Volkswagen Financial Services expect record earnings for the financial year 2017
- Operating result significantly above previous year level
- Total contract portfolio expected to reach 19.7 million units
- Business model digitalisation further underway
- New organisational set-up successfully completed
Volkswagen Financial Services will be ending the financial year 2017 once again with a record result (previous year: EUR 2.1 billion) and recording a significant increase in their portfolio of current contracts. According to provisional figures, the portfolio of current contracts will have increased by over eight percent to more than 19.7 million (2016: 18.2 million). "Our successful path over the past few years has continued during the financial year 2017 and we have set course for further growth in the future with our new organisational set-up and our digitalisation projects," says Lars Henner Santelmann, Chairman of the Management Board of Volkswagen Financial Services AG.
CFO Frank Fiedler forecasts new record earnings for the 2017 financial year. "By the end of 2017, we expect the operating result for the Volkswagen Financial Services division to be significantly higher than in the previous year," says Frank Fiedler. He adds: "The good result is primarily based on the positive growth of our current contract portfolio and a lower level of refinancing costs than last year."
Based on provisional figures, the number of customer financing contracts is expected to further rise to a projected figure of 6.85 million contracts worldwide during the financial year2017 (2016: 6.51 million). This represents a plus of 5.2 percent over the previous year. On this basis, the number of leasing contracts has increased by almost 14 percent to around 3.23 million contracts (2016: 2.84 million). The services business, such as maintenance and inspection contracts, has grown particularly strongly. With a projected increase of almost 16 percent to 3.98 million current contracts, this segment will then be achieving a new peak by 31 December 2017 (previous year: 3.44 million units). In addition, extrapolated to the end of the year, Volkswagen Financial Services will also have more than 5.66 million insurance contracts on its books worldwide, a rise of 3.7 percent (2016: 5.46 million). For the first time, the level of current and new contracts for 2017 also includes contracts from Porsche Financial Services. The previous year figures have not been adjusted.
"The close and good cooperation with the Volkswagen Group brands, our attractive product portfolio and our international positioning are the basis of our success," says Dr. Christian Dahlheim, Chief Sales Officer of Volkswagen Financial Services AG: "The increasing availability of our products and services online will further increase the attractiveness of what we offer to our customers." Volkswagen Financial Services set up a Digital Unit in Berlin at the beginning of 2017 to develop online products.
The number of new contracts is expected to reach a total of 7.92 million by the end of the year. This amounts to an increase of around 4.6 percent (2016: 7.58 million units). The volume of new contracts in the field of vehicle financing lies at 2.76 million units (+6.5 percent, previous year: 2.59 million) according to preliminary figures. In addition to that, around 1.4 million new leasing contracts (+8.5 percent, previous year: 1.3 million), 1.54 million new service contracts (+1.4 percent, previous year: 1.52 million) and 2.2 million new insurance contracts (+ 2.0 percent, previous year: 2.16 million) will be in the company's portfolio by the end of the year.
In order to provide an impetus for future growth, Volkswagen Financial Services have realigned themselves with effect from September 1st this year. The aim of the new organisational set-up was to bundle the credit and deposit business conducted within the European Economic Area (EEA) in Volkswagen Bank GmbH. Responsibility for the other activities, such as the leasing, insurance, service and mobility business and the credit business outside Europe, remain with Volkswagen Financial Services AG.
"The reorganisation has enabled us to reduce the complexity of our corporate structure and to create the scope for capital-efficient growth both at Volkswagen Bank GmbH and at Volkswagen Financial Services AG," explains Dr. Michael Reinhart, Chairman of the Management Board of Volkswagen Bank GmbH.