Porsche AG Warns of Lower Margins As It Launches New EV, Hybrid Models — 2nd Update
By David Sachs
Porsche AG's margins will be squeezed by the launch of new electric and hybrid models this year.
The German premium sports-car maker will roll out the fully electric Macan this year, as well as the next generation of its all-electric Taycan. It will also roll out hybrid versions of the 911 and Panamera.
"This will put the wind at our back for years to come," Porsche Chief Executive Oliver Blume said.
Manufacturers of high-end sports cars known for rumbling gas-burning engines aren't immune from electrification. Ferrari's first fully-electric model, the Vigna, is expected to hit the streets in late 2025. Chinese electric-car maker BYD--which recently passed Tesla as the world's best-selling EV car company--launched the U9 in February, a $233,000 luxury sports-car under the Yangwang brand.
On top of the new launches, Porsche expects global economic conditions and depreciation as well. This will pressure margins, which the company pegs at 15% to 17% after posting a return on sales of 18% in 2023, it said.
The guidance speaks to a company in the midst of digitalization and electrification, Citi analysts said in a note.
"The Porsche transformation will take time," the analysts said. "Porsche will focus on brand and pricing in future, but to do this, the product range needed to be renewed."
However, the company's share of fully-electric vehicles is expected to grow to just between 13% and 15% from 12.8%, suggesting limited sales growth for the electric Macan, Citi said.
Porsche's sales revenue rose 7.7% from 2022 to 40.53 billion euros ($44.29 billion), said the company, which is majority-owned by Volkswagen. Analysts had expected sales of EUR40.29 billion, according to Visible Alpha consensus estimates. Vehicle deliveries rose 3.3% to 320,221.
The company expects sales of between EUR40 billion and EUR42 billion this year.
Operating profit jumped 7.6% to EUR7.28 billion last year, Porsche said, finishing slightly ahead of the Visible Alpha consensus of EUR7.23 billion.
The company proposed a dividend of EUR2.30 an ordinary share compared with EUR1.00 in 2022. The company aims to distribute 50% of its after-tax net income to shareholders in the medium term, it said.
Porsche's net cash flow from its automotive operations finished last year at EUR3.97 billion.
Write to David Sachs at david.sachs@wsj.com
(END) Dow Jones Newswires
March 12, 2024 06:18 ET (10:18 GMT)
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