Porsche Automobil : Speech Hans Dieter Pötsch

Speech

by Hans Dieter Pötsch

Chairman of the board of management of Porsche Automobil Holding SE

Annual general meeting taking place as a virtual annual general meeting on 30 June 2023 in Stuttgart

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Ladies and gentlemen, dear shareholders!

I also would like to welcome you to the annual general meeting of Porsche Automobil Holding SE.

Today, we are looking back on an economically successful fiscal year 2022 for Porsche SE. The highlight was without doubt the acquisition of 25 percent plus one share of the ordinary shares of Porsche AG. With this investment, we added to our portfolio a company with a strong growth and dividend profile that is uniquely positioned in the sports and luxury segments of the automotive industry.

Despite a difficult market environment, the IPO of Porsche AG was the largest in terms of market capitalization that has ever taken place in Europe. Just a few weeks after the initial listing, Porsche AG was already included in the German Stock Index (DAX) in December 2022.

The IPO was also extremely successful for the Volkswagen Group, giving it the additional financial headroom to help accelerate the industrial and technological transformation of the group and support further growth. The IPO also made Porsche AG's valuation directly visible on the capital market. This also shows a valuation perspective for Volkswagen that, in the opinion of many analysts, is not yet reflected in Volkswagen's share price.

Finally, the IPO means that Porsche AG can now evolve with greater entrepreneurial freedom, while retaining synergies with the Volkswagen Group.

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Porsche SE was able to add a second, strong core investment to its portfolio, granting a greater degree of diversification and allowing it to benefit from a second dividend stream. With the acquisition of the blocking minority in Porsche AG, Porsche SE will in the future have direct, significant influence over Porsche AG, while the voting majority at 75 percent minus one share of the ordinary shares remains with Volkswagen. In addition, Porsche SE made an important financial contribution for a successful transformation of the Volkswagen Group. As its anchor shareholder, we support this transformation and see it as an additional considerable value driver for both Volkswagen and Porsche AG.

The acquisition of Porsche AG ordinary shares for a total value of 10.1 billion euro is based on a sound financing plan. The purchase price for the first tranche of 17.5 percent plus one share, in the volume of 7.1 billion euro, was entirely debt-financed. By contrast, we were able to fully finance the acquisition of the second tranche of

7.5 percent of the ordinary shares for a purchase price of 3.0 billion euro from the special dividend that Volkswagen AG distributed to its shareholders in the context of the transaction.

Prior to the transaction, Porsche SE had concluded a financing agreement with an international syndicate of banks for an original volume of 8.9 billion euro, for which we were able to secure attractive conditions.

In a first step towards the long-term refinancing of the bridge financing raised to acquire the shares of Porsche AG, we placed a Schuldschein loan with a volume of around 2.7 billion euro in March 2023. The investors were offered maturities of three, five, seven and ten years. Thanks to the high demand, the original target volume was substantially oversubscribed, and the interest rate was set at the lower end of the price range. Roughly 120 institutional investors such as banks, pension

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funds and insurance companies participated in the Schuldschein loan. The volume achieved marks an important step towards our refinancing. And we are proud to say that this was the largest Schuldschein loan ever issued by a company. The high level of interest shown by investors was an impressive demonstration of Porsche SE's attractiveness also for debt capital investors.

In a second step of the refinancing, Porsche SE issued a bond with a volume of 750 million euro at the end of April 2023. The bond, which matures in September 2028, was in high demand in the market and the order book was oversubscribed several times. In order to give private investors the opportunity to invest, we chose a small denomination of 1,000 euro per share for the bond. Following the very successful placement of our Schuldschein loan, we are thus enabling new investor groups to participate in Porsche SE on the debt capital side.

Following these two long-term financings, the bridge financing raised in connection with the acquisition of ordinary shares in Porsche AG was already repaid in full in May 2023. As a result, Porsche SE has no significant refinancing requirements until fiscal year 2026.

Porsche SE's financing situation is very comfortable. A few days ago we used the attractive market environment to place another bond. The bond, with a volume of

1.25 billion euro, is divided into two tranches with maturities until September 2027 and September 2030. This is one of world's largest unrated bond placements. The placement has enabled us to further reduce our existing bank debt and to optimize financing costs and maturities.

The investment in Porsche AG, which has a strong dividend profile, was made with a clear financing strategy. We intend to systematically repay the debt over the

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coming years and we will continue to align our long-term financing structure with investment grade requirements. However, we do not believe that an equity ratio close to 100 percent is necessarily the optimum ratio, even from an investor's point of view. Debt capital is therefore also an entirely conceivable part of our capital structure in the long term.

In the period from 29 March 2022 to 6 May 2022, preference shares in Volkswagen AG were acquired for around 400 million euro, increasing Porsche SE's stake in Volkswagen AG to 31.9 percent of subscribed capital. Porsche SE's shareholding in the ordinary shares in Volkswagen AG remains at

53.3 percent. Porsche SE is fully committed to its role as a long-term anchor shareholder in Volkswagen AG. We are convinced of Volkswagen Group's future prospects and therefore of its long-term value appreciation potential.

Let me now come to the earnings figures of Porsche SE. We raised our group result after tax to 4.8 billion euro in the fiscal year 2022 compared to 4.6 billion euro in the prior year. This group result after tax is significantly influenced by the result of our core investment in Volkswagen AG accounted for at equity of 4.5 billion euro. Overall, the Volkswagen Group performed robustly despite the sustained effects of the Covid-19 pandemic as well as Russia's ongoing war against Ukraine and the resulting problems with the supply chains and high inflation. Porsche AG also closed the fiscal year 2022 very successfully. Following the acquisition of ordinary shares of Porsche AG, the result of the Porsche SE Group will be more strongly influenced in the future by the earnings situation of the Porsche AG Group than before.

Net liquidity of the Porsche SE Group amounted to minus 6.7 billion euro as of 31 December 2022, compared to 641 million euro reported at the end of 2021. This

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