Porsche, the renowned luxury car brand, is intensifying its efforts in electric vehicle (EV) development, aiming to have 80% of its new vehicle fleet consist of EVs by 2030. The company, which specializes in producing SUVs and sports cars, has made it a priority to become a leading producer of fully-electric SUVs and sports cars.
Porsche’s push towards electric mobility is supported by its majority stakeholder, Volkswagen AG, which holds a 75% minus one share equity stake in the company. In September 2022, Porsche made its debut on the stock market with an IPO. Since then, the company has been steadily working towards its goal of an electrified future.
In the first half of 2023, Porsche achieved impressive results, celebrating 75 years of sports cars. The company saw a significant increase in top-line sales, thanks to higher deliveries, leading to a turnover of €20.43 billion, a 14% increase compared to the previous year. Additionally, Porsche recorded an operating profit of €3.85 billion, representing a 10.7% growth. While these results were impressive, the company experienced a slight decrease in its automotive EBITDA margin from 26.4% to 25.6%, with a return on sales (ROS) of 18.9% compared to 19.4% in the previous year.
In terms of expectations, Porsche’s Q2 operating profit slightly exceeded consensus estimates, reaching €2.0 billion with a margin of 19.5%. However, the company’s automotive free cash flow (FCF) fell short of estimates at €800 million. Despite the challenges posed by the supply chain and distribution costs, Porsche delivered 167,354 vehicles in the first half of 2023, a 14.7% increase compared to the previous year.
Porsche maintains a strong financial position, with a net cash flow of €2.21 billion. However, the company’s net debt is projected to reach €2.3 billion by the end of the year due to ongoing deleverage plans and dividend payments already made in July. The total distribution, including €1.00 per ordinary share and €1.01 per preferred share, amounted to €916 million.
Undeterred by industry challenges, Porsche remains committed to its electric race. The company plans to introduce an all-electric version of its popular Macan model by 2024, followed by the electrification of the 718 and the iconic Cayenne. Porsche aims for over 80% of its new vehicle offerings to be fully electric models by 2030.
Despite a lower marginality in Q2, analysts predict a stable EBIT margin of 18% for Porsche in 2023. With an unchanged P/E multiple of 19x, analysts maintain a neutral rating target of €117 per share.
Porsche’s electrification drive demonstrates its dedication to sustainable mobility and aligns with the global shift towards clean energy. As the company accelerates its EV development, it remains on track to transform its vehicle fleet and contribute to a greener future in the luxury car market.
