Lamborghini Gets Hollywood Treatment on the Heels of Porsche’s IPO
Lamborghini is getting the Hollywood treatment.
The Lionsgate biopic Lamborghini: The Man Behind The Legend opens in theaters Friday, offering audiences a big-screen account of how tractor magnate Ferruccio Lamborghini challenged Enzo Ferrari (NYSE: RACE ) for the supercar crown in postwar Italy.
Stirring up House of Gucci-like publicity or replicating the sales boost that The Lego Movie generated for the Danish toy company seems a long shot. After all, the 2019 drama Ford v Ferrari, which featured more star power and bagged two Academy Awards, did little for its title role brands beyond stoking nostalgia.
Still, this film comes at an opportune moment. Lamborghini is probably the likeliest candidate within the Volkswagen group stable to be offered up to the market the way Porsche (F: P911_p ) was in September. The German manufacturer’s wager that investors would assign a big valuation to an asset that wasn’t getting its due under the thumb of its parent has panned out: Porsche quickly surpassed VW’s market capitalization and now ranks behind only Tesla (NASDAQ: TSLA ) and Toyota (NYSE: TM ).
Recent executive comments indicate preparations are well underway. Lamborghini has been developing a strategy for presenting itself to investors since well before VW asked each of its brands to come up with virtual equity stories, CEO Stephan Winkelmann said last week.
“We’ve been working on this with other agencies in order to create clarity,” Winkelmann told reporters. “As a brand, we’ve done so for a long time, to show what worth, what value we have.”
Automakers across Europe are trying to find ways to unlock more value by reworking their corporate structures. In France, Renault (EPA: RENA ) is splitting up into five different units as CEO Luca de Meo tries to raise money for electric vehicle development. Germany’s Daimler (OTC: DDAIF ) ended more than a century of making cars and big rigs under one roof, splitting up last year into separately listed Mercedes-Benz and Daimler Truck. Stellantis just hinted it may jump on the bandwagon, with CFO Richard Palmer suggesting this month that Maserati eventually may be able to stand on its own.
The €9.4 billion Porsche (ETR: PSHG_p ) IPO — Europe’s largest in more than a decade — raised a tidy sum VW (ETR: VOWG_p ) will put to use trying to unseat Tesla as the EV leader. VW CEO Oliver Blume has said he sees the listing as a blueprint for the broader group, which also includes Audi, Bentley and motorcycle brand Ducati.
Still, it’s difficult to judge how close another listing might be. Audi, which oversees VW’s premium brands, said last month there are no concrete plans for a Lamborghini IPO. A previous push to potentially spin off the supercar and motorcycle units ran into opposition from labor leaders.
VW’s own shares also haven’t fared well since the Porsche listing, bearing more of the brunt of investor concerns about how demand will trend if the ill effects of the war in Ukraine push Europe further into recession.
While high-end car sales have proven relatively resilient so far, Lamborghini knows how painful energy catastrophes can be. The company’s sales cratered as a result of the 1973 oil crisis, sparking several ownership changes and a bankruptcy five years later.
Lamborghini can rest assured by orders booked for its Aventador, Huracan and Urus models all the way out to early 2024, covering about 18 months of production. The manufacturer delivered a record 5,090 vehicles in the first half, putting up a 31.9% operating margin.
“An IPO is something that could potentially happen in the next 18 months, depending on market conditions,” Mike Dean, a Bloomberg Intelligence analyst, said last week. “A €15 billion valuation is entirely justifiable and could be even higher, given the margin metrics.”
©2022 Bloomberg L.P.
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