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Winterkorn, Pötsch Join Board of Porsche SE Today

VW tightens control as Porsche posts first loss in 14 years.

by on Nov.25, 2009

Still the family jewels after all thee years, or should we say now VW's jewels?

Still the family jewels since 1964, or should we say the 911 range is now VW's jewels?

Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG, and Hans Dieter Pötsch, Member of the Board responsible for “Finance and Controlling,” join the Board of Management of Porsche Automobil Holding SE today.

The appointments came as Porsche presented its results for the business year 2008/09, covering operations from August 1, 2008 to July 31, 2009.

During that period, Porsche SE lost (-€4.4) billion before taxes. Net loss was (-€2.52) billion for the 12 months. The loss was Porsche’s first annual deficit since 1994.

The latest moves are part of VW’s ongoing integration of Porsche into its business, after the smaller company failed to gain control of VW with borrowed money during a contentious multi-year takeover bid, which failed earlier this year when Porsche debt reached an unsustainable €10 billion.

The next step in VW’s acquisition is 49.9% ownership by Volkswagen in Porsche AG, which is planned for the end of 2009 at a price of €3.9 billion.

There is also an “Extraordinary General Meeting” of VW AG on December 3, 2009, where VW has proposed a large, some say breathtaking, authorization of up to 135 million shares of preferred stock to finance the balance of the Porsche takeover.

Takeover Views!

Takeover Views!

The Porsche loss was largely the result of writing down the value of options on VW shares acquired during the aborted takeover bid. The previous year’s total was + €8.6 billion, according to Pötsch. Next year could also see a loss he said.

The Stuttgart-based manufacturer saw revenue decreased by 12% to €6.6 billion, while sales fell by 24% to 75,238 vehicles. Revenue remained relatively healthy as a result in changes to the model mix.

Higher cost 911 models accounted for a larger proportion of total sales, while the share of cheaper Boxster models dropped. The 911 range recorded sales of 27,070 vehicles (-14%), the Cayenne sport utility sold 34,265 units (-25%), and sales of the Boxster range stood at 13,140 vehicles (-40%). However, the $45,000 mid-engine sports car was revised this past February, so annual sales were hurt as the old model phased out.

Despite the fall in vehicle sales, Porsche was able to create new jobs during the 2008/09 financial year, with the total number of positions rising by 450 to 12,652. New posts were created in Leipzig and in the service organizations.

“All major issues concerning the creation of an integrated automotive group have now been settled,” Dr. Winterkorn said.

“By 2011, we will have joined forces to form a new, strong group with an unparalleled model range and the highest technological competence. We are seizing a unique strategic opportunity for all parties. With the integration of Porsche, Volkswagen is systematically continuing its successful multi-brand strategy. Porsche will benefit from new, additional openings for growth,” the victor concluded.

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