Volkswagen

FY results came in higher than expected with a very strong  beat in Q4 with sales flat to €87.4bn but 3% ahead of consensus. Q4 EBIT stood at  €6.34bn (-3% YoY), beating consensus by 19%, leading to a 7% margin (-30bps YoY).

FY sales at  €324.7bn (+0.74% YoY), 0.7% ahead of consensus and  operating profit at €19.1bn (-16% YoY), 5.3% above expectations, leading to a 5.9% margin (-110bps YoY), outperforming the 5.6% consensus.

China JV operating profit declined to €1.74bn (-34% YoY). Volkswagen expects €500m-1bn in FY25 before a potential recovery towards year-end.

FCF remained solid at €5bn (-53% YoY), nearly double the €2.55bn consensus.

Outlook 25: Company targets up to 5% sales growth (consensus is at 0% ) and an op margin in the 5.5% -6% range (consensus is at 5.8%).

Our analyst remains cautious on the name, especially as the guidance doesn’t take into account the potential effects from the trade tariffs nor the positive impact of the relaxation of the EU CO2 regulation. The momentum is likely to remain adverse and the evolution of VOW market share in China is a clearly worrying. Yet some of the opinions tend to be (slightly) more constructive than our analyst on the name. Valuation remains VERY low and they believe consensus will upgrade its numbers on the strong beat in Q4 and decent 25 guidance. VOW is no longer a short in their opinion.