Porsche 2006 Annual Report Download - page 39

second fiscal year in which Porsche AG was the big-
gest single shareholder in the Wolfsburg-based auto-
motive group, the majority of financial analysts and
investors were clearly convinced of the benefits that
the collaboration brings for both companies. At the
Porsche Annual General Meeting in January 2007,
and subsequently the extraordinary shareholders’
meeting in June 2007, support for the strategy taken
was equally positive (see also page 11, in the ‘Holding
Company’ chapter). Porsche supported the opinion-
forming process on the capital markets by explaining
the industrial logic behind collaboration between the
two motor vehicle manufacturers and the positive in-
fluence it has on Porsche accounts. Moreover, from
the perspective of many investors, Porsche was dis-
tinguished from its competitors as it continued to
achieve a highly profitable growth rate by manufac-
turing premium sports vehicles.
Higher Stake in VW Fuels Porsche Stock Prices
The stock performance of Porsche shares between
August 2006 and March 2007 was characterized by
a continuing upward trend. When Porsche announced
at the end of March that it wanted to increase its share
of common stock in Volkswagen AG to just below 31
percent, thereby triggering a takeover bid under Ger-
man law, the price of stock once again increased sig-
nificantly. The price of Volkswagen stock subsequent-
ly rose as well, further strengthening the conviction
on the financial markets that the collaboration bet-
ween the two companies is mutually beneficial. Just
before the extraordinary shareholders’ meeting at the
end of June, which approved an amended company
structure and the new name Porsche Automobil Hol-
ding SE, the price of stock once again experienced
sharp growth. Only a few days later, on July 9, 2007,
Porsche shares reached an interim all-time high of
1,418 Euro.
The stock also benefited from Porsche’s close con-
tacts with participants on the financial markets. The
company’s development was, for example, explained
in detail to institutional investors and analysts at road
shows held at all the most important financial centers
both at home and abroad, as well as during intensive
discussions at Porsche’s headquarters in Zuffenhau-
sen. Investors and analysts were not only impressed
by the sales successes of the 2006/07 fiscal year,
achieved in particular by the 911 series, but were also
increasingly convinced of the benefits of cooperation
with Volkswagen. Porsche worked at improving finan-
cial experts’ understanding of the strategy behind this
cooperation and of the associated complex company
results. Such activities repeatedly culminated in a
commitment to Porsche stock, with the overwhelm-
ing majority of financial experts recommending the
purchase of Porsche stock. Several investment banks
increased their target price forecasts for Porsche
shares to values from 1,100 Euro through to just
under 1,500 Euro. In the 2007/08 fiscal year, targets
were set even higher.
Outstanding Long-term Development
The long-term development of the stock illustrates the
excellent reputation Porsche enjoys. During the last
ten fiscal years, from August 1, 1997 to the last day
of the current review year on July 31, 2007, the price
of shares has risen from the equivalent of 142 Euro to
1,340 Euro, an increase of 844 percent, compared
with the Dax’s increase of only 72 percent.
The increase in value of a shareholding with Porsche
stock over the same ten-year period was equally posi-
tive. If a sum of 10,000 Euro had been invested in the
sports car manufacturers’ shares on August 1, 1997,
it would have increased to 97,000 Euro (including
dividends) by July 31, 2007.
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