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Porsche wins at IPO, results equally impressive
Having successfully listed their IPO in Europe in September of 2022, Porsche have broken a number of impressive financial records. Firstly, this was the biggest European IPO in history in Euro terms, just to give you an idea of scale. But perhaps more importantly even coming on the back of a post Covid restarting of economies and businesses Porsche have managed to deliver returns that break records.
Deliveries increased by 2.6% to just under 310k cars for 2022, based on a nett revenue that has increased by some 13.6% to 37.6B Euros. That is billion, with a B. Operational profit grew by 27.4% to 6.8B Euros.
Shareholders in the company must be happy and one glance at the share’s price chart will confirm it (they’re up by around 30%). Porsche then go on to add more meat to this particularly chunky set of results with reports of an order book that is ‘full to busting’.
It is impressive. And yet Porsche want more. They announced their ‘Road to 20’ as their new program in their financial targets – and this is set to achieve a consistent 20% return on sales in the next decade. Considering they are already at 17% it looks achievable.
You could see that both Oliver Blume (Chairman of the Executive Board Porsche AG) and Lutz Meschke (Deputy Chairman of the Executive Board and Member of the Executive Board for Finance and IT) had their tails up in the air. Both were both animated and expressive throughout the results presentation and it is not hard to see why.
With results like these Porsche are getting more things right than they are wrong and it is to the future that the attention must swing to ensure that the next five to ten Annual Results Presentations meet the standards set in 2022.
Thus, it is ‘all about electric’. Whilst Porsche have made a commitment to keeping 20% of their vehicles as traditional ICE engined affairs, they can only do so with a carbon neutral fuel. In December of 2022 they turned on their own first alternate eFuel plant in Chile. It puts Porsche in the unique position of being able to say:
‘Porsche. Powered by Porsche.’
eFuels are liquid fuels similar to petroleum but carbon neutral owing to their formulation and burn characteristics. We didn’t get around to discussing the price but Porsche have at least proven that it can be done now at a commercial scale.
Further, I think Porsche are playing it smart by remembering that there is a large installed base of ICE vehicles still on the face of the planet and that there are also a number of ICE engines in things that are not cars, and not even Porsches. Things like ships and aeroplanes are also on Porsche’s radar as consumers of eFuels.
It is interesting to see Porsche adopt eFuels with some appreciable vigour especially when compared to some of their fellow motor manufacturers. Is this one of those events in business case studies for the next generation of MBAs to discuss how other OEMs simply missed the boat?
That said, the 80% of vehicles that Porsche will still be making in 2035 will be electric. From the initial offerings of the all electric Macan to be followed by the 718 and then Cayenne and above (there was a hint dropped of a new bigger all electric SUV on the cards) the electric platform that Porsche have already done stellar work in, will continue to expand to this road map. Cayenne is touted to receive one of the biggest revisions that Porsche have ever given a model and so we await to drive it with some interest.
There is one glaring exception here and Porsche glossed over it. There will be no electric 911 at this stage. A hybrid derivative is on the cards however but with Cayenne the best selling vehicle in the Porsche stable one has to wonder if the narrative is being gently setup for the unthinkable. Personally I doubt it but stranger things have happened.
However it may not matter. Porsche being Porsche stated that their focus will be on high performance charging and high performance batteries. Expect then to see the next generation of electric Porsches being even faster, and quicker to charge than their competition. I for one, am certainly looking forward to seeing that in action. Taycan by way of example has already set the performance benchmark for electric literally a few years ahead of the competition with the Turbo S (yes, the name still jars). If what Porsche didn’t say in the presentation comes about as the typically conservative Porsche has a habit of bringing to market then it means that the electric cars on their way are going to be stellar.
Porsche in 2023 are then in a solid position all round. They are selling cars as fast as they can make them. They are going to be increasing head counts, they have cash in the bank and they have a clear vision of what they need to do and how they are going to go about doing it. They have proven that their ability to make money with their business recipe with quality vehicles is on full display. What’s not to like?
Maybe it is that they will not be in F1.
But they will be in the 100th LeMans and competing with a 963. And as Blume himself puts it, and I cannot do better than him:
“Porsche has always remained Porsche. We’re all driven by dreams.”
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