Profit slump Narrower roads for Porsche

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Dr.Ing.h.c.F. Porsche AG

Wuxi InfiMotion Technology Co., Ltd.

At the German sports car manufacturer Porsche, future cost-cutting measures may have to be greater than expected. Although the figures are stable according to the company, profits have plummeted. Competition from China is only one reason for the poor sales figures.

Although the market environment was challenging, Porsche said it was able to close the 2024 financial year with a stable result. Although operating profit fell by 22.6 percent compared to the previous year, a stable net cash flow was achieved thanks to record sales in several regions.

Financial development and challenges

Porsche was confronted with major economic challenges last year. The Group's turnover amounted to 40.08 billion euros (approx. 43.66 billion USD). The operating result amounted to 5.64 billion euros (approx. 6.09 billion USD) and fell by 22.6 percent compared to the previous year. The return on sales fell to 14.1 percent and was thus below the long-term target of over 20 percent.

Group profit after tax fell even more sharply, dropping by 30.3% to around 3.6 billion euros (approx. 3.89 billion USD). The difficult market environment in China had a particularly negative impact. The challenging market situation in China in particular had a negative impact. Deliveries fell by three percent to 310,718 vehicles. In China, sales even fell by 28 percent, which contributed significantly to the negative impact on earnings. High costs for model adjustments and strategic investments also put additional pressure on the profit margin.

Strategic realignment and investments

Porsche has further adapted its diversified drive strategy. Investments in combustion engines, plug-in hybrids and the further development of electromobility are now even more of a focus. In addition, significant resources have been made available for updating the model portfolio. In 2024 alone, five out of six model series were revised and relaunched on the market. These include the Cayenne, Panamera, Taycan, 911 and the all-electric Macan.

Optimization of the cost structure

A comprehensive savings and efficiency program is another key element of the realignment. Around 1,900 jobs are to be cut at the Zuffenhausen and Weissach sites by 2029. At the same time, investments will be strategically deployed to maintain innovative strength and competitiveness.

Outlook for 2025

Porsche is planning investments of around 800 million euros (approx. 869 million USD) for the current year. Oliver Blume, the CEO, emphasizes that even if there are short-term declines, the company wants to focus on long-term profitable development. The estimate for the operating margin in 2025 is 10 to 12 percent, while turnover is expected to be between 39 and 40 billion euros (approx. 42.8 billion USD).

"Porsche has proven in 2024 that we are highly profitable and financially robust even in challenging times," explained CFO Dr. Jochen Breckner.

Despite economic turbulence, Porsche remains in a stable position. The company wants to maintain its market position and continue to develop in the long term by clearly focusing on product innovations, strategic investments and efficiency improvements. (mr)