LETTER TO EMPLOYEES

Dear colleagues

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We wish to speak to you at a point in time that is both

revolutionary and extremely important for the Š

­ KODA

brand and for the Volkswagen Group as a whole.

The automotive industry is going through a

substantial transformation, and to withstand this

change, there are high demands on all teams

from all units of the company. A pathway to hav‑

ing cars without combustion engines is also hin‑

dered by European legislation changes and regula‑

tory measures, and we need to incur high expenses

for research, development and the production of

new products. We are also investing in infrastruc‑

ture connected to the electric mobility, digitisation

and data connection of our cars. Without these sig‑

nificant investments, the future of ŠKODA AUTO

would be compromised. We are approaching the

necessary changes and measures responsibly in or‑

der to ensure work positions and the corresponding

remuneration for the ŠKODA brand and for you, the

company’s employees, in the long term.

Last year was extremely demanding in many re‑

spects. Although the revenues and sales went up,

the operational profit decreased. The main reason

for this is the adverse movement of exchange rates,

negative influences related to transition to a new

system for testing WLTP emissions, growth in per‑

sonnel expenses and investments in the develop‑

ment of new products. The company’s profit is one

of the basic inputs to calculate the variable of bo‑

nuses given to employees together with the sala‑

ry for the month of April, which is paid out in May.

Furthermore, the calculation uses the results of tar‑

iff negotiations from the prior period. Thanks to last

year’s results of tariff negotiations, the variable bo‑

nus amount for 2018 will be slightly higher than last

year, even though the company’s profit decreased.

This is surely great news for all the employees who

deserve the remuneration for their hard and respon‑

sible work in 2018. The ŠKODA AUTO Board would

like to express its gratitude and say a big thank you

to everyone for their work performance. The varia‑

ble of bonus for employees with full entitlement will

be CZK 61,000 after rounding. During the tariff ne‑

gotiations, a one-off bonus of CZK 4,000 was agreed

upon and will be paid out on the same day as the

variable bonus. The full amount of both parts com‑

bined will be CZK 65,000.

It is necessary to add that, in the current situa‑

tion, and given the outlook for next year, it is clear

that we will not be able to repeat the result of last

year’s tariff negotiations. Conversely, we will need

to look for ways to achieve long-term sustainability,

competitiveness and higher flexibility of the ­ŠKODA

brand on the market, as well as ways to quickly ad‑

just to the new demands of customers. Only this

way will we be able to enjoy the company’s good re‑

sults and interesting amounts of the variable bonus.

We firmly believe that we will, together with our

social partner the KOVO Trade Unions, find balance

in our constructive and fair negotiations that will

be acceptable from the employees’ perspectives, as

well as economically sustainable long-term stabili‑

ty for the whole company. In this respect, we would

like to ask you for understanding and support so

that the ŠKODA brand can withstand the dramat‑

ic changes in the automotive industry and maintain

its position as a respected employer in our country.

Yours sincerely

Bernhard Maier

Bohdan Wojnar

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OLLECTIVE NEGOTIATIONS ENDED ON

22 MARCH 2019, AND ALL AGREEMENTS

RESULTING FROM THEM WILL BE

PRESENTED IN THE APRIL ISSUE OF

ŠKODA MOBIL IN THE COLLECTIVE

AGREEMENT STIPULATIONS SUPPLEMENT.

MARCH 2019 ŠKODA MOBIL 3