Porsche operating profit in 2022 surges $7.2bn on high revenues

Porsche said its annual operating profit rose by 27 per cent to $7.2bn (EUR6.8bn) in 2022 from EUR1.5bn in the previous year as deliveries surged by 2.6 per cent to 309,884 units.

The company’s revenues surged to EUR37.6bn, a 13,6 per cent increase compared to EUR33.1bn. The Stuttgart-based automaker’s board proposed a dividend of EUR911m following the company’s initial public offering (IPO) last September – which is equivalent to EUR1 per ordinary share and EUR1.01 per preferred share.

“Our keys to success are improved price positioning, a strong product mix, increased group sales, currency effects, and last but not least, our consistent cost discipline,” said Lutz Meschke, deputy chairman and member of the executive board finance at Porsche said on an analyst call on Monday.

Porsche’s ambitious strategy

Porsche is pushing its strategy of modern luxury in 2023 and the automaker has started its ambitious Road to 20 programme to ensure its long-term profit goal. It projected that its sales would surge as much as EUR42bn this year after the company sped to record earnings and revenue in its first year since going public.

#Porsche annual press conference: “We do not intend to rest on our laurels. On the contrary. We are now launching our ambitious Road to 20 programme.” – Porsche CFO Lutz Meschke #RoadTo20 https://t.co/E2iWNCWtDA pic.twitter.com/Wbi7ZclId2

— Porsche Newsroom (@PorscheNewsroom) March 13, 2023

The company represents a substantial portion of revenues for Volkswagen Group and overtook the German auto giant as the most valuable carmaker in Europe during its first week on the Frankfurt Stock Exchange. Volkswagen still owns 75 per cent minus one ordinary share of the luxury carmaker’s total share capital.

“With the Road to 20 we are making Porsche even more resilient and our brand stronger than ever,” Meschke said while adding that the company’s newly attained autonomy from the listing gives it additional entrepreneurial freedom.

Going electric

Porsche plans to revamp everything, from its product range and pricing to our cost structure. The company plans to set up a new Car-IT department, that will be led by Sajjad Khan. The move follows protracted problems at Volkswagen’s Cariad software unit that have delayed several important models including an electric Macan.

“We are delighted that in Sajjad Khan we have been successful in winning over an experienced and incredibly connected expert for Porsche,” said Oliver Blume, CEO of Porsche.

The luxury automaker said an ‘all-electric Macan is expected to hit the markets by 2024 while an electric 718 is planned for the middle of the decade. An all-electric Cayenne is in the books and the 4^th generation of the luxury sport utility vehicle (SUV) signals Porsche’s ambitious target to deliver more than 80 per cent of its new vehicles as all-electric models in 2030.

Read: Volkswagen targets significant EV returns from 2026

The maker of the 911 is also planning to expand its product portfolio upwards with an all-electric SUV positioned above the Cayenne. However, the automaker did not share many details about the all-electric SUV, including its name, price point, or specific production date.

Blume confirmed in a media call following the company’s annual conference that the SUV would be bigger than the Cayenne, a size that is likely aimed to attract consumers in North America and China.

The SUV is expected to arrive before the end of the decade, suggesting a launch date between 2027 and 2028. The company brought its first electric vehicle, the Taycan, to the market in 2019.

The carmaker priced its shares at the top end of the indicated range and raised EUR19.5bn via IPO. Qatar Investment Authority, Abu Dhabi’s ADQ, Norway’s sovereign wealth fund and T. Rowe Price were cornerstone investors in the IPO and together they committed to taking up as much as EUR3.7bn.

Read: Porsche family seeks redemption with IPO after tearful defeat