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NOT FOR DISTRIBUTION OR ANNOUNCEMENT, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR ANNOUNCEMENT WOULD BE UNLAWFUL
- Porsche AG welcomes the decision of Volkswagen AG to offer up to 25% of Preferred Shares of Porsche AG in an Initial Public Offering (IPO).
- Listing is planned on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange.
- The IPO is targeted for the end of September or beginning of October and is expected to be completed by year end, subject to capital market conditions.
- Porsche CEO Oliver Blume: “This is a historic moment for Porsche. We believe an IPO would open up a new chapter for us with increased independence as one of the world's most successful sports car manufacturers.”
- Preferred Shares would also be offered to retail investors via a public offering in Germany and several other European countries.
The Supervisory Board of Volkswagen AG (“Volkswagen”) has decided to pursue an IPO of up to 25% of non-voting Preferred Shares of the luxury automotive manufacturer. The Preferred Shares are planned to be listed on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard). The planned IPO is targeted for the end of September or beginning of October and is expected to be completed by year end, subject to capital market conditions.
“We very much welcome the decision of the Volkswagen Supervisory Board in favor of an IPO of Porsche AG,” Oliver Blume, Chairman of the Executive Board of Porsche AG said. “This is a historic moment for Porsche. We believe an IPO would open up a new chapter for us with increased independence as one of the world's most successful sports car manufacturers. It would strengthen our ability to further execute our strategy.”
In preparation for the IPO, the share capital of Porsche AG was divided into 50% Preferred Shares and 50% Ordinary Shares. In the IPO itself, up to 25% of the Preferred Shares in Porsche AG would be listed to support a meaningful free float and help create a liquid aftermarket for the Porsche AG shares.
Public offer to retail investors in several European key markets
The IPO would comprise public offerings in Germany, Austria, France, Italy, Spain and Switzerland as well as private placements to institutional investors. Lutz Meschke, Deputy Chairman of the Executive Board and Board Member responsible for Finance and IT, emphasized: “Porsche has established a strong financial track record, delivering compelling financial results and fulfilling the dreams of sports car fans around the world. We are fully committed to continue our successful path in the future and aim to benefit from a structural growth environment for our modern luxury vehicles. We believe Porsche is well positioned and will continue to focus on high-quality and exclusive products, electromobility and sustainability. Therefore, I am optimistic that we could attract a very strong and well-diversified shareholder base with the IPO.”
Porsche is aiming to unleash its full potential by leveraging its many strengths, including: i) its iconic brand and racing heritage, ii) structural growth environment, iii) superior customer experience, iv) innovative battery electric vehicle (“BEV”) technologies, v) commitment to sustainable luxury, vi) people-centric performance culture as well as vii) compelling financial performance.
Thus, Porsche AG intends to targets a dividend payout ratio of 50 percent of the Porsche Group's IFRS consolidated profit after tax attributable to its shareholders in the mid-term.
Increased entrepreneurial independence
The IPO is intended to provide Porsche with increased entrepreneurial independence to execute its strategy. Therefore, the domination agreement and profit and loss transfer agreement currently in place with Volkswagen AG would be terminated by the end of this year. At the same time, Volkswagen and Porsche have agreed to maintain their successful cooperation and plan to continue to benefit from joint synergies in the future. Porsche and Volkswagen have agreed to conclude an industrial cooperation agreement, on an arm’s length basis, to govern their future industrial and strategic relationship.
Iconic brand, attractive sports car portfolio and sustainability
Porsche is an iconic brand which stands for design and engineering heritage, racing legacy, performance, modern and sustainable luxury, prestige, innovation, technological achievement and reliability. Its high-quality portfolio of sports cars operates in a structural growth environment that has allowed the company to become one of the world's most successful sports car manufacturers.
Porsche is active in attractive luxury market segments which are expected to experience growing fundamental demand in the coming years, with BEVs and sport utility vehicles (SUVs) being among the main drivers.
In addition, a commitment to a comprehensive understanding of sustainability is an integral part of Porsche’s strategy. Following the successful launch of the Taycan, Porsche is pushing ahead its electrification strategy and has set itself ambitious targets: Porsche’s ambition is for BEVs to comprise over 80% of new vehicles delivered in 2030. As part of its strategy, Porsche is also working towards a net carbon-neutral value chain in 2030 and a net carbon-neutral use phase for future BEV models.
Ambitious financial targets
Porsche looks back to a decade of consistent revenue growth. In the first half of 2022, Porsche again posted strong growth in revenue, operating profit and return on sales. For the full year 2022, the company is aiming for Group revenues in the range of approximately 38 to 39 billion euros and a Group return on sales in the range of 17 to 18 percent. The outlook is based on certain assumptions including, among other factors, the expectation of continued positive currency tailwinds and no significant deterioration in economic or political conditions or further significant disruptions in supply chains.
In addition, Porsche targets to deliver in the mid-term Group revenue growth at an approximately 7 to 8 percent compound average growth rate (CAGR), a Group return on sales in a range of approximately 17 to 19 percent and Automotive EBITDA margin in a range of approximately 25 to 27 percent while generating an Automotive net cash flow margin of approximately 12.5 to 14 percent.
Porsche has further set itself the long-term ambition of achieving a Group return on sales of more than 20 percent.
Details of the Offering
The listing of Porsche AG is planned on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange. Acting as Joint Global Coordinators and Joint Bookrunners in connection with the proposed transaction are: BofA Securities, Citigroup, Goldman Sachs and J.P. Morgan. BNP Paribas, Deutsche Bank, Morgan Stanley, Santander, Barclays, Société Générale, UniCredit are acting as Joint Bookrunners. Commerzbank, Crédit Agricole, LBBW and Mizuho are acting as Co-lead Managers. Mediobanca is acting as Financial Advisor to Porsche AG.
Further information will be available on https://investorrelations.porsche.com/en/
IMPORTANT NOTICE
This announcement is an advertisement for the purposes of the prospectus regulation EU 2017/1129 ("Prospectus Regulation"). It does not constitute an offer to purchase any shares in Porsche AG and does not replace the securities prospectus which will be available free of charge, together with the relevant translation(s) of the summary, at www.porsche.com/ipo. In addition, copies of such securities prospectus will be available free of charge in Switzerland from UBS AG, Investment Bank, Swiss Prospectus Switzerland, P.O. Box, 8098 Zürich, swiss-prospectus@ubs.com. The approval of the securities prospectus by the German Federal Financial Supervisory Authority ("BaFin") should not be understood as an endorsement of the investment in any shares in Porsche. It is recommended that investors read the securities prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the shares. Investment in shares entails numerous risks, including a total loss of the initial investment, which will be described in chapter 1 "Risk Factors" of the securities prospectus. This document constitutes advertising in accordance with article 68 of the Swiss Financial Services Act. Such advertisements are communications to investors aiming to draw their attention to financial instruments.
The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.
This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada or Japan. This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States, Australia, Canada or Japan. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act").
The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.
In any EEA Member State other than Germany, Austria, France, Italy and Spain, this communication is only addressed to and is only directed at "qualified investors" in that Member State within the meaning of Article 2(e) of the Prospectus Regulation.
This document is not a prospectus within the meaning of the Swiss Financial Services Act. In Switzerland, an investment decision regarding the publicly offered securities of Porsche AG should only be made on the basis of the securities prospectus as filed with the SIX Exchange Regulation Ltd. pursuant to article 54(2) of the Swiss Financial Services Act immediately after approval by BaFin. This communication constitutes advertising within the meaning of article 68 of the Swiss Financial Services Act. Copies of the prospectus, once approved and published, may be obtained free of charge in electronic form at investorrelations.porsche.com or in printed form, upon request from UBS AG, Bahnhofstrasse 45, 8001 Zurich, Switzerland.
In the United Kingdom, this publication is being distributed only to and is directed only at persons who are "qualified investors" within the meaning of Article 2 of the Prospectus Regulation as it forms part of retained EU law in the United Kingdom as defined in the European Union (Withdrawal) Act 2018 (as amended) and who (i) have professional experience in matters relating to investments falling within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) are persons who are high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts, as described in Article 49(2)(a) to (d) of the Order or (iii) are persons to whom this communication may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons"). The securities are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be available only to or will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.
This announcement contains forward-looking statements that reflect Porsche's current views about future events. The words "will," "target," "aim," "ambition", "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "can," "could," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks, uncertainties and assumptions. If any of these risks and uncertainties materializes or if the assumptions underlying any of Porsche's forward-looking statements prove to be incorrect, the actual results may be materially different from those Porsche expresses or implies by such statements. Forward-looking statements in this announcement are based solely on the circumstances at the date of publication.
The forward-looking financial information set forth above is based on a number of assumptions, including no significant deterioration of economic conditions or the COVID-19 pandemic situation in Porsche's main markets, no significant disruptions in the supply chain, especially relating to semiconductors, energy and materials parts and components, no material price increases of raw materials and no further escalation of the conflict in Ukraine. Such forward-looking financial information also assumes that in the second half of the fiscal year 2022 the euro remains weak against the currencies of Porsche's main markets.
Subject to compliance with applicable law and regulations, neither Porsche AG nor any other member of the Porsche Group, nor Volkswagen AG, nor BofA Securities Europe SA, Citigroup Global Markets Europe AG, Goldman Sachs Bank Europe SE, J.P. Morgan SE, BNP Paribas, Deutsche Bank Aktiengesellschaft, Morgan Stanley Europe SE, Banco Santander, S.A., Barclays Bank Ireland Plc, Société Générale, UniCredit Bank AG, COMMERZBANK Aktiengesellschaft, Crédit Agricole Corporate and Investment Bank, Landesbank Baden-Württemberg and Mizuho Securities Europe GmbH (together, the "Banks") nor their respective affiliates intend to update, review, revise or conform any forward looking statement contained in this announcement to actual events or developments whether as a result of new information, future developments or otherwise, and do not undertake any obligation to do so.
This announcement also contains certain financial measures that are not recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures are presented because Porsche AG believes that they and similar measures are widely used in the markets in which it operates as a means of evaluating a company's operating performance and financing structure. They may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles.
This announcement also contains statements relating to certain of Porsche's sustainability-related ambitions, including without limitation in relation to electrification of its vehicles and its ambition to work towards a net carbon neutral value chain, including a net carbon neutral use phase for future BEV models (including its ambition to procure green energy certificates to enable such net carbon neutral use phase). Emissions from cars delivered in previous years, before achieving net carbon neutrality, will not be included in the assessment of carbon neutrality. Such ambitions are subject to progress made in individual areas, such as technological advancements, market and regulatory developments and other matters that in certain cases cannot be influenced by Porsche, and therefore might not be achievable. In addition, offsets (including carbon reduction and carbon removal) are included in Porsche's decarbonization ambitions.
This announcement does not purport to contain all information required to evaluate Porsche AG, the Porsche Group and/or their respective financial position(s). Financial information (including percentages) has been rounded according to established commercial standards. Certain industry, market and competitive position data contained in this announcement come from third party sources. Third party industry publications generally state that the information they contain originates from sources assumed to be reliable, but that the accuracy and completeness of such information is not guaranteed and that the calculations continued therein are based on assumptions. While Porsche believes that each of these publications has been prepared by a reputable source, neither Porsche nor any of its representatives have independently verified the market data and other information on which third parties have based their studies or make any representation or give any warranty as to the accuracy or completeness of such information. Accordingly, reliance should not be placed on any of the industry, market or competitive position data contained in this announcement.
The Banks are acting exclusively for Porsche AG, the selling shareholder and Volkswagen AG and no-one else in connection with the planned IPO. They will not regard any other person as their respective clients in relation to the planned IPO and will not be responsible to anyone other than Porsche AG and the selling shareholder and Volkswagen AG for providing the protections afforded to its clients, nor for providing advice in relation to the offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
In connection with the planned IPO, the Banks and their respective affiliates may take up a portion of the shares offered in the planned IPO as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of Porsche AG or related investments in connection with the planned IPO or otherwise. In addition, the Banks and their respective affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which the Banks and their respective affiliates may from time to time acquire, hold or dispose of shares of Porsche AG. The Banks do not intend to disclose the extent of any such investment or transactions, other than in accordance with any legal or regulatory obligations to do so.
None of the Banks nor any of their respective affiliates nor any of the Banks’ or such affiliates’ directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this release (or whether any information has been omitted from the release) or any other information relating to Porsche AG, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this release or its contents or otherwise arising in connection therewith.
THIS DOCUMENT IS NOT A PROSPECTUS BUT AN ADVERTISEMENT AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ADVERTISEMENT EXCEPT ON THE BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS.
