Porsche AG's 2011 EBIT Rises 22% on Strong Cayenne Sales

Porsche AG has posted a very strong financial result for the full year in 2011, according to a press release that was reported by Bloomberg and Reuters. According to the release, Porsche AG's earnings before interest and tax (EBIT) increased by 22% year-on-year (y/y) to EUR2.05 billion (USD2.69 billion) which compares to the EUR1.67 billion the company posted a year earlier. The company's sales revenue also rose impressively, with an 18% y/y rise to EUR10.9 billion. Commenting on the results, Porsche CEO Matthias Mueller professed how pleased he was with Porsche's performance in 2011. He said, "For Porsche, 2011 was the most successful financial year in the company's history, not just for sales but for revenue and operating profit as well."

The company is looking to post an equally strong increase in sales and financial results in 2012, backed by the launch of the new 911 and Boxster/Cayman ranges, with the 911 making its debut in showrooms at the start of this year, while the new Boxster is also currently being rolled out across Porsche's principal markets having made its public debut at the Geneva Motor Show. The company is targeting sales of 140,000 units in 2012 after recording sales of 116,978 sales last year. However, this was a lower figure than it first announced, having in January claimed sales of 118,867 units. This original figure would have been a 22% y/y rise, and an increase in line with the company's EBIT. There was no reason given for the restatement of the 2011 sales volumes. The Cayenne was the main driver of the sales increase, with a highly accelerated and impressive rise of 49% y/y to 59,873 units, which means the model accounted for more than half of the Porsche's overall sales volumes. The Panamera four-door model's sales rose by 20% to 28,218 units for the year, with the model currently performing significantly above Porsche's original forecast for the model of 20,000 unit sales per annum.

Outlook and Implications

The sales and financial performance of Porsche AG, the actual carmaking business of the company, shows that Porsche's core activity has survived the financial slump and the failed takeover of VW in very robust shape. The stellar sales and financial results have been underpinned by the extraordinary success of the second-generation Cayenne SUV. Porsche has really hit the sweet spot with this model in terms of improving the styling of the slightly frumpy first-generation model, as well as giving the model a much higher grade interior in terms of materials and design. The model is an intoxicating mix of brand, design and segment that has proven especially popular in China, where there remains a waiting list of up to 12 months for the model. The waiting list in Western Europe also remains long at around six to seven months, which is an impressive achievement for a model that is just entering the third year of its model cycle. While the financial results of Porsche's holding company, Porsche Automobil SE, include the company's 50.7% shareholding in VW which can sometimes overshadow the performance of the car business, these figure show that Porsche's core business remains in good shape. Porsche is still set to become the 11th brand in the VW Group stable, although it appears that this will happen through VW simply buying the remaining 50.1% stake rather than through the mechanism of a legal merger, which has been delayed as a result of the ongoing legal cases that Porsche SE currently still faces due to the behaviour of its previous management regime during the failed VW takeover. Going forward into 2012 Porsche's sales momentum should be maintained by the launch of the new 911 and Boxster/Cayman ranges and IHS Automotive agrees with the company's forecast of hitting 140,000 unit sales during the year, while its long-term target of 200,000 units by 2018, especially given the launch at the end of 2013 of the new sub-Cayenne SUV, the Cajun.