development and perspectives of Škoda · 6/9/2015 · the development of Škoda as a brand of the...

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superceded.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.

2

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





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


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


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





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]


0.4

1.0

0.2

0.0

0.6

0.8

2014

-8%

0.7

2007

0.8


[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 %



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]


3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-18%

2014

2.8

2007

3.5


[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 %



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


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 %


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





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)

http://s1.cdn.autoevolution.com/images/gallery/SKODA-Octavia-Combi-RS-4877_12.jpg

http://s1.cdn.autoevolution.com/images/gallery/SKODA-Octavia-Combi-RS-4877_12.jpg

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.

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development and perspectives of Škoda · 6/9/2015 · the development of Škoda as a brand of the...

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