After the spin-off and listing, Porsche is more profitable?

On March 13, Porsche delivered its first post-IPO financial report, which was also the strongest fiscal year in its history.

Specifically:

In 2022, Porsche's overall operating income was 37.6 billion euros, a year-on-year increase of 13.6%; Profit on sales of €6.8 billion, €1.5 billion higher than in the previous fiscal year; Global deliveries were 309884 units, up 2.6% year-over-year; Return on sales increased from 16.0% to 18.0%.

From the perspective of financial fundamentals, Porsche did deliver a brilliant result after going public. However, it is not the past achievements that are important for Porsche, but the future development.

Porsche is more profitable after the spin-off and listing?

According to the financial report, Porsche's revenue climbed to 37.6 billion euros in 2022, which is also the highest revenue performance in the past four years. In comparison, Porsche's revenue from 2019 to 2021 was 28.515 billion euros, 28.695 billion euros and 33.138 billion euros, respectively.

In terms of sales profit, Porsche's sales profit in 2022 was 6.8 billion euros, an increase of 1.5 billion euros over the previous fiscal year, and the operating profit between 2019 and 2021 was 3.862 billion euros and 4.177 billion euros, respectively.

In addition, in fiscal 2022, the net cash flow of Porsche's automotive business increased from €3.7 billion to €3.9 billion. It seems that after the spin-off and listing, Porsche's ability to make money is stronger.

However, it is worth noting that Porsche's performance last year was impressive, but vehicle sales did not grow much, with global deliveries of 309884 units in 2022, a year-on-year increase of 2.6%.

In terms of specific models, Porsche Cayenne is at the top of the delivery list, with a total of 95,604 units delivered in 2022, followed by the Macan, with 86,724 units delivered throughout the year, and Panamera and 911 delivered more than 34,000 and more than 40,000 respectively.

In the past year, the Chinese market remained Porsche's largest single market worldwide, contributing 93,286 new vehicles throughout the year, accounting for 30% of Porsche's global sales. However, it should be pointed out that although the Chinese market is still the sales center of Porsche, Porsche's sales in the Chinese market last year also declined, falling by 2.5%; This is not a positive signal for Porsche.

In this regard, Porsche explained that the supply chain crisis caused by the epidemic last year has not fully recovered, and the unstable international environmental factors have also had a negative impact on the supply chain, resulting in Porsche in an unstable environment.

The "Road to 20" strategy was proposed

Building on last year's good performance, Porsche officially launched the "Road to 20" program in 2023. The aim of the program is to achieve a long-term return on sales of more than 20 percent for Porsche.

"Excluding further economic challenges, we expect Group return on sales to be between 17 and 19 percent in the 2023 financial year, based on Group revenues of around €40 billion to €42 billion." Mr. Maxke, Vice Chairman and Member of the Executive Board of Porsche AG and in charge of Finance and Information Technology, announced on the earnings call.

In order to realize this strategy, Porsche said that it will firmly pursue the electrification strategy, the double e strategy - e-mobility & e-fuels.

At the earnings conference, Porsche gave more specific plans, including:

The all-electric Macan will arrive in 2023 and deliveries are expected to begin in 2024. The 718 is scheduled to be available in an all-electric version in the mid-20s, followed by the all-electric Cayenne. The fourth-generation SUV will deepen Porsche's goal of achieving more than 80 percent of all new vehicles sold by 2030. Expand its portfolio with a new all-electric SUV positioned on top of the Cayenne, based on the SSP Sport platform. Invest in new high-performance battery technologies to continuously improve the charging network.

In response to the reasons for the launch of the new pure electric model, Porsche CEO Oberme said that Porsche is strengthening its product positioning for sports luxury, and the company is concerned that the profit pool in this segment is also growing, especially in China and the United States.

From the perspective of product layout, Porsche is indeed "ambitiously" advancing its electrification strategy. However, compared with domestic electric brands, traditional luxury brands have not made much breakthrough in product intelligence, or it can be said that there is no competitive advantage relatively speaking. Domestic electric brands have also been sprinting into the high-end electric vehicle market in recent years, and have begun to seize the market share of some luxury brands.

With the continuous improvement of the product strength of self-owned brand new energy vehicles in recent years, the acceptance of Chinese users to independent brands is also increasing. For ultra-luxury brands, how to continue to maintain market competitiveness in the new energy era?

In this regard, Porsche China President and CEO Keshimai said, "China's new energy vehicles have been quite successful in a reasonable price range, but there is no real winner in the field of luxury electric vehicles. Compared with the European market, the advantage of the Chinese market is that there is no need to explain to consumers where new energy vehicles are good and how convenient charging is. But Chinese consumers generally believe that electric vehicles are cheaper than internal combustion engine vehicles, after all, there are no engines. Therefore, the pricing of electric vehicles in the Chinese market is lower than that of fuel vehicles, which is a challenge for luxury brands. As Porsche, we pay the most attention to brand value and brand history, this inheritance and accumulation will be reflected in all aspects of products and services, we are confident to do our own products. ”

As a complement to e-Fuels, the pilot plant in Haru Oni eFuels Chile, in which Porsche participated, was put into operation in December 2022.

It is worth mentioning that in the field of digitalization, Porsche has added a new member of the global executive board - Sajjad Khan, who served as the chief technology officer of Mercedes-Benz and will take over the new vehicle IT business after joining Porsche.

In addition, Porsche Digital Technology, Manhop Management Consultants (MHP) and Porsche IT have formed a digital family in collaboration with Porsche IT on the process of digitalization.

It is not difficult to see that in the era of vehicle electrification and intelligence, Porsche is also facing a transformation situation. It is not difficult to see from the financial results that Porsche has achieved outstanding results after the spin-off and listing, but to maintain such a highlight moment, or impact a higher level of performance, there is still a lot to do for Porsche.

(This article was first published in the Titanium Media App, author |.) Xiao Man, Editor | ZHANG Min)