The Supervisory Board of Volkswagen AG has decided to pursue an IPO of up to 25% of Preferred Shares of the luxury automotive manufacturer.

The Preferred Shares are planned to be listed on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard). The planned IPO is targeted for the end of September or beginning of October and is expected to be completed by year end, subject to capital market conditions.

“We very much welcome the decision of the Volkswagen Supervisory Board in favor of an IPO of Porsche AG,” Oliver Blume, Chairman of the Executive Board of Porsche AG said.

“This is a historic moment for Porsche. We believe an IPO would open up a new chapter for us with increased independence as one of the world’s most successful sports car manufacturers. It would strengthen our ability to further execute our strategy.”

In preparation for the IPO, the share capital of Porsche AG was divided into 50% Preferred Shares and 50% Ordinary Shares. In the IPO itself, up to 25% of the Preferred Shares in Porsche AG would be listed to support a meaningful free float and help create a liquid aftermarket for the Porsche AG shares.

Public offer to retail investors in several European key markets
The IPO would comprise public offerings in Germany, Austria, France, Italy, Spain and Switzerland as well as private placements to institutional investors.

Lutz Meschke, Deputy Chairman of the Executive Board and Board Member responsible for Finance and IT, emphasized: “Porsche has established a strong financial track record, delivering compelling financial results and fulfilling the dreams of sports car fans around the world. We are fully committed to continue our successful path in the future and aim to benefit from a structural growth environment for our modern luxury vehicles.

We believe Porsche is well positioned and will continue to focus on high-quality and exclusive products, electromobility and sustainability. Therefore, I am optimistic that we could attract a very strong and well-diversified shareholder base with the IPO.”

Thus, Porsche AG intends to targets a dividend payout ratio of 50 percent of the Porsche Group’s IFRS consolidated profit after tax attributable to its shareholders in the mid-term.

Increased entrepreneurial independence
The IPO is intended to provide Porsche with increased entrepreneurial independence to execute its strategy. Therefore, the domination agreement and profit and loss transfer agreement currently in place with Volkswagen AG would be terminated by the end of this year.

Porsche is active in attractive luxury market segments which are expected to experience growing fundamental demand in the coming years, with BEVs and sport utility vehicles (SUVs) being among the main drivers.

In addition, a commitment to a comprehensive understanding of sustainability is an integral part of Porsche’s strategy. Following the successful launch of the Taycan, Porsche is pushing ahead its electrification strategy and has set itself ambitious targets: Porsche’s ambition is for BEVs to comprise over 80% of new vehicles delivered in 2030.

As part of its strategy, Porsche is also working towards a net carbon-neutral value chain in 2030 and a net carbon-neutral use phase for future BEV models.

Ambitious financial targets
In the first half of 2022, Porsche again posted strong growth in revenue, operating profit and return on sales. For the full year 2022, the company is aiming for Group revenues in the range of approximately 38 to 39 billion euros and a Group return on sales in the range of 17 to 18 percent.

The outlook is based on certain assumptions including, among other factors, the expectation of continued positive currency tailwinds and no significant deterioration in economic or political conditions or further significant disruptions in supply chains.

In addition, Porsche targets to deliver in the mid-term Group revenue growth at an approximately 7 to 8 percent compound average growth rate (CAGR), a Group return on sales in a range of approximately 17 to 19 percent and Automotive EBITDA margin in a range of approximately 25 to 27 percent while generating an Automotive net cash flow margin of approximately 12.5 to 14 percent.

Porsche has further set itself the long-term ambition of achieving a Group return on sales of more than 20 percent.