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Shareholder's Grim Forecast for Volkswagen: Anticipates Millions in Potential Financial Losses

Volkswagen's predicament and Porsche AG's sports car woes are placing considerable strain on the umbrella company, Porsche SE.

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Struggles at Volkswagen and Porsche AG, sports car arm of Porsche SE, are placing significant...
Struggles at Volkswagen and Porsche AG, sports car arm of Porsche SE, are placing significant pressure on the parent company, Porsche SE.

Porsche SE Facing Tough Times: Massive Impairments in VW and Porsche AG Stakes

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Shareholder's Grim Forecast for Volkswagen: Anticipates Millions in Potential Financial Losses

Things are not looking rosy for Porsche Automobil Holding SE (Porsche SE), the major stakeholder in the automotive behemoth Volkswagen AG (VW). The Munich-based company revealed a potential write-off of its VW stake's book value, ranging between €7 billion and €20 billion, and a write-down of its Porsche AG stake (25% voting rights) by between €1 billion and €2 billion. This bookkeeping disaster has resulted in a hefty net loss for Porsche SE, which the company described as a "substantial negative."

The troubles at VW and the sports car manufacturer Porsche AG are causing headaches for Porsche SE, with the Stuttgart-based holding company bracing for red numbers in the coming year.

Digging Deeper: What's Happening at Porsche AG?

Porsche AG has revised its forecast for 2025, citing special effects such as a slower rollout of electric mobility and a strategic realignment of battery activities. This shift has led to an increase in special spending for Porsche AG, which could, in turn, indirectly impact Porsche SE. Here's a sneak peek at the adjusted forecast for Porsche AG:

  • Sales Revenue: Expected to be between €37 and €38 billion, down from the initial €39 to €40 billion.
  • Return on Sales: Now projected to be between 6.5% and 8.5%, reduced from the previous 10% to 12%.
  • Automotive Net Cash Flow Margin: Now between 4% and 6%, down from the original 7% to 9%.
  • Automotive EBITDA Margin: Reduced to between 16.5% and 18.5%, down from the previous 19% to 21%.
  • Automotive BEV Share: Remains between 20% and 22%.

These adjustments are primarily attributed to the delayed growth of electrification and strategic battery activity adjustments [1][2][3]. Although financial reports for Porsche SE in 2024 haven't been released yet, the altered forecast for Porsche AG might provide some clues about the company's potential struggles. Stay tuned for updates!

[1] - Reuters[2] - Automobilwoche[3] - Auto Motor und Sport

  1. The potential write-off of Porsche SE's VW stake's book value could range between €7 billion and €20 billion, while its Porsche AG stake (25% voting rights) could be written down by between €1 billion and €2 billion.
  2. The financial troubles at VW and Porsche AG are causing significant concerns for Porsche SE, with the company expecting red numbers in the coming year.
  3. Porsche AG has revised its forecast for 2025, citing special effects such as a slower rollout of electric mobility and a strategic realignment of battery activities, which could lead to increased special spending.
  4. The adjusted forecast for Porsche AG includes projected sales revenue between €37 and €38 billion, down from the initial €39 to €40 billion, and a reduction in expected return on sales, automotive net cash flow margin, and automotive EBITDA margin.
  5. The delayed growth of electrification and strategic battery activity adjustments are primarily attributed to the revised forecast for Porsche AG, and these adjustments might provide some insights into potential struggles for Porsche SE in the finance and transportation industry.

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