Dusseldorf Porsche wants to make the IPO planned for the end of the year palatable to investors – with strong growth and more independence from the parent company Volkswagen. “Porsche is in a unique market position,” said CEO Oliver Blume on Monday at an investor day.
On the one hand, Porsche offers exclusivity and combines luxury with sport. On the other hand, with an annual production of 300,000 cars, the Stuttgart-based company can use the advantages of mass production and produce at low cost.
CFO Lutz Meschke announced that sales should grow at an average rate of seven to eight percent over the next few years. This year, sales are expected to increase even more sharply compared to 2021, from 33 to more than 38 billion, which would correspond to growth of around 15 percent.
In terms of profitability, Porsche is also expected to continue to improve in the coming years. In 2021, the sports car manufacturer achieved an operating return on sales of 16 percent. This year, the Volkswagen subsidiary calculates with 17 to 18 percent, in the medium term with a range of 17 to 19 percent.
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Meschke named a return on sales of 20 percent as a long-term goal. This would bring Porsche closer to its Italian competitor Ferrari, which already has an operating margin of around 25 percent.
Porsche expects higher returns on e-cars
The Porsche CFO did not give an exact date when the sports car manufacturer will achieve a return of 20 percent. As was also reported from business circles, this mark could be reached around the year 2030. Then Porsche wants to sell 80 percent purely electrically powered cars worldwide.
profit machine
16
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Porsche achieved return on sales in 2021. Ferrari comes to 25 percent.
In the longer term, Porsche calculates with a higher return on electric cars. “In the future we will earn more with it than with cars with combustion engines,” promised the CFO. In a comparatively short time, the electric models would catch up with the combustion engines in terms of profitability. In order to achieve an electric share of 80 percent, Porsche wants to increase the number of its electrically powered models from year to year.
Increasing independence from Volkswagen should make Porsche even more attractive to investors. CEO Blume said that his company is currently negotiating industrial cooperation with the VW Group. “We are well on our way with these talks,” emphasized Blume. Details would be communicated later.
>> Read herehow the software cooperation should look like in the future in the VW group.
A contractually defined cooperation is intended to guarantee Porsche a high degree of independence. At the same time, however, the sports car manufacturer wants to be able to draw on group resources in order to keep its own costs low.
Own software: Porsche does without new Cariad developments
It is already clear that Porsche will go its own way with the software. “We have decided to end the cooperation with Cariad on the E 2.0 software variant,” said CFO Meschke. In the future, the sports car manufacturer will only rely on the predecessor version E 1.2. There should only be a limited cooperation with Cariad.
Porsche wants to earn more with pure electric models in the future.
(Photo: Bloomberg)
Cariad is Volkswagen’s central software unit, which was founded two years ago. Within the group there had been a dispute over the past few months as to the extent to which the software subsidiary should still be active for all subsidiary brands. The triggers were major delays in the software version E 1.2 developed by Cariad. Several Audi and Porsche models have been significantly delayed as a result.
Porsche is now drawing the consequences from the delays in the joint software unit and is refraining from future cooperation with Cariad on the E 2.0 software architecture planned for 2026. “The E 2.0 is simply too late for our next models,” emphasized the CFO.
“In the future we will earn more with it than with cars with combustion engines.” Porsche CFO Lutz Meschke on electric cars
The Stuttgart-based sports car manufacturer then wants to independently develop the E 1.2 version later together with partners. Larger cooperations with tech companies from the USA and China are then planned. “In China, for example, we need a digital ecosystem with local partners,” said CEO Blume. Chinese drivers expect more IT equipment than, for example, European customers. Porsche wants to react to this and have software developed more locally in China.
Porsche is also preparing to go it alone when it comes to autonomous driving. “There are talks with a well-known player,” said CFO Meschke. Within the automotive industry there has recently been repeated speculation that the Stuttgart-based company is preparing to cooperate with Apple. The E 1.2 software platform also contains a great deal of technical know-how from the Intel subsidiary Mobileye, another possible partner for Porsche.
Blume and Meschke did not give any details about the IPO. That is the responsibility of the owner, i.e. the VW Group. Volkswagen wants to list Porsche in the fourth quarter. Because of the downward trend on the financial markets, however, there are question marks behind the plans in the opinion of investors. The final decision is still pending, said Porsche CEO Blume, who is also a member of the VW Group board. The Volkswagen supervisory board is expected to make a decision in September.
More: The free swimmer: How CEO Oliver Blume removes Porsche from the VW Group.