Porsche CEO sticks to targets as he navigates road to recovery
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A logo of Porsche is seen in Brussels, Belgium March 13, 2023. REUTERS/Yves Herman
By Rachel More
BERLIN, June 22 (Reuters) - Porsche faces fundamental challenges in crucial markets and a long road back to recovery, but the German sports car maker is sticking by this year's financial targets, its CEO will tell investors on Tuesday.
A profit warning from premium rival BMW last week, citing a prolonged downturn in China and rising costs resulting from the Iran war, has prompted analysts to look more closely at other carmakers' targets for the year.
Porsche continues to expect its operating margin to recover to between 5.5% and 7.5% this year despite persistent challenges in key markets, CEO Michael Leiters is set to say at the company's AGM, according to speech text published online ahead of the meeting.
"In the short term, we will not see a return to the targeted margins we have seen in the past," the speech says, highlighting U.S. tariffs and Chinese competition as major challenges.
RECOVERY PLAN DETAILS EXPECTED IN OCTOBER
Leiters, however, confirmed the 2026 forecast "despite the environment remaining very challenging".
Investors will be eager to hear how the new CEO plans to restore the fortunes of the Stuttgart-based maker of the 911 sports car, which is part of the Volkswagen group, after its operating margin slumped to 1.1% last year.
Leiters, who took over from Volkswagen CEO Oliver Blume at the start of the year, has pledged a shift to higher-margin sports cars and intensified cost cuts, promising details of his recovery plan at a capital markets day in October.
"We shareholders look at Porsche today and see a shambles," Deka investment fund manager Ingo Speich will tell management, according to excerpts from the text of his speech.
Porsche's strong brand gives grounds for optimism, but the company must simplify its product offering in a more focused strategy, Speich is set to say.
(Reporting by Rachel MoreEditing by Tomasz Janowski and David Goodman)
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