PAUL MCVEIGH

Porsche is Volkswagen's profit champion

Paul McVeigh is Managing Editor at Automotive News EuropePaul McVeigh is Managing Editor at Automotive News Europe
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The true worth of the Porsche sports car brand to Volkswagen Group became apparent today when VW released its 2013 financial results.

Porsche's operating profit last year was 2.6 billion euros ($3.6 billion) on revenue of 14.3 billion euros, giving the sports car brand an 18 percent return on sales.

At 5.0 billion euros, Audi's operating profit was almost twice as much as Porsche's, but Audi's result was on revenue of 49.9 billion euros. Audi sold 1.35 million vehicles last year compared with Porsche's unit sales of 155,000.

The core VW car brand was the group's biggest revenue generator with sales of 99.4 billion euros but its 2.9 billion euro operating profit was only slighter higher than Porsche's. VW brand sold 4.7 million cars and SUVs last year.

VW Group acquired Porsche in fortuitous circumstances. Former Porsche CEO Wendelin Wiedeking tried to buy the much-bigger VW Group in 2008 but Porsche hit problems when it racked up more than 10 billion euros in debt in the middle of a global financial crisis. VW rescued Porsche by buying it.

The Porsche family, which is led by Wolfgang Porsche and his cousin, VW Chairman Ferdinand Piech, lost operational control of the brand, but they were left crying all the way to the bank.

The family has nearly 51 percent of VW's common stock through their holding company Porsche SE, making the family VW's anchor shareholder in a company they cannot directly control because of the so-called VW Law.

Today VW said it will propose at its May 13 annual meeting a 4 euro dividend per ordinary share, up from 2.5 euros last year, and a 4.06 dividend per preferred share, up from 3.56 euros.

VW Group's results showed that the Skoda and Seat brands need work. Skoda's operating profit fell to 522 million euros from 712 million euros last year on revenue of 10.3 billion euros. Seat's loss was 152 million euros on 6.9 billion euros revenue, a reduction of 4 million euros on its 2012 loss.

The ultraluxury Bentley brand is in good health with a 168 million euros operating profit, up 67 percent from 2012, on 1.7 billion euros revenue.

You can reach Paul McVeigh at pmcveigh@crain.com.

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