Volkswagen Shares Dip on Missed 2022 Free Cash Flow Target
08 Februar 2023 - 11:25AM
Dow Jones News
By Christian Moess Laursen
Volkswagen AG shares dipped early Wednesday after the company
said 2022 free cash flow missed expectations due to supply-chain
snags that led to higher unsold inventory at year-end.
The German car maker said free cash flow for 2022 came in at 5
billion euros ($5.36 billion), below its goal of matching the
prior-year's EUR8.6 billion. Other metrics were in line with
expectations.
At 0942 GMT, shares were 0.7% lower at EUR130.34, after falling
more than 2% earlier in the session.
Analysts said they didn't expect Volkswagen shares to take too
much of a beating on missing its FCF target, noting other
manufacturers have faced similar issues and the situation is likely
to improve over the course of the year.
The lower-than-expected cash flow was due to an unstable supply
situation and logistics disruptions, mainly toward the end of the
year, Volkswagen said. That resulted in higher-than-expected
working capital and inventories of finished goods, it said.
Volkswagen expects the headwinds affecting cash flow to ease
over the course of 2023.
The company isn't alone in facing logistics challenges related
to getting finished inventories to dealers at year-end, RBC Capital
Markets analyst Tom Narayan said in a research note.
"Other European OEMs have also communicated similar supply chain
issues," Citi analysts also said in a note.
While not good news, the analysts from RBC and Citi said they
don't expect the market to react too harshly on the 2022 FCF
pre-release.
RBC said that Volkswagen peer Stellantis NV likely faced similar
working capital headwinds in the fourth quarter, and noted that
parts supplier Aptiv PLC last week said supply constraints are
easing. Input from other car makers leads the Canadian bank to
expect that the inventory situation improves this year.
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
February 08, 2023 05:10 ET (10:10 GMT)
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