Corporate finance case study
Corporate Finance Case Study:
Volkswagen
Volkswagen (VW)
Volkswagen (VW) is a German automobile manufacturer which was originally founded in 1937. Now VW Group is one of world’s leading automobile manufacturers and the largest carmaker in Europe, with its recent headquarter in Wolfsburg. VW is one of the ten brands under VW Group. (Volkswagen Homepage, 2011)
2011 VW’s revenue is 159,337 million EUR; net income is 15,409 million EUR, with a profit margin of 9.6707%. (Bloomberg, 2012) The increase from 2010 to 2011 is illustrated obviously in the following chart. (Bloomberg, 2012)
Income Statement for Volkswagen AG (VOW) 2010-2011, Bloomberg, 2012
Volkswagen stock (VOW: GR)
The current share price, close (Apr 13, 2012) is 119.3 EUR, its 52-week range is 82.350 - 138.800 EUR, and its 1-year return is 14.26%, as well as, market capitalization is 56,601.00 million EUR. (Bloomberg, 2012)
Interactive One-year Stock Chart for Volkswagen AG (VOW), Bloomberg, 2011-2012
VOW’s Earning Per Share (ttm) is 33.1 EUR, current P/E Ratio (ttm) is 3.5408, and Dividend Per Share (yield annualized) is 1.8771 EUR. (Bloomberg, 2012)
SWOT Analysis
In order to draw a conclusion for VW’s stock rating, SWOT analysis is conducted in this part.
Strengths
High product quality
Strong brand equity
VW group’s brand portfolio includes Audi, Bentley, Bugatti, Lamborghini, SEAT, 49.9% of Porsche, Giugiaro, Škoda marques and the truck manufacturer Scania and MAN. (VW Homepage, 2012)
Strong R&D
Weaknesses
High costs for implementing the new modular technology (Just-auto, 2012)
Inadequate focus on shareholder interests (VW Corporate Governance Code, 2010)
Comparatively low productivity
Opportunities
Good return on VW stocks
VW Group Share EPS 2003-2010, VW investor relations, 2012
Large purchasing power increase in Chinese market
Acquisitions
The Volkswagen Group continued its strategic growth trajectory by acquiring Porsche Holding Salzburg and
Volkswagen
Volkswagen (VW)
Volkswagen (VW) is a German automobile manufacturer which was originally founded in 1937. Now VW Group is one of world’s leading automobile manufacturers and the largest carmaker in Europe, with its recent headquarter in Wolfsburg. VW is one of the ten brands under VW Group. (Volkswagen Homepage, 2011)
2011 VW’s revenue is 159,337 million EUR; net income is 15,409 million EUR, with a profit margin of 9.6707%. (Bloomberg, 2012) The increase from 2010 to 2011 is illustrated obviously in the following chart. (Bloomberg, 2012)
Income Statement for Volkswagen AG (VOW) 2010-2011, Bloomberg, 2012
Volkswagen stock (VOW: GR)
The current share price, close (Apr 13, 2012) is 119.3 EUR, its 52-week range is 82.350 - 138.800 EUR, and its 1-year return is 14.26%, as well as, market capitalization is 56,601.00 million EUR. (Bloomberg, 2012)
Interactive One-year Stock Chart for Volkswagen AG (VOW), Bloomberg, 2011-2012
VOW’s Earning Per Share (ttm) is 33.1 EUR, current P/E Ratio (ttm) is 3.5408, and Dividend Per Share (yield annualized) is 1.8771 EUR. (Bloomberg, 2012)
SWOT Analysis
In order to draw a conclusion for VW’s stock rating, SWOT analysis is conducted in this part.
Strengths
High product quality
Strong brand equity
VW group’s brand portfolio includes Audi, Bentley, Bugatti, Lamborghini, SEAT, 49.9% of Porsche, Giugiaro, Škoda marques and the truck manufacturer Scania and MAN. (VW Homepage, 2012)
Strong R&D
Weaknesses
High costs for implementing the new modular technology (Just-auto, 2012)
Inadequate focus on shareholder interests (VW Corporate Governance Code, 2010)
Comparatively low productivity
Opportunities
Good return on VW stocks
VW Group Share EPS 2003-2010, VW investor relations, 2012
Large purchasing power increase in Chinese market
Acquisitions
The Volkswagen Group continued its strategic growth trajectory by acquiring Porsche Holding Salzburg and
References: Bloomberg, 2012. http://www.bloomberg.com/quote/VOW:GR Just-auto, 2012. http://www.just-auto.com/news/4-volkswagen-hikes-2011-operating-profit-59-to-new-record_id120644.aspx Volkswagen Homepage, 2011. http://www.volkswagenag.com/content/vwcorp/content/en/homepage.html VW strategy 2018, 2012. http://www.volkswagenag.com/content/vwcorp/info_center/en/talks_and_presentations/2012/03/JPK_IK_2012_Part_III_.bin.html/binarystorageitem/file/Part_III_Charts_Winterkorn.pdf