O U P D E L I V E R I E S

In the first half of 2015, the Volkswagen Group delivered 5,039,210


vehicles to customers, on a level with the previous year. The chart
on page 12 shows the changes in deliveries by month. Separate
details of deliveries of passenger cars and commercial vehicles are
provided in the following.

V O L K SWA G E N G R O U P D E L I V E R I E S F R O M J A N U A RY 1 TO J U N E 3 0 *

Passenger cars
Commercial vehicles
Total

2015

2014

4,729,383

4,751,927

0.5

309,827

313,758

1.3

5,039,210

5,065,685

0.5

* Deliveries for 2014 have been updated to reflect subsequent statistical trends. Includes
the Chinese joint ventures.

Deliveries in North America

In North America, demand for Volkswagen Group vehicles increased


by 6.0% year-on-year in the reporting period. The Groups share of
the passenger car market amounted to 4.5% (4.4%). The Jetta
remained the Groups bestselling model in North America.
In the US market, we delivered more vehicles to customers in
the first half of 2015 than in the previous year (+2.4%). The market
as a whole grew by 4.4% in the same period. Models in the SUV and
pickup segments remained in particularly high demand. The
Groups Golf, Jetta, Passat, Audi A3 saloon, Audi Q5 and Porsche
Cayenne models were especially popular.
The Mexican market as a whole continued to show dynamic
growth and Group sales in the reporting period were also sharply up
on the prior-year figure (+9.9%). The Vento, Jetta and SEAT Ibiza
models were particularly popular.
Demand for Group models in the growing Canadian market
rose by 21.1% year-on-year between January and June 2015. The
Golf, Audi A3 saloon and Audi Q3 were among the models to see the
highest increases.

PA S S E N G E R C A R D E L I V E R I E S W O R L D W I D E

In the period from January to June 2015, the Volkswagen Group


delivered 4,729,383 passenger cars to customers worldwide,
matching the prior-year level. The market as a whole grew by 2.6%
in the same period. The Audi (+3.8%), KODA (+4.2%), Porsche
(+29.8%) and Lamborghini (+96.9%) brands reached new highs in
the first half of the year. While demand for Volkswagen Group
passenger cars rose in Western Europe, Central Europe and North
America, and was slightly below the prior-year level in the AsiaPacific region, deliveries to customers in South America and Eastern Europe were in some cases significantly lower year-on-year.
The table on the next page provides an overview of passenger
car deliveries to customers in the reporting period by market.
Below we explain the trends in our sales figures in the
individual markets.
Deliveries in Europe/Other markets

In the growing passenger car market in Western Europe, we


delivered 6.5% more vehicles to customers in the first half of 2015
than in the previous year, recording rising sales figures in all major
markets in this region. The Polo, Golf Sportsvan and Passat models
saw the highest growth in demand. The Golf, Tiguan, Audi A3,
KODA Octavia and Porsche Macan models were also very popular.
The Audi Q7 and the KODA Superb saloon were successfully
launched on the market. In Western Europe, the Volkswagen Group
achieved a 24.4% share of the passenger car market (24.7%).
In the German passenger car market, demand for Volkswagen
Group models increased by 6.7% year-on-year in the reporting
period. The market as a whole grew by 5.2% in the same period.
The Golf Sportsvan, Passat and Audi TT Coup models recorded the
highest growth rates. Eight Group models led the Kraftfahrtbundesamt (KBA German Federal Motor Transport Authority) registration statistics in their respective segments: the up!, Polo, Golf,

Deliveries in South America

Conditions in the highly competitive South American markets


continued to deteriorate in the first six months of 2015. The
number of deliveries made to Volkswagen Group customers in this
period was down 20.3% on the low prior-year figure. The Groups
share of the passenger car market in this region was 16.6% (17.2%).
In the sharply declining passenger car market in Brazil,
demand for Volkswagen Group vehicles fell by 26.1% year-on-year
between January and June 2015. The bestselling models were the
up!, Fox, Gol, Golf, Saveiro and Audi A3.
In Argentina, the Groups sales recovered slightly in the
reporting period, exceeding the low prior-year figure by 4.9%. The
sharp downward trend in the market as a whole continued but
weakened slightly. The Gol was the most sought-after Group model
in Argentina.

10

I NTER IM M ANAGE MENT R EP ORT

Business Development

In Japan, Group passenger car sales declined by 9.7% year-on-year


between January and June 2015. The market as a whole also
contracted in the same period. Demand for the Polo, Audi A3 and
Audi Q3 models recorded positive growth.
The Indian passenger car market continued to see moderate
growth in the first six months of this year. The Volkswagen Group
delivered 12.0% more vehicles to customers there than in the
prior-year period. The most sought-after Group model was the Polo;
the Vento, KODA Rapid and KODA Octavia models were also very
popular.

Deliveries in the Asia-Pacific region

In the first half of 2015, Volkswagen Group passenger car sales in


the Asia-Pacific region were down slightly on the previous years
level (3.1%). The market as a whole grew by 3.8% in this period;
the Groups market share was 12.5% (13.4%).
Growth in the Chinese passenger car market slowed significantly in the course of the reporting period and even slid into
negative territory for one month in June. Demand remained particularly strong for attractively priced entry-level models in the SUV
segment. In the reporting period, we delivered 3.9% fewer vehicles
to customers in China than in the previous year. The Lavida, Jetta,
Santana, Tiguan, Audi Q5, Audi A6 and Porsche Macan models
recorded strong demand. The Lamando was successfully launched
on the market.

PA S S E N G E R C A R D E L I V E R I E S TO C U ST O M E R S B Y M A R K E T F R O M J A N U A RY 1 TO J U N E 3 0 *

DELIVERIES (UNITS)

CHANGE

2015

2014

(%)

2,092,239

2,012,001

+ 4.0

1,619,156

1,519,781

+ 6.5

594,274

557,218

+ 6.7

United Kingdom

278,735

266,068

+ 4.8

France

136,114

132,292

+ 2.9

Spain

135,966

115,414

+ 17.8

Europe/Other markets
Western Europe
of which: Germany

Italy
Central and Eastern Europe
of which: Russia
Czech Republic
Poland

114,558

104,002

+ 10.1

277,418

312,508

11.2

79,534

130,633

39.1

63,595

50,253

+ 26.5

54,196

52,853

+ 2.5

195,665

179,712

+ 8.9

80,231

52,757

+ 52.1

43,507

49,603

12.3

447,255

421,982

+ 6.0

294,992

287,953

+ 2.4

Mexico

98,609

89,726

+ 9.9

Canada

53,654

44,303

+ 21.1

263,467

330,701

20.3

193,934

262,286

26.1

51,861

49,451

+ 4.9

1,926,422

1,987,243

3.1

of which: China

1,739,904

1,811,195

3.9

Japan

48,740

53,981

9.7

India

36,585

32,651

+ 12.0

4,729,383

4,751,927

0.5

2,945,709

3,065,899

3.9

Audi

902,389

869,357

+ 3.8

KODA

544,300

522,499

+ 4.2

SEAT

216,463

200,140

+ 8.2

4,639

5,254

11.7

Other markets
of which: Turkey
South Africa
North America
of which: USA

South America
of which: Brazil
Argentina
Asia-Pacific

Worldwide
Volkswagen Passenger Cars

Bentley
Lamborghini

1,882

956

+ 96.9

Porsche

113,984

87,803

+ 29.8

Bugatti

17

19

10.5

* Deliveries for 2014 have been updated to reflect subsequent statistical trends. Includes the Chinese joint ventures.

11

I NTER IM M ANAGE MENT R EP ORT

Business Development

VOLKSWAGEN GROUP DELIVERIES BY MONTH

Vehicles in thousands

2015
2014
1,000

900
900

800
800

700
700

600
600

500
500
J

the persistently weak ruble due to the tense political situation linked
to the Ukraine crisis and the low oil price.
In the Other markets, the Group sold a total of 36,677 commercial vehicles in the period from January to June 2015: 24,153
light commercial vehicles, 11,134 trucks and 1,390 buses.
At 3,986, the Volkswagen Group delivered 2.7% more units to
customers in North America than in the prior-year period. 2,891
light commercial vehicles, 165 trucks and 930 buses were sold.
Deliveries in the South American markets fell by 36.1% to
33,862 commercial vehicles. Of the units sold, 17,876 were light
commercial vehicles, 13,829 were trucks and 2,157 were buses.
The Amarok was the most sought-after Group model. Demand for
commercial vehicles in Brazil suffered due to further deterioration
in the macroeconomic environment and the more difficult financing conditions. Sales figures were down 53.9% in the first half of
2015, to 17,855 vehicles.
In the Asia-Pacific region, demand for Volkswagen Group
commercial vehicles was on a level with the previous year, at 17,066
units. 11,735 light commercial vehicles, 4,395 trucks and 936 buses
were delivered. The Amarok and the Transporter were in particularly high demand there.

COMM E RC IA L V E H IC LE DE LIV ER I E S

The Volkswagen Group delivered a total of 309,827 commercial


vehicles worldwide in the first half of 2015, 1.3% fewer than in the
prior-year period. Of these, 78,800 were trucks (8.4%) and 8,065
were buses (19.0%). Volkswagen Commercial Vehicles increased
its deliveries by 2.4% year-on-year to 222,962 units. In the period
from January to June 2015, the number of vehicles delivered by the
Scania brand was down 3.7% year-on-year to 36,989. MAN delivered 49,876 units to customers in the reporting period, 13.5%
fewer than in the previous year.
In the Western European markets, demand for the Volkswagen
Groups commercial vehicles in the first six months of 2015 was up
9.4% on the prior-year figure to 191,696 units on the back of the
economic recovery. Of the vehicles delivered, 151,066 were light
commercial vehicles, 38,445 were trucks and 2,185 were buses.
The Caddy and the Transporter were particularly popular.
In Central and Eastern Europe, the Volkswagen Groups commercial vehicle brands sold a total of 26,540 units (15.4%). Of
these, 15,241 were light commercial vehicles, 10,832 were trucks
and 467 were buses. The Caddy and the Transporter were the most
sought-after Group models. At 4,717 units, deliveries to customers
in Russia were down 60.4% on the prior-year figure as a result of

12

I NTER IM M ANAGE MENT R EP ORT

Business Development

C O M M E R C I A L V E H I C L E D E L I V E R I E S TO C U STO M E R S B Y M A R K E T F R O M J A N U A RY 1 TO J U N E 3 0 *

DELIVERIES (UNITS)

CHANGE

2015

2014

(%)

254,913

239,882

+ 6.3

191,696

175,202

+ 9.4

Central and Eastern Europe

26,540

31,374

15.4

Other markets

+ 10.1

Europe/Other markets
Western Europe

36,677

33,306

North America

3,986

3,881

+ 2.7

South America

33,862

52,985

36.1

of which: Brazil

17,855

38,761

53.9

17,066

17,010

+ 0.3

3,088

2,871

+ 7.6

309,827

313,758

1.3

222,962

217,732

+ 2.4

Scania

36,989

38,391

3.7

MAN

49,876

57,635

13.5

Asia-Pacific
of which: China
Worldwide
Volkswagen Commercial Vehicles

* Deliveries for 2014 have been updated to reflect subsequent statistical trends.

A total of 2.0 million new contracts were signed in the Europe/


Other markets region between January and June 2015 (+10.0%).
The total number of contracts amounted to 9.6 million as of June 30,
2015, up 2.7% on the figure recorded at the end of 2014. The
Customer Financing/Leasing area accounted for 5.2 million
contracts (+2.1%).
The number of contracts in North America was 2.0 million at
the end of the reporting period, falling 5.6% short of the figure for
year-end 2014. The Customer Financing/Leasing area accounted
for 1.6 million contracts, up 2.5% compared with December 31,
2014. The number of new contracts signed as of June 30, 2015
amounted to 375 thousand (385 thousand).
In South America, the number of new contracts signed in the
first half of 2015 was 133 thousand, a decline of 9.6% on the prioryear period. The total number of contracts decreased to 780 thousand at the end of the reporting period, down 5.7% on the figure for
the end of 2014. The contracts mainly related to the Customer
Financing/Leasing area.
In the Asia-Pacific region, the number of new contracts signed
in the first six months of the year amounted to 257 thousand
(+8.2%). At 1.1 million, the total number of contracts as of June 30,
2015 was up 4.7% on the year-end figure. The Customer Financing/Leasing area accounted for 931 thousand contracts (+8.0%).

DELIVER I ES I N TH E POWER ENGI N EER I NG SEGMENT

Orders in the Power Engineering segment are usually part of major


investment projects. Lead times typically range from just under one
year to several years, and partial deliveries as construction progresses are common. Accordingly, there is a time lag between
incoming orders and sales revenue from the new construction
business.
In the first six months of 2015, sales revenue in the Power
Engineering segment was largely driven by Engines & Marine
Systems and Turbomachinery, which together generated nearly
three-quarters of overall sales revenue.
GROU P FI NA NCIAL SERVICES

The Financial Services Division combines the Volkswagen Groups


dealer and customer financing, leasing, banking and insurance
activities, fleet management and mobility offerings. The division
comprises Volkswagen Financial Services and the financial services
activities of Scania, Porsche and Porsche Holding Salzburg.
Demand for the Financial Services Divisions products and
services remained strong in the first half of 2015. The number of
new financing, leasing, service and insurance contracts signed
worldwide rose by 6.8% year-on-year to 2.7 million. At 13.5 million,
the total number of contracts as of June 30, 2015 was up 1.1% on
the figure for year-end 2014. In the first six months of the year, the
ratio of leased or financed vehicles to Group deliveries (penetration
rate) in the Financial Services Divisions markets was level year-onyear at 29.7% (29.8%).

13

I NTER IM M ANAGE MENT R EP ORT

Business Development

S A L E S TO T H E D E A L E R O R G A N I Z AT I O N

I N V E N TO R I E S

The Volkswagen Groups unit sales to the dealer organization


including the Chinese joint ventures amounted to 5,090,239
vehicles in the first half of 2015, 2.2% fewer than at the prior-year
reporting date. The increase in demand for Group models in
Western Europe, Central Europe and North America was not
enough to offset the declines in the Chinese, Brazilian and Russian
markets. Unit sales outside Germany decreased by 3.1%, while unit
sales in Germany recorded a 3.8% rise. As a consequence, vehicles
sold in Germany as a proportion of overall sales increased to 13.1%
(12.4%).

Global inventories at Group companies and in the dealer organization were higher at the end of the reporting period than at yearend 2014 and at June 30, 2014.
E M P L OY E E S

The Volkswagen Group had 575,621 active employees at the end of


the first half of 2015. A further 6,620 employees were in the passive
phase of their partial retirement, and 15,608 young people were in
vocational traineeships. The Volkswagen Group had a total of
597,849 employees worldwide at the end of the first half of 2015, up
0.9% on the number as of December 31, 2014. The expansion
of the workforce was primarily attributable to the recruitment
of specialists and experts, the transfer of temporary workers to
permanent contracts and the expansion of the production facilities
in Mexico and Poland. At 273,852, the number of employees in
Germany was up 1.0% on year-end 2014. The proportion of
employees in Germany was 45.8% (45.7%).

PRODUCTION

The Volkswagen Group produced 5,313,568 vehicles in the first six


months of 2015, an increase of 1.5% year-on-year. Production in
Germany increased by 6.2% to 1,394,816 units. The proportion of
vehicles produced in Germany rose to 26.3% (25.1%).

14

I NTER IM M ANAGE MENT R EP ORT

Results of Operations, Financial Position and Net Assets

Results of Operations, Financial


Position and Net Assets
ratio of both distribution and administrative expenses to sales
revenue declined. In addition to negative exchange rate effects,
other operating income was depressed by the special items
resulting from restructuring measures in the trucks business,
declining by 1.9 billion year-on-year to 0.3 billion.
At 5.7 billion, the Automotive Divisions operating profit for
the reporting period exceeded the prior-year figure by 0.4 billion
or 8.3%, as higher fixed costs and special items were more than
offset by optimized product costs, overall positive effects from
exchange rates and an improved mix. The operating return on sales
rose to 6.1% (6.0%). Excluding the special items in the Commercial Vehicles/Power Engineering Business Area, operating profit
amounted to 5.9 billion (5.3 billion). Since the profit recorded by
the joint venture companies is accounted for in the financial result
using the equity method, the business performance of our Chinese
joint ventures is mainly reflected in the Groups operating profit
only by deliveries of vehicles and vehicle parts as well as license
revenue.
The financial result decreased by 0.7 billion to 0.8 billion;
the decline was primarily due to expenses from the measurement of
derivative financial instruments at the reporting date. Income from
the Chinese joint ventures was on a level with the previous year.

R E S U LT S O F O P E R AT I O N S O F T H E G R O U P

The Volkswagen Group generated sales revenue of 108.8 billion in


the first half of 2015, 10.1% more than a year earlier. The rise was
primarily due to a favorable trend in exchange rates and positive
mix effects. The proportion of the Groups sales revenue generated
outside Germany was 79.2% (79.6%).
At 21.7 billion in the reporting period, gross profit was 3.0
billion higher than in the previous year. The gross margin was
19.9% (19.0%).
Despite lower vehicle volumes and higher fixed costs, the
Volkswagen Groups operating profit improved to 7.0 billion (6.2
billion) before special items in the first six months of 2015 due to
optimized product costs as well as exchange rate and mix effects.
Restructuring measures in the trucks business resulted in special
items of 170 million in the reporting period. Operating profit was
6.8 billion (6.2 billion) and the operating return on sales stood at
6.3% (6.3%).
Profit before tax was down slightly on the prior-year figure to
7.7 billion (7.8 billion). Profit after tax was on a level with the
previous year at 5.7 billion (5.7 billion).
Results of operations in the Automotive Division

Sales revenue in the Automotive Division was 7.0 billion higher


than in the previous year, at 94.1 billion in the period from January to June 2015. In particular, the favorable trend in exchange
rates and mix effects had a positive impact. Sales revenue in both
the Passenger Cars Business Area and the Commercial Vehicles/
Power Engineering Business Area exceeded the prior-year figure.
As our Chinese joint ventures are accounted for using the equity
method, the Groups business performance in the Chinese
passenger car market is mainly reflected in its sales revenue only by
deliveries of vehicles and vehicle parts.
Cost of sales was negatively impacted by increased depreciation
charges as a result of high capital expenditures, greater fixed costs
due to growth factors, higher research and development costs, in
particular for new drive concepts, and exchange rate effects, while
improved product costs had a positive effect. The ratio of cost of
sales to sales revenue declined; gross profit in the Automotive
Division climbed to 18.7 billion (16.0 billion).
Distribution expenses in the first half of 2015 were 2.7%
higher and administrative expenses 3.5% higher than a year
earlier due to factors including exchange rate effects, although the

R E S U LT S O F O P E R AT I O N S I N T H E PA S S E N G E R C A R S B U S I N E S S A R E A
A N D COMM E RC IA L VE H I C L ES/POW ER EN GI N EER I NG B U SI N E S S
A R E A F R O M J A N U A RY 1 TO J U N E 3 0

million

2015

2014

Passenger Cars
Sales revenue

77,129

70,711

Gross profit

15,834

13,466

5,346

4,748

6.9

6.7

16,964

16,333

2,832

2,561

354

514

2.1

3.1

Operating profit
Operating return on sales (%)
Commercial Vehicles/Power Engineering
Sales revenue
Gross profit
Operating profit
Operating return on sales (%)

15

I NTER IM M ANAGE MENT R EP ORT

Results of Operations, Financial Position and Net Assets

OPERATING PROFIT BY QUARTER

Volkswagen Group in million

2015
2014
3,500
3,000
2,500
2,000
1,500
1,000
500
500
0 0
Q1

Q2

Q3

Q4

Cash inflows from financing activities amounted to 1.0 billion


(0.3 billion).
The Groups net liquidity was 99.3 billion at the end of the
reporting period; at December 31, 2014, it had stood at 96.5
billion.

Results of operations in the Financial Services Division

The Financial Services Division generated sales revenue of 14.7


billion in the period from January to June 2015. The year-on-year
increase of 24.8% is mainly the result of higher business volumes
and positive exchange rate effects.
Gross profit rose by 0.3 billion year-on-year to 3.0 billion.
Due to the rise in volumes and, above all, compliance with
regulatory requirements, both distribution and administrative
expenses were higher than in the first half of 2014. The ratio of both
administrative and distribution expenses to sales revenue declined.
Operating profit rose by 21.3% year-on-year to 1.1 billion and
the operating return on sales stood at 7.6% (7.9%).

F I N A N C I A L P O S I T I O N I N T H E PA S S E N G E R C A R S B U S I N E S S A R E A
A N D TH E COM ME RC IA L V EH IC L E S/ POW E R E NG I N E E R I NG B U S I N E S S
A R E A F R O M J A N U A RY 1 TO J U N E 3 0

million

2015

2014

Gross cash flow

12,506

9,507

Change in working capital

2,495

807

Cash flows from operating activities

10,011

8,699

Cash flows from investing activities


attributable to operating activities

5,757

5,326

4,254

3,374

FI NANCIAL POSITION OF TH E GROUP

The Volkswagen Groups gross cash flow increased by 4.7 billion


year-on-year to 18.2 billion in the first six months of 2015. Funds
tied up in working capital were 3.1% higher than in the previous
year at 10.5 billion. As a result, cash flows from operating activities
more than doubled to 7.8 billion (3.3 billion).
At 7.0 billion in the reporting period, investing activities
attributable to the Volkswagen Groups operating activities were
0.8 billion higher than in the first half of 2014. Within investing
activities, investments in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs (capex) increased, while capitalized development costs
declined.

Passenger Cars

Net cash flow


Commercial Vehicles/Power Engineering
Gross cash flow

1,499

1,150

43

1,462

Cash flows from operating activities

1,542

312

Cash flows from investing activities


attributable to operating activities

1,005

143

537

455

Change in working capital

Net cash flow

16

I NTER IM M ANAGE MENT R EP ORT

Results of Operations, Financial Position and Net Assets

The Automotive Division recorded net liquidity of 21.5 billion as of


June 30, 2015; at year-end 2014, it was 17.6 billion.

Financial position in the Automotive Division

The gross cash flow generated by the Automotive Division in the


first half of 2015 was 3.3 billion higher than in the previous year at
14.0 billion. Funds tied up in working capital amounted to 2.5
billion (2.3 billion). In the previous year, the higher dividends
receivable from the Chinese joint ventures had a positive effect on
gross cash flow but also increased funds tied up in working capital
because of the undistributed amounts. As a result, cash flows from
operating activities rose to 11.6 billion (8.4 billion).
Investing activities attributable to operating activities increased
year-on-year to 6.8 billion (5.5 billion) in the period from January to June 2015. Capex rose to 4.7 billion (3.6 billion), producing a capex ratio of 4.9% (4.1%). We invested primarily in our
production facilities and in models to be launched in 2015 and
2016, as well as in the ecological focus of the model range. At 2.2
billion (2.4 billion), capitalized development costs were lower than
in the prior-year period. The year-on-year comparison of investing
activities is impacted by MAN SEs sale of MAN Finance International GmbH to Volkswagen Financial Services AG in 2014.
The Automotive Divisions net cash flow rose 1.9 billion above
the prior-year figure to 4.8 billion in the reporting period.
A capital increase carried out by Volkswagen AG at Volkswagen
Financial Services AG at the beginning of the year in order to
finance the growth in business volumes and meet regulatory capital
requirements resulted in outflows from financing activities of 1.1
billion. In May, a dividend of 2.3 billion in total, 0.4 billion
higher than in the previous year, was distributed to Volkswagen AG
shareholders. Conversely, the successful placement of dual-tranche
hybrid notes with an aggregate principal amount of 2.5 billion via
Volkswagen International Finance N.V. in March resulted in a cash
inflow. They consist of a 1.1 billion note that carries a coupon of
2.5% and has a first call date after seven years, and a 1.4 billion
note that carries a coupon of 3.5% and has a first call date after 15
years. Both tranches are perpetual and increase equity by the full
amount, net of transaction costs. 2.5 billion of the hybrid notes
was classified as a capital contribution, which increased net liquidity. Overall, cash outflows from financing activities amounted to
3.3 billion (5.6 billion). In the previous year, the figure included
the acquisition of Scania shares, a capital increase and the issuance
of hybrid notes.

Financial position in the Financial Services Division

The Financial Services Divisions gross cash flow rose by 1.4


billion to 4.2 billion in the first six months of 2015 as a result of
improved earnings quality. Due in particular to growth in business
volumes, funds tied up in working capital increased slightly
compared with the first half of 2014 to 8.0 billion (7.9 billion). At
0.2 billion (0.8 billion), investing activities attributable to
operating activities were significantly lower than in the previous
year, when the figure reflected the intragroup acquisition of MAN
Finance International GmbH from MAN SE.
The Financial Services Divisions negative net liquidity, which
is common in the industry, stood at 120.8 billion at the end of
June 2015; at December 31, 2014, it had amounted to 114.1
billion.
C O N S O L I D AT E D B A L A N C E S H E E T ST R U C T U R E

Due partly to currency factors, in particular relating to the US dollar,


sterling and the Chinese renminbi, the Volkswagen Groups total
assets amounted to 374.0 billion at the end of the reporting period,
exceeding the figure at December 31, 2014 by 6.5%. The Groups
equity rose to 96.2 billion (90.2 billion) and the equity ratio was
25.7% (25.7%).
Automotive Division balance sheet structure

In the Automotive Division, property, plant and equipment increased


slightly compared with December 31, 2014 and intangible assets
remained almost unchanged. While equity-accounted investments
declined as a result of the dividend distributions resolved by the
Chinese joint ventures, deferred taxes increased. This was due in
particular to the measurement of derivative financial instruments.
At the end of June 2015, noncurrent assets were 2.5% higher
overall than at year-end 2014. Current assets rose by 13.9%; the
inventories contained within this item increased due to productionrelated and exchange rate factors, while other receivables and
financial assets include the unpaid dividends of the Chinese joint
ventures. Cash and cash equivalents in the Automotive Division
amounted to 15.5 billion (16.5 billion) at the reporting date.

17

I NTER IM M ANAGE MENT R EP ORT

Results of Operations, Financial Position and Net Assets

elimination of intragroup transactions between the Automotive and


Financial Services divisions. As the current financial liabilities for
the primary Automotive Division were lower than the loans granted
to the Financial Services Division, a negative amount was disclosed
for the reporting period. The item Put options and compensation
rights granted to noncontrolling interest shareholders primarily
comprises the liability for the obligation to acquire the shares held
by the remaining free float shareholders of MAN.
At 210.2 billion as of June 30, 2015, the Automotive Divisions
total assets were higher than at December 31, 2014 (197.4 billion).

B A L A N C E S H E E T ST R U C T U R E I N T H E PA S S E N G E R C A R S B U S I N E S S
AREA AN D TH E COMMERCIAL VEH ICLES/POWER ENGI N EER I NG
BUSI NESS AREA

million

June 30, 2015

Dec. 31, 2014

104,102

101,459

Passenger Cars
Noncurrent assets
Current assets

61,060

52,869

165,162

154,328

Equity

61,954

58,708

Noncurrent liabilities

57,717

54,366

Current liabilities

45,490

41,254

Noncurrent assets

27,327

26,772

Current assets

17,748

16,311

Total assets

45,075

43,083

Equity

14,707

14,107

Noncurrent liabilities

11,922

12,072

Current liabilities

18,447

16,904

Total assets

Financial Services Division balance sheet structure

The Financial Services Division recorded total assets of 163.8


billion at the end of the reporting period, 6.5% higher than at
December 31, 2014.
Lease assets and noncurrent financial services receivables
increased due to the positive business performance and exchange
rate factors. Overall, noncurrent assets rose by 7.8% compared
with year-end 2014. The 4.6% rise in current assets was also
attributable to higher volumes and exchange rate effects. The
Financial Services Division accounted for approximately 43.8% of
the Volkswagen Groups assets at June 30, 2015.
At 19.5 billion, the Financial Services Divisions equity at the
end of the reporting period exceeded the figure at December 31,
2014 by 12.2%. In addition to earnings growth and currency
translation, equity was pushed up by the capital increase carried out
by Volkswagen AG at the beginning of the year in order to finance
the growth in business and meet regulatory capital requirements.
The equity ratio was 11.9% (11.3%). Noncurrent liabilities
increased by 6.8% and current liabilities by 4.9% compared with
December 31, 2014. These increases are attributable respectively
to the funding of the growth in volumes and exchange rate effects.
At 24.8 billion, deposits from direct banking business were
down slightly on December 31, 2014 (25.3 billion).

Commercial Vehicles/Power Engineering

The Automotive Divisions equity was 76.7 billion at the end of the
first half of 2015, 5.3% higher than at December 31, 2014. It was
positively impacted by healthy earnings growth, the hybrid notes
issued in March, currency translation and lower actuarial losses
from the measurement of pension provisions. The amounts
recognized in other comprehensive income from measurement of
derivatives and the dividend payment to Volkswagen AG
shareholders reduced the Automotive Divisions equity. The
noncontrolling interests are mainly attributable to RENK AG and
AUDI AG. These were lower overall than the noncontrolling
interests attributable to the Financial Services Division, so the
figure for the Automotive Division, where the deduction was
recognized, was negative.
Noncurrent liabilities increased by 4.8% compared with
December 31, 2014; the other financial liabilities contained within
this item rose due to exchange rate factors and negative effects from
the measurement of derivatives. Pension provisions decreased due
to the change in the discount rate. Current liabilities rose by 9.9%.
Other liabilities were higher than at year-end 2014 as a result of
exchange rates, the measurement of derivatives and growth in
business. The figures for the Automotive Division also contain the

REPORT ON EX PECTED DEV ELOPMENTS, R ISKS A N D


OPPORTU N ITI ES

We have adjusted our expected deliveries to customers due to the


weaker global economic growth and the tense situation in the
Chinese, Brazilian and Russian vehicle markets. Beyond this, there
were no significant changes in the reporting period compared with
the disclosures on the Volkswagen Groups expected development
in fiscal year 2015 in the Report on Expected Developments and
Report on Risks and Opportunities chapters of the 2014 Annual
Report.

18

I NTER IM M ANAGE MENT R EP ORT

Outlook

Outlook
The robust growth in the global economy lost momentum slightly in
the first half of 2015. While the economic upturn held steady in
many industrialized nations, some emerging economies continued
to record below-average growth. The Volkswagen Groups Board of
Management expects the global economy to record the same level of
growth in 2015 as in the previous year, despite some uncertainties.
The financial markets still entail risks resulting above all from the
strained debt situation of many countries. In addition, growth prospects are being hurt by geopolitical tensions and conflicts. The
emerging economies in Asia will probably record the highest
growth rates. While we expect to see an economic upturn in the
major industrialized nations, the rates of expansion will remain
moderate.
In the period from January to June 2015, global new passenger
car registrations were up year-on-year, although demand varied
from region to region. We also expect trends in the passenger car
markets in the individual regions to be mixed for the full year.
Overall, growth in global demand for new vehicles will probably be
slower than in the previous year. We anticipate a slight increase in
demand for automobiles in Western Europe and expect to see slight
growth in the German market as well. The Central and Eastern
European markets are likely to be down sharply year-on-year due
primarily to the substantial fall in demand in Russia. In North
America, we expect last years positive trend to continue at a noticeably weaker pace. We assume that the South American passenger
car markets will fall appreciably short of the prior-year level. The
markets in the Asia-Pacific region that are strategically important
for the Volkswagen Group will probably continue to grow at a slower
pace.
Global demand for light commercial vehicles will probably see a
moderate increase in 2015. We expect trends to vary from region to
region.
In the markets for trucks and buses that are relevant for the
Volkswagen Group, new registrations in 2015 will probably be
noticeably lower than in the previous year.
We expect automotive financial services to continue to grow in
importance worldwide in 2015.

The Volkswagen Group is optimally positioned to deal with the


mixed developments in the global automotive markets. The Companys strengths include in particular its unique brand portfolio, its
diverse range of models, its steadily growing presence in all major
world markets and its wide selection of financial services. We offer
an extensive array of attractive, environmentally friendly, cuttingedge, high-quality vehicles for all markets and customer groups.
This ranges from motorcycles through compact, sports and luxury
cars to heavy trucks and buses, and covers almost all segments. The
Volkswagen Groups brands will press ahead with their product
initiative in 2015, modernizing and expanding their offering by
introducing new models. Our goal is to offer all customers the
products and innovations they need, sustainably strengthening our
competitive position in the process.
We expect the Volkswagen Groups deliveries to customers in
2015 to remain on a level with the previous year in a persistently
challenging market environment.
The difficult market environment, fierce competition, interest
rate and exchange rate volatility, and fluctuations in raw materials
prices all pose challenges. We anticipate a positive effect from the
efficiency programs implemented by all brands and, increasingly,
from the modular toolkits.
Depending on the economic conditions, we expect 2015 sales
revenue for the Volkswagen Group and its business areas to increase
by up to 4% above the prior-year figure. However, economic trends
in Latin America and Eastern Europe will need to be continuously
monitored in the Commercial Vehicles/Power Engineering Business Area.
In terms of the Groups operating profit, we anticipate an
operating return on sales of between 5.5% and 6.5% in 2015 in
light of the challenging economic environment. The operating
return on sales is expected to be in the 6.0% to 7.0% range in the
Passenger Cars Business Area and between 2.0% and 4.0% in the
Commercial Vehicles/Power Engineering Business Area. For the
Financial Services Division, we are forecasting an operating profit
at the prior-year level. Disciplined cost and investment management and the continuous optimization of our processes remain
integral elements of the Volkswagen Groups Strategy 2018.

This report contains forward-looking statements on the business development of the


Volkswagen Group. These statements are based on assumptions relating to the development of the economic and legal environment in individual countries and economic
regions, and in particular for the automotive industry, which we have made on the basis
of the information available to us and which we consider to be realistic at the time of
going to press. The estimates given entail a degree of risk, and actual developments may
differ from those forecast. Any changes in significant parameters relating to our key sales

markets, or any significant shifts in exchange rates relevant to the Volkswagen Group, will
have a corresponding effect on the development of our business. In addition, expected
business development may vary if the assessments of the factors influencing sustainable
value enhancement, as well as risks and opportunities presented in the 2014 Annual
Report develop in a way other than we are currently expecting, or additional risks and
opportunities or other factors emerge that affect the development of our business.

19

BRANDS AND BUSINESS FIELDS

Brands and Business Fields


performance indicators for the Audi brand also include the
Lamborghini and Ducati brands. A total of 35,248 Ducati motorcycles were sold in the first six months of 2015 (+18.1%).
The KODA brands unit sales remained level with the prioryear figure in the first half of 2015, at 421 thousand (426 thousand)
vehicles. There was increasing demand for the Octavia and the new
Fabia. Sales revenue rose by 7.5% to 6.4 billion. Operating profit
increased by 22.8% to 522 million, primarily due to improvements in mix and exchange rates, as well as lower material costs.
The SEAT brands positive growth trend continued in the first
half of 2015, with sales of 286 thousand vehicles, up 10.5% yearon-year. This figure includes the Q3 manufactured for Audi. There
was strong customer demand for the models in the Leon family and
for the Ibiza. Sales revenue rose by 13.2% to 4.5 billion. SEAT
generated an operating profit of 52 million, an improvement of
89 million on the prior-year figure. This was primarily due to
increased volumes, positive exchange rate effects and cost
optimization.
The Bentley brands unit sales declined by 10.9% to 5,016
vehicles in the reporting period; by contrast, sales revenue rose by
5.9% year-on-year to 939 million due to exchange rate factors.
Positive exchange rate effects and lower costs were insufficient to
offset the reduced volumes and higher upfront investments in new
products; as a result, operating profit decreased to 54 million
(95 million).

S A L E S R E V E N U E A N D O P E R AT I N G P R O F I T B Y B R A N D A N D
BUSINESS FIELD

The Volkswagen Group generated sales revenue of 108.8 billion in


the first half of 2015, up 10.1% on the prior-year figure of 98.8 billion. Operating profit rose by 10.3% to 6.8 billion. Excluding the
special items of 170 million for restructuring measures, operating
profit amounted to 7.0 billion (6.2 billion).
Sales by the Volkswagen Passenger Cars brand amounted to
2.3 million vehicles (2.3 million) in the reporting period. The
Sportsvan, Golf and new Passat models proved particularly popular.
Sales revenue rose by 8.8% year-on-year to 53.6 billion. Operating
profit rose to 1.4 billion (1.0 billion) due to sales revenue and cost
optimization in addition to positive exchange rate effects. Although
the markets in South America and Russia were negative factors,
there were positive effects from the efficiency program.
The Audi brand sold 784 thousand vehicles worldwide between
January and June 2015, 4.5% more than in the previous year. A
further 240 thousand (248 thousand) Audi vehicles were sold by the
FAW-Volkswagen Chinese joint venture. The compact models in the
A3 family, the SUV models and the new TT were particularly popular
with customers. Sales revenue increased by 3.1 billion year-onyear to 29.8 billion. Operating profit improved by 9.1% to
2.9 billion due to the growth in unit sales and positive exchange
rate effects. By contrast, high upfront investments in new products
and technologies, as well as the expansion of the international
production network, weighed on earnings. The financial key

V O L K S WA G E N G R O U P

Division

Automotive

Brand/
Business Field

Volkswagen
Passenger
Cars

Financial Services

Audi

KODA

SEAT

Bentley

Porsche

20

Volkswagen
Commercial
Vehicles

Scania

MAN

Other

Dealer and customer


financing
Leasing
Direct bank
Insurance
Fleet business
Mobility offerings

BRANDS AND BUSINESS FIELDS

The Porsche brand sold 109 thousand vehicles worldwide between


January and June 2015, an increase of 23.1% year-on-year. Sales
revenue amounted to 10.8 billion, up 32.9% on the figure for the
first half of 2014. Operating profit improved to 1.7 billion
(1.4 billion), with positive volume and exchange rate effects more
than offsetting the negative impact of changes to the mix, increased
structural costs and higher development costs for future projects
and technologies. The Macan and the new 911 derivatives were
particularly popular with customers.
Volkswagen Commercial Vehicles sold 231 thousand (221 thousand) vehicles in the reporting period. There was strong customer
demand for the Multivan/Transporter and the Caddy. At 5.2 billion
(4.7 billion), sales revenue was up 10.6% year-on-year. However,
higher volumes and more advantageous exchange rates were
unable to offset the year-on-year increase in costs incurred for the
renewal of the product range; as a result, operating profit declined
by 4.1% to 268 million.

The Scania brand sold 38 thousand (38 thousand) vehicles in the


first half of 2015. While volumes in Western Europe saw positive
growth, the difficult conditions in Brazil and Russia had a negative
impact. At 5.2 billion (5.1 billion), sales revenue was up slightly
year-on-year. Operating profit improved to 503 million (476 million). In particular, exchange rate trends were positive and there
was healthy growth in the service business.
Unit sales by the MAN brand were down 13.5% in the first six
months of 2015 to 50 thousand vehicles. At 6.7 billion (6.7 billion), sales revenue remained at the prior-year level. Operating
profit before special items was weighed down by the negative trend
in the commercial vehicles business in South America, and
amounted to 185 million (222 million). Restructuring measures
resulted in special items of 170 million.
Volkswagen Financial Services generated an operating profit of
970 million in the first half of 2015, up 25.1% year-on-year on the
back of positive volume and exchange rate effects.

K E Y F I G U R E S B Y B R A N D A N D B U S I N E S S F I E L D F R O M J A N U A RY 1 TO J U N E 3 0

SALES TO THIRD
VEHICLE SALES

thousand units/ million

Volkswagen Passenger Cars

SALES REVENUE

OPERATING RESULT

PARTIES

2015

2014

2015

2014

2015

2014

2015

2014

2,251

2,302

53,578

49,259

36,426

34,263

1,428

1,012

Audi

784

750

29,784

26,690

19,775

17,668

2,914

2,671

KODA

421

426

6,421

5,974

3,227

2,950

522

425

SEAT

286

258

4,469

3,948

1,873

1,700

52

37

Bentley

939

887

621

561

54

95

Porsche2

109

89

10,850

8,162

9,912

7,541

1,698

1,398

Volkswagen Commercial Vehicles

231

221

5,223

4,724

2,487

2,340

268

280

Scania2

38

38

5,182

5,067

5,182

5,067

503

476

MAN

50

58

6,719

6,699

6,593

6,626

185

222

VW China3

1,743

1,847

Other

827

788

27,407

23,026

10,816

10,585

1,6054

1,1324

Volkswagen Financial Services

13,018

10,423

11,862

9,508

970

776

Volkswagen Group before special items

6,990

6,186

Special items

170

Volkswagen Group

5,090

5,207

108,776

98,808

108,776

98,808

6,820

6,186

Automotive Division5

5,090

5,207

94,093

87,044

95,412

88,086

5,700

5,262

4,772

4,890

77,129

70,711

81,449

74,333

5,346

4,748

318

317

16,964

16,333

13,963

13,754

354

514

14,683

11,764

13,364

10,722

1,120

924

of which: Passenger Cars Business Area


Commercial Vehicles/Power
Engineering Business Area
Financial Services Division

1 All figures shown are rounded, so minor discrepancies may arise from addition of these amounts.
2 Including financial services.
3 The sales revenue and operating profit of the joint venture companies in China are not included in the figures for the Group. The Chinese companies are accounted for using the equity
method and recorded a proportionate operating profit of 2,744 million (2,622 million).
4 Mainly intragroup items recognized in profit or loss, in particular from the elimination of intercompany profits; the figure includes depreciation and amortization of identifiable assets
as part of purchase price allocation for Scania, Porsche Holding Salzburg, MAN and Porsche.
5 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.

21

BRANDS AND BUSINESS FIELDS

vehicles in these markets, 23.3% fewer than in the prior-year


period. The decline in volumes and the negative exchange rate
trend caused sales revenue to decrease by 17.6% to 5.4 billion.
The Volkswagen Groups unit sales in the Asia-Pacific region
were down year-on-year between January and June 2015 in light of
the sharp decline in momentum in the Chinese passenger cars
market. Including the Chinese joint ventures, 2.0 million vehicles
were sold, 5.0% fewer than in the prior-year period. At 18.4
billion, sales revenue exceeded the prior-year figure by 5.2% due to
exchange rate effects. This figure does not include our Chinese joint
ventures, which are accounted for using the equity method.

U NIT SALES AND SALES REVENU E BY MARKET

The Volkswagen Group sold 2.3 million vehicles in the Europe/


Other markets region in the first half of the year, up 1.9% on the
prior-year period. Sales revenue rose by 9.2% to 67.6 billion on
the back of volume, mix and exchange rate effects.
A total of 457 thousand vehicles were sold in the North American market in the reporting period, an increase of 8.2% year-onyear. Sales revenue rose by 34.9% to 17.4 billion, primarily due to
the increase in volumes, the strong US dollar and positive mix
effects.
Conditions in South America increasingly deteriorated in the
first six months of 2015; the Volkswagen Group sold 283 thousand

K E Y F I G U R E S B Y M A R K E T F R O M J A N U A RY 1 T O J U N E 3 0

VEHICLE SALES

thousand units/ million

Europe/Other markets

SALES REVENUE

2015

2014

2015

2014

2,321

2,279

67,568

61,868

North America

457

422

17,414

12,905

South America

283

368

5,365

6,510

Asia-Pacific2

2,030

2,138

18,429

17,525

Volkswagen Group2

5,090

5,207

108,776

98,808

1 All figures shown are rounded, so minor discrepancies may arise from addition of these amounts.
2 The sales revenue of the joint venture companies in China is not included in the figures for the Group and the Asia-Pacific market.

22

BRANDS AND BUSINESS FIELDS

program in the reporting period. In April 2015, Volkswagen


Leasing GmbH securitized leasing contracts with a volume of
approximately 1.03 billion as part of its 21st ABS transaction
VCL 21, which was awarded the Certified by TSI - deutscher
Verbriefungsstandard seal of quality by True Sale International
(TSI) GmbH. TSI certification is awarded to transactions that are
clearly defined and meet strict transparency, disclosure, lending
and loan processing standards.
Volkswagen Financial Services AG implemented further international capital market transactions for funding purposes. A dualtranche euro-denominated benchmark note with a total volume of
1.25 billion was placed in April, and local activities in Brazil and
South Korea were supported by bonds of approximately 130 million and 140 million that saw a high level of oversubscription.
The number of new financing, leasing, service and insurance
contracts signed between January and June 2015 rose by 6.4%
year-on-year to 2.5 million. At 12.6 million, the total number of
contracts at the end of the first half of 2015 was up 1.7% on the
figure as of December 31, 2014. The number of contracts in the
Customer Financing/Leasing area amounted to 8.0 million
contracts, up 2.1% on the year-end figure 2014. In the Service/
Insurance area, the number of contracts rose slightly to 4.6 million
(+1.0%) in the reporting period. The ratio of leased or financed
vehicles to Group deliveries (penetration rate) declined to 29.5%
(29.7%) in Volkswagen Financial Services markets in the first half
of 2015, with credit quality requirements remaining unchanged.
Volkswagen Banks direct banking business had approximately
1.4 million (1.4 million) accounts as of June 30, 2015.
Volkswagen Financial Services employed a total of 13,174
people at the end of the first half of 2015, up 2.8% compared with
the figure for the end of 2014.

V O L K SWA G E N F I N A N C I A L S E R V I C E S

Volkswagen Financial Services supported the Volkswagen Group


brands unit sales in the first half of 2015 with its innovative
products and services along the entire automotive value chain.
In Puerto Rico, Volkswagen Credit, Inc. entered into a partnership with Reliable Financial Services, the largest local automotive
financing company. This enables Volkswagen Passenger Cars and
Audi dealers to offer attractive financing opportunities to customers
in Puerto Rico buying new vehicles.
In Germany, Volkswagen Bank GmbH was named best automotive bank for the fourth consecutive time by the readers of Auto
Bild magazine. Over 32,000 people took part in the reader poll,
assessing areas including the quality of financial services products.
In April 2015, Volkswagen Financial Services AGs environmental management system at its Braunschweig site was certified
in accordance with ISO 14001 by certification organization
TV Nord. The system enables the company to track and systematically optimize its environmental footprint at all central and
decentralized units.
In Germany, Volkswagen Financial Services trainees supported
the project run by Naturschutzbund Deutschland e.V. (NABU) for
the ecological restoration of the Lower Havel river. Old and
defective mobile phones were collected and professionally recycled,
and the proceeds were donated to the project.
The main refinancing sources for Volkswagen Financial Services are unsecured bonds placed on the capital markets, auto
asset-backed securities (ABS) transactions and deposits from the
direct banking business. Securitized financing agreements with a
volume of approximately 481 million were placed on the French
market for the second time as part of the Driver France Two
transaction, marking the successful continuation of the ABS

23

24

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Income Statement

Interim Consolidated
Financial Statements
(Condensed)
I NCOME STATEMENT FOR TH E PERIOD JAN UARY 1 TO J U N E 30

VOLKSWAGEN GROUP

DIVISIONS
AUTOMOTIVE

million

2015

2014

FINANCIAL SERVICES

2015

2014

2015

2014

Sales revenue

108,776

98,808

94,093

87,044

14,683

11,764

Cost of sales

87,078

80,075

75,427

71,018

11,651

9,058

Gross profit

21,698

18,733

18,666

16,027

3,032

2,706

10, 431

10,138

9,819

9,563

613

575

3,626

3,427

2,818

2,723

808

705

Other operating income/expense

821

1,019

330

1,521

491

502

Operating profit

6,820

6,186

5,700

5,262

1,120

924

Distribution expenses
Administrative expenses

Share of profits and losses of equity-accounted


investments
Other financial result
Financial result
Profit before tax
Income tax expense
Profit after tax

2,241

2,143

2,222

2,127

19

16

1,397

552

1,437

608

39

56

843

1,591

785

1,520

58

71

7,664

7,777

6,485

6,782

1,179

995

2,000

2,061

1,603

1,808

397

253

5,663

5,716

4,882

4,974

781

742
24

of which attributable to
Noncontrolling interests

75

51

12

99

60

99

60

5,558

5,581

4,789

4,863

770

718

Basic earnings per ordinary share ()

11.06

11.32

Diluted earnings per ordinary share ()

11.06

11.32

Basic earnings per preferred share ()

11.12

11.38

Diluted earnings per preferred share ()

11.12

11.38

Volkswagen AG hybrid capital investors


Volkswagen AG shareholders

1 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
2 Explanatory information on earnings per share is presented in note 4. Prior-year figures adjusted to reflect application of IAS 33.26.

25

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Statement of Comprehensive Income

STATE MENT OF COMPREH ENSIVE I NCOME FOR TH E PERIOD JAN UARY 1 TO J U N E 30

million

2015

2014

5,663

5,716

Pension plan remeasurements recognized in other comprehensive income, before tax

1,773

2,657

Deferred taxes relating to pension plan remeasurements recognized in other comprehensive income

523

779

1,250

1,878

Profit after tax


Pension plan remeasurements recognized in other comprehensive income

Pension plan remeasurements recognized in other comprehensive income, net of tax


Share of other comprehensive income of equity-accounted investments
that will not be reclassified to profit or loss, net of tax
Items that will not be reclassified to profit or loss

1,248

1,881

1,829

150

Exchange differences on translating foreign operations


Unrealized currency translation gains/losses
Transferred to profit or loss
Exchange differences on translating foreign operations, before tax
Deferred taxes relating to exchange differences on translating foreign operations
Exchange differences on translating foreign operations, net of tax

1,829

150

1,829

150

7,589

1,218

Cash flow hedges


Fair value changes recognized in other comprehensive income
Transferred to profit or loss
Cash flow hedges, before tax
Deferred taxes relating to cash flow hedges
Cash flow hedges, net of tax

2,243

133

5,346

1,351

1,576

403

3,770

947

588

431

Available-for-sale financial assets


Fair value changes recognized in other comprehensive income
Transferred to profit or loss
Available-for-sale financial assets, before tax
Deferred taxes relating to available-for-sale financial assets
Available-for-sale financial assets, net of tax

182

22

406

453

50

29

456

424

473

103

Share of other comprehensive income of equity-accounted investments


that may be reclassified subsequently to profit or loss, net of tax
Items that may be reclassified subsequently to profit or loss

1,011

476

Other comprehensive income, before tax

867

3,511

Deferred taxes relating to other comprehensive income

1,104

1,154

237

2,357

5,900

3,359

13

Other comprehensive income, net of tax


Total comprehensive income
of which attributable to
Noncontrolling interests
Volkswagen AG hybrid capital investors
Volkswagen AG shareholders

26

99

60

5,794

3,286

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Income Statement

I NCOME STATEMENT FOR TH E PERIOD APRI L 1 TO J U N E 30

VOLKSWAGEN GROUP

DIVISIONS
AUTOMOTIVE

million

Sales revenue
Cost of sales

2015

2014

FINANCIAL SERVICES

2015

2014

2015

2014

56,041

50,977

48,287

44,990

7,754

5,987

44,652

41,207

38,454

36,586

6,198

4,621

Gross profit

11,389

9,771

9,832

8,405

1,557

1,366

Distribution expenses

5,455

5,374

5,144

5,078

311

296

Administrative expenses

1,811

1,774

1,399

1,429

412

346

Other operating income/expense

631

708

446

939

186

231

Operating profit

3,492

3,330

2,844

2,837

648

493

Share of profits and losses of equity-accounted


investments

1,095

1,150

1,086

1,143

Other financial result

891

60

917

89

26

29

Financial result

204

1,089

170

1,055

34

35

3,696

4,420

3,014

3,892

682

528

Income tax expense

965

1,171

687

1,043

278

128

Profit after tax

2,731

3,249

2,328

2,849

404

400
9

Profit before tax

of which attributable to
Noncontrolling interests

24

15

56

38

56

38

2,671

3,186

2,273

2,796

398

391

Basic earnings per ordinary share ()

5.33

6.46

Diluted earnings per ordinary share ()

5.33

6.46

Basic earnings per preferred share ()

5.33

6.46

Diluted earnings per preferred share ()

5.33

6.46

Volkswagen AG hybrid capital investors


Volkswagen AG shareholders

1 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
2 Explanatory information on earnings per share is presented in note 4. Prior-year figures adjusted to reflect application of IAS 33.26.

27

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Statement of Comprehensive Income

STATE MENT OF COMPREH ENSIVE I NCOME FOR TH E PERIOD APRI L 1 TO J U N E 30

million

Profit after tax

2015

2014

2,731

3,249

7,281

1,322

Pension plan remeasurements recognized in other comprehensive income


Pension plan remeasurements recognized in other comprehensive income, before tax
Deferred taxes relating to pension plan remeasurements recognized in other comprehensive income
Pension plan remeasurements recognized in other comprehensive income, net of tax

2,159

384

5,123

938

Share of other comprehensive income of equity-accounted investments


that will not be reclassified to profit or loss, net of tax
Items that will not be reclassified to profit or loss

5,123

938

697

276

Exchange differences on translating foreign operations


Unrealized currency translation gains/losses
Transferred to profit or loss
Exchange differences on translating foreign operations, before tax
Deferred taxes relating to exchange differences on translating foreign operations

697

276

697

276

Fair value changes recognized in other comprehensive income

1,854

1,108

Transferred to profit or loss

1,100

53

Cash flow hedges, before tax

2,955

1,161

Exchange differences on translating foreign operations, net of tax


Cash flow hedges

Deferred taxes relating to cash flow hedges


Cash flow hedges, net of tax

845

348

2,110

814

Available-for-sale financial assets


Fair value changes recognized in other comprehensive income

168

521

142

36

Available-for-sale financial assets, before tax

26

484

Deferred taxes relating to available-for-sale financial assets

61

87

475

Transferred to profit or loss

Available-for-sale financial assets, net of tax


Share of other comprehensive income of equity-accounted investments
that may be reclassified subsequently to profit or loss, net of tax

158

12

Items that may be reclassified subsequently to profit or loss

1,342

50

9,406

1,711

Other comprehensive income, before tax


Deferred taxes relating to other comprehensive income

2,942

723

Other comprehensive income, net of tax

6,464

988

Total comprehensive income

9,196

2,261

of which attributable to
Noncontrolling interests
Volkswagen AG hybrid capital investors
Volkswagen AG shareholders

28

56

38

9,134

2,228

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Balance Sheet

BALANCE SH EET AS OF J U N E 30, 2015 AN D DECEMBER 31, 2014

VOLKSWAGEN GROUP

DIVISIONS
AUTOMOTIVE*

million

FINANCIAL SERVICES

2015

2014

2015

2014

2015

2014

Noncurrent assets

230,444

220,106

131,429

128,231

99,015

91,875

Intangible assets

60,363

59,935

60,126

59,697

236

237

Property, plant and equipment

47,462

46,169

45,239

44,080

2,223

2,089

Lease assets

30,743

27,585

2,958

2,815

27,785

24,770

Financial services receivables

61,822

57,877

61,822

57,877

Assets

Investments, equity-accounted
investments and other equity investments, other
receivables and financial assets

30,054

28,541

23,106

21,639

6,948

6,902

143,575

131,102

78,808

69,180

64,767

61,923

Inventories

35,262

31,466

32,210

28,269

3,052

3,197

Financial services receivables

46,861

44,398

538

464

47,399

44,862

Other receivables and financial assets

28,760

25,254

19,466

15,677

9,294

9,577

Marketable securities

15,095

10,861

12,191

9,197

2,904

1,664

Cash, cash equivalents and time deposits

17,598

19,123

15,479

16,499

2,119

2,624

374,019

351,209

210,237

197,411

163,782

153,798

96,162

90,189

76,661

72,815

19,501

17,374

88,442

84,950

69,192

67,828

19,250

17,122

7,513

5,041

7,513

5,041

95,955

89,991

76,705

72,870

19,250

17,122

207

198

44

55

251

253

137,833

130,314

69,639

66,438

68,195

63,876

Financial liabilities

71,889

68,416

10,343

10,643

61,546

57,773

Provisions for pensions

28,221

29,806

27,798

29,361

423

445

Other liabilities

37,723

32,092

31,497

26,434

6,226

5,658

140,024

130,706

63,937

58,158

76,086

72,547

Current assets

Total assets
Equity and Liabilities
Equity
Equity attributable to Volkswagen AG
shareholders
Equity attributable to Volkswagen AG hybrid
capital investors
Equity attributable to Volkswagen AG
shareholders and hybrid capital investors
Noncontrolling interests
Noncurrent liabilities

Current liabilities
Put options and compensation rights
granted to noncontrolling interest shareholders

3,632

3,703

3,632

3,703

Financial liabilities

67,489

65,564

2,269

847

69,758

66,411

Trade payables

20,511

19,530

18,338

17,838

2,173

1,692

Other liabilities

48,392

41,909

44,237

37,465

4,155

4,444

374,019

351,209

210,237

197,411

163,782

153,798

Total equity and liabilities

* Including allocation of consolidation adjustments between the Automotive and Financial Services divisions, primarily intragroup loans.

29

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Statement of Changes in Equity

STATE MENT OF C HANGE S I N EQU ITY

OTHER RESERVES

million

Balance at Jan. 1, 2014

Subscribed capital

Capital reserves

Retained earnings

Currency
translation reserve

2,799

1,191

12,658

72,341

Profit after tax

5,581

Other comprehensive income, net of tax

1,870

204

Total comprehensive income

3,711

204

27

1,959

Dividend payment

1,871

Capital transactions involving a change in ownership interest

4,484

45

Capital increase

Other changes

109

Balance at June 30, 2014

1,218

14,616

69,587

2,641

Balance at Jan. 1, 2015

1,777

1,218

14,616

71,197

Profit after tax

5,558

Other comprehensive income, net of tax

1,250

1,828

Total comprehensive income

6,809

1,828

Capital increase

Dividend payment

2,294

Capital transactions involving a change in ownership interest

Other changes

1,218

14,616

75,704

51

Balance at June 30, 2015

1 Volkswagen AG recorded an inflow of cash funds amounting to 3,000 million, less a discount of 29 million and transaction costs of 19 million, from the hybrid capital issued in
March 2014. Additionally, there were noncash effects from the deferral of taxes amounting to 13 million. The hybrid capital is required to be classified as equity instruments
granted. Volkswagen AG recorded an inflow of cash funds amounting to 2,000 million, less transaction costs (20 million), from the capital increase implemented in June 2014
by issuing new preferred shares. Additionally, there are noncash effects from the deferral of taxes amounting to 6 million. Volkswagen AG recorded an inflow of cash funds
amounting to 2,500 million, less a discount of 29 million and transaction costs of 14 million, from the hybrid capital issued in March 2015. Additionally, there were noncash
effects from the deferral of taxes amounting to 11 million. The hybrid capital is required to be classified as equity instruments granted.
2 The capital transactions involving a change in ownership interest in 2014 are attributable to the derecognition of the noncontrolling interests in the equity of Scania AB.

30

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Statement of Changes in Equity

Equity attributable to
Volkswagen AG
shareholders and hybrid
capital investors

Noncontrolling
interests

Total equity

90,037

Cash flow hedges

Available-for-sale
financial assets

Equity-accounted
investments

Equity attributable to
Volkswagen AG hybrid
capital investors

1,845

724

229

2,004

87,733

2,304

60

5,641

75

5,716

947

424

106

2,295

62

2,357

947

424

106

60

3,346

13

3,359

2,965

4,951

4,951

1,871

1,875

4,527

2,123

6,650

109

109

900

1,147

334

5,028

89,524

190

89,714

1,715

1,263

148

5,041

89,991

198

90,189

99

5,657

5,663

3,769

456

470

235

237

3,769

456

470

99

5,892

5,900

2,469

2,469

2,469

128

2,422

2,429

32

25

32

5,485

1,719

618

7,513

95,955

207

96,162

31

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Cash Flow Statement

CASH FLOW STATE MENT F OR TH E PERIOD JAN UARY 1 TO J U N E 30

VOLKSWAGEN GROUP

DIVISIONS
AUTOMOTIVE

million

Cash and cash equivalents at beginning of period


Profit before tax
Income taxes paid
Depreciation and amortization expense
Change in pension provisions
Other noncash income/expense and
reclassifications

FINANCIAL SERVICES

2015

2014

2015

2014

2015

2014

18,634

22,009

16,010

19,285

2,624

2,724

7,664

7,777

6,485

6,782

1,179

995

1,924

2,531

1,841

2,227

83

304

8,947

7,822

6,159

5,690

2,788

2,132

209

116

200

110

3,334

309

3,002

301

332

18,230

13,493

14,005

10,657

4,225

2,837

Change in working capital

10,464

10,147

2,452

2,269

8,012

7,878

Change in inventories

2,797

2,689

2,967

2,706

170

17

Change in receivables

3,505

3,829

3,545

3,181

40

648

Change in liabilities

3,376

4,275

2,964

3,568

412

707

Change in other provisions

1,425

677

1,412

591

12

86

(excluding depreciation)

4,845

4,143

391

467

4,454

3,676

Change in financial services receivables

4,118

4,439

74

74

4,192

4,365

7,766

3,347

11,553

8,388

3,787

5,041

to operating activities

6,993

6,236

6,761

5,469

231

767

of which: Investments in intangible assets


(excluding capitalized development
costs), property, plant and equipment,
and investment property

4,823

3,779

4,652

3,578

171

201

2,170

2,396

2,170

2,396

Gross cash flow

Change in lease assets

Cash flows from operating activities


Cash flows from investing activities attributable

capitalized development costs


acquisition and disposal of equity
investments

Net cash flow


Change in investments in securities and loans

166

195

89

380

77

576

773

2,889

4,791

2,919

4,018

5,808

3,944

1,235

3,121

815

823

420

Cash flows from investing activities

10,937

7,471

9,882

6,284

1,055

1,187

Cash flows from financing activities

999

306

3,283

5,567

4,282

5,873

Effect of exchange rate changes on cash and cash


equivalents

444

21

401

30

43

51

Net change in cash and cash equivalents

1,728

3,797

1,212

3,493

516

304

Cash and cash equivalents at June 30

16,906

18,213

14,798

15,792

2,108

2,421

Securities, loans and time deposits

23,166

18,105

14,765

10,187

8,401

7,918

Gross liquidity

40,072

36,318

29,563

25,980

10,509

10,338

139,378

126,332

8,074

12,001

131,304

114,331

99,306

90,014

21,489

13,979

120,796

103,993

96,453

82,318

17,639

16,869

114,092

99,186

Total third-party borrowings


Net liquidity at June 30
For information purposes: at Jan. 1

1 Including allocation of consolidation adjustments between the Automotive and Financial Services divisions.
2 Net of impairment reversals.
3 These relate mainly to the fair value measurement of financial instruments, application of the equity method and reclassification of gains/losses on disposal of noncurrent
assets to investing activities.
4 Net cash flow: cash flows from operating activities, net of cash flows from investing activities attributable to operating activities.

Explanatory notes on the cash flow statement are presented in note 12.

32

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

Notes to the Interim


Consolidated Financial
Statements
Accounting in accordance with International Financial Reporting Standards (IFRSs)
In accordance with Regulation No. 1606/2002 of the European Parliament and of the Council, Volkswagen AG prepared its
consolidated financial statements for 2014 in compliance with the International Financial Reporting Standards (IFRSs), as
adopted by the European Union. These interim consolidated financial statements for the period ended June 30, 2015 were
therefore also prepared in accordance with IAS 34 and are condensed in scope compared with the consolidated financial
statements.
All figures shown are rounded, so minor discrepancies may arise from addition of these amounts.
In addition to the reportable segments, the Automotive and Financial Services divisions are presented in the
condensed interim group financial report for explanatory purposes alongside the income statement, balance sheet and
cash flow statement for the Volkswagen Group. This supplemental presentation is not required by IFRSs. Eliminations of
intragroup transactions between the Automotive and Financial Services divisions are allocated to the Automotive Division.
The accompanying interim consolidated financial statements were reviewed by auditors in accordance with section
37w(5) of the Wertpapierhandelsgesetz (WpHG German Securities Trading Act).

Accounting policies
Volkswagen AG has applied all accounting pronouncements adopted by the EU and effective for periods beginning on or
after January 1, 2015.
A number of amendments to International Financial Reporting Standards resulting from the Annual Improvements
Project 2013 became effective on January 1, 2015. These relate to changes to IFRS 1, IFRS 3, IFRS 13 and IAS 40, and do
not materially affect the Volkswagen Groups net assets, financial position and results of operations.
IFRIC 21 has also been required to be applied since January 1, 2015. IFRIC 21 governs the accounting for levies that do
not fall within the scope of IAS 12 Income Taxes. In particular, it provides guidance on when a liability has to be
recognized for payment of a levy. This Interpretation also does not materially affect the Volkswagen Groups net assets,
financial position and results of operations.
A discount rate of 2.6% (December 31, 2014: 2.3%) was applied to German pension provisions in the accompanying
interim consolidated financial statements. The increase in the discount rate decreased pension provisions and deferred
taxes attributable to pension provisions and also decreased the actuarial losses for pension provisions that are recognized
in retained earnings.
The income tax expense for the interim reporting period was calculated on the basis of the average annual tax rate that
is expected for the entire fiscal year, in accordance with IAS 34, Interim Financial Reporting.
In other respects, the same accounting policies and consolidation methods that were used for the 2014 consolidated
financial statements are generally applied to the preparation of the interim consolidated financial statements and the
measurement of the prior-year comparatives. A detailed description of the policies and methods applied is published in the
notes to the consolidated financial statements in the 2014 Annual Report. This can also be accessed on the Internet at
www.volkswagenag.com/ir.

33

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

Basis of consolidation
In addition to Volkswagen AG, which is domiciled in Wolfsburg and entered in the commercial register at the
Braunschweig Local Court under No. HRB 100484, the consolidated financial statements comprise all significant German
and non-German subsidiaries, including structured entities, that are controlled directly or indirectly by Volkswagen AG.
This is the case if Volkswagen AG obtains power over the potential subsidiaries directly or indirectly from voting rights or
similar rights, is exposed, or has rights to, positive or negative variable returns from its involvement with the subsidiaries,
and is able to influence those returns.
I N T E R E ST S I N J O I N T V E N T U R E S

Through its 50% interest in the joint venture Global Mobility Holding B.V., Amsterdam, the Netherlands, the Volkswagen
Group holds a 50% indirect stake in the joint ventures subsidiary, LeasePlan Corporation N.V., Amsterdam, the
Netherlands. Volkswagen agreed with Fleet Investments B.V., Amsterdam, the Netherlands, an investment company
belonging to the von Metzler family, that Fleet Investments would become the new co-investor in Global Mobility Holding
in 2010. The previous co-investors were instructed by Volkswagen AG to transfer their shares to Fleet Investments B.V. on
February 1, 2010 for the purchase price of 1.4 billion. Volkswagen AG has granted the new co-investor a put option on its
shares. If this option is exercised, Volkswagen must pay the original purchase price, less purchase price reductions, plus
accumulated pro rata preferred dividends. Additionally, Volkswagen AG has a preemptive right of purchase at any
applicable higher fair value. The put option is accounted for at fair value.
In addition, Volkswagen has pledged claims under certificates of deposit with Bankhaus Metzler in the amount of
1.3 billion to secure a loan granted to Fleet Investments B.V. by Bankhaus Metzler. This pledge does not increase the
Volkswagen Groups risk arising from the above-mentioned short position.
In fiscal year 2013, the put option and the certificates of deposit were prolonged by two years until January 2016.

34

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

DISC LOSU RE S ON TH E CONSOLI DATED FI NANC IA L STATEMENTS

1. Sales revenue
ST R U C T U R E O F G R O U P S A L E S R E V E N U E

H1

million

2015

2014

Vehicles

71,823

66,543

Genuine parts

7,237

6,650

Used vehicles and third-party products

5,509

4,963

Engines, powertrains and parts deliveries

4,672

4,697

Power Engineering

1,812

1,633

Motorcycles

361

308

10,170

7,575

Interest and similar income

3,409

3,097

Other sales revenue

3,783

3,343

108,776

98,808

Leasing business

2. Cost of sales
Cost of sales includes interest expenses of 972 million (previous year: 936 million) attributable to the financial services
business.
In addition to depreciation and amortization expenses, cost of sales also includes impairment losses on intangible
assets, items of property, plant and equipment, and lease assets. The impairment losses identified on the basis of updated
impairment tests amount to a total of 260 million (previous year: 101 million).

3. Research and development costs in the Automotive Division

H1

million

Total research and development costs


of which: capitalized development costs
Capitalization ratio in %

2015

2014

6,648

6,478

2.6

2,170

2,396

9.4

32.6

37.0

Amortization of capitalized development costs

1,521

1,391

9.3

Research and development costs recognized in the income statement

5,999

5,474

9.6

35

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

4. Earnings per share


Basic earnings per share are calculated by dividing profit attributable to shareholders of Volkswagen AG by the weighted
average number of ordinary and preferred shares outstanding during the reporting period.
In 2012 and 2013, Volkswagen AG placed two mandatory convertible notes with identical features and an aggregate
principal amount of 3.7 billion via a subsidiary, Volkswagen International Finance N.V. Amsterdam (issuer). Both
mandatory convertible notes mature on November 9, 2015. The current minimum conversion price is 144.50, and the
corresponding maximum conversion price is 173.40. The conversion price will be adjusted if certain events occur. The
convertible notes will be settled by issuing new preferred shares no later than at maturity. The issuer is entitled to convert
the mandatory convertible notes at any time at the minimum conversion price. The note terms and conditions also provide
for early conversion options. This voluntary conversion right was exercised in the reporting period, with a total of 100
thousand of the notes being converted into 564 newly created preferred shares at the effective maximum conversion price
at the conversion date.
IAS 33.23 sets out that all potential shares that will be issued upon the conversion of a mandatory convertible note must
be accounted for as issued shares and included in the calculation of basic and diluted earnings per share. The number of
outstanding preferred shares is therefore increased by the potential preferred shares that would be issued if the
mandatory convertible notes issued were actually to be converted. The average number of preferred shares not yet
converted that have to be included is calculated based on the maximum conversion ratio resulting from the current
minimum conversion price of 144.50. The terms and conditions require the minimum conversion price to be adjusted
following the distribution of dividends. The number of potential preferred shares was calculated retrospectively at the new
minimum conversion price in accordance with IAS 33.26, including for the previous year. The finance costs associated
with the mandatory convertible notes are not included in the calculation of consolidated profit because the interest
component was recognized in other comprehensive income when the note was issued, and interest expense arises only
from the amount of compound interest. Since the number of basic and diluted shares is identical, basic earnings per share
also correspond to diluted earnings per share. In total, the existing mandatory convertible notes still entitle the holders to
subscribe for a maximum of 25,570,242 no-par value preferred shares of Volkswagen AG, based on the current maximum
conversion ratio.

Q2

H1

2015

2014*

2015

2014*

million

295.1

295.1

295.1

295.1

million

295.1

295.1

295.1

295.1

million

206.2

198.0

206.2

196.8

million

206.2

198.0

206.2

196.8

Profit after tax

million

2,731

3,249

5,663

5,716

Noncontrolling interests

million

24

75

Profit attributable to Volkswagen AG hybrid capital investors

million

56

38

99

60

Profit attributable to Volkswagen AG shareholders

million

2,671

3,186

5,558

5,581

5.33

6.46

11.06

11.32

5.33

6.46

11.06

11.32

5.33

6.46

11.12

11.38

5.33

6.46

11.12

11.38

Weighted average number of shares outstanding


Ordinary shares: basic
diluted
Preferred shares: basic
diluted

Earnings per share


Ordinary shares: basic
diluted
Preferred shares: basic
diluted
* Prior-year figures adjusted to reflect application of IAS 33.26.

36

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

5. Noncurrent assets
C H A N G E S I N S E L E C T E D N O N C U R R E N T A S S E T S B E T W E E N J A N U A RY 1 A N D J U N E 3 0 , 2 0 1 5

Carrying amount
at Jan. 1, 2015

Additions/
Changes in
consolidated
Group

Disposals/ Other
changes

Depreciation and
amortization

Carrying amount
at June 30, 2015

Intangible assets

59,935

2,324

137

2,032

60,363

Property, plant and equipment

46,169

4,677

522

3,906

47,462

Lease assets

27,585

8,389

2,221

3,009

30,743

June 30, 2015

Dec. 31, 2014

Raw materials, consumables and supplies

4,209

3,941

Work in progress

3,686

3,552

22,991

20,156

4,233

3,679

million

6. Inventories

million

Finished goods and purchased merchandise


Current lease assets
Prepayments

143

139

35,262

31,466

There was no requirement to recognize or reverse significant impairment losses on inventories in the reporting period.

7. Current other receivables and financial assets

million

June 30, 2015

Dec. 31, 2014

Trade receivables

12,628

11,472

Miscellaneous other receivables and financial assets

16,132

13,782

28,760

25,254

In the period January 1 to June 30, 2015, impairment losses and reversals of impairment losses on noncurrent and
current financial assets reduced operating profit by 386 million (previous year: 250 million).

37

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

8. Equity
Following the approval by the Annual General Meeting of MAN SE of the conclusion of the control and profit and loss
transfer agreement between MAN SE and Truck & Bus GmbH on June 6, 2013, Volkswagen is obliged to pay a cash
settlement to the remaining noncontrolling interest shareholders of MAN SE. For this reason, the noncontrolling interests
in the equity of MAN SE and the interest in Scania AB attributable to those noncontrolling interest shareholders were
derecognized from Group equity as of this date. At the same time, a liability was recognized in accordance with the cash
settlement offer for the obligation to acquire the shares. MAN SEs profit or loss is attributed in full to the shareholders of
Volkswagen AG. As of June 30, 2015, a total of 360,020 ordinary shares and 117,656 preferred shares had been tendered.
On March 14, 2014, Volkswagen AG published an offer to the shareholders of Scania Aktiebolag, Sdertlje, (Scania)
to acquire all Scania shares. The offer was completed on May 13, 2014 and Volkswagen initiated a squeeze-out for the
Scania shares that were not tendered in the course of the offer. Scania shares were delisted from the NASDAQ OMX
Stockholm at the end of June 5, 2014. The Groups retained earnings were reduced by the total value of the offer
amounting to 6,650 million as a capital transaction with noncontrolling interest shareholders recognized directly in
equity. At the same time, the equity interest in Scania previously attributable to the noncontrolling interest shareholders in
Scania amounting to 2,123 million was reclassified from noncontrolling interests to the reserves attributable to the
shareholders of Volkswagen AG. The remaining noncontrolling interests are largely attributable to shareholders of RENK AG
and AUDI AG.
In March 2015, Volkswagen AG placed unsecured subordinated hybrid notes with an aggregate principal amount of
2.5 billion via a subsidiary, Volkswagen International Finance N.V. Amsterdam (issuer). The perpetual hybrid notes were
issued in two tranches and can be called by the issuer. The first call date for the first tranche (1.1 billion and a coupon of
2.50%) is after seven years, and the first call date for the second tranche (1.4 billion and a coupon of 3.50%) is after
15 years. Under IAS 32, the hybrid notes must be classified in their entirety as equity. The capital raised was recognized in
equity, less a discount and transaction costs and net of deferred taxes. The interest payments payable to the noteholders
will be recognized directly in equity, net of income taxes.
In the first six months of the fiscal year, Volkswagen AG issued 564 newly created preferred shares (notional value:
1,443.84) resulting from the exercise of mandatory convertible notes. The subscribed capital is composed of
295,089,818 nopar value ordinary shares and 180,642,042 preferred shares, and amounts to 1,218 million (December
31, 2014: 1,218 million).
Volkswagen AG paid a dividend of 2,294 million in the reporting period (previous year: 1,871 million). 1,416 million of this amount (previous year: 1,180 million) was attributable to ordinary shares and 878 million (previous year:
691 million) to preferred shares.

9. Noncurrent financial liabilities

million

June 30, 2015

Dec. 31, 2014

Bonds, commercial paper and notes

58,662

56,639

Liabilities to banks

10,923

9,692

Deposit business
Other financial liabilities

38

892

980

1,412

1,105

71,889

68,416

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

10. Current financial liabilities

million

June 30, 2015

Dec. 31, 2014

Bonds, commercial paper and notes

32,935

29,639

Liabilities to banks

10,242

11,109

Deposit business

23,861

24,353

Other financial liabilities

451

463

67,489

65,564

11. Fair value disclosures


The principles and techniques used for fair value measurement remained unchanged year-on-year. Detailed explanations
of the measurement principles and techniques can be found in the 2014 Annual Report.
Fair value generally corresponds to the market or quoted market price. If no active market exists, fair value is
determined using valuation techniques, such as by discounting the future cash flows at the market interest rate, or by using
recognized option pricing models.
Assets and liabilities measured at fair value through profit or loss consist of derivatives or components of derivatives
that are not included in hedge accounting. These relate primarily to the interest component of currency forwards used to
hedge sales revenue, commodity futures and currency forwards relating to commodity futures.
Available-for-sale financial assets (marketable securities) are carried at fair value. Changes in fair value are recognized
directly in equity, net of deferred taxes.
Shares in unconsolidated subsidiaries and other equity investments that are not accounted for using the equity method
are also classified as available-for-sale financial assets. They are recognized at cost in the consolidated financial statements
if there is no active market for those companies and fair values cannot be reliably ascertained without undue cost or effort.
Fair values are recognized if there are indications that fair value is lower than cost. There is currently no intention to sell
these financial assets.
Uniform valuation techniques and inputs are used to measure fair value. The fair value of Level 2 and 3 financial
instruments is measured in the individual divisions on the basis of Group-wide specifications. The fair value of put options
and compensation rights granted to noncontrolling interest shareholders is calculated using a present value model based
on the contractually agreed cash settlement, including cash compensation, as well as the minimum statutory interest rate
and a risk-adjusted discount rate for a matching maturity.

39

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

The following table contains an overview of the financial assets and liabilities measured at fair value:
F I N A N C I A L A S S E T S A N D L I A B I L I T I E S M E A S U R E D AT FA I R VA L U E B Y L E V E L

million

Dec. 31, 2014

Level 1

Level 2

Level 3

Other equity investments

2,922

2,922

Other financial assets

2,047

2,023

24

Noncurrent assets

Current assets
Other financial assets

1,551

1,543

Marketable securities

10,861

10,861

2,390

2,216

174

2,991

2,916

75

June 30, 2015

Level 1

Level 2

Level 3

Other equity investments

3,500

3,500

Other financial assets

2,240

2,217

23

Noncurrent liabilities
Other noncurrent financial liabilities
Current liabilities
Other current financial liabilities

million

Noncurrent assets

Current assets
Other financial assets

1,758

1,752

Marketable securities

15,095

15,095

5,822

5,643

179

5,656

5,576

80

Noncurrent liabilities
Other noncurrent financial liabilities
Current liabilities
Other current financial liabilities

The allocation of fair values to the three levels in the fair value hierarchy is based on the availability of observable market
prices. Level 1 is used to report the fair value of financial instruments for which a price is directly available in an active
market. Examples include marketable securities and other equity investments measured at fair value. Fair values in Level 2,
for example of derivatives, are measured on the basis of market inputs using market-based valuation techniques. In
particular, the inputs used include exchange rates, yield curves and commodity prices that are observable in the relevant
markets and obtained through pricing services. Level 3 fair values are calculated using valuation techniques that
incorporate inputs that are not directly observable in active markets. In the Volkswagen Group, long-term commodity
futures are allocated to Level 3 because the prices available on the market must be extrapolated for measurement purposes.
This is done on the basis of observable inputs obtained for the different commodities through pricing services. Options on
equity instruments and residual value protection models are also reported in Level 3. Equity instruments are measured
primarily using the relevant business plans and entity-specific discount rates. The significant inputs used to measure fair
value for the residual value protection models include forecasts and estimates of used vehicle residual values for the
appropriate models.

40

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

C H A N G E S I N B A L A N C E S H E E T I T E M S M E A S U R E D AT FA I R VA L U E B A S E D O N L E V E L 3

million

Balance at Jan. 1, 2014

Financial assets

Financial liabilities

measured at fair value

measured at fair value

32

218

Foreign exchange differences

Total comprehensive income

30

14

recognized in profit or loss

25

14

recognized in other comprehensive income


Additions (purchases)

Sales and settlements

19

Transfers into Level 2

Balance at June 30, 2014

51

205

Total gains or losses recognized in profit or loss

25

14

Net other operating expense/income


of which attributable to assets/liabilities held at the reporting date
Financial result
of which attributable to assets/liabilities held at the reporting date

million

Balance at Jan. 1, 2015

25

14

21

Financial assets

Financial liabilities

measured at fair value

measured at fair value

32

249

Foreign exchange differences

Total comprehensive income

66

recognized in profit or loss

62

recognized in other comprehensive income

Additions (purchases)

Sales and settlements

36

Transfers into Level 2

20

Balance at June 30, 2015

30

259

62

Total gains or losses recognized in profit or loss


Net other operating expense/income
of which attributable to assets/liabilities held at the reporting date
Financial result
of which attributable to assets/liabilities held at the reporting date

41

62

47

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

The transfers between the levels of the fair value hierarchy are reported at the respective reporting dates. The transfers out
of Level 3 into Level 2 comprise commodity futures for which observable quoted prices are now available for measurement
purposes due to the decline in their remaining maturities; consequently, no further extrapolation is required. There were
no transfers between other levels of the fair value hierarchy.
Commodity prices are the key risk variable for the fair value of commodity futures. Sensitivity analyses are used to
present the effect of changes in commodity prices on profit after tax and equity.
If commodity prices for commodity futures classified as Level 3 had been 10% higher (lower) as of June 30, 2015,
profit after tax would have been 13 million higher (lower) and equity would have been 2 million higher (lower).
The key risk variable for measuring options on equity instruments held by the Company is the relevant enterprise value.
Sensitivity analyses are used to present the effect of changes in risk variables on profit after tax.
If the assumed enterprise values had been 10% higher, profit after tax would have been 1 million higher. If the
assumed enterprise values had been 10% lower, profit after tax would have been 1 million lower.
Residual value risks result from hedging agreements with dealers under which earnings effects caused by marketrelated fluctuations in residual values that arise from buy-back obligations under leases are borne in part by the Volkswagen Group.
The key risk variable influencing the fair value of the options relating to residual value risks is used car prices.
Sensitivity analyses are used to quantify the effects of changes in used car prices on profit after tax.
If the prices for the used cars covered by the residual value protection model had been 10% higher as of June 30, 2015,
profit after tax would have been 208 million higher. If the prices for the used cars covered by the residual value protection
model had been 10% lower as of June 30, 2015, profit after tax would have been 208 million lower.
Reconciliation of balance sheet items to classes of financial instruments

The following table shows the reconciliation of the balance sheet items to the relevant classes of financial instruments,
broken down by the carrying amount and fair value of the financial instruments.
The fair value of financial instruments measured at amortized cost, such as receivables and liabilities, is calculated by
discounting using a market rate of interest for a similar risk and matching maturity. For reasons of materiality, the fair
value of current balance sheet items is generally deemed to be their carrying amount. In the reconciliation presented in the
following tables, equity instruments recognized at their carrying amount are allocated to Level 3 of the fair value hierarchy.

42

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

R E C O N C I L I AT I O N O F B A L A N C E S H E E T I T E M S T O C L A S S E S O F F I N A N C I A L I N ST R U M E N T S A S O F D E C E M B E R 3 1 , 2 0 1 4

BALANCE SHEET
MEASURED
MEASURED AT AMORTIZED COST

AT FAIR VALUE

million

Carrying amount

Carrying amount

NOT WITHIN

ITEM AT

SCOPE OF IFRS 7

DEC. 31, 2014

Fair value

Carrying amount

Noncurrent assets
Equity-accounted investments

9,874

2,922

761

761

3,683

57,877

60,052

57,877

2,047

4,451

4,496

6,498

Trade receivables

11,472

11,472

11,472

Financial services receivables

44,398

44,398

44,398

Other financial assets

1,551

6,141

6,141

7,693

Marketable securities

10,861

10,861

19,123

19,123

19,123

68,416

70,238

68,416

2,390

1,564

1,568

3,954

Other equity investments


Financial services receivables
Other financial assets

9,874

Current assets

Cash, cash equivalents and time


deposits
Noncurrent liabilities
Noncurrent financial liabilities
Other noncurrent financial liabilities
Current liabilities
Put options and compensation
rights granted to noncontrolling
interest shareholders

3,703

3,822

3,703

Current financial liabilities

65,564

65,564

65,564

19,530

19,530

19,530

2,991

4,652

4,652

7,643

Trade payables
Other current financial liabilities

43

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

R E C O N C I L I AT I O N O F B A L A N C E S H E E T I T E M S T O C L A S S E S O F F I N A N C I A L I N ST R U M E N T S A S O F J U N E 3 0 , 2 0 1 5

BALANCE SHEET
MEASURED
MEASURED AT AMORTIZED COST

AT FAIR VALUE

million

Carrying amount

Carrying amount

NOT WITHIN

ITEM AT

SCOPE OF IFRS 7

JUNE 30, 2015

Fair value

Carrying amount

Noncurrent assets
Equity-accounted investments

8,288

3,500

865

865

4,365

61,822

64,267

61,822

2,240

4,595

4,636

6,835

Trade receivables

12,628

12,628

12,628

Financial services receivables

46,861

46,861

46,861

Other financial assets

1,758

7,384

7,384

9,142

Marketable securities

15,095

15,095

17,598

17,598

17,598

71,889

73,223

71,889

5,822

1,760

1,766

7,582

Other equity investments


Financial services receivables
Other financial assets

8,288

Current assets

Cash, cash equivalents and time


deposits
Noncurrent liabilities
Noncurrent financial liabilities
Other noncurrent financial liabilities
Current liabilities
Put options and compensation
rights granted to noncontrolling
interest shareholders

3,632

3,533

3,632

Current financial liabilities

67,489

67,489

67,489

20,511

20,511

20,511

5,656

5,609

5,609

11,264

Trade payables
Other current financial liabilities

44

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

12. Cash Flow Statement


The cash flow statement presents the cash inflows and outflows in the Volkswagen Group and in the Automotive and
Financial Services divisions. Cash and cash equivalents comprise cash at banks, checks, bills, cash-in-hand and call
deposits.

million

June 30, 2015

Cash, cash equivalents and time deposits as reported in the balance sheet
Time deposits
Cash and cash equivalents as reported in the cash flow statement

June 30, 2014

17,598

20,002

691

1,789

16,906

18,213

Cash inflows and outflows from financing activities are presented in the following table:
H1

million

2015

Capital contributions
Dividends paid
Capital transactions with noncontrolling interest shareholders
Other changes
Proceeds from issuance of bonds
Repayment of bonds
Change in other financial liabilities
Lease payments

2014

2,457

4,932

2,429

1,875

6,535

45

12,963

14,874

10,204

11,961

1,771

917

16

999

306

13. Segment reporting


Segments are identified on the basis of the Volkswagen Groups internal management and reporting. In line with the
Groups multibrand strategy, each of its brands (operating segments) is managed by its own board of management. The
Group targets and requirements laid down by the Board of Management of Volkswagen AG or the Group Board of
Management must be complied with. Segment reporting comprises four reportable segments: Passenger Cars,
Commercial Vehicles, Power Engineering and Financial Services. The operating segments are combined into reportable
segments based on similar economic characteristics (in particular the nature of the products or services, integration in the
development, production and sales processes, and similar customer groups).
The activities of the Passenger Cars segment cover the development of vehicles and engines, the production and sale of
passenger cars, and the corresponding genuine parts business. As a rule, the Volkswagen Groups individual passenger car
brands are combined on a consolidated basis into a single reportable segment.
The Commercial Vehicles segment primarily comprises the development, production and sale of light commercial
vehicles, trucks and buses, the corresponding genuine parts business and related services.
The activities of the Power Engineering segment consist of the development and production of large-bore diesel
engines, turbo compressors, industrial turbines and chemical reactor systems, as well as the production of gear units,
propulsion components and testing systems.
The activities of the Financial Services segment comprise dealer and customer financing, leasing, banking and
insurance activities, fleet management and mobility services.
In the segment structure, purchase price allocation for companies acquired is allocated directly to the corresponding
segments.

45

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

At Volkswagen, segment profit or loss is measured on the basis of operating profit or loss.
The reconciliation contains activities and other operations that by definition do not constitute segments. It also
includes the unallocated Group financing activities. Consolidation adjustments between the segments are also contained
in the reconciliation.
As a matter of principle, business relationships between the companies within the segments of the Volkswagen Group
are transacted at arms length prices.

R E P O RT I N G S E G M E N T S : H 1 2 0 1 4

million

Passenger Cars

Commercial
Vehicles

Power
Engineering

Financial
Services

Total segments

74,112

12,121

1,632

10,722

6,324

2,578

1,042

80,437

14,699

1,634

5,528

509

Passenger Cars

Sales revenue from


external customers
Intersegment sales revenue
Total sales revenue
Segment profit or loss
(operating profit or loss)

Reconciliation

Volkswagen
Group

98,587

221

98,808

9,947

9,947

11,764

108,533

9,725

98,808

924

6,965

780

6,186

Commercial
Vehicles

Power
Engineering

Financial
Services

Total segments

Reconciliation

Volkswagen
Group

81,358

12,150

1,812

13,364

108,684

92

108,776

7,760

3,001

1,319

12,081

12,081

89,118

15,151

1,813

14,683

120,765

11,989

108,776

6,215

349

1,120

7,689

868

6,820

R E P O RT I N G S E G M E N T S : H 1 2 0 1 5

million

Sales revenue from


external customers
Intersegment sales revenue
Total sales revenue
Segment profit or loss
(operating profit or loss)

R E C O N C I L I AT I O N

H1

million

Segment profit or loss (operating profit or loss)


Unallocated activities
Group financing

2015

2014

7,689

6,965

113

74

10

15

Consolidation

991

869

Operating profit

6,820

6,186

843

1,591

7,664

7,777

Financial result
Consolidated profit before tax

46

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

14. Related party disclosures


At 50.73%, Porsche SE holds the majority of the voting rights in Volkswagen AG.
The creation of rights of appointment for the State of Lower Saxony was resolved at the Extraordinary General Meeting of
Volkswagen AG on December 3, 2009. As a result, Porsche SE cannot appoint the majority of the members of Volkswagen AGs
Supervisory Board for as long as the State of Lower Saxony holds at least 15% of Volkswagen AGs ordinary shares.
However, Porsche SE continues to have the power to participate in the operating policy decisions of the Volkswagen Group.

SUPPLIES AND SERVICES

SUPPLIES AND SERVICES

RENDERED

RECEIVED

H1

million

H1

2015

2014

2015

2014

Porsche SE

10

Supervisory Board members

Unconsolidated subsidiaries

571

425

353

295

6,367

7,174

566

577

59

73

311

145

Joint ventures and their majority interests


Associates and their majority interests
State of Lower Saxony, its majority interests and joint ventures

RECEIVABLES

LIABILITIES

(INCLUDING COLLATERAL) FROM

(INCLUDING OBLIGATIONS) TO

million

Porsche SE
Supervisory Board members
Unconsolidated subsidiaries
Joint ventures and their majority interests
Associates and their majority interests
State of Lower Saxony, its majority interests and joint ventures

47

June 30, 2015

Dec. 31, 2014

June 30, 2015

Dec. 31, 2014

348

356

12

14

154

218

837

673

874

815

7,808

6,295

2,178

2,127

64

69

291

168

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

The supplies and services received from joint ventures and associates in the first six months do not include resolved
dividend distributions amounting to 4,589 million (previous year: 2,925 million).
The receivables from Porsche SE comprise a receivable under a loan agreement and receivables from land transfer
taxes. The obligations to Porsche SE consist mainly of liability compensation for guarantees.
Obligations to members of the Supervisory Board amounting to 154 million relate primarily to interest-bearing bank
balances of Supervisory Board members that were invested at standard market terms and conditions at Volkswagen Group
companies.
Obligations to joint ventures and their majority interests contain miscellaneous financial obligations under an
irrevocable credit commitment in the amount of 1.3 billion to LeasePlan Corporation N.V., Amsterdam, the Netherlands,
with a term until December 2018.

15. Litigation
Volkswagen AGs Annual Report for fiscal year 2014 contains detailed information on litigation and other legal
proceedings.
There were no significant changes compared with the situation described there.

16. Contingent assets and liabilities


There were no significant changes as of June 30, 2015 in the contingent assets and liabilities described in the 2014 Annual
Report.

17. Other financial obligations


The other financial obligations increased by 875 million compared with the 2014 consolidated financial statements to
28,161 million, due in particular to an increase in purchase commitments for items of property, plant and equipment,
and intangible assets, because of initiated or planned investment projects.

48

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Notes to the Interim Consolidated Financial Statements

German Corporate Governance Code


The current declarations in accordance with section 161 of the Aktiengesetz (AktG German Stock Corporation Act) on the
German Corporate Governance Code by the Board of Management and Supervisory Board of Volkswagen AG, AUDI AG,
MAN SE and RENK AG are permanently available on the Internet at www.volkswagenag.com/ir, www.audi.com/cgkdeclaration, www.corporate.man.eu/en and www.renk.biz/corporated-governance.html respectively.

Significant events after the balance sheet date


On July 23, 2015, Global Mobility Holding B.V., Amsterdam, Netherlands, sold its 100% interest in LeasePlan Corporation
N.V., Amsterdam, the Netherlands, (LeasePlan) to a consortium of international investors. The legal transfer of the shares
is subject to the condition precedent that the necessary official approvals are issued during the further course of the sale.
The Volkswagen Group assumes that the approvals will be issued in the second half of 2015 and that the transaction can be
completed. The total value of the transaction is approximately 3.7 billion. It is expected that a gain in the low triple-digit
millions of euros will be reported in the Volkswagen Groups financial result.
Volkswagen AG did not grant additional credit lines either to the consortium of investors or to LeasePlan in connection
with the intended sale of the indirect interest in LeasePlan. On completion of the transaction, the existing credit line of
1.3 billion provided by the Volkswagen Group will be terminated and replaced by a facility commitment by a banking
syndicate.
For a description of the previous arrangements under company law, please refer to our explanations on Interests in
joint ventures in the Basis of consolidation section.

49

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Responsibility Statement

Responsibility Statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting,
the condensed interim consolidated financial statements give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group in accordance with German accepted accounting principles, and the interim
management report of the Group includes a fair review of the development and performance of the business and the
position of the Group, together with a description of the material opportunities and risks associated with the expected
development of the Group for the remaining months of the fiscal year.

Wolfsburg, July 29, 2015

Volkswagen Aktiengesellschaft
The Board of Management

Martin Winterkorn

Herbert Diess

Francisco Javier Garcia Sanz

Jochem Heizmann

Christian Klingler

Matthias Mller

Horst Neumann

Hans Dieter Ptsch

Andreas Renschler

Rupert Stadler

50

I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S ( C O N D E N S E D )

Review Report

Review Report
This report was originally prepared in German. In case of ambiguities the German version shall prevail:
Review Report
To VOLKSWAGEN AKTIENGESELLSCHAFT, Wolfsburg
We have reviewed the condensed consolidated interim financial statements - comprising the condensed income statement
and condensed statement of comprehensive income, condensed balance sheet, condensed statement of changes in equity,
condensed statement of cash flows and selected explanatory notes - and the interim group management report of
VOLKSWAGEN AKTIENGESELLSCHAFT, Wolfsburg, for the period from January 1 to June 30, 2015, which are part of the
half-yearly financial report pursuant to (Article) 37w WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act).
The preparation of the condensed consolidated interim financial statements in accordance with the IFRSs applicable to
interim financial reporting, as adopted by the EU, and of the interim group management report in accordance with the
provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of
the parent Company's Board of Management. Our responsibility is to issue a review report on the condensed consolidated
interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated
by the Institut der Wirtschaftsprfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan
and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed
consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRSs
applicable to interim financial reporting, as adopted by the EU, and that the interim group management report has not
been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable
to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical
procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance
with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated
interim financial statements have not been prepared, in all material respects, in accordance with the IFRSs applicable to
interim financial reporting, as adopted by the EU, nor that the interim group management report has not been prepared,
in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim
group management reports.

Hanover, July 29, 2015


PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprfungsgesellschaft

Norbert Winkeljohann
Wirtschaftsprfer
(German Public Auditor)

Frank Hbner
Wirtschaftsprfer
(German Public Auditor)

51

Contact Information

PU BLISH ED BY

FI NA NC IA L CA L E N DA R

Volkswagen AG
Financial Publications
Letterbox 1848-2

October 28, 2015


Interim Report January September 2015

38436 Wolfsburg
Germany
Phone

+ 49 (0) 5361 9-0

Fax

+ 49 (0) 5361 9-28282

I N V E STO R R E L AT I O N S

Volkswagen AG
Investor Relations
Letterbox 1849
38436 Wolfsburg
Germany
Phone

+ 49 (0) 5361 9-86622 IR hotline

Fax

+ 49 (0) 5361 9-30411

E-mail

investor.relations@volkswagen.de

Internet

www.volkswagenag.com/ir

This Interim Report is also available on the


Internet, in German and English, at:
www.volkswagenag.com/ir

Printed in Germany
558.809.560.20

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