Porsche Mission
Arjun Kharpal | CNBC
Porsche It warned on Tuesday that profitability would decline this year as it launches new models amid difficult economic conditions, but raised its profits against the backdrop of higher operating profits for 2023.
The German luxury car maker said it expects an operating return on sales of between 15% and 17% in 2024, down from the 18% margin it achieved in 2023 and 2022. In the long term, the group targets an operating return on sales of more than 20%.
Explaining the more cautious profitability outlook, the company cited “the comprehensive renewal of its product portfolio in 2024, global framework conditions, high amortization on capitalized development costs, and continued investments in the brand and Porsche ecosystem.”
The company's shares rose about 4.8% by early afternoon, after reversing opening losses of more than 2%.
Porsche will launch four new vehicle ranges in 2024: the Panamera, Macan, Taycan and 911.
“2024 will be a year of product launches for Porsche – more than any year in our history,” Chairman of the Board of Management Oliver Blume said in a statement.
“We will bring a variety of exhilarating sports cars to the road, which will delight our customers around the world. This will sustain us for years to come.”
Porsche's sales revenue rose 7.7% in 2023 to 40.53 billion euros ($44.29 billion), while operating profits jumped 7.6% to 7.28 billion euros, the company announced.
As a result, the company proposed a dividend of €2.30 per common share, more than double the €1 per share offered in 2022.
“Porsche has proven in 2023 that we are resilient, highly profitable and financially strong even in uncertain times,” Lutz Mischke, CFO, said in a statement. “We benefit from a more balanced sales structure than in the past.”
“As such, we are laying the foundation in 2024 for a strong start in 2025. Our focus remains on the sustainable success of the company. Our customers, employees, the company and our shareholders will all benefit.”
Sales are expected to range between €40 billion and €42 billion in all of 2024.
Porsche still expects a “very difficult situation” in China, but the company is investing heavily in its customer base, despite economic headwinds in the country, Meschke told CNBC on Tuesday.
“We expect significant growth when it comes to high-net-worth individuals in China, and therefore it is necessary to invest not only in the product itself but also in the entire ecosystem, in our brand itself, and we will also do that in 2024 and 2025,” he told a CNB correspondent. C. Annette Weisbach at the automaker's facility in Leipzig, Germany.
“With the four new models, we will have the full model range in 2025, and we expect a strong recovery for Porsche in China.”
The parent company of Porsche, VolkswagenIt warned last week that sales growth is expected to slow due to weak economic conditions, increased competition and rising costs.
