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CONSUMER CYCLICALS: Volkswagen (VW A3/BBB+/A-): 2Q24 Results

CONSUMER CYCLICALS

Looks credit negative to us. Sizeable revision to FY cash flow guidance, well below consensus. Net liquidity now expected to deteriorate YoY. It says outlook confirmed confusingly, we assume this refers to revenue and margin guidance only.

  • Volkswagen revenue came in-line with consensus at +4% YoY. China continues to decline, with the Americas doing better.
  • Adj. EBIT was marginally better than expected; margin fell to 6.6%.
  • 1H FCF reached -€0.1bn, implying +€2.9bn for 2Q reversing the 1Q move. Net liquidity fell to €31.3bn from €37.2bn on annual dividend, Rivian investment and restructuring costs.
  • Automotive cash flow guidance cut to €2.5-4.5bn and liquidity to €37-39bn (both €2bn lower). Follows the margin warning in July due to restructuring.
  • Webcast 08.00 BST https://www.webcast-eqs.com/volkswagen-2024-h1

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