Good Start: Porsche Increases Sales Revenue and Operating Profit in Q1
Despite myriad challenges from wars to sinking ships Porsche still managed to increase profit in Q1 of 2022.
How the heck did Porsche pull this one off? Every automaker in the world right now is dealing with supply disruptions making it difficult to build and deliver vehicles to customers. Porsche even had some additional misfortune when a cargo ship sent hundreds of their cars to the ocean floor. This has all contributed to drive prices through the roof. It would have been completely reasonable to expect a drop in sales and profits during this challenging time. However, Porsche recently announced that sales revenue and operating profit in Q1 actually increased. “Sales revenue grew from €7.73 to €8.04 billion, and operating profit from €1.26 to €1.47 billion. This is an increase of 4.1 and 17.4 percent respectively. The return on sales improved from 16.2 to 18.2 percent.”
“Despite all the global challenges, we’re still right on track,” says Lutz Meschke, Deputy Chairman and Member of the Executive Board responsible for Finance and IT at Porsche AG. “In the first quarter, Porsche benefited in particular from a strong sales mix, disproportionate growth in the other business segments and positive currency effects. Due to many external challenges that we cannot influence, it is difficult to provide an outlook. Nevertheless, we are aiming for a return on sales of at least 15 percent in the financial year 2022.”
How is this Possible?
Later in his statement Meschke mentions that a task force was set up to help ensure good financial results. We don’t know what that task force did exactly, but they earned their keep. With the supply chain challenges, deliveries were down 5 percent compared to 2021. Yet, the profits increased. 68,426 vehicles were delivered to customers in the first quarter. The best sellers were the Cayenne and Macan which combined for over half of those deliveries. The Taycan took the final step on the podium with 9,470 deliveries. The 911 might be the most iconic model in the Porsche lineup but it is far from being its best seller.
Electromobility Strategy
Porsche may have differentiated itself from other automakers in the profit department. But when it comes to the shift to electric power Porsche is in lockstep with the rest of the industry. 23 percent of all vehicles delivered in Q1 were electrified (all-electric or plug-in hybrid). 14 percent of vehicles were all-electric. These numbers will only increase in the future. By 2025 half of all new Porsche sales are expected to be electrified. And by 2030 it is expected that over 80 percent of all new Porsche vehicles will be all-electric. The flat six powerplant that has become synonymous with the Porsche sports car will be a tiny minority by the end of this decade.
The Future
Increased profit in Q1 of 2022 is nice, but companies are always looking towards the future and Porsche is no different. “One thing we can say for certain,” emphasizes Meschke. “In-house we have a lean, robust structure in place. The goal of Porsche is and remains to set standards in terms of profitability and cash flow.” A lean structure is important but the fact that Porsche makes some of the most desirable vehicles in the world also helps. As fans of the brand, we wish Porsche continued success so they have the capital they need to continue to develop the cars and SUVs we all love. Even if most of them will soon be electric.
Photos: Porsche
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