Volkswagen AG

Volkswagen Group reported H1 2026 sales revenue of EUR 158 billion, broadly stable year over year, with operating profit of EUR 5.9 billion and an operating margin of 3.8%. Excluding restructuring costs and the ID.4-related U.S. write-off, operating profit was EUR 6.9 billion and margin was 4.3%. Profit before tax fell 26% to EUR 4.8 billion and profit after tax declined to EUR 3.1 billion. Automotive net cash flow was EUR 3.2 billion, up EUR 4.5 billion year over year, and net industrial liquidity was EUR 32.7 billion. For the full year 2026, management reiterated guidance for sales revenue to be down in the range of 3% versus prior year, operating return on sales of 4% to 5.5%, automotive net cash flow of EUR 3 billion to EUR 6 billion, and net liquidity of EUR 32 billion to EUR 34 billion.

Oliver Blume framed the first half as proof that Volkswagen is holding up financially despite a structurally difficult market, especially in China, tariff pressure in the U.S., and weak demand in Europe. He emphasized that the company has moved beyond the initial three-year transformation and is now entering a deeper 2030 phase focused on products, technology, regions and performance programs. His tone was determined and urgent, repeatedly saying the industry has changed structurally and that Volkswagen is acting early rather than waiting for conditions to improve.

Arno Antlitz stressed that the results still reflect a cost structure that is too high and that the 4% to 5.5% margin outlook excludes any additional restructuring. He cited overhead costs of about EUR 45 billion, said SG&A is roughly 30% above peers, and described a target to reduce overhead globally by around EUR 11 billion, taking the automotive overhead ratio to about 12% by 2030 from roughly 16% today. He also pointed to automotive net cash flow of EUR 3.2 billion, clean net cash flow of EUR 3.7 billion, and net industrial liquidity of EUR 32.7 billion as evidence the balance sheet can support the restructuring and portfolio actions.

Analysts pressed management on whether plant closures are needed to hit the 2030 goals, the timing and cost of the new restructuring, the impact on dividends, and how quickly China-to-Europe exports and alternative uses for German plants could materialize. Blume said plant closures are not realistic as the first step this decade and that competitiveness, model mix and capacity adaptation come first, though closure remains the last option. On China, management said local models are getting encouraging early responses and could support exports to the global south and, over time, Europe; on Audi, they pointed to strong reception for new models and said recovery should build with product momentum.