Porsche: share down on 2024 margin warning

(CercleFinance.com) - Last night Porsche warned that its operating margin for 2024 would be at the lower end of the range of its previous estimates of between 14% and 15%.


For the record, the premium carmaker had already revised its annual operating margin target downwards last July, from 15% to 17%, due to problems encountered in the supply of aluminum.

On Thursday evening, the Stuttgart-based group also provided a forecast for its operating margin for 2025, which it sees falling back to a range of 10% to 12%.

Porsche explains that it has implemented a number of measures to improve profitability in the short and medium term, including increased spending on the development of new vehicles, the strengthening of its product range and investment in battery technologies.

According to its estimates, all these elements should weigh on its operating profit and cash flow from automotive activities by around 800 million euros this year.

Porsche, which announced last week that it had entered into discussions to terminate the functions of CFO Lutz Meschke and Sales Director Detlev von Platen, did not provide any information on the progress of these talks.

UBS analysts believe that cleaning out the Augias stables and replacing certain senior executives, starting with the CFO (...), is a good opportunity to start afresh and get the business back on track at operational level.

The broker also welcomes the group's intention to adapt its strategy by launching new-generation internal combustion engine (ICE) vehicles, in particular for the Cayenne, Panamera and Macan.

However, this will take time (until 2027 in our opinion) and investments are likely to remain high in the meantime, UBS adds.

For 2024, Porsche plans to pay a dividend relatively equivalent to that of FY 2023.

Following these announcements, Porsche shares fell by almost 6% on the Frankfurt Stock Exchange on Friday, bringing their losses over the last 12 months to over 30%.


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