Porsche CFO sees potential IPO reap Ferrari-like multiples

FRANKFURT: Porsche AG’s chief financial officer said a share sale of Volkswagen AG’s most profitable unit could unlock value to echo Ferrari NV’s successful public offering and help the sports-car maker raise money if needed.

The maker of the 911 model could easily be valued “between 60bil (RM289bil) and 70bil (RM337bil)”, applying multiples for luxury-goods producers such as Ferrari, Lutz Meschke told reporters at Porsche’s development centre outside Stuttgart at an event for the brand’s first electric car, the Taycan.

A partial initial public offering would add financing flexibility as the auto industry faces “the biggest transformation ever”.

Porsche isn’t pursuing plans for a listing, a decision that would be taken at group level, the company said in a written statement yesterday following the comments.

At Meschke’s estimate, the market value of an independent Porsche would rival that of the entire VW group, which includes 11 other brands. Shares of the parent have lost 16% this year, giving it a market € capitalisation to 69.3bil.

The comments show the structural changes run deeper than VW has mapped out so far, and offer a rare insight into deliberations within VW’s top ranks. Meschke said he has pointed out the benefits of a listing during internal discussions, but declined to say to what degree his view is shared by VW chief executive officer Herbert Diess or key stakeholders like the Porsche and Piech owner family.

“VW is one of the few carmakers whose management team is aware that actions are needed in the nearterm in order to optimise the positioning of the company,” Evercore ISI analyst Arndt Ellinghorst said in note. Partial listing of VW’s units are “one obvious way through which VW can prepare itself”.

Volkswagen gained as much as € 1.1%, and was 0.2% lower at 139.84 at 10:58 am in Frankfurt trading.

Diess, continuing an asset review that started two years ago, has pledged to make the world’s biggest carmaker more efficient as the industry goes through a seismic shift to make electric cars with new digital features.

The only tangible result of the review is a planned share sale of VW’s heavy-truck unit Traton AG. An effort to sell the Ducati motorbike unit stalled last year, after VW’s powerful labour unions resisted the plan amid a lack of support from the Porsche and Piech family.

VW chief financial officer Frank Witter last month said the company might consider options including a separate listing of the sports-car operations led by Porsche at some point.