Production of the electric Porsche Taycan
Undeterred by the crisis, the sports car manufacturer plans to invest a total of around 15 billion euros in electromobility and digitalization by 2024, thereby increasing the budget by five billion euros.
Stuttgart Porsche has short-time work for the production interruptions in Zuffenhausen and Leipzig applied for in the next two weeks. “We have made appropriate requests,” confirmed PorscheCEO Oliver Blume in a conference call. With that takes the most profitable German car maker State aid was also sought during the spread of the coronavirus.
The Porsche boss pointed out that the company has always assumed its responsibility as a taxpayer and has paid over five billion euros in income taxes in the past five years alone. It is therefore also legitimate to accept the help from the state, which is of particular benefit to the workers.
“In the crisis, we have to use the funds that are available to make ourselves crisis-proof,” said CFO Lutz Meschke. “We drive by sight and have to see how the markets develop. Depending on the situation, the production interruption can take even longer, ”emphasized the CFO. According to him, the VWSubsidiary on a liquidity cushion of three billion euros. A forecast is currently not possible.
The chief financial officer expects a drop in sales of around ten percent in the first quarter. There are already signs of normalization in China. Around 60 percent of retailers have already opened again. If it stays that way, a catch-up process will be initiated from April, May. In Europe and the USA, developments have to be awaited.
The head of finance emphasized that the basis for a double-digit return even in the crisis was there. Porsche had achieved double-digit returns even during the financial crisis ten years ago. Despite the great uncertainty about the economic consequences of the corona crisis, Porsche is sticking to its strategic return target of 15 percent. “It is not the first crisis for Porsche, and I am confident that we will emerge from it stronger than before,” said the CFO.
A lot of money for new electric cars
Last year, Porsche increased sales by eleven percent to EUR 28.5 billion and the operating result by three percent to EUR 4.4 billion. Sales rose by 11 percent to EUR 28.5 billion, the operating result before special items increased by three percent compared to the previous year to EUR 4.4 billion. The operating return on sales before special items was 15.4 percent.
As a special factor, a fine of 535 million euros has to be deducted in the course of the diesel scandal. This still leaves a return of 13.5 percent. In the same period, the workforce grew by ten percent to 35,429 employees, primarily due to the expansion of Taycan production.
Undeterred by the crisis, the sports car maker wants a total of around 15 billion euros in electromobility and by 2024 digitalization invest and thus increases the budget by five billion euros. “The money should flow, among other things, into the development of new electric cars, such as variants of the Taycan and the battery-powered Macan for 2022,” announces Meschke.
The driver is also the digitization budget, doubled to 900 million euros. The company is investing another 150 million euros in investments in young companies (venture capital). If the corona crisis lasts longer, the investments could stretch. “In total, however, it will remain at 15 billion,” said Meschke.