Monday, 16th May
in Hamburg
Investors Criticize Blume for Dual Role Resumption in Volkwagen
The automotive sector took a hit in 2024: Volkswagen's vehicle deliveries dropped by 2.3%, operational profit by a staggering 15.4%, and net cash flow plummeted over 50%. It was a rough year for the mighty VW, with its shares plummeting by more than a fifth, while the DAX rose nearly 19%. The proposed dividend, a measly 6.30 (previously 9.00) euros per ordinary share and 6.36 (9.06) euros per preferred share, means a reduction of 1.3 billion euros for 2024, compared to the previous financial year.
Shareholders aren't pleased, and it's likely they'll voice their discontent once again, even more fiercely, during the virtual annual general meeting. The focus of their ire? Oliver Blume, CEO of the VW Group, also grappling with the ailing Porsche subsidiary.
Now, let's take a step back. Despite the grim headlines, Volkswagen's financials were still respectable at a glance. The company raked in a whopping 324 billion euros in revenue, selling 9.03 million vehicles. But dig a little deeper, and the cracks start showing. The net profit was just 12.3 billion euros, with certain segments and quarters exhibiting weakness[5].
The dividend approved for the 2025 AGM will result in a payout of around 30%, a significant drop from the previous fiscal year[1]. Costs were on the rise, labor disputes emerged, and the company announced planned plant closures and worker layoffs in Germany, all contributing to operational inefficiencies[2].
It's no wonder shareholders have been less than impressed with the ongoing profitability decline and continuing inefficiencies under CEO Oliver Blume. He's acknowledged the need for change, stating that Volkswagen needs to become more cost-efficient and agile. However, investors are concerned about the lack of swift progress in reducing costs and streamlining operations[3]. The slow pace of restructuring measures has added fuel to the skepticism.
For a quick comparison:
| Metric | 2024 Value/Result | 2025 Q1 Value/Result ||---------------------|-------------------------|----------------------------|| Revenue | EUR 324 billion | - || Net Profit | EUR 12.3 billion | - || Vehicle Sales | 9.03 million units | - || Operating Profit | - | Q1: €2.9 billion (down 37%) || Operating Margin | - | Q1: 3.7% (vs 6% Q1 2024) || Dividend Payout Ratio | ~30% | - |
Long story short? Volkswagen had a decent showing in revenue and sales in 2024, but shareholders are not impressed with the company's declining profitability, unresolved cost issues, and slow restructuring under CEO Oliver Blume[2][3][5].
The financial troubles within the automotive industry extend to Volkswagen, with a decline in profitability and shareholder discontent, causing concern in the finance and business sectors. Despite the company's respectable revenue and vehicle sales in 2024, the ongoing operational inefficiencies and lack of progress in cost reduction have raised questions about the company's future in the industry.
