Porsche maps out profit push ahead of landmark luxury IPO

VOLKSWAGEN'S Porsche sketched out plans to bolster profits in the next 4 years as the sports-car brand tries to win over investors for its initial public offering (IPO).

Porsche targets an Ebitda margin of as much as 27 per cent by 2026, the company said on Monday (Jul 18). That would be below what Ferrari generated in 2021, but well ahead of Tesla and BMW.

VW is planning to sell a minority stake in Porsche in the fourth quarter to help finance its push into electric cars and unlock value. The German company has hired more than a dozen banks to push the IPO, which could value Porsche at as much as 80 billion euros (S$113.4 billion) to 90 billion euros, according to people familiar with the matter.

VW has pitched the listing as a way for Porsche to gain greater autonomy in areas like software and partnerships while it can continue to benefit from a symbiotic relationship with the parent.

That narrative has sparked pushback from investors, who have flagged a listing structure that fails to make the asset more independent from the billionaire Porsche and Piech family and headwinds in the overall IPO market. Under the plan, the family would gain a blocking minority stake of 25 per cent plus one share.

Sales of the 911, Porsche's most profitable model, could approach a record 40,000 units this year and help deliver luxury-level Ebitda margins, according to an analysis by Bloomberg Intelligence. BLOOMBERG