(BFM Bourse) – The premium automobile brand published revenues and margins above expectations in the fourth quarter. However, the German company expects its profitability to decline in 2024.
The year 2023 was clearly not one to mark with a blank stone for Porsche, which suffered on the stock market, due in particular to execution problems and sluggish sales in China. Entering the Frankfurt Stock Exchange with fanfare at the end of 2022, the German brand has relapsed and is now barely trading above its IPO price (86.26 euros compared to 82.5 euros).
The Volkswagen subsidiary, which still owns more than three-quarters of the capital, however found some enthusiasm on the stock market this Tuesday. Its action rose 7.7% in Frankfurt around 4 p.m., after losing more than 2% at the start of the session.
The group delivered its annual results as well as its annual forecasts, with some good and some bad.
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An expected margin decline this year
On the other hand, Porsche’s 2024 objectives disappoint. The overseas manufacturer will launch four new products this year, what it presents as “the most important rejuvenation of the range in its history”, with the Panamera, the electric Macan, or even the new version of its legendary 911 , scheduled for early summer.
With these new upcoming releases, the group expects to generate revenues of between 40 billion euros and 42 billion euros, compared to 40.53 billion euros in 2023, while the operating margin would be between 15% and 17 % compared to 18% in 2023. The automotive gross operating margin is expected between 24% and 26%.
If these forecasts exceed expectations in terms of revenues, Porsche disappoints in terms of profitability since the consensus expected, according to HSBC, an operating margin of 17.1% in 2024 and an automotive gross operating margin of 25.8%.
Patience required
But on the other hand, the group revealed significantly better results than expected in the fourth quarter. Porsche’s revenues stood at 10.39 billion euros, according to HSBC, down 4.5% year-on-year, due to a drop in deliveries of nearly 12%, with a further significant fall in China (-24% year-on-year in the fourth quarter). But the company’s revenues were still higher than the consensus which was 10 billion euros.
At 1.78 billion euros, operating profit exceeded expectations by 10% while the corresponding margin, at 17.1% over the last three months of the year, was slightly above the consensus (16.1%).
Porsche has also decided to more than double its dividend, proposing a coupon of 2.30 euros per share, compared to 1 euro per share for 2022.
For the future, if UBS expects still “chaotic” quarters for Porsche this year, the Swiss bank argues that the action is currently trading at “undemanding” levels for a premium automobile group, at 17 times the benefits expected in 2024.
“It is now critical that management execute on product launches and regain investor confidence, which we believe has been dented over the past two quarters by execution issues and China weakness,” explained the Swiss bank in a recent note. “We remain buyers of the stock, while emphasizing that patience will be required while Porsche navigates the coming quarters with model changes,” added the Swiss establishment.
Julien Marion – ©2024 BFM Bourse