Volkswagen AG – Annual report – 31 December 2019
INVESTMENTS IN ASSOCIATES
From a Group perspective, the associates Sinotruk (Hong Kong) Ltd., Hongkong, China (Sinotruk), Bertrandt AG, Ehningen (Bertrandt), There Holding B.V., Rijswijk, the Netherlands (There Holding), and Navistar International Corporation, Lisle, Illinois/USA (Navistar), were material at the reporting date.
Sinotruk is one of the largest truck manufacturers in the Chinese market. There is an agreement in place between Group companies and Sinotruk regarding a long-term strategic partnership, under which the Group participates in the local market. In addition to the partnership with Sinotruk in the volume segment, exports of MAN vehicles to China are also helping to expand access to the small, but fast-growing premium truck market. Sinotruk’s principal place of business is in Hongkong, China.
As of December 31, 2019, the quoted market price of the shares in Sinotruk amounted to €1,312 million (previous year: €908 million).
Bertrandt is an engineering partner to companies in the automotive and aviation industry. Its portfolio of services ranges from developing individual components through complex modules to end-to-end solutions. Bertrandt’s principal place of business is in Ehningen.
As of December 31, 2019, the quoted market price of the shares in Bertrandt amounted to €165 million (previous year: €201 million).
Together with the BMW Group, Daimler AG and other companies, Volkswagen holds an equity investment in There Holding B.V., Rijswijk (the Netherlands), an investment company. In turn, There Holding B.V. holds around 85 % of the shares of HERE International B.V., Eindhoven (the Netherlands). HERE International B.V. is one of the world’s largest producers of digital road maps for navigation systems. Since the interest held does not grant control in accordance with IFRS 10, HERE International B.V. is included in the financial statements of There Holding B.V. as an associate using the equity method.
Capital increases were implemented at There Holding B.V. in 2019, in which Volkswagen participated. As a result, the shares accounted for using the equity method increased by €69 million. The ownership interest in There Holding B.V. amounted to 29.7 % as of December 31, 2019.
In December 2019, it was announced that additional investors would acquire shares in HERE International B.V. Following the signing in December 2019, Mitsubishi Corporation (MC) and Nippon Telegraph and Telephone Corporation of Japan (NTT) are aiming to jointly acquire 30 % of the shares of HERE International B.V. in the first half of 2020, subject to antitrust approval. The interest held by There Holding B.V. in HERE International B.V. is expected to decline to around 60 % as a result.
Navistar International Corporation (Navistar) is a US manufacturer of commercial vehicles; it is based in Lisle, Illinois/USA. Navistar and TRATON GROUP companies have entered into master agreements for strategic technology and supply cooperation as well as a procurement joint venture.
Since two members of TRATON SE’s Executive Board are represented on the Board of Directors of Navistar and because of the agreed cooperations, the investment in Navistar is reported as an equity-accounted investment in the consolidated financial statements.
As of December 31, 2019, the quoted market price of the shares in Navistar amounted to €429 million (December 31, 2018: €377 million).
SUMMARIZED FINANCIAL INFORMATION ON MATERIAL ASSOCIATES ON A 100% BASIS
1 Balance sheet amounts refer to the June 30 reporting date and income statement amounts refer to the period from July 1 to June 30.
2 Balance sheet amounts refer to the September 30 reporting date and income statement amounts refer to the period from October 1 to September 30.
3 Balance sheet amounts refer to the October 31 reporting date and income statement amounts refer to the period from November 1 to October 31.
4 Proportionate dividends are shown net of withholding tax.
RECONCILIATION OF THE FINANCIAL INFORMATION TO THE CARRYING AMOUNT OF THE EQUITY-ACCOUNTED INVESTMENTS
1 Dividends are shown before withholding tax.
SUMMARIZED FINANCIAL INFORMATION ON INDIVIDUALLY IMMATERIAL ASSOCIATES ON THE BASIS OF THE VOLKSWAGEN GROUP’S PROPORTIONATE INTEREST
There were unrecognized losses of €54 million (previous year: €– million) relating to investments in associates. Furthermore, there were no contingent liabilities or financial guarantees relating to associates.