After Record Earnings In 2022, Porsche Issues A Growth Outlook

Porsche AG, the luxury automaker, issued a long-term outlook that aims for a return on sales of over 20% in 2022. According to Porsche, the company reported record earnings on Monday on the back of higher deliveries.

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In the last year, the carmaker said its operating profit increased by 27% to 6.77 billion euros ($7.23 billion), with deliveries growing by 2.6% to 309,884 vehicles, a rise of 2.6% relative to the previous year.

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CEO of Porsche, Oliver Blume, told Trade Algo on Monday that the year 2022 was a "very successful one" for Porsche, with record sales, revenue, and operating profit, as well as an 18% profit margin on top of that.

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“If I were to look back on the last year, I think the main effect we had was a very positive product mix, our cost work is extremely efficient, and then on the other side, we had currency effects at the end to come to such a positive result,” Blume told Trade Algo.

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“Porsche is very particular about its pricing and as a result of our luxury positioning, we are able to go to a very positive pricing level with our vehicles. As our prices increase continuously, we are not jumping up and down, and we have a very clear pricing strategy that we are following."

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The company proposes a dividend of 1.01 euros per preferred share and 1 euro per ordinary share. Both medium- and long-term growth guidance was provided:

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“Should the economic conditions not continue to intensify significantly, we expect the Group operating return on sales to be between 17 and 19 percent for the 2023 financial year,” stated Lutz Meschke, deputy chairman of the Board of Directors and the head of finance and information technology at the company.

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It is estimated that sales revenue for the medium-term will range between 40 and 42 billion euros, in accordance with the guidance.

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“We aim for a Group operating return on sales of more than 20 percent in the long run,” Meschke said.

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Porsche accounts for a significant portion of Volkswagen Group's revenues, and it has overtaken VW as Europe's most valuable carmaker during its first week of trading on the German stock market following its listing on September 29 of last year. As of today, Volkswagen still owns 75% of Porsche's total share capital, minus one ordinary share.

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Earnings are due from Volkswagen on Tuesday.

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The shares of Porsche fell by 3.9% provisionally on Monday, whereas the shares of Volkswagen closed down by 3.4%. Despite these declines, Porsche shares remain up by around 8% and Volkswagen shares remain up by around 12% since the beginning of 2023, respectively.