Despite a global sales decline, Porsche's profitability is on the rise. On July 29, the German luxury automaker released its first-half 2026 results. While global vehicle deliveries continued to fall, the company’s profitability has improved significantly year-on-year, driven by cost control, an optimized product mix, and reduced expenses from strategic adjustments. However, given the new restructuring costs expected in the second half, the company has maintained its full-year guidance unchanged.

Deliveries down 16.5%, operating profit rebounds sharply

According to the financial report, Porsche generated sales revenue of €17.229 billion in the first half, a 5.1% decrease year-on-year; operating profit reached €1.348 billion, a 33.9% increase year-on-year; and the operating return on sales (ROS) improved to 7.8% from 5.5% in the same period last year. Segment-wise, the profit recovery was primarily driven by the automotive business. The report shows that the automotive division's operating profit increased to €1.208 billion, up from €832 million in the prior year; the operating margin for the automotive business rose to 8% from 5.2%; and the EBITDA margin for the automotive business was 18.3%, compared to 16% in the same period last year. Amid the profit improvement, Porsche continues to face sales pressure. From January to June, Porsche delivered a total of 122,300 vehicles globally, a 16.5% decline year-on-year. The decline in sales volume significantly outpaced the drop in revenue. The company emphasized that it will adhere to its "Value over Volume" strategy, along with strict pricing management, cost control, and product portfolio optimization, to continue improving profitability. It is also worth noting that the strategic adjustments in the first half of last year heavily weighed on performance, whereas the related impact has been significantly reduced this year, which is also a key factor driving the year-on-year rebound in operating profit. Specifically, Porsche's strategic adjustment measures in the first half incurred approximately €400 million in costs, but due to agreements reached with suppliers, the company released about €300 million in provisions previously set aside, resulting in a net impact on performance of roughly €100 million. In contrast, the net cost related to these adjustments in the first half of 2025 was about €800 million.

Full-year outlook maintained, substantial restructuring costs ahead in second half

Despite the profit recovery in the first half, Porsche has not raised its full-year performance forecast. The company stated that it will launch the previously announced "Future Package" organizational adjustment in the second half, which is expected to generate "restructuring costs in the hundreds of millions of euros" in the second half of 2026, with these measures extending into 2027. Therefore, it maintains its previously announced full-year targets: sales revenue of €35 billion to €36 billion, an operating return on sales of 5.5% to 7.5%, an automotive EBITDA margin of 15% to 17%, and an automotive net cash flow margin of 3% to 5%. On July 27, Porsche announced it will cut an additional approximately 5,000 jobs in Germany by 2035. Combined with the roughly 3,900 job cuts already decided, Porsche will reduce a total of about 8,900 positions in Germany. The company also noted in its outlook that the risk from commodity prices has increased compared to the end of last year, due to rising prices for raw materials such as aluminum, copper, nickel, cobalt, and lithium. Porsche CEO Michael Leiters stated that over the past six months, the company has continued to advance its strategic adjustments and achieved interim results in line with expectations. However, facing a complex market environment, Porsche still needs to further enhance its competitiveness and profitability. CFO Jochen Breckner emphasized that strict cost management and the "Value over Volume" strategy are working, and the company will continue to focus on improving the quality of earnings rather than solely pursuing sales volume growth. Notably, although profitability has recovered significantly from the same period last year, Porsche still has some ground to cover to reach its historical levels. The operating return on sales is currently at 7.8%, which, while up 2.3 percentage points from the first half of 2025, remains below the company's normal profit levels in recent years. As competition in the global luxury car market intensifies, the electric vehicle transition continues, and the restructuring plan enters the implementation phase, Porsche will still face the dual challenges of improving profitability and controlling costs in the coming quarters.