Good morning, and thank you for standing by. Welcome to the Volkswagen Group H1 2026 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. We will first take questions from investors and analysts, after a short break, followed by a separate Q&A session for members of the media. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dr. Sebastian Rudolph, Vice President, Global Group Communications, Volkswagen AG. Please go ahead. Thank you. Good morning, everyone. A warm welcome to the half-year 2026 results call of Volkswagen Group. This is a joint call for both the media as well as investors and analysts, moderated by Rolf Woller, our Head of Group Treasury and IR, and myself, Sebastian Rudolph. With us today are Oliver Blume, our CEO of Volkswagen Group, and Arno Antlitz, our CFO and COO of Volkswagen Group. A few remarks before we start. You should have received the press release, the interim financial report, and all other related materials, which were published this morning. If you do not have them yet, you can find all documents on our website or just drop us an email. Let me hand over to Rolf. The floor is yours. Thank you, Sebastian. Good morning to everyone on the call. Thank you for joining us today. Let's have a look at our agenda. Oliver will start with the key developments of the first half-year. Arno will then take you through the half-year financial results and the full-year outlook for 2026. I will hand it back to Oli, who will guide you through the current status of the Group Target Picture 2030. Following their presentations, we will first host a Q&A session for the investor analyst community, which will be hosted by myself. After the session and a short break, we will continue with the media Q&A moderated by Sebastian. Since our call will include forward-looking statements, the safe harbor language, and other cautionary statements on the slide you should currently see on the screen will govern today's presentation. As usual, I encourage you to read the disclaimer carefully as all forward-looking statements are qualified by this language. In the interest of time, I will not read it out loud. With that, I hand it over to Oli. Oli, please go ahead. Thank you, Rolf, and good morning and also a warm welcome to everyone on this call. Let me start by providing you with an overview of key developments of the first half-year. We are operating, as you know, in a more than challenging environment. Major markets face weak consumer confidence, subdued demand, and intense competition. In China, the market declined by 20% in half-year one, further increasing excess capacity. Everything in spite of over 500 new models arrived in half-year one in the market. As a result, Chinese OEMs have sharply increased exports, adding pressure in Europe. U.S. tariffs create a significant burden and restrict international trade. In our home market, regulatory requirements and high energy costs add further pressure. This affects not only Volkswagen but the European auto industry as a whole. We at Volkswagen are acting early on and decisively. Before I take you through our Group Target Picture 2030, let me start where we stand after the first six months of 2026. In the environment described, group deliveries came in 6% lower at 4.1 million vehicles. Underlying demand for Volkswagen is stronger than the headline figures suggest. Europe remained positive, with the deliveries up 3% in our home market. We thus retained the clear number one position. North America returned to growth, with volumes increasing 8%, despite continued BEV weakness and supported by the new models. South America also delivered solid growth of 9%. In China, deliveries declined 37% in quarter two and 26% in half-year one, reflecting very weak consumer sentiment, the end of subsidies, and the ongoing model transition. In light of a weak NEV market in quarter one, we started the year as number one in China. After six months in 2026, we continue to be strongly positioned in the top three. Excluding our China JVs, deliveries increased 2% year-on-year in the first six months and by 3% in the second quarter standalone. Our renewed SUV portfolio is creating momentum across key markets. In North America, Tiguan and Atlas supported growth, while T-Cross and Audi Q3 continued to drive volumes in Europe. Even in China, initial customer response to locally developed models, such as AUDI E7X and Volkswagen ID. ERA 9X, is encouraging, strengthening our confidence in the China for China strategy. We are not standing still. The I.D. Cross is complementing the Electric Urban Car Family in Europe. The vehicle was just introduced to the market. Order intake remains strong and increased 4% year-on-year to 2.1 million vehicles in half-year one. As a result, the order book grew to around 1.1 million vehicles at the end of June, providing visibility of more than three months of sales. We are especially encouraged by the strong momentum in our BEV order book, which increased by 57% year-on-year to 330,000 vehicles. BEVs now account for 31% of the European order book, up from 22% at year-end 2025. A major contributor is our new Electric Urban Car Family. For the first time, Volkswagen Group has a comprehensive and highly competitive offering in the entry-level BEV segment, opening up a large customer group that we were previously unable to address effectively. The Volkswagen ID. Polo, Škoda Epiq, and CUPRA Raval have already generated more than 70,000 orders within weeks of launch, even before entry-level variants become available. Together with the recently launched ID. Cross, this provides a strong foundation for future BEV growth and market share gains in Europe. This shows how our platform strategy is working. One platform shared by three brands across four models. Unique cars and highly differentiated, yet about 80% shared parts. Produced together in two factories in Spain. Overall, realizing synergies of more than EUR 600 million. Importantly, this will also put us in a better position to reduce the remaining gap to the CO2 targets in Europe. In such demanding environment, Volkswagen Group held up also financially. The group generated stable sales revenue of EUR 158 billion. Operating profits amounted to EUR 5.9 billion, corresponding to a 3.8% margin. Excluding restructuring costs and the ID.4-related write-off in the U.S., the margin reached 4.3%. The consistent implementation of our performance programs is increasingly visible in our results. Over the past years, these measures have enabled us to weather substantial market-related headwinds with a cumulative headwind in a double-digit billion euro range to date. At the same time, cash generation remained strong, with EUR 3.2 billion automotive net cash flow in half year one, up EUR 4.5 billion year-over-year. Net industrial liquidity amounted to EUR 32.7 billion. This is providing us with a solid base to stay successful in the market environment and to decisively push ahead with our Group Target Picture 2030. Looking at the results of our passenger car business, the operating profit increased from EUR 4.4 billion- EUR 4.8 billion in half year one. With Brand Group Core, Volkswagen Brand stayed firmly on the path of improved efficiency while simultaneously advancing the largest product campaign in its history. The Brand Group Core margin, excluding special effects, improved to 5.9% in half year one 2026. Brand Group Progressive increased results with improved performance in Europe, overweighting the headwinds in China and the U.S. In half year two, the operating margin is expected to accelerate to 6%-8%. Brand Group Progressive should benefit from product launches such as the new Q7, Q9, and RS 5 models, as well as continued cost work. At Porsche, we undertook a comprehensive restructuring and repositioning in 2025, including a sharper focus on our core business and expanded cost program. As forecast, the restructuring measures are beginning to gain traction, with operating profit increasing to more than EUR 1 billion in the first half year 2026. On a reported basis, results were up by 45% to a corresponding margin of 8%. With that, I hand over to Arno for a more detailed presentation of our financial results. Yeah. Thank you, Oliver. Good morning, everyone. Ladies and gentlemen, the market environment has remained challenging in recent months, and pressure has intensified. The ongoing conflict in the Middle East continues to create volatility. In China, the overall market is down by 20%. Chinese competitors not only export their vehicles to Europe, but they also export competitive pressure. In this environment, we continue to manage the situation with discipline by consistently advancing the implementation of our strategic initiatives. We continue ramping up our attractive new vehicle portfolio, both electric and combustion engine models. We continue to reduce investment spending and overhead costs while workforce reduction is progressing as planned. Automotive net cash flow was strong at EUR 3.2 billion in the first half of the year, EUR 4.5 billion above the first six months of 2025. The announced sale of 51% of Everllence with expected proceeds of around EUR 7.4 billion is further evidence of our active portfolio management. Despite this progress, our operating margin is still not at the sustainable level, at 3.8% after six months, or 4.3% before special effects. Results clearly reflect the environment we are operating in and the challenges of our business model and an overly high-cost structure. The 4% margin shows that the cost reductions currently agreed under the existing programs are not sufficient in today's economic and competitive environment. In short, the half year result are another wake-up call for action. We must accelerate and broaden our efforts to lower our cost base structurally, generate adequate returns, and safeguard the delivery on our financial ambitions. This requires structural and sustainable improvements across the Group, improving vehicle cost structures without compromising product substance, reducing overhead costs, increasing plant efficiency, and accelerating technology development and decision-making. The prerequisites are clear. To achieve this, we need substantially lower complexity and faster execution across our product base and technology platforms, our portfolio of participations, and our leadership and decision-making structures. These are the areas addressed by the Group Target Picture 2030 Oliver will present later. What matters now is swift and disciplined, and consistent implementation. With that, let us dive straight into the operating and financial performance of the first half of the year. Vehicle sales totaled four million units in the first six months, 8% below the prior year level, or 1% higher, excluding the China joint ventures. Group sales revenue remained broadly stable on EUR 158 billion as growth in financial services offset lower revenue in passenger cars. The operating result came in to EUR 5.9 billion, 12% below H1 2025, corresponding to a margin of 3.8% in Q2, a lower net margins to that 4.2%. H1 results were burdened by special effects of around EUR 0.9 billion, equivalent to approximately 50 basis points of margin. Excluding these effects, operating profit reached EUR 6.9 billion, and the operating margin was 4.3%, slightly below the midpoint of our full-year outlook range. Profit before tax declined by 26% to EUR 4.8 billion in the first half of 2026. This was driven by the lower operating result and a negative swing in our other financial result, mainly due to valuation effects and impairments on participations and shareholdings. Profit after tax decreased to EUR 3.1 billion. Automotive net cash flow increased to a solid EUR 3.2 billion compared with an outflow of EUR 1.4 billion in the prior year period. Excluding M&A, clean net cash flow increased to EUR 3.7 billion and cash out for M&A amounted to EUR 0.4 billion. This includes EUR 0.9 billion for the investment in Rivian, partially offset by EUR 0.5 billion cash inflow from TRATON's disposal of a stake in Sinotruk. This development underlines our continuing M&A discipline. Automotive net liquidity at the end of June came in at EUR 2032.7 billion. Net cash flow of EUR 3.2 billion, more than offset dividends to shareholders and hybrid bonds, interest payments totaling EUR 3.1 billion. Overall, automotive net liquidity remained very solid at EUR 32.7 billion at the end of June. Moving on to the performance of the divisions in the first six months of 2026. Passenger cars recorded an operating profit of EUR 4.8 billion, some 8% up on H1 2025, and corresponding to a margin of 4.1%. Commercial vehicles were impacted by costs related to restructuring and alignment measures booked in the first quarter. Supported by a stronger Q2, the operating result came in 24% lower year-on-year at EUR 0.9 billion. Financial services delivered a robust performance with EUR 1.9 billion operating profit, roughly on par with prior year period. Looking at the profit bridge of the passenger car business area, volume and other had a negative impact of minus EUR 0.7 billion compared with the same period last year. Price mix had a negative impact of around minus EUR 1.6 billion. This was mainly due to higher incentive levels for electric vehicles and an unfavorable regional and product mix. Product costs were slightly down by EUR 0.3 billion due to higher raw material costs and increased memory chips and logistics prices. Fixed costs and others had a positive effect of EUR 2 billion, supported by improved overhead costs and significantly lower restructuring compared to last year. Fixed costs continue to be supported by further improvements of automotive overhead costs. Overhead costs were reduced by EUR 0.7 billion, supported by strict cost discipline across the organization. The overhead cost ratio improved by 20 basis points. The development of overhead costs was supported by the continued reduction of workforce, which is progressing according to plan and is delivering tangible results across the group. Under the current agreement, we decided in 2024 to reduce headcount at Volkswagen AG by 35,000. Including Audi, Porsche, and CARIAD, we are planning to reduce headcount by 50,000 in the German entities by 2030. The reduction refers to the manufacturing as well as the administrative part of our business in Germany. So far, roughly 21,000 employees have already left the company in Germany, for the most part, in the context of early retirement schemes. Despite all the progress made so far, SG&A costs remain a major structural gap versus automotive peers, and this gap amounts to roughly 30%. It's largely driven by the complexity of the group structure across all levels, creating a clear cost disadvantage. Sustainably closing this gap is essential to strengthen our financial robustness. Under the Group Target Picture 2030, we aim to reduce overhead costs globally by around EUR 11 billion. Consistent execution would bring the overhead cost ratio in the automotive division down to around 12% by 2030, from roughly 16% today. That 4 percentage point improvement would translate directly into a 4 percentage point margin uplift. Since personnel costs account roughly 60% of total overhead costs, closing the gap to competition would imply a further workforce reduction of around 50,000 employees in addition to the current program, mostly in the administrative areas of the group worldwide. Turning to the development of the brand groups and platforms, as well as the financial services. Brand Group Core delivered a performance on last year's level in the first six months of 2026. Vehicle sales and sales revenue were up by 3% and 1% respectively. Operating result came in broadly stable at EUR 3.6 billion and a margin of 4.9%. Brand Group Progressive reported a market decline in sales by 8% and sales revenue by 10%, reflecting weaker volumes in China and the U.S. Nevertheless, operating result came in broadly stable compared to prior year period at EUR 1.1 billion. This corresponds to a margin of 3.8%, up by 50 basis points. Results in H1 2025 had been impacted by restructuring charges and higher costs related to U.S. tariffs, which posed a smaller headwind to results in the first half 2026. Despite a pronounced decline in vehicle sales, Porsche automotive business delivered strongly improved financial results. Operating profit came in 45% higher year-over-year at EUR 1.2 billion, corresponding to a margin of 8%. Porsche will report half year results on July 29th. Let's have a closer look at the brands in the Brand Group Core. Volkswagen recorded an operating margin of 2.4%, broadly on par with the prior year level. If adjusting for non-recurring effects, operating margins stood at 3.8%. Škoda continues to show impressively what can be achieved in a highly competitive environment based on strong products and a competitive cost base. The operating margin of 8.5% in the first six months of 2026 give us confidence that we are on the right track. CARIAD sales revenue increased by 44% to EUR 4.8 billion, backed by increased volume of the 1.1 and 1.2 software stacks. Operating results improved by EUR 0.3 billion- EUR -0.9 billion. PowerCo kept the operating results broadly stable despite the ongoing production ramp-up at the Salzgitter plant and continued construction works at the Valencia and St. Thomas sites. After a slow start to the year, industrial operations of TRATON caught up in the second quarter. Overall sales revenue in H1 was slightly down on lower unit sales, and operating result came in at EUR 0.9 billion, 24% below the prior year level. Operating margins stood at 4.5%. Lower volumes, costs related to U.S. tariffs, and special effects negatively impacted the results. The financial services business delivered a robust performance. Contract volumes increased by around 3% in the first half of the year. At the same time, residual value risk slightly increased. The credit loss ratio was broadly stable on a solid level, and operating profit at EUR 0.9 billion was slightly down compared to the prior year period. Investments, CapEx, and R&D in the automotive division were further reduced by EUR 1.5 billion- EUR 14.8 billion in the first half of the year. This corresponds to an investment ratio of 10.6%, 80 basis points below the level recorded in H1 2025. Going forward, we will focus our resources more consistently on the areas that matter most for the future competitiveness and value creation. At the same time, we will reduce complexity in our product portfolio and variants, leverage group synergies more systematically, and apply an asset-light approach where appropriate, aiming for an investment ratio of around 9% in 2030. China's automotive market has come under increasingly strong pressure since the beginning of the year. Factors including charge, changes in subsidy and tax policies, rising fuel prices, and ongoing price competition have impacted consumer confidence. In this weak market environment, our unit sales were 31% lower year-over-year at 0.9 million vehicles. At the same time, Volkswagen Group China continues its model offensive under the In China, for China strategy. To counter these pressures, Volkswagen Group China intensifies its cost work and was able to compensate for parts of the pressure. As a result, the proportionate operating profit of our joint ventures activities in China amounting to EUR 184 million in the first half of 2026. Before moving on to the outlook, let me briefly comment on the agreed sales of 51% in Everllence. The agreement with Bain Capital is a result of a highly competitive and transparent bidding process based on clearly defined criteria. The winning bid provided a compelling combination of ambitious growth, committed future investment in Everllence, and an attractive valuation. The transaction is expected to generate proceeds of around EUR 7.4 billion for the Volkswagen Group. Beyond the financial benefits, this step further sharpens our focus on the automotive core business and supports a more efficient allocation of capital. This brings me to the financial outlook for the full year 2026. Against the backdrop of development in the first half year, we now expect sales revenue to be minus 3% below the previous year. At the same time, we continue to expect operating return on sales in the range between 4% and 5.5%. Building on the strong cash flow in the first half year, we continue to expect automotive net cash flow to range between EUR 3 billion and EUR 6 billion and net liquidity in a bandwidth of EUR 32 billion- EUR 34 billion. Ladies and gentlemen, since the launch of Zukunft Volkswagen program, the world has changed fundamentally. In this environment, it is not enough to just incrementally step up cost measures. We need a fundamental change in our business model with a pronounced step-up of structural and lasting improvement in terms of cost competitiveness of our products, in terms of overhead cost reduction and efficiency improvement in our plant, and in terms of speed. To achieve this, we must significantly reduce the complexity of our business, or better, of this company. I am convinced if we are able to simplify our business, we will become more agile in adapting to the world around us. These are the priorities we will address with determination over the coming months to achieve our long-term targets for 2030, a group operating margin of 8%- 10%, automotive cash conversion of above 60%, an overhead cost ratio of 12%, and an investment ratio of around 9%. Together, these targets form a comprehensive framework to lead the Volkswagen Group towards a successful future. With that, I hand back to Oliver. Thank you very much, Arno. Three years ago, we set out an ambitious transformation agenda. Until today, we have demonstrated tangible progress across all key pillars of our strategy. In short, progress delivered, major operational targets achieved, promises kept in products, software and technologies, in the regions, and with our performance programs. Reality is that the automotive industry is faced with fundamental challenges, geopolitics, trade barriers, regulatory pressure, adverse demand trends, technological disruption, unprecedented competitive intensity. These factors are reshaping our industry across all major regions. They are not cyclical, they are increasingly structural. The measures that were adequate in the past are no longer allowing us to achieve our goals. The Group Target Picture 2030 represents the next phase of our transformation. This is not just a cost reduction program. It is a comprehensive plan with a holistic approach to make Volkswagen faster, more resilient, more competitive, and even more innovative. The program comprises 12 fields of action clustered into three main areas: technology, performance, group steering. Let me highlight some of the initiatives that we have decided and started to implement. Covering key vehicle segments with fewer models, thereby creating significant added value for our customers. That is what we want to achieve. To that end, we will streamline our model lineup by up to 50%. This allows us to consolidate our development and production resources to focus our expenditure on even higher level innovation, equipment, and quality of our cars to reduce segment overlaps and substitution. By doing so, reduce complexity and cost, and ultimately increase the volume and profit per model. Every remaining model shall lead its segment in driving and technology experience. At the same time, we have looked through all parts and supplies and found that we could reduce the number of available equipment options by up to 75% without compromising product substance. Implementation has already started. Depending on the component, complexity will be reduced by up to 90%, for example, in seats, variants, windscreens, and similar parts. Customer will continue to have a meaningful choice. We are cutting what is not ordered. We scale what customer demand. A key element of our technology strategy is a consolidation of platforms, electric electronic architectures, and software stacks into two regional technology ecosystems, one for the Western Hemisphere and one for the Eastern Hemisphere. This allows us to tailor solutions to local customer requirements while reducing complexity, eliminating duplicate development, and improving investment efficiency. At the same time, we maintain our ambition of technology leadership by focusing resources on scalable technologies and selective strategy partnerships such as Rivian and CARIZON. We are fully on track in all these activities. The goal is not to create more technology ecosystems, but fewer and stronger ones. The objective is simple: maximize synergies globally while localizing where it creates customer value. In the West, we build on Rivian partnership in the RV Tech joint venture, in the East, on China Electronic Architecture and CARIZON ecosystem. We therefore intend to make full use of our presence to fill market gaps, for example, serving the Global South from our China hub. As the only international player, we are able to act like a Chinese OEM in terms of technology and cost base, going global from China. By further streamlining our technical capacities, we are aligning our production network to the changed market environment. Our cost base will be aligned to a production volume of nine million units per year. Prior to the COVID pandemic, the company was invested for production capacity of approximately 12 million vehicles per year. During the past year, we have already made significant progress with a reduction of two million units. We are currently discussing a further reduction of technical capacities by more than 500,000 vehicles in each China and Europe. Our target is to lower the break-even point to a production level of less than eight million units. Operational excellence is about tackling the structural cost and complexity embedded across the group. We are focusing on six key levers: R&D, procurement, production, quality, sales, and overhead. Through greater standardization, increased scale effects, simpler processes, and higher productivity, we aim to reduce structural cost while improving speed and competitiveness. Sometimes the simple things have the greatest impact. Simplifying technical specifications and purchasing processes, consequently use AI to support the development process or in product testing. Implement use of shared services across the group and eliminate consequently dual work within the organization. We need to consequently look for growth opportunities in parallel. First, in regions. For example, in North America, India, and the Global South are tomorrow's growth engines for us. Second, market instruments. Fleet business, used cars, after sales, and insurance business offer growth opportunities we want to further exploit for Volkswagen. Third, technologies. We are moving decisively into future-oriented fields, including circular economy, SoCs, energy storage, or robotics. This is how we are turning our engineering strength into entirely new sources of value creation and competitiveness. With consistent implementation across all action fields of our Group Target Picture 2030, we are safeguarding achievement of our 2030 ambition, an operating return on sales of 8%-10% by 2030. Over the past months, the program has been developed and detailed. The setup is in place. Objectives are defined. Initial measures have been established. In the months ahead, measures will be further specified across all 12 initiatives, with implementation already started in parallel. The entire process is supported by close tracking at group and brand level, complemented by regular reporting to the board. You will have noticed that while the announced initiatives are already far-reaching, not all potential fields of action are finally agreed. We are in constructive dialogue and plan to obtain outstanding approvals as fast as possible. Let me conclude the presentation with three main messages. First, the underlying demand picture is stronger than headline deliveries suggest as we continue our model offensive. Excluding China, vehicle deliveries increased by 2%. Our enhanced model lineup is resonating well with customers. The European order book rose to more than one million vehicles, with particular strength in battery electric vehicles. It's a strong early momentum of the Electric Urban Car Family and customer response to our newly launched China models like ID. ERA 9X or AUDI E7X are encouraging. Second, despite a highly challenging environment, particularly in China, the group held well with regards to financial performance in the first half year. We continue to act from a position of strength with a very solid net liquidity position and strong net cash generation. We confirm the full-year outlook for operating margin, net cash flow, and net liquidity. Third, we have launched a truly unparalleled far-reaching corporate program, our Group Target Picture 2030, we have got our foot on the gas pedal. We are aligning our products, technologies, and structures to succeed in the new market realities. We are reducing complexity, accelerating execution, improving competitiveness, and allocating capital more selectively. We are sizing growth opportunities in key future fields. In short, while market conditions remain extremely tough, we act early on, and we see encouraging progress in the areas that matter most. This gives us conviction to successfully master the next phase of Volkswagen's transformation. With that, I hand back to Rolf. Thank you, Oli. Thank you, Arno. With this, we conclude the prepared remarks, let us now move to the Q&A session. If you want to ask a question, please press star followed by one one. Looking here at the queue, I have the first question coming from Tim Rokossa from Deutsche Bank. Tim, please go ahead. Thank you very much. First of all, Oli, Arno, Rolf, I think I speak for the capital markets in general when I say that we appreciate that you, against all of this pressure, start the 2030 program despite having just shortly launched the other one. It would be nice if it wasn't needed, in this world it clearly is. To my questions. The first one is the discussions in the press often focus on plant closures when we discuss about the 2030 plan. I agree that a plant closure would obviously pretty powerful message, at the same time, I don't think it's feasible to assume that that would be possible pre-2030, we're discussing about a 2030 plan here. Could you just confirm that plant closures are not needed to achieve the 2030 targets that you also just spoke about? Secondly, never easy with you guys given all of the complexity, I think drilling it down to the key issues, one of the key issue for the group is Audi right now. I had the question again this morning from a lot of investors. If Audi, with this model initiative, isn't working, will it ever? What do you say to people when you think about this? When should we get our hopes up again for Audi? Thank you. Yeah, Tim. Thanks for your remarks and your questions. First of all, I think we have built, during the last three years, a foundation for everything to come. Now we are a more stable situation in terms of products, technology, also in regions, and especially the performance programs, which helps us to compensate the major part of the headwinds we have faced. Now we are entering in the next phase of our transformation with our Group Target Picture 2030. We have the need because of the risk scenario. We are acting early. To, say it very clear, this is not only a cost reduction program, it's a comprehensive program which touches all fields of our company. It's the deepest and the most innovative program we have ever implemented in the history of Volkswagen Group. For us, it's very motivating that we have already started with a lot of fields. One part, of course, is to adapting furthermore our capacities. We were able to reduce already during the last two years, to reduce two million of capacities with around seven plant closures we have done. Now we have a work to do of over 500,000 in China and also in Europe. On the one hand side, in our existing plants, especially in Germany, we have models in production and we need these models. It's not realistic to talk about plant closures up to the end of this decade, on the one hand side. On the other side, to close a plant is also the last solution. First, we will focus on competitiveness and this in a European context. There, we have opportunities. When I talk about intelligent solutions, we also can consider for example, for a different industrial usage or opportunities also more in the future to pick some of our Volkswagen Group products from China to bring them in plants in Europe. Step by step, first focus is on competitiveness and at the end, the last option would be to close a plant. We have done this during the last two years in some cases. This is always the consideration we have to take. Coming to Audi, the response from the market is very positive on the new product, especially our RS 5, Q7 or then the Q9. This will bring momentum. We started three years ago, a deep restructuring in Audi. Now we can see step by step that Audi will recover. Now with the new product momentum and everything to come, it's quite promising. We think that will be possible. Thank you, Tim. Thank you. The next question coming from Horst Schneider from Bank of America. Horst, please go ahead. Yes, thank you. Good morning. I hope you can hear me. The first question that I have relates to the guidance for this year. You kept the operating margin guidance unchanged, and that implies that H2 needs to be stronger than H1. Maybe a question for Arno. Arno, maybe you can explain us what is getting better exactly in H2. It does not seem to be volume, it should be maybe price mix or it should be other line of costs. Maybe you can provide more details on that. Maybe for Oli, since you said you aim to reduce complexity of the group, do I get it right that this means also that you want to accelerate disposals? Maybe you can provide here more details also on the timeline, how quick they're going to come, and if they come, what you want to do then with the liquidity that you increase by that. The last one, of course, on restructuring. I know it's for you difficult to talk about that because, in the end, you need the approval maybe also from the Works Council, and they probably also listen to this call. Maybe you can at least tell us what's the ambition on the timeline. By when can you basically, you think you can make an agreement or does it require, in the end, if it comes from bad to worse, an AGM and that could basically extend the agreement to, I don't know, maybe even H1 2027. Thank you. Yeah. Hello, Horst. I take the first question. Obviously, it applies a better second half of the year, but there are some factors that gives us tailwind. First and foremost, obviously, Audi. We expect a strong improvement in margin in the second half based on the product momentum, both in terms of model mix. They just launched their RS models and S models, which are really well-received by the customers with good margins. Last but not least, they will launch a new Q7, and then at the end of the year, also a Q9, which will in some of the markets. That should give momentum at Audi. Second, cost program. You saw the reduction on headcount we achieved so far. I think we stand at 21,000. We expect at least to end up with reduction of 25,000, 26,000 at the end of the year. This should give also a continuous tailwind. Last but not least, taking the third question as well. From today's perspective, we don't expect major restructuring in the second half of the year so far. We had quite some restructuring in the first half, for example, the discontinuing of the ID.4 in the U.S. These are the effects based on that, we're confident that we achieve a margin in the corridor. In the end, Arno, you expect Q3 is always weak. You expect now a very strong Q4, right? Yeah, exactly. Horst, you know us very well. Q3 is typically the quarter when we have the summer holidays in major term plans. Yes, as last year, and also as already, we expect a strong Q4. Okay. Thank you. Horst, Oli speaking, coming to your second and third question. First of all, complexity. We are working on reducing complexity in terms of products, technologies, but also investment portfolio, as we have done in the last weeks, which was Everllence. It was a very positive result. All of this, we have further opportunities as you know. First of all, safeguarding our liquidity position and having our stability, but also safeguarding an attractive dividend on the one hand side. Further on, it depends a bit on the steps we will do with our investment portfolio. We will consider how we will deal with other liquidity options, but too early to predict. First of all, work has to be done and then having the stability and offering opportunities also for our investors. When you look to our cash flow situation, first half of this year, already EUR 4.5 billion better than last year. That shows a stable situation. Also after the strong cash flow we have shown last year. We keep on working on safeguarding our stable situation on cash flow liquidity, step by step to decide. Restructuring. The major part of our program is not part of being agreed by the Supervisory Board, that is already in an execution now and in all cost positions. To the main deeper restructuring, we are executing the agreement we have done in 2024 already. It's a 50,000-reduction of headcount, where 37,000 we have agreed contracts by our employees. It's well received. We are well on track. In terms of the adaptation of our production capacity, we are making good progress. Already two million per year we have already reduced. There you can see the speed, only in two years, what we have done in the past, it wouldn't have been thinkable to come to this direction. Now, we are entering in the next period of transformation. I think we will come to a conclusion agreement during this year. We started two weeks ago with the first overall presentation in the supervisory board, and it's clear that there are some points to be discussed in terms of plant utilization, what competitiveness means for our plants, especially in a European context and also for the overhead costs. There we have set a clear benchmark where we want to go, and now we are working this out with all our brands, our organizations, and regions. What is possible in terms of headcount adaption and on the other side, in terms of labor costs. At the end, the product in between both of them will be the adaption of our cost. Summing up, the major part of our target picture is already in execution, especially in terms of all the technologies, products, and cost. The part of the restructuring has to be discussed furthermore, especially with worker union and our supervisory boards, then we will take decisions during this year. Okay. That's great. Thanks, Oli. Good luck. Thank you, Horst. We are moving on in the queue to José Asumendi from JP Morgan. José, please go ahead. Great. Thank you, Rolf. A couple of questions, please. Oli, can you talk a little bit about the business model in China? It's been a difficult first half of the year. But obviously, you've done a lot of work with Ralf there to take down capacity, launch new vehicles, launch new products. Are you seeing signals of stabilization in the business model in China? Is this not a vote of confidence also when you're discussing with the unions that you're able to restructure the business and stabilize the business model in China? This will have also, as you bring these best practices into Europe or some of them at least, it will also help to improve the business in Europe. If you could talk about this, please. Second, Arno, when we think about the different cost measures, what do you think is the biggest sort of cost bucket where you see a big difference in terms of the competitiveness? I think you mentioned several of them, but the biggest one that for you stands out. And when you think about the restructuring cash outflow we should be expecting over the next years, can you give us any signals, any guidance, or maybe talk about liquidity and the sale of Everllence, how that is going to be helping to potentially fund restructuring cash outflows on a three-year view? Thank you. José, let me start with your first question. The environment in China is clear. First half of this year, the market overall went down of more than 20%. We have over 150 competitors in the market, and there have been over 500 new model launches in the first of the half year. Yeah? That shows the tension in terms of competitiveness in the market. In spite of this, we started in first quarter as market leader and second quarter or half year, under top three. And this underlines the strong position of Volkswagen Group in China. We have done a huge restructuring during the last three years with our In China, for China business, with the engineering center, the biggest one outside of Germany. We have brought to life our new electric/ electronic architecture and all the new products to start now in the market. Our intention is to launch over 30 models up till the end of next year. And the first market response is very positive. But this opens us other opportunities. I'm often asked, is it worthwhile to invest in China? And my clear answer is yes. It's on the one hand side, China, it brings us on this technology level and this cost level. We can see also our Chinese competition. On the other side, it opens us the same opportunities Chinese competitors are executing right now in other regions of the world. And for us, especially export opportunities to the Southern Hemisphere, in Southeast Asia, Australia, India, South America and Africa, but also in Europe, where we are not present in some segments with products from Europe. We could consider to bring our own products from China to Europe. Now this shows that we are the only international player who is in conditions to use all these global opportunities. What we have done in China, our strengths and core business in Europe, and on the other side, our corporations and businesses we are doing in the U.S. and combining this is a unique offer to the markets for the future. Yeah, José, thanks for the question. If I look on our business, the biggest advantage is clearly reducing overhead cost so far. If you look at our business, and Oliver mentioned it, we are rather complex in front of the customer with a lot of model, a lot of offers, but we are also very complex internally. A lot of layers, a lot of entities. This weighs on our costs and also makes us slow in decision-making. I'm deeply convinced in simplifying our business. This is one of the biggest advantages and chances we have as a Volkswagen Group. Become more leaner and more agile in adapting to the world around us. Also in terms of cost, we did an in-depth benchmark versus competition about SG&A and applied that to our overhead costs. As you know, they are roughly EUR 45 billion today. If we close the gap to competition, this is a chance or an improvement of about EUR 10 billion-EUR 11 billion. Then we aim for overhead cost ratio from today 16%-12%, which is a four percentage point improvement in an industry that makes only 4%-5%-6%-7% margin. This is a magnitude we see there. Don't get me wrong. We need to improve our other costs as well. We need to improve our material costs without sacrificing product substance, as Oliver mentioned, we also need to improve the efficiency and productivity in the plants. The competition is coming to Europe. Chinese competitions are building plants in Southern and Eastern Europe, it's hard to compete with underutilized plants. It's a comprehensive program which addresses all the levers of cost in the company. Clearly the biggest advantage is reducing complexity and overhead cost. In terms of restructuring, it's obviously too early to tell or to give specific numbers. We need to wait until we have detailed decisions and then come up with detailed figures on that. It's very clear. We look on a company with a net liquidity on more than EUR 30 billion, EUR 33 billion-EUR 34 billion. The proceeds of Everllence will give us further positive effects on that topic. We have a very solid balance sheet still. We increase that robustness with a good cash flow first quarter, more than EUR 3 billion, we kept our outlook. This is a company that will clearly be able to manage also the potential restructuring measures. Thank you. Thank you, José. We are moving on to Patrick Hummel from UBS. Patrick, please go ahead. Thank you, Rolf. Good morning, Oli and Arno. My first question to you, Arno, regarding the 50,000 headcount reduction, or at least target picture that you painted. In the first wave, you've been using early retirement, which was, let's say, relatively straightforward and relatively low cost. This time it seems to get more expensive. I understand you can't give us any details, but is it fair to say that at least a significant share of the Everllence proceeds will be required for that restructuring? You said, Oli, before actually, that you expect a deal with the unions to be reached by the end of this year. Arno, you said no restructuring you currently foresee for the second half. That sounds a little bit like contradicting. Should we expect that incremental restructuring to be booked this year or not? What would be the impact if I put it all together on the dividend? Is it fair to assume a flattish dividend trend? Is that what you're targeting? Could we see a cut in dividend? Any color you can give on that. The second one, just on the implementation of that restructuring. The Chinese are gaining share in Europe at the speed of light. It feels every two to three months, they're gaining 1 percentage point of market share in Europe. If the implementation of what you're trying to do here is skewed towards the back end of the decade, it might not even be fast enough. What can you actually do to get those headcount-related savings sooner rather than later? Oli, do you actually expect any support on the political front? It feels all very half-hearted so far on the Industrial Accelerator Act. It's not really banning Chinese cars from entering Europe. The plug-in hybrid tariff that's under discussion, are these instruments that you think will change this market share shift trend? Or is it just fair to say for as long as China as a market is weak, these Chinese companies will push as much as they can into Europe? Patrick, I take the first question, then I hand over to Oliver. First and foremost, on the topic of restructuring. Yes, we embarked on a first strategy. We agreed on 2024 with the reduction of 50,000 headcount, mainly in Germany, in the indirect and direct areas, so administrative and manufacturing part of our business. We use, for the most of the time, early retirement schemes. They're there in place, but let's not forget, they weigh on our margins and our result with EUR 400 million- EUR 500 million a year so far already. It's just not seen in the bridge because we spend every year roughly EUR 500,000.000. If you take out this restructuring fees, our operating business is even stronger. The second wave is, as I explained, is a benchmark on a worldwide basis, the second wave of up to 50,000 is mostly in the administrative side and on a worldwide basis. It's really, Patrick, it's too early. First, we have to identify where we want to reduce. On the other hand, there are also other potential. We are not looking for job reductions per se. We are looking for a much better cost base and the structural reduction of our cost base to be more competitive. There might be also elements in the labor cost that will help us there. This is where we stand. Let me be very precise. What I have to say is in the 4%-5.5% margin guidance and outlook, obviously, in this guidance is no restructuring incurred. If we had to decide on restructuring in the second half, this is clear that comes on top. Patrick, coming to the second part of your question, how could the politics be supportive? Let me go to three approaches. First of all, we have to do our homework. We have done it already in terms of products. They are competitive. They are attractive for our customers. Our order intakes show this in spite of the competition we have faced right now, and the deliveries also in Europe. What we have done to furthermore is cost work. Now reducing more and more our costs and bringing there in a better positioning, earning more money with our products. That's our homework. Second, we will benefit from our China opportunities. Yeah, you can see us also as a China player, and we can do the same like the Chinese do, and having the same opportunities, being competitive in terms of products, technologies, and also costs. Also for exports. The third aspect, in terms of politics. We need a level playing field, not more, not less. In some areas, it's already working. The regulations on BEV is working. There, we are competitive also in terms of pricing, where it's still not working are the plug-in hybrids, for example. What has to be done is the Made in Europe. I think this will adapt the market, and I hope during the next month, the European politics, with the support of the German politics, will bring the European automotive market to a level playing field, which today does not exist. At the end, with our homework we are doing right now and benefiting from the China business, I think we have the opportunities in Germany, the politics have to accelerate the upcoming decisions in terms of plug-in hybrids, for example, and Made in Europe strategy. Oli, maybe a quick word on the implementation timeline of this upcoming program. Is that like a savings target that we'll only hit by 2030? Or is there a chance that we could hit that already in 2028, let's say? Well, not only 2028. I expect that the politics will react this year, yeah? That's a clear expectation from an industry leader. The level playing field has to be built in Europe. That should be a European industry interest to do so, yeah? From 2027 on, we will benefit from the current product portfolio and everything to come already, and then step by step also with our Chinese opportunities. We are well prepared for everything to come, the politics has to do with the work, which we talked about. Thank you very much. Thank you, Patrick. We are moving on in the queue to Mike Tyndall from HSBC. Mike, please go ahead. Yes. Morning, gentlemen. Thanks for taking my question. I've got a few if I can. Can we just talk a little bit about China as an export base? I think that story is changing because back in 2024 it was China for China. In April, it was China to the global south, but we're now talking about China into Europe. Am I reading that right? When will we see this tangibly happening? That's question number one. The second question is just around, I know that when you were initially looking at plans for Osnabrück, you were looking for alternative uses. I'm curious whether or not some of the people that approached you at that time said, Osnabrück doesn't fit, but we like Hannover, we like Emden. What's the potential for finding alternative uses for some of those German plants? The last one, a very quick one, just in terms of disposals. I just wonder if you can talk at all about TRATON. TRATON clearly having a pretty good run at this point in time. I know you've sort of said before that you would like to reduce your stake. I wonder if you could just give us sort of an update on that. Thanks very much. Mike. That is correct, that we started In China, for China, three years ago, still with different market conditions. The advantage now is that we brought ourselves in the same competitive situations where many Chinese competitors are. Volkswagen Group in China is a China player. With the changed market conditions, the market is going down, the margins are under pressure. This opens for us the same what Chinese OEM are doing in terms of export. Furthermore, it opens us opportunities we have never had in the past, because of our cost structure, not having the right product for the southern hemisphere. Also for Europe. We can benefit in terms of our complete products we have there in China, but also in terms of technologies. I am thinking about autonomous driving. This could be an option and maybe also for our existing combustion engine product portfolio. We have many opportunities now also, benefiting from engineering, from parts we are producing there in China with our own organizations, processes we can adapt. No, that is many advantages. Talking about the timeline, we are implementing right now our experiences from China to Europe in terms of products. It needs a bit of time. We need to ramp up the current product portfolio in China. I think it would be realistic in 2028, with complete products, technologies maybe, but we have to do it step by step. We already launched the first models in the last months in China. Many attractive products on our own platform, the CSP platform, are entering in the market in China in 2027. This offers opportunities up to, I would think realistically from 2028. Talking about Osnabrück, there we are in very advanced negotiations with defense industry. That is not a secret, but we cannot deep dive any furthermore there. It is confidential, but we expect a decision during this year. Talking about other plans, first of all, as I said before, is European competitiveness. That is a headline. Second step is, do we have usage with other products and also usage in an industrial context. Therefore, also we will check each plant, where we have need for action, what opportunities we would have. Every plant has got different conditions, so we have to develop a specific plan. That is what we are kicking off right now. We have done, I think, very hard and deep work during the last two years to reduce capacities to two million cars a year. This is not a small part of capacity reduction and also the 50,000 of headcount reduction we are doing, which is well on track. Now we are entering in the next phase, which has to be done to be more competitive as we are today. Yeah. In terms of TRATON, in our target picture, it's clearly what we continued to say in the past. We want to stay a responsible shareholder with 75% plus one share, we are on the way to that, we are aware of the current share price performance, which reflects the very good performance at TRATON and the strategic p ositive outlook and also the good work of the management team. This is where we stand today, and we can only announce the next steps once we have decided on them. Got it. Thank you very much. Thank you. We are moving on and Stephen is the next one. Stephen Reitman from Bernstein. Please go ahead. Yes. Thank you. I have a question about China again. You made roughly about EUR 200 million or so in the first half of the year, and your guidance for the full year is basically EUR 200 million-EUR 600 million. Basically from flat to EUR 400 million. I just want to look at how you're judging your progress so far. You talk about the new models you've launched with the [inaudible], the ID. UNYX models and such like, and the models from Audi. How would you judge how successful they are? What kind of volume numbers are you looking at? Obviously the figures we're seeing when we look on a monthly basis, registrations are still very low, and there's also quite a lot of volatility, where sometimes they appear to have initially, one month, which is quite good, and then they're tailing off, I think, again. We've seen that with the Audi model, the S5. Also, now we're seeing other ones picking up a bit. What would your criteria for success given the fact that the volume seems to be very low relative to some of the launches or the models that we're seeing from the Chinese brands? Secondly, more of a philosophical question about the expectation for change within the Volkswagen Group. It seems to me that probably one of the most successful periods of change, in terms of cost reduction and reorientation of the company, happened in the 1990s. That really occurred when the company basically went into loss and it seemed that really you'd reached the end of the road, and that caused a situation maybe where you could actually make deep changes. At the moment, your numbers, you say are not satisfactory, and I think that most people would agree with that, but still you're generating reasonable free cash flow. Margins are still, your guidance is still quite positive as well. Do you feel there's sufficient urgency that is fully appreciated by all the parties that they need to make the sacrifices that you're seeking? Thank you. Maybe I can start with our model launches in China. Maybe Arno can add some aspects in terms of the financials. Then, I'll talk about if there is sufficient urgency, what we are planning right now. About the China models, what we can say that the first response we are getting, first of all, media tests, the Audi E5 was voted as the car of the year in China, is very positive. In concrete, talking about the ID. ERA 9X, we have over 10,000 deliveries right now since the launch. That's very positive. Also, the ID. UNYX 07, was around 6,000. We see very positive opportunity with the ID. UNYX 08, which is a product which starts with around RMB 200,000 and offering already our new electric electronic architecture. The response on the Audi E7X is also positive. We delivered over 4,000 units in June, we are ranked among the top three, in the range of RMB 300,000 level. You can see, in between the competition, which is by far very strong. We are very well positioned and many more to come. Expecting now, our first premium platform with the CSP, we will launch in 2027. There are opportunities. We have the market conditions I talked before. We will use these opportunities also for export. Then, they're coming to higher volumes with the help of the export. Maybe Arno. In terms of financials, obviously the guidance for this year is EUR 200 million- EUR 600 million proportion operative result, and going forward, it will heavily depend on our plan to catch up market share in the electric segment. We are still a clear market leader in combustion engine, we bring, as Oliver said, 20 new models this year. Very attractive, both in terms of features, but also in terms of cost and technology, to the market. Next year, again 20 new models. Based off that, the team wants to achieve towards 2030, a share between 10% and 12%. Based on that, we gave our outlook some month ago, that we want to achieve EUR 1.6 billion- EUR 2 billion proportionate operative result in 2030. This is the way we need to go. Coming, Stephen, to second part of your question. Is there sufficient urgency recognized by all the stakeholders? You brought the comparison to the 1990s, where Volkswagen Group was in the losses, and you can't compare the situation of today with the 1990s. That's correct. When you look on the one side to the profit margins, our long-term average profit margin since the 1990s was exactly on 4%. This year, our expectation is to be better than the average profit margin we have seen since 1990 up today. On the other side, this is not a guarantee. The environment has never been as heavy as we have faced today. As I said before, we are able to compensate a double-digit billion euro year by year by our cost work we have implemented already during the last three years. That's heavy work to do this. Now without this, we would've been in a completely different situation right now. When we look to the future, we have more and more risk coming. You know the pressure in China and the more than 150 competitors and/or are coming to the market. Now with a low cost positioning, and we have to face this position, and this means that we have to reduce even furthermore, if we want or not, our cost position. All stakeholders, and I can confirm this, because we have done also a belief about it, are aware that we are in this risk scenario, not only Volkswagen Group, the whole industry, but we are reacting now. Yeah. That's maybe the difference comparing to others. We are after the first period of transformation, looking back to the last three years, now we are entering already in the next phase. We have now to negotiate all the cornerstones of our plan of the Target Picture 2030. I can confirm, the major part of the program is already in execution. The second step of the restructure has to be done. That's clear, but urgency is recognized by all stakeholders. Thank you. Thank you. Thank you, Stephen. We have to hurry up a little bit given the timeline. We have two remaining questions in the queue. The first one comes from Christian Frenes from Goldman Sachs. Christian, please go ahead. I will try to keep it brief. First of all, in terms of China stabilization, it sounds like that question is already been answered. It is 2028 you expect stabilization. I am wondering, as we think about Audi specifically, which you also referenced earlier, and the second half, and also 2027, should we expect stabilization in Audi within China when you think about operating profitability to happen before 2028 already? How do we think about that for the second half, for example? In Audi obviously, the implication is for margin improvement in the second half overall. I am just wondering what role Audi China plays within that. That was my first question. Christian, only one comment to China. When I talk about 2028, I talk more about to benefit from the Chinese developments in other regions of the world. It will start for some regions, the southern hemisphere already in 2027. In 2028, I think we will be in full swing with all the product launches we will have ahead, especially in this year and the next year. That is what about I mean, I am talking about 2028. It is not a stabilization. The stabilization starts right now with all the new products to come while we are still stable in terms of our combustion engine business as market leader with over 22% of market share. Maybe, Arno, you can elaborate a bit the Audi situation, and then margin in the second half and maybe talking about the residual values. I think we addressed Audi already and the tailwind basically from the product momentum. As we said, Audi is ramping up Q7, Q9, brand new. The model launches on the S and RS models bring headwind. This should really help Audi for the second half of the year. Obviously, Audi also embarked on a strategy to significantly reduce costs, specifically overhead costs, which should also be part of the, a much stronger second half of the year. Overall, Audi and specifically our part of the group, what we haven't talked about so far, the successful ramp-up of BEVs waits on our margin so far. It is also a chance in terms of the CO2 fines from today's perspective over the three-year period. There might be also a financial chance in the second half of the year that we need not to book any provisions for CO2 fines in Europe anymore. These are the major effects. Okay. Thank you. My second question is on restructuring, broadly speaking. I think you mentioned the eight million capacity goal longer term. Could you elaborate, if you export from the Global South, the China model, just thinking maybe, for example, Latin America. Is this implying that you would close capacity, presumably in China, because you have capacity, obviously, in Latin America, or how do we think about that? Also on the topic of closing factories, obviously you've had a supervisory board meeting. Is this topic over now, or should there be more to come? Maybe a third point here, we've seen also a different model that Stellantis has talked about with basically partnering up with Chinese OEMs to share capacity. Is this also an option for you, or is this not really a strategy? Thanks. Yeah. Giving you some figures. We will adapt our cost structure on around nine million cars, that we think will be realistic in the next years, especially looking to 2030. Also with our opportunities we have in the southern hemisphere, I talked about. The intention is to bring down our breakeven situation lower than eight million. To have a margin there and a robustness. At the nine million cost structure, under eight million, the breakeven situation. In terms of adapting capacities, we have still the need coming from over 12 million a year, we want to bring it down to nine million. We are already working on 10 million. We were able to reduce two million during the last two years. We have closed around seven factories already. Looking ahead, that's what I said before, we will adapt capacities, but we also think in improving competitiveness of our plants and also thinking about a different use in an industry context. The last part of your question was, if we are considering something like Stellantis. We are in different conditions. We have the opportunities of our own business we have built in China, and we don't need to think about other competitors to bring them in our plants. We have our own products there in China, and when there are opportunities and on the other side also the need for a plant, we could do it. Yeah, that's a major difference to all the other international players, that we are a Chinese, like all the other Chinese OEMs, a China player. This we could use for export on the one hand side, but also for plant utilization in Europe. Great. Thank you very much. Christian, one remark in all transparency. Knowing that Audi has their own conference call next week, we don't want to take too much information here or give too much information on Audi there. We want to leave it to Jürgen Rittersberger, but you should expect that Audi takes down their guidance from 6%-8% to 5%-7%, which is still a significant uplift from the first half. All the measures and all the tailwind topics, they are in place. Also, rest assured, this 5%-7% margin, which would be an uplift in the second quarter, is also included in our group outlook for the full year. Great. Thank you for clarifying. Thanks. Okay. In light of the time, I am super sorry, Daniel and Philippe, I see you still in the queue, we have to make a cut here on the analyst side, and we will, without doing a break, directly hand over to the media question session. Thank you for your understanding. Daniel and Philippe, please reach out to our team, and we will make sure that all your questions will get answered. Okay. Thanks, Rolf. We go right away in the media call. As we have some English-speaking colleagues, we stick to English. I am happy to get your questions and the first goes to Christina from Reuters. You could also speak in German, though, but- Good morning. Vice versa. Good morning. Good morning. Thanks for the first question. I was wondering on your elaboration, Oliver Blume, on Chinese cars for German plants. I understand the first step would be to import the cars, the second could be to produce them here. What does that mean for your development operations in Europe? On the margin outlook, I'm a little bit wondering, because the margin was so bad or the income was worse in the first half of the year. What is driving your optimism for the second half? What should really uplift the margin towards the end of the year? Do you have first visibility towards next year? Okay. May I start with your first question in terms of China products? Of course. What I explained in the analyst call is that we are now in a very great situation as an international player, benefiting from our Chinese achievements, having products like Chinese competitors in terms of technology and cost, which brings us in a situation to export. First of all, to the southern hemisphere, where already Chinese OEMs are winning market shares, and this brings us in the same situation. In Europe, we would bring only products and segments which are not invested with European products. These exports won't inflag or won't have an impact on our European development. Completely different cars, there isn't single segments. You are right. We will do the step, first export, then checking how's the response in the market. We have already a good feeling what works, looking to the Chinese competitors. We will carefully plan in which segments we will enter, and then this might open also an opportunity to build one or two products there in European plants. To elaborate more the margin situation, Arno, I would like to hand over to you. Thank you very much for this question, Christina. As I said, first and foremost, every business starts with the products. We see some products momentum at Audi. On the whole group, we talked about a very successful new Electric Urban Car Family, which I will elaborate on in a minute. The product momentum at Audi should drive margins there, and see improved margins in the second half of the year. As I said before, their updated margin guidance would be 5%-7%, which is significantly stronger than in the first half of the year. Cost work. We will continue our cost work, specifically on overhead costs, also on productivity in the plants. Hopefully, we see even first effects on the transformation program in 2026 already. As Oliver said, we don't wait. We started working already. There are two technical effects. Let me call them technical effects. One effect is we had restructuring burden of about EUR 1 billion in the first half of the year, which we, from today's perspective, don't foresee. Last but not least, we also booked CO2 provisions for not meeting the CO2 guidance. With the very encouraging order intake of the new Electric Urban Car Family, we have already 70,000 orders on hand. Our renewed outlook for the three-year period, it seems that we do not need to book this restructuring, this CO2 provisions in the second half of the year, or even can we see some of the reversals. In all fairness, as you know, the margin dilution effect of the electric cars ramping up will also be a headwind, but at least we see a compensation on the relief on the CO2 burdens. Giving you three examples of the restructuring work we have implemented already during the last years. On the one hand side, you can see the progress in terms of overhead costs. You can see the progress of the restructuring we have done in Brand Group Core, not only on the products, but also on the results, and especially at Porsche, where we have done a huge restructuring last year. There you can see already the results. We have promised already last year, on a profit margin level on 8%, half year one. In terms of operating profit of 45% better than last year. There you can mention already all the effects we have implemented last year, or in the other years before, for the other aspects. There are some arguments which will pay off now step by step. The next question goes to The Financial Times, Sebastien Ash, please. Good morning, Oliver and Arno. Hope you can hear me. I just had a couple of questions. The first one was about Chinese competition. I think you both mentioned the idea that Chinese manufacturers were exporting competitive pressures increasingly to Europe. I'm wondering whether you can elaborate on that point a little bit. How are you seeing that at this point in time, and how do you expect that to affect your business in future? Is it going to be through prices, or will it be harder to kind of sustain the same market share going forwards? Secondly, I wanted to ask a question about U.S. tariffs. In your forecast, you say it's based on the current tariff situation in international markets. Overnight we've had what seems like a potentially significant change. I'm wondering whether that was factored into the forecast, then whether you have any thoughts on what the most recent announcements, what effect they could have on Volkswagen. Thank you. Sebastien, may I start with your first question, then I hand over to Arno to elaborate a bit, situation on tariffs. Chinese competition in Europe. It's heavy, it's heavier than we expected some years before. The market share already is over 8% of Chinese OEMs in Europe, and in some segments like the plug-in hybrids, which are not protected with tariffs right now, which has to be done but hasn't been done in the past. There the market share is already over 30%. First of all, there has to be built a level playing field. That is a task for the European Union to establish quickly. The Chinese competitors are there because they have the pressure in their home market in China, and export is their only opportunity to be successful. Therefore, we think, even if we would have a level playing field in Europe, we are faced this strong competition there. That's a need for us to enter now in the second period of our transformation plan to reduce even more our costs beside of this, and that is the positive aspect, is that our products are so attractive. We are by far market leader for combustion engines. We are by far market leader for the electric cars. We have the strong order intake for our urban car family with over 70,000 orders only in the first weeks. We have products, or we are the strongest positioned player in the BEV model, for example, the Škoda Elroq, is number two top BEV model in Europe. Now, with the promising new models to come, we have opportunities. On the one hand side, level playing field, politics, costs, our homework, to continue with our strong momentum, we will need, I think, we could face a Chinese competition. They are there, and that's the biggest risk for the whole European automotive industry right now. I hand over to Arno for the tariffs. Sebastien, on the tariff side, as we communicated several times. The tariff situation is really one of the factors besides the competition in China for premium OEMs and also the competitive pressure in Europe, Oliver elaborated on, that we have to step up our restructuring efforts in order to stay competitive. We still continue to calculate with a burden of EUR 4 billion-EUR 5 billion, on a yearly basis. That burden consists of basically the tariffs we pay. Let's not forget, we also have a significant impact on the volume. First and foremost, we had to take out some of the entry-level models from Mexico that we export from Mexico to U.S., like Jetta or Taos, which are not profitable anymore. Also from Europe, we had to increase prices to at least partially offset the tariff. Look, we are in an industry with 4%-5% margin. We talk about 50% tariffs from Europe. We increased prices. We have also lower exports from Europe to U.S., which also in turn puts pressure on plant utilization and the volumes in Europe. From today's perspective, we expect this burden to continue. This is why it's so important that we make progress on the restructuring program we just discussed, both in terms of cost and in terms of capacity utilization and efficiency in our plants. Now we go to the FAZ, Christian Müßgens. Two questions, if I may. The first would be on the Porsche agreement on cost reduction that we saw this week. There was an agreement regarding the cost-cutting program. Even as talks will continue until Monday, it seems like they reached an agreement and there has been a lot of talk about this agreement being difficult for VW because it entails like, I don't know, significant concessions for the labor representatives in Stuttgart. The question is to Oliver Blume, do you foresee any impact on VW and on the negotiations that you are having in Wolfsburg, with the cost-cutting program for the Volkswagen concern and maybe is it an option for you to extend an employment guarantee to Audi and VW as well? I don't know, I'm just speculating. Could you elaborate a little bit on the Porsche effect? The second would be just, could you give some examples of which models, concrete models you want to cut out of the portfolio in the group? Are there any A or A zero models from SEAT or CUPRA that you are cutting? Can you give some specific examples? Yeah. May I start with the Porsche situation. First of all, what is important from our group view is that we have agreed the profit margins we want to achieve in each brand and brand group in 2030. This is our guideline. At the end, the situation of each brand is a bit specific. In terms of restructuring, there's a major restructuring at Porsche we have done last year. In terms of overhead adaption, Porsche is doing a two-step approach. The first step we have implemented already last year, and now they are entering in the second step. This is work in progress. They have presented this in the supervisory board this week, but there are still work to do. So I can't go into any details. From the group view, it's important at the end, to achieve the margin corridor, which leads at the end to the margin. We have as a target for the group, published in between 8% and 10% profit margin in 2030. Talking about concrete products. First of all, to say what we want to do. We want to focus our expenditures on clear focused products to improve innovations, to improve technologies, to improve equipment, and to improve quality for the single product. To achieve higher volume with a more focused product, and with this at the end to achieve a higher profit margin per product. That's the intention there. We know from today that we have substitutions in some segments in between the brands. We have a high number of derivatives. There we will cut at first, with the derivatives. We will come to a number of products which still will be by far higher than what we see at the competition. For us, it will be major reduction of up to 50% of our product. Where we will start are the derivatives, and there we have to plan up to 2035. That's a longer progress because we have our current portfolio currently in production and in the market. Then step by step, we will clean it up and reduce complexity. There it's too early to predict. We have clear ideas where we want to tackle, where we have substitution in between the brands. Today, I want to address some concrete products, but at the end, the customer will benefit. We will benefit in terms of profit margin, and at the end, also, the investors will benefit from higher profit margins. We go to the Handelsblatt Lazar Backovic, please. Thank you so much for taking my question. I have two questions. First to Oliver Blume, and the second one to Arno Antlitz. Oliver, following up on the question of Christian Müßgens, could you imagine offering extending employment guarantees at Volkswagen AG or would that be incompatible with your group restructuring plans? That would be interesting to know, not only in the light of Porsche, but if you could just imagine doing so. The second question would be to Arno. It's a question on the proceeds from the Everllence transaction. How should investors think about the use of those funds? Should they primarily expect a stronger automotive cash flow or will be a significant portion of that needed for finance restructuring measures such as, I don't know, programs for [Foreign language], I would say, transformation costs. That would be also interesting to know the share of how you use the money from the Everllence transaction. Lazar, let me start with your first question. It's too early to talk about employment guarantee. We know the situation we are faced, with a huge risk scenario, especially in Europe, being faced with the Chinese competitors. We will do it step by step. Two weeks ago, we have been, for the first time in the supervisory board to present the overall transformation plan and with our Group Target Picture 2030. There are some points to elaborate and to discuss furthermore, and one of these points are the adaption of overhead. There we are deep diving now into brands, in our subsidiaries, but also in the regions. At the end, it will be a combination in terms of overhead adaption and labor costs. At the end, we will have to talk about how to deal. What you have seen in 2024 already, where we came to a very positive agreement at the end, which we are executing right now, making good progress. So we will enter in the next phase of transformation, having done all the analysis then to talk about the conditions. There, it is too early to talk about employment guarantees. Sure. Arno, maybe you can pick the second part of the question. Hello, Lazar. In principle, although I have to say it is too early to talk about the potential restructuring we have to book, because we have to decide on the measures first. In terms of situation of the group, I mentioned before, we have a net liquidity on hand of EUR 32 billion, which is a solid balance sheet. The process from Everllence will further increase this net liquidity. Obviously, depending on when we close the deal. Currently, we have so-called signing and the proceeds we get when we close the deal. We really need to decide on the restructuring measures. We also look at minimizing restructuring measures for obvious reasons, because it is also money that is outflowing. We try to optimize that as well. What we can say from today's perspective, there will be restructuring efforts and measures incurred, and we can finance this restructuring, which is also a strong message to the market. Thank you. Thank you. The next question goes to Bloomberg and William, please. Hi, good morning, everyone. I just had a question on asset disposals. There was a line in your statement after the Supervisory Board meeting about focusing on automobiles. Does that mean that Ducati is up for sale? When might you start a sales process for that company, which is hugely successful in motorsport, and would be attractive asset for many people, I think. Thank you. Okay. We do not enter right now in the details of the plan. We haven't an overall agreement to our restructuring plan. What we are checking, of course, is our investment portfolio, as we talked about right now about Everllence. We always think about how we will develop our brands. Do we need an investor or something like this? Right now, we do not enter in any details, because we haven't done right now an external information on this. Internally, we are doing information frequently for our management, for our employees, but also for our labor representatives. In details, we are still not in conditions. Two weeks ago, we started our first overall presentation, step by step, up to the moment when we have an overall agreement, we will do an external communication of the whole Group Target Picture 2030. Thank you. We have Christoph Kapalschinski from Die Welt. Please. Hello. Regarding politics, you didn't mention the phasing out of ICEs, the plan of the European Union. You just said that you're optimistic that there will be no fines in the years to come. Isn't it that high on your mind anymore that there needs to be a change in this regulation concerning phasing out ICEs by 2030? Thank you. On the one hand side, we are well prepared with our product portfolio, which I already mentioned. In terms of deliveries, we can see this year and also the order intakes, which are very promising, which brings us to a situation to being able to manage the current CO2 regulations. Looking further to 2030, I think there's still need for reaction. There, we are aiming for a more flexible averaging, what they implemented in between 2025 and 2027. If not, the whole industry would be affected. We have to achieve at the end, a regulation which is linked to the real market development. We are very successful right now. We have a BEV market share of around 20% or a bit more than 20% in Europe, but by far not what is now in the regulations in 2030. This has to be worked out. Now we have some brands which are on a higher level, like Porsche, for example, who's very successful in terms of electrification, which is higher than 30%. When you add the plug-in hybrids, it's over 50% in Europe already. This is linked to the successful Porsche electrification strategy. Overall, in average, we are still only on a level of around 20%, and we are by far market leader. Therefore when you're a market leader, you should expect that you have no problem with CO2. With the current regulations in 2030, we have still problems. So we need the averaging, which has to be done by the European Union. Christoph, I would like to confirm what Oliver just said. When I was referring to the CO2 topic, as Oliver said, it's 2025 to 2027 this period. The significant step down in 2030 and beyond will put burden on our balance sheet, because from today's perspective, we need to sell more electric cars than the customers will accept or would like to buy, naturally. This would be still a burden, and we need to discuss this 2030 step as Oliver mentioned. We have time for three more questions, starting with Paulina Würminghausen from Süddeutsche Zeitung. Yes. Thank you. Mr. Blume, first, regarding the Group Target Picture 2030, you have just said that you expect to see significant progress on this by the end of the year. Could you elaborate on that? Isn't that an overly optimistic assumption given the resistance you are facing? Yes. We elaborated a complete Group Target Picture 2030 during the last month with our management board, with very clear positions, clear answers, what has to be done in Volkswagen Group. You know about the foundation we have laid during the last years, which brought us in a stable situation, and our financial figures show, in terms especially comparing with the competition, that we are still in a stable situation. This is not a guarantee for the future in the overall environment. Once again, this is not a Volkswagen crisis. It is an industry crisis we are faced. Because of China, the market went down, the Chinese competitors in Europe, the shrink market in Europe, the tariffs, the regulations we talked about, that's an industry crisis. Volkswagen is doing quite well in this industry, but only because we laid the foundation during the last years. Now, working from this foundation, we are entering the next period of transformation, our Group Target Picture 2030. We are already executing the major part of the program. We do not need any agreement from our supervisory board, especially in terms of what we are doing in product, in technologies, what we are doing in engineering costs, what we are doing in material costs, sales costs, and so on. There are many fields we are already working, but there are some points which has to be agreed in the supervisory board. That's my expectation, that we will come to a conclusion during next year as soon as possible. What we do not have is time. We want to accelerate also these open topics, but the major part is already in a ramping up period. You can see our activities already and our expectation for the end of this year, that we announced that our results will be over last year. This is a result of our efforts we implemented during the last years. The second last question goes to The Wall Street Journal and Stephen Wilmot, please. Hi there. Thank you for taking the question. Firstly, I wanted to ask about the 8%-10% margin target. Where does this come from, given that it's a number that Volkswagen hasn't achieved in decades? Is it the result of your benchmarking exercise? It seems more in line with targets that you get from premium players, whereas Volkswagen is 75% or so volume, more mass market brands. Just if you could talk through how you think about that target, which is obviously underpinning a lot of what's going on at the moment. The second question was, in terms of your China product push, the results so far, I think you said 6,000 or so sales so far for the ID. UNYX 07. Typically, the Chinese brands, they're reporting sort of 10,000+ sales in their first sales month when they do these launches. There's a huge emphasis on the initial sales push. We haven't really seen that at Volkswagen on way. Can you just talk through how you're seeing those initial results? Are you targeting a more gradual ramp-up than your Chinese peers would normally do, or can you just speak to the, I guess, slightly low figures that we're seeing from Volkswagen way after the initial push? Thank you. Stephen, I'll take the first question on the margin target. Technically, yes, I could say it's derived from benchmarks where typically other OEMs in this industry want to be at the end of the decade. More importantly, if you look at ourselves, we need a robust level of earnings and a robust level of productivity in this uncertain environment. Look, if you shoot only for 4% and something goes wrong or there's a tariff included here or there's some decisions there, you're under pressure. We want to achieve, and we are motivated and committed to achieve a margin, a target of 8%-10% in order to be much more robust, to be able to invest also in innovation in the future. It's also possible. We talk not only about a program that reduces costs or reduce some of the models, is a fundamental change of our business where we invest in technology, we streamline the model range, but we take out significant level of complexity and out of our company, and we want to streamline our company both in terms of cost, but in terms of also in speed of decision making. It's derived from competitive benchmarks. It's necessary in order to be robust, to move robustly into the future, and it's achievable if we implement our transformation program consequently and with speed. Coming to the sales figures in China. You always have to look at the market and the competition. Starting with the ID. ERA 9X. The ID. ERA 9X I talked about that we have delivered already over 10,000 units, and the ID. ERA 9X is number one in the market of extended range full-size SUVs. Number one. Are the figures as high as we used to see them years ago in China? No. That's about that we have over 150 competitors there in the market. For us, the orientation is to be on the top of the market. Second example is the Audi E7X, which is above the top three in the market. When you look to the ID. UNYX 07, that's correct that we have delivered orders placed because we entered in the market by the end of May of 6,000 units. It's successful, but there we have the situation. We have still only a smaller number of dealerships and dealer network, and we have to expand this to come to higher numbers. It was a very positive start also to compare with the competition. There always to differentiate in between the situation we have seen with low competition in the last decades in China and now with a very high competition. There we have to be successful. That's one part, and the other part then benefiting from these models also for other regions of the world. This is now the new China thinking where we have unique opportunities as an international player being or having a big footprint in China. We take the last one for today as an overtime question, Lutz, from Capital. Hey, can you hear me? Good morning. Yes, we can hear you. Thank you for taking my question. Two questions in fact. First, you were talking a lot about China, but I still don't fully get where your confidence comes from. Is it still the perspective to get back to EUR 1.5 billion of profit in the forthcoming years? Will that only come from this export perspective you cited? You also mentioned the competition and the situation in the Chinese market overall. I heard He Xiaopeng last week and also he was speaking about the market as being brutal. Is that realistic to compare yourself with the Chinese player as the Chinese players are saying themselves that they are in a difficult situation in the moment? Can you come back to this perspective of EUR 1.5 billion- EUR 2 billion profits from China in the coming years? The second question, you also made the comparison to the situation in the 1990s of the Volkswagen Group then and said it's not comparable at all because on the one hand, you're better off now in terms of profitability, and in the other hand, the market conditions are worse than there was. Nevertheless, can you learn something from how this situation was solved back then? Thank you. Lutz. So, I'll take the first question. When I said the targets or the ambition we just communicated some weeks ago in China, they obviously depend on the successful ramp-up of our new energy vehicles, which some of them we mentioned already, like the ERA, others, they have to still being ramped up throughout this year, next year. We bring in total 20 new models this year, next year. It depends on the recovery of the overall market, and then our potential market share we want to achieve at the end of the decade of 10%-12%, because then obviously we want to keep our market share in the combustion engine, but the combustion engine market will go down and with these 20 new models this year and 20 new models next year. In the new energy vehicle segment, we want to regain share to 10%-12%, and this then all factors into the roughly EUR 1.5 billion-EUR 2 billion. Obviously depending on overall situation and obviously depending on the overall market, but this is basically factored in this plan. The key element is the successful ramp-up of our, In China, for China, developed new energy vehicles with very good product substance and a much better cost base, which should give us then these contributions towards the end of 2030. Coming to your second part of the question, always, you can learn from the past. What our colleagues have done in the 1990s, was a great work. The conditions were different, but they focused on cost reductions. For example, material cost reductions, initiated, with, [Foreign language] López and Mr. Piëch, focused on the right products. The main deficits had been on products and costs. On the other side, there was a regular competition in the market, not as tough as today. You have been in growing markets in this period. The situation today is different. The business is more complex. Technologies are more complex. Our group is much bigger than it used to be in the 1990s. We are in an environment, where we, on the one hand side, have a lot of financial headwinds, double-digit billion euros. We have to compensate what we are doing already. If we wouldn't have this headwinds, we would've been in a completely different situation right now. We have a very tough competition, only from China, over 150 new companies entering into the market. What we can mention, already in Europe, also. We have the trade barriers, we have the regulation and so on. We have to face them. What we have done, in the last years, we built a foundation for Volkswagen Group with all the restructurings we have done. We brought ourself now in a strong position in terms of products, technologies, and also the software strategy will help us in the future. We have the battery business. We need to manage the transformation. Then, we can link also to some achievements from the 1990s. Especially when I look to the material cost, there's a huge need for us to improve. There, for example, we can pick some aspects they have done in the 1990s. You can't compare the situation because the environment is completely different, more complex and even more and more challenging. With this, I say thank you to Oliver Blume and Arno Antlitz for all the answers and all the information. Also to my colleague, Rolf. We're at the end of this call. I wish you a good day, a good weekend, and see you soon. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.