German sports car manufacturer Porsche AG has announced that it is on track to meet its 2023 targets, following a significant increase in revenue and operating profit for the first nine months of the year. Although the company experienced a slight dip in return on sales, it remains optimistic about its long-term prospects.
Strong Sales Performance and Diverse Market Demand
Porsche reported a 13% year-on-year increase in revenue, reaching an impressive 30.13 billion euros ($31.91 billion). The company attributes this growth to surging demand in Europe, the U.S., and emerging markets. Additionally, Porsche’s commitment to offering a wide range of high-quality vehicles and catering to customizations has contributed to its sales success.
Positive Operating Profit Growth
Operating profit for Porsche rose by 9% to EUR5.50 billion. However, the company saw a slight decline in operating return on sales, which decreased from 19% to 18%. This decline can be attributed to investments in technology and motorsports, as well as preparations for upcoming model launches. Inflation also played a role in affecting the company’s return on sales.
Automotive Segment and Financial Services Division Performance
Net cash flow for Porsche’s automotive segment experienced positive growth, increasing from EUR3.27 billion to EUR3.39 billion. However, the net cash flow margin for the automotive segment decreased from 13.4% to 12.2%.
In terms of the financial services division, Porsche witnessed sales revenue growth from EUR2.47 billion to EUR2.52 billion. However, the operating profit of this division declined from EUR301 million to EUR230 million due to higher interest rates and refinancing activities.
Future Outlook and Targets
Porsche remains confident in achieving its 2023 outlook, which predicts an operating return on sales between 17% and 19%. This forecast is based on a sales revenue target of EUR40 billion to EUR42 billion.
With the ongoing support of their primary shareholder Volkswagen, Porsche is well-positioned to continue its growth trajectory and maintain its reputation as a leader in the sports car industry.
Note: David Sachs contributed to this report.