Porsche Confirms 2024 Earnings Outlook Despite Challenges

Porsche has confirmed its earnings outlook for 2024, despite facing various challenges, according to a note by Bernstein Research analysts. The carmaker expects to achieve a 14-15% profit margin this year, even as it grapples with a decline in sales volume due to the withdrawal of combustion-engine Macan and 718 models from the European Union, as well as potential supply chain issues for the 911 model.

In an investor call held before a closed period on company information before annual results scheduled for March 12, Porsche reaffirmed its forecast for the full year 2024, provided that the framework conditions do not worsen significantly. The company expects sales revenue of 39 to 40 billion euros, operating return on sales of 14 to 15 percent, automotive net cash flow of 7 to 8.5 percent, automotive EBITDA margin of 23 to 24 percent, and BEV share of between 12 and 13 percent.

Porsche's confidence in achieving its ambitious targets for the year as a whole is driven by several key factors. Firstly, the company's financial robustness and profitability, as evidenced by its earnings per ordinary share of 3.03 euros and earnings per preferred share of 3.04 euros after the first nine months of 2024. Secondly, Porsche's year of product launches, with five out of six model lines updated in just a few months, offering the youngest product portfolio in years. This context has high market potential for the years ahead, as demonstrated by the 21% increase in sales of the current Cayenne model in the first nine months of 2024.

Moreover, Porsche's focus on innovations, digitalization, sustainability, and future products and services contributes to its resilience and long-term growth prospects. By investing in these areas, Porsche can better navigate uncertainties and financial burdens arising from various geopolitical tensions and conflicts. For instance, the company is planning a trio of powertrains for the Cayenne into the next decade, demonstrating its commitment to continuous improvement and innovation.

In conclusion, Porsche's confirmation of its 2024 earnings outlook, despite facing various challenges, is a testament to the company's financial robustness, innovative product portfolio, and strategic focus on long-term growth. By maintaining its 'value over volume' strategy and investing in future growth, Porsche is well-positioned to navigate the complexities of the global automotive market and deliver strong financial performance.