Annual Report

Shares and Bonds

Encouraging share price performance for Volkswagen AG shareholders

2010 was a consistently positive fiscal year for Volkswagen AG shareholders. Highlights were the issue of new preferred shares and the move towards an integrated automotive group with Porsche. The price of both ordinary and preferred shares increased significantly.


Volkswagen AG successfully completed its capital increase on April 16, 2010, generating net proceeds of €4.1 billion. Under this capitalization measure, a total of 64.9 million new Volkswagen preferred shares with preemptive rights were issued, in part by utilizing the authorized capital. Preemptive rights to the new shares were granted to both Volkswagen ordinary and preferred shareholders. As a result of the capital increase, the number of preferred shares increased year-on-year from 105,238,280 to 170,142,778.

The capital increase is a key step in the planned creation of an integrated automotive group with Porsche. The net issue proceeds improved the Volkswagen Group’s capitalization, strengthened its financial stability and bolstered its rating.

All new shares were placed in advance under a public offer in Germany and a private placement for foreign institutional investors in the course of an accelerated bookbuilding process. This pre-placement of the new Volkswagen preferred shares was possible because the principal shareholders of Volkswagen ordinary shares had assigned their preemptive rights to the lead banks in the run-up to the transaction. These banks had in turn undertaken not to exercise the preemptive rights so that the new shares could be placed with investors. The remaining new Volkswagen preferred shares were subject to a claw-back clause under which the rights holders wishing to exercise their preemptive right within the subscription period were able to successfully subscribe for the new Volkswagen preferred shares despite the pre-placement.

The new Volkswagen preferred shares met with substantial interest worldwide, especially from investors in the United Kingdom and the USA. The pre-placement price and the subscription price were €65.00 per preferred share.

99.3% of all free float preemptive rights not assigned to the underwriters in the run-up to the transaction were exercised during the subscription period. This high percentage underlines the significant interest in the Volkswagen Group and in Volkswagen preferred shares.

The transaction structure offered a large number of advantages for Volkswagen AG shareholders: the low price discount meant that fewer new shares needed to be issued to achieve the target issue proceeds than under a rights issue with no pre-placement. As a result, earnings per share were only slightly diluted by the capitalization measure.

The capital increase confirmed DAX-listed Volkswagen preferred shares as the more liquid Volkswagen share class.


The international equity markets recorded a mixed performance for investors in 2010. The upbeat mood that had prevailed in the last few months of fiscal year 2009 cooled in the opening weeks of 2010. Uncertainty among market participants due to the strained financial situation facing certain eurozone countries resulted in a sharp decline in share prices that continued into February. During this period, the DAX fell below 5,500 points. In late February, the markets began a rally that lasted until the end of the first quarter.

The equity markets were extremely volatile in the second quarter. Positive momentum from good corporate results was overshadowed in April and May by the ongoing difficult financial situation in some eurozone countries. Sentiment among market participants improved at the end of May. Share prices increased into June, before declining towards the end of Q2. The DAX hovered around the 6,000 mark in the second quarter of 2010, accompanied by some more pronounced movements up and down.

The international equity markets remained volatile in the third quarter of 2010, but recorded a positive trend overall. Above all, healthy corporate results at the beginning of the quarter led to an increase in share prices that continued into August.

Q4 saw a sustained upward trend. The recovering economy drove predominantly positive corporate results. During this period, Germany’s leading share index, the DAX, steadily moved towards the 7,000 mark, and even exceeded it at times.

At the end of 2010, the DAX had reached 6,914 points, a year-on-year increase of 16.1%. On December 31, 2010, the DJ Euro STOXX Automobile closed at 332 points, 43.0% higher than at the end of 2009.

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