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Porsche boss Blume assesses IPO as “very emotional”


Porsche shares have been trading on the Frankfurt Stock Exchange since today – it was the largest IPO in decades. CEO Blume speaks in an interview therefore of a “historic day”. Oliver Blume, as head of Porsche, today was a big day for you: the IPO. How was it for you to ring the bell?

Oliver Blume: Yes, very emotional. Today is a historic day. Porsche AG is back on the stock exchange: very emotional for us personally. And it’s a great honor for me to be here for our entire team, which did a great job.

Bettina Seidl, HR, in an interview with Porsche CEO Oliver Blume

9/29/2022 1:25 p.m Are you satisfied with the first course?

Flower: Of course you always look forward to it. And yes, we were pleasantly surprised that he rose to the top right away. And that quite simply shows how much potential there is in our company. And that too in the stock market environment. Would you have wished for a better environment?

Flower: The environment is certainly difficult at the moment, but we have proven over the past few years that we have weathered the many crises very robustly with Porsche. And that is of course also a great motivation for the many investors. Capital is in the market, and investors are longing for secure, future-oriented works. And that’s what we stand for with Porsche AG.

“Win-win situation” for Porsche and VW Let’s get to the reasons for the IPO: Was it just too close to VW to be able to develop with Porsche?

Flower: It’s a win-win situation in the end. For the Volkswagen Group, it means fresh capital to finance the transformation. With the independence it has gained, Porsche AG now has the opportunity to develop even more speed. And speed is what counts in the strong transformation that our industry is currently experiencing. What happens to the money that comes in through an IPO? Some also goes to the Piech and Porsche families – but the rest that goes into the company?

Flower: First and foremost it is for the Volkswagen Group. We will use it to finance transformation issues. These are battery factories, these are software, these are new platforms and new products. And of course it is also something that we want to give back to the employees from the success. We are now evaluating this after the success of the IPO. So far, it has always been very important to us that great work is then rewarded. The entire automotive industry is facing enormous challenges and also facing investments, in research and development, for electric cars and autonomous driving. Wouldn’t it have been better to do this together with VW – i.e. Porsche and VW continued to work together?

Flower: This complements each other perfectly. With the independence we have gained and the speed that we now get at Porsche, we naturally also support Volkswagen. Volkswagen will benefit from the dividends in the future to finance the transformation. Porsche itself has a very robust, very strong financial profile, so we are able to handle our transformation ourselves. And in the end, both companies have the same interest in developing Porsche in a sustainable, value-creating way for the future. So will you stay tightly wired?

Flower: On the one hand we are separate companies, but we will continue to work very closely together in the future. In the future, Porsche AG will also be able to benefit from the economies of scale of the Volkswagen Group when it comes to bundling purchasing volumes, using components, technologies and factories. And the same goes both ways. That Porsche will then also support the Volkswagen Group.

“We have shown resilience to crises” Porsche has a high market valuation, actually almost as big as VW. Do you reckon there are chances on the DAX?

Flower: Yes, for Porsche itself, measured in terms of capital market value, it is the largest IPO in Europe of all time, and for the Volkswagen Group it certainly also has positive aspects. We from the Volkswagen Group will also take a very close look at where we have the major leverage for the capital market. We have fantastic brands Audi, Volkswagen, we have Lamborghini Bentley to name a few. And there is still a lot of potential there. Is this extremely high rating justified?

Flower: For Porsche, we think it’s justified because we think we’ve done a great job of developing Porsche in recent years. Technologically sustainable, but also particularly financially. We have shown resilience to crises and set ourselves very ambitious goals for the future. And in this respect, this potential is currently being evaluated. However, if you compare Porsche with VW, for example, the sales are significantly lower.

Flower: The capital market is very focused on cash flows, very focused on returns. And there is a lot in Porsche, and we have also identified further potential there for the future. Why should investors buy Porsche shares? They have no voting rights at the general meeting, so they cannot have a say in the end.

Flower: First and foremost, it is an iconic brand with fantastic products, where a lot of emotionality naturally also plays a role. On the other hand, the financial profile that we have at Porsche shows a lot of potential for the future. We stand for a modern interpretation of luxury that is strongly associated with sustainability. It’s also about values. And that inspires our customers. But in the future, of course, so will our investors. So is Porsche more of a luxury stock than an auto stock?

Flower: Porsche is an emotional stock, and a lot plays into that: the products, the people, the company culture, but also the clear commitment to sustainability.

Two companies, one boss Now they have a huge task of managing two companies – there was a lot of criticism beforehand – and maybe at some point there will also be two DAX companies. Don’t you think there is a conflict of interest? What may be good for one company may not be good for another.

Flower: First of all, it is not at all unusual in the automotive industry to lead a group – from the strategic flight level and an operative company: We see that in other places with many examples. On the other hand, the Porsche IPO now gives us the opportunity to run two completely separate companies and we will avoid any conflicts of interest. Should conflicts arise, I will remain neutral. That’s what we’ve done in the last few months between Volkswagen AG and Porsche AG. My colleague Lutz Meschke and I represented Porsche AG there, and my colleagues at Volkswagen then represented the interests of the group. And we’ll manage to do that very reasonably in the future, But it also means a lot of work for them. How long is your working day? Is that tolerable?

Flower: This is of course always a question of organization. But of course I’ve also been on the Volkswagen Group Board of Management in recent years, and I’ve attended all the appointments that I’ll be doing in the future. I’ll do that in a different role in the future, I’ll also give up topics like the corporate production that I’ve done in recent years, which is also very complex. And it’s always about prioritizing, doing the right things right. And the question is, when you consider conflicts of interest, who do you choose in the event of a conflict – for Porsche or VW?

Flower: For the time being, we will avoid these conflicts of interest. That gives the structure. And if something like this actually happens, I will behave neutrally. And what will you drive? Which car in the future: VW or Porsche?

Flower: I’m in the great position of being able to test all of our Group’s products. There are a lot of fantastic brands out there. At the moment, of course, I also drive a Porsche. But that will also change in the future, that I test everything. I’m an absolute car fan and can get excited about everything there.

The interview was conducted by Bettina Seidl, ARD stock exchange studio