Net Assets

Consolidated balance sheet structure

At the end of fiscal year 2020, the Volkswagen Group had total assets of €497.1 billion, 1.9% more than at the end of the prior year. The rise is mostly attributable to the boost in gross liquidity and the successful issue of hybrid notes in the second quarter of 2020. It was offset by exchange rate effects. A chart showing the structure of the consolidated balance sheet as of the reporting date can be found in this chapter. The Volkswagen Group’s equity increased by €5.1 billion to €128.8 billion. The equity ratio was 25.9 (25.3)%.

As of the end of fiscal year 2020, the Group had off-balance-sheet commitments in the form of contingent liabilities in the amount of €8.6 (8.5) billion and in the form of financial guarantees in the amount of €0.4 (0.4) billion. In addition, there were other financial obligations of €22.0 billion, which exceeded the prior-year figure of €20.0 billion. The contingent liabilities relate primarily to legal risks in connection with the diesel issue, as well as to potential liabilities from tax risks in the Commercial Vehicles Business Area in Brazil. Other financial obligations primarily result from purchase commitments for property, plant and equipment and irrevocable credit commitments to customers. They also include commitments to invest in the infrastructure for zero-emission vehicles and in initiatives to promote access to and awareness of this technology. These commitments were made as part of the settlement agreements in the USA in connection with the diesel issue. The other financial obligations include an amount of €0.9 billion for this purpose. In addition, this item reflects the payment of the purchase price for the acquisition of all of Navistar’s outstanding shares totaling around USD 3.7 billion, as the merger agreement between TRATON and Navistar contains conditions precedent and the purchase price payment cannot be recorded as a liability in the balance sheet at present.

CONSOLIDATED BALANCE SHEET STRUCTURE 2020
in percent

Automotive Division balance sheet structure

As of December 31, 2020, the Automotive Division’s intangible assets increased slightly compared with fiscal year 2019, driven among other factors by a rise in capitalized development costs. Property, plant and equipment declined due to exchange rate factors and depreciation in excess of additions. Equity-accounted investments were up as the year-on-year decline in the business results of the Chinese joint ventures was offset by resolutions to pay lower dividends and by additions to the interests held in entities such as Argo AI, QuantumScape, Anhui Jianghuai Automobile Group Holdings and Northvolt. Noncurrent other receivables and financial assets increased. Total noncurrent assets were up €3.1 billion to €156.9 billion.

Current assets were higher than at the end of 2019, amounting to €97.2 (93.1) billion. As a result of downscaled production in response to the pandemic and due to exchange rate effects, the inventories included in this item were lower. The Automotive Division’s securities and cash and cash equivalents rose by €8.5 billion to €41.7 billion.

In the previous year, the “Assets held for sale” item included the carrying amounts of assets to be derecognized as a result of the contribution of AID to the Argo AI joint venture and those relating to the sale of Renk.

At the end of the reporting year, the Automotive Division’s equity amounted to €96.7 billion, 4.3% more than a year earlier. The increase was mainly attributable to the profit generated, the hybrid notes issued in June 2020, and the positive effects from the measurement of derivatives recognized directly in equity. Currency translation, the dividend payment to the shareholders of Volkswagen AG resolved by the Annual General Meeting, and higher actuarial losses from the remeasurement of pension plans reduced equity. Noncontrolling interests are primarily held by the noncontrolling interest shareholders of TRATON. The equity ratio was 38.1 (37.6)%.

Noncurrent liabilities increased by €2.7 billion to €93.5 billion. The decrease in noncurrent financial liabilities included in this item was driven primarily by reclassifications from noncurrent to current liabilities to reflect shorter remaining maturities and by exchange rate effects; the issuance of green bonds in September 2020 had an offsetting impact on this item. Pension provisions were significantly higher than the comparative 2019 figure, due mainly to the actuarial remeasurement following a change in the discount rate.

At €63.8 (63.2) billion, current liabilities were on a level with the previous year. Current financial liabilities amounted to €−2.8 (−7.3) billion due primarily to reclassifications from noncurrent to current liabilities. The figures for the Automotive Division also contain the elimination of intragroup transactions between the Automotive and Financial Services divisions. As the current financial liabilities for the primary Automotive Division were lower than the loans granted to the Financial Services Division, a negative amount was disclosed in both periods. Current other liabilities were down, primarily due to the effects of the measurement of derivatives and to lower liabilities from buyback transactions. Other provisions decreased, due mainly to utilizations in connection with the diesel issue.

At the end of fiscal year 2020, the Automotive Division’s total assets amounted to €254.1 billion, up 2.9% compared with the figure on December 31, 2019.

CONSOLIDATED BALANCE SHEET BY DIVISION AS OF DECEMBER 31

 

 

VOLKSWAGEN GROUP

 

AUTOMOTIVE1

 

FINANCIAL SERVICES

€ million

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

1

Including allocation of consolidation adjustments between the Automotive and Financial Services divisions, primarily intragroup loans.

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent assets

 

302,170

 

300,608

 

156,861

 

153,736

 

145,309

 

146,873

Intangible assets

 

67,968

 

66,214

 

67,781

 

66,010

 

187

 

204

Property, plant and equipment

 

63,884

 

66,152

 

62,807

 

65,043

 

1,077

 

1,110

Lease assets

 

50,686

 

48,938

 

1,512

 

2,084

 

49,174

 

46,853

Financial services receivables

 

82,565

 

86,973

 

−377

 

−390

 

82,942

 

87,363

Investments, equity-accounted investments and other equity investments, other receivables and financial assets

 

37,067

 

32,331

 

25,137

 

20,989

 

11,930

 

11,342

Current assets

 

194,944

 

187,463

 

97,236

 

93,081

 

97,708

 

94,382

Inventories

 

43,823

 

46,742

 

39,055

 

41,898

 

4,768

 

4,844

Financial services receivables

 

58,006

 

58,615

 

−557

 

−640

 

58,562

 

59,255

Other receivables and financial assets

 

38,044

 

38,620

 

17,012

 

17,803

 

21,033

 

20,817

Marketable securities

 

21,162

 

16,769

 

17,503

 

13,546

 

3,658

 

3,223

Cash, cash equivalents and time deposits

 

33,909

 

25,923

 

24,222

 

19,679

 

9,687

 

6,243

Assets held for sale

 

 

795

 

 

795

 

 

Total assets

 

497,114

 

488,071

 

254,097

 

246,816

 

243,017

 

241,255

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

128,783

 

123,651

 

96,733

 

92,774

 

32,050

 

30,877

Equity attributable to Volkswagen AG shareholders

 

111,336

 

109,117

 

79,913

 

78,872

 

31,423

 

30,246

Equity attributable to Volkswagen AG hybrid capital investors

 

15,713

 

12,663

 

15,713

 

12,663

 

 

Equity attributable to Volkswagen AG shareholders and hybrid capital investors

 

127,049

 

121,781

 

95,626

 

91,535

 

31,423

 

30,246

Noncontrolling interests

 

1,734

 

1,870

 

1,107

 

1,239

 

627

 

631

Noncurrent liabilities

 

202,921

 

196,497

 

93,523

 

90,822

 

109,398

 

105,675

Financial liabilities

 

114,809

 

113,556

 

15,637

 

17,592

 

99,173

 

95,965

Provisions for pensions

 

45,081

 

41,389

 

44,207

 

40,631

 

874

 

759

Other liabilities

 

43,031

 

41,551

 

33,680

 

32,600

 

9,352

 

8,951

Current liabilities

 

165,410

 

167,924

 

63,840

 

63,220

 

101,569

 

104,703

Financial liabilities

 

88,648

 

87,912

 

−2,806

 

−7,312

 

91,454

 

95,224

Trade payables

 

22,677

 

22,745

 

19,539

 

19,603

 

3,137

 

3,142

Other liabilities

 

54,085

 

56,896

 

47,107

 

50,559

 

6,978

 

6,337

Liabilities associated with assets held for sale

 

 

370

 

 

370

 

 

Total equity and liabilities

 

497,114

 

488,071

 

254,097

 

246,816

 

243,017

 

241,255

At the end of 2020, intangible assets in the Passenger Cars Business Area were higher than at the 2019 balance sheet date. This was attributable among other factors to an increase in capitalized development costs. Exchange rate factors and depreciation in excess of additions led to a decrease in property, plant and equipment. Equity-accounted investments rose compared with December 31, 2019: the year-on-year decline in the business results of the Chinese joint ventures was set against resolutions to pay lower dividends in the Chinese joint ventures, as well as additions to the interests held in entities such as Argo AI, QuantumScape, Anhui Jianghuai Automobile Group Holdings and Northvolt. Overall, noncurrent assets increased by 3.0% compared with the end of 2019. Current assets rose by 10.2%. The inventories included in this item were lower as a result of downscaled production in response to the pandemic and due to exchange rate effects. Total securities and cash and cash equivalents in the Passenger Cars Business Area significantly exceeded the figure recorded at the end of 2019. On December 31, 2020, the Passenger Cars Business Area had total assets amounting to €213.4 (201.8) billion.

At €81.4 (75.8) billion, the Passenger Cars Business Area’s equity was up on the figure for December 31, 2019, mainly for earnings-related reasons. Total noncurrent liabilities were 4.6% higher than at the end of 2019. The noncurrent financial liabilities included in this item increased, and pension provisions rose, mainly due to the actuarial remeasurement following a change in the discount rate. A rise in current financial liabilities was the main factor driving the 4.9% increase in current liabilities compared with the end of 2019. This was offset in particular by lower other provisions, whose decline was driven by factors such as utilizations in connection with the diesel issue.

PASSENGER CARS BUSINESS AREA BALANCE SHEET STRUCTURE

€ million

 

Dec. 31, 2020

 

Dec. 31, 2019

 

 

 

 

 

Noncurrent assets

 

130,237

 

126,387

Current assets

 

83,180

 

75,459

Total assets

 

213,417

 

201,846

Equity

 

81,423

 

75,773

Noncurrent liabilities

 

82,263

 

78,679

Current liabilities

 

49,731

 

47,394

At the end of the reporting period, property, plant and equipment in the Commercial Vehicles Business Area was up slightly, while lease assets were down. In total, noncurrent assets were slightly lower than at the last balance sheet date in 2019, amounting to €24.8 (25.1) billion. Current assets declined by 16.1%. The inventories included in this item were lower as a result of downscaled production in response to the pandemic. Total securities and cash and cash equivalents decreased in the reporting year. At €36.0 billion, total assets were again €2.5 billion lower than in the previous year.

The Commercial Vehicles Business Area’s equity was down on the previous year, amounting to €13.4 (14.1) billion. Noncurrent liabilities were 6.8% lower overall than on December 31, 2019. There was a decline in other noncurrent liabilities. Current liabilities dropped by a total of 7.9%. The current other liabilities included in this item were lower than on the previous year’s balance sheet date.

COMMERCIAL VEHICLES BUSINESS AREA BALANCE SHEET STRUCTURE

€ million

 

Dec. 31, 2020

 

Dec. 31, 2019

 

 

 

 

 

Noncurrent assets

 

24,777

 

25,143

Current assets

 

11,256

 

13,420

Total assets

 

36,033

 

38,563

Equity

 

13,389

 

14,115

Noncurrent liabilities

 

10,592

 

11,367

Current liabilities

 

12,052

 

13,081

The Power Engineering Business Area’s intangible assets and property, plant and equipment were lower on December 31, 2020 than on the prior-year balance sheet date. Noncurrent assets dropped by a total of 16.3%. Current assets decreased by 33.4%, with a significant reduction in the cash and cash equivalents included in this item. In the previous year, the “Assets held for sale” item had included the carrying amounts of assets derecognized as a result of the sale of Renk completed in October 2020. As a result, total assets in the Power Engineering Business Area went down to €4.6 (6.4) billion at the end of fiscal year 2020.

At the end of 2020, the Power Engineering Business Area’s equity amounted to €1.9 (2.9) billion. Overall, noncurrent liabilities were lower than a year earlier. Current liabilities also declined compared with the end of 2019. The financial liabilities included here fell significantly, while other provisions went up because of provisions recognized for restructuring measures. Current liabilities as of the end of 2019 had also included the carrying amounts of the liabilities of Renk, which were derecognized as a result of the sale of Renk in 2020.

POWER ENGINEERING BUSINESS AREA BALANCE SHEET STRUCTURE

€ million

 

Dec. 31, 2020

 

Dec. 31, 2019

 

 

 

 

 

Noncurrent assets

 

1,847

 

2,206

Current assets

 

2,800

 

4,202

Total assets

 

4,647

 

6,408

Equity

 

1,922

 

2,885

Noncurrent liabilities

 

668

 

777

Current liabilities

 

2,057

 

2,746

Financial Services Division balance sheet structure

On December 31, 2020, the Financial Services Division had total assets of €243.0 (241.3) billion, slightly more than at the balance sheet date in 2019.

Noncurrent assets declined by 1.1% to €145.3 billion compared with the end of the prior year; the property, plant and equipment included in this item was virtually unchanged. Lease assets increased, while non-current financial services receivables were down because volumes and exchange rates were affected by the Covid-19 pandemic.

Current assets expanded to €97.7 (94.4) billion. Current financial services receivables were lower than at the end of 2019, primarily for pandemic-related reasons. At €13.3 billion, total securities and cash and cash equivalents in the Financial Services Division exceeded the figure recorded at the end of 2019 by €3.9 billion.

On December 31, 2020, the Financial Services Division accounted for around 48.9 (49.4)% of the Volkswagen Group’s assets.

At the end of the reporting year, the Financial Services Division’s equity stood at €32.0 billion, 3.8% more than a year earlier. Negative exchange rate effects were offset by positive earnings. The equity ratio was 13.2 (12.8)%.

Noncurrent liabilities increased by 3.5% overall, mainly due to a rise in noncurrent financial liabilities and higher other provisions. A reduction in current financial liabilities, offset by higher other current liabilities, led to a net decrease in total current liabilities.

Deposits from the direct banking business amounted to €28.9 (32.5) billion, and were therefore below the figure recorded at the end of 2019.