Porsche AG enjoys 9.9pc ROS after challenging start to 2020

Aziz Idris

After a challenging first half of 2020, Porsche AG achieved a return on sales (ROS) of 9.9 per cent. The sales revenue of EUR12.42 billion is 7.3 per cent down on the previous year; the return on sales of EUR1.23 billion fell by 26.3 per cent compared to 2019.

The good performance compared to the competition is based on an extensive programme to improve the break-even point as well as the successful new Porsche products.

Chairman of the Executive Board at Porsche AG Oliver Blume in a press statement said, “The current situation has been challenging for our company. We are managing the coronavirus crisis responsibly and systematically, and at the same time see it as an opportunity.

“We have been given a boost by our attractive new products – from the 911 Turbo to the Taycan electric sports car, which was recently voted the world’s most innovative car,” he said, adding that Porsche is committed to stand firm with its visions and set new standards.

“This pioneering spirit is what drives us,” Blume said before revealing that the company will invest EUR15 billion over the next five years in new technologies alone.

Meanwhile, Deputy Chairman and member of the Executive Board responsible for Finance and IT at Porsche AG Lutz Meschke said, “When it comes to investment in electro mobility and digitalisation, we are still in the fast lane. At the same time, we are continuing to pursue our ambitious strategic targets for the return on sales so that we can safeguard jobs at Porsche in the long term.” That is why the CFO said that Porsche will take further measures to increase efficiency. “Tremendous joint efforts are required to secure jobs,” he added.

“The coronavirus crisis has not left Porsche unscathed,” Meschke said, explaining, “In Europe and the United States (US), we suffered a significant downturn in the first half of 2020. In China and other Asian markets like Korea and Japan, things have already been running well again for some weeks. It is still too soon to make a forecast for the rest of the year.”

“We are optimistic that we will be able to offset some of the losses from March, April and May. Of course, this will only be possible if there are no more setbacks due to coronavirus,” Meschke said.

In 2020, the year of coronavirus, Porsche is abandoning its strategic target of a 15 per cent return on sales. “But we are making every effort,” he said before adding, “to also achieve a double-digit return on sales in 2020.”