Volkswagen Financial Services report stable contract portfolio
- Half-year operating result totals EUR 1.16 billion (− 9.8 percent)
- Current portfolio grows to over 21.3 million contracts (+ 1.8 percent)
- New contracts during first half-year amount to 3.4 million (− 17.4 percent)
Under the conditions imposed by the global COVID-19 pandemic, Volkswagen Financial Services achieved an operating result of EUR 1.16 billion during the first six months of 2020 (previous year: EUR 1.28 billion; minus 9.8 percent). While the portfolio of current contracts had increased by the end of June this year compared to the respective point in time last year to reach more than 21.3 million units (plus 1.8 percent), the number of new contracts acquired in the first half-year declined year-on-year to 3.4 million units (minus 17.4 percent). "As a result of the COVID-19 pandemic, we have had to accept a substantial drop in new contracts during the first half of the year. In addition, the operating result is adversely impacted by higher risk costs for credit and residual value risks, which are affecting the entire portfolio," says Frank Fiedler, CFO of Volkswagen Financial Services AG.
To further safeguard their business despite the repercussions of the COVID-19 pandemic, Volkswagen Financial Services will intensively pursue their existing cost reduction and efficiency program, Operational Excellence (OPEX), in addition to implementing numerous stabilization measures, such as the sales program already launched jointly with the Volkswagen Group brands.
"The global COVID-19 pandemic has severely hindered our business during the first half of 2020 and we are still facing major uncertainties in the second half of the year too. We therefore expect the operating result of the Volkswagen Financial Services division at the end of the year to be significantly below the previous year's level," says Fiedler.
In Germany, the largest single market for Volkswagen Financial Services, the portfolio of current contracts as at 30 June 2020 totaled almost 6.36 million units (previous year: 6.30 million; plus 1.0 percent). The number of new contracts, however, fell 17.0 percent during the same half-year period to almost 993,000 units (previous year: 1.2 million units).
|Portfolio of current contracts worldwide
|at as 30 June 2020||at as June 2019||Change in %|
|New contracts worldwide (in thousands*)
||January to June 2020
||January to June 2019
||Change in %|