Net Assets

Consolidated balance sheet structure

At the end of the reporting year, the Volkswagen Group had total assets of €528.6 billion, 6.3 % more than one year earlier. The increase was mainly attributable to higher earnings, the initial consolidation of Navistar and changes in exchange rates. 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 rose by €17.4 billion to €146.2 billion. The equity ratio went up to 27.6 (25.9) %.

As of the end of fiscal year 2021, the Group had off-balance-sheet commitments in the form of contingent liabilities in the amount of €9.7 (8.6) billion and in the form of financial guarantees in the amount of €1.4 (0.4) billion. In addition, there were other financial obligations of €34.7 (30.3) 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, irrevocable credit commitments to customers and from development and supply contracts. 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 €0.7 (0.9) billion for this purpose. In the previous year, this item had also reflected the payment of the purchase price for the acquisition of all of Navistar’s outstanding shares totaling around USD 3.7 billion. In addition to the other financial obligations, there are purchase commitments for inventories with a short turnover period, which arise primarily from the Master Collaboration Agreement with Ford Motor Company for the joint development of vans and mid-sized pickups for the global market.

CONSOLIDATED BALANCE SHEET STRUCTURE 2021

in percent

Automotive Division balance sheet structure

As of December 31, 2021, intangible assets in the Automotive Division increased, driven among other factors by a rise in capitalized development costs. The goodwill recognized as a result of the acquisition of Navistar also had to be taken into account. Property, plant and equipment was on a level with the previous year. Due to the rise attributable to capital increases and the investment in Gotion High-Tech among other factors, equity-accounted investments were up substantially in the fiscal year under review, despite dividend resolutions. In total, noncurrent assets increased to €170.4 (156.9) billion.

Current assets expanded by €4.3 billion compared with the figure at the end of 2020, to €101.5 billion. The inventories included in this item were driven higher, primarily by exchange rate effects. Current other receivables and financial assets increased.

The Automotive Division’s cash and cash equivalents grew by €1.3 billion to €25.5 billion.

The “Assets held for sale” item consists mainly of the carrying amounts of the assets of SITECH intended for derecognition. The “Liabilities held for sale” item comprises the carrying amount of the corresponding liabilities intended for derecognition.

Equity in the Automotive Division amounted to €109.0 billion at the end of the reporting period, up 12.7 % from December 31, 2020. Good earnings performance, lower actuarial losses from the remeasurement of pension plans and positive currency translation effects pushed equity higher, while the dividend paid to the shareholders of Volkswagen AG, negative effects from the measurement of derivatives recognized directly in equity, and the redemption of the hybrid note called in the first quarter of 2021 weighed on this item. Noncontrolling interests are primarily held by the noncontrolling interest shareholders of the TRATON GROUP. The equity ratio was 40.1 (38.1) %.

Noncurrent liabilities increased by €5.4 billion to €98.9 billion. The noncurrent financial liabilities included here were driven up by exchange rate effects, among other factors. Pension provisions were lower than the comparative 2020 figure, due mainly to the actuarial remeasurement following a change in the discount rate.

At €63.9 (63.8) billion, current liabilities were on a level with the previous year. Current financial liabilities amounted to €−10.2 (−2.8) 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. Trade payables were up distinctly, by 7.4%, compared with the end of 2020.

Current other liabilities exceeded the figure as of December 31, 2020; the other financial liabilities included in this item increased, due among other things to the effects of the measurement of derivatives and to higher liabilities from buyback transactions. Other current provisions rose because, among other reasons, provisions in connection with the EU antitrust proceedings against Scania had to be increased to €0.9 billion in the reporting period.

At the end of 2021, the Automotive Division’s total assets stood at €271.9 billion, an increase of 7.0% compared with December 31, 2020.

Financial Services Division balance sheet structure

The Financial Services Division’s total assets on December 31, 2021 were €256.7 billion, exceeding the figure on the 2020 reporting date by 5.6%, mainly due to exchange rate effects.

Noncurrent assets were 8.6 % higher than at the end of 2020, at €157.9 billion; the property, plant and equipment included in this item was down. Lease assets and noncurrent financial services receivables were up, driven by business growth and changes in exchange rates.

At €98.8 (97.7) billion, current assets were virtually on a level with the previous year’s reporting date. Current other receivables and financial assets, inventories and current financial services receivables ended the year lower, while total securities and cash and cash equivalents in the Financial Services Division amounted to €19.1 billion, thus exceeded the figure at the end of 2020 by €5.7 billion.

At the balance sheet date, the Financial Services Division accounted for around 48.6 (48.9) % of the Volkswagen Group’s assets.

On December 31, 2021, the Financial Services Division’s equity stood at €37.1 billion, 15.9% more than a year earlier, driven by earnings and exchange rate effects. The equity ratio was 14.5 (13.2) %.

Noncurrent liabilities increased by 8.9 % overall, mainly because of a rise in noncurrent financial liabilities to refinance the business volume and higher noncurrent other liabilities. Overall, current liabilities were in a similar range as in the previous year. A reduction in current financial liabilities was offset mainly by higher current other liabilities.

Deposits from the direct banking business amounted to €26.7 (28.9) billion, down from the figure recorded a year earlier.