A successful year for Volkswagen AG on the stock markets

A successful year for Volkswagen AG on the stock markets

The performance of ordinary and preferred shares was unequivocally positive in fiscal 2012. However, for Volkswagen AG shareholders the year was also marked by pronounced volatility on the stock markets precipitated by the European debt crisis. Volkswagen further strengthened its liquidity and capital base through the successful issue of a €2.5 billion mandatory convertible note.

EQU ITY MARKETS

resolution on unlimited bond-buying by the ECB lifted the Fiscal year 2012 was dominated by the debt crisis in DAX at the end of the third quarter to a preliminary high Europe, the elections in the United States and the change of for the year of over 7,400 points. government in China. The year started significantly better

In the closing quarter, uncertainty about a long-term on the capital markets than had been expected at the end solution to the problems in Greece and other countries on of 2011. The threat of the crisis in Greece spreading to the periphery of the eurozone initially put a damper on the other members of the eurozone was mitigated by the uptrend, as a result of which Germany’s leading index negotiations on the second recovery package for Greece. mainly moved sideways. Particularly the doubts about the The additional liquidity injection by the European Central ability to reform the eurozone prevented the DAX from Bank ( ECB ), together with positive economic indicators rising further and led to several sharp price fluctuations. and optimistic company forecasts, prompted a rise in Furthermore, the elections and the automatic budget share prices on financial markets around the world.

freezes and tax increases planned for the New Year (the In the second quarter of the year, indications of a fiscal cliff) impacted price trends in the United States deepening debt crisis in Europe put the markets under during the fourth quarter of the year. By contrast, the pressure. More cautious forecasts of economic growth in seamless changeover in China’s political leadership China as well as uncertainty about the future composition bolstered the markets. Hopes of a speedy end to the US of the government in Greece led to the DAX temporarily budget dispute then pushed the DAX up to new annual falling to an annual low of under 6,000 points. Market highs in the last few weeks of trading. sentiment brightened in the wake of the expansion of the

At the end of 2012, the DAX had reached 7,612 points, a European rescue fund and the agreement reached by the significant increase on the previous year’s figure (+29.1%). EU member states on the European fiscal pact in mid- The EURO STOXX Automobile & Parts closed the year at 338 June.

points, 35.3% higher than at the end of the previous year. The DAX started to regain some of the lost ground at the

beginning of the second half of the year when the rescue DEVELOPMENT OF THE VOLKSWAGEN SHARE PRICE

package for Spanish banks was approved and the ECB cut On the whole, Volkswagen AG’s ordinary and preferred its key interest rates to the lowest level in its history. This shares performed very positively during the year in spite of trend was given a further boost by unexpectedly strong volatile market trends. The securities not only increased in economic data from China and the United States as well as value year-on-year, but also outperformed the overall healthy corporate results for the first half-year. The market and the sector. ratification of the European Stability Mechanism and the

MANAGEMENT REPORT 167 Business Development Shares and Bonds

Results of Operations, Financial Position and Net Assets Volkswagen AG (HGB) Value-Enhancing Factors Risk Report Report on Expected Developments

SHARE PRICE DEVELOPMENT FROM DECEMBER 2011 TO DECEMBER 2012 Index based on month- end prices: December 31, 2011 = 100

125 Volkswagen ordinary shares 100

Volkswagen preferred shares DAX

75 EURO STOXX Automobile & Parts

In the first quarter of 2012, Volkswagen AG’s preferred with the Company’s figures for the first half of 2012 and and ordinary share prices participated in the upturn on the the strong monthly sales figures, all supported an upward equity markets and initially recorded significant increases. trend that continued until the beginning of August. The The share prices then moved sideways amid substantial share prices then moved sideways amid substantial volatility. volatility from the beginning of February to the middle of Price gains led to new highs for the year in mid-September, March. Following the announcement of the results for although they were lost again by the end of the third quarter. fiscal year 2011, which were largely in line with the market

In the face of considerable volatility, Volkswagen shares expectations, both share classes lost ground for a short sustained their strong uptrend in the fourth quarter, while, before trending upwards slightly again for several hitting fresh highs after the publication of the Group’s days. However, reports of demand weakening in the results for the first three quarters of 2012 at the end of Chinese passenger car market, the smoldering nuclear October. The issue of a mandatory convertible note at the dispute with Iran and the associated rises in oil prices beginning of November had only a fleeting impact on unsettled investors, causing automotive share prices to Volkswagen’s share price. As the year went on, the stock was retreat towards the end of March 2012.

given a boost by solid sales figures in a favorable trading In the second quarter of 2012, both of Volkswagen’s environment. share classes outperformed the market as a whole. The

Volkswagen AG’s preferred shares recorded their share prices initially declined slightly until mid-April in a highest daily closing price for the year of €172.70 on market environment that was also deteriorating. Volkswagen December 20, 2012. They recorded their low for the year share prices rose considerably until the beginning of May of €118.00 on June 28, 2012. At the end of 2012, the in response to the positive reception for the Company’s preferred shares closed at €172.15, 48.7% higher than in figures for the first quarter of 2012. However, the price the previous year. gains were lost again by the end of June, reflecting the

Volkswagen’s ordinary shares closed on December 28, trend in the market as a whole.

2012, the last trading day of the year, at €162.75. This was The prices of preferred and ordinary shares surged in a the highest closing price and 57.0% higher than at the end positive environment in the third quarter. The announce- of 2011. The shares traded at their lowest daily closing ment that the integrated automotive group with Porsche price for the year of €106.20 on January 2, 2012. would be implemented as early as August 1, 2012, together

SHAREHOLDER STRUCTURE AT DECEMBER 31, 2012 as a percentage of subscribed capital

Porsche Automobil Holding SE 32.2 Foreign institutional investors

24.9 Qatar Holding LLC

16.4 State of Lower Saxony

12.7 Private shareholders/Others

9.3 German institutional investors

3.0 Porsche GmbH, Salzburg

DIVIDEN D POLICY

The current dividend proposal can be found in the chapter Our dividend policy matches our financial strategy. In the entitled Volkswagen AG (condensed, according to the Ger- interests of all stakeholders, we are pursuing continuous man Commercial Code), on page 189 of this annual report. dividend growth so that our shareholders can participate

appropriately in our business success. The proposed divi- EARNI NGS PER SHARE

dend amount reflects our financial management objectives Basic earnings per ordinary share were €46.42 in fiscal – in particular, ensuring a solid financial foundation as part year 2012 (2011: €33.10). Basic earnings per preferred of the implementation of our Strategy 2018.

share were €46.48 (2011: €33.16). In accordance with IAS The dividend for ordinary and preferred shares pro-

33, the calculation is based on the weighted average number posed by the Board of Management and the Supervisory of ordinary and preferred shares outstanding in the fiscal Board of Volkswagen AG is €0.50 (around 16%) higher year. than the previous year. On this basis, the total dividend for

The calculation of earnings per share for fiscal year fiscal year 2012 is €1.6 billion (2011: €1.4 billion). The 2012 must also make allowance for the effect of the €2.5 distribution ratio is based on the Group’s profit after tax, billion mandatory convertible note issued in November. attributable to the shareholders of Volkswagen AG and is IAS 33.23 sets out that all potential shares that will be 7.5% for the reporting period (2011: 9.1%). After account- issued upon the conversion of the mandatory convertible ing for noncash income mainly from the updated measure- note must be accounted for as issued shares and included ment of the put/call rights relating to the acquisition of the in the calculation of basic and diluted earnings per share. stake in Porsche AG indirectly held by Porsche SE, as well The number of new preferred shares to be included is based as the remeasurement of the existing stake held at the on the most advantageous conversion rate resulting from contribution date, the adjusted distribution ratio amounts the minimum conversion price of €154.50. In line with IAS to 17.8% (2011: 15.7%). The Group is aiming to achieve a 33.19f., these shares are calculated using the weighted distribution ratio of 30% in the medium term.

average. Since the number of basic and diluted shares is identical, basic earnings per share correspond to diluted

DIVIDEN D YI ELD

earnings per share.

Based on the dividend proposal for the reporting period, See also note 11 to the Volkswagen consolidated financial

the dividend yield on Volkswagen ordinary shares is 2.2%, statements for the calculation of earnings per share. measured by the closing price on the last trading day in

2012. The dividend yield on preferred shares is 2.1%.