Porsche SE profits from excellent development of its investments

Significantly improved group profit / CEO Prof. Dr. Winterkorn: Capital increase is the next milestone on the road to the integrated automotive group / “Great trust between Porsche and Volkswagen”

Stuttgart, 17 March 2011. In its short fiscal year 2010 from 1 August 2010 to 31 December 2010, Porsche Automobile Holding SE, Stuttgart (Porsche SE) generated group profit after tax of 1.286 billion euro.In the fiscal year 2009/10 (ended 31 July), Porsche SE had disclosed a loss after tax of 454 million euro.The outstanding development of the two investments made a major contribution to the excellent result.In the short fiscal year from 1 August to 31 December 2010, the Porsche AG group achieved a 17.8 percent return on sales, with an operating result of 688 million euro.The Volkswagen group also achieved record figures in fiscal 2010, with an operating result of 7.141 billion euro.

"Porsche SE has a stake in two exceptionally successful automobile manufacturers that are well placed to master the challenges of the future, and that are both built on a sound and sustainable foundation." said Prof. Dr. Martin Winterkorn, CEO of Porsche SE.He also stated that the next milestone on the road to the integrated automotive group is the upcoming capital increase at Porsche SE."We are very optimistic that we will succeed in persuading our shareholders to subscribe," said Winterkorn.The Porsche and Piëch families will make a significant investment as part of the capital increase.Qatar Holding, as another major shareholder, has also indicated its willingness to invest.

The resolution of the annual general meeting on the capital increase of 30 November 2010 must be implemented by the end of May 2011 at the latest. "With the capital increase, the executive board of Porsche SE will successfully complete another central point on the agenda pursuant to the basic agreement regarding the creation of the integrated automotive group," said CFO Hans Dieter Pötsch.Porsche SE intends to use the target issue volume of five billion euro to significantly improve its net liabilities.

He explained that this was a prerequisite for the merger of Porsche SE with Volkswagen AG to form the integrated automotive group. Porsche SE will announce further details of the planned capital increase after the prospectus has been approved by the German Federal Financial Supervisory Authority (BaFin).

Porsche SE's total profit from investments accounted for at equity in the short fiscal year totaled 1.075 billion euro.This contains a share attributable to Porsche SE in the Porsche Zwischenholding GmbH group's profit for the year of 106 million euro and the Volkswagen group's profit for the year of 969 million euro.

The tax income of 666 million euro released through the income statement, but without affecting liquidity, is the result of the reversal of provisions set up in prior years relating to the tax treatment of stock option transactions.A net gain of 92 million euro arose from the divestiture of all cash-settled options relating to Volkswagen AG.Expenses also developed positively.In this connection, the lower interest payments to banks through new credit lines that were agreed on in late 2009 clearly had a positive impact. These credit lines total 8.5 billion euro, of which around seven billion euro has been drawn.

New shares to carry full dividend rights for the short fiscal year 2010

The new shares from the planned capital increase will carry full dividend rights for the past short fiscal year 2010. The finalized dividend proposal will - after the capital increase is carried out - be presented to the annual shareholders' meeting of Porsche SE on 17 June 2011 for voting.

Thanks to the continued profitable growth of the two investments, Porsche Zwischenholding GmbH and Volkswagen AG, Pötsch expects the share in profit attributable to Porsche SE from investments accounted for at equity to continue to develop positively.For the current fiscal year 2011 (1 January to 31 December), Pötsch expects Porsche SE to generate again a profit at group level before special effects, such as the possible adjustment of the put and call options of Porsche SE or Volkswagen AG as regards the 50.1 percent shareholding of Porsche SE in Porsche Zwischenholding which is held by a trustee.

Pötsch underscored that not all the legal and tax hurdles on the way to the integrated automotive group had been cleared yet.Nonetheless, he stated that the merger could succeed, even if this is after 2011. "We have the backing of important parties involved: Volkswagen, Porsche, the Porsche and Piëch families as well as the employee representatives of both companies," said Pötsch.From 2012, the basic agreement provides for an alternative approach to the integrated automotive group - the increase of Volkswagen AG's investment in Porsche Zwischenholding GmbH, for which Porsche SE and Volkswagen AG have granted each other put and call options for the remaining 50.1 percent of the shares.

Porsche SE an attractive investment after capital increase

Pötsch pointed out that the executive board could not say with certainty which approach Porsche SE would adopt.However, he added that it was already clear that, if the direct capital increase is performed successfully in the coming weeks, Porsche SE would not only be well prepared for the creation of the integrated automotive group, but would also be an attractive investment itself.

Winterkorn praised the good cooperation between the two companies:"There is great trust between Porsche and Volkswagen.And we have the right team spirit."He went on to state that Volkswagen and Porsche are striving together to reach the top of the automobile industry league table."We firmly believe that we can achieve this aim," said Winterkorn.


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