Dr. Ing. h.c. F. Porsche Aktiengesellschaft (P911) March 2026 Conference Transcript

Hello and welcome to our Analysts and Investors Conference 2026 of Porsche AG. My name is Björn Scheib and with me today is our CEO Dr. Michael Leiters and our CFO Dr. Joachim Breckner. Today we would love to give you an update on our financials results of the last year and we will give you also an update on our outlook. All materials that we have available such as the investor stack or the annual and sustainability report are available right now on the investor section of the Porsche website. Before we begin, as you know, we will remind you that any forward-looking statements that we will make during this call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement included in our materials. this intro will also be governed by this language with that said i'd love to hand over to michael good morning ladies and gentlemen and a very warm welcome thank you for joining us today for our analyst and investors conference at the beginning a few words regarding my background are i believe

necessary. My professional career has spanned the automotive industry across many companies. My most recent responsibility was as the CEO of McLaren. This job entailed a significant restructuring of our capital structure, a revamp of the organization and a renewed focus on McLaren's product offerings, leading up to the successful launch of several models. Prior to this, I was the chief technology officer of Ferrari for eight years. I led the entire research and development focused capital expenditures and the expansions of the Ferrari's successful product portfolio, which enhanced and sustained the significant margin improvements and a viable shareholder returns. Before moving to Ferrari I worked at this great company for 13 years in various capacities. These were particularly formative. I learned how a largely manufacturing-based production system can be optimized by efficiency, how processes can be improved to drive profitability and how the introduction of new highly profitable models can reshape a brand allowing Porsche to grow volumes while still being perceived as a focused and exclusive manufacturer of sports cars. As such I am returning to my original home with a determined commitment to restore this amazing company's former glory. In all humility my career today has exposed me to numerous challenges and the related adoption of successful principles that I believe will serve me well at Porsche going forward a clear focus on the customer and on products that truly excite our customers a strong focus on cost efficiency this is a hygiene factor for any company regardless of how profitable it is and an excellent team rich in talent held together by a clear vision and a strong set of shared values. You can well imagine that over the last 70 days or so I've worked hard with my team to delve into every detail of our strengths and weaknesses both internally and externally. This comprehensive exercise has allowed us to formulate an initial strategic plan that will be with urgency as the next few months unfold. I do not wish to minimize the challenges we face, but I do take great confidence in our collective ability to address and tackle the issues we confront head-on. This confidence relies on the quality of our people, the culture and the spirit of the organization. our technological resources, our superior brand equity and consumer loyalty as well as our strong balance sheet and capital structure. This together with our willingness to take the hard decisions that are both necessary and vital to address our bloated cost structure across the board, revitalize our product offerings and enhance our revenue opportunities. Our clear priority is to fundamentally realign Porsche. Our focus must be on our customers and their expectations, on our products, on our sports cars. Parallel to the mentioned strategic planning process, our leadership team has systematically analyzed the current situation and we have also taken immediate action. We have already initiated a number of targeted measures. These include the consistent application of our value over volume principle, particularly in the challenging Chinese market. A quality driven ramp up of production for the all-electric Cayenne and a sharper focus on our core business. We are determined to render Porsche significantly more financially resilient and better able to withstand external challenges. We must enhance our profit margins and cash flow generation as you and many others expect from us and it is needed to invest in the development of innovative products and to handsomely reward our shareholders I have no doubt that this can be achieved but I'm also a realist it will take time, but rest assured that every effort will be devoted to delivering our objectives as rapidly as possible within the various and obvious constraints that will be inevitable arise. I will further expand upon our priorities and strategies going forward shortly, but first Jochen, our CFO, will review our 2025 results and our outlook for this coming fiscal year. His presentation will also highlight the important steps that the team under the leadership of my predecessor Oliver Blume has already initiated.

Jochen, the floor is yours. Thank you Michael and good morning everyone. i will now walk you through porsche's performance in fiscal year 2025. 2025 was an exceptionally challenging year for porsche in response we took decisive action to rescale and recalibrate the business across all key dimensions as a result we recognized one of charges of 3.1 billion this sum is primarily related to the realignment of our product strategy to the recalibration of our battery activities and to organizational adjustments. These measures weight on our reported results for the year 2025. They are necessary steps to safeguard Porsche's long term profitability, resilience and strategic flexibility. Now we are combining these initiatives to develop them further in our strategy 2035. With that, let me briefly update you on our sales development. Last year, customer deliveries declined significantly. Total deliveries amounted to 279,000 vehicles, representing a year-on-year decrease of 10%. North America remained our largest market, with deliveries stable at 86,000 units. In China, including Hong Kong, deliveries declined by 26% to almost 42,000 units. China was, is, and will remain an important strategic market for Porsche. At the same time, we are adjusting our footprint to reflect new market realities. This includes streamlining our dealer network and reinforcing our presence in high-demand regions. Accordingly, the planned reduction of our dealer network has been revised from around 100 points of sales to approximately 80 by the end of 2026. Porsche vehicle sales, the basis of our revenue generation, totaled 266,000, down 15% compared to the prior year. Also, due to the region-specific supply gaps in the 718 Boxland Cayman and the combustion engine Macan. Throughout the year, we deliberately focused on value-oriented sales management. This enabled us to maintain a well-balanced regional mix, while we kept production below both vehicle sales, volumes, and customer deliveries. This disciplined approach clearly strengthens Porsche's long-term brand positioning and protects our pricing power. Now let us take a look at the financial figures. Group revenue reached 36.3 billion in 2025, a 9.5% year-on-year decline. Revenues proved more resilient than volumes, reflecting strong brand strengths, a favorable product mix and pricing as well as robust demand for individualization. Auto revenue per vehicle sales increased to 121,000 units, up 4,000 units from the prior year. In addition, revenue in the financial services segment increased. Porsche faced broad-based operational and external cost pressure throughout the year from an operational perspective three key cost drivers stood out first persistent inflationary pressure across the supply chain second cost related to the slower ramp up of electric mobility including supplier compensation and third higher expense development costs reflecting lower capitalization levels as well as increased depreciation and amortization These pressures were significantly mitigated through comprehensive countermeasures under our Push-to-Pass performance program. Together with strict spending discipline, these measures contributed to around $1 billion, offsetting the operational cost increases. However, reported results were significantly impacted by one-time charges related to our strategic realignment amounting to 3.1 billion as well as more than 700 million from the U.S. tariffs. Overall costs of goods sold increased by 1.5 billion year-on-year to 31.2 billion. Group operating profit declined to 413 million corresponding to an operating return on sales of 1.1%. Excluding one-time charges associated with the strategic realignment and additional US tariffs, our operational performance held up well despite the challenging market geopolitical backdrop. Let us now turn to the automotive net cash flow. Our net cash flow was underpinned by a robust underlying operating business and by disciplined investment activity in the ongoing business. This is reflected in significantly lower cash outflows from reduced capitalized development costs compared with the prior year. On the other hand, at the same time, automotive net cash flow was impacted by extraordinary outflows of approximately 900 million euros related to our strategic realignment initiatives. Furthermore, we had tariff-related expenses of around 700 million euros as a result automotive net cash flow declined to 1.5 billion corresponding to a margin of 4.7 percent excluding one-time charges related to the strategic realignment and the increased u.s. tariffs underlying automotive net cash flow remained strong the high cash conversion of our underlying business once again underscores the quality and uniqueness of the Porsche asset. Let me now turn to our capital allocation and balance sheet development. In line with our disciplined capital allocation framework, CapEx in 2025 totaled 2.1 billion flat year on year, while R&D expenditure declined by approximately 9% to 2.3 billion. As a result of a conservative capitalization rate of 42% and higher depreciation and amortization, Porsche's asset base was reduced by around $1 billion compared to the previous year. With net liquidity of $7.3 billion, Porsche is in a very strong financial position. Our healthy balance sheet provides a solid foundation for the future. And this brings me straight to our dividend strategy. Our objective is to provide our long-term shareholders with a reliable and predictable dividend both this year and in years to come against this backdrop the executive board intends to propose a dividend for last year of one euro per ordinary share and one euro and one cent per preferred share resulting in a payout ratio significantly above our target level of 50 percent however as you know the final decision on the dividend amount remains subject to approval by the responsible corporate bodies. With that, let me turn to the outlook. In 2026, Porsche will continue to operate in a quite challenging market environment. In addition, heightened geopolitical uncertainties and headwinds, such as US import tariffs and the China's luxury tax, continue to affect visibility, cost structures, and planning reliability. As a result, and reflecting a more selective product offering due to supply constraints, we expect significantly lower vehicle sales this year. This decline is primarily driven by portfolio effects, including the runout of the 718 and the final phase of the ICE Macan. Group revenues in 2026 are expected to range between 35 billion and 36 billion while revenues will reflect the impact of lower vehicle sales this will be partially offset by supportive pricing a stronger 9 11 mix and a further meaningful increase in the share of battery electric vehicles as a result revenue development is expected to outperform the decline in vehicle sales volumes now turning to costs we continue to expect inflationary pressure particularly in material costs among others driven also by memory chips or compensation payments to bath suppliers the latter is driven by lower than anticipated volumes in addition further investments in product quality and customer satisfaction will add to cost headwinds as we launch numerous new products in recent periods we also anticipate a sustained high level of depreciation and amortization. Moreover, the temporary gaps in our product portfolio will continue to weigh on fixed cost absorption. On the positive side, our cost base will benefit from the continued execution of our push-to-pass initiatives. These will have a clear focus on operational performance, working capital discipline and cost efficiency. CO2 regulations and foreign exchange rates are expected to trend negatively versus 2025. We continue to pursue a disciplined hedging strategy, with a substantial portion of our 2026 FX exposure already secured. While this enhances planning certainty and margin protection, Euro appreciation remains a headwind through both translation and transaction effects. Our guidance is based on the current EU-US tariff framework and the existing China luxury tax regulation. It further assumes stable geopolitical conditions. The current situation in the Middle East and any further deterioration of the situation could adversely affect supply chains and demand, and such potential impacts are not reflected in the current outlook. we expect a group return on sales of 5.5 to 7.5 percent and an automotive net cash flow margin of three percent to five percent our guidance includes approximately 800 to 900 million of extraordinary expenses this reflects additional targeted initiatives taken since the beginning of the year to strengthen the group's long-term resilience and profitability as outlined earlier by michael the group return on sales guidance also includes an estimated 700 million impact from us import tariffs broadly consistent with last year automotive net cash flow for the full year is expected to reflect cash outs of around 1.4 to 1.5 billion mainly related to strategic realignment measures including the audi license payment of around 1 billion in addition we expect tariff payments of around 700 million. Adjusted for the cash outs related to the strategic realignment, the underlying operating automotive net cash flow is expected to be significantly higher than in 2025. Our increased focus on the core business may also result in selective adjustments to our portfolio of shareholdings. Limited additional restructuring costs related to battery activities and other non-core areas are already reflected in our outlook potential m&a activities relating to the divestment of non-core shareholdings are not included in the outlook due to their uncertain nature however if successfully executed such transactions could result in one-off cash inflows looking ahead our capital allocation strategy will continue to prioritize partnerships and licensing over ownership and vertical integration. While Porsche operates as an independent company, we will continue to benefit from scale effects and the exchange of technologies, procurement and manufacturing assets with the Volkswagen Group across both hardware and software. This approach enhances our agility and strategic flexibility in a fundamentally transformed market environment. As a result of the comprehensive recalibration and strategic refocusing underway, R&D spending is expected to remain broadly in line with 2025 levels. Capital expenditure will be higher year on year, driven solely by the previously communicated one-off license payment to Audi of around $1 billion. Taken together, this disciplined approach to R&D, capex and liquidity provides the foundation to navigate current headwinds while preserving financial flexibility. Despite structural headwinds, including US tariffs of around 150 to 200 basis points and adverse FX effects at current exchange rates, Porsche remains committed to its midterm target of a group return of sales of 10 to 15 percent michael will now outline the strategic framework supporting this trajectory with that let me head over to michael thank you very much thank you johan as you can see we are facing major challenges i would now like to outline at a high level what we are working on and how we intend to address these challenges.

The foundation for this is the result to date of a comprehensive situation analysis that is currently underway. We have structured our strategy around three pillars. The first pillar focuses on the brand and our customers. Porsche is one of the most desirable brands in the world. To strengthen this value brand we will further pursue our principle of value over volume. The long-term value retention of our vehicles is more important than short-term unit volumes. This strategy will remain in place even in a challenging market environment. This also applies to China, a market we continue to believe in, however, on a different level. Demand for vehicles with internal combustion engines will continue to offer us potential. In contrast, the BEV market is characterized by intense price competition, which we will not follow for economic and brand-related reasons. Market conditions in the United States have also changed as a result of tariff policies. Despite implemented price adjustments, demand remains solid and we currently see stable market development. Porsche's very essence combines leading luxury and premium sports cars. Exclusivity combined with approachability. A unique position that provides us with a golden opportunity to generate strong cash flows, high profit margins and increased returns on our investments. All our actions going forward will be dictated by this key feature of our wonderful company. Crucial for realizing this unique price volume equation are the right products and technologies. And that brings me to the second pillar. We stand for unique sports cars you want to drive yourself with true Porsche DNA. The 911 is an iconic vehicle that has broken numerous sales records in the high price segment, Most recently in 2025, other products beyond the two-door sports cars such as 911 and 718 have over the past two decades significantly enriched the brand and our portfolio and have been vital to the strong development of our company. At the same time, it is also true that a large number of derivatives have significantly increased complexity, both from the customer perspective and internally. We will therefore streamline our future product portfolio and reduce complexity and variance. Additionally, we are evaluating an expansion of our product portfolio in order to grow in higher margin segments. As a result, we are assessing models and derivatives both above our current two-door sports cars and above the Cayenne. Expanding into these segments allows us to further grow our high-margin personalization program, such as Sonderwunz, thereby strengthening the exclusivity of our brand. Beside the question of future models, we must also answer the question of the right propulsion technology. With the Taycan, we were a pioneer in electromobility and well ahead of our time. But we are now seeing that market conditions have changed significantly. European customers, in particular, are adopting to the transformation more slowly than expected. Other markets, such as the US, have even created opposing market and regularity conditions. We are adjusting therefore the ramp-up and portfolio of fully electric vehicles, while at the same time extending the life cycle of our combustion engine and hybrid offerings. We are doing this because we are technology agnostic and do not simply follow regulations but above all aim to meet customer demand. This will enable us to minimize product overlaps and internal cannibalization and thus increase capital efficiency. As I explained, customer enthusiasm, high-margin products and technologies are core pillars of our plan. However, rigorous cost discipline is equally critical as the third pillar. To significantly improve our margin structure, we have to establish an overall competitive cost structure. For our products, we need to reduce both initial investments and product costs. Therefore, we are fundamentally rethinking the development of our sports cars. We are analyzing where we can unlock additional synergies across our models. We are reviewing how we can use platforms and industry solutions more flexibly and make greater use of digital technologies. This explicitly includes the intelligent use of group platforms and modules. We have already demonstrated in the past that we can successfully apply this approach with the Macan and Cayenne. this will by the way better help us to reduce time to market cost work will also pertain to the organization a program was already initiated prior to my arrival which we are now adjusting we will streamline our leadership structure reduce hierarchies and cut bureaucracy our goal is faster decision-making and consistent execution. Porsche has a highly motivated and committed team with outstanding talent. However, the organization, particularly in indirect functions, has grown disproportionately relative to the development of our business. Under the change conditions, the previously planned reduction will not be sufficient also our corporate culture culture must adapt to the new environment what matters is performance both in teamwork and on an individual level this performance culture will apply across all areas of our strategy and will help us to deliver to the highest standards. Ladies and gentlemen with strategy 2035 we are creating the framework to reposition Porsche. It is a comprehensive program to strengthen competitiveness and financial resilience and the foundation for achieving sustainable strong cash flows, solid results and Porsche appropriate margins. Our program will require difficult decisions and measures but a crisis is also a great opportunity. Porsche has proven that many times in the past. In the end we will come out stronger. Porsche represents a compelling recovery story strategy 2035 will lead to higher resilience in high price segments and highly differentiated portfolio stronger capital efficiency and higher margins all this will support cash generation and ultimately attractive shareholder returns That is the core of our brand, a promise, our promise. And now we look forward to your questions.

Michael, Jochen, thank you very much. the operator will now outline the instructions for how to put your questions and after this we're going to start with the Q&A session.

Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue you may press star and two. Please press the star key followed by zero for operator assistance in case of any technical difficulties. Participants are requested to use only handsets while asking a question. Please ensure that all other devices with which you may be watching the video stream in parallel are completely muted to avoid interference. In the interest of time, please limit yourself to one or two questions. As mentioned, anyone who has a question may press star and one at this time. With that, I hand over again to Björn Scheib. Please go ahead.

Thank you very much. So we're going to start the Q&A session with Tim of Deutsche and he will be followed by Harold of Citi. Tim, the line is open.

Thank you very much Björn and thank you Michael and Jochen. Good to talk to you again. Michael, I think you did strike a very difficult balance today of not wanting to say too much obviously but having to say something already. I think that went down quite well but I still have to question obviously a couple of things that you said there i understand you don't want to reveal a lot of details yet but can you give us a glimpse into some of your very fundamental thoughts here i'm thinking specifically does porsche need to be smaller given that you just really said value over volume multiple times does a macan still fit with the sports car positioning and the sportwagen schmiede and the higher margin ambition that you have do you need to leave china Is that bouncing back again? Some of these questions are obviously very important to all of us to understand. So any opinion that you can voice there would be really interesting. And then secondly, I guess, Jochen, this goes to you, but maybe also, Michael, there were some pretty heavy charges on the strategic realignment again in Q4. There's a lot of that planned again for this year. Can you give us any details of what that entails, please? We appreciate that there was a pretty fundamental shift in the power train approach, but the total sum of this number is just extremely high. particularly as we also need to be able to believe that these are quote-unquote literally one-timers as we have now heard it a couple of times already from you guys. Thank you.

Yeah, Tim, thank you for recognizing about the level of detail that we want to share today. But let me first answer regarding the size of Porsche and how we want to size our company. I have mentioned that we have to go through a cost-cutting program and this is equal to reduce or this should lead us to reduce our break-even point okay so I think without telling you any number I think it is clear that Porsche will be let me call it more compact than it is today regarding your question to the Macan, regarding the Macan, I have to say I mentioned the unique positioning of the Porsche brand and the Porsche brand is characterized by exclusivity and approachability and I think the Macan is an excellent example how we can realize approachability and realize this unique price volume point so I think that the Macan is fitting very well in our product portfolio. We have to do it right but I think if you look at the Macan the actual the current version and also the previous version we have demonstrated we have proven that the Macan is a real portion. Regarding China you are right this is a very difficult situation in the market there is a strong price competition but we have taken very important actions to reduce our dealer network there and to reduce the, let me say, fixed cost level in China. We still believe that China is, especially in the higher segments and for internal combustion engines, there is a market at a lower level, but we think there's potential for us. For the rest, we come back to the first part of your questions. I think we have to dimension our company in a way that China, for us, is an opportunity. It's not a risk. So whatever China is doing better than today should be an opportunity for us And we should be capable to sustain and have good margin in our company, even though China is weaker than in the past.

Johan, regarding the charges. We'll pack up, Tim, your second question that was on the charges. And indeed, 2025 was a rather special year. We had one of charges of 3.1 billion in the full year. And again, we have taken the decisions deliberately with all these burdens that we had to give the business model of Porsche a more resilient and robust basis for the future, which is the most important part. We were not running, never running for short-term profits. We tried to optimize the midterm and the long term. Now, the 3.1 billion is a rather huge number. I would totally agree there. And let me just give you the analysis on that one again. 1.7 billion, we had special write-offs and costs for the suppliers for the stop of the SSP61 platform that we've postponed well into the 2030s. We had battery-related activities that we've updated with burdens of around 700 million. And we're also on top investing into the product portfolio and in the restructuring of our company with another almost 600 million. So this is the 3.1 billion, excluding U.S. tariffs, of course, because they are here to stay. Looking at 2026, it's a much lower number, but still a relevant one. We've always communicated that around 500 to 600 million burdens will stay in the current year, coming from the initiatives we've started last year. It's a remainder on the battery activities, it's on product strategy, and it's on the restructuring and reorganization on the company. On top of that, what we have added and also included in our guidance is another couple, few couple of hundreds of millions for an even more value over volume oriented approach, especially in China, where we see even increased price pressure from competitors and we will not play that game. We will safeguard our price protection and the brand. And on top of that, with the Cayenne E4, the full electric car, we've also deliberately decided that this will be a car that will hit the market in Porsche adequate, best-in-class quality. And therefore, we just postponed the start of a production by a few weeks, fixing everything that this car will be the best Porsche you can imagine of. And of course, that gives us some headwinds in the current year. So these are things that will go in the further future and are more or less the comments and the explanation of the rather huge numbers in 2025 and already reduced burdens that we have in the current fiscal year.

Very good, so thank you very much. Next in the row will be Harold of Citi and thereafter we're gonna have Jose of JP Morgan.

Thanks Björn, can you hear me? Hello Björn, can you Yes, Harold. We can hear you. Very good. Thank you so much for taking my question. Welcome, Mr. Leiters. Thank you for hosting us today. We appreciate all your comments. Always with the new CEO, it's always a nice question to ask. What are the surprises that you found? You've highlighted a lot of the challenges and stuff. And investors obviously have had a lot of challenges over the last few years. And I think people are very aware of both the EV and the China issues that we have. But where have you been positively and negatively surprised? And then obviously related to that, you know, we've had a lot of packages over the last few years. It feels like it has taken quite a long time now. How far in the sort of restructuring and repositioning process do you think Porsche was already when you arrived? And do you think you're going to be able to fix the future strategic direction within at least the 2026 timeframe? And hopefully we can then get to a situation where Porsche can report the much stronger underlying position without exceptionals going forward so kind of what are the positives and negatives and do you think you can fix all the strategic decisions in 2026 thank you yeah thank you for your question Harold surprises so I wouldn't call it surprises but let me point out the most positive and let me say the most challenging part.

Obviously I know the company still a little bit from my first 13 years here and the most positive point for me is the talent I found. I think we have a really strong team and I feel also a lot of energy in organization so this is very very positive a challenge definitely will be that the company has grown a lot and growth brings a lot of opportunities but also a lot of challenges with it so you need more organizational constraints you need more rules you need more procedures and I think one of the challenges we have is to reduce significant bureaucracy, I found here. Regarding the restructuring, let me say that the question from Tim before was, they are big numbers. Yes, these are big numbers, but I think that shows you already the dimension of the restructuring that was thought of already, and I have to say, these have been right decisions. I appreciate that. But there will be more to do definitely and I think also that the world around us is still changing. We are living in a very volatile world and I think Porsche has to do even more to be prepared for the future.

Thank you. jose the line is open for you and after jose we're gonna take patrick of ubs very much is joseph and epi morgan uh very good morning michael most welcome and hello your friend as well uh two questions please um michael can you talk about uh the keys to restore the momentum in the chinese market uh which vehicles you think are going to be driving demand in china uh in in the short and medium term and do you think the the tech stack that you currently have in the vehicles is it competitive or do you think you need to do further changes to improve it uh and second uh johan can you uh please comment on on capex and why would capex come down after 2026 if you are going to go into potentially into a product offences which will broaden the portfolio and provide additional growth to the company thank you yeah thank you jose um yeah i think to the chinese market um i think we should uh um repeat what we would be what we said before i think definitely the market is difficult um i think on the

internal combustion segment there is potential for us it is it is going decreasing down going down but they are still good margins and we have a good positioning there and the market share itself is good where we are in this segment on the BEV side the situation is more more difficult and I think for the moment we have to understand how we can rethink our and and rebalance our cost structure and continue to preserve our brand and not participating in this price competition which is going on there. Value over volume is very very serious initiative and principle of us and I think that is the best we can do for the moment. Definitely we have also to think can we answer here in this market with products that are more appealing for the Chinese market but please understand this is a question we don't want to answer right now here and obviously also the execution of such an idea would take more time and it's not tomorrow.

José, I will take your second question and maybe Just as a quick addition to what Michael just outlined, talking about the tech stack in China, just to give you one example, what we are doing there is that we partner with local R&D experts and we will launch a completely newly developed, locally developed with China's piece, China cost structures, infotainment system in our cars in the second half of the current fiscal year. So this will give also some momentum product-wise. Now talking about CapEx, as you rightly outlined in 2026, we have a peak. in capex also compared to 2025 and this really comes down to a huge one-off payment to audi it's 1 billion around 1 billion that we expect for the current year and this is a say a symbol a sign of our strategy that we really try to be very synergetic within the group we share platforms we share modules we share drivetrains and we share as much as we can to have in a total period as least as possible R&D and capex spending if you take out the 1 billion in 2026 we would have a first drastic reduction in capex and that is the way forward also for the upcoming

years where we want to optimize our strategic capital allocation on both actually capex and R&D thank you thank you very much so the next in the row would be then Patrick and Patrick will be followed by Stephen of Bernstein thank you Bjorn I hope you can hear me we can hear you okay great good morning Michael and Johan thank you for taking my questions Michael if I can just follow up in intent in terms of what is the right size or Porsche in the medium term I would like to get a little bit more color from you. You're obviously thinking about adding product at the higher end of the spectrum. At the same time, you emphasize accessibility and accessibility or approachability is equally important. So bearing in mind that we had about 265,000 cars last year, would you say the future Porsche a few years out with the products in the pipeline being launched is going to be larger or smaller volume-wise? And how important do you think volume is when it comes to these 10% to 15% medium-term margin targets that you still maintain? And if I can follow up on your footprint, how important do you think it is to have a footprint in the U.S. to defend your position there in the market? And one for Jochen, please. It seems like in your 2026 guide, the further strategic decisions that are yet to be taken aren't factored in and could lead to further charges, I guess, both on the headcount front as well as as far as product decisions are concerned. I'm pretty sure you're not going to give us a number today, but I would be interested in terms of the magnitude of these potential additional charges. Could those be equal in size as what we've already seen? Larger, smaller, any kind of soft guidance would be appreciated.

Okay, Patrick, thank you for your question. Let me go through it in the sequence you asked. regarding the size I don't want to say it's smaller or bigger I come to the point of the margin but I think we have to be leaner that's for sure and we are not looking at volume so I prefer to have high margins and the right margin quality instead of volume and and that means definitely we are not looking out for more volume, we are looking for margin. The margin is, we spoke about the Cayenne and you touched on that, the Macan and you touched on that again, I I think to realize higher margins, you have to consider the equation of pricing and volume. So there's naturally a limit regarding the volume we are heading for. And that is this equation we will solve. And if there is a car in it, we do the car and we take the volume. But only if we can realize the high margin and the exclusivity of our brand for these products regarding the Footprint I have to tell you that right now. This is not on the table I This is much more complicated than people normally think because it's not only about the factory and where's the factory It's also about the supply chain So this is something we are looking at. We are always analyzing our opportunities, but right now there is no decision on the table to decide a different footprint from what we have today.

On the second one, Patrick, you were asking about additional one-timers for restructuring and strategic realignment. And on that, just let me briefly repeat what we have included in our 2026 margin. It's five to six hundred million from the programs that you already know that we've started in 2025. And we've added a few couple of hundreds of million for an even stricter value over volume approach, especially in China, given the market situation there. And what I just outlined, the quality driven launch of the Cayenne Electric. also a minor budget, let's say, for the focusing on the core activities that we have with the one or the other minority shareholding that we are looking at. On top of that, unfortunately, and I hope you understand that even a soft guidance would be something that I would not be able and willing to give today because we are working on strategy 2035 on all the initiatives Michael outlier talked about, and we take it from there. We will deliberately decide on everything that is helpful for a robust, resilient and bright future for Porsche. If that would come with one of the charges, we would deliberately take these. If it makes sense, if not, not. But as I said today, unfortunately, no orientation that I can give in terms of potential size of such potential initiatives. Thank you very much.

Thank you both. Obviously this call attracts quite high interest and we still have a couple of gentlemen in the queue. As such I would love to ask for your discipline that you limit yourself to one question to give all the others also the opportunity to talk to Michael and to Jochen. So next in the row would be then Steven and thereafter we have Horst.

Yes, good morning Michael and Jochen. Michael, with your experience after Porsche and Ferrari and McLaren, you worked in smaller, very fast-moving organizations. I'm wondering how you judge now the speed that Porsche can bring to model development, and I think particularly about the BSUV for which you are paying Audi the $1 billion for the right of use. given how the need to speed up development processes and bring things to market quicker do you feel that there's any ways that you can actually accelerate the process of bringing this vehicle to market and then given the fact that you're spending it's a very high amount of money it seems a lot for rights of use so it seems that there's a lot of Audi development in that PPC platform obviously already so again three years to develop basically a top hat for this platform

seems a long time what are your thoughts on that so first of all i think in general that is not related now to the to the mark on you mentioned but in general our company can be quicker and one of the focus we have is to reduce time to market obviously this needs also this needs also to be implemented in the organization and this needs some time so but I'm confident that we can have a quick impact on our development process but I have also to say that the Macan is already for our organization right now a very quick development or timing we have. We have reduced already significantly what we have done. You are mentioning what is the commonality between the Porsche and the Audi car and I have to tell you it is very important on the one hand side to use these commonalities and synergies, on the other hand side we have to make sure that this is a real Porsche and this needs some content, some product substance, some technology which is new on this car, will be new on these cars and therefore a certain time is necessary to come to industrialization and to come to the launch of this product. Let me also underline that the license Jochen was mentioned on the license charge is not only for the Macan this is for several models we are doing together on both sides Audi with Porsche and Porsche with Audi so obviously this is the part we pay for to Audi but there's more than only one one model um yeah i think that was from my side that was i think that was all that matter it um next one would be host and after host we have christian of goldman's yes good morning i hope

you can hear me it's host here from bank of america uh good morning michael good morning rest of the team um i've got a question around top line growth and and revenues um you were saying that your guidance is noted including this Middle East crisis. Do you see already any impact on demand on which models you have got at the moment best order visibility? And Michael, you were saying that volumes are not important for you. Value over volume has got priority. So how should we think going forward then about top line growth? My understanding was always that 2028 is a year when the top line growth comes back because new models get launched. Is that still valid or is that being pushed out because you may take more model decisions? Thank you.

I can take the first one Horst. Thanks for raising the Middle East a topic and situation which we are concerned about in general. Looking at our order intake, order bank of course is robust but also order intake we do not see any effects yet it's much too early and from my perspective it will really depend on how long that conflict will last hopefully and we keep our fingers crossed that the solution can be found rather quickly but as of now it's too early to say what impacts we might see there in general all the intake is robust all the bank as well and that is the basis for 2026 um revenue and um kind of volume guidance that we're commenting on 2026 will be um even lower than 2025 but as you were mentioning with the updated product portfolio we are working on

the growth will come back volume wise but also mix and pricing wise which is very important and which you um should not forget host um yes i said value over volume that doesn't mean I don't care about volume so please understand both is important but value is more important than volume and that is our key driver here as we mentioned we will give you details or more details about the product portfolio in autumn anyways I can tell you that the whole picture is that until the new product comes and that is as we said before around 28 we have to bridge this time frame and the most important thing we have to do in this bridging time is cost work hard cost work to rescale our company.

Next in the row would be then Christian and thereafter we have Henning.

Yeah, good morning. Thanks for taking my question, Michael and Jochen. I think the key question sort of in the background is always how quickly Porsche can get back to a solid mid-teen margin rather than a medium-term 10% to 15% margin. And in that light, I suppose it's too early to ask you details on that. but presumably do you think that you'll be able to answer or respond to that in more detail in autumn this year or could you give me some color on when we would get more detail on on a pathway to a solid 15% margin that's my first question I think autumn is a very good timing for that to have a solid plan and not only to commit to something but really have the substance and give you also the confidence and us to reach it that's great to hear thank you very much and then my second question is just going back to your factory footprint and i think you know given the tariffs and the currency uh it's a valid question despite uh porsche's very proud heritage in Zuffenhausen and Germany. You know, the factory footprint question, I suppose, you do have an example of a CKD facility in Kolumb, Malaysia, for example, and you do have an ICA or the Industrial Cooperation Agreement with the Volkswagen Group, which you work with, which I think runs through 2040 from memory. And I'm just wondering if both on those two fronts, on the ica agreement with volkswagen or on you know the ckd facility in coulomb whether that those two sort of avenues provide you any more flexibility to um to improve uh your current margin situation going forward so uh christian we are looking at all opportunities Obviously, we are well aware of the opportunities that are in other countries and other markets.

But again, I think it will take a lot of time and longer time. So it will take until the autumn to take a decision and have a clearer direction on these things because they are complex. And as I mentioned before regarding the United States, yes, it looks, let me say, compelling, but it's a huge investment. It takes a lot of time and there is a lot of, let me say, related things to it, the product portfolio, the supply chain. so give us some time and definitely regarding footprint and competitiveness of our factories we can update you in autumn that's fair thank you very much so next in the row would be Henning and thereafter we've got Sam and gentlemen please remember one question only Yeah, thanks, Björn.

Morning, Michael. Morning, Jochen. It's Henning from Barclays. I'll stick to one question. It's on 27 versus 26. I appreciate it's more appropriate to park some of the midterm things for CMD in the autumn, but are you able to give us a bit of direction for 26? but ultimately what i'm getting is 26 a down year or an up year um or 27 rather is that a down year and up year on 26 and and especially i'm after volume if we could um i think we're talking magnitude of 10 down in 26 so is it going to go down further in 27 on the special effects johan um you know i don't know if we can say they're up or down i think you don't want to say that given the potential additional effects for portfolio readjustment. But on China specifically, if you could just say what that China charge was and if that would continue or not, just the nature or the one-off character of that specifically. And then supplier compensation. I think that's not part of the special effects that you're singling out.

If you could just give us an idea of the trajectory there, what was it in 2025 and what you think that will be in 26 and and then again in 27 thank you so much yeah henning thanks for raising um a couple of questions uh actually um let me try to um answer them as as crisp as i can so first um 2027 it's really too early to talk about 2027 there's so much volatility in the world and even more importantly we are working on strategy 2035 We are working on an updated plan and I think as Michael outlined earlier with the other question, these Capital Markets Day in autumn would be a better point in time to give maybe a first soft guidance, first orientation into 2027 than today. what is clear is we stick to our 10 to 15 midterm margin ambition that is something that we definitely want to achieve and for that the updated product portfolio is key is the most important lever and that takes some time in 2027 the huge impacts of an updated product portfolio will not be there yet now you were talking about a charge in china just to comment on that one what we've included in our 2026 guidance is not what i would call a charge on china it's just a reduction of our supply given the market situation that we see in the relevant segments given the situation that we see on the pricing side from competitors and we are not willing to play that game on on the discount side so therefore we updated our plan reduced the volumes in china even a bit further and that comes with a loss in contribution margin which we have included in our 2026 numbers and i think that was that i hope i've not forgotten something okay supplier compensation um compensation will go down over time because these compensations came with the update strategy the stop of the ssp61 and also the reduced bath volume so these improve over time on top of that material costs the bomb initiatives are

really at the core of our push-to-pass program so we are really targeting variable costs especially material costs over time thank you okay now we've got Sam and after Sam we've got Mike of HSBC hi thanks take my question the probably more one for Jochen just on the one-off charges for 2026 can you give any indication of how they're likely to fall on a quarterly basis through the year um i think you said five to six hundred million from the previous plan are they more sort of equally weighted than

maybe i think the additional charges which you brought in today i think some are related to the ramp up of the cayenne would they fall more in the first quarter maybe second quarter of the year thanks yeah I mean we are not guiding a specific quarters and therefore also I would I would yeah just not give an assumption on what we have in our books how these play out over the various quarters but a give and take I would expect a rather even situation throughout the quarters because there are some things that we will see in rather early quarters other in rather late just to give you one example the quality driven ramp up of the cayenne is something that will have additional costs in the rather early quarters first and second quarter and then at the end of the year we will miss some of the volumes that we had initially planned so you can see it's it's spread out throughout the year no huge specific peaks i would accept from today's perspective cool thanks very much mike can you hear us yes mike yeah mike tinder from hsbc a couple of questions well sorry one question i know that i know the rules um i just the messaging i'm hearing is that we've got a bloated cost base we need to be leaner and you've also talked about

introducing new products in higher margin segments i wonder if you can give me some level of comfort in terms of all of that sounds like it's going to require cost and it doesn't sound like it's necessarily within the current planning. So I know you want to leave this till autumn, but can you give us some sense of the order of magnitude of what those plans are going to cost?

Mike, thanks for that question. And I think we had a rather similar question just a couple of minutes ago so therefore i i keep it short it's too early to comment on that one we've transparently disclosed what we have included in our plan especially for 2026 we are working on strategy 2035 we're especially working on organizational and strategic alignments and if these would come with additional costs and one-timers we would deliberately decide on these if they make sense for a more robust business model of porsche and a brighter future for porsche if not we won't do that but it's really too early to tell whether we will have these and what a potential magnitude would be then can I just sneak in a

follow-up which is when we talk about the higher segment cars or higher margin segments are we talking about something like the mission X are we talking about something that is independent of the current lineup or are we talking about variants of the current lineup again please be patient with us and we will show you at the couple of markets day in autumn more info information understood can't blame you for trying thanks it's okay thank you very much gentlemen as we have only a couple of minutes left we would now take Mike of Kepler and it

would take anthony and after this we would then finish the call thank you very much yeah jens morning everyone mike rap from kepler here um when it i know you're not gonna give any details on what potential costs in the future or cash equivalents of that could be on the back of the realignment bed let's say if you really faced a tsunami of realignment cost under strategy 2035 Would you also be willing to sacrifice the dividend for that in a specific year?

Yeah, I mean, I commented in my initial introductory comments that we had deliberately decided on a discretionary dividend of 1 euro for 2025 to be paid out in 2026 if we get final approval by the AGM. And I think that is a clear sign, a positive sign to our shareholders that we take care of total shareholder return. we are of course very well aware of our development of our capitalization on the stock market so therefore dividends are also key and we have a rather healthy balance sheet with a high net liquidity so from today's perspective we want to stick to our dividend policy of distributing 50 of our net earnings if there are other special years if there would be other special years we would look at these and would come up with reasonable decisions as we've done for this year and also if you remember it last year we also increased our payout ratio above the 50 percent

with the two euros 30 that we had paid out all right thank you good luck thanks thank you and last in the row now would be anthony yes hi thank you anthony dick from odobhs um just one question on the 718 dev so obviously there's been media reports that the car was under review and i'm assuming considering there's no further realignment charges today that the car has been maintained but maybe could you just confirm that and also update us on the industrialization of the car the timeline and also how you're adapting volume expectations to new market

demand thank you so again we will comment on the product portfolio in in autumn you are you have commented on what we have said today and what is on on the balance sheet so there is no change on that and I just can can share with you that we have tested the whole product portfolio last week and I have driven several times now a 718 and I can tell you that is a great car and people are doing a great job working on that so but any addition or amendments to the product portfolio will be communicated in autumn.

Thank you. Michael, Jochen, thank you very much for taking the time this morning. Gentlemen, thank you very much for raising these questions, obviously reflecting the quite strong interest in our company. We very much look forward to see you in context of our upcoming Roadshow or investor relations event. and as Michael and Johan outlined you can expect that this company is going to host its Capital Market Day after the summer break and we will very much look forward to see you soon thank you and goodbye thank you thanks for dialing in