Volkswagen Financial Services increase earnings forecast
- Half-year operating result is over one billion euros for the first time
- New contracts up 2.1 percent to more than 3.8 million units
- Current portfolio grows 8.2 percent to more than 18.8 million contracts
Volkswagen Financial Services are well on course in 2017 und have successfully completed their first half-year with an operating result of EUR 1.2 billion (previous year: EUR 995 million; plus 17 percent). New contract acquisitions increased worldwide by 2.1 percent to more than 3.8 million. The overall level of current contracts rose by 8.2 percent compared to the same period last year and reached a figure of more than 18.8 million at the end of June. "We are satisfied with our performance during the first half of the year 2017. The good interim result was mainly due to the positive development of our contract portfolio and the lower level of refinancing costs in comparison to the previous year," says Frank Fiedler, CFO of Volkswagen Financial Services AG. He adds further: "As a result of the good progress so far, we are raising the earnings forecast for the Volkswagen Financial Services division for the financial year 2017 and we expect the year-end operating result to be at least at the level of the previous year." The operative result for the financial year 2016 totalled EUR 2.1 billion. At the start of the year 2017, Volkswagen Financial Services had predicted a result of at least EUR 1.9 billion.
The service business with maintenance and inspection contracts has recorded a particularly positive development. In addition, the international positioning of Volkswagen Financial Services has also contributed to the dynamic growth. For example, especially high increases in new business were achieved in China, in Mexico and in southern Europe.
The new contracts in the vehicle financing segment amounted to almost 1.3 million units during the first half-year (+4.4 percent). In addition, 689,000 new leasing contracts (+4.7 percent), 816,000 new service contracts (+6.7 percent) and more than 1.0 million new insurance contracts (-5.2 percent) were also concluded. The decline in new insurance contracts is explained by the above-average growth that was achieved in the wake of the Trust Campaign during the first half-year of 2016.
The contract portfolio of Volkswagen Financial Services amounted to 18.82 million units (+8.2 percent) at the end of the first half-year. This figure comprised 6.66 million current contracts for vehicle financing (+5.8 percent), 2.97 million leasing contracts (+8.0 percent), 3.78 million service contracts (+21.8 percent) and 5.41 million insurance contracts (+3.3 percent).
Growth in Germany
Volkswagen Financial Services also recorded increased growth during the first half of the year in Germany. The total number of new contract acquisitions amounted to 1.245 million units (previous-year period: 1.241 million units). This represents an increase of 0.3 percent. The overall portfolio rose to 6.20 million contracts by the end of June 2017 (previous year: 5.85 million contracts), an increase of 6.0 percent.