Ladies and gentlemen, welcome to our first part of today's agenda, the Volkswagen's Conference Call for Investors and Analysts for the Full Year Results 2020, based on the annual report we published early this morning. For today's conference call, I'm delighted to be joined by Herbert Diess, our CEO, Frank Witter, our still current CFO, and our incoming CFO, Arno Antlitz, and also Christian Dahlheim, our Director of Group Sales of the Volkswagen AG. Of course, we look forward to taking your questions. Most of you will have followed our Power Day yesterday, and this morning's annual press conference. Our focus now is to cover your specific needs as investors and analysts. Let me now hand you over to Herbert, who will open today's session. Okay. Thank you, Helen. Welcome to everybody. For shortly resuming a little bit the main messages from this morning. I think despite the challenges of the pandemic, Volkswagen Group has proven to be robust and powerful in 2020. I think we managed well. We started our BEV ramp-up in the volume segment, and at the end tripled our BEV sales to 230,000. Also, we had a late launch in the year. I think it was quite successful and the momentum is continuing, and we are very confident that MEB is the right concept, and we will be very competitive with our BEV lineup. In terms of digitalization software, I think we have laid very important groundwork to become a software-enabled car company. Software org is really gaining shape. The first updates into our electric platform, MEBs, are just happening this year. This will go into a 12 weeks continued update and upgrade of the cars. You will really perceive a new customer experience in those cars. We are learning by the day and becoming better and faster. Within two life cycles, gentlemen, the car industry will change dramatically, radically. Profit pools will shift from conventional cars first into EVs, then radically into software. That has a lot to do with the automated driving, which is going to happen in that period of time, we are preparing for that shift. I think the first transition, we are well on the way into EVs, there are even signs that EV business could be at least as good as the business with the conventional cars. We are also confident that following this transition, or going through that transition, afterwards, Volkswagen can be an even stronger company. We can even gain market shares through that transition, because it's also a game of scale. Our ICE portfolio will broadly finance the transition and open new profit pools for us. I think this year, touching a little bit on this year, it will be a difficult year because of supply. Still, we are confident that we will recover from COVID, and we should have a good second half of the year. That should, once again, become a decent year for Volkswagen. I'm also very happy with the new team on board now, a little bit enlarged, and we are committed to unleash the value of the group further. I think we will, in 2021, accelerate the transition journey with additional decisions to come, speeding up, gaining momentum. As you may have noticed, our share price has taken a little bit of momentum. As we are passing through the proof points, electrification, and then later on software, I think there is still a lot of potential in the share. Helen. Yes. Thank you very much, Herbert, for the opening. I'll pass over now to Frank, who will briefly take us through some of the highlights of the financials. Yeah. Thank you, Herbert. Thank you, Helen. Without a doubt, we have proven our robustness throughout the pandemic. Since Q1 2020, we are in full task force mode. We hit the production brakes in order to safeguard liquidity. In the months thereafter, we carefully balanced sales and production. We took advantage of the recovery and momentum, which started late in Q2. In H2, and especially in the last quarter, our strong products, pricing power, cost discipline, and management of working capital paid off. We also managed to ramp up a significant number of BEVs without diluting our margins. We know that many of you guys seriously question our legacy business. We realize fully that one day phasing out the legacy business is ultimate and necessary for a sustainable future. At the same time, we cannot forget that there are still a significant number of customers demanding ICEs, and this will continue for a significant number of years to come. Let's be very transparent. The ICE world is providing us with the resources necessary today in order to invest in future technologies and to pay competitive dividends. Therefore, the ICE portfolio is still an asset and necessary to protect our operating margins during the BEV ramp-up. Now, moving on to the analysis of operating profit versus calendar year 2019. The COVID-19 pandemic gave all of us an extremely challenging environment. Nevertheless, we succeeded in containing the impact on our financial performance. The lost volume of 1.3 million lower vehicles certainly hit the column volume mix price hard. This meant, in total, a sharp decline of EUR 7.4 billion. On the other hand, pricing was strong with a positive impact of around EUR 0.9 billion. Mix was also positive with EUR 1.4 billion, mostly in the premium brands. The block exchange rate and derivatives came in negative at about EUR 2 billion. As you are well aware, numerous currencies have devalued substantially in the crisis. In total, even with a volatile fair value variation of dollar-denominated commodity hedges being $200 million better than in 2019, the combination of the currency translation of both sales revenue and cost of sales were, in total, EUR 2 billion negative versus calendar year 2019. Product costs deteriorated by around EUR 0.6 billion versus prior year. Fixed costs were positive at around EUR 3.8 billion, significantly lower than the prior year. This reflects the countermeasures we put everywhere in place during the crisis. Rest assured, Arno will ensure that we keep on pushing. He will give you more details in just a few moments. To remind you, the one-off non-cash positive effect of EUR 0.1 billion from the contribution of AID in the Argo joint venture with Ford is also included in this column. Commercial vehicles at minus EUR 0.1 billion were down EUR 1.7 billion year-on-year, mainly driven by lower sales. Negative exchange rate effects and the launch costs of the new truck generation of MAN also burdened the result. Scania had a positive mix effect, and the service business had a stabilizing impact. Power engineering came in with minus EUR 0.1 billion before restructuring measures at prior year level. Following the sale of RENK in October, the operating result here is only included pro rata. As you are aware, we are executing several restructuring programs. In 2020, we booked restructuring costs of EUR 0.5 billion in total related to Volkswagen do Brasil, EUR 132 million, MAN Energy Solutions, EUR 359 million, and Bentley, EUR 28 million. The result of the Financial Services division only declined by EUR 200 million and came in at strong EUR 3 billion. The robust level of contracts, the strong used car business, and stable residual values contributed positively. An impact from credit risks remains to be seen, but the FS division is well provisioned if risks materialize. Group operating profit before special items in total was down EUR 8.7 billion to EUR 10.6 billion. A result far better than originally expected back in March, April of last year, when the severity and duration of the pandemic was completely unpredictable. The EUR 0.9 billion negative special items in 2020 were all related to legal risks resulting from the diesel issue. The wrap up on the EBIT bridge, operating profit after special items, came in at a solid EUR 9.7 billion. The reported net cash flow of the automotive division came in at EUR 6.4 billion for calendar year 2020. Much stronger than assumed back in April, May of 2020. Our clean cash flow came in at very strong EUR 10 billion. I'm especially proud of this achievement. We reached our strategic target even during the worst crisis the automotive industry has ever seen. Ending an unprecedented year with a net liquidity close to EUR 27 billion is pretty decent and shows how robust we are. We are also sending a strong signal to the capital market that despite the impact of COVID on our results, we are proposing a dividend of the same amount of last year. Furthermore, we are certainly sticking to our commitment of a dividend payout of 30%, and with 29% based on our dividend proposal, we are almost there. To conclude my part with this well-known chart. Since 2016, the Volkswagen Group continuously delivered on what has been promised, especially on cash. We are very determined to continue this development. Ladies and gentlemen, my turn as CFO of Volkswagen Group is coming to an end soon. I'm overdue to dedicate more time to my family. I started as CFO right after diesel in October 2015. It was a very tough time for all of us. Volkswagen disappointed all its stakeholders in the most terrible way. Some of your colleagues lost their job because of us. The atmosphere in our first IR sessions was tense, but still very professional from your side. I never took the fact for granted that so many of you gave Volkswagen a fair chance to regain your trust over time. I'm very grateful that we have been able to build so many invaluable personal relationships. Last but not least, I had the opportunity to learn so much from your feedback and the questions you raised. It was a privilege and honor for me to represent Volkswagen in the capital markets. With great pleasure, I'm handing over to Arno on April 1st. Arno is an esteemed colleague you know quite well from his previous positions at Volkswagen Passenger Cars and Audi. All the best to all of you and your families. Take care. I will now hand over to Arno, who will speak about calendar year 2021, how to interpret today the 2022 interim targets we posted back in November 2020, and how passionate we continue to be about our strategic targets for 2025. Arno, please. Thank you, Frank. First of all, thank you for your kind words, and as already said this morning, also for the support and the excellent collaboration throughout all the years we've worked together. I also very much appreciate the robust financial foundation that you're handing over to me. Ladies and gentlemen, Herbert and Frank already described what we've achieved in 2020, and now I would like to turn the focus to 2021 and beyond. Our goal is to finance the ambitious transformation of our group. For this, we need robust earnings and cash flows. This is very clear. Our strategic targets are defined, and we are sticking to them. Our target is to achieve a return on sales in the range of 7%-8% in 2025 at the latest, and to generate at least EUR 10 billion of clean cash flow. Let's take a closer look at our outlook and guidance for 2021. We've guided for a return on sales in the range of 5%-6.5%. Rest assured, we are striving for the upper end. For clean cash flow, we are sticking to our strategic target of greater than EUR 10 billion. To get there, we need strong sales momentum, commitment to our BEV ramp-up, and continued strong cost and investment discipline. Strong working capital management is also key. I've just mentioned strong cost discipline. Be assured we will make no compromise when it comes to the necessary investment in future technologies. For that reason, we've guided for R&D around 7%. This is a reflection of our execution of our BEV strategy and of building up our software competence. In relation to CapEx, we will continue our strict discipline approach and are guiding around 6%. It's our goal to stay well below this figure. It's still early days in 2021, and 2021 is not risk-free. Our level of achievement depends on how the worldwide COVID pandemic situation develops and the level of pace of recovery. There's a further risk regarding sufficient supply of semiconductors for the entire automotive industry. We are striving to keep the operating impacts of current undersupply of semiconductors as low as possible and to compensate them as far as possible during the remainder of the year. Looking at the interim strategic targets for 2022, as you're aware, these targets were communicated back in mid-November 2020 as part of our five-year planning round. At that time, we were still very conservative since forecasting on the severity and duration of COVID was even more difficult back then. I think it's fair to say that if we revisited these targets today, we would make them more ambitious. Ladies and gentlemen, I would like to take the opportunity to lay out my priorities for the years to come. I have two clear strategic goals as CFO. First, to financially steer the transformation. This includes allocation and shifting of resources and capital towards electrification, digitalization, and mobility services. Our second goal is to safeguard and further strengthen our financial foundation. To achieve these twofold goals, we will focus on six major topics. First, product transformation towards electric. Second, digitalization and developing further our software stack. Topic number three, capturing group-wide synergies between the brands. I'm deeply convinced group-wide synergies provide a unique source of competitive advantage. Topic number four, steering group-wide cost and efficiency programs to finance the transformation. Number five, strengthening brand positioning and pricing. Everything we do will be based on our integrity and values. We are fully committed to continuing the transformation of this company. On the left side of this chart, you can see our investment in terms of R&D and CapEx in each five-year planning round. You also see the share of the allocation of investment in new technologies, BEV software and services. Each planning round, we increase this share, and we will continue to do so. The question is whether this is ambitious enough. We think it's extremely ambitious. By 2025, we expect our sales of battery electric vehicles to amount up to 20% of our total fleet, and we will see an increase each year beyond 2025. In the meantime, the ICE business will help to generate the cash flows necessary to fund the transformation. We are ambitious in our transformation. We will offer around 50 BEV models until 2030, and combined with the shift in resource allocation, we will transform this company to a leading tech player in our industry. Ladies and gentlemen, these ambitious plans need to be financed. Therefore, we need to keep overhead costs under tight control. In the past, our fixed costs grew over time. This is not necessarily a problem for a company that is growing, but for various reasons, our overhead costs grew faster than our sales. We want to reverse this trend. We are convinced that the lower fixed cost base is necessary to improve our competitive position and to finance our future. Therefore, we want to reduce fixed costs without R&D and CapEx until 2023 by 5% versus a defined base in 2020. This equals a reduction of around EUR 2 billion. In this cost base, we have included general overhead costs in our headquarters, indirect costs in our plants worldwide, or the budget of our national sales companies, including marketing spend, to name some examples. Taking the year 2019 as a more normalized base year, the program target implies a reduction of around 10%. We also communicated that we intend to reduce material cost by 7% by 2023. Later this year, Murat Aksel will give a deep dive to explain his strategic approach and the financial impact. Ladies and gentlemen, Volkswagen is a bundle of some of the most fascinating, powerful and valuable brands in our industry. Without a doubt, strong individual brands will remain a differentiating factor going forward. We strive to even better position our brands in the future, draw synergies where possible, and work hard on cost and efficiency for the good of our customers and stakeholders. At the same time, we need to transform ourselves into a unified technology and mobility service group. This means that we need to shift our focus also towards value drivers, like unified software stack, BEV platforms, and autonomous driving, to name a few. Our internal decision-making and capital allocation will be geared towards this goal. Step-by-step, we will complement our current planning and steering of individual brand performance with focus along these value drivers, BEV platforms, software stack, battery, energy and charging, and mobility platform and autonomous driving. Ladies and gentlemen, we have a clear plan. We will scale our BEV platforms, we are going to develop a leading automotive software stack, and we will continue to invest in autonomous driving and mobility services. During this transition, our traditional business will help to generate the profits and cash to do so. We are convinced, based on these unique opportunities and a solid financial basis, we will be a leader in the transformation of our industry. We will preserve our natural resources, and we will achieve this with integrity and based on our values. We look forward to this task. Thank you very much. Thank you very much, Arno. We would like to take our questions from investors and analysts now. Please take note that Thomas Schmall, our new board member for technology, will give insights on the components and battery and everything we spoke about in the Power Day yesterday, and Christian Dahlheim will present our sales outlook in our following event. If you wouldn't mind, we would very much appreciate if you could hold back your questions on these topics until later on this afternoon. Thank you. Operator, over to you, please. Our first question is from Arndt Ellinghorst from Bernstein. Please go ahead. Yes. Hi, everyone. Firstly, on behalf of the entire financial community, I'd like to say a really big thank you to Frank Witter for more than five years, enduring all our questions and discussions, and especially Frank, those on the event bridge. As you said earlier, you took over as CFO in autumn 2015, right at the rock bottom of the diesel crisis. It's fair to say that this was the worst time in the history of Volkswagen. Obviously, all of you at Volkswagen together managed that crisis. As CFO, there's certainly a significant pressure to ensure the financial viability of the company during such times. On top of this, Frank, you managed to transform financial steering of the group by targeting and delivering more than EUR 10 billion of free cash flow per annum. We've had tense discussions surrounding hidden values in the group. Obviously, those will continue with management and the supervisory board. What many people don't know, Frank is a passionate football fan, former second-division player, and he's the Chairman of VfL Wolfsburg, which is currently in third position in the Bundesliga. There's plenty of stuff for Frank to engage in, moving forward. Frank, with all this in mind, more than EUR 100 billion VW market cap, Wolfsburg potentially playing the Champions League next season, I believe you deserve to move on. We all wish you a great and fun time with your family and success in all your future ventures. Thank you really very, very much for the last five years. Now, I think I should ask one of these painful questions. I assume it's one for Arno. Arno, can you explain the 7% material cost savings target a bit more in detail? You're giving a good baseline for the 5% fixed cost reduction. That's very clear now. On the material cost, I think you stopped giving material costs in your annual report in 2015, but then they were reported at around EUR 150 billion. Can you give us a bit more color on the 7%? Is there a real tangible savings number behind that, and can you share that with us? Thank you very much. Arndt, yeah. Thanks for the question. Look, indeed, we try to be as precise as possible on the fixed cost program. What we would like suggest is, Murat Aksel is still working on the program. He's working out the details, also the effects that we will see throughout the Planning Round. As far as we have the concrete effects and the precise figures, we will come back to you guys and explain the program in detail now. Okay. That's fair. Probably to add from my side, because it was also, let's say, this was kind of the package we agreed with the supervisory board and the new assignments on the board. It is, let's say, we have assumptions for material cost development, which are assuming reductions, but the 7% are more than what we have in the plan. I would also say, let's give Aksel the chance to lay that out and then that you really can follow that up. He's prepared to give full transparency on that. Okay. Thank you, Herbert. Thank you, Arno. Arndt, do you have a second question? No, I think I've talked already too much. I'll leave it to other people. Okay. Thanks, Helen. Oh, that's something new. Thank you. Okay, we'll move, operator, to the next question, please. Thank you. Just as a reminder, in the interest of time, all participants will be limited to one question and one follow-up. We thank you for that. We'll now move to our next question from Patrick Hummel from UBS. Please go ahead. Yes, thank you. It's Patrick from UBS. Also, from my side, many thanks, Frank. I think you already heard from Arndt what your achievements were, so I don't have to repeat, but just wanted to say a wholehearted thank you for all the collaboration. Best of luck also to Arno, for this certainly exciting and challenging role ahead. I will focus on just two topics. The first one, based on what you announced yesterday in the Power Day, and I know there is a follow-up session with Thomas and the team, but on a bigger picture level. You're changing the game a little bit or quite significantly actually by rather than just sourcing from external parties, you're co-owning the new manufacturing assets and my understanding is that you want to bring in additional partners for that. I'm just curious what type of profile you're looking for. Are you looking for new entrant players like Northvolt? Are you looking for the big guys just to jump on your bandwagon and produce the unified cell format as you wish so that we will end up with, let's say, four different type of joint ventures with the likes of LG Chem, Samsung, SK Innovation and so on? If you can just share a little bit of color how you're thinking about that, and also how much money you're ready to put down because one gigafactory, I guess is about EUR 4 billion or so. Do you want to pay that all yourself or do you look for a 50/50 type of joint venture structure for all these assets? Related to that, what about the raw material sourcing? I think these assets are only assets once you have secured the raw material and there seem to be bottlenecks also further upstream. I'm just curious, what is your sourcing strategy here? Are you ready to put significant amounts of money on the table, getting take or pay contracts to make sure these plans will be well-utilized? If I can just sum that up into the whole CapEx complex and we totally appreciate the cash flow from the legacy business. That is what funds the growth in EV and AV. At the same time, it feels like with a very steep EV curve, this is a business that should be run as a cash cow. Can you help us how much actually in the existing EUR 150 billion budget is still directly related to combustion engine powertrains and how much you think you can take off the table without compromising having a competitive product portfolio for the next, say, five to seven years? Thank you. Maybe I start with the battery assumptions. Yes, we announced the capacities we still need. I think the most important message yesterday was that we go for a single-cell format with a standardized cell worldwide, which we are able to define ourselves. Also we make progress in the manufacturing process. We can define manufacturing processes to drive down costs and change chemistry over the period until 2030. I think there's a technological roadmap and also an industrial roadmap, which is laid out now. Yes, we will produce some of those cells in-house because we need the knowledge, deep understanding, also understand the supply chains for raw materials, custom materials, and so on and so forth. We are also looking for other investments, and you mentioned those, Northvolt. First and foremost, we are talking to our established cell suppliers, which are basically CATL from China. We are invested in Gotion, and there are the typical Korean suppliers, which we are tied in and working close together. Our aim is to define a manufacturing process, cell format, also materials, raw materials, and then share or let's say, co-invest or outsource the capacity investment. That has to be seen because some of the investments will go into other parts of Europe. Spain is a hot candidate, and even governments are interested in spending money. Financial hedge funds are interested in spending money on batteries because it's a growth business and there are margins behind that business. We know that. That is to be chosen. We do not want to, let's say, fully integrate battery manufacturing in our balance sheet. That wouldn't make sense. Raw materials. There's a lot of discussion about raw materials. Yes, we probably will see some short-term squeezes, shortages. Overall, this is a different game than what we normally talk in raw materials. Normally, we talk about precious metals or rare earths or so where we have really limited amount of the minerals. Whereas when we talk lithium or nickel or even cobalt is on a downturn. Basically, we have resources in abundance. The question is only are the capacities there for the exploration. Are we in time for the demand? This is where we might see some balances. On the long run, we just started our plant in Salzgitter. We will reuse mostly all the materials in the batteries in a closed circle and so becoming more or less independent from. This will take time, several years, probably decades, until really this is fully established. Yes, there might be squeezes, but I think they will be relatively short-term. Keshika? I think we hand over to Arno for the questions on investment and on the money we need to put down for battery. Yeah. Patrick, thanks for the question. First of all, let me say, you're well aware, and everybody's aware that the battery is a huge lever in terms of cost in the car, in terms of securing supply and also in terms of performance like range and charging time. I very much appreciate what my colleagues yesterday showed. On the other hand, we said that we will stick to the 6% CapEx and also to the EUR 10 billion of free cash flow. We try to make sure that with what Herbert just said, like intelligent partnerships and investment, that we will see over time that we make progress on a better topic and at the same time, be able to stick to our strategic targets. Thank you. Any word on the. Yeah, okay. Patrick, I think you raised the second question, the amount of the split basically between ICEs and electric battery cars, BEVs, and also software and mobility services. In the Planning Round 69, it's 50%. As I said, you will see an increase every year. What we must take into account, this transition takes time. It's a transformation that we see over 10 years. We have long product life cycles, and we generate cash flows today and tomorrow from combustion engine cars, and we need to make them or keep them competitive. It's a compromise, but we think we are extremely ambitious already in the investment into battery. As said before, all planning around 50%, and I wouldn't be surprised if that proportion would be much higher in the next Planning Round. Got you. Thank you. Okay. Operator, if we can take the next participant, please. Our next question comes from Dorothee Cresswell from Exane. Please go ahead. Oh, hi there. It's Dorothy from Exane. Thanks for taking my question. The first one is around your near-term BEV aspirations. I thought they were for at least 20% by 2025, and it now sounds like it's up to 20%. The same sort of applies for 2021, where it's now 6% and previously was for 6%-8%. I'm just wondering why that seems to be a tad lighter when the 2030 BEV target proportion has actually gone up to the 50% that you mentioned globally, I think. Then if we could have any color on premium brand profitability in 2021, that would be fantastic. Q4's margins were outstanding, as you said. I'm just wondering whether you have any color for us on that for the coming year. Of course, Frank, I wish you all the very best for the next chapter. Thank you. Bye-bye. Christian, maybe you could take the part on BEV. Oh, sorry, I think Herbert is ready. Okay. Maybe a quick comment, Christian Dahlheim, on the percentage share. Let's put it this way, I think we're now able to give you more precise guidance. You're right to point out that it's the lower end of the initial guidance. I wouldn't take that as a sign of a slowing transformation. On the contrary, and I will comment on that later this afternoon, transformation will accelerate after 2025. Let's take it as a promised ramp-up to 6% in 2020 and 20% in 2025. Again, afterwards, the acceleration will happen, and I'll comment on that later this afternoon. Yeah. Let me start with the premium margins, with the margins for the premium brands. I think it's fair to assume that Porsche will exceed its strategic target of 50% return on sales. I think Audi is guiding a corridor of 7%-9%. I'm pretty sure that this is where we should expect them, and as always, we are striving for the higher end of. With respect to the percentages, please also keep in mind that those percentages do vary also based on the success we expect on ICEs. Yeah? It's a relative percentage number. We are still seeing a lot of ICE business, so please don't read into it that we foresee any problems with the BEV ramp-up over time. We also see a lot of business around the globe on ICEs. That's really helpful. Thank you so much. I think, Arno, you just wanted to make a little statement on Audi. Since I'm currently still CFO of Audi, I want to make you aware of our investor call on Friday. There we will go into much more detail concerning margin, cost work, and also what we achieved on the market side. Yeah, I really look forward to this call on Friday. Thank you. Great. Operator, if we could take the next person, please. Our next question comes from George Galliers from Goldman Sachs. Please go ahead. Thank you. Thank you for taking my question. The first question I had was just on the EUR 2 billion fixed cost saving. I just wanted to ask, are you expecting any offsets against that EUR 2 billion target, or should it ultimately lead to a EUR 2 billion improvement in operating profit by 2023? The second question I had was just with respect to the electrification. Obviously, you've announced plans to vertically integrate the supply chain. Do you see an opportunity to materially change your go-to market strategy and pursue a more digital online approach? If yes, by how much do you think you can reduce your distribution cost? Maybe a comment on how your experience with the agency model is going with ID.3 in Germany. Thank you. George. Thanks very much for your first question on the fixed cost. Let me say, the fixed cost Program as it is defined, is basically we need that to secure our margin. We gave you the guidance of our strategic corridor. You also asked whether we see some offset. This program is defined as a net program. That means, basically, we want to reduce the fixed cost by net EUR 2 billion. That means, for example, wage increase or inflation. We need to compensate within that program. This is the reason why we think it's pretty ambitious. There might be other offsets. In total, we need that program in order to secure our margin guidance. Yeah, George, allow me to comment on your question on digital and agency. First of all, you're right. Yes, we intend to significantly increase our share of digital sales, although we consider them, let's say, omni-channel sales. You won't see many exclusive digital or offline customers. Most customers will use both channels. It absolutely provides opportunity for a reduction of cost of sales. What we see currently from our agency in Germany, with now, let's say, nine months in, is an opportunity between 1% to 2% in cost of sales reduction. We think that can be sustainable. Okay. Operator, can we please take the next participant? If I could request, could you please ask one question? We have a lot of people in the line, so out of fairness, maybe you can stick to one. Thank you. We will now take our next question from José Asumendi from JP Morgan. Please go ahead. Thanks very much, José, JP Morgan. Yes, Frank, thanks very much for the collaboration also over the past years. I actually had the honor of hosting that very first meeting for you investors at the peak of the diesel topic, and certainly since then, the company has changed and transformed over the past years. Thank you for that. Two questions. I'll stick to two this time. Arno, can you speak a little bit more, please, around momentum into the first quarter, how the business is evolving? Any details you may share, please, around sales, margining of the group. Are we traveling sort of the lower end, the middle end, or maybe the higher end of the margin range? Your overall confidence to hit the higher end of the range. What are the sort of most important support factors you see in the year in 2021? Second question, please, for Dr. Diess. As we think about Rimac and Porsche, can you talk a little bit about what Rimac brings to Volkswagen, to Porsche, in terms of the collaboration, that maybe, potentially, Audi would not bring? How does it help bring that acceleration into EVs? Also, would you consider increasing the stake in the entity? Thank you very much. Sorry, José. Increasing the stake. Could you just repeat the end of your question? We didn't understand that here. I apologize. Whether you would be interested in increasing the stake in Rimac. In Rimac. Okay. Yes. Arno, we can start with you with the quarter. Hi. I take the first question. Look, we guide it for the whole year of 2021 to the upper end of the 5%-6.5% corridor. The first quarter would be a little bit more difficult, I would expect, rather than the lower end of that corridor for the first quarter. We still have good momentum on the sales side, and we also try to continue our good performance on the cost side. However, there will be risks, specifically around the semiconductor shortages. We try to compensate for some of the risk throughout the year. We expect also a restructuring to be booked at MAN in a lower three million digit number. On the other hand, as you're aware, there are positive effects currently from fair value valuation of commodity derivatives. We should also try to compensate the risk on the sales side due to the semiconductor topic. In total, more like on the lower end of the corridor, but then towards the whole year, we try to compensate, and then we expect the upper end of the corridor at the end of the year. Okay. Bugatti. Porsche took over the helm there, so I only will do the introduction and later probably Porsche will comment on the next steps. Why did we consider to change the allocation of Bugatti? Bugatti development team is based here in Wolfsburg. They have a plant in Molsheim, as you know. The synergies between volume and Bugatti are very, very low. Bugatti is, they are doing carbon fiber monocoque chassis, 1,000 horse powers engine. There's very little synergies to drive that business from here, from Wolfsburg. Also, I have to say, we struggled to find a business plan, the way forward, even looking for more synergies. That is when the discussion with Porsche started. They took the decision that it would make sense for them. They have much more synergies. Rimac came into the game when we have been talking about electrifying super sports cars. They have a track record there. They're coming with a product to market, and this is how this game will be and should be probably played. I would spare that to the Porsche announcement. They are in charge now, and they will tell you exactly what's going to happen next. Okay. Thank you, Herbert. Can we move to the next participant, please? We will now move to Tim Rokossa from Deutsche Bank. Please go ahead. Yeah, thank you very much. Tim Rokossa, Deutsche Bank. It's a short call. There needs to be assigned time for this if a legend retires. Frank, also from my side, thank you very much for being such a trustworthy and interesting discussion partner. It's been an amazing ride. Just because you said so often that the work at VW wasn't over the years, I hope that your next step is indeed a walk in the park for you. Since you picked a great company to oversee, I have no doubt it will be. Coming to my question, it's about EV profitability. Selling a few hundred thousands of those this year, especially considering what we saw in Q4, you selling a lot of EVs and you being very profitable. Can you just update us on where you stand with respect to profitability of those vehicles, and when do you expect to be break even with ICE cars? Thank you. Yeah. We have been talking very often about this, is probably your biggest concern and our biggest concern, EVs, and we always said that the first generation is difficult to achieve because there's a lot of investment going into it. We just last week, we had a workshop where also Christian Dahlheim showed us a little bit what are the profit pools in the future. How is this game changing from ICEs to EVs? As we are, let's say, looking at the full value chain, we have to consider what's going to happen in retail, in wholesale, in parts business. This was quite interesting, because what we saw is that after all, let's say after this transition, EVs will be cheaper for the customer, considerably cheaper for the customer to run, mostly because of the cost of energy but also because of less maintenance. The potential for us to earn some money on those cars will be probably even bigger than today because we have a higher part of the value chain. We can sell energy, we can sell equipment around the cars, and that is where we are working on. For the first generation, we always said that we would introduce top-down, so from Taycan to e-tron, to ID.4 to ID.3, with the idea to keep the margins as high as possible, which I think is working well. The lower margin cars are coming in later, so starting 2025 with the smaller cars, which I think is a better strategy compared to some of our peers. What we see is that the first generation is If you would take away the big one-time investment in some of the plants and batteries and so, we could come relatively close to some of the A-size profitability figures we today experiencing, which should be some potential. I think we are in good shape because we will have already, in this generation, high economies of scale. The platform is working, it's scaled worldwide, so we should be competitive. Also, Our agency model had a good start, which allows us to keep better price discipline. We are not pessimistic, and we think long term, we should become even more profitable with our economies of scale and our approach. Short term, we will manage the transition without losing our margin promise or aspiration. Yeah. Thank you. Thank you. If we can move to the next participant, and again, please, my request to stick to one question. Thank you. Our next question comes from Stephen Reitman from Société Générale. Please go ahead. Thank you very much. Stephen Reitman, Société Générale, London. First of all, again, Frank, thank you very much for all the work you've done at Volkswagen. It's been a pleasure working with you. My question is, the ID., at least, is now your global EV, and at least we now have an idea about pricing levels around the world. I was wondering, in Europe and in the U.S., you've already priced the ID.4, it seems, against close to the level of the Model Y. In China, your longer range version of the ID.4 is priced at CNY 120,000, which is about 35% below the long-range Model Y. I'm just wondering, what does that say about profitability? Do you have a significant cost advantage manufacturing the car in China? Is it reaching the levels of profitability you'd be looking for? Obviously, you're only just starting it, but I'd just be interested in your view about pricing on EVs. Yeah. Probably one comment. In China, we have high volume aspirations. We are ramping up two plants at the same time for basically the ID.4. One is our north joint venture, south joint venture. Price levels are also in China. We're coming from Volkswagen, and we have really a big volume approach ahead of us, whereas probably, I don't know, I can't comment on that, but the entry of Tesla into the Chinese market was coming down from the premium segment. As Tesla is changing the prices quite some often, that might change. We think we have the right price position for our volumes, and also in China, the cars also in the first cycle will be, margin-wise, okay for us. Okay. Operator, could we take the next participant, please? We'll now move to our next question from Philippe Houchois from Jefferies. Please go ahead. Yes, thank you, and all the best, Frank, in your retirement. My question was more on the balance sheet. You've made great progress on balance sheet repair, I think. I'm just trying to understand. You're due to refinance some of the hybrids this year. Should we assume, Arno, that you will not be adding to your hybrid position, which would be a clear sign of confidence in your balance sheet? The second part of the question would be, if I try to reconcile your net liquidity aspiration for the end of this year, moderately up year-over-year, I know your M&A guidance doesn't include the impact of Navistar. Isn't the most logical way, since you're trying to unleash value, as Dr. G said, in the group, shouldn't it be the most logical step to actually raise capital, the level trade, and increase the free float, which would increase the interest on its stock, and therefore reflect back on the valuation of the group? Thank you. Frank, I think you'll take the first one on the banking question about hybrids, please. I think we're pretty much close to the ceiling of hybrids outstanding. Since we are repaying, we definitely plan to replace hybrid bonds, which we are repaying. You shouldn't be overly surprised to see us tapping this market again, total ceiling in mind. Okay. Yeah, I think the way I understood your question on Traton, I think it's no secret that there's a limited free float. We IPO'd Traton, obviously, in difficult market conditions, and we have a lot of strategic shareholders, so the free float is limited. That is certainly an option, but we currently don't have any plans. Focus of Traton team is entirely on taking over Navistar and executing the global championship strategy. From my humble personal perspective, I think before somebody would probably contemplate listing more shares, the share price needs to get closer to the true value of the company. We are fully convinced that there should be a higher price than what we currently see. We have a plan. The management team is executing, and with Navistar, we truly would become a global player at Traton. Thanks, Frank. Operator, can we take another participant, please? We will now move to our next question from Horst Schneider from Bank of America. Please go ahead. Yeah. Thank you for taking also my question, and Frank, also for you, the best for the future. Was always a pleasure with you. The last question that I have that relates to raw material prices. We got from General Motors, also Stellantis, a quite negative guidance on 2021, since they talk about EUR 1.5 billion-EUR 2 billion negative raw mat impact. They sell less cars than you do. My question to you, what are your assumptions on raw materials for this year? Thank you. I think Frank will take this one. Yeah, Horst, I think we pretty much go with GM and we expect raw materials to be a headwind. We expect price increases, but this is certainly included in the guidance we gave for the full calendar year. On the other hand, obviously, having a bit more conservative forecast, but we've seen a lot of volatility, and even short-term movement. We clearly expect headwind. We have some hedging in place where possible. It's currently definitely a concern and we are working on, or firing on all cylinders to have and secure the best possible outcome. Okay, we can take our next participant, please. We'd like to run over five minutes to ensure everybody in the line has a chance. We'll now move to our next question from Henning Cosman from HSBC. Please go ahead. Please ensure you're not on mute. Apologies. Afternoon. It's Henning from HSBC. I just had two quick clarifications please. One is on the other line. If you could please share how much of the costs for the car software are now included in the other line and not in the divisions anymore, and also if that's a good proxy for going forward. The other clarification was just on the dividend. I believe in the past, we have also discussed exceeding eventually the 30% payout ratio. Just wondering if that's still on the table. Thank you very much. I think we give Frank the other line. It's one of his favorite positions, and also, a comment on dividend will come from Frank. Yeah. With the 30%, we certainly will strive for that. Arno is inheriting that promise. Absolutely, you can rest assured that we take that to heart. We made a big step forward with the proposal for calendar year 2020. I think as I said at earlier occasions, you shouldn't wait for the end of the planning round. Obviously, let's take a closer look when we know what we bring home for calendar year 2021, and then decisions being made accordingly. I think the other line, obviously, big swing came in, positive EUR 760 million for the full year, particularly strong Q4. We had definitely a significant amount of lower eliminations of intragroup profits, which are part of it. We had the disposal of AID. EUR 500 million of the total of EUR 800 ended up in Audi's P&L and EUR 300 in the other line. We had higher income from our fully consolidated Chinese companies. This is pretty much what drove. I think you also referred to our spending for the car software org. It's pretty much a main driver in the R&D section. EUR 2 billion-EUR 2.5 billion annually is what we are going to invest. We are fully convinced that this is a very strategic and critical investment. We are certainly turning around every stone, but we will keep on pushing on software. That is what the current and the new management team is very clear about, because that is a huge opportunity in terms of customer experience, competitiveness of our product, but also what Herbert related to The scale which we can bring home from one standardized backbone architecture. There is certainly a three-digit impact in the other line, but the main impact you find in the R&D section. Thanks, Frank. I think, operator, we'll have to take our last person. I can see there's four left in the line. We should have some time left at the end of the next event. If you can keep your question until then or send me an email with it, I'll make sure it gets done in the next event. Operator, last person please. Our final question comes from Kai Mueller from Barclays. Please go ahead. Hi. Thank you very much for taking my question. I'll keep it brief. For you, Dr. Diess, maybe one question you mentioned earlier, you're very excited about the momentum that is building up now with your battery electric vehicle sales. What are the biggest headaches to you if you think about the next couple of years? Is it maybe that the demand environment does change, given you have invested that much? Is it really the internal change that you have to drive within business given how big you are? Maybe even external factors such as the chip shortage you've been seeing, potential battery bottlenecks. What is the challenge for you in the coming years? Actually, we are quite confident. We see a difference in the markets according to the incentivization in the different markets. We have markets here in Europe where we already have 50%, 60% EV share, and the ID.3 is the most sold car in those countries. That depends on tax schemes, how much penalties do you get on ICE and how much incentives do you get on the EVs. This is quite asymmetric all over Europe, and the markets are really behaving differently. The next most important influential factor is fast charging network. There's also a big difference between, I would say, central Europe, Germany, Holland, Norway, Sweden, where we are good, I would say, sufficient infrastructure. Whereas in Spain, Italy, or so, we are really lagging behind. That is why we are pushing there and even spending our own money with partnerships to make sure that we get the fast charging infrastructure. On the other hand, there's a huge commitment. This will develop, from most of the governments are supporting. In Germany, we have big programs, so this situation will alleviate. There's also, I would say, a very positive effect that also the petrol companies are now changing. Though we are partnering with BP to put a fast charging station to all their refueling stations in Germany. Though that helps, and that also pours additional money and resources into our sector, into EV, which should propel us. Batteries, yes, probably the third biggest challenge for EVs. Two plants are still in the ramp up. A third plant coming into play now here in Europe. You always, in such kind of a ramp-up phase, you would notice some hiccups. So far, I would say until 2025, the investment is done, the contracts are there, the technology is clear. That should work well. Customer sentiment, which is basically changing, and over time, I think it will gain even more momentum, because already today, to drive an ID.3 is cheaper than if you would own a Golf. For many people, the ID.3 is already today the better option. People are a bit skeptical about, is the infrastructure already there? Once your neighbor drives, your other neighbor drives as well, and you self-drive, then you get basically the final push to get into EVs. Those are probably the three, I wouldn't call it constraints, but challenges to overcome. We are confident that we will overcome those because three years ago, we have been talking about EVs. There is no real other alternatives. All our peers have announced huge EV programs. Sooner or later, the customer will notice that there is no other real option. That is why we think we are confident that we achieve the 2025 targets and then also for the next phase between 2025 and 2030, we are just now replanning, rescheduling. Planning Round 70 will then contain all the investments in batteries, in fast charging for the next step to end up at 50% or 60% EVs. We don't see any alternative, and I haven't heard about any of our peers going another route. Okay. Thank you very much, Herbert. That's a very good and relevant wrap-up statement. We're actually finishing up for this portion of the agenda. We're a little bit over time, so we'll take 10 minutes break, and we'll start back at about 20 past, if that's okay. Just to remind you, Arno also mentioned we do have several brand conference calls coming up within the next few days. The details are on our website if you need to find out some more. Thank you.