Volkswagen Group (VOW) investor relations material

Strategic Transformation and Direction

• The Group Target Picture 2030, unanimously approved by the Supervisory Board, outlines a comprehensive transformation with 12 initiatives across technology, performance, and governance to ensure long-term competitiveness and adaptability to changing industry dynamics.

• The plan is driven by the need to address geopolitical, regulatory, and market shifts, with implementation led by the Group Management Board and ongoing engagement with employee representatives.

• A three-figure billion euro investment is allocated to enhance brand strength, competitiveness, and technological leadership.

Financial and Operational Framework

• Targets include an 8%-10% operating margin by 2030, EUR 31 billion operating profit, and annual sales of 9 million vehicles, with a break-even point at 8 million units.

• Overhead costs will be reduced to EUR 37 billion, with capex and R&D investments capped at EUR 135 billion for 2027-2031.

• Cash conversion rate is targeted at 60%, potentially doubling free cash flow to EUR 15 billion annually by 2030.

• Asset sales and divestments of non-core businesses are planned to strengthen net liquidity and support the balance sheet.

• Dividend policy remains unchanged, with payout above 30%, and financial services remain integral to the group.

Portfolio, Efficiency, and Product Strategy

• The product portfolio will be streamlined by 50% and component variety reduced by 75% by 2035, focusing on fewer, stronger models tailored to regional needs.

• Consolidation of platforms and technologies aims for higher volumes per model at lower costs, with a group-wide Operational Excellence program to drive efficiency.

• BEV mix is expected to reach 40% in Europe by 2030, with ongoing improvements in BEV margins and material costs.

• Growth opportunities include energy storage, defense, circular economy, and semiconductors, leveraging internal capabilities and scaling new businesses.

• Investment portfolio will be reduced by 35% to focus on core business.