Dr. Ing. h.c. F. Porsche AG (P911.DE) Q3 2026 Earnings Call Transcript

Operator: Ladies and gentlemen, thank you for standing by. Welcome, and thank you for participating in the Media Analyst and Investor Call regarding Porsche AG's Q3 2026 results. This call will be hosted by Dr. Jochen Breckner, member of the Executive Board of Finance and IT. [Operator Instructions] At this time, it's my pleasure to hand over to Bjorn Scheib, Head of Investor Relations. Please go ahead, sir.

Björn Scheib: Thank you very much, and good morning to everyone. This is our Media and Analyst Call of Porsche AG on the Q3 2026 results. My name is Bjorn Scheib, and I'm the Head of Investor Relations. And with me today is Anja Wassertheurer, our Director of Corporate and Product Communications. Before our CFO, Jochen Breckner, will give you an overview of our business performance in the first 9 months of 2026, just a couple of words on the procedure. After the intro statement by Jochen, we will start the Q&A session with the analysts. Our separate Q&A session for journalists will be held in German and start at 9:00 a.m. Central European Time. You can find further detailed information online in the Porsche Newsroom, as well as on the Investor Relations website. And as always, we would like to remind you that all forward-looking statements are subject to the risks and uncertainties mentioned in the safe harbor statement in our documents. And with that, I hand over to Jochen.

Jochen Breckner: Bjorn, thank you very much. Good morning, everyone, on this call, ladies and gentlemen, warm welcome, and thanks for joining us today for analysts, investors and media conference. As outlined at our Capital Markets Day 3 weeks ago, we continue to execute our strategy, Sportwagenschmiede '35, with clear focus and discipline. And we are beginning to see the first benefits in our financial performance. We are sharpening our product portfolio and focusing on our core business. We are improving our cost structure and reducing capital intensity. We continue to sharpen our focus on the core business and have reached 2 important milestones. First, the divestments of our stakes in Bugatti Rimac and Rimac Group were completed in the third quarter. Second, a sale agreement and foundation of a strategic partnership for MHP has been signed. At the same time, we delivered a solid operating result and generated strong net cash flow in the first 9 months despite the challenging market environment. Combined with a strong balance sheet, this gives us the financial resilience and the strength to continue executing our strategy with discipline. And we confirm our outlook for the full year 2026. Let me now turn to our financial performance in the third quarter and the first 9 months of 2026 in more detail. Looking at the first 9 months of this year, group revenue came in at EUR 25.3 billion, down approximately 6% year-on-year. While vehicle sales were lower, strong pricing and positive mix effects continue to support the quality of our revenues. This results in a significantly more resilient revenue development compared with unit sales. And this reflects the strength of our value-over-volume approach, our pricing discipline and the quality of our sales mix. At the same time, our geographically balanced sales footprint continues to provide resilience across different markets. As you know, we have significantly reduced our exposure to China. This makes our overall business less dependent on developments from this challenging market environment. With the successful launch of the all-electric Cayenne, BEVs account for 22% of our vehicle sales year-to-date. Automotive revenues per vehicle sold increased to around EUR 126,000. This is an increase of approximately EUR 6,000 against last year. In addition, revenues in the Financial Services segment continued to grow. Ladies and gentlemen, you also know that we maintain to operate in a challenging cost environment. This is characterized by inflationary pressures, costs associated with the slower transition to electric mobility and elevated development expenses and depreciation. Despite these headwinds, we've made tangible progress on costs. The disciplined execution of our Push-to-Pass performance program contributed to a reduction in our underlying cost base. Turning to cost of sales. In the first 9 months of this year, cost of sales declined by EUR 3.2 billion to EUR 20.4 billion. This development mainly reflects substantially lower expenses related to our strategic realignment, and it includes the release of provisions following successful negotiations in connection with the realignment of our product strategy. This improvement was also clearly visible in the third quarter. Cost of sales declined by approximately EUR 2.2 billion to EUR 6.6 billion. Strategic realignment expenses amounted to around EUR 300 million, mainly related to the Zukunftspaket. Compared to this, in Q3 last year, the expenses in connection with the strategic realignment measures amounted approximately EUR 1.9 billion. Overall, we achieved a clear improvement in profitability. For the first 9 months, group operating profit reached EUR 1.7 billion, up significantly from EUR 40 million last year, resulting in an operating return on sales of 6.9%. This development was also reflected in our third quarter performance. Strong pricing and mix, improved cost of sales and substantially lower strategic realignment expenses supported an operating profit of EUR 387 million and an operating return on sales of 4.8%. What is also important, we continue to deliver strong cash conversion, reflecting our disciplined approach to capital allocation and cash management. In the first 9 months of 2026, Automotive net cash flow increased significantly to EUR 2.5 billion. This corresponds to a strong net cash flow margin of 11.3% compared with 5.6% last year. This increase was supported by lower cash outflows from investing activities and in particular, the proceeds from the completed Bugatti Rimac and Rimac Group transactions. This strong cash generation continued in the third quarter. Automotive net cash flow increased significantly to around EUR 1.5 billion. This includes a net extraordinary cash contribution of around EUR 500 million, mainly related to the more than EUR 900 million from mainly Bugatti Rimac transactions. On the other hand, this was partly offset by cash outflows for the strategic realignment and pension contributions. Excluding these extraordinary effects, automotive net cash flow remained broadly in line with the prior year quarter. Now this brings me to our capital allocation. We remain disciplined in our investment approach and continue to focus resources on strategic priorities. Year-to-date, CapEx amounted to EUR 1.2 billion, including around EUR 300 million of license payments to Audi, slightly below the prior year level. We also continue to manage R&D spending with discipline. R&D expenditures decreased to EUR 1.5 billion year-to-date compared with EUR 1.8 billion last year. At the same time, we maintained our conservative R&D accounting approach with a capitalization rate of around 43% year-to-date. This continues to support the quality and sustainability of our earnings and cash flow generation. This is fully aligned with the directions we outlined at our Capital Markets Day. Our strategy, Sportwagenschmiede '35, is about stronger cash generation and a structurally more capital-efficient business model. We are becoming more focused and disciplined in how we allocate capital. But let me be clear, this is not about investing less. It's about investing better. We will continue to invest in our products, technologies and innovation leadership, but with an even sharper focus on value creation, capital efficiency and returns. As a result, Automotive net liquidity stood at EUR 8.2 billion at the end of Q3. With this, we see Porsche in a very strong financial position. Our healthy balance sheet gives us both the resilience to execute our transformation and the financial flexibility to continue investing in Porsche's future. With that, let me turn to the outlook. Again, first and foremost, despite the continued challenging market environment, geopolitical uncertainties and external headwinds, we confirm our guidance for the full year 2026. Our guiding principle remains unchanged, value over volume. Vehicle sales are expected to decline significantly compared with 2025 due to several reasons. The phaseout of the 718 and the ICE Macan model lines. Base effects, especially from the first full BEV Macan year 2025. The impact of changes to U.S. tax incentives on demand for electric vehicles, as well as our conservative outlook for the Chinese market. Based on our current assumptions, second half volumes are expected to be broadly in line with first half levels. At the same time, the ramp-up of the all-electric Cayenne is expected to drive a significantly higher BEV share in the second half of the year. We continue to expect a group operating return on sales of 5.5% to 7.5% for the full year. As I previously outlined, our profitability guidance includes approximately EUR 800 million to EUR 900 million of net extraordinary burdens related to our strategic realignment. With this, let us turn to cash flow. We continue to expect an automotive net cash flow margin of 5.5% to 7.5%. This includes several extraordinary effects. First, around EUR 1.3 billion of cash outflows related to the strategic realignment. This includes the Audi license payment in the high triple-digit million euro range. Second, around EUR 500 million of pension contributions. And third, around EUR 900 million of net cash flow relevant inflows related to the Bugatti Rimac transactions. Together, these extraordinary items are expected to result in a net cash outflow of around EUR 900 million to EUR 1 billion. Now let me come to the end with following conclusion. Overall, we remain firmly on track with the execution of our strategic and financial priorities. While the environment remains challenging, our focus is clear: strengthening profitability, improving cash generation and building a more capital-efficient Sportwagenschmiede. With that, after a short break, I look forward to your questions. Thank you very much.

Operator: Thank you, Mr. Breckner. Ladies and gentlemen, we will now have a short break. Afterwards, the Q&A session for the analysts and investors will start. [Break]

Operator: [Operator Instructions] With that, I hand over again to Bjorn Scheib. Please go ahead, sir.

Björn Scheib: Thank you very much. So we will start the Q&A session with analysts, investors now. And first in the row will be Tim of Deutsche Bank. And next after Tim will be Patrick of UBS.

Tim Rokossa: I have 2 questions, please. The first one will be on the Zukunftspaket. We're starting to see the moving parts on cash and cost, obviously. At the CMD, you indicated that you should expect decent progress relatively quickly. Can you quantify where we stand on the Zukunftspaket, particularly the headcount reduction? How much of the targeted savings is already secured? How much does still depend on further negotiations and executions? And then secondly, very impressive free cash flow, obviously today, even though some of us that had expected you to print a decent one, we're still positively surprised here. With the strong free cash flow and your liquidity situation, how should investors think about capital returns from here, especially how do you balance the regular dividend and the participation of shareholders in proceeds of what you call M&A, such as Bugatti and Rimac, i.e., I'm thinking about the potential for a special distribution obviously here.

Jochen Breckner: Tim, thank you very much for the 2 questions. Let me answer them in the order that you've raised these 2 points. First one was on the Zukunftspaket, the question how we progress with the reduction in our workforce and the headcount. And what I can confirm here again is as we also communicated and confirmed on the Capital Markets Day is that the development of headcount reduction is completely in line with our expectations. The programs that we've set up with regards to partial retirement and also the mutual termination agreements are well on track. Reduction is going on as we've planned it, and we do not see any risk that we will not fulfill our targets that we've defined. You might remember, we communicated that we will reduce our workforce by, in total, 9,000 full-term equivalents by 2032, and that is still the target and will be achieved. On top of that, no additional negotiations are needed for that one. If I got the second part of your first question correctly, this is all in line with the Zukunftspaket. The Zukunftspaket is signed. And as I said, we are already executing and progressing quite well on that one. The second question was on capital returns. Given our very strong net liquidity and also the very strong net cash flow that we had in Q3, including the M&A proceeds from the Rimac Group and Bugatti Rimac. With that, I confirm what we've also communicated on the Capital Markets Day. We've updated our dividend policy from around 50% dividend payments of the net proceeds based on IFRS on our group results to more than or at least 50% to be precise. And this is what we are targeting. We have not yet defined the dividend payment for the full year yet. This is something that we will discuss with the corporate bodies and then suggest to the Annual General Meeting in spring or early summer 2027. But from today's perspective, we think that this will be in line with the updated policy that we've communicated on the Capital Markets Day.

Björn Scheib: So next in a row is Patrick of UBS. And after Patrick, we will have Jose of JPMorgan.

Patrick Hummel: Two questions also for me, please. First one, starting with the full year guide and what's implied for the fourth quarter. I think for revenues, you said already that you expect a result at the lower end of the range, which would still be close to EUR 10 billion of revenues in the fourth quarter, so a substantial improvement quarter-over-quarter. If I take the midpoint of your EBIT margin corridor for the full year, you would make only 5.5% margin on that relatively high revenue number. So is there anything on the cost front that we should be aware of? I think you're guiding realignment costs even a bit lower by about EUR 100 million than you did previously. So if you could just elaborate a little bit on what's implied here for the fourth quarter? And also when it comes to cash flow for the fourth quarter, the underlying one should still be solid. And I think R&D, cash R&D is a key contributor here because it went down a couple of hundred million year-over-year. Was that cash R&D of the third quarter an outlier, a positive outlier? Or is that sort of the run rate from here? And my second one, very simple. You launched Mission S concept, on the day somebody else has shown a flying car to the world, but I think you got still really, really good traction. Can you just share a little bit qualitative feedback and what that means for your thinking about the product launch?

Jochen Breckner: Yes. Patrick, thank you very much. I start with the Mission S, fantastic vision model that we've communicated on the Capital Markets Day and then presented it to the worldwide audience 2 or 3 weeks ago in New York at a historic place. And that car received really overwhelming feedback from all the stakeholders and groups that we were targeting with that car. From our perspective, that vision model is, in terms of design, in terms of positioning of the brand, a great proof point for our strategy, Sportwagenschmiede '35. And also the feedback we received from our customer groups is, as I said, really overwhelming. Most of these guys ask for a piece of paper where they can sign a purchasing contract, which is not possible yet, of course, since that car is not decided. It's still a vision model and a design model, but it received really fantastic feedback, and we are really happy with the feedback we received since then. Now on your first question on financial performance. We confirm the outlook for the full year. As I said, 5.5% to 7.5% return on sales. We are just above the midpoint with 6.9% as per Q3. And this year, again, has a lot of, as you said, moving parts in terms of extraordinary expenses that we had. And indeed, in quarter 4, we expect additional expenditures, both for the Zukunftspaket, but also for the other line items that we have in the external expenses for the strategic realignment that gives us a bit of a headwind so that we do not expect that profitability would increase for the full year. But as I said, we will be, yes, really in the corridor between 5.5% and 7.5% and no surprises are to be expected there. Cash R&D was the second part of the question that was quite positive until Q3 and also in Q3. We usually see a bit of a hike and increase in Q4 with the year-end rally that we have is closing all the bookkeeping and the project work that we are doing. So therefore, that is not something that you should take as a performance for the fourth quarter and also into next year. As we said, we are still sitting on elevated strategic capital allocation in terms of R&D and also CapEx, '26, '27, the improvements that we are targeting based on our Sportwagenschmiede activities will kick in thereafter with the minus 20% to 25% that we are targeting for the midterm. Maybe on top of that, what you've asked, what is also important on top of cash R&D is our conservative bookkeeping that we have. I mentioned that in the intro statement, we're sitting at 43% per Q3 of capitalized R&D, which is compared to what we had in the past, quite conservative and therefore, also shows that the bigger part of R&D is expensed and therefore, already included in our EBIT and return on sales as we communicated it today for the third quarter.

Björn Scheib: So next in the row then is Jose of JPMorgan, and he will be followed by Michael of HSBC.

Jose Asumendi: Could you provide some comments with regards to the moving parts for 2027, so we can get a sense of the trajectory into next year? And then second, strategically, when you think about manufacturing of vehicles across different plants, is the discussion still on the table to potentially move Cayenne back to Leipzig? Or is this not currently in the discussions?

Jochen Breckner: Jose, thank you. On your first question into 2027, you were asking about the moving parts, but let me start with a more general and broader statement. As we communicated and as you know, we expect 2027 to be a rather transitional year where we recommend to rather look through that year for '28 and the years to come for the positive effects of our Sportwagenschmiede '35 strategy to kick in. Why is that? Why is '27 expected to be the trough? That's because of the holes that we have in our product portfolio. It will be the first full year without the ICE Macan. And given other movements in the markets and the life cycle effects, we expect that 2027 will have less volume than 2026. And given our contribution margins, that's definitely a headwind. Now on the strategic realignment expenditures, we will see improvements in '27 compared to '26. The most important part that we will still have there are the budgets for our Zukunftspaket and restructuring initiatives that we have, so for partial retirement, also for the mutual agreements for reducing the workforce, we expect EUR 300 million to EUR 400 million as a headwind and as a cost item in 2027. Now moving from '27 to the more specific question in terms of production footprint that we have concerning the Cayenne, you've mentioned that one and also maybe potentially the additional SUV above the Cayenne, which is still under investigation. There is no final decision made yet. There are alternatives that we are evaluating. Of course, one of the scenarios is Bratislava, where the current model is manufactured, but also Leipzig could be an option. We're still in the process of doing the math and see what would be beneficial for Porsche. We are in discussion also with the group and Volkswagen since Bratislava is not our own factory. So we need to also realign on that question there. And yes, decisions are still to be made. So the short answer would be it's open, and we will communicate as soon as we've made final decisions on the location where we will produce the next Cayenne.

Björn Scheib: So as I said, Michael of HSBC is next in a row. And thereafter, we're going to have Horst of Bank of America.

Michael Tyndall: Hopefully, you can hear me. A couple for me. I wonder if, Jochen, you can just talk through -- you've closed quite a few businesses and sold a few businesses this year. What does that mean in terms of savings? Because I assume things like e-bike, Cellforce were actually a drag on the P&L. So how much of that do you get sort of relief in '27? And then the second one is more about your relationship with Audi. You're paying them for a platform. But if I'm not wrong, they're going to be paying you for a platform. Where does that end up net-net once they've got the BEV EV -- 718 platform? Is it still in their favor? I mean, can you give us some steer as to where that sort of whole thing plays out?

Jochen Breckner: Yes. Michael, thanks for the first question. You're raising a very important topic. We closed some businesses that we've started as a Porsche Group, and we also sold off some subsidiaries and financial stakes that we had with Bugatti, with Rimac and also with MHP, at least with the signing we had on MHP. And all these initiatives come down to, say, the sub-strategy that we have in the context of our Sportwagenschmiede, which is called Focus on the Core, which is very important. We want to reduce distraction and the kind of adventures in other business opportunities that we had seen in the past and really focus on what is Porsche all about, Volkswagen heritage, legacy and convincing technology. So these are first and very important proof points on that strategy, and that helps to focus Porsche and make it also a more profitable company. When it comes to the relief in terms of cost items, you need to understand that we've baked those closures when it comes to e-bike, but also, for example, the Cellforce Group and the smaller companies that we had like Cetitec, into our special effects that we're communicating this year. So the most important effect that you will see is that the special effects will be lower in 2027. As I just said with the other question from Jose, we will just have EUR 300 million to EUR 400 million remaining in 2027, and that's for the Zukunftspaket. So that's a positive effect that you will see. Other than that, these companies were not really significant as they were still growing and being built in the phase that they were at when we were closing them. Of course, selling MHP when the closing happens, that would give definitely a relief on the cost items since that was a fully consolidated 100% subsidiary of Porsche with more than 4,500 employees. And there you will see the reductions in SG&A, but also in the cost of sales. And having mentioned that, just to be clear on that one, these 4,500 employees come on top to the 9,000 that we've communicated for a reduction in general for making Porsche slimmer than it has been in the last year. Now on your second one, completely different topic, platform strategy, which really is the basis for a joint synergy generation and exploitation between the brands, especially Audi and Porsche, but also in our case, we have synergy projects with Bentley, for example, and to some extent, also Lamborghini. That's an important part for our financial model. And you are right, this goes in both directions. We are using platforms, modules and technology from Audi, especially when it comes to our SUV cars. And we will have elevated high cash spending for the license payments for the next platform for the successors of our Cayenne for the potential additional SUV above the Cayenne and also for the M1, the ICE Macan. On the other hand, we are offering our electric platform for the 718 Boxster and Cayman, which is about to be launched next year for an Audi project they call C-Sport internally, and we will get cash from their side. And that payment is expected to come in at 2027. But what is important to understand is that, that will be a much lower number than that -- what we have to pay to Audi. And this is for the sole reason that what happens within the group is that you distribute the expenditures that are in the books. And the -- yes, the platforms and the modules that we use from Audi are, say, much bigger and have a much bigger extent than what we are giving to Audi on the 983. So you should not think into high EUR 100 millions or even EUR 1 billion for the 983. It's rather a low 3-digit number that we expect in 2027.

Björn Scheib: Very good. So next in the row then, as said is Horst of Bank of America. And he will be followed by Daniel of Metzler.

Horst Schneider: I have got a few questions. First of all, related to deliveries and volumes. I still struggle with the forecasting of the volume outlook. I mean the Macan phaseout that flagged on your side, and I understand that impact. But aside from that, when we look at the other model lines, and we see recently some wealth deflation around the world. Do you see any impact in your order book already on these wealth deflation trends? And take the Macan aside, we should expect for Q4 then higher volumes versus Q3 or rather flattish? Then the second question relates to tariffs. I know it's a delicate question and probably hard for you to comment on that, but it was always said that the entire Volkswagen Group is basically looking for kind of tariff deal. So if Volkswagen adds capacity in the U.S., the entire group could get a kind of tariff exemption. Is that still under discussion? I know nothing has been announced. So therefore, you can't say it's in the books, of course. But is there still a possibility that you get a tariff exemption if Volkswagen expands capacity in the U.S.? That would be the second question. And the last one relates to FX rates because the dollar strengthened recently and maybe you can again mention what are your assumptions regarding currencies going forward? Is this strengthening of the dollar is also based of your assumption?

Jochen Breckner: Horst, thank you very much. I'll start with the third question on the FX exposure and the development of the U.S. dollar lately. You are right, we've seen the appreciation of the U.S. dollar to EUR 1.12 on some days, even below EUR 1.12, which is a positive development for our export-oriented business. But what is important to understand, if you look for the midterm, we've communicated that for 2030, 2031, we assumed a rather conservative approach on FX rates, especially on the U.S. dollar that it's quite early days to predict from the appreciation that we've seen today, what will happen in 2030, '31. That's one. And second, based on the interest rate differential that we have or difference that we have between the Eurozone and the U.S. dollar, even given the fact that we see this rather strong U.S. dollar during the last couple of days and few weeks, it's still not possible to hedge at these rates for our midterm business plan. So these short-term movements are beneficial for short-term performance to some extent, for the exposures that are not hedged yet. But for the midterm and the strategy, there is no change in what we've communicated on the Capital Markets Day with our midterm ambition of 10% to 15% return on sales for the midterm with the indication that from today's perspective, given this conservative approach on macroeconomic and especially FX assumptions, we expect to be in the lower bracket of that one. Now, on your second question, I do it in the inverse order. I hope that it's all right with you, Horst, and everyone on the call. It was about tariff and the potential tariff deal of the Volkswagen Group that was debated around the time when the tariffs were imposed and implemented on the U.S. side, where there were a lot of discussions. There were some comments from the Volkswagen Group. But as then, we do not have any knowledge that there is something under discussion that there will be something agreed. And in our financial ambition midterm and also in our financial guidance for the current year and the indication that we have given for the next year, we do not expect that something positive happens. We are basing our -- or putting our business model on the assumption that the 15% import tariffs remain in place. And your first question was on the volume movements. We expect Q4 to be rather flat. So there are some increases, some decreases in terms of model lines, but also in terms of the regions that we have, especially China remains a headwind. You know that we reduced the volume there substantially following our value-over-volume strategy, stabilizing the business. This is also something that we expect for 2027. The second reason next to the ICE Macan that we expect that 2027 will have a lower volume. What is important is the 911, we see a very strong demand on that icon of our business model, still very strong. We still have waiting times that are in line with our strategy, and this gives us really a robust order bank. Also the Cayenne Electric, especially in Europe, where we see a positive trend into electric mobility is received very well by our customer base.

Horst Schneider: Okay. Just one small follow-up. If the currency rate stays where it is at the moment, would that be a headwind or a tailwind in '27?

Jochen Breckner: That would be a small tailwind.

Björn Scheib: So next in the row, as said, is Daniel of Metzler, and he will be then followed by Henning of Barclays.

Unknown Analyst: I have one more question on '27. So the volumes are seasonally low in Q3, and you had above 8% underlying EBIT margin. With around 56,000 unit wholesale in Q3, would you say the Q3 capacity utilization is near to what you are expecting for '27? And the second question would be on the Cayenne production. You said that's still open. Is it a possibility or an option to produce Cayennes in the Audi factory in the U.S., if and when they have a factory in the U.S.? And lastly, expensed R&D, you mentioned it relatively low in Q3. If I understand right, you expect higher cost in Q4. Is that relatively low in Q3 or also up year-over-year? And could you remind us, is it also going to be a headwind in the P&L in '27?

Jochen Breckner: Daniel, thank you very much. Three questions. I'll start with the first one, 56,000 wholesale units in -- in the current quarter, and you were asking about a bit of orientation into 2027 and also what that means in terms of capacity utilization in our factories. Now 2027 will be lower in terms of volume than what we expect for the full year 2026. The sales that we've seen in the third quarter, if you do the, say, easy calculation and multiply that by 4, that could be something that would be even a bit higher than what we expect for next year given the effect on our portfolio given the effects that we expect in the various regions, especially in China. And these effects give us also a bit of a headwind in terms of capacity utilization and also in terms of fixed cost absorption. And therefore, also when it comes to profitability and EBIT, 2027 is expected to be lower than 2026. And in terms of our strategy for improving our business, again, this will be the transitional year and the trough when it comes to the plan that we have. Second question was on the question where the Cayenne could be produced. We also already debated in this call Leipzig versus Bratislava. I commented on that one. You were adding to the question whether it could be an option for us to produce the Cayenne in the United States in an Audi factory in case they invest into one. That's something that, first, I want to say that we do not comment on the plans of what Audi is doing. So whether there will be a factory or not is something that is not for a discussion in this call. But if we would assume that there would be a factory, we still believe that this would not turn out into a business case for Porsche to move our production into the United States because even in such a scenario, it could be synergetic to use a joint factory, it's still adding complexity to our business. We would still have engines and other parts that we would need to export into the United States. We would have double investments when it comes to suppliers, et cetera. And given our rather small volume and high complexity also in terms of individualization, that's something that from today's perspective, we do not take into consideration. And the last question you raised were on expensed R&D. We are heavily working on R&D efficiency. That's one of the major pillars of our cost improvement programs under our Strategy '35, Sportwagenschmiede '35. We are executing on that one. We are increasing the development speed, maybe not up to China speed, but we will have an R&D process, which is substantially faster and therefore, in terms of timing, shorter than what we have today. This will help to improve our R&D. 20% is the target that we have for specific car projects under R&D where we want to see the improvements in the midterm. But on the other hand, we are in the process of updating our portfolio. We are adding cars again, back to the portfolio like the ICE Macan. We are in the first phases of investigating into the additional SUV on top of the Cayenne and other cars need to have updates either technology -- on the technology side, on the platforms, but also in terms of what we offer to the customers. And therefore, it's a combination of improving R&D cost per vehicle project on the one side. But on the other side, we have a quite intense program to develop in our R&D center in Weissach. And therefore, we expect elevated levels in '26, also in '27 and the improvements will kick in thereafter.

Björn Scheib: And next in the row then will be Henning of Barclays.

Henning Cosman: Jochen, I think you just touched on it already, but I just wanted to bring up the topic of consensus again. We're talking about trough in 2027, getting into the bottom end of the 10% to 15% by 2030, '31, yet in the context of that consensus that you're seeing kind of populated into the Q3 print now. I think we're still at about EUR 2.2 billion EBIT, 6.5% margin next year. We're at 10% consensus margin for '29 already. So basically 2 years before your 2030, '31 language from the Capital Market Day. So I mean, I suppose we sort of get the trough language for '27, but it's not consistent with the current consensus. So I just wanted to ask if you might address this one more time now, just so we're all on the same page.

Jochen Breckner: Yes. Henning, it's not guidance time for 2027. We will have our forecast report in our press conference for the annual results 2026 in March 2027. And there, as always, we will give a precise guidance and a precise range of what to expect in 2027. So you need to understand that we cannot disclose specific numbers at this point in time, not only for formal and process reasons, but also because we are still in the process of doing the concrete budget for 2027 with all the effects that we need to bake in and with all the initiatives that we have to improve profitability and cut costs. But on a more, say, forecast basis, as I said, 2027 will have less volume than 2026. We will sit on a rather -- a rather unfavorable fixed cost absorption position. And we still have extraordinary effects, especially for the Zukunftspaket. So therefore, we expect that we will be below 2026. What the exact numbers will -- sorry, yes, below 2026. What the exact numbers will be for 2027, this is something that is still something we are working on and that we will communicate more precisely along the road, as I just said. Important, a midterm ambition, of course, also 3 weeks after the CMD is confirmed, that's a fixed plan. The initiatives are progressing very well. The first proof points are already achieved. I commented on the Mission S on the product strategy side, but also on the progress of the Zukunftspaket, when I come back to the first question Tim raised in this call. So no changes, no updates there. And between '27 and '30, '31, we will do it year-by-year and see how things move and how we get along with the improvements that we are targeting.

Henning Cosman: But -- and just to confirm on the one-offs, it's EUR 800 million to EUR 900 million this year down to around EUR 400 million next year. Yes, that's correct, right?

Jochen Breckner: That's correct. Yes.

Henning Cosman: And we're not expecting anything from improvement in the supplier compensation payments that's for a little bit later, right, when you get into the new EV platforms?

Jochen Breckner: That's correct. That's correct. The increased material costs that we have on our current EVs will stay until these EVs run out and the next cars will be launched.

Björn Scheib: Thank you very much, Jochen. With this, we -- I see -- okay, last in the row will be Philippe of Jefferies.

Philippe Houchois: I'm still not quite clear. Jochen, could you clarify again how much payment was made to Audi in the third quarter? We understand that you keep it kind of vague in the full year, but the Q3 amount, did you mention something?

Jochen Breckner: Philippe, you're asking about the Audi payments, which are a special...

Philippe Houchois: No, in Q3 specifically. I am a bit confused.

Jochen Breckner: Yes. Until Q3, we had first EUR 300 million. In Q3, it was 0. And we expect a substantial additional payments in Q4.

Philippe Houchois: Okay. There's nothing in Q3. That's what I want to hear.

Björn Scheib: Thank you, Jochen. Thank you. With this, finally, now we come to the end. Thank you to all of you joining this call, and thank you very much to all of you listening in to this Q3 conference call for analysts and investors of Porsche AG. Before we come to an end, we would love to point you to our upcoming capital market events. First of all, this is now the Q3 roadshow that will get us to London, to New York and to the West Coast. And most of you should have the invite in their inboxes for the Icons of Porsche community event that will be accompanied by a small capital markets update by the Porsche management team. If you are interested in Porsche, if you love the brand and if you want to see the passion of our customers, you need to come to Dubai and join us over there. And for the ones of those who have not seen the Mission S, this could be also a quite nice and great opportunity to take a closer look at that product. Thank you very much. Have a lovely day, and we stay in touch. Bye-bye.

Jochen Breckner: Bye-bye. Thanks, everyone.