Segment reporting

Segments are identified on the basis of the Volkswagen Group’s internal management and reporting. In line with the Group’s multibrand strategy, each of its brands (operating segments) is managed by its own Board of Management. The Group targets and requirements laid down by the Board of Management of Volkswagen AG must be complied with. Segment reporting comprises four reportable segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering and Financial Services. As a result of an internal management change as from January 1, 2019, light commercial vehicles of the Volkswagen Commercial Vehicles brand are no longer allocated to the Commercial Vehicles segment, but reported under the Passenger Cars and Light Commercial Vehicles segment. The prior-year figures have been adjusted accordingly.

The activities of the Passenger Cars and Light Commercial Vehicles segment cover the development of vehicles and engines, the production and sale of passenger cars and light commercial vehicles, and the corresponding genuine parts business. In the Passenger Cars and Light Commercial Vehicles reporting segment, the individual brands are being combined into a single reportable segment, in particular as a response to the high degree of technological and economic interlinking in the production network. Furthermore, there is collaboration within key areas such as procurement, research and development or treasury.

The Commercial Vehicles segment primarily comprises the development, production and sale of trucks and buses, the corresponding genuine parts business and related services. Just as in the case of the car brands, there is collaboration within the areas procurement, development and sales. The aim is to achieve further forms of interlinking.

The activities of the Power Engineering segment consist of the development and production of large-bore diesel engines, turbo compressors, industrial turbines and chemical reactor systems, as well as the production of gear units, propulsion components and testing systems.

The activities of the Financial Services segment comprise dealer and customer financing, leasing, banking and insurance activities, fleet management and mobility services. In this segment, combinations occur especially while taking into account the comparability of the type of services as well as the regulatory situation.

Purchase price allocation for companies acquired is allocated directly to the corresponding segments.

At Volkswagen, segment profit or loss is measured on the basis of the operating result.

In the segment reporting, the share of the result of joint ventures is contained in the share of the result of equity-accounted investments in the corresponding segments.

The reconciliation contains activities and other operations that by definition do not constitute segments. It also includes the unallocated Group financing activities. Consolidation adjustments between the segments are also contained in the reconciliation.

Investments in intangible assets, property, plant and equipment, and investment property are reported net of investments in right-of-use assets from leases.

As a matter of principle, business relationships between the companies within the segments of the Volkswagen Group are transacted at arm’s length prices.

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REPORTING SEGMENTS 20181

€ million

 

Passenger Cars and Light Commercial Vehicles

 

Commercial Vehicles

 

Power Engineering

 

Financial Services

 

Total segments

 

Reconciliation

 

Volkswagen Group

1

The prior-year figures have been adjusted to reflect a change in the allocation of Light Commercial Vehicles of the Volkswagen Commercial Vehicles brand.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

176,613

 

23,803

 

3,605

 

31,592

 

235,613

 

236

 

235,849

Intersegment sales revenue

 

12,895

 

979

 

3

 

3,190

 

17,067

 

−17,067

 

Total sales revenue

 

189,508

 

24,781

 

3,608

 

34,782

 

252,680

 

−16,830

 

235,849

Depreciation and amortization

 

12,700

 

1,966

 

378

 

6,523

 

21,567

 

−56

 

21,511

Impairment losses

 

629

 

89

 

 

469

 

1,186

 

110

 

1,296

Reversal of impairment losses

 

156

 

6

 

2

 

98

 

262

 

 

262

Segment result (operating result)

 

13,068

 

1,191

 

−64

 

2,793

 

16,988

 

−3,068

 

13,920

Share of the result of equity-accounted investments

 

3,094

 

213

 

3

 

58

 

3,369

 

 

3,369

Interest result and other financial result

 

164

 

297

 

2

 

−70

 

393

 

−2,039

 

−1,646

Equity-accounted investments

 

6,731

 

971

 

18

 

712

 

8,434

 

 

8,434

Investments in intangible assets, property, plant and equipment, and investment property

 

16,709

 

1,380

 

176

 

510

 

18,776

 

187

 

18,962

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REPORTING SEGMENTS 2019

€ million

 

Passenger Cars and Light Commercial Vehicles

 

Commercial Vehicles

 

Power Engineering

 

Financial Services

 

Total segments

 

Reconciliation

 

Volkswagen Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

186,511

 

25,401

 

3,995

 

36,446

 

252,353

 

280

 

252,632

Intersegment sales revenue

 

15,762

 

1,043

 

2

 

3,714

 

20,522

 

−20,522

 

Total sales revenue

 

202,273

 

26,444

 

3,997

 

40,160

 

272,875

 

−20,242

 

252,632

Depreciation and amortization

 

14,622

 

2,280

 

420

 

8,080

 

25,402

 

−996

 

24,406

Impairment losses

 

201

 

1

 

 

538

 

740

 

209

 

949

Reversal of impairment losses

 

886

 

71

 

2

 

181

 

1,140

 

−15

 

1,124

Segment result (operating result)

 

15,610

 

1,653

 

−93

 

3,212

 

20,381

 

−3,422

 

16,960

Share of the result of equity-accounted investments

 

3,053

 

225

 

−1

 

71

 

3,349

 

 

3,349

Interest result and other financial result

 

−1,582

 

−70

 

1

 

−64

 

−1,715

 

−238

 

−1,953

Equity-accounted investments

 

6,232

 

1,118

 

34

 

784

 

8,169

 

 

8,169

Investments in intangible assets, property, plant and equipment, and investment property

 

17,098

 

1,460

 

197

 

223

 

18,977

 

423

 

19,401

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RECONCILIATION

€ million

 

2019

 

2018¹

1

The prior-year figures have been adjusted to reflect a change in the allocation of Light Commercial Vehicles of the Volkswagen Commercial Vehicles brand.

 

 

 

 

 

Segment sales revenue

 

272,875

 

252,680

Unallocated activities

 

969

 

981

Group financing

 

28

 

24

Consolidation

 

−21,239

 

−17,835

Group sales revenue

 

252,632

 

235,849

 

 

 

 

 

Segment result (operating result)

 

20,381

 

16,988

Unallocated activities

 

−72

 

−22

Group financing

 

−38

 

−17

Consolidation

 

−3,312

 

−3,029

Operating result

 

16,960

 

13,920

Financial result

 

1,396

 

1,723

Consolidated result before tax

 

18,356

 

15,643

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BY REGION 2018

€ million

 

Germany

 

Europe/Other markets¹

 

North America

 

South America

 

Asia-Pacific

 

Hedges sales revenue

 

Total

1

Excluding Germany.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

43,526

 

99,563

 

37,656

 

10,405

 

43,166

 

1,535

 

235,849

Intangible assets, property, plant and equipment, lease assets and investment property

 

95,217

 

36,110

 

29,332

 

2,795

 

2,830

 

 

166,285

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BY REGION 2019

€ million

 

Germany

 

Europe/Other markets¹

 

North America

 

South America

 

Asia-Pacific

 

Hedges sales revenue

 

Total

1

Excluding Germany.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue from external customers

 

48,991

 

105,009

 

43,351

 

11,297

 

43,974

 

11

 

252,632

Intangible assets, property, plant and equipment, lease assets and investment property

 

101,092

 

47,353

 

26,771

 

3,064

 

3,562

 

 

181,842

Allocation of sales revenue to the regions follows the destination principle.

The allocation of interregional intragroup transactions has been unitary presented according to the economic ownership regarding the segment assets.