development and perspectives of Škoda · 6/9/2015 · the development of Škoda as a brand of the...
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Development and Perspectives of ŠKODA
WINFRIED KRAUSE
Board Member for Commercial Affairs (CFO)
J.P. Morgan European Auto Conference, London, 9 June 2015
Disclaimer
The following presentations contain forward-looking statements and information on the business development of the Volkswagen
Group. These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”,
“believes”, “seeks”, “estimates”, “will” or words with similar meaning. These statements are based on assumptions relating to the
development of the economies of individual countries, and in particular of 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 involve a degree
of risk, and the actual developments may differ from those forecast.
Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western Europe (and especially
Germany) or in the USA, Brazil or China, will have a corresponding impact on the development of our business. The same applies in the
event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese rinminbi and Czech
koruna.
If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may
significantly differ from those expressed or implied by such statements.
We do not update forward-looking statements retrospectively. Such statements are valid on the date of publication and can be
superceded.
This information does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.
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Agenda
3
The history of the ŠKODA Group
Continuous development of the brand ŠKODA
Development of relevant markets and sales volume
Financial performance and outlook
ŠKODA AUTO – one of the longest established car companies in the world
4
1905 – the first car
from Mladá Boleslav: the Voiturette A
ŠKODA 860 (1932)
The development of ŠKODA as a brand of the Volkswagen Group
The Czech government was looking for a strategic partner to establish a joint venture
Good short and medium-term growth expectations of car markets in the CEE area
Production of technologically advanced cars at a already established low-cost location
High educational standards and technical competencies of ŠKODA employees
5
Why did Volkswagen invest in the Czech Republic?
Development of the Volkswagen Group‘s share in ŠKODA’s equity
[rounded]
30 %60 % 70 %
100 %
1991 1994 1995 2000
Agenda
6
The history of the ŠKODA Group
Continuous development of the brand ŠKODA
Development of relevant markets and sales volume
Financial performance and outlook
Development of the ŠKODA product portfolio – 2005
7
2005 2010 2015
Lif
tba
ck/
se
da
nH
atc
h-
ba
ckM
PV
SU
VE
sta
te
Octavia II
Octavia II
Combi
Fabia
Sedan
Fabia
Fabia
Combi
Superb
Model series
Fabia
Octavia
Superb3
Development of the ŠKODA product portfolio – 2010
8
2005 2010 2015
Lif
tba
ck/
se
da
nH
atc
h-
ba
ckM
PV
SU
VE
sta
te
Octavia II
Octavia II
Combi
Superb
Model series
Fabia
Roomster
Octavia
Yeti
Superb5
Fabia II
Roomster
Yeti
Fabia II
Combi
Superb II
Combi
Octavia II
Octavia II
Combi
Fabia
Sedan
Fabia
Fabia
Combi
Superb
Development of the ŠKODA product portfolio – 2015
9
2005 2010 2015
Lif
tba
ck/
se
da
nH
atc
h-
ba
ckM
PV
SU
VE
sta
te
Octavia II
Combi
Superb
Fabia
II
Roomster
Yeti
Fabia II
Combi
Superb II
Combi
Model series
Citigo
Fabia
Rapid
Roomster
Octavia
Yeti
Superb
7
Rapid
Citigo
Octavia III
Rapid Spaceback Fabia III
Superb III
„Roomster II“„Roomster
Yeti Outdoor / „City“
Octavia III
Combi
Fabia III
CombiSuperb III
Combi
Development of the ŠKODA product portfolio
10
emotional globaldiversifiedrobustfunctional
Systematic development of product portfolio
Citigo
Fabia / Fabia Combi
Roomster
Rapid family
Octavia / Octavia Combi
Superb / Superb Combi
SUV-Lineup:
Yeti
A-Plus SUVScout
Monte Carlo
RS
2010 2011 2012 2013 2014 etc.
Spaceback
Tradition of the brand
ŠKODA AUTO – Production sites
11
Russia
Kaluga
Nižnij NovgorodCzech Republic
Mladá Boleslav Kvasiny
Vrchlabí
Slovakia
BratislavaUkraine
Solomonovo
Kazakhstan
Usť-Kamenogorsk
China
Shanghai
Yizheng
Ningbo
India
Aurangabad
Pune
ŠKODA AUTO – Production of cars in the Czech Republic
12
Mladá Boleslav Kvasiny Vrchlabí
+33 %
2014
494
2013
430
2011
384
2009
335
2007
411
2005
373
+685 %
2014
166
2013
153
2011
142
2009
94
2007
96
2005
21
-27 %
201420132012
67
2011
71
2009
71
2007
95
2005
92
‘00
0 C
ars
Mo
de
ls
+3
Octavia
SEAT Toledo
Rapid Lim.
Rapid SB
Fabia
2014
5
2005
21
+2
Superb
Yeti
Roomster
2014
3
2005
660596
2009
501602
2005
485
20142011 2013
+36 %
583
2007
Total production in CZ
End of car
production
Start of
gearbox
production
+33 %
411373494
430384
2011 20142009 2013
335
20072005
ŠKODA AUTO – Production of gearboxes and engines in the Czech Republic
13
648
+59 %
2005 2014
621 615
2009 2011
571
20132007
519407
‘00
0 G
ea
rbo
xe
s‘0
00
En
gin
es
Mladá Boleslav Vrchlabí (only gearboxes)
20142013
354
10
202
2012
DQ200
MQ200
MQ/SQ100
EA111/211
1.0/1.2 MPI
EA111/211
1.2/1.4 TSI
EA211
1.6 MPI
ŠKODA – Positioning within the Volkswagen Group
14
Audi – progressive prestige for the
innovation seekers
Volkswagen – mainstream mobility
for the upmarket drivers
ŠKODA – functional and roomy cars
for the product-value focussed
audience
SEAT – sporty and stylish - for the
young and young-in-mind driver
Positioning focus
Sporty Value for money
Family
Eco
no
mica
lPre
miu
m
ŠKODA growth strategy – Profitability and financial strength
as a core element!
15
>1.5 million ŠKODA cars
Year 2010
Sales of
> 1.5 m
vehicles by 2018,
concentrating
on EU and RIC
markets
Top
employer
with international
talent pool
Profitability
and financial
strength
Strategic
“spearhead”
focused
on price/value,
practicality and
spaciousness
Agenda
16
The history of the ŠKODA Group
Continuous development of the brand ŠKODA
Development of relevant markets and sales volume
Financial performance and outlook
ŠKODA – Western Europe and China are the most important markets!
17
Total 2014: 1,037 k
Russia:
~84,000
India:
~16,000
Central / Eastern Europe:
~185,000
All others:
~55,000
Western Europe:
~413,000
China:
~281,000[Memo: China JV consolidated at Equity in the
Financial Result of the Volkswagen Group]
[Deliveries to customers, January-December 2014]
Car markets: Sharp market decline in Western Europe since 2007 –
Improved market shares!
18
[Definition: Austria, Belgium, Canary Islands, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland, UK]
Market development Deliveries to customers & market share
0
5
10
15
12.1
2007
14.9
-18%
2014
Total market development
[in million cars]
413370358362
333345316327
0
100
200
300
400
500 4.5
4.0
2.5
2.0
1.5
3.5
3.02.8 %3.0 %
2.6 %2.5 %2.3 %2.2 %
2012 201320112010
+26 %
20142009
3.2 %
2008
3.4 %
2007
Market share [in %, right scale]
Deliveries to customers [in thousand cars, left scale]
Car markets: Market share in Central Europe on a high level!
19
[Definition: Croatia, Czech Republic, Hungary, Poland, Slovakia, Slovenia]
Market development Deliveries to customers & market share
0.4
1.0
0.2
0.0
0.6
0.8
2014
-8%
0.7
2007
0.8
Total market development
[in million cars]
150
126124123121120131
142
0
50
100
150
0
5
10
15
20
25
30
2009
19.3 %19.1 %
2010
+6 %
20142013
20.0 %
20122011
18.7 %17.0 %
2007
16.6 %
2008
15.3 %17.4 %
Market share [in %, right scale]
Deliveries to customers [in thousand cars, left scale]
Car markets: Market shares in Eastern Europe (incl. Russia) on a good level
20
[Definition: Belarus, Bosnia, Bulgaria, Estonia, Kazakhstan, Latvia, Lithuania, Moldova, Romania, Serbia, Russia, Ukraine, Rest of Middle Asia, Rest of South-East Europe]
Market development Deliveries to customers & market share
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-18%
2014
2.8
2007
3.5
Total market development
[in million cars]
119125137
108
7460
124
95
0
50
100
150 6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
+25 %
2014
4.2 %
2013
3.9 %
2012
4.1 %
2011
3.6 %
2010
3.3 %
2009
3.3 %
2008
3.2 %
2007
2.7 %
Market share [in %, right scale]
Deliveries to customers [in thousand cars, left scale]
20.0
17.5
15.0
12.5
10.0
7.5
5.0
2.5
0.0
11.4
2007
5.1
2010
+56%
2014
17.8
Car Markets: China – A market of growing importance to ŠKODA!
21
Market development Deliveries to customers & market share
281
227
123
5927
0
50
100
150
200
250
300
0.5
2.0
1.0
1.5
2014
+55 %
1.6 %
2013
1.4 %
2012
236
1.7 %
2011
220
1.8 %
2010
181
1.6 %
2009
1.4 %
2008
1.1 %
2007
0.5 %
Market share [in %, right scale]
Deliveries to customers [in thousand cars, left scale]Total market development
[in million cars]
„Transition year“
with many
production launches
Having surpassed the 1 million deliveries level in 2014 our focus is on the next
target
22
[in thousand cars]
879
675
492
0
500
1,000
1,500
+111%
20152014
1,037
201120082005
>1.5 m ŠKODA
deliveries Deliveries to customers more than
doubled between 2005 and 2014!
Agenda
23
The history of the ŠKODA Group
Continuous development of the brand ŠKODA
Development of relevant markets and sales volume
Financial performance and outlook
ŠKODA’s model offensive
[Main models]
24
NEW = New or
completely revised car
2011 2015 2016
New SUV
Rapid India
(NEW)
2013
Spaceback (NEW)
Octavia (Lim+Combi)
(NEW)
2014
Octavia RS (NEW) Fabia Combi (NEW)Yeti
Citigo (NEW) Superb Combi
(NEW)
Superb
(Lim+Combi)
Fabia (NEW)
Octavia Scout
(NEW)
Superb (NEW)
2012
Rapid EU (NEW)
Sustainable success secured through the roll-out of modular toolkits
25
Superb Combi
Superb
Octavia Combi
Octavia
Roll-out of the MQB platform in the future
on other models (e.g. A Plus SUV, etc.)
2013
Volkswagen
Group1)
1) Including China; the Chinese share in the global MQB volume amounted to around
one fifth in 2014 and is expected to increase to more than one third in 2018
2014
2016
ŠKODA products based on the MQB platform MQB production share of total production volumes
Development of model range and investments
26
Superb Combi
Superb
Octavia Combi
Fabia Combi
Fabia
Yeti
Octavia
Rapid Spaceback
Rapid
Citigo
Completely
revised
New
car series
TODAYYear 2010
Facelift
301396 389
568
832741 698
7%
8%
6%5%5%5%
6%
9.01,000
0
500
750
1.5
3.0
6.0
4.5
250
7.5
2013 20142009 2012201120072005
Capital expenditure [in € m, left scale]
Capex ratio [in % of sales revenue, right scale]
Model range Investments
Development of net cash flow – Investments fully self financed
(€ million)
27
Cash flow
840
339
-89
489512516
336
800
1,000
600
400
200
0
-200
2014201320122011200920072005
Net Cash Flow
Return on sales on a high level
(€ million)
28
Operating result & return on sales
325
712
203
743 712
522
817
0
2
4
6
8
10
200
1,000
800
600
400
0
7.0 %
2014
5.1 %
2012 2013
6.8 %
2011
7.2 %
2005
2.9 %
2009
5.2 %
2007
8.9 %
Return on salesOperating result
2015 deliveries to customers2014 deliveries to customers
ŠKODA record: More than 350 thousand deliveries to customers
within the first four months of 2015!
(in '000 units, Jan. - Apr. 2015 vs. 2014)
29
84
6
27
11
52
141
95
5
2010
59
144
-26%
+2%
+13%
Russia
+13%
Central Europe India ChinaEastern Europe
(w/o Russia)
Western Europe
January – April 2014: 337,000
January – April 2015: 357,000
+5.9%
Key figures – January to March
(€ million; ‘000 units)
30
*Note: Change in % corresponds to percentage points
Return on Sales
Deliveries to customers (incl. China)
+4.5
+1.4*
+7.2
Change
in %
Deliveries to customers (excl. China) 185
6.2
247
2014 2015
265
193
Sales revenue +6.32,986 3,175
Operating profit +30.9185 242
7.6
Operating profit
Reconciliation January - March 2015 to 2014 (€ million)
31
242
185
Q1/2014
+31%
Q1/2015
Higher depreciation
Negative effects from
Higher volume
Better mix (Octavia)
MQB
Positive effects from
The automotive industry is changing significantly…
32
Autonomous Driving
CO2 Targets
Connectivity
New technologies have to be developed much more quickly
More legislative regulations (CO2) require higher investments and new car
concepts
Customer preferences and their attitudes towards cars are changing
…therefore we will make ŠKODA fit for the future in current good times:
Project “High Performance Organisation”
33
A simplified organisational structure and
quicker decision-making processes have been introduced
Redesigned career paths / new development opportunities
for employees
Deep analysis of core / non core activities
Intelligent administration by less bureaucracy and more intelligent IT tools
Agility of the
organisation
Career paths and
performance
Efficiency of the core
business
Intelligent
administration
modern flexibleagile
Summary
ŠKODA … continuously improved and expanded its product program!
ŠKODA … financed all investments from its own cash flow!
ŠKODA … is a highly profitable company with return on sales
at the upper level of the volume segment in Europe!
ŠKODA … aims to achieve >1.5 m deliveries to customers
34
Thank you.
35