WEBVTT 1 00:00:07.500 --> 00:00:10.400 Hello and welcome to this educational film which is 2 00:00:10.400 --> 00:00:13.800 devoted to a famous company, which was recently 3 00:00:13.800 --> 00:00:16.400 listed and whose story so 4 00:00:16.400 --> 00:00:19.800 eventful that it looks like a Greek tragedy 5 00:00:19.800 --> 00:00:22.800 Porsche at the very beginning Port 6 00:00:22.800 --> 00:00:25.700 is a person an outstanding technical 7 00:00:25.700 --> 00:00:28.300 engineer fairly. No Porsche. 8 00:00:28.300 --> 00:00:32.200 He was born in 1875 as 9 00:00:31.200 --> 00:00:34.700 a young person because a worker 10 00:00:34.700 --> 00:00:37.600 in a cap and his name is Bella Edgar which 11 00:00:37.600 --> 00:00:40.300 we later become Brown buffery very 12 00:00:40.300 --> 00:00:43.700 well known company is so remarkable and talented 13 00:00:43.700 --> 00:00:46.700 that he's going to be quite quickly promoted 14 00:00:46.700 --> 00:00:49.000 as manager of the test center. 15 00:00:49.800 --> 00:00:52.500 He's going to promote plenty of Innovations and 16 00:00:52.500 --> 00:00:55.400 thanks to this Innovations the cause which are 17 00:00:55.400 --> 00:00:58.500 produced by the company are going to win plenty of races. So 18 00:00:58.500 --> 00:00:59.700 very successful. 19 00:01:00.500 --> 00:01:03.500 Trying to leave the company to join also a 20 00:01:03.500 --> 00:01:07.100 very well-known company Daimler in 1923 21 00:01:06.100 --> 00:01:09.500 a few years later is a technical 22 00:01:09.500 --> 00:01:12.200 direct or technical manager of the group 23 00:01:12.200 --> 00:01:16.800 and he's a member of the executive board extremely successful. 24 00:01:17.700 --> 00:01:20.300 At that time it receives a title and he's 25 00:01:20.300 --> 00:01:24.700 going to be very proud of this title is Doctor enginir 26 00:01:23.700 --> 00:01:26.400 on a race cars out 27 00:01:26.400 --> 00:01:30.500 from the technical horser of Stuttgart. He's 28 00:01:29.500 --> 00:01:32.500 going to be so proud of this title 29 00:01:32.500 --> 00:01:35.500 that it's going to be the name of his company the name 30 00:01:35.500 --> 00:01:39.000 of the company, which is today listener stock market but 31 00:01:38.300 --> 00:01:42.000 there will be some problems some conflicts with support because 32 00:01:41.400 --> 00:01:44.200 he wants to design a car 33 00:01:44.200 --> 00:01:48.100 which is a small where it's car compared with Mercedes and 34 00:01:47.100 --> 00:01:50.300 so on so forth there is a conflict and 35 00:01:50.300 --> 00:01:53.600 he's going to resign he's going to leave the company and 36 00:01:53.600 --> 00:01:56.500 join another campaign in the 37 00:01:56.500 --> 00:02:00.600 automobile business. The name was a company is Shire automobile. 38 00:02:00.600 --> 00:02:03.400 He's going to join 1929 not 39 00:02:03.400 --> 00:02:06.000 the very best moment to move from one job to the other 40 00:02:06.500 --> 00:02:09.200 because there's a crisis in Wall Street and the consequence will 41 00:02:09.200 --> 00:02:12.200 be the Great Depression style automobile will not 42 00:02:12.200 --> 00:02:15.200 survive for that and it's going to disappear. He's going to 43 00:02:15.200 --> 00:02:17.500 stop from scratch again and in 19 44 00:02:17.600 --> 00:02:20.800 31 it creates his own company. It is 45 00:02:20.800 --> 00:02:24.400 an independent office which is going to design cars 46 00:02:23.400 --> 00:02:27.100 for OEM for car manufacturers and 47 00:02:26.100 --> 00:02:29.500 also car under his own name. 48 00:02:29.500 --> 00:02:32.100 He wanted to design a small car you remember 49 00:02:32.100 --> 00:02:36.500 it was a cause of his resignation from diver. Adolf 50 00:02:35.500 --> 00:02:38.900 Hitler is going to give him the opportunity because 51 00:02:38.900 --> 00:02:42.100 he wants a small car. He wants 52 00:02:41.100 --> 00:02:44.800 a car for the people of fox Fagen 53 00:02:44.800 --> 00:02:47.200 in order to be Tech what had been done 54 00:02:47.200 --> 00:02:50.500 in Italian the fact five hundred. 55 00:02:50.500 --> 00:02:53.700 So it's going to create Beetle the 56 00:02:53.700 --> 00:02:57.600 folks wagon, which was born in 1935 57 00:02:56.600 --> 00:02:59.800 and it's going to be the tremendous success 58 00:02:59.800 --> 00:03:02.600 which you know the beetle we start it's all 59 00:03:02.600 --> 00:03:05.300 career. The wind is a terrible turbulence, which 60 00:03:05.300 --> 00:03:08.400 were created by World War 2. The company is going 61 00:03:08.400 --> 00:03:11.800 to interrupt it's activity at the end of the world and he's 62 00:03:11.800 --> 00:03:14.300 going to start again. Another Porsche name 63 00:03:14.300 --> 00:03:17.000 created by fairy portion is 64 00:03:17.800 --> 00:03:20.200 Fatten on Anton Ernest 65 00:03:20.200 --> 00:03:24.000 in 1947 the new Porsche IS 66 00:03:23.700 --> 00:03:26.500 designed and there will be now standing 67 00:03:26.500 --> 00:03:30.300 cars name is a three five six plus 68 00:03:29.300 --> 00:03:32.500 plenty of royalties coming from 69 00:03:32.500 --> 00:03:35.900 the Beatles Because the beetle is experiencing fantastic 70 00:03:35.900 --> 00:03:38.800 success and the patterns of The Beatles are 71 00:03:38.800 --> 00:03:41.200 owned by Porsche. So they are 72 00:03:41.200 --> 00:03:44.500 going to receive plenty of royalties to finance Innovation and 73 00:03:44.500 --> 00:03:47.500 growth at Porsche. Now, is it Legend is it 74 00:03:47.500 --> 00:03:50.800 reality? Who knows but it seems that fat no 75 00:03:50.800 --> 00:03:54.300 Porsche looking at the three 56 is 76 00:03:53.300 --> 00:03:56.200 so emotion over one 77 00:03:56.200 --> 00:03:59.100 by emotions that he will have a stroke and later on 78 00:03:59.100 --> 00:04:02.400 early 1951 is going to pass away now. 79 00:04:02.400 --> 00:04:05.500 I will now standing in engineer, but it 80 00:04:05.500 --> 00:04:08.900 was an outstanding Technical and commercial success as 81 00:04:08.900 --> 00:04:11.300 well. Not only the car business but also in 82 00:04:11.300 --> 00:04:14.400 the ironics the first hybrid car 83 00:04:14.400 --> 00:04:17.600 combining terrible on the electric and 84 00:04:17.900 --> 00:04:20.700 That it's so important was created 85 00:04:20.700 --> 00:04:23.800 by 39 Porsche. The name was a loner 86 00:04:23.800 --> 00:04:27.300 Porsche 1901. He 87 00:04:26.300 --> 00:04:29.900 also created an electric car a 88 00:04:29.900 --> 00:04:33.200 full electric car at that time when it 89 00:04:32.200 --> 00:04:35.300 was working for them there. He created 90 00:04:35.300 --> 00:04:38.500 plenty of new designs for Mercedes and 91 00:04:38.500 --> 00:04:41.700 Spence and Porsche as a company, but his 92 00:04:41.700 --> 00:04:44.900 son Ferry created the nine eleven 93 00:04:44.900 --> 00:04:47.300 the Fantastic Porsche car. 94 00:04:47.300 --> 00:04:50.700 Now, this is 911 is so important in the history of 95 00:04:50.700 --> 00:04:53.400 the company. That's it symbol. The 96 00:04:53.400 --> 00:04:56.800 teacher of Porsche on the stock market is p 97 00:04:56.800 --> 00:04:59.200 which stands for Porsche 911 98 00:04:59.900 --> 00:05:02.800 How many shares at ports nine 99 00:05:02.800 --> 00:05:05.600 hundred and eleven million shares 100 00:05:05.600 --> 00:05:09.700 divided into two parts 455.5 million 101 00:05:09.700 --> 00:05:13.800 all the nearest shares 455.5 million 102 00:05:13.800 --> 00:05:16.800 preferred shares. Now Porsche is 103 00:05:16.800 --> 00:05:19.900 a Founder that porschees a family in 104 00:05:19.900 --> 00:05:23.500 1903 fairly. No Porsche married, alloysia 105 00:05:22.500 --> 00:05:25.200 guys. They had a daughter 106 00:05:25.200 --> 00:05:28.800 in 1904 Louis and Louis married and 107 00:05:28.800 --> 00:05:31.400 Tom piersch. This is why you 108 00:05:31.400 --> 00:05:34.700 have a pH family and a Porsche family today 109 00:05:34.700 --> 00:05:38.000 cousins then fairly. Now 110 00:05:37.400 --> 00:05:40.600 Anton Ernest was born 111 00:05:40.600 --> 00:05:43.400 in 1909 and the nickname is 112 00:05:43.400 --> 00:05:46.200 very Porsche. And after World War 113 00:05:46.200 --> 00:05:50.900 2 Lewis is Volkswagen fairy 114 00:05:49.900 --> 00:05:52.500 is Porsche. There 115 00:05:52.500 --> 00:05:55.700 are two branches for the family. There are two causes that 116 00:05:55.700 --> 00:05:59.200 their relationship inside. The family is a 117 00:05:58.200 --> 00:05:59.800 great. 118 00:05:59.900 --> 00:06:02.800 Tragedy is here. That's right. The 119 00:06:02.800 --> 00:06:05.700 education is completely different. The lifestyle is 120 00:06:05.700 --> 00:06:08.600 completely different. Some are a little bit short 121 00:06:08.600 --> 00:06:11.800 of some are a little bit straight and rigorous 122 00:06:11.800 --> 00:06:15.100 and they just hate each other. Now the 123 00:06:14.100 --> 00:06:17.600 conflict is going to become paroxystic in 124 00:06:17.600 --> 00:06:20.300 2005 because Porsche will 125 00:06:20.300 --> 00:06:24.100 try to take over Volkswagen this year Porsche 126 00:06:23.100 --> 00:06:26.800 seven billion Euro turnover sales 127 00:06:26.800 --> 00:06:29.700 unravevenues buys 20% of 128 00:06:29.700 --> 00:06:32.400 Volkswagen shares and folks Fargo at 129 00:06:32.400 --> 00:06:35.200 that time. It's one hour five billion years turn over. 130 00:06:35.900 --> 00:06:39.200 to protect the company against potential hostile 131 00:06:38.200 --> 00:06:39.900 takeover, which 132 00:06:40.300 --> 00:06:44.000 is absolutely not founded because when you look at the equity 133 00:06:43.900 --> 00:06:46.200 portfolio and the shareholders of 134 00:06:46.200 --> 00:06:50.300 Volkswagen, you have a land of lower Saxony 135 00:06:49.300 --> 00:06:52.400 which controls with voting right 136 00:06:52.400 --> 00:06:55.200 time. So it's just to take the control and now 137 00:06:55.200 --> 00:06:57.100 in generate 2007. 138 00:06:58.700 --> 00:07:01.600 Porsche owns more than 30% of the 139 00:07:01.600 --> 00:07:04.400 company and the capital is extremely successful at 140 00:07:04.400 --> 00:07:07.900 that time. The profit is your are about six 141 00:07:07.900 --> 00:07:11.100 billion euros. So you understand that Porsche is 142 00:07:10.100 --> 00:07:13.900 financing the control of Volkswagen. 143 00:07:13.900 --> 00:07:16.600 We see it's old internally generated funds 144 00:07:16.600 --> 00:07:19.100 and profitability financial performance. 145 00:07:20.500 --> 00:07:23.600 Later on September 2008. They go 146 00:07:23.600 --> 00:07:26.000 beyond 35% But if you 147 00:07:26.300 --> 00:07:29.900 go beyond this level, you have to launch a takeover. You 148 00:07:29.900 --> 00:07:32.300 have to make an offer to the share orders to sell their 149 00:07:32.300 --> 00:07:32.700 shares. 150 00:07:33.200 --> 00:07:36.300 The offer is not going to be extremely generous but in 151 00:07:36.300 --> 00:07:39.600 January 2009 now Porsche has 152 00:07:39.600 --> 00:07:42.100 to control folks wagon with a little 153 00:07:42.100 --> 00:07:44.500 bit more than 50% of the shares. 154 00:07:45.300 --> 00:07:48.300 But 2000 is a difficult period because it 155 00:07:48.300 --> 00:07:51.300 is the explosion of the subprime crisis the stock market 156 00:07:51.300 --> 00:07:54.800 first macroeconomics then and what's 157 00:07:54.800 --> 00:07:57.200 going to happen Porsche has plenty of 158 00:07:57.200 --> 00:08:00.900 that in the balance sheet because the profit generated 159 00:08:00.900 --> 00:08:03.500 by the company was not enough to finance 160 00:08:03.500 --> 00:08:06.600 all these shared purchases. So they 161 00:08:06.600 --> 00:08:09.800 had to raise some debt. And in the meantime, the revenues 162 00:08:09.800 --> 00:08:12.900 are says Jared by Porsche are 163 00:08:12.900 --> 00:08:15.200 down for very simple reason. There is 164 00:08:15.200 --> 00:08:18.200 a crisis and nobody buys cars anymore. That is 9 165 00:08:18.200 --> 00:08:22.300 billion. Euros. That's too much the company's 166 00:08:21.300 --> 00:08:25.000 very much in the bills of Crisis and Volkswagen 167 00:08:24.200 --> 00:08:27.500 is going to receive the political support of 168 00:08:27.500 --> 00:08:29.300 the land of lower Saxony. 169 00:08:29.900 --> 00:08:32.700 And also German government at large 170 00:08:32.700 --> 00:08:35.700 so that they can counter attack and 171 00:08:35.700 --> 00:08:38.300 Volkswagen is going to try to take a control 172 00:08:38.300 --> 00:08:41.700 of Porsche which is going to be achieved in July 173 00:08:41.700 --> 00:08:44.300 2009. Now, it's no more 174 00:08:44.300 --> 00:08:47.600 Porsche who has a majority of Volkswagen. It's 175 00:08:47.600 --> 00:08:50.600 Volkswagen which controls Porsche if you 176 00:08:50.600 --> 00:08:54.300 look at the shareholders portfolio today Porsche 177 00:08:53.300 --> 00:08:57.600 automobile holding SE holds 178 00:08:56.600 --> 00:08:59.500 31.4% of the shed. 179 00:09:00.200 --> 00:09:03.300 But as a predominantly have voting rights 180 00:09:03.300 --> 00:09:06.400 shares they have more than 50% of 181 00:09:06.400 --> 00:09:10.200 the voting right other control some foreign 182 00:09:09.200 --> 00:09:13.800 institutional investors 27% Qatar. 183 00:09:14.300 --> 00:09:17.400 10.5% the state the land 184 00:09:17.400 --> 00:09:20.800 of lower Saxony 11.8% and 185 00:09:20.800 --> 00:09:23.400 some other institutional private investor. 186 00:09:23.400 --> 00:09:26.100 So what is funny to observe is that you have the 187 00:09:26.100 --> 00:09:30.200 all the his name is Portia which controls 188 00:09:29.200 --> 00:09:33.000 first wagon and Volkswagen which 189 00:09:32.600 --> 00:09:35.400 owed doctor in here on 190 00:09:35.400 --> 00:09:38.800 his cows are fair, you know Bosch action gazelle shaft. 191 00:09:39.400 --> 00:09:42.700 Which itself owns a brand Porsche which 192 00:09:42.700 --> 00:09:45.900 is so unknown before moving to the IPO itself. 193 00:09:45.900 --> 00:09:48.500 I would like to have a few words on 194 00:09:48.500 --> 00:09:51.600 performance and communication at Volkswagen 195 00:09:51.600 --> 00:09:54.400 Consolidated group the company in general 196 00:09:54.400 --> 00:09:57.700 report provides plenty of information about its 197 00:09:57.700 --> 00:10:00.100 financial performance starting with a 198 00:10:00.100 --> 00:10:02.500 famous weighted average cost of capital. 199 00:10:03.400 --> 00:10:06.600 How you calculate that cost of equity cost of 200 00:10:06.600 --> 00:10:09.500 that share faculty share of that cost of 201 00:10:09.500 --> 00:10:12.300 Faculty Government Bond rate, which is close to 202 00:10:12.300 --> 00:10:15.700 zero in 2020 and in 2021, and 203 00:10:15.700 --> 00:10:18.100 then you add an equity risk premium, which 204 00:10:18.100 --> 00:10:22.300 is the market which premium 7.5% multiplied by 205 00:10:22.300 --> 00:10:25.000 the systematic race coefficient, which is 206 00:10:25.300 --> 00:10:28.500 named the beta which is very much about the sensitivity of 207 00:10:28.500 --> 00:10:31.200 the values of company to what happens to 208 00:10:31.200 --> 00:10:32.800 macro economic conditions. 209 00:10:33.500 --> 00:10:36.900 When the bedtime is more than one there is overreaction and 210 00:10:36.900 --> 00:10:39.700 a reaction if it is less than one in this 211 00:10:39.700 --> 00:10:43.400 case. It's 1.16 in 2021. 212 00:10:42.400 --> 00:10:45.300 What does it mean it means that you're 213 00:10:45.300 --> 00:10:49.800 going to add to the government bone rate 7.5% multiplied 214 00:10:48.800 --> 00:10:51.500 by 1.16. So 215 00:10:51.500 --> 00:10:54.000 beyond the 7.5% you have a 216 00:10:54.100 --> 00:10:57.100 kind of additional risk premium, which is 217 00:10:57.100 --> 00:11:00.500 due to the company. It's leverage. It's business 218 00:11:00.500 --> 00:11:03.600 operations and the 1.2% on 219 00:11:03.600 --> 00:11:07.100 top of the 7.5. Is it Factor 0.16 220 00:11:06.100 --> 00:11:09.500 on top of one multiplied by 221 00:11:09.500 --> 00:11:13.700 7.5% It's 1.2% Then 222 00:11:13.700 --> 00:11:16.500 your other cause of equity capital and you 223 00:11:16.500 --> 00:11:19.400 have the cost of that which is interest rate after tax because 224 00:11:19.400 --> 00:11:22.100 the interest expense is as you know, 225 00:11:22.100 --> 00:11:23.900 deductible from the taxable income. 226 00:11:24.700 --> 00:11:27.200 What else do you need share for equity share 227 00:11:27.200 --> 00:11:31.200 of that share faculty that's important to know to search 228 00:11:30.200 --> 00:11:33.600 share of that one, sir. We'll use 229 00:11:33.600 --> 00:11:36.100 this figures a little bit later at the 230 00:11:36.100 --> 00:11:39.900 end of the day the way that average cost of capital in 2020 231 00:11:39.900 --> 00:11:42.100 or 2021 World a bit more 232 00:11:42.100 --> 00:11:46.100 than 6% 6.2% in 2021. 233 00:11:45.100 --> 00:11:48.600 Now let me propose you some comments about 234 00:11:48.600 --> 00:11:51.300 the calculations of what the formula is. 235 00:11:51.300 --> 00:11:55.000 Okay, waited average cost of capital very often. 236 00:11:54.200 --> 00:11:57.600 The problem is in the parameters themselves. 237 00:11:58.400 --> 00:12:01.300 Before we get to the parameters, there's something quite 238 00:12:01.300 --> 00:12:05.100 interesting to observe the company names specific 239 00:12:04.100 --> 00:12:07.500 risk. What is named by 240 00:12:07.500 --> 00:12:11.000 corporate? Final Theory systematic you remember 241 00:12:10.400 --> 00:12:13.500 that specific is ideal syncretic. 242 00:12:13.500 --> 00:12:17.300 It's a risk which disappears through diversification when 243 00:12:16.300 --> 00:12:19.800 you build a portfolio of assets the 244 00:12:19.800 --> 00:12:23.000 one which remains is a systematic risk again 245 00:12:22.600 --> 00:12:25.400 sensitivity to macroeconomic conditions. 246 00:12:25.400 --> 00:12:28.900 Okay. Now, what about the parameters? There's 247 00:12:28.900 --> 00:12:31.800 a very important one which is a beta and 248 00:12:31.800 --> 00:12:34.400 the company says for the automotive division of 249 00:12:34.400 --> 00:12:37.400 the auto body division. It's 1.60. But 250 00:12:37.400 --> 00:12:40.700 when you look at different websites to just Financial 251 00:12:40.700 --> 00:12:43.400 Times or Yahoo! Finance, how much do 252 00:12:43.400 --> 00:12:45.200 you get about 1.4? 253 00:12:46.600 --> 00:12:50.000 A better of a group is awaited average 254 00:12:49.600 --> 00:12:52.700 beta of the Strategic business 255 00:12:52.700 --> 00:12:54.000 units of the companies. 256 00:12:54.600 --> 00:12:58.200 We've got off sbus. Do you have at Volkswagen you 257 00:12:57.200 --> 00:13:00.400 have the automotive business and you're also a 258 00:13:00.400 --> 00:13:03.800 very big one which is financial services financial services. It's 259 00:13:03.800 --> 00:13:07.000 about specialized customer financing for 260 00:13:06.500 --> 00:13:10.300 this kind of industry is a better speaking a 261 00:13:09.300 --> 00:13:12.400 little bit more than one not much 262 00:13:12.400 --> 00:13:15.500 more than one. So if you combine the car business 263 00:13:15.500 --> 00:13:18.400 and the financial services in the street, you have 264 00:13:18.400 --> 00:13:21.200 a better which is a bit more than what a beta 265 00:13:21.200 --> 00:13:24.600 which is supposedly when you look at comparable companies 266 00:13:24.600 --> 00:13:28.200 as they say, yeah or report 1.60 and 267 00:13:27.200 --> 00:13:30.300 the average of 1.16 and one 268 00:13:30.300 --> 00:13:33.800 should be one point four which of course doesn't work. Of 269 00:13:33.800 --> 00:13:36.400 course, there's a drug business or so inside but 270 00:13:36.400 --> 00:13:39.200 it does not count for the difference between these two. 271 00:13:39.200 --> 00:13:42.900 So you understand that it's a little bit strange. This 272 00:13:42.900 --> 00:13:45.700 is calculation. Someone very interesting information 273 00:13:45.700 --> 00:13:48.100 provided by the government. See how many profit 274 00:13:48.800 --> 00:13:52.100 You remember the economic value added return 275 00:13:51.100 --> 00:13:55.000 on Capital? Let's cost of capital for the 276 00:13:54.200 --> 00:13:58.100 automotive division. What do you do you calculate the operating 277 00:13:57.100 --> 00:14:00.400 income before or after taxes? 278 00:14:00.400 --> 00:14:05.100 This case it provide after tax, which is 11.70 279 00:14:03.100 --> 00:14:07.000 something billion and you 280 00:14:06.100 --> 00:14:09.300 divide that by the average invested capital. 281 00:14:10.300 --> 00:14:13.600 Non camera assets working capital requirement on a 282 00:14:13.600 --> 00:14:16.400 few additional 6, but when you divide the first figure about 283 00:14:16.400 --> 00:14:19.800 the second one, which is when I have 13 billion you get 284 00:14:19.800 --> 00:14:22.300 a return on Capital after tax, which is 285 00:14:22.300 --> 00:14:23.300 10.5% 286 00:14:24.300 --> 00:14:27.500 And you remember the walk is 6.2. So the 287 00:14:27.500 --> 00:14:30.500 company is profitable the performance is positive 288 00:14:30.500 --> 00:14:34.000 and the economic profit in percentage terms. 289 00:14:33.600 --> 00:14:37.100 He's returned Capital. Let's go start capitalist 10.4 290 00:14:36.100 --> 00:14:40.400 minus 6.2. So it's 4.2% 291 00:14:39.400 --> 00:14:43.000 the companies why profitable 292 00:14:42.600 --> 00:14:45.400 in a business in an industry, which is 293 00:14:45.400 --> 00:14:46.800 quite tough industry. 294 00:14:47.900 --> 00:14:50.600 Now when you taxi operating profit 295 00:14:50.600 --> 00:14:53.200 after tax again and you deduct from 296 00:14:53.200 --> 00:14:57.100 that the total cost of financing, which is invested Capital multiplied by 297 00:14:56.100 --> 00:14:59.300 the weighted average cost of capital. 298 00:15:00.200 --> 00:15:04.000 You get no pet what is generated by operations Minus 299 00:15:03.200 --> 00:15:06.100 cost of financing, which is promised to 300 00:15:06.100 --> 00:15:08.500 the investors and you get the economic profit. 301 00:15:09.300 --> 00:15:12.800 Out otherwise also to take the rose day after tax minus or 302 00:15:12.800 --> 00:15:15.600 walk which you multiply by the invested capital. And 303 00:15:15.600 --> 00:15:19.700 in this case you have an economic profit, which is 4.7 billion 304 00:15:19.700 --> 00:15:23.000 Euro. So the company is communicating any 305 00:15:22.500 --> 00:15:25.200 report that the automotive division is 306 00:15:25.200 --> 00:15:28.700 extremely performing now. We need to calculate a 307 00:15:28.700 --> 00:15:29.600 little bit further. 308 00:15:30.500 --> 00:15:34.100 When we calculated no walk. We say debt 309 00:15:33.100 --> 00:15:36.200 Equity cost of debt cost of 310 00:15:36.200 --> 00:15:39.400 equity and that is supposed to be 33% of 311 00:15:39.400 --> 00:15:43.100 the invested Capital. So it takes invested Capital One hundred 312 00:15:42.100 --> 00:15:45.500 and thirteen billion you multiply by one sir, 313 00:15:45.500 --> 00:15:48.200 and you get 38 billion. So the death of 314 00:15:48.200 --> 00:15:50.200 the automotive business is 38 billion. 315 00:15:51.200 --> 00:15:55.000 Now when you look at the Consolidated balance sheet of Volkswagen are 316 00:15:54.100 --> 00:15:57.500 gay you have a financial debt 317 00:15:57.500 --> 00:16:00.800 net of cash which represents and 48 318 00:16:00.800 --> 00:16:02.700 billion, which is quite a lot. 319 00:16:03.500 --> 00:16:07.100 Now 38 billion of that is Automotive business. 320 00:16:06.100 --> 00:16:09.600 The rest is 148 minus 321 00:16:09.600 --> 00:16:12.400 38, which is 110 million and why 322 00:16:12.400 --> 00:16:15.700 is a gearing very high why is indepness very 323 00:16:15.700 --> 00:16:19.000 high because there's a financial services business. Now 324 00:16:18.300 --> 00:16:21.300 when you look at the assets side of the balance, 325 00:16:21.300 --> 00:16:24.400 it was a financial receivable as long term and short term 326 00:16:24.400 --> 00:16:27.800 which in total represent why had 140 327 00:16:27.800 --> 00:16:30.400 billion euros. This is finance by debt 328 00:16:30.400 --> 00:16:33.800 and the equity of the financial services activity. 329 00:16:33.800 --> 00:16:36.200 If you take us an assumption that the 330 00:16:36.200 --> 00:16:39.000 one-handed and 10 billion is fully allocated to the 331 00:16:39.700 --> 00:16:42.000 financing of the receivables. Then you have 332 00:16:42.600 --> 00:16:45.300 one hand 140, which is 100 and 10 dead plus 30 333 00:16:45.300 --> 00:16:48.400 Equity of the financial services activity. 334 00:16:49.600 --> 00:16:52.200 Is it consistent with what is communicated by the 335 00:16:52.200 --> 00:16:55.400 company? Yes, because the company says a return 336 00:16:55.400 --> 00:16:58.300 on Equity before tax of the financial 337 00:16:58.300 --> 00:17:00.700 services business is about 17% 338 00:17:01.500 --> 00:17:04.200 Now they will also provide the profit before tax, which 339 00:17:04.200 --> 00:17:04.700 is six. 340 00:17:05.400 --> 00:17:08.500 To the I6 by 30 you get a 20% 341 00:17:08.500 --> 00:17:11.100 calculation which is quite close to 342 00:17:11.100 --> 00:17:14.400 the success. You should divide 6 by 30 you get 343 00:17:14.400 --> 00:17:17.400 20% before tax return equity for 344 00:17:17.400 --> 00:17:20.100 the financial services division. She's quite 345 00:17:20.100 --> 00:17:23.100 consistent. So this calculations seem to be a little bit 346 00:17:23.100 --> 00:17:23.500 reasonable. 347 00:17:24.400 --> 00:17:27.000 Now, let's go back to exit the equity which is 348 00:17:27.800 --> 00:17:31.200 allocated to the automotive division is 76 billion 349 00:17:31.200 --> 00:17:33.800 how you calculate that you take the same invested capital? 350 00:17:34.700 --> 00:17:37.400 And you multiply that by two thirds because you remember 351 00:17:37.400 --> 00:17:41.100 that the one hybrid uncertainty billion of finals Equity 352 00:17:40.100 --> 00:17:44.100 to search that one, sir, seven six 353 00:17:43.100 --> 00:17:46.800 billion. Now if you mix a song of the equity which 354 00:17:46.800 --> 00:17:49.900 is allocated to the automotive 76 and 355 00:17:49.900 --> 00:17:52.300 the equity which is allocated to the finals or 356 00:17:52.300 --> 00:17:55.600 Services business. So do we just calculate we 357 00:17:55.600 --> 00:17:57.000 get to one house six billion? 358 00:17:57.800 --> 00:18:00.700 The new group equities not 1006 billion. 359 00:18:00.700 --> 00:18:03.900 It is 100 and 46 billion, 360 00:18:03.900 --> 00:18:06.100 which is quite a lot. 361 00:18:06.900 --> 00:18:09.500 At the end of the day you understand that there 362 00:18:09.500 --> 00:18:13.200 are 40 billion euros which are missing in the calculation. And 363 00:18:12.200 --> 00:18:15.100 the question is where does it 364 00:18:15.100 --> 00:18:15.500 come from? 365 00:18:16.800 --> 00:18:19.300 You don't have the answer. So you understand that the company 366 00:18:19.300 --> 00:18:22.700 is communicating quite a lot on its Financial metrics, but 367 00:18:22.700 --> 00:18:25.600 sometimes it's a little bit difficult to understand what's 368 00:18:25.600 --> 00:18:28.500 behind the figures and this might be an 369 00:18:28.500 --> 00:18:28.600 issue. 370 00:18:29.500 --> 00:18:32.800 This issue can be reflected in the 371 00:18:32.800 --> 00:18:36.000 financial and stock market metrics of 372 00:18:35.100 --> 00:18:36.200 the company. 373 00:18:37.400 --> 00:18:40.800 You remember that the automotive business is jury duty 374 00:18:40.800 --> 00:18:44.500 and economic profit beyond the Walk of 4.7 375 00:18:43.500 --> 00:18:46.700 billion company the 376 00:18:46.700 --> 00:18:49.400 business the division is performing the 377 00:18:49.400 --> 00:18:52.400 financial services business is generating a return 378 00:18:52.400 --> 00:18:56.700 equity which before taxes about 17% it 379 00:18:55.700 --> 00:18:58.500 certainly much more than the expected 380 00:18:58.500 --> 00:18:59.500 return on equity. 381 00:19:00.300 --> 00:19:03.700 And so at the end of the day, you have two men businesses which are 382 00:19:03.700 --> 00:19:06.400 both of that very profitable. 383 00:19:07.400 --> 00:19:10.300 Performance is a source of value. So if you are 384 00:19:10.300 --> 00:19:13.200 performing very well, you should create value. How do 385 00:19:13.200 --> 00:19:16.600 you measure the value which is created or destroyed by a 386 00:19:16.600 --> 00:19:19.400 company. It's quite simple. You look at 387 00:19:19.400 --> 00:19:22.800 the stock market price. The 388 00:19:22.800 --> 00:19:25.400 stock market gives you the value of equity 389 00:19:25.400 --> 00:19:28.000 and the market capitalization. If you 390 00:19:28.300 --> 00:19:31.400 add to that that you get the entire price value and what 391 00:19:31.400 --> 00:19:34.700 is interesting is to compare the stock market value and 392 00:19:34.700 --> 00:19:35.700 the Book value. 393 00:19:36.900 --> 00:19:39.900 And at the end of the day the company's communicating 394 00:19:39.900 --> 00:19:42.800 not only on its Financial Matrix, but 395 00:19:42.800 --> 00:19:45.900 is communicating on the fact that the market 396 00:19:45.900 --> 00:19:48.100 value of equity represents. If you look at 397 00:19:48.100 --> 00:19:51.300 the last five years between 0.6 and 398 00:19:51.300 --> 00:19:54.700 0.8 between 60 and 80% of the 399 00:19:54.700 --> 00:19:55.400 book equity. 400 00:19:56.500 --> 00:19:59.400 It's a values a company is less and what shows in the 401 00:19:59.400 --> 00:20:02.600 book it means that it's very distraction. So it's permanent and 402 00:20:02.600 --> 00:20:05.600 significant value destruction. When in 403 00:20:05.600 --> 00:20:08.600 the meantime the performance looks positive you say that 404 00:20:08.600 --> 00:20:11.500 there's a kind of creativity. Yeah. Those are 405 00:20:11.500 --> 00:20:14.900 company is as it is communicated performing 406 00:20:14.900 --> 00:20:17.600 at the much higher rate. That was a 407 00:20:17.600 --> 00:20:18.700 stock market is suggesting. 408 00:20:19.500 --> 00:20:22.600 It might come from communication and governance 409 00:20:22.600 --> 00:20:25.800 will discuss later now. Let's start in 410 00:20:25.800 --> 00:20:28.300 the world of the stock market metrics. 411 00:20:28.800 --> 00:20:31.300 You remember there are some multiples which are quite well 412 00:20:31.300 --> 00:20:34.500 known price earning stock price divided by 413 00:20:34.500 --> 00:20:35.500 earnings per share. 414 00:20:36.100 --> 00:20:39.700 The stock price of the company represents five times the 415 00:20:39.700 --> 00:20:43.200 earnings per share Enterprise Value market capitalization 416 00:20:42.200 --> 00:20:45.400 plus net Financial Tech the Enterprise 417 00:20:45.400 --> 00:20:48.600 Value represents seven years seven 418 00:20:48.600 --> 00:20:51.600 times the earnings before interest access 419 00:20:51.600 --> 00:20:54.400 to Precision advertisation to cash operating profit. 420 00:20:54.400 --> 00:20:57.100 They're good at the end of the day. It does not 421 00:20:57.100 --> 00:21:00.500 show a very big confidence in the performance and in 422 00:21:00.500 --> 00:21:03.600 the ability of the company to grow but the financial 423 00:21:03.600 --> 00:21:06.900 structure itself is quite heavy 424 00:21:06.900 --> 00:21:09.900 because net Financial net 425 00:21:09.900 --> 00:21:13.700 represents four times those there 426 00:21:13.700 --> 00:21:17.200 is a high gearing High financial leverage the 427 00:21:16.200 --> 00:21:20.200 four months according to the multiples. He's 428 00:21:19.200 --> 00:21:23.100 quite average and gross 429 00:21:22.100 --> 00:21:26.200 expectations are not very high. So you 430 00:21:25.200 --> 00:21:28.700 understand the markets will be gloomy about but 431 00:21:28.700 --> 00:21:31.800 slogan our game now after we discuss all 432 00:21:31.800 --> 00:21:34.300 let's go back to the transaction itself on the 433 00:21:34.300 --> 00:21:36.000 listing of Porsche you remember 434 00:21:36.300 --> 00:21:36.700 what I say 435 00:21:37.200 --> 00:21:40.600 There are nine hundred and eleven million shares 436 00:21:40.600 --> 00:21:43.400 and Porsche divided split into 437 00:21:43.400 --> 00:21:46.300 two halves preferred stock. 438 00:21:46.300 --> 00:21:50.200 No voting right 455.5 million. 439 00:21:51.100 --> 00:21:53.600 And ordinary shares with voting rights. 440 00:21:54.300 --> 00:21:57.400 As preferred shares the preference shares. 441 00:21:57.400 --> 00:22:00.300 They don't have the voting right are they have 442 00:22:00.300 --> 00:22:03.000 a higher dividend? So they receive a dividend which is 443 00:22:03.100 --> 00:22:06.900 a dividend received by the ordinary ratio orders plus zero point 444 00:22:06.900 --> 00:22:09.500 zero one Euros, which is ex 445 00:22:09.500 --> 00:22:12.300 religion. What's going to happen when the capital 446 00:22:12.300 --> 00:22:16.000 is listed 25% of the preferred Shares 447 00:22:15.600 --> 00:22:18.700 are going to be listed including the 448 00:22:18.700 --> 00:22:21.200 offer allotment though. What does 449 00:22:21.200 --> 00:22:24.500 it means that one half percent of 14 rights 450 00:22:24.500 --> 00:22:27.500 of Porsche are still according to 451 00:22:27.500 --> 00:22:30.500 this arrangement in the Volkswagen at 452 00:22:30.500 --> 00:22:34.600 gay company, but before the ipu Volkswagen is 453 00:22:33.600 --> 00:22:36.900 going to sell 25% of 454 00:22:36.900 --> 00:22:39.700 you all the generation including voting 455 00:22:39.700 --> 00:22:43.100 right plus one so that you have the 456 00:22:42.100 --> 00:22:45.300 blocking minority in an 457 00:22:45.300 --> 00:22:48.400 extraordinary Ratio or a meeting and it's going to sell these yes 458 00:22:48.400 --> 00:22:51.500 to the Monarch happening Porsche s e 459 00:22:51.500 --> 00:22:54.100 the Family holding at which 460 00:22:54.800 --> 00:22:57.800 The price which is going to be offered for the preferred 461 00:22:57.800 --> 00:23:00.600 shares plus the premium which represents 462 00:23:00.600 --> 00:23:03.300 the fact that the ordinary shares the other 4G right 463 00:23:03.300 --> 00:23:06.400 as opposed to the preferred yet. So premium is 464 00:23:06.400 --> 00:23:09.500 7.5% So this is 465 00:23:09.500 --> 00:23:11.600 a value of the voting right? 466 00:23:12.400 --> 00:23:15.900 Which is exceptionally low Corporate Finance 467 00:23:15.900 --> 00:23:19.000 academics have extensively published 468 00:23:18.800 --> 00:23:21.300 on the difference in the value 469 00:23:21.300 --> 00:23:24.200 of all generations with voting rights and 470 00:23:24.200 --> 00:23:27.300 prefer chairs or preferences without voting. Right 471 00:23:27.300 --> 00:23:30.400 and the difference is value is very often 20 472 00:23:30.400 --> 00:23:34.100 or 30 sometimes 50% not 473 00:23:33.100 --> 00:23:36.600 exactly seven point five percent. So 474 00:23:36.600 --> 00:23:39.100 the price which was asked to 475 00:23:39.100 --> 00:23:42.800 Porsche to pray for the voting. What is quite 476 00:23:42.800 --> 00:23:45.800 low. How much is going to be cashed in Bible. 477 00:23:45.800 --> 00:23:48.400 The offer price was a preferences 478 00:23:48.400 --> 00:23:51.600 going to be 82.5 Euros per 479 00:23:51.600 --> 00:23:54.200 share you add 7.5% to 480 00:23:54.200 --> 00:23:57.800 that and you are the price paid by portishe to buy 481 00:23:57.800 --> 00:24:00.400 the port shares sold by 482 00:24:00.400 --> 00:24:04.600 those bug and are gay and you get 88.69 483 00:24:03.600 --> 00:24:06.500 Euros per share your multiplied, 484 00:24:06.500 --> 00:24:10.100 but the number of shares and it is about 10.1 billion 485 00:24:09.100 --> 00:24:12.000 euros cash in Bible. 486 00:24:12.300 --> 00:24:15.300 Wagon from Porsche SE the Family 487 00:24:15.300 --> 00:24:18.900 holding now the preferred shares as I told you where so 488 00:24:18.900 --> 00:24:21.400 for 82.5 Euros in September. 489 00:24:21.400 --> 00:24:25.300 The price range was 76.5 age 490 00:24:24.300 --> 00:24:27.000 2.5. So at the 491 00:24:27.300 --> 00:24:30.300 end of the day what wall accepted selected was a 492 00:24:30.300 --> 00:24:33.000 top of the price range 82.5 493 00:24:34.200 --> 00:24:38.500 then Volkswagen sold 100 million shares 494 00:24:37.500 --> 00:24:40.500 at 82.5 to 495 00:24:40.500 --> 00:24:44.300 the public. It's represents 9.4 billion 496 00:24:43.300 --> 00:24:45.500 euros. 497 00:24:46.600 --> 00:24:50.600 Today the stock price is 100 and 2.5 Euros. 498 00:24:49.600 --> 00:24:53.000 So you understand that the 499 00:24:52.200 --> 00:24:56.100 price as increased by 20 euros 500 00:24:55.100 --> 00:24:58.000 per preferred. Yes. This is quite 501 00:24:58.000 --> 00:24:58.600 successful. 502 00:24:59.500 --> 00:25:03.000 And today the value of Porsche is on the 503 00:25:02.200 --> 00:25:05.600 stock market 98 billion euros 504 00:25:05.600 --> 00:25:08.900 when they value force of market capitalization of 505 00:25:08.900 --> 00:25:11.800 Volkswagen. He's unless 76 506 00:25:11.800 --> 00:25:14.200 billion. So Port is now worth 507 00:25:14.200 --> 00:25:17.400 much more than it's more that company. Now if 508 00:25:17.400 --> 00:25:20.400 you combine the two transactions the sales 509 00:25:20.400 --> 00:25:23.800 are shares on the IPO the preferred Chase what 510 00:25:23.800 --> 00:25:27.200 were the proceeds which were cashed in by Volkswagen? 511 00:25:28.300 --> 00:25:31.800 9.4 billion from the IPO selling 512 00:25:31.800 --> 00:25:33.200 the preferred shares to the market. 513 00:25:34.200 --> 00:25:37.700 10.1 billion from selling the ordinary shares 514 00:25:37.700 --> 00:25:41.500 to Porsche as is this is a solve of 19.5 515 00:25:40.500 --> 00:25:43.500 billion euros, which is 516 00:25:43.500 --> 00:25:46.300 quite a lot of money the question is 517 00:25:46.300 --> 00:25:49.000 that why do you do with this cash, which is now in the 518 00:25:49.300 --> 00:25:52.300 bank account distribute almost 50% of that. 519 00:25:53.400 --> 00:25:56.900 December 16, there will be an extraordinary 520 00:25:56.900 --> 00:25:59.500 shareholder meeting which is going to of course 521 00:25:59.500 --> 00:26:02.800 approve something which is proposed today, which is 522 00:26:02.800 --> 00:26:06.400 to pay an exceptional divided unto the Volkswagen shareholders 523 00:26:05.400 --> 00:26:08.900 and this extraordinary dividend 524 00:26:08.900 --> 00:26:12.100 represents 9.55 billion euros, 525 00:26:11.100 --> 00:26:14.200 almost half of the 526 00:26:14.200 --> 00:26:17.700 19.5 billion collected by 527 00:26:17.700 --> 00:26:18.400 the company. 528 00:26:19.300 --> 00:26:22.500 Now Porsche SE is a shield 529 00:26:22.500 --> 00:26:25.500 Volkswagen. They have more than 30% of 530 00:26:25.500 --> 00:26:28.700 the shares who are going to receive more than 30% of 531 00:26:28.700 --> 00:26:32.300 this extraordinary dividend this exceptional dividend. 532 00:26:31.300 --> 00:26:34.900 It's going to be more than three billion. 533 00:26:34.900 --> 00:26:37.500 So they pay attention billion and they 534 00:26:37.500 --> 00:26:40.000 receives Rebuilder. The net of it is 7 billion 535 00:26:40.900 --> 00:26:43.600 which quite significantly reduces the 536 00:26:43.600 --> 00:26:43.800 bill. 537 00:26:44.600 --> 00:26:46.400 Isn't it an interesting statement? 538 00:26:47.400 --> 00:26:51.300 Now what were the alternatives for Volkswagen of 539 00:26:50.300 --> 00:26:53.700 returning the cash to 540 00:26:53.700 --> 00:26:56.200 shareholders their chance? It was investing in 541 00:26:56.200 --> 00:26:57.300 business operations. 542 00:26:57.900 --> 00:27:01.300 You can and or repented to 543 00:27:00.300 --> 00:27:03.200 gain some flexibility and the ability 544 00:27:03.200 --> 00:27:06.300 to invest and or invest in your 545 00:27:06.300 --> 00:27:09.700 business operations in innovation in capacity in 546 00:27:09.700 --> 00:27:12.500 productivity something which makes a company be stronger 547 00:27:12.500 --> 00:27:13.500 and more competitive. 548 00:27:14.400 --> 00:27:18.400 So there were some strategy and business maternities. They 549 00:27:17.400 --> 00:27:20.300 decided to return 50% of 550 00:27:20.300 --> 00:27:23.600 the cash to the shareholder. If you look at Porsche as 551 00:27:23.600 --> 00:27:26.200 it is now almost standing alone. 552 00:27:26.200 --> 00:27:30.300 What are the Matrix The Matrix are quite positive. The 553 00:27:29.300 --> 00:27:32.600 company is a big company. So he's Rebellion 554 00:27:32.600 --> 00:27:35.400 your sales in 2021 and 555 00:27:35.400 --> 00:27:38.100 growing the return on says operating in 556 00:27:38.100 --> 00:27:42.000 calm divided by revenues commercial performance 20% Yeah 557 00:27:41.900 --> 00:27:44.700 the return on Capital after tax. 558 00:27:44.700 --> 00:27:47.500 You remember the calculate here return on investment 559 00:27:47.500 --> 00:27:50.700 origin Capital after that about 20% level. 560 00:27:50.700 --> 00:27:53.400 So there's a company's doing very well. It's a 561 00:27:53.400 --> 00:27:57.700 strong company, which is very profitable the market cap. Remember 198 562 00:27:56.700 --> 00:27:59.500 billion euros. So 563 00:27:59.500 --> 00:28:02.900 it's a very big market capitalization the Enterprise 564 00:28:02.900 --> 00:28:05.400 Value, which is Market capitalist that's represents 565 00:28:05.400 --> 00:28:09.400 about three times the capital employed. It's 566 00:28:08.400 --> 00:28:11.900 a market to book of three, which 567 00:28:11.900 --> 00:28:13.600 is value creation. 568 00:28:14.400 --> 00:28:17.600 They have a competitor. Very one on 569 00:28:17.600 --> 00:28:20.300 one whose name is Ferrari Ferrari was 570 00:28:20.300 --> 00:28:22.200 listed in 2015. 571 00:28:23.300 --> 00:28:26.600 What are their 2021 says Four Points three 572 00:28:26.600 --> 00:28:29.700 billion euros, so it's much smaller than 573 00:28:29.700 --> 00:28:32.600 Porsche. But what are the financial metrics 574 00:28:32.600 --> 00:28:35.500 return on says operating income to 575 00:28:35.500 --> 00:28:38.900 say if you remember it was 20% for Porsche. It's 25% for 576 00:28:38.900 --> 00:28:41.400 Ferrari quite the same order of magnitude. 577 00:28:42.200 --> 00:28:46.300 The return on Capital after tax for Porsche Automotive 578 00:28:45.300 --> 00:28:48.400 division was 20% The return 579 00:28:48.400 --> 00:28:51.900 Capital before tax calculated for Ferrari 580 00:28:51.900 --> 00:28:54.700 is 30% of the tax. It's close 581 00:28:54.700 --> 00:28:57.400 to 20% for roughly the same Matrix. 582 00:28:58.200 --> 00:29:01.500 But you remember that Ferraris merch smaller 583 00:29:01.500 --> 00:29:03.200 than portions of revenues. 584 00:29:03.900 --> 00:29:06.200 But it's not exactly it's scale in terms 585 00:29:06.200 --> 00:29:09.100 of market capitalization because Ferrari is 586 00:29:09.100 --> 00:29:13.100 worth all the stock market 35 billion euros, 587 00:29:12.100 --> 00:29:15.900 which means an Enterprise value of 24 588 00:29:15.900 --> 00:29:19.200 years of it now, which is absolutely outstanding 589 00:29:18.200 --> 00:29:21.800 and another prize value, which is 590 00:29:21.800 --> 00:29:24.200 8.5 times the capital 591 00:29:24.200 --> 00:29:24.900 employed. 592 00:29:25.900 --> 00:29:28.500 So you understand that the company has a fantastic 593 00:29:28.500 --> 00:29:32.200 reputation of the stock market Ferrari versus 594 00:29:31.200 --> 00:29:34.400 Porsche Porsche is 595 00:29:34.400 --> 00:29:38.000 bigger and significantly bigger birds are 596 00:29:37.400 --> 00:29:41.300 very very profitable the 597 00:29:40.300 --> 00:29:44.900 stock markets. They're very much preferory the 598 00:29:43.900 --> 00:29:46.800 love Ferrari as 599 00:29:46.800 --> 00:29:49.200 it is today does it means that if you are 600 00:29:49.200 --> 00:29:53.700 a luxury car brand you will automatically generated 601 00:29:52.700 --> 00:29:56.100 plenty of financial returns 602 00:29:55.100 --> 00:29:58.600 for your shareholders and fortunately, this 603 00:29:58.600 --> 00:30:00.800 is a little more complex if you benchmark 604 00:30:01.600 --> 00:30:04.500 A prestigious name which is Ferrari who's 605 00:30:04.500 --> 00:30:07.400 annals are very prestigious name, which is Aston Martin 606 00:30:07.400 --> 00:30:10.500 Lagonda James Bond. Okay. 607 00:30:10.500 --> 00:30:13.500 Well you look at the last five years and 608 00:30:13.500 --> 00:30:16.200 you understand that Ferrari stock price 609 00:30:16.200 --> 00:30:18.800 was increased by 400 percent. 610 00:30:19.700 --> 00:30:22.700 If you look at I still Martin see the 611 00:30:22.700 --> 00:30:25.800 company was listed in 2017 to stock 612 00:30:25.800 --> 00:30:29.300 price went down by 97% So 613 00:30:28.300 --> 00:30:31.700 what we made today 3% of 614 00:30:31.700 --> 00:30:35.000 the initial IPO price of Aston 615 00:30:34.100 --> 00:30:37.800 Martin land on that, which is a disaster. So 616 00:30:37.800 --> 00:30:40.600 it's not enough to be supported by James Bond 617 00:30:40.600 --> 00:30:43.700 to be a success in the stock market to conclude. 618 00:30:43.700 --> 00:30:46.700 Let's go back to Volkswagen and the governance 619 00:30:46.700 --> 00:30:47.000 problems. 620 00:30:47.900 --> 00:30:50.600 You all remember that diesel gate 621 00:30:50.600 --> 00:30:54.200 and the platy of business operations 622 00:30:53.200 --> 00:30:56.200 issues here and there 623 00:30:56.200 --> 00:30:57.600 that's really a problem. 624 00:30:58.300 --> 00:31:01.200 Today is the Bloomer is the CEO 625 00:31:01.200 --> 00:31:04.200 of Volkswagen and he's a CEO of 626 00:31:04.200 --> 00:31:04.900 Porsche. 627 00:31:05.500 --> 00:31:08.500 So you can say that there is a potential confusion between 628 00:31:08.500 --> 00:31:11.900 sister and Porsche is not really an 629 00:31:11.900 --> 00:31:13.600 autonomous and independent company. 630 00:31:14.500 --> 00:31:18.000 There is a family holding which was 631 00:31:17.200 --> 00:31:20.700 nicely and courage to 632 00:31:20.700 --> 00:31:24.800 improve and increase its control of Porsche 633 00:31:23.800 --> 00:31:25.400 brand name. 634 00:31:26.200 --> 00:31:29.500 They are causes and there are difficulties between 635 00:31:29.500 --> 00:31:32.200 the cousins even though it seems that they want 636 00:31:32.200 --> 00:31:35.600 to get into more friendly relationship 637 00:31:35.600 --> 00:31:36.900 today and tomorrow. 638 00:31:37.900 --> 00:31:40.800 You have said that there are some problems of control. You 639 00:31:40.800 --> 00:31:43.900 understand that there are some problems of transparency starting in 640 00:31:43.900 --> 00:31:47.000 a communication. And if I should account now, it 641 00:31:46.300 --> 00:31:49.700 can be common fantastic value Creations 642 00:31:49.700 --> 00:31:52.500 these outstanding story, but they 643 00:31:52.500 --> 00:31:55.500 have to transform the governance in order 644 00:31:55.500 --> 00:31:58.400 to create value and longer now, what 645 00:31:58.400 --> 00:32:01.300 we have to do is to wait and see. 646 00:32:02.400 --> 00:32:02.900 Thank you very much.