Volkswagen said on Friday that it expects supply chain issues to ease and sales to rise to as much as 331 billion euros ($352 billion) in 2023, sending shares in Europe’s top carmaker to their highest level in three and a half months.
The carmaker’s outlook, which comes after preliminary 2022 results published last month, also foresees a strong recovery of vehicle deliveries to 9.5 million, an increase of more than 14% year-on-year.
“Our performance last year demonstrated the improved resilience of the Volkswagen Group amid a challenging global backdrop,” Chief Financial Officer Arno Antlitz said.
“We expect the supply chain bottlenecks to gradually ease in the current year, allowing us to service the high order backlog.”
The comments reflect growing optimism of an industry slowly emerging from a global shortage of chips as well as supply chain problems also caused by the COVID-19 pandemic, with peers Stellantis and Renault, too, releasing upbeat views for 2023 in recent weeks.
Volkswagen shares closed 10.6% higher at the top of Germany’s DAX index after hitting their highest level since Nov. 16 and the biggest intraday gain in a year, with Jefferies analysts calling the outlook “surprisingly strong.”
Cole Smead, CEO of Smead Capital Management - which holds shares in Volkswagen and division Porsche AG - said the reason why automakers were doing so well was because economic fears had been overblown.
“And that’s really been the biggest overhang to any cyclical business,” he said.
Volkswagen, which last year listed Porsche AG in a landmark listing, forecast sales to grow by 10% to 15%, indicating 2023 revenues of 307 billion euros to 331 billion euros, higher than the 280 billion Refinitiv estimate.
The group said operating return on sales was expected to be in the range of 7.5% to 8.5%, compared with 7.9% in 2022, adding its dividend would rise by 1.20 euros apiece to 8.70 euros per common share and 8.76 euros per preferred share for 2022.
According to Refinitiv estimates, holders of Volkswagen’s preferred shares were expected to get a dividend of 8.46 euros apiece.