Traffic in Shanghai
PTV’s software is designed to help monitor the flow of traffic.
(Photo: Bloomberg)
Stuttgart The VW parent company Porsche SE is pulling the reins on its investments. In addition to the large stake in the Volkswagen Group, the holding company, in which the Porsche and Piëch families have the say with 100 percent of the ordinary shares, is also involved in six smaller companies.
With the investments, Porsche SE actually wanted to put the VW dividends into the automotive technology sector and thus position itself more broadly. “The performance of individual holdings is in some cases below our own expectations,” said Lutz Meschke at the virtual general meeting of the holding company in October.
The manager is CFO of the sports car manufacturer Porsche AG, but has also been in charge of the investment business in the family holding company since the beginning of July. “However, we are working on the further development of these investments with the clear goal of being able to realize an attractive return.”
The largest investment three years ago was the PTV Group in Karlsruhe. The company was founded in 1979 as a planning office for transport and traffic from the University of Karlsruhe. Today it sees itself as a world leader in programs for planning and managing transport systems.
2500 cities around the world use the company’s software. Control centers can use it to monitor the flow of traffic. The long-term planning of optimal road networks for cities is also possible. It is practically creating a digital twin of a city. With the help of AI, precise traffic forecasts should also be possible.
However, PTV has not yet met the expectations associated with the takeover. Porsche SE had invested 300 million euros, up to now it was only enough for an annual turnover of 117 million euros. Last year, Porsche changed management.
The new boss Christian Haas has initiated a fundamental change in strategy. He wants to move away from the sale of permanently installed software to customers in the direction of cloud solutions. “The step into the cloud is essential in order to be competitive in the future,” emphasizes Haas.
The new PTV boss has ambitious goals
After sales rose by a double-digit percentage in the 2019 financial year and operating profit reached five million euros, PTV posted losses in the first half of this year. “That was due to the corona. I expect a positive result for the year as a whole despite the restructuring, ”Haas is certain that his change in strategy will still bear fruit by the end of the year.
Previously, the software was permanently installed on the customers’ computers for license and maintenance fees. Haas has created a new IT infrastructure in which the programs are offered in the cloud. He is following the trend of software giants such as SAP, who are switching to solutions in the computer cloud.
“We want to open up new customer groups with it,” says Haas. In Asia or the USA in particular, access via the cloud is now a prerequisite for doing business at all.
Haas is already happy to show the demo versions of the new platform, which is already running in Shanghai, at its headquarters in Karlsruhe. It works like an app store, so to speak, that offers software packages for which subscription fees are paid. The system simulates in real time how traffic changes, for example when a road becomes single-lane through a construction site.
Haas has set itself ambitious goals. By 2025, the current turnover is expected to almost double to 200 million euros. The goal is a double-digit operating profit margin. That would also reassure the owners in Zuffenhausen.
The 46-year-old ex-banker is optimistic about fears that the pandemic could thwart his plans. “The strengths of PTV lie in simulation using artificial intelligence. The pandemic increases the need for simulation ”. Many transport companies want to know how Covid will affect traffic in the city and how they can adjust their planning. PTV can deliver that in real time.
Software as a differentiating factor
In addition to PTV, the Porsche Holding is also involved in the two American 3D printing specialists Markforged and Seurat Technologies, as well as AEVA Inc. from Silicon Valley, which specializes in the field of laser-based object recognition, or lidar (light detection and ranging).
Most recently, Aurora Labs from Tel Aviv was added. For around 2.5 million US dollars, the Zuffenhausen company secured a “low single-digit share of capital”. Aurora Labs was founded in 2016. The company’s technology is particularly suitable for efficient and secure software updates via a radio interface, so-called “over-the-air” updates.
“In the future, software will be the major differentiating factor in vehicles,” said Porsche board member Lutz Meschke about his first participation. The PTV simulations could also be docked there.
The participation strategy of Porsche SE is subject to continuous review, said Meschke. “This also includes a critical analysis of previous investment and participation management processes, particularly with regard to possible improvement potentials in the future. These then find their way into the further developed investment strategy of Porsche SE with a clearly defined focus and ambitious goals. ”
If that doesn’t succeed, the manager has a plan B that already worked for his predecessor: whenever the holding company didn’t know what to do with the money, the stake in Volkswagen was increased. In eight years that was a billion euros.
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