Porsche Automobil : Annual Report Fiscal Year 2020

March 23, 2021 at 05:29 am EDT

2020

Annual Report

2020

Key figures

2020	2019	2018
IFRS	IFRS	IFRS
Porsche SE Group
Total assets	€ million	36,250	35,592	33,708
Equity	€ million	35,946	35,284	33,416
Investments accounted for at equity	€ million	35,259	34,597	32,518
Result from investments accounted for at equity	€ million	2,641	4,406	3,641
Revenue	€ million	107	116	103
Personnel expenses	€ million	80	80	77
Financial result	€ million	54	24	-3
Result before tax	€ million	2,646	4,416	3,514
Result after tax	€ million	2,624	4,408	3,491
Earnings per ordinary share1	€	8.56	14.39	11.39
Earnings per preference share1	€	8.57	14.39	11.40
Net liquidity	€ million	563	553	864
Employees on 31 December	916	951	935
2020	2019	2018
HGB	HGB	HGB
Porsche SE
Net profit	€ million	703	788	480
Net profit available for distribution	€ million	676	952	676
Dividend per ordinary share	€	2.2042	2.204	2.204
Dividend per preference share	€	2.2102	2.210	2.210

1 Basic and diluted

Proposal to the annual general meeting of the Porsche SE

Investments of Porsche SE

Core Investment

Stake of ordinary shares: 53.3% (Represents a stake of subscribed capital: 31.4%)

Further Investments

Minority stakes

Status 10 March 2021

2020

"The ﬁscal year 2020 was also challenging for

Porsche SE. We recorded a positive group result after tax of around 2.6 billion euro, despite

conditions remaining difﬁcult overall."

Hans Dieter Pötsch

report and management report of PorscheAutomobil Holding SE 30

Fundamental information 32 about the group

Report on economic position 34

Significant events and developments

at the Porsche SE Group 34

Significant events and developments

at the Volkswagen Group 40

Business development 43

Results of operations, financial position

and net assets 47

Porsche Automobil Holding SE

(financial statements pursuant

to the German Commercial Code) 53

Sustainable value enhancement

in the Porsche SE Group 56

Overall statement on the economic situation

of Porsche SE and the Porsche SE Group 57

Remuneration report 58

Opportunities and risks

of future development 68

Publication of the declaration

of compliance 90

Subsequent events 91

Forecast report and outlook 92

Glossary 97

To our shareholders

Brief an die Aktionäre

Letter to our shareholders

Dear shareholders,

The fiscal year 2020 was also challenging for Porsche SE. The Covid-19 pandemic resulted in a sharp downturn in virtually all major economies. Since March 2020, the Volkswagen Group and its brands have reacted to the pandemic determinedly and taken measures to cushion the impact as best as possible. With the number of new cases falling, the automotive business then began to stabilize again in the second half of the year, not least on the important Chinese market. In consequence, this pleasing development led to Porsche SE recording a positive group result after tax of around 2.6 billion euro for the fiscal year 2020, despite conditions remaining difficult overall.

This result was significantly influenced by the result from our investment accounted for at equity in Volkswagen

AG of 2.7 billion euro, after 4.4 billion euro in the prior year. Net liquidity of the Porsche SE Group amounted to 563 million euro as of 31 December 2020, compared to 553 million euro as of year-end 2019.

Regardless of the Covid-19 pandemic, the automotive industry is undergoing a fundamental change that has accelerated even more this past fiscal year. In light of this, the Volkswagen Group is planning to invest around 73 billion euro in electromobility, hybridization and digitalization over the next five years, thus pushing ahead with its transformation into a technology group. We at Porsche SE support this strategy and are confident that the market value of the Volkswagen Group will increase in the medium to long term.

Our subsidiary PTV AG is continuing to push ahead with its strategic development. The modernization of the product portfolio and cloud-based solutions are opening up promising growth perspectives in light of the accelerated digitalization of mobility. Although revenue decreased in the fiscal year 2020 as a result of the pandemic, a positive operating result on a par with the prior year was generated. This is proof that the substantial measures taken by the board of management to improve profitability are working.

A positive development is also shown in our venture capital investments. Indeed, the two US companies AEVA and Markforged have announced IPOs as of the end of the first and third quarters of 2021, respectively. In

August 2020, Porsche SE invested in the Israeli software company Aurora Labs. The technology from Aurora

Labs enables efficient and secure software updates for vehicles via a radio interface and will thus save a considerable amount of time, data volume and cost.

Letter to our shareholders

Hans Dieter Pötsch

Chairman of the board of management

On the legal side, there was little movement in the fiscal year 2020. Most of the scheduled hearings did not take place due to the Covid-19 pandemic. Following a ruling handed down by the Federal Court of Justice, the Higher Regional Court of Stuttgart appointed a model case plaintiff for a case according to the Capital Markets Model Case Act (KapMuG) in October 2020. We are convinced that the lawsuits brought against Porsche SE are without merit and partially also inadmissible.

For the fiscal year 2021, we expect a recovery in important automobile markets provided that efforts to sustainably curb the Covid-19 pandemic are successful. On this basis, Porsche SE expects a group result after tax of between 2.6 billion euro and 4.1 billion euro. This is mainly attributable to the result of the Volkswagen Group. Net liquidity in the Porsche SE Group is expected to range between 0.4 billion euro and 0.9 billion euro as of 31 December 2021, not taking into account future investments.

For the past fiscal year 2020, the board of management and supervisory board propose that a dividend of 2.21 euro per share be distributed to the holders of preference shares and of 2.204 euro per share to the holders of ordinary shares. The resulting payout of around 676 million euro is on a par with the prior-year amount.

An additional encouraging piece of news for our shareholders is that Porsche SE has been admitted to the MDAX as announced by Deutsche Börse at the beginning of March 2021. Admission to the index could result in an increase in the liquidity in our shares, driven for instance by increased demand of index-oriented investors and funds.

We are convinced more than ever that Volkswagen AG will successfully help shape the transformation of the automotive industry and that Porsche SE will benefit from this. We continue to count on your trust and your support on this journey.

Hans Dieter Pötsch

10 10

Company boards of

Porsche Automobil Holding SE and their appointments

Members of the supervisory board Membbeerrssoof fththeesuspueprevrivsoisroyrbyobaordard

Dr. Wolfgang Porsche Dr. Wolfgang PorscheDr. Hans Michel Piëch Dr. Hans Michel Piëch

Chairman

Deputy chairman Deputy chairman

Chairman of the supervisory board of Chairman of the supervisory board of Dr. Ing. h.c. F. Porsche AG

Supervisory board of Volkswagen AG Supervisory board of Volkswagen AG

Dr. Ing. h.c. F. Porsche AG

Appointments: Appointments:Appointments: Appointments:

 AUDI AG, Ingolstadt



AUDI AG, Ingolstadt

 AUDI AG, Ingolstadt



AUDI AG, Ingolstadt



Dr. Ing. h.c. F. Porsche AG, Stuttgart Dr. Ing. h.c. F. Porsche AG, Stuttgart



Dr. Ing. h.c. F. Porsche AG, Stuttgart (chairman) Dr. Ing. h.c. F. Porsche AG, Stuttgart (chairman) Volkswagen AG, Wolfsburg



Volkswagen AG, Wolfsburg Volkswagen AG, Wolfsburg

Volkswagen AG, Wolfsburg

Familie Porsche AG Beteiligungsgesellschaft, Familie Porsche AG Beteiligungsgesellschaft, Salzburg (chairman)

Salzburg (chairman)

Porsche Cars Great Britain Ltd., Reading Porsche Cars Great Britain Ltd., Reading Porsche Cars North America Inc., Atlanta Porsche Cars North America Inc., Atlanta Porsche Greater China, consisting of: Porsche Greater China, consisting of:

oPorsche Cars Great Britain Ltd., Reading Porsche Cars Great Britain Ltd., Reading Porsche Cars North America Inc., Atlanta Porsche Cars North America Inc., Atlanta Porsche Greater China, consisting of: Porsche Greater China, consisting of: Porsche (China) Motors Ltd., Shanghai Porsche (China) Motors Ltd., Shanghai Porsche Hong Kong Limited, Hong Kong Porsche Hong Kong Limited, Hong KongPorsche (China) Motors Ltd., Shanghai Porsche (China) Motors Ltd., Shanghai Porsche Hong Kong Ltd., Hong Kong Porsche Hong Kong Ltd., Hong Kong

oPorsche Holding Gesellschaft m.b.H., Porsche Holding Gesellschaft m.b.H., Salzburg

Salzburgo

oSchmittenhöhebahn AG, Zell am See Schmittenhöhebahn AG, Zell am Seeo

oPorsche Holding Gesellschaft m.b.H., Porsche Holding Gesellschaft m.b.H., Salzburg

o Volksoper Wien GmbH, Vienna
o Volksoper Wien GmbH, Vienna

Salzburg

o Schmittenhöhebahn AG, Zell am See
o Schmittenhöhebahn AG, Zell am See

Prof. Dr. Ulrich Lehner Prof. Dr. Ulrich Lehner

Member of the shareholders' committee Member of the shareholders' committee of Henkel AG & Co. KGaA of Henkel AG & Co. KGaA

As of 31 December 2020

Appointments: Appointments:

 Memberships in German statutory supervisory boards
-  Deutsche Telekom AG, Bonn (chairman)
 Memberships in German statutory supervisory boards

 Deutsche Telekom AG, Bonn (chairman)

o Comparable appointments in Germany and abroad
- o Henkel AG & Co. KGaA, Düsseldorf
o Comparable appointments in Germany and abroad

o Henkel AG & Co. KGaA, Düsseldorf

Dr. Ferdinand Oliver Porsche

Mag. Marianne Heiß

Chairman of the board of management of Familie Porsche AG Beteiligungsgesellschaft

Chief Executive Officer of BBDO Group Germany GmbH

Appointments:

 AUDI AG, Ingolstadt
-  AUDI AG, Ingolstadt
 Dr. Ing. h.c. F. Porsche AG, Stuttgart
-  Volkswagen AG, Wolfsburg
 Volkswagen AG, Wolfsburg

o Porsche Holding Gesellschaft m.b.H., Salzburg
o Porsche Lizenz- und Handels-gesellschaft mbH & Co. KG, Ludwigsburg

Dr. Günther Horvath

Managing director of

Dr. Günther J. Horvath Rechtsanwalt GmbH

Mag. Josef Michael Ahorner

Supervisory board of AUDI AG

Dr. Stefan Piëch

Appointments:

 AUDI AG, Ingolstadt

Member of the board of management of Your Family Entertainment AG

o Automobili Lamborghini S.p.A., Sant'Agata Bolognese
Appointments:
o Emarsys eMarketing Systems AG, Vienna (chairman) (until 4 November 2020)

o SEAT S.A., Barcelona

Peter Daniell Porsche

Supervisory board of

Porsche Automobil Holding SE as well as member

Peter Daniell Porsche of additional control bodies of domestic and foreign Supervisory board of commercial enterprises

Porsche Automobil Holding SE as well as member of additional control bodies of domestic and foreign commercial enterprises

Appointments:

o Porsche Holding Gesellschaft m.b.H., Salzburg
o Porsche Lizenz- und Handelsgesellschaft

Appointments: mbH & Co. KG, Ludwigsburg

ooPorsche Holding Gesellschaft m.b.H., Salzburg ŠKODA AUTO a.s., Mladá Boleslav

Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG, Ludwigsburg

o ŠKODA AUTO a.s., Mladá Boleslav

Prof. TU Graz e.h. KR Ing. Siegfried Wolf

Supervisory board of Schaeffler AG as well as member of additional control bodies of domestic

Prof. TU Graz e.h. KR Ing. Siegfried Wolf and foreign commercial enterprises Supervisory board of Schaeffler AG as well as member of additional control bodies of domestic Appointments: and foreign commercial enterprises

 Continental AG, Hanover
 Schaeffler AG, Herzogenaurach

Appointments:

o Banque Eric Sturdza SA, Geneva

 Continental AG, Hanover
(until 21 April 2020)
- o MIBA AG, Mitterbauer Beteiligungs AG,
 Schaeffler AG, HerzogenaurachoBanque Eric Sturdza SA, Geneva Laakirchen (in accordance with (until 21 April 2020)

Sec. 28a (5) No. 5 Austrian Banking Acto

oMIBA AG, Mitterbauer Beteiligungs AG, a position on the supervisory board) Laakirchen (in accordance with OJSC GAZ Group, Nizhny Novgorod Sec. 28a (5) No. 5 Austrian Banking Act (since 19 June 2020)

a position on the supervisory board) Sberbank Europe AG, Vienna (chairman) OJSC GAZ Group, Nizhny Novgorod

(since 19 June 2020)o

Sberbank Europe AG, Vienna (chairman)

As of 31 December 2020

 Memberships in German statutory supervisory boards

Aos oCf o3m1 pDaercaebmlebaeprp2o0i2n0tments in Germany and abroad

 Memberships in German statutory supervisory boards

o Comparable appointments in Germany and abroad

Currrreennt tccomommittieteteseosf of thessuuppeervrivsiosroyrbyobaordarodf of PorrsscchheeAAutuotmomoboilbHiloHldoinldgiSnEg SE and tthheeirirmmemembebres rs

Executive committee:

· Dr. Wolfgang Porsche (chairman)
· Dr. Hans Michel Piëch
· Dr. Ferdinand Oliver Porsche

Audit committee:

· Prof. Dr. Ulrich Lehner (chairman)
· Dr. Hans Michel Piëch
· Dr. Ferdinand Oliver Porsche

Nominations committee:

· Dr. Wolfgang Porsche (chairman)
· Dr. Hans Michel Piëch
· Dr. Ferdinand Oliver Porsche


	AUDI AG, Ingolstadt
	Autostadt GmbH, Wolfsburg
	Bertelsmann Management SE, Gütersloh
	Bertelsmann SE & Co. KGaA, Gütersloh
	Dr. Ing. h.c. F. Porsche AG, Stuttgart
	TRATON SE, Munich (chairman)
	Volkswagen AG, Wolfsburg (chairman)
	Wolfsburg AG, Wolfsburg
o	Porsche Austria Gesellschaft m.b.H.,
Salzburg (chairman)
o	Porsche Holding Gesellschaft m.b.H.,
Salzburg (chairman)
o	Porsche Retail GmbH, Salzburg (chairman)
o	VfL Wolfsburg-Fußball GmbH, Wolfsburg
(deputy chairman)

Hans Dieter Pötsch

Memberrs offththeebbooaardrdofomfmanaangaegmeemnetnt

Chairman of the board of management and Chief Financial Officer of

Porsche Automobil Holding SE

Chairman of the supervisory board of Volkswagen AG

Appointments:

Dr. Manfred Döss

Board of management member responsible for legal affairs and compliance of Porsche Automobil Holding SE

Appointments:

 PTV Planung Transport Verkehr AG, Karlsruhe
 TRATON SE, Munich

Lutz Meschke (since 1 July 2020)

Philipp von Hagen (until 30 June 2020)

Board of management member responsible for investment management of Porsche Automobil Holding SE

Board of management member responsible for investment management of Porsche Automobil Holding SEDeputy chairman of the board of management and board of management member responsible for LfinuatzncMeeasncdhIkTeo(fsDinr.cIeng1.Jhu.cly.F2.0P2o0r)sche AG Board of management member ArAepspoinstmibelenftos:r investment management of PMoHrsPchMeaAnuatgoemoebnitl HunodldIiTn-gBSerEatung GmbH,Appointments:

 PTV Planung Transport Verkehr AG, Karlsruhe

Phi(lciphpairvmoannH)(augnetinl 3(0unJtuiln3e020J2u0n)e 2020)

BooaINrdRoIXf Imnca.n,aKgierkmlaenndt,mWeamshbienrgton res(puonntisli3b0leJfuonrein2v0e2st0m) ent management of Porsche Automobil Holding SE

Ludwigsburg (chairman) DepPuotryscheaiCrmoannsuoltfinthgeGbmoabrHd,oBfiemtiagnhaegimem-Beinstsingen andPborosacrhdeoDf emuatnscahgleamndenGt mbeHm,ber responsible for finaBniceetigahnedimIT-BoifsDsirn. gInegn. h.c. F. Porsche AGAppointments:

 PTV Planung Transport Verkehr AG, Karlsruhe (chairman) (until 30 June 2020)

 Porsche Digital GmbH, Ludwigsburg (chairman)

AppPoirnstcmhenEtsn:gineering Group GmbH, Weissach

o INRIX Inc., Kirkland, Washington (until 30 June 2020)

As of 31 December 2020 or as of the date of departure from the board of management of Porsche Automobil Holding SE.

 Memberships in German statutory supervisory boards

o Comparable appointments in Germany and abroadAs of 31 December 2020 or as of the date of departure from the board of management of Porsche Automobil Holding SE.

 Memberships in German statutory supervisory boards

o Comparable appointments in Germany and abroad


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	PBoiertsigcheimDe-Butisscihnlgaennd (GchmabirHm,an)
	PBoiertsigcheimLe-iBpizsisginGgmenbH, Leipzig
	Porsche LDiizgeitnazl-GumndbH,aLnuddewlsigessbeulrlsgc(hcahfatirman)
	PmobrHsc&heCEon. gKiGne, eLruindgwGigrsobuuprgG(mchbaHir,mWaeni)ssach
	Porsche EWnegrkinzeeurginbgauSeGrvmicbeHs,GSmchbwHa,rzenberg
	PBTieVtigPhlaenimun-BgisTsrai ngsepnort Verkehr AG, Karlsruhe
	P(cohrasicrmheanF)in(saincieal3S0eJrvuilcye2s0G20m) bH,
	VBoielktisgwheaigme-nBBisasninkgGenm(bcHh,aiBrmraaun)schweig
o	BPoenrstclehyeMLoeitpozrsigLGimitbeHd, LCereipwzeig
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o	Porsche WDiegritkazle, uIngcb.a, uWGilmibnHgt,oSnc, hDwealarwzeanreberg
	(PcThVairPmlaannu)n(ugnTtrila1nsSpeoprteVmerbkeerh2r0A2G0,) Karlsruhe
o	P(cohrasicrmheanE)n(tseinrpcreis3e0s JInucly., 2W0i2lm0)ington, Delaware
o	PVolrksscwhaegReunsBslankdGOmObOH, ,MBorsakuonwschweig
o	Bentley Motors Limited, Crewe
o	Porsche Business Services Inc., Wilmington,
Delaware (until 1 September 2020)
o	Porsche Digital, Inc., Wilmington, Delaware
(chairman) (until 1 September 2020)
o	Porsche Enterprises Inc., Wilmington, Delaware
o	Porsche Russland OOO, Moskow

The board of management

Dr. Manfred Döss

Legal affairs and compliance

The board of management

Hans Dieter Pötsch

Chairman of the board of management and Chief Financial Officer

Lutz Meschke

Investment management

Report of the

supervisory board

Report of the supervisory board

Ladies and gentlemen,

Porsche SE is a holding company with investments in the areas of mobility and industrial technology. As a core investment, it holds the majority of the ordinary shares in Volkswagen Aktiengesellschaft, Wolfsburg ("Volkswagen AG" or "Volkswagen"), and sees itself as a long-term anchor investor. In the fiscal year 2020, Porsche SE acquired an additional 0.2% of the ordinary shares in Volkswagen AG via the capital market. Porsche SE therefore now holds 53.3% of the ordinary shares. We remain convinced that the Volkswagen Group has vast potential for increasing value added.

The board of management of Volkswagen AG is currently realigning the company. Electromobility, digital connectivity and autonomous driving will revolutionize the industry in the years to come. We believe this transformation harbors huge opportunities. The Volkswagen Group is planning to invest around €73 billion in electromobility, hybridization and digitalization over the next five years. In the area of digitalization, a large portion of funds is being invested in artificial intelligence, autonomous driving as well as the digitalization of significant business processes. With this strategy, the Volkswagen Group has set itself the target of transforming itself into a technology group within the automotive industry as well as increasing the enterprise value. We at Porsche SE support this strategy and are convinced that Volkswagen will continue to play a leading role in the automotive industry in the future.

In the past fiscal year, our subsidiary PTV Planung Transport Verkehr AG, Karlsruhe ("PTV"), devised a strategy for developing the company further. On the basis of its position as a world-leading software provider in the area of mobility infrastructure planning as well as the optimization of logistics processes, PTV's product portfolio is gradually being modernized and refined. The new strategy opens up promising growth prospects for PTV.

In August 2020, Porsche SE also invested in the Israeli technology company Aurora Labs. For the investment volume of around US$2.5 million, we acquired a low single-digit capital share. The technology of Aurora Labs is specifically designed for efficient and secure software updates for vehicles via a radio interface, known as over-the-air updates. In light of the growing use of software functions in vehicles over the next few years and the associated necessity of keeping them up to date, strong growth is expected for this market.

Dr. Wolfgang Porsche

Chairman of the supervisory board

In addition to Aurora Labs, Porsche SE holds non-controlling interests in four US technology companies via its investment companies.

Tasks of the supervisory board

Pursuant to the articles of association, the supervisory board has ten members (shareholder representatives) to be appointed by the annual general meeting. The composition of the supervisory board can be found in the section "Company boards of Porsche Automobil Holding SE and their appointments" of the annual report of Porsche SE.

In the fiscal year 2020, the supervisory board of Porsche SE performed all the tasks assigned to it by law, the articles of association and rules of procedure. During the fiscal year 2020, the supervisory board held four ordinary meetings and three extraordinary meetings. The ordinary meetings took place in March, June, October and December, the extraordinary meetings in June, July and August. The purpose of these extraordinary meetings of the supervisory board was to discuss the appointment of a new member of the board of management, prepare proposals for resolution by management for the annual general meeting of Porsche SE as well as to deal with the investigation against Prof. Dr. Martin Winterkorn, Hans Dieter Pötsch and Matthias Müller concerning the alleged market manipulation in connection with the diesel issue.

All supervisory board members participated in every supervisory board meeting in the fiscal year 2020. Members participated either in person or, in line with the company's articles of association, by video or conference call.

Individual resolutions of the supervisory board were passed by circularization. These included in particular resolutions on the appointment of Mr. Meschke as member of the board of management of Porsche SE, the reappointment of Dr. Döss as member of the board of management, the approval of ancillary activities of a former member of the board of management as well as the determination of the key audit topics and the approval of the auditor's fees.

Within the framework of its control and advisory responsibilities, the supervisory board was informed in depth about company performance during the fiscal year 2020 by means of written reports from the board of management as well as verbally in meetings. Reporting focused on Porsche SE's economic position and its investments (in particular Volkswagen AG), business results, the development of net assets, financial position and results of operations and the risk situation. The supervisory board also monitored the effectiveness of corporate governance. Furthermore, the supervisory board reviewed the annual and consolidated financial statements issued with unqualified auditor's reports as well as the combined management report and the non-financial group report for the fiscal year 2019, approved these and ratified the 2019 annual financial statements of Porsche SE. Likewise, no objections were raised against the dependent company report. In the fiscal year 2020, the supervisory board largely dealt with the impact of the Covid-19 pandemic and its influence on the business operations of Porsche SE, and regularly had the board of management inform it about any developments. Another focus of the supervisory board's monitoring activities was on obtaining regular reports on the development and status of the various legal disputes (especially the claims for damages, the criminal investigation by the Stuttgart public prosecutor's office against Mr. Pötsch, Prof. Dr. Winterkorn and Mr. Müller as well as the rescission proceedings and compulsory information procedures). Central topics were also the actions for damages concerning the stake building of the investment in Volkswagen AG in 2008 as well as those in connection with the diesel issue. In addition, the supervisory board discussed the possibility claims of the company existing against a former member of the board of management in connection with the credit fraud proceedings. Based on various reports by an independent university professor, which the supervisory board reviewed in detail, it came to the conclusion that strong grounds relating to the interests of the company conflict with asserting any possible claims or taking measures to toll the statute of limitations, which is why no additional measures should be taken.

The supervisory board also discussed the business plan. Furthermore, the supervisory board ensured that the board of management carried out its business in compliance with the regulations. Monitoring also encompassed appropriate measures for risk avoidance and compliance. It checked that the board of management carried out the measures for which it is responsible in accordance with Sec. 91 (2) AktG in an appropriate form and that the risk monitoring system the act requires is functioning effectively to identify any developments jeopardizing the company's ability to continue as a going concern at an early stage.

The supervisory board also dealt extensively with the new statutory requirements and the recommendation of the German Corporate Governance Code published by the Federal Ministry of Justice on the remuneration system for the board of management. Based on this, on

3 December 2020 a new remuneration system was decided on for the board of management of Porsche SE, which will be presented to this year's annual general meeting for approval.

As certain matters are subject to the approval of the supervisory board, it also discussed the voting behavior of Porsche SE at the annual general meeting of Volkswagen AG.

Committees

As before, the supervisory board has a total of three committees to carry out its duties: the executive committee, audit committee and nominations committee. The committees support the supervisory board and prepare supervisory board resolutions as well as topics for discussion by the full supervisory board. Moreover, decision-making authority of the supervisory board may be transferred to the individual committees to the extent permitted by law.

The executive committee decides in urgent cases on business matters requiring the approval of the supervisory board. It also functions as a personnel committee and makes recommendations to the supervisory board on concluding, amending and terminating contracts of employment for members of the board of management. In addition, the executive committee draws up a proposal for the individual amount of the variable remuneration for each completed fiscal year, taking into account the respective business and earnings situation and based on the specific performance of the individual member of the board of management, if agreed as such with Porsche SE. This proposal is submitted to the supervisory board of Porsche SE for decision. Furthermore, the executive committee is responsible for the approval of ancillary activities of members of the board of management and prepares resolutions of the supervisory board on the remuneration system for the board of management as well as its regular review.

The audit committee supports the supervisory board in monitoring management of the company and pays particular attention to reviewing accounting, monitoring the accounting process, the effectiveness of the internal control system, the risk management system and internal audit, compliance function and the audit. In the past fiscal year, the audit committee regularly reviewed whether the risk early warning system in place is suitable for identifying at an early stage any developments jeopardizing the ability of the company to continue as a going concern. It satisfied itself as to the efficiency of the risk management system, including the internal control system, as well as the activities of internal audit and obtained regular reports on these. The audit committee passed its findings on to the full supervisory board in regular reports.

The audit committee's review of accounting primarily relates to the consolidated financial statements and the combined management report, interim financial information and the annual financial statements prepared in accordance with HGB. The audit committee deals with the half-yearly financial report and the group quarterly statements for the supervisory board and discusses them with the board of management and the auditor. The audit committee also focuses on the non-financial group report, the dependent company report and the proposal for profit appropriation and prepares them for review by the supervisory board.

In connection with the audit, the audit committee submits to the supervisory board a recommendation for the appointment of the auditor, which - except in cases where the auditor is reappointed - is prepared following a selection procedure within the meaning of Art. 16 (3) Regulation (EU) No 537/2014, comprises at least two candidates and is explained. In addition, the audit committee monitors the independence of the auditor and ensures that the auditor'snon-audit services assigned by the board of management do not give rise to any indications of grounds for exclusion or disqualification or that endanger the independence of the auditor. The audit committee is authorized on behalf of the supervisory board to award the audit engagement to the auditor selected by the annual general meeting, to agree on the fee with the auditor and to determine the key topics of the audit. It also examines the key audit matters and regularly assesses the quality of the audit.

The nominations committee makes recommendations for the supervisory board's proposals to the annual general meeting concerning the election of supervisory board members.

The composition of the individual committees of the supervisory board is described in more detail in the corporate governance declaration of compliance, published on the company's website.

During the fiscal year 2020, the executive committee held four ordinary meetings and two extraordinary meetings. The audit committee met five times. The nominations committee did not meet in the fiscal year 2020. The chairman of the supervisory board, Dr. Wolfgang Porsche, attended the meetings of the audit committee as a guest. The members of the respective committees attended all meetings held in the fiscal year 2020, with the exception of Dr. Hans Michel Piëch, who did not attend one of the executive committee's meetings. The full supervisory board was regularly informed about the work of the committees.

Cooperation with the board of management

The chairman of the supervisory board and the chairman of the audit committee were in regular contact with the board of management to exchange ideas and information, thus ensuring that they were kept directly informed about significant events and developments for the company and the group.

The supervisory board gave its approval as required for individual transactions, such as the voting behavior of Porsche SE in the annual general meeting of Volkswagen AG.

Corporate governance

The supervisory board and board of management have repeatedly and intensively discussed the recommendations and suggestions of the German Corporate Governance Code, submitted the first annual declaration of compliance in accordance with Sec. 161 AktG in December 2020 under the updated German Corporate Governance Code and made it permanently accessible to shareholders on the company's website atwww.porsche-se.com/en/company/corporate-governance/. Furthermore, in June and September 2020 the board of management and supervisory board published updates to the declaration of compliance submitted in December 2019. The current declaration of compliance is reproduced in full in the declaration of compliance, published on the company's website.

Due to the influence of individual members of the supervisory board of Porsche SE on individual ordinary shareholders of Porsche SE or the fact that individual supervisory board members are also members of the supervisory boards of Porsche SE and Volkswagen AG or Volkswagen subsidiaries, conflicts of interest can arise for these members of the supervisory board in individual cases.

To the extent that concrete conflicts of interest existed or were feared, the particular conflict of interest was reported to the supervisory board. In the past fiscal year, this related to the resolutions of the company at the annual general meeting of Volkswagen AG regarding the individual exoneration of members of the supervisory board for the fiscal year 2019. If supervisory board members are also on the supervisory board of Volkswagen AG, they abstained from voting in the resolutions on voting behavior in the annual general meeting of Volkswagen AG regarding their own exoneration.

Comments on the result of the audit of the financial statements and on the proposal for the appropriation of profit

The annual general meeting on 2 October 2020 elected PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, Stuttgart office, to audit the annual financial statements and consolidated financial statements for the fiscal year 2020. Prior to the supervisory board issuing its recommendation for election to the annual general meeting, the auditor submitted a declaration of independence to the supervisory board, which was reviewed by the audit committee.

Alongside the key audit matters identified by the auditor in the auditor's report, the audit committee set the key topics as "Presentation of legal risks in the combined management report", "Presentation of the effects of the diesel issue in the combined management report" and "Accounting treatment of the acquisition of ordinary shares in Volkswagen in the consolidated financial statements and combined management report" and "Presentation of the impact of the Covid-19 pandemic in the combined management report".

The auditors responsible at PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, Stuttgart office, audited the separate and consolidated financial statements of Porsche SE as well as the combined management report for fiscal year 2020 and issued an unqualified auditor's report. They attended both the audit committee meeting and the supervisory board meeting where the separate and consolidated financial statements and the combined management report for the fiscal year 2020 were discussed. The members of the audit committee and supervisory board provided extensive documents and the audit reports of the auditor for preparation. The audit committee examined and discussed all reports made available to it and inquired about them in a critical manner. These were also discussed in great detail in the presence of the auditor. The auditors reported on the results of their audits, also referring to the key audit matters, the respective procedures during the audit, including theconclusions, the additional key topics set by the audit committee and were available to answer any additional questions or provide information. Furthermore, the auditor confirmed that the risk early warning system implemented by the board of management is suitable for identifying at an early stage any risks jeopardizing the ability of the company to continue as a going concern, and that no weaknesses were found in the internal control system and risk management system with regard to the accounting process. After its own audit, the audit committee concurred with the result of the audits by the auditor.

The chairman of the audit committee and the auditor reported on the results of their audits to the supervisory board and were available to answer any additional questions or provide information. After its own audit, the supervisory board concurred with the result of the auditor's and audit committee's audits. It determined that it had no objections to raise, approved the consolidated and annual financial statements as well as the combined management report prepared by the board of management for the fiscal year 2020 and thus ratified the financial statements for the fiscal year 2020 of Porsche SE.

Based on this, the supervisory board endorsed the suggestion of the board of management for the appropriation of net profit available for distribution.

Audit of the dependent company report

Pursuant to Art. 9 (1) lit. c (ii) SE-VO and Sec. 312 AktG, the board of management prepared a report on related companies (dependent company report) for the fiscal year 2020. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, Stuttgart office, audited the dependent company report and rendered the following opinion:

"Based on our audit and assessment in accordance with professional standards we confirm that

(1) the factual disclosures contained in the report are correct,
(2) the payments made by the company in connection with transactions detailed in the report were not unreasonably high."

The supervisory board concurred with the result of the audit by the auditor of the dependent company report. According to the concluding results of its own review, the supervisory board had no objections to raise with respect to the closing declaration of the board of management in the dependent company report.

Audit of the non-financial group report

The supervisory board thoroughly examined the non-financial group report. It had no objections to raise.

Composition of the board of management and supervisory board

Member of the board of management Mr. Philipp von Hagen stepped down from his position on the board of management at his own volition and by mutual agreement effective 30 June 2020. Mr. Lutz Meschke was appointed by the supervisory board as his successor in charge of the investment management function effective 1 July 2020. In addition to this, the supervisory board extended the appointment of the board of management member responsible for legal affairs and compliance, Dr. Manfred Döss, by five years effective 1 January 2021.

There were no changes in personnel on the supervisory board of Porsche SE in the fiscal year 2020.

Acknowledgment

The supervisory board expresses its gratitude to the board of management and all employees in acknowledgment of the work they have done and their unflagging commitment.

Stuttgart, 12 March 2021

The supervisory board Dr. Wolfgang Porsche Chairman

Porsche SE share

Stock markets1

In the reporting year 2020, the Covid-19 pandemic not only had a severe impact on society, but also shaped the international financial markets. After the first cases of the new infectious disease were reported in China in December 2019, with the virus then spreading across many countries worldwide in the following months, the stock markets collapsed in March 2020. Following a temporary decline in the number of cases and the announcement of comprehensive government aid packages, the stock markets began to recover before global uncertainty started to grow again towards the end of the year as cases began to rise once more. However, this time the stock markets were largely left unscathed.

Other factors influencing the financial markets included the low-interest policy of the most important central banks, the foreign and economic policy of the USA and China as well as the US presidential elections in November and the Brexit negotiations that were concluded in December with the signing of the trade agreement between the European Union and the United Kingdom.

After a strong start to 2020 and reaching an all-time high in February, the German stock exchange index (DAX) plummeted in response to the Covid-19 pandemic, hitting a low for the year of 8,441.71

points on 18 March. However, the index was able to recover from its losses over the course of the year, reaching its high for the year (13,790.29 points) on 28 December. As of year-end, the index closed at 13,718.78 points - up 469.77 points or around 4% on the closing from 30 December 2019 (13,249.01 points).

As of the end of 2020, the Euro Stoxx 50 by contrast recorded 3,552.64 points, down around 5% compared to the 2019 closing level (3,745.15 points). The high for the year of 3,865.18 points was recorded on 19 February. The low for the year of 2,385.82 points was recorded on 18 March.

Porsche SE's preference shares reached the highest price for the year of €69.86 on 10 January 2020. However, the shares were unable to escape the effects of the collapse in the share markets as a result of the Covid-19 pandemic, hitting a low for the year of €30.27 on 19 March. Over the rest of the year, the shares recovered again and ended 2020 at a price of €56.40, down around 15% on the price as of the end of 2019 (€66.64).

The preference shares of Porsche SE have been admitted to the MDAX effective 22 March 2021. We expect this to increase the liquidity in our stock, also due to the demand of index-oriented investors and funds.

1 All disclosures with regard to the respective closing price.

All disclosures with regard to the respective closing price.

2020 annual general meeting

The annual general meeting of Porsche SE, originally planned for 19 May 2020 and postponed due to the Covid-19 pandemic, took place on

2 October 2020 and was held virtually for the very first time. The annual general meeting resolved to distribute a dividend of €2.210 per preference share and of €2.204 per ordinary share for the fiscal year 2019. This corresponds to a payout of around €676 million.

The shareholders exonerated the members of the board of management and those of the supervisory board in office in the fiscal year 2019. Furthermore, the annual general meeting elected PricewaterhouseCoopers GmbH Wirtschafts-prüfungsgesellschaft to audit the annual financial statements and consolidated financial statements for the fiscal year 2020.

Development of the Porsche SE preference share price 2020

(indexed to 31 December 2019)

120

Porsche SE preference share

Volkswagen preference share

EURO STOXX 50

Porsche SE preference share: basic data

ISIN

Porsche SE preference share: basic data

WKN

DE000PAH0038 PAH003

Stock codes Stock exchange TISraINding segment WSeKcNtor KSteoycikndciocdeess Stock exchange Trading segment Sector

PSHG_p.DE, PAH3:GR

GAlel nGeerraml Aanll Ssthoacrke,exchanges

STOXX Europe 600 Index, Automotive

Key indices

Subscribed capital1 Denomination Class of shares

Subscribed capital1

Denomination

1 Of which half as ordinary shares

Class of shares

1 Of which half as ordinary shares

Shareholder composition

Porsche SE's subscribed capital in the form of no-par value bearer shares comprises 153,125,000

Shareholder composition ordinary shares and 153,125,000 non-voting preference shares, each share arithmetically PreoprrsecsheentSinEg'sas1ubesucrroibneodtiocanpalitvaal liunethoef tfhoermshoafre cnaop-pitarl.value bearer shares comprises 153,125,000 ordinary shares and 153,125,000 non-voting preference shares, each share arithmetically representing a 1 euro notional value of the share capital.

All German stock exchanges DGEen0e0r0aPlASHta0n0d3a8rd APAutHo0m0o3tive PCSDHAGX,_p.DE, PAH3:GR

MSCI International Euro Price Index, General Standard

STOXX All Europe 800, ECUDRAOX,STOXX Auto & Parts General All Share, €306,250,000

MSCI International Euro Price Index, 153,125,000 ordinary and preference shares respectively STOXX Europe 600 Index,

NSToO-pXaXr vAallluEeurboepaere8r0s0h,ares EURO STOXX Auto & Parts €306,250,000 153,125,000 ordinary and preference shares respectively No-par value bearer shares

Significantly more than half of the preference shares are held by institutional investors, the majority of which are based outside of Germany. Private investors in Porsche SE's preference shares are SlairgneilfyicbaanstleydminorGeethrmananhya.lf of the preference shares are held by institutional investors, the majority of which are based outside of Germany. Private investors in Porsche SE's preference shares are largely based in Germany.

Porsche SE share key figure

2020

2019

2018

Closing price1,2

Porsche SE share key figure

Annual high1,2

Annual low1,2

Number of ordinary shares issued (31 December)

€ € €

56.40 69.86 30.27 2020 153,125,000

66.64

51.64

70.00

78.72

50.28

50.78

153,125,000

2019

2018

153,125,000

Number of preference shares issued (31 December) Closing price1,2

Market capitalization (31 December)3 Annual high1,2

Earnings per ordinary share4 Annual low1,2

Earnings per preference share4

Number of ordinary shares issued (31 December) Dividend per ordinary share

Number of preference shares issued (31 December) Dividend per preference share

Market capitalization (31 December)3

Earnings per ordinary share4

EaPrnreifnegresnpce rshparrefeinreXnectrea tsrhadairneg

Dividend per ordinary share

2 Based on the closing price

3 Ordinary shares valued at the market price of the preference shares Dividend per preference share

4 Basic and diluted
5 Proposal to the annual general meeting of Porsche SE
1 Preference share in Xetra trading
2 Based on the closing price
3 Ordinary shares valued at the market price of the preference shares

4 Basic and diluted
5 Proposal to the annual general meeting of Porsche SE

Investor relations activities

€ € € € € € € € € € € € €

56.40

17,272,500,000

153,125,000

66.64

20,408,500,000

51.64

15,814,750,000

69.86

8.56

70.00

14.39

78.72

11.39

30.27

8.57

50.28

14.39

50.78

11.40

153,125,000

2.2045

153,125,000

2.204

153,125,000

2.204

153,125,000

2.2105

153,125,000

2.210

17,272,500,000

20,408,500,000

153,125,000

2.210

15,814,750,000

8.56

14.39

11.39

8.57

14.39

11.40

2.2045

2.204

2.2105

2.210

Beyond the regular corporate reporting in the quarterly and half-yearly financial reports as well as Ithneveansntuoarl rgeelnaetriaolnmseeatcintgiv, itthie sboard of management and investor relations team stayed in close contact with analysts and investors. Due to Beyond the regular corporate reporting in the the Covid-19 pandemic, face-to-face events and quarterly and half-yearly financial reports as well as roadshows were only possible to a very limited the annual general meeting, the board of extent in the fiscal year 2020. In order to management and investor relations team stayed in nevertheless meet all the information needs of close contact with analysts and investors. Due to capital market participants, the investor relations the Covid-19 pandemic, face-to-face events and team increasingly used digital communications roadshows were only possible to a very limited channels such as virtual meetings or conference extent in the fiscal year 2020. In order to calls.

nevertheless meet all the information needs of capital market participants, the investor relations team increasingly used digital communications channels such as virtual meetings or conference calls.

The aim of our investor relations work was and is to inform the capital market participants about the latest business developments, our investment strategy as well as the status of the legal proceedings.

Group management report and management report of Porsche Automobil Holding SE

Fundamental information about the group 32

Report on economic position 34

Significant events and developments at the Porsche SE Group 34

Significant events and developments at the Volkswagen Group 40

Business development 43

Results of operations, financial position and net assets 47

Porsche Automobil Holding SE

(financial statements pursuant to the German Commercial Code) 53

Sustainable value enhancement in the Porsche SE Group 56

Overall statement on the economic situation of Porsche SE and

the Porsche SE Group 57

Remuneration report 58

Opportunities and risks of future development 68

Publication of the declaration of compliance 90

Subsequent events 91

Forecast report and outlook 92

Glossary 97

Group management report and management report of Porsche SE

32 32

Group management report and management report Group management report and management report of Porsche SE of Porsche SE

Fundamental information about the group

Fundamental information

FPuonrsdchaemAuetnomtaolbilnHfooldrmingaStEio("nPorsche SE" or

Investment manage

ment of Porsche SE

Porsche SE is a holding company with investments in the areas of mobility and industrial technology. In

atbheo"ucot mthpaenyg")r,oaus pthe ultimate parent of the about the group

Porsche SE Group, is a European Company

(Societas Europaea) and is headquartered at

PPoorsrscchheeApulatotzm1oibnil7H0o4l3d5inSgtuStEtg(a"Prto, rGsecrhmeaSnEy". Aosr of Porsche Automobil Holding SE ("Porsche SE" or th3e1"Dceocmepmabneyr")2,0a2s0t,hteheulPtimorastcehpeaSreEnGt orofutphehad the "company"), as the ultimate parent of the P9o1rs6cehme pSlEoyGeerosu(p9,5i1s eamEpulroypeeeasn).Company Porsche SE Group, is a European Company (Societas Europaea) and is headquartered at (Societas Europaea) and is headquartered at PTohrsecPhoerpslcathze1SiEn G70ro4u3p5 iSstumtatgdaertu, pGoefrmthaenfyu. lAlys of Porscheplatz 1 in 70435 Stuttgart, Germany. As of 3c1oDnescoelidmabtedr 2s0u2b0s,idthiaeriPesorPsochrsechSeEBGertoeuilpighuandg 31 December 2020, the Porsche SE Group had 9G16mebmHp, lSotyuetetgsa(r9t,5P1oermscphloeyZewese)i.te Beteiligung GmbH, 916 employees (951 employees).

Inpvaertsictmulearn, titmhaonldasgtehme emnatjorfitPyorfstchheeorSdEinary

Investment management of Porsche SE shares in Volkswagen AG, one of the leading

Stuttgart, including PTV Planung Transport Verkehr

TAheG,PKoarsrlcshruehSeE("GPrToVupAGis"m), adned uitps souf bthseidfiualrliyes (the The Porsche SE Group is made up of the fully c"oPnTsVoliGdaroteudp"s),uPbsoirdsicahriesDPriottrescBheeteBiliegtuenilig uGnmgbH, consolidated subsidiaries Porsche Beteiligung GSmtubtHtg,aSrt,uPttograsrct,hPeoVrsiecrht e BZewteiltieguBnegteGilimgubnHg, GmbH, GmbH, Stuttgart, Porsche Zweite Beteiligung GmbH, SStututttgtgaartr,t,inacnluddtihneg aPltTeVrnPaltaivneuningveTrsatmnsepnotrftuVnedrkehr Stuttgart, including PTV Planung Transport Verkehr AHGI,-LKiaqrulsidruithäets(f"oPnTdVs.ATGh"e),inavnedstitmsesnutbssiindiVaorileksw(thageen AG, Karlsruhe ("PTV AG"), and its subsidiaries (the "PATkVtieGngroeuspe"ll)s, cPhoarfst,chWeoDlfsribttuergBe("tVeoillikgsuwngagGemn bAHG," "PTV Group"), Porsche Dritte Beteiligung GmbH, Sotur t"tVgoalrkt,sPwoargsecnh"e),VainedrteINBReItXeiIlnigcu.,nKgiGrkmlabndH,, Stuttgart, Porsche Vierte Beteiligung GmbH, SWtuattsghainrtg, taond, UthSeAa(lt"eINrnRaItXiv"e), ianrveeisntcmluednetdfuind Stuttgart, and the alternative investment fund HPI-oLrisqcuhideitSäEts'sfoInFdRsS. TchoensinovliedsatmedenfitnsaincViaollkswagen HI-Liquiditätsfonds. The investments in Volkswagen Askttaietenmgesnetlslsacshafsts, oWcoialftsebsu. rg ("Volkswagen AG" Aktiengesellschaft, Wolfsburg ("Volkswagen AG" or "Volkswagen"), and INRIX Inc., Kirkland, or "Volkswagen"), and INRIX Inc., Kirkland, WTahsehbinugstionne,sUs SaActi(v"iItNieRsIXo"f)P, aorescinhceluSdEedesisnentially Washington, USA ("INRIX"), are included in Pcoorsncshiset SinEa'scqIFuRirSingc,ohnosoldlidnagt,emdafninaagnicnigaland selling Porsche SE's IFRS consolidated financial sitnavtemstemnetsntassinascsoomcpiaatensie.s. The management statements as associates.

PaourstocmheobSiEleismanhuofladcintugrecrosminpathney woitrhldi.nTvehsetments Porsche SE is a holding company with investments inVothlkesawreaagsenofGmrooubpilictyomanpdrisinedsutswtreialvletebcrhanodlsogwyi.thIn in the areas of mobility and industrial technology. In praergtiicsutelarer,ditohfoficldesstihnesmevaejonrEityurofptehaenocrdoiunnatryies: particular, it holds the majority of the ordinary sVhoarlkeswinagVeonlkpswasasgeenngAerGc,aorns,eAoufdthi,eSlEeAaTd,inŠgKODA, shares in Volkswagen AG, one of the leading aButeonmtleoyb,ilBeumganttui,faLcatmurbeorsrgihninthi,ePworosrcldh.eT, hDeucati, automobile manufacturers in the world. The VVoolklkswswaaggeennGcromupmceorcmiaplrviseehsictlwese,lvSecbarnainadasnwd iMthAN. Volkswagen Group comprises twelve brands with reTghiestceorelldabooffriacteiosninbseetwvenenEuthroepMeaAnNcaonudntSriceasn: ia registered offices in seven European countries: Vcoolkmswmaegrceinalpvaeshsiecnlegberacnadrs,isAucdoio, rSdEinAaTt,eŠdKinODA, Volkswagen passenger cars, Audi, SEAT, ŠKODA, BTeRnAtlTeyO,NBuSgEa,twti,hLicahmhbaosrgbheienni, Plisotresdchoen,tDhuecsattoi,ck Bentley, Bugatti, Lamborghini, Porsche, Ducati, Veoxlkcshwaangenscinocmemeidrc-i2a0l1v9e.hIincleasd,dSitcioanitaoathned MAN. Volkswagen commercial vehicles, Scania and MAN. TihnevecsotlmlaebnotraintioVnolbksewtwaegen tAhGe ,MthAeNPaonrdscShceaSniEa The collaboration between the MAN and Scania cGomromuperhcoialdl vse1h0ic0l%e boraf nthdes sishacroeosrdininPaTteVdAinG as well commercial vehicle brands is coordinated in TaRsATnoOnN-cSoEn,trwohllincgh ihnatesrbesetesninlisftieved toenchthneolsotgoyck TRATON SE, which has been listed on the stock ecxochmapnagneiessinbcaesmedidi-n2t0h1e9U. ISnAadandditioIsnrateol.the exchange since mid-2019. In addition to the investment in Volkswagen AG, the Porsche SE investment in Volkswagen AG, the Porsche SE

GTrhoeu prhinocldipsa1l 0cr0it%erioafotfhPeosrhsacrheesSinEPfoTrVthAeGaacsquwiseitllion Group holds 100% of the shares in PTV AG as well aosfninovne-sctomnetrnotlslinagreinthterecsotnsniencftiivoentteocihnndoulsotgriyal as non-controlling interests in five technology cpormodpuacntieiosnboarsteodthine tfhuetuUreSoAf amnodbIilsitrya.eTl.he companies based in the USA and Israel. prerequisites for investment by Porsche SE are

reports for Porsche SE and for the Porsche SE

TGherobuupsainrescsoamcbtiivniteiedsinofthPisorrsecphoertS. E essentially The business activities of Porsche SE essentially consist in acquiring, holding, managing and selling consist in acquiring, holding, managing and selling investments in companies. The management investments in companies. The management reports for Porsche SE and for the Porsche SE reports for Porsche SE and for the Porsche SE Group are combined in this report.

Group are combined in this report.

Tahlewparyisncthipeapl corsititeiorinainogf PinorasnchaettrSaEctfivoer tmhearakceqt uisition The principal criteria of Porsche SE for the acquisition oef ninvvireosntment,saanreatbhoevceo-anvneercatgioengtrowintdhupsrtorifaille and of investments are the connection to industrial pmroidu-ctotiolonnogr-toertmhepfoutteunretiaolffomropbroiliftiyt.abThiliety of the production or to the future of mobility. The pcreormeqpuainsiteess. for investment by Porsche SE are prerequisites for investment by Porsche SE are always the positioning in an attractive market always the positioning in an attractive market environment, an above-average growth profile and environment, an above-average growth profile and mid- to long-term potential for profitability of the mid- to long-term potential for profitability of the companies.

companies.

All figures and percentages are rounded according to customary business practice, so minor discrepancies may arise from the addition of these amounts. The comparative prior-year figures are presented in parantheses alongside the figures for the current reporting period.

All figures and percentages are rounded according to customary business practice, so minor discrepancies may arise from the addition of these All figures and percentages are rounded according to customary business practice, so minor discrepancies may arise from the addition of these amounts. The comparative prior-year figures are presented in parantheses alongside the figures for the current reporting period.

amounts. The comparative prior-year figures are presented in parantheses alongside the figures for the current reporting period.

Fundamental information about the group

Core management and financial indicator system

Porsche SE's main corporate goal is to invest in companies that contribute to the mid- and long-term profitability of the Porsche SE Group while securing sufficient liquidity. In line with this corporate goal, the result and liquidity are the core management indicators in the Porsche SE Group.

The IFRS group result after tax is used as the financial indicator for the result of the Porsche SE Group. For liquidity, net liquidity is monitored and managed accordingly. By definition, net liquidity is calculated as cash and cash equivalents, time deposits and securities less financial liabilities.

The management of the Porsche SE Group comprises Porsche SE and the consolidated entities. There is therefore no separate management and forecast of the core management indicators for Porsche SE.

The planning and budgeting process implemented in the Porsche SE Group is designed to enable management to take its decisions on the basis of the development of these indicators. In this context, an integrated multi-year plan is prepared for the results of operations, financial position and net assets of the Porsche SE Group.

In the course of the year, the development of the indicators is continuously tracked and made available to the board of management and supervisory board in regular reports. The reporting includes in particular the consolidated financial statement reports for the Porsche SE Group as well as risk reports.

Report on economic position

Group management report and management report of Porsche SE

Report on economic position

Significant events and developments at the Porsche SE Group

Global spread of the coronavirus SARS-CoV-2

At the end of December 2019, initial cases of a potentially fatal respiratory disease became known in Wuhan, in the Chinese province of Hubei. This disease is attributable to a novel coronavirus. Infections also appeared outside China from mid-January 2020. In Europe, the number of peoplecaused by the Covid-19 pandemic. During the third quarter, and particularly during the fourth quarter of 2020, many regions around the world saw a renewed - and in some cases very rapid - increase in new infections, which led to the easing of restrictions being reversed in certain situations.

Throughout the whole of 2020, the global spread of the SARS-CoV-2 virus brought enormous disruptioninfected rose continuously in the course of February, to all areas of everyday life and the economy. and especially in March and April 2020. While many

European countries recorded declining numbers of

new infections as the second quarter of 2020 progressed, the rate of new infections continued to rise in North, Central and South America, Africa and parts of Asia. In the second quarter, many of the measures taken to contain the Covid-19 pandemic were gradually eased, especially in Europe. This included partially lifting border controls and travel restrictions and easing lockdowns as well as the reopening of businesses and public facilities. In addition, the European Commission and numerous European governments approved aid packages to support the economy. In other regions, too, governments introduced measures aimed at shoring up the economy to counteract the enormous disruption to everyday life and economic activity

Significant developments with regard to the investment in Volkswagen AG accounted for at equity

Due to its share in capital of Volkswagen AG, Porsche SE is significantly influenced by the developments at the level of the Volkswagen Group. In this context, the impact of the Covid-19 pandemic as well as the diesel issue at the level of the Volkswagen Group and their implications for the Porsche SE Group are the main points to be addressed in the fiscal year 2020.

On 18 September 2015, the US Environmental Protection Agency (EPA) publicly announced in a notice of violation that irregularities in relation to nitrogen oxide (NOx) emissions had been discovered in emissions tests on certain Volkswagen Group vehicles with 2.0 l diesel engines in the USA. On 2 November 2015, the EPA issued a notice of violation alleging that irregularities had also been discovered in the software installed in US vehicles with type V6 3.0 l diesel engines. In this regard, numerous judicial and regulatory proceedings were subsequently initiated in various countries ("diesel issue"). In the fiscal year 2020, the operating result at the level of the Volkswagen Group was negatively influenced by special items in connection with the diesel issue of minus €0.9 billion (minus €2.3 billion) in the passenger car business area. They largely result from legal risks.

The Volkswagen Group's business in the fiscal year 2020 was severely affected by the Covid-19 pandemic. The group result after tax decreased from €14.0 billion in the prior year to €8.8 billion (see also sections "Business development" and "Results of operations of the Volkswagen Group").

Furthermore, the proportionate market capitalization of the investment in Volkswagen AG is influenced by the development of the prices of the Volkswagen ordinary and preference shares that may result from any negative effects in connection with theCovid-19 pandemic and/or with the diesel issue. As of 31 December 2020, there was no need to recognize an impairment loss on the basis of the earnings forecasts for the investment accounted for at equity in Volkswagen AG. However, an impairment in the value of the investment cannot be ruled out, particularly in the event of any sustained decline in earnings due to the Covid-19 pandemic and/or a further increase in the costs of mitigating the diesel issue. In addition, there may be consequences for the dividend policy of Volkswagen AG and therefore for the cash inflows at the level of Porsche SE. We refer to the explanations in the section "Opportunities and risks of future development".

Porsche SE acquires further ordinary shares in Volkswagen AG

Porsche SE holds the majority of the ordinary shares in Volkswagen AG as a core investment, sees itself as a long-term anchor investor and remains convinced of the Volkswagen Group's potential for increasing value added. In the period from 17 March 2020 to 20 April 2020, Porsche SE acquired overall an additional 0.2% of the ordinary shares in Volkswagen AG for €81 million via the capital market. As of 31 December 2020, Porsche SE held 53.3% (53.1%) of the ordinary shares in Volkswagen AG. The acquisitions resulted

Group management report and management report of Porsche SE

overall in income from first-time at equity accounting of €127 million. This increase in the investment is another demonstration of the company's clear commitment to Volkswagen.

Significant developments and current status relating to litigation risks and legal disputes

scheduled to begin on 21 April 2021. Porsche SE is of the opinion that the claims asserted in the suspended initial proceedings are without merit and that the requested establishment objectives in the model case will be rejected. Porsche SE considers its opinion endorsed by the previous development of the oral hearing before the Higher Regional Court of Celle.

For several years, Porsche SE has been involved in various legal proceedings. The main developments that occurred in the legal proceedings during the reporting period are described in the following. Porsche SE continues not to have reliable findings or assessments that would lead to a different evaluation of the legal risks.

Legal proceedings and legal risks in connection with the expansion of the investment in Volkswagen AG

A model case according to the Capital Markets Model Case Act (KapMuG) against Porsche SE initiated by an order of reference of the Regional Court of Hanover dated 13 April 2016 is pending with the Higher Regional Court of Celle. Subject of those actions are alleged damage claims based on alleged market manipulation and alleged inaccurate information in connection with Porsche SE's expansion of the investment in Volkswagen AG. In part these claims are also based on alleged violations of antitrust regulations. In the six initial proceedings suspended with reference to the model case a total of 40 plaintiffs assert alleged claims for damages of about €5.4 billion (plus interest). Since the beginning of the model case several hearings have already been held before the Higher Regional Court of Celle, in which the court, inter alia, explained its preliminary view on the state of affairs and of the dispute. The next dates for hearings are

In a proceeding pending before the Regional Court of Frankfurt against an incumbent and a former, meanwhile deceased, member of the supervisory board of Porsche SE, Porsche SE joined as intervener in support of the defendants. In this proceeding the same alleged claims are asserted that are already subject of a currently suspended action concerning alleged damages of about €1.81 billion (plus interest) pending against Porsche SE before the Regional Court of Hanover. No new developments occurred in this proceeding during the reporting period. Porsche SE considers these claims to be without merit.

Since 2012, Porsche SE and two companies of an investment fund have been in dispute over the existence of alleged claims in the amount of about US$195 million and have filed lawsuits in Germany and England respectively. On 6 March 2013, the English proceedings were suspended at the request of both parties until a final decision had been reached in the proceedings commenced in the Regional Court of Stuttgart concerning the question of which court is the court first seized. A final decision on this issue continues to be outstanding. Currently, the proceedings are pending before the Higher Regional Court of Stuttgart. Porsche SE considers the action filed in England to be inadmissible and the asserted claims to be without merit.

Legal proceedings and legal risks in connection with the diesel issue and shareholder proceedings

In connection with the diesel issue, legal proceedings with a total volume of approximately €1.1 billion (plus interest) are pending against Porsche SE before the Regional Court of Stuttgart, the Higher Regional Court of Stuttgart and the Regional Court of Braunschweig. The plaintiffs accuse Porsche SE of alleged nonfeasance of capital market information or alleged incorrect capital market information in connection with the diesel issue. Some of these proceedings are directed against both Porsche SE and Volkswagen AG. Porsche SE considers the actions to be inadmissible in part, but in any case to be without merit.

Before the Regional Court of Stuttgart 199 actions are currently pending at first instance. After withdrawal of a few lawsuits, the actions concern payment of damages, if quantified, in the total amount of approximately €914.4 million (plus interest) and in part establishment of liability for damages. In the majority of the proceedings pending before the Regional Court of Stuttgart, the plaintiff side had filed motions for recusal. To the extent that decisions have been made so far on these motions for recusal, they have been dismissed. The remaining motions for recusal have become inadmissible because of a change in the composition of the chamber. 30 claims for damagesagainst Porsche SE, with a claim volume (according to the current assessment of the partially unclear head of claims) of approximately €9 million (plus interest), are pending before the Regional Court of Braunschweig. A number of the proceedings pending before the Regional Court of Stuttgart and the Regional Court of Braunschweig are currently suspended with reference to the KapMuG proceedings pending before the Higher Regional Court of Stuttgart and the Higher Regional Court of Braunschweig. Porsche SE considers the actions filed against it before the Regional Court of Stuttgart to be without merit. The actions filed against Porsche SE before the Regional Court of Braunschweig are considered by Porsche SE to be inadmissible and to be without merit.

In addition, two further proceedings, in which a total of further approximately €164 million (plus interest) in damages was claimed, are pending before the Higher Regional Court of Stuttgart on appeal. The Regional Court of Stuttgart granted these actions in the amount of approximately €47 million (plus interest) and otherwise dismissed the actions on 24 October 2018. Porsche SE and the respective plaintiffs filed appeals. The appeal proceedings had been suspended with reference to the KapMuG proceedings pending before the Higher Regional Court of Stuttgart and the Higher Regional Court of Braunschweig. The orders to suspend the proceedings by the Higher Regional Court of Stuttgart were appealed by the respective plaintiffs on points of law. In one proceeding, the appeal on

points of law against the order to suspend the proceeding has meanwhile been withdrawn. In the other proceeding, the Federal Court of Justice, by court order dated 16 June 2020, set aside the order to suspend the proceeding by the Higher Regional Court of Stuttgart and ordered that the proceeding be resumed. Porsche SE considers these actions filed against it before the Regional Court of Stuttgart to be without merit.

A KapMuG proceeding, initiated by order for reference of the Regional Court of Stuttgart of 28 February 2017, is pending before the Higher Regional Court of Stuttgart. The Higher Regional Court of Stuttgart decided by court order dated 27 March 2019 that the model case proceeding is inadmissible. Against this decision an appeal on points of law was filed with the Federal Court of Justice. By court order dated 16 June 2020, the Federal Court of Justice set aside the court order of the Higher Regional Court of Stuttgart and referred the case back to the Higher Regional Court of Stuttgart. On 22 October 2020, the Higher Regional Court of Stuttgart appointed a model case plaintiff.

Following corresponding orders to suspend the proceedings by the Regional Court of Braunschweig and the courts of Stuttgart, Porsche SE became a further model case defendant in the model case proceedings before the Higher Regional Court of Braunschweig. Several oral hearings have taken place before the Higher Regional Court of Braunschweig. The next oral hearing is set to take place on 19 April 2021. With regard to the partial model case ruling of the Higher Regional Court of Braunschweig regarding questions of jurisdiction, an appeal on points of law was filed with the Federal Court of Justice. By court order dated 21 July 2020, the Federal Court of Justice dismissed the appeal on points of law.

During the reporting period, no significant new developments have occurred with regard to claims asserted out of court and not yet brought to court against Porsche SE with a total amount of approximately €63 million and in some caseswithout defined amounts as well as with regard to the waiver of the statute of limitations defense granted by Porsche SE to the United States of America for alleged claims for damages in relation to the alleged acquisition of in total 40,992 Porsche SE preference shares.

The investigation proceedings on suspicion of market manipulation against Matthias Müller, Hans Dieter Pötsch and Prof. Dr. Martin Winterkorn, have meanwhile been terminated. After a thorough examination and consideration, the Porsche SE supervisory board has argued that Porsche SE will assume a fine imposed in this regard on Hans Dieter Pötsch amounting to €1.5 million. The regulatory fining proceedings against Porsche SE pursuant to Sec. 30, 130 Regulatory Offences Act (OWiG) continue to be pending. Porsche SE considers the allegation made to be without merit.

In the shareholder proceedings, the so-called status proceeding in accordance with Sec. 98 German Stock Corporation Act (AktG) was closed due to the withdrawal of all motions. Also closed is the proceeding for annulment regarding the resolutions of the annual general meeting on 29 June 2016 on the exoneration of the board of management and the supervisory board for the fiscal year 2015. The appeal against the refusal of leave to appeal on points of law filed by Porsche SE has been rejected.

Significant events and developments at the Volkswagen Group

Effects of the Covid-19 pandemic

By causing a global decline in demand - driven among other factors by measures taken by governments in the form of restrictions on trade in motor vehicles - as well as temporary production stoppages, the Covid-19 pandemic had a negative impact on the Volkswagen Group's net assets, financial position and results of operations in fiscal year 2020.Since the Covid-19 pandemic still persists at the beginning of 2021, effects on the net assets, financial position and results of operations of the Volkswagen Group are again expected for 2021. We refer to the explanations in the sections "Business development", "Results of operations of the Volkswagen Group", "Report on opportunities and risks of the Volkswagen Group" and "Forecast report and outlook".

Capital increase at QuantumScape Corporation

In the fiscal year 2020, the Volkswagen Group took part in a capital increase at QuantumScape Corporation, a US-based company that develops solid-state batteries, entering into forward purchaseagreements for new shares.The capital contribution comprises two tranches of US$100 million each. The first tranche was already paid in December 2020.

Payment of the second tranche is subject to a technical milestone being reached. Since there has meanwhile been a merger with a special purpose acquisition company (SPAC), which resulted in a listing on the New York Stock Exchange, the forward purchases are measured with reference to the share price of QuantumScape Corporation until the contribution has been made and the new shares have been issued. This measurement and realization resulted in non-cash income of €1.4 billion in the fiscal year 2020, which is reported in the other financial result.

Diesel issue

context, Volkswagen AG announced that noticeable discrepancies between the figures recorded in testing and those measured in actual road use had been identified in around eleven million vehicles worldwide with type EA 189 diesel engines. On 2 November 2015, the EPA issued a notice of violation alleging that irregularities had also been discovered in the software installed in US vehicles with type V6 3.0 l diesel engines. The diesel issue is rooted in a modification of parts of the software of the relevant engine control units - which, according to Volkswagen AG's legal position, is only unlawful under US law - for the type EA 189 diesel engines that Volkswagen AG was developing at that time. The decision to develop and install this software function was taken in late 2006 below board of management level of Volkswagen. No member of the board of management of Volkswagen had, at that time and for many years to follow, knowledge of the development and implementation of this software function.

In the fiscal year 2020, additional expenses of €0.9 billion mainly for legal risks had to be recognized in this connection at the level of the Volkswagen Group.

Contribution of Autonomous Intelligent Driving

On 12 July 2019, Volkswagen announced that, together with Ford Motor Company (Ford), it would be investing in Argo AI, a company that is working on the development of a system for autonomous driving. The investment involves the provision of financial resources totaling US$1.0 billion, spread over several years, and the contribution by Volkswagen of its consolidated subsidiary Autonomous Intelligent Driving (AID).Furthermore, Volkswagen acquired existing Argo AI shares from Ford for a purchase price of US$500 million, payable in three equal annual installments.The transaction, including the contribution of AID, was executed as of 1 June 2020. After proportional profit elimination, the contribution of AID to Argo AI at fair value resulted in non-cash income of €0.8 billion, which was recognized in the other operating result. Argo AI will be accounted for as a joint venture and included in the consolidated financial statements of the Volkswagen Group using the equity method.

Squeeze-out under the German Stock Corporation Act agreed at AUDI AG

As part of the planned squeeze-out at AUDI AG under the German Stock Corporation Act, Volkswagen AG announced on 16 June 2020 that the cash settlement for the transfer of shares held by minority shareholders had been set at €1,551.53 per share. On 31 July 2020, the annual general meeting of AUDI AG approved the squeeze-out under the German Stock Corporation Act at AUDI AG and thus the transfer of all outstanding Audi shares to Volkswagen AG. By resolution, the present value of the granted put option of around €0.2 billion was recognized by the Volkswagen Group as a current liability through other comprehensive income. The non-controlling interests in the Volkswagen Group and the retained earnings of the shareholders of Volkswagen AG decreased accordingly. This resolution took effect upon its entry in the commercial register on

16 November 2020. In December 2020, a former shareholder of AUDI AG initiated award proceedings against Volkswagen AG at the Munich I Regional Court, asking the court to review the amount of the cash settlement offered by Volkswagen AG.

Sale of interest in Renk AG

On 6 October 2020, the Volkswagen Group completed the sale of its 76% interest in Renk AG following the required regulatory approvals. The sale price was €0.5 billion. The transaction generated operating income of €0.1 billion at the level of Volkswagen.

Acquisition of all shares in Navistar

In November 2020, TRATON SE (TRATON) and Navistar International Corporation (Navistar), a leading US truck manufacturer, announced the signing of a binding merger agreement. Under this agreement, TRATON will acquire all outstanding shares in Navistar not already owned by TRATON in return for cash payment at a price of US$44.50 per share (total: approximately US$3.7 billion). As of 31 December 2020, TRATON already held a 16.7% interest in Navistar. The shareholders of Navistar approved the takeover by TRATON at the annual general meeting on 2 March 2021. The transaction is subject to regulatory approval. The completion of the transaction, through which TRATON will become Navistar's sole owner, is still intended for mid-2021.

Business development

The business development of the Porsche SE Group is largely shaped by its investment in Volkswagen AG as well as the development of the actions pending. For the business development of the Porsche SE Group, please refer to the sections "Significant events and developments at the Porsche SE Group" and "Results of operations, financial position and net assets". The following statements take into consideration factors influencing operating developments in the passenger cars and light commercial vehicles, commercial vehicles and financial services business areas at the Volkswagen Group.

General economic development

The global spread of the SARS-CoV-2 virus, the associated restrictions, and the resulting downturn in demand and supply meant that growth in the world economy was negative in 2020, at minus 4.0% (2.6%). The average rate of expansion of gross domestic product (GDP) was far below the prior-year's level in both the advanced economies and the emerging markets. At country level, performance in the reporting period depended on the extent to which the negative impact of the Covid-19 pandemic was already materializing. The governments and central banks of numerous countries responded in some cases with substantial fiscal and monetary policy measures. This meant cuts in the already relatively low interest rates. There

Trends in the markets for passenger cars and light commercial vehicles

In the fiscal year 2020, the global market volume of passenger cars fell significantly below the prior-year level due to the Covid-19 pandemic, decreasing to 67.7 million vehicles (down 15.2%). This marked a decline for the third year in a row. All regions were affected by this slump. The overall markets of Western Europe, South America and Africa recorded above-average losses, while the decline in Asia-Pacific and the Middle East was smaller in percentage terms. Global demand for light commercial vehicles in the reporting period was down significantly on the prior year.

Trends in the markets for commercial vehicles

In the markets that are relevant for the Volkswagen Group, global demand for mid-sized and heavy trucks with a gross weight of more than six tonnes was down substantially year on year in the fiscal year 2020 due to the spread of the SARS-CoV-2 virus: 460 thousand new vehicles were registered (down 20.1%). Despite the ongoing uncertainty generated by the Covid-19 pandemic, a recovery could be seen in almost all of the markets that are relevant for the Volkswagen Group in the second half of 2020 compared with the first six months. Demand for buses in the markets that are relevantwas a significant drop in prices for energy resources, for the Volkswagen Group was much lower than inwhile other commodity prices increased slightly year on year on average. On a global average, consumer prices rose at a slower pace than in 2019, and global trade in goods declined in the reporting period.

the prior year as a consequence of the pandemic.

Trends in the markets for financial services

Demand for automotive financial services was at a high level in 2020, particularly in the first three months, due in part to the persistently low-key interest rates in the main currency areas. Nevertheless, the Covid-19 pandemic put pressure

on the demand for financial services in almost all regions during the reporting period. The effects of the Covid-19 pandemic were noticeable worldwide, especially in the second quarter of 2020. Markets for automotive financial services staged a partial recovery in the third and fourth quarters.

registered declining demand year on year in all regions. The Volkswagen Group's e-mobility offensive had a positive impact on group sales, delivering 231,624 fully electric vehicles to customers globally - more than three times as many as in 2019.

Volkswagen Group deliveries

The Volkswagen Group delivered 9.3 million vehicles to customers worldwide in the fiscal year 2020. The decrease of 15.2% or 1.7 million units year on year was due almost exclusively to the Covid-19 pandemic and the measures taken worldwide to contain its spread. Sales figures for both the passenger cars business area and the commercial vehicles business area declined as a result of the fall in demand.

In connection with the pandemic, deliveries to customers were affected by differing temporal and geographical effects. Following in some cases drastic losses at the end of the first quarter and the start of the second quarter, demand for group models recovered as the reporting year went on, with declines becoming weaker. Volkswagen

In a significantly declining overall global market, the Volkswagen Group's passenger car market share increased slightly to 13.0% (12.9%).

In the period from January to December 2020, the Volkswagen Group handed over 21.5% fewer commercial vehicles to customers worldwide than in the prior year. Volkswagen delivered a total of 190 thousand commercial vehicles to customers.

Deliveries of passenger cars, light commercial vehicles, trucks and buses of the Volkswagen Group1

2020	2019	Change
%
Regions
Europe/Other markets	3,907,671	4,881,577	- 20.0
North America	785,801	951,494	- 17.4
South America	489,698	608,560	- 19.5
Asia-Pacific	4,122,202	4,533,666	- 9.1
Worldwide	9,305,372	10,975,297	- 15.2
by brands
Volkswagen passenger cars	5,328,029	6,279,007	- 15.1
Audi	1,692,773	1,845,573	- 8.3
ŠKODA	1,004,816	1,242,767	- 19.1
SEAT	427,035	574,078	- 25.6
Bentley	11,206	11,006	1.8
Lamborghini	7,430	8,205	- 9.4
Porsche	272,162	280,800	- 3.1
Bugatti	77	82	- 6.1
Volkswagen commercial vehicles	371,657	491,559	- 24.4
Passenger cars and light commercial vehicles total	9,115,185	10,733,077	- 15.1
Scania	72,085	99,457	- 27.5
MAN	118,102	142,763	- 17.3
Commercial vehicles total	190,187	242,220	- 21.5

1 Deliveries for prior year have been updated to reflect subsequent statistical trends. The figures include the Chinese joint ventures.

Group management report and management report 2of Porsche SE

Financial services of the VolkswagenGroup

The producGtrsouapnmdansaegrevmiceentsreopfotrht aendVomlaknsawgeamgeennt report of Porsche SE

financial services division were popular in the fiscal year 2020, although the Covid-19 pandemic weighed on demand. At 8.6 million (9.3 million), the number of new financing, leasing, service and insurance contracts worldwide was below the prior-year level. The ratio of leased or financed vehicles to group deliveries (penetration rate) in the financial services division's markets increased to 35.5% (34.5%) as the group's deliveries fell at a higher rate than the number of contracts signed. As of

31 December 2020, the total number of contracts

Financial services of the Volkswagen Group was 24.1 million, up 1.8% from year-end 2019.

The products and services of the Volkswagen financial services division were popular in the fiscal

Sales, production and inventory in the year 2020, although the Covid-19 pandemic

Volkswagen Group weighed on demand. At 8.6 million (9.3 million), the number of new financing, leasing, service and

The Volkswagen Group's unit sales to the dealer insurance contracts worldwide was below the prior-organization1 decreased by 16.4% to 9.2 million year level. The ratio of leased or financed vehicles units (including the Chinese joint ventures) in the to group deliveries (penetration rate) in the financial reporting year. This decline was essentially due to services division's markets increased to 35.5% the negative effects of the Covid-19 pandemic. (34.5%) as the group's deliveries fell at a higher rate Ongoing uncertainty in connection with this and than the number of contracts signed. As of national measures introduced to contain the

31 December 2020, the total number of contracts pandemic, such as mobility restrictions and store was 24.1 million, up 1.8% from year-end 2019. closures, were accompanied by a fall in customer demand.

Sales, production and inventory in the Volkswagen Group

The Volkswagen Group's unit sales to the dealer organization1 decreased by 16.4% to 9.2 million units (including the Chinese joint ventures) in the reporting year. This decline was essentially due to the negative effects of the Covid-19 pandemic. Ongoing uncertainty in connection with this and national measures introduced to contain the pandemic, such as mobility restrictions and store closures, were accompanied by a fall in customer demand.

In the fiscal year 2020, the Volkswagen Group's global production declined by 17.8% to a total of 8.9 million vehicles due to the measures taken to contain the spread of the SARS-CoV-2 virus. The impact of national measures to contain the pandemic led to a disruption of supply chains and consequently to production stoppages within the Volkswagen Group. The production figures for the locations in China saw a year-on-year recovery from the second quarter of 2020. By contrast, the delayed impact of the Covid-19 pandemic at the other locations worldwide caused declines in production in the first three quarters of 2020.

In the fiscal year 2020, the Volkswagen Group's Global inventories at Group companies and in the global production declined by 17.8% to a total of dealer organization were significantly lower at the 8.9 million vehicles due to the measures taken to end of the reporting period than at year-end 2019. contain the spread of the SARS-CoV-2 virus. The impact of national measures to contain the pandemic led to a disruption of supply chains and consequently to production stoppages within the Volkswagen Group. The production figures for the locations in China saw a year-on-year recovery from the second quarter of 2020. By contrast, the delayed impact of the Covid-19 pandemic at the other locations worldwide caused declines in production in the first three quarters of 2020.

Global inventories at Group companies and in the dealer organization were significantly lower at the end of the reporting period than at year-end 2019.

1 The dealer organization comprises all external dealer companies that are supplied by the Volkswagen Group.

Results of operations, financial position and net assets

The Porsche SE Group distinguishes between two segments. The first segment, "PSE", primarily includes Porsche SE holding operations including the investments in Volkswagen AG and the five non-controlling interests in technology companies. The second segment, "Intelligent Transport Systems" ("ITS"), comprises the development of smart software solutions for transport logistics as well as traffic planning and traffic management. The results of operations of the Porsche SE Group are essentially the sum of the two segments, as the consolidation effects are immaterial.

Results of operations of the Porsche SE Group

The group result after tax for the fiscal year 2020 came to €2.6 billion (€4.4 billion). On 16 April 2020, the board of management of Porsche SE had decided to no longer uphold the forecast for the group result after tax for the fiscal year 2020 as disclosed in the combined group management report of Porsche SE for the fiscal year 2019 due to the extraordinary uncertainty caused by the Covid-19 pandemic. As a result of the effects of the Covid-19 pandemic at the level of the Volkswagen Group and the related reduction in profit contributions from at equity accounting at the Porsche SE Group the corridor of between

€3.5 billion and €4.5 billion originally forecast in the Annual Report 2019 has not been achieved.

Of the result after tax, €2.6 billion (€4.4 billion) related to the PSE segment. For the ITS segment, a result after tax of minus €7 million (minus €6 million) was derived. This includes effects from the purchase price allocation amounting to minus €9 million (minus €9 million).

In addition to that, total comprehensive income of €1.4 billion (€2.3 billion) mainly contains positive effects from the measurement of cash flow hedges of €0.5 billion (minus €0.6 billion) as well as negative effects from currency translation of minus €0.9 billion (€0.2 billion) and from actuarial losses from the remeasurement of pension provisions of minus €0.6 billion (minus €1.7 billion) from at equity accounting for the investment in Volkswagen AG.

The result after tax for the PSE segment was significantly influenced by the result from the investment in Volkswagen AG accounted for at equity of €2.7 billion (€4.4 billion). This contains profit contributions from ongoing at equity accounting of €2.6 billion (€4.2 billion) as well as subsequent effects from purchase price allocations of minus €90 million (minus €88 million). The decrease in the result from ongoing at equity accounting reflects the impact of the Covid-19

pandemic at the level of the Volkswagen Group. The result from investments accounted for at equity also contains income from first-time at equity accounting of newly acquired ordinary shares of Volkswagen of €127 million (€322 million). Income from first-time at equity accounting is mainly attributable to the fact that the fundamental data for the Volkswagen Group used particularly in the valuation of the brands and the investments in joint ventures are not fully reflected in the share price and therefore not in the acquisition cost when calculating the pro rata revalued equity. Furthermore, matters negatively affecting the share price only had an impact on the revalued equity to the extent that they satisfy the recognition criteria for accounting purposes.

The decrease in other operating income for the PSE segment by €43 million primarily results from income from the prior-year reversal of provisions in connection with other taxes. Other operating expenses decreased mainly due to lower legal and consulting fees compared to the prior year of €21 million (€26 million). The increase in the financial result to €55 million (€25 million) is largely attributable to the positive development of the non-controlling interests in technology companies.

The €13 million increase in the income tax expense in the PSE segment to €24 million largely relates to the income tax receivables recognized for refunds

in the prior year. This was counterbalanced by the lower year-on-year result from the investment accounted for at equity in Volkswagen AG and as a result the lower deferred income tax expense.

In the reporting period, the ITS segment generated revenue of €107 million (€116 million), resulting primarily from the sale of software products (license sales and subscriptions), maintenance services and the project business. The decrease in revenue caused by the Covid-19 pandemic resulted accordingly in a proportionate decrease in the cost of materials. With personnel expenses down slightly year-on-year to €67 million (€68 million), cost-cutting measures reduced other operating expenses by €9 million to €17 million and the segment result before interest, tax, amortization and depreciation remained unchanged year-on-year at €13 million. Amortization and depreciation of €21 million

(€21 million) related in particular with an amount of €13 million (€13 million) to the subsequent measurement of the hidden reserves identified in the intangible assets in the course of the purchase price allocation as well as depreciation of right-of-use assets from leases of €4 million (€4 million).

Financial position of the Porsche SE Group

Net liquidity of the Porsche SE Group, i.e., cash and cash equivalents, time deposits and securities less financial liabilities, amounted to €563 million as of 31 December 2020. This was therefore within the corridor forecast for net liquidity of between €0.4 billion and €0.9 billion in the Annual Report 2019.

The cash flow from operating activities for the fiscal year 2020 came to €773 million (€722 million) and primarily contains the dividends of €756 million (€753 million) received from the investment in Volkswagen AG. The increase in the cash flow from operating activities on the prior year is largely attributable to income tax refunds received and the interest accrued thereon.

There was a cash outflow from investment activities totaling €186 million (€318 million) in the fiscal year 2020. This resulted primarily from a €104 million increase (€15 million decrease) in investments in time deposits as well as cash paid for the acquisition of additional ordinary shares in Volkswagen AG of €81 million (€311 million).

There was a cash outflow from financing activities of €676 million (€676 million) in the fiscal year 2020, largely due to the dividend payment made to the shareholders of Porsche SE of €680 million (€681 million).

Compared to 31 December 2019, cash and cash equivalents decreased by €93 million to €259 million. In addition to that, Porsche SE has at its disposal a credit facility with a volume of €1 billion and a term until July 2025.

Net assets of the Porsche SE Group

The Porsche SE Group's total assets amount to €36.3 billion as of 31 December 2020 (€35.6 billion).

The Porsche SE Group's non-current assets primarily relate to the carrying amount of the investment in Volkswagen AG accounted for at equity of €35.3 billion (€34.6 billion). Of the increase in the carrying amount, €2.5 billion is attributable to the result from investments accounted for at equity, €81 million to the acquisition of further ordinary shares in Volkswagen AG and €127 million to income generated as a result of the acquisition.

Group management report and management report of Porsche SE

This was counterbalanced in particular by expenses and income recognized through other comprehensive income of minus €1.3 billion. Furthermore, dividend payments received of €756 million reduced the carrying amount of the investment accounted for at equity.

Intangible assets of the Porsche SE Group of €227 million (€241 million) primarily contain the goodwill of the PTV Group of €147 million

(€147 million) as well as the carrying amounts for customer bases, software and brand resulting from the purchase price allocation. Current assets of €637 million (€684 million) mainly consist of cash and cash equivalents, securities and time deposits.

As of 31 December 2020, the equity of the Porsche SE Group increased to a total of €35.9 billion (€35.3 billion) in particular due to the positive group result after tax; this was counterbalanced by dividend payments made to the shareholders of Porsche SE and other comprehensive income. As of 31 December 2020, the equity ratio remained virtually constant compared to the end of the fiscal year 2019 at 99.2%.

Results of operations of the Volkswagen Group

The following statements relate to the original profit/loss figures of the Volkswagen Group in the fiscal year 2020. It should be noted that the group result of Porsche SE only reflects its capital share in the result of the Volkswagen Group in the course of at equity accounting. Furthermore, effects from at equity accounting in the consolidated financial statements of Porsche SE, particularly relating to the subsequent measurement of the hidden reserves and liabilities identified in the course of the purchase price allocations, are not taken into consideration in the explanations below.

In the fiscal year 2020, the Volkswagen Group generated revenue of €222.9 billion. The year-on-year decrease of 11.8% was mainly attributable to falling volumes as a result of the Covid-19 pandemic, as well as the negative effects of changes in exchange rates. Improvements in the mix and in price positioning had a positive impact. 80.8% (80.6%) of the Volkswagen Group's revenue originated abroad.

Gross profit amounted to €38.9 billion, €10.2 billion lower than in 2019. This figure also included risk provisions for any non-compliance with legal emissions limits. Positive special items amounting to €0.1 billion (€0.3 billion) recognized here in both periods due to the reversal of provisions for technical measures in connection with the diesel issue had an offsetting effect. The gross margin stood at 17.5% (19.5%); excluding special items, it amounted to 17.4% (19.3%).

The persistent negative impact of the spread of the SARS-CoV-2 virus was the main factor driving the €8.7 billion decline in the Volkswagen Group's operating result before special items to €10.6 billion in the reporting year. The operating return on sales before special items fell to 4.8% (7.6%). In addition to lower unit sales due to the pandemic-related decline in customer demand, turbulence in the capital markets meant that the measurement of receivables and liabilities denominated in foreign currencies had a negative effect. One-off expenses for restructuring measures of €0.5 billion also contributed to the reduction in profit. Positive factors were lower costs. The contribution of the consolidated subsidiary Autonomous Intelligent Driving (AID) to Argo AI, a company that is working on the development of a system for autonomous driving, led to income of €0.8 billion. This figure also includes the income from the sale of Renk. Special items in connection with the diesel issue weighed on the operating result, reducing this item by €0.9 billion (minus €2.3 billion). The Volkswagen Group's operating result was €9.7 billion

(€17.0 billion), while the operating return on sales fell to 4.3% (6.7%).

Group management report and management report of Porsche SE

The financial result increased by €0.6 billion year on year to €2.0 billion. The interest expenses included in the financial result were down, mainly for measurement-related reasons caused by a change in discount rates applied in the measurement of liabilities, while changes in share prices, also as a response to the Covid-19 pandemic, weighed on net income from securities and funds. The share of the result of equity-accounted investments was lower than in the prior year. The decline was primarily due to lower profit generated by the Chinese joint ventures, which were affected by the spread of the SARS-CoV-2 virus especially in the first quarter of 2020. The other financial result includes the measurement and realization of forward purchase agreements for new shares in QuantumScape Corporation, which led to non-cash income of €1.4 billion in the fiscal year 2020.

The Volkswagen Group's result before tax amounted to €11.7 billion (€18.4 billion). The return on sales before tax decreased to 5.2% (7.3%). Income taxes resulted in an expense of €2.8 billion (€4.3 billion) in the fiscal year 2020, which in turn led to a tax rate of 24.4% (23.6%). The result after tax decreased by €5.2 billion to €8.8 billion.

Porsche Automobil Holding SE (financial statements pursuant to the German Commercial Code)

The following explanations of the results of operations, financial position and net assets relate to the separate financial statements of Porsche SE for the fiscal year 2020.

Results of operations

Porsche SE achieved a net profit of €703 million (€788 million) in the fiscal year 2020. The result after tax amounted to €703 million (€744 million) and was within the upper-triple-digit million-euro range expected for the fiscal year 2020.

Other operating expenses of €33 million

(€39 million) mainly contain legal and consulting fees of €21 million (€26 million).

In the fiscal year 2020, Porsche SE received a dividend from its investment in Volkswagen AG of €756 million (€753 million). In the reporting period, profit and loss transfer agreements resulted in a negative effect on the result from investments of €8 million (positive effect of €1 million).

The interest result for the fiscal year 2020 decreased from €10 million in the prior year to minus €2 million. In the prior year, this had primarily comprised interest income on capitalized tax refund claims.

Income tax recognized in the prior year are attributable to tax refund claims for past fiscal years. The income from other tax recognized in the prior year is largely due to the reversal of provisions for other taxes.

Income statement of Porsche Automobil Holding SE
€ million	2020	2019
Revenue	0	1
Other operating income	4	2
Personnel expenses	- 15	- 16
Other operating expenses	- 33	- 39
Result from investments	748	754
Interest result	-2	10
Income tax	0	32
Result after tax	703	744
Other tax	0	45
Net profit	703	788
Transfer to (-) / withdrawal from (+) retained earnings	- 27	163
Net profit available for distribution	676	952
53

Group management report and management report of Porsche SE

Net assets and financial position

Non-current assets primarily contain the investment in Volkswagen AG of €22,512 million (€22,431 million). The increase in the carrying amount of the investment results from the acquisition of further ordinary shares in Volkswagen in the fiscal year 2020. This was counterbalanced by sales from securities classified as non-current assets of €99 million.

in cash and cash equivalents was primarily attributable to the surplus of €80 million from dividend payments received of Volkswagen AG over the dividends paid to shareholders of

Porsche SE as well as income tax refunds including interest on tax refunds of €49 million. This was counterbalanced by the acquisition of ordinary shares in Volkswagen AG of €81 million in the first half of 2020 as well as cash paid for other operating holding expenses.

The decrease in receivables and other assets was largely attributable to the collection of tax refund claims of €32 million capitalized as receivables in the prior year and the corresponding interest on tax refunds of €16 million.

Cash and cash equivalents contain bank balances including short-term time deposits. The increase

Balance sheet of Porsche Automobil Holding SE

Provisions contain provisions for pensions and similar obligations, tax provisions as well as other provisions.

As before, the liabilities relate largely to loan relationships entered into with subsidiaries.

€ million	31/12/2020	31/12/2019
Assets
Non-current assets	22,945	22,961
Receivables and other assets	1	50
Marketable securities	95
Cash and cash equivalents	412	396
Prepaid expenses	0	1
23,453	23,407
Equity and liabilities
Equity	23,238	23,211
Provisions	92	93
Liabilities	123	103
23,453	23,407

Risks relating to the business development

Dependent company report

The risks relating to the development of Porsche SE's business are closely connected to the risks relating to the significant investment in Volkswagen AG and to the development of the legal proceedings. The risks are described in the section "Opportunities and risks of future development".

Dividends

Porsche SE's dividend policy is generally geared to sustainability. The shareholders should participate in the success of Porsche SE in the form of an appropriate dividend, while taking the objective of securing sufficient liquidity into consideration, in particular for the purpose of acquiring future investments.

The separate financial statements of Porsche SE as of 31 December 2020 report a net profit available for distribution of €676 million consisting of a net profit of €703 million and a transfer to retained earnings of €27 million. The board of management proposes a resolution for the distribution of a dividend of €2.204 per ordinary share and €2.210 per preference share, i.e., a total distribution of €676 million.

In accordance with Sec. 312 AktG, Porsche SE has drawn up a report on relations with holders of its ordinary shares and companies affiliated with these (dependent company report). The conclusion of this report is as follows: "In accordance with the circumstances known to it when the transactions stated in the report were conducted, Porsche SE has rendered or, as the case may be, received reasonable payment. The company was not disadvantaged by these transactions."

Outlook

Due to Porsche SE's links with its group companies and their significance within the group, we refer to the statements in the section "Anticipated development of the Porsche SE Group", which also in particular reflect the expectations for the parent company. Based on the dividend proposed by the board of management and supervisory board of Volkswagen AG, Porsche SE expects a dividend of €4.80 per ordinary share and €4.86 per preference share for the fiscal year 2020. As a result, dividend income from Volkswagen of €756 million is expected at the level of Porsche SE for the fiscal year 2020, which will have a significant impact on the 2021 separate financial statements.

Sustainable value enhancement in the Porsche SE Group

The investment in Volkswagen AG remains Porsche SE's core investment. In addition to this, Porsche SE's aims to acquire additional investments related to industrial production or the future of mobility in order to generate sustainable returns through active investment management.

When it comes to identifying, implementing and further developing investment projects, Porsche SE draws on its integration into one of the world's largest automotive and industrial networks.

In addition to the core investment in Volkswagen, the Porsche SE Group has over the past few years invested in several companies that have significant sustainability aspects anchored in their respective business models. With the data portfolio they offer and their software solutions, the PTV Group and INRIX are aiming to optimize traffic and routes, thereby making a significant contribution to reducing the consumption of resources andlowering emissions. The innovative 3D printing solutions of two of our investments should allow raw materials to be used more efficiently in development and production.

Separate non-financial group report

The separate non-financial group report of the Porsche SE Group pursuant to Sec. 315b HGB for the fiscal year 2020 can be accessed at the latest by 30 April 2021 in German at www.porsche-se.com/unternehmen/corporate-governance and in English atwww.porsche-se.com/en/company/ corporate-governance.

Overall statement on the economic situation of Porsche SE and the Porsche SE Group

In the past fiscal year 2020 the results of operations of Porsche SE and the Porsche SE Group were largely characterized by the development of the Volkswagen Group. In light of the extraordinary challenges and negative economic impact caused by the Covid-19 pandemic, the board of management of Porsche SE assesses the business development in the fiscal year 2020 and the economic situation with a group result after tax of €2.6 billion (€4.4 billion) as positive. As a result of the severe disruption of the Volkswagen Group's business activities through the Covid-19 pandemic and the related reduction in profit contributions from at equity accounting at the Porsche SE Group, the corridor of between €3.5 billion and €4.5 billion originally forecast in the Annual Report 2019 has not been achieved. At €703 million, Porsche SE's result after tax was within the expected upper-triple-digit million-euro range.

The financial position was influenced to a large extent by dividends received and paid as well as the acquisition of further ordinary shares in Volkswagen AG. As of 31 December 2020, net liquidity was within the corridor forecast in the prior year of between €0.4 billion and €0.9 billion.

The board of management of Porsche SE expects the Volkswagen Group to maintain its market position in a persistently challenging environment, and remains convinced of the Volkswagen Group's potential for increasing value added. By acquiring further ordinary shares in the fiscal year 2020, the board of management of Porsche SE has made another clear demonstration of its commitment to the company's role as Volkswagen AG's long-term anchor shareholder.

of Porsche SE

Remuneration report

The remuneration report describes the main features of the remuneration system applicable in the fiscal year 2020 for members of the board of

Remuneration of t of management

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Remuneration report

the basic structure, composition and the individualized amounts of remuneration. The total remuneration for each member of the board of management is disclosed by name in accordance with the provisions of the German Commercial Code and the German Corporate Governance Code

(GCGC)1, divided into fixed and variable

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The disclosures comprise the remuneration that members of the board of management and supervisory board receive for board activities at the parent company and subsidiaries of the Porsche SE Group. As a result, the disclosures below do not contain any remuneration granted for board activities at the level of the Volkswagen Group.

In connection with ARUG II that came into force on 1 January 2020 and the revised version of the German Corporate Governance Code effective

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Remuneration of the board

In connection with ARUG II that came into force on 1 January 2020 and the revised version of the German Corporate Governance Code effective

20 March 2020, the supervisory board decided at its meeting on 3 December 2020 to introduce a new board of management remuneration system. This is being presented for approval to the 2021 annual general meeting pursuant to Sec. 120a AktG and will be generally applicable as of 1 January 2021.

The disclosures on the remuneration of the board of management in this remuneration report relate to the remuneration system that applied to the members of the board of management of Porsche SE in the fiscal year 2020.

1 All of the following references relate to the version of the GCGC dated 7 February 2017 (GCGC 2017). For reasons of consistency, the remuneration report continues to contain the model tables recommended by the GCGC 2017, which will continue to be used until transition to the new remuneration report within the meaning of Sec. 162 AktG introduced by the German Act to Implement the Second Shareholder Rights Directive (ARUG II).

Changes in the composition of the board of management in the fiscal year 2020

In consultation with the supervisory board, Mr. von Hagen left the company effective 30 June 2020 of his own accord and by mutual agreement. Mr. Meschke was appointed by the supervisory board as his successor in charge of the investment management function of Porsche SE effective 1 July 2020.

Remuneration principles at Porsche SE

All members of the board of management receive fixed basic remuneration for their work at Porsche SE.

40% of the set variable remuneration is due for payment three months after the fiscal year relevant for the bonus ends (short-term variable remuneration). The remaining 60% is generally due for payment two years after the short-term variable remuneration falls due (long-term variable remuneration). For Dr. Döss and Mr. Meschke, payment of long-term variable remuneration is primarily dependent on the Porsche SE Group generating a positive group result before tax in the most recent fiscal year concluded before the long-term variable remuneration falls due. Payment of long-term variable remuneration for both members of the board of management is therefore dependent on the development of the Porsche SE Group over several years.

In addition to this, Dr. Döss and Mr. Meschke as well as the former member of the board of management Mr. von Hagen receive variable remuneration. The amount of variable remuneration is specified by the supervisory board at its discretion, taking into account the business and earnings situation of the company, as well as their performance. If all targets are met, this amounts to €750 thousand (€750 thousand) for Dr. Döss andFor Mr. von Hagen, payment of both variable remuneration components was dependent on the Porsche SE Group generating a positive group result before tax in the most recent fiscal year concluded before the variable remuneration fell due. The payment of long-term variable remuneration was also contingent on Porsche SE having positive net liquidity as of the end of the fiscal year before it fell due. Following the exit of Mr. von Hagen, it was

€375 thousand for Mr. Meschke for 2020 as a whole. agreed not to apply these conditions.

For Mr. Meschke, the supervisory board is entitled, in the event of extraordinary developments, i.e., special situations not adequately accounted for in the set targets, to increase or decrease the bonus amount by up to 20% at its discretion.

Moreover, at its discretion, the supervisory board of the company may grant Mr. Pötsch and

Mr. Meschke a special bonus for previously agreed targets and Mr. Pötsch and Dr. Döss a subsequent bonus in recognition of outstanding performance.

Group management report and management report of Porsche SE

All members of the board of management of Porsche SE receive non-cash benefits, Mr. Pötsch and Dr. Döss in particular in the form of the use of company cars. Furthermore, members of the board of management who also serve as members of the Volkswagen AG supervisory board are also reimbursed for any costs between their place of residence and primary workplace. Porsche SE bears any taxes incurred in connection with this. Non-cash benefits are included at their tax or actual values in the table presenting the remuneration of the members of the board of management.

Porsche SE continues to pay the remuneration to the members of the board of management for a period of twelve months in the event of illness and, in the event of death, to the beneficiary dependents for six months following the month of death.

Board of management remuneration received and granted

The remuneration of each member of the board of management of Porsche SE presented below contains the remuneration as defined by the German Commercial Code and the GCGC that each member received for his service as a member of the board of management of Porsche SE or which was respectively granted. The disclosures on Mr. Meschke, Dr. Döss and Mr. von Hagen also contain the remuneration paid by PTV AG for serving as chairman of its supervisory board and member of the supervisory board respectively. The remuneration paid by PTV AG for Mr. Meschke's service on the supervisory board since 30 July 2020 (since 26 August 2020 as chairman of the supervisory board) is offset against his remuneration paid by Porsche SE. There was no other remuneration for membership on governing bodies from subsidiaries.

The short-term variable remuneration is recognized as benefits granted in the year for which they were granted. It is also recognized as benefits received in the same year.

The long-term variable remuneration is also recognized as benefits granted in the year for which they were granted. By contrast, they are recognized as benefits received at the end of the year in which all conditions precedent were fulfilled and the plan term ended in the reporting period; this is usually two fiscal years after the fiscal year for which they were granted.

A subsequent bonus in recognition of outstanding performance is recognized as benefits granted and received in the year in which it was resolved. This is not included in the presentation of the maximum remuneration for the benefits granted.

Hans Dieter Pötsch

Chairman of the board of management (since 1 November 2015) and Chief Financial Officer (since 25 November 2009)

Benefits received

Benefits grantedin €

2019

2020

2019

2020

2020 (Min)

2020 (Max)

Fixed compensation Fringe benefits

Total remuneration (non-performance related)

824,1961

500,000	500,000	500,000	500,000	500,000
315,695	324,196	315,695	315,695	315,695
815,6951	815,695	815,695	815,695

500,000324,196

Remuneration as defined by Sec. 285 No. 9a HGB, Sec. 314 (1) No. 6a in conjunction with Sec. 315e HGB.

Dr. Manfred Döss

Board of management member responsible for legal affairs and compliance (since 1 January 2016)

Benefits received

Benefits granted

in €
Fixed compensation1	532,927
Fringe benefits	85,647
Non-performance
related components	618,5742
One-year variable
compensation	260,000
Multi-year variable
compensation
(long-term incentive)	0
Performance
related components	260,0002
Total	878,5742
Service cost	481,838
Total remuneration	1,360,412

2019

2020

2019

2020

2020 (Min)

2020 (Max)

562,383	532,927	562,383	562,383	562,383
86,826	85,647	86,826	86,826	86,826
649,2092	618,574	649,209	649,209	649,209
280,000	260,000	280,000	0	300,000
330,000	390,000	420,000	0	450,000
610,0002	650,000	700,000	0	750,000
1,259,2092	1,268,574	1,349,209	649,209	1,399,209
548,276	481,838	548,276	548,276	548,276
1,807,485	1,897,485	1,197,485	1,947,485

€32,383 (€2,927) thereof relates to remuneration for his service as member of the supervisory board of PTV AG, a subsidiary of Porsche SE.

2 Remuneration as defined by Sec. 285 No. 9a HGB (taking footnote 1 into account), Sec. 314 (1) No. 6a in conjunction with Sec. 315e HGB.

Group management report and management report of Porsche SE

Lutz Meschke

Board of management member responsible for investment management (since 1 July 2020)

Benefits received

Benefits grantedin €

2020

2020 (Min)

2020 (Max)

Fixed compensation Fringe benefits

Non-performance related components

One-year variable compensation Multi-year variable compensation (long-term incentive)

Performance related components Total1

Service cost

Total remuneration

270,000	270,000	270,000	270,000
78	78	78	78
270,0782	270,078	270,078	270,078
64,000	64,000	0	90,000
96,000	0	135,000
64,0002	160,000	0	225,000
334,0782	430,078	270,078	495,078
30,221	30,221	30,221	30,221
364,299	460,299	300,299	525,299

The remuneration for service on the supervisory board of PTV AG since 30 July 2020, a subsidiary of Porsche SE, of €20,943 is offset against total remuneration.

2 Remuneration as defined by Sec. 285 No. 9a HGB (taking footnote 1 into account), Sec. 314 (1) No. 6a in conjunction with Sec. 315e HGB.

Philipp von Hagen

Board of management member responsible for investment management (from 1 March 2012 until 30 June 2020)

Benefits received

Benefits granted

in €
Fixed compensation1	546,150
Fringe benefits	86,603
Non-performance
related components	632,7532
One-year variable
compensation	100,000
Multi-year variable
compensation
(long-term incentive)	150,000
Performance
related components	250,0002
Total	882,7532
Service cost	330,120
Total remuneration	1,212,873

2019

2020

2019

2020

2020 (Min)

2020 (Max)

292,181	546,150	292,181	292,181	292,181
46,715	86,603	46,715	46,715	46,715
338,8962	632,753	338,896	338,896	338,896
50,000	100,000	50,000	0	60,000
150,000	150,000	75,000	0	90,000
200,0002	250,000	125,000	0	150,000
538,8962	882,753	463,896	338,896	488,896
392,696	330,120	392,696	392,696	392,696
931,592	856,592	731,592	881,592

€22,181 (€6,150) thereof relates to remuneration for his service as chairman of the supervisory board of PTV AG, a subsidiary of Porsche SE. Effective 30 June 2020, he resigned from the supervisory board mandate at PTV AG.

2 Remuneration as defined by Sec. 285 No. 9a HGB (taking footnote 1 into account), Sec. 314 (1) No. 6a in conjunction with Sec. 315e

HGB; for 2020 this also contains €225,000 for multi-year variable remuneration from activities in the fiscal year 2019 and 2020, for which the conditions precedent no longer apply due to his exit.

Group management report and management report of Porsche SE

Benefits in connection with the exit of a member of the board of management during the fiscal year 2020

In connection with Mr. von Hagen leaving the board of management, it was agreed that the benefits to which he is entitled under his contract of employment will be honored in full until the end of the term of the contract on 28 February 2021. As a result, for the period from 1 July to 31 December 2020 Mr. von Hagen received fixed remuneration of €270 thousand, fringe benefits of €25 thousand, short-term variable remuneration of €50 thousand (benefits received in 2020) as well as long-term variable remuneration of €75 thousand (benefits to be received in 2022). For the period from 1 January 2021 to 28 February 2021, Mr. von Hagen receives a fixed salary of €90 thousand, fringe benefits of €8 thousand as well as variable remuneration of €42 thousand (short-term variable remuneration to be received in 2021 and long-term variable remuneration in 2023). The originally planned determination/disbursement requirements for the variable remuneration for 2018 to (pro rata) 2021 (positive group result before tax and - in the case of long-term variable remuneration - also positive net liquidity of Porsche SE) are no longer applied.

Post-employment benefits in the event of regular or early termination of service

Mr. Pötsch does not receive any pension benefits from the company. In addition to retirement benefits and surviving dependents' benefits, Dr. Döss',

Mr. Meschke's and Mr. von Hagen's pension benefits include benefits in the event of permanent disability.

The future retirement benefits of Dr. Döss and

Mr. von Hagen are calculated as a percentage of an agreed pensionable income. Starting at 25%, this percentage increases by one percentage point for each full year of active service on the board of management of Porsche SE. The defined maximumis 40%. As of 31 December 2020, Dr. Döss has a retirement pension entitlement of 30% and Mr. von Hagen of 33%; the benefit rate of Mr. von Hagen will also increase by one percentage point in his last year of service regardless of early termination of his board of management activity. Immediate vesting was agreed for both gentlemen.

The retirement pension is paid in monthly amounts upon reaching the age of 65 or earlier in the event of permanent disability. In the event of entitlement to a retirement pension before reaching the age of 65, the retirement pension is calculated using actuarial principles by annuitization of the pension provision permissible in accordance with tax law at the time the retirement pension falls due.

For both gentlemen, the surviving dependents' benefits comprise a widows' pension of 60% of the retirement pension and orphans' benefits of 20% of the retirement pension for each child, reduced to 10% for each child if a widow's pension is paid. The total amount of widows' pensions and orphans' benefits may not exceed the amount of the retirement pension. Orphans' benefits are limited to a total of 80% of the retirement pension.

Mr. Meschke is entitled to a pension contribution of €60 thousand for each calendar year that he serves on the board of management - however, at the latest until the age of 62. The pension contribution is calculated on a pro rata basis for 2020, the year he joined the board of management and in the event of termination of his board of management service during the year.

The pension capital is paid as a one-off principal amount upon reaching the age of 62 or earlier in the event of a full or partial reduction in earning capacity most likely lasting no less than six months.

For the widow, otherwise for the children, the surviving dependents' benefits comprise a claim to the pension capital determined in accordance with the entitlement.

Dr. Döss will continue to be entitled to a company car following the date of retirement.

The service cost pursuant to IFRSs corresponds to the respective pension expense; as a result, we refer to the tables in the section "Board of management remuneration received and granted". The table below contains the service cost pursuant to HGB and the present values from each performance obligation pursuant to HGB or IFRSs:

Service cost and present values from performance obligations

Service cost HGB

Present value HGB

Present value IFRS

in €	2020	2019
Dr. Döss	4,456,115	3,652,372
Meschke	31,225	n/a
von Hagen	3,895,503	3,119,494
65

2019

2020

2019

554,467	562,717	3,480,483	2,848,813	4,456,115
27,923	n/a	27,923	n/a	31,225
433,203	2,531,301	3,895,503

Group management report and management report of Porsche SE

In the event of early termination of service on the board of management without due cause, a severance payment cap is provided for each member, according to which any severance payments, including fringe benefits, may not exceed a maximum of two years' compensation. Under no circumstances may the payments exceed the amount of remuneration due for the remaining term of the employment agreement. The severance payment cap is calculated on the basis of the total compensation for the past full fiscal year and, if appropriate, also the expected total compensation for the current fiscal year.

On termination of service, however, the variable remuneration for the current fiscal year is reduced pro rata temporis. The date when payment falls due is not affected by early exit from the board of management of the company.

In the event of exiting the board of management as a result of termination for due cause by Porsche SE, the entitlements to variable remuneration that are not yet due (in full or in part) expire for Dr. Döss, and the variable remuneration not yet paid out expires for Mr. Meschke.

Remuneration of the supervisory board

Remuneration principles at Porsche SE

The remuneration of Porsche SE's supervisory board is governed by Art. 13 of the company's articles of association. Each member of the supervisory board receives fixed remuneration of €75 thousand for the past fiscal year. The chairman of the supervisory board receives €150 thousand and his deputy €100 thousand. Each member of the executive committee also receives fixed remuneration of €25 thousand for each fiscal year and the chairman receives additional fixed remuneration of €50 thousand. In addition, the members of the audit committee receive additional annual fixed remuneration of €50 thousand. The chairman of the audit committee receives additional annual fixed remuneration of €100 thousand. The members of the nomination committee do not receive separate remuneration. Supervisory board members who have been a member of the supervisory board or one of its committees for only part of a fiscal year or chair the committee receive the remuneration pro rata temporis.

Remuneration of the supervisory board

The supervisory board received remuneration totaling €1,150 thousand (€1,129 thousand) for its service at Porsche SE in the fiscal year 2020.

The remuneration for the current individual members of Porsche SE's supervisory board presented below comprises the remuneration for their service on the supervisory board of Porsche SE as well as their service on a committee of the supervisory board of Porsche SE.

Non-performance related remuneration of the supervisory board

in €

2020

2019

Dr. Wolfgang Porsche Dr. Hans Michel Piëch Prof. Dr. Ulrich Lehner

175,000

Dr. Ferdinand Oliver Porsche Mag. Josef Michael Ahorner Mag. Marianne Heiß

150,000

75,000

Dr. Günther Horvath Dr. Stefan Piëch Peter Daniell Porsche

75,000

Prof. KR Ing. Siegfried Wolf

Total

75,000 1,150,000

54,452 1,129,452

Opportunities and risks

oGrofupfumatnuagermeentdreepovrt aendlomapnamgemeentnretport of Porsche SE

Opportunities and risks of future development

Report on opportunities and risks at the Porsche SE Group

Risk management system of the Porsche SE Group

Overview of the risk management system

The risk management system of the Porsche SE Group was set up to identify at an early stage any potential risks to the ability of the group to continue as a going concern as well as any risks that could have a significant and long-term negative impact on the results of operations, financial position and net assets of the group and to avoid these by means of suitable countermeasures that allow the group to avoid any risks to its ability to continue as a going concern.

The risk management system of the Porsche SE Group monitors both the direct risks at the level of Porsche SE as well as the significant indirect and direct risks from investments described below. The investments generally have their own independent risk management system and are responsible for managing their own risks. The risk management system can therefore be divided into the sphere of Porsche SE as holding company and the sphere of the investments.

In its risk management system, Porsche SE focuses on potential negative effects of risks. However, on occasion potential opportunities are also analyzed and presented.

The risk management system is designed to ensure that the management of Porsche SE is always informed of significant risk drivers and able to assess the potential impact of the identified risks in order to take suitable countermeasures at an early stage.

The Porsche SE Group's risk management system is updated on an ongoing basis and adapted to the company's requirements. Porsche SE's auditor examines the Porsche SE Group's risk early warning system annually with respect to its fundamental suitability of being able to identify risks at an early stage that might jeopardize the continued existence and assesses the functionality of the risk early warning and monitoring systems in accordance with Sec. 317(4) HGB. Assessing the probability and extent of future events and developments is, by its nature, subject to uncertainty. Even the best risk management system cannot foresee all potential risks and can never completely prevent irregular acts.

Risk management system of Porsche SE

Porsche SE's risk management system is subdivided into three lines of defense: "operational risk management", "strategic risk management" and "review-based risk management".

As the first line of defense, "operational risk management" comprises analysis, management, monitoring and documentation of risks at operational level. Porsche SE distinguishes between two types of risk. The first type of risk comprises risks from business activities which are entered into as part of (conscious) entrepreneurial decisions ("entrepreneurial risks"). The second type of risk comprises risks resulting from the lack of a definition or insufficient compliance with processes ("organizational risks"). Each individual department within Porsche SE is responsible for independently identifying, evaluating, managing, monitoring and documenting risks in its area and reporting significant risks to the finance department. In particular, this means that measures for managing risks are derived and implemented immediately at this level in all areas of the company, with the aim of preventing these risks from spreading to other areas or even to the company as a whole. With regard to the organizational risks, operational risk management is performed using the internal control system, which is described in the "Internal control system including internal control system of Porsche SE relevant for the financial reporting process" section. In addition to operational management ofthe specific individual risk areas at department level, the finance department also creates a complete view of the significant risks in order to take into consideration the overall risk exposure of the group and identify interactions between risk areas.

The second line of defense, "strategic risk management", is responsible for the conceptual design and control of the proper implementation of the entire risk management system. In addition to creating a risk map, deriving generic risk strategies, defining a general process structure for the operational management of risks and allocating risk areas to their respective risk owners, this includes in particular also control of the operation, effectiveness and documentation of operational and strategic risk management by the board of management and the supervisory board of Porsche SE.

The third line of defense, "review-based risk management", aims to ensure the appropriateness and effectiveness of the risk management system and therefore in particular that the operational and strategic risk management are in line with externally and internally defined standards. Review-based risk management is the responsibility of the internal audit, which, as an objective instance, reviews on the basis of samples whether operational risk management is firmly embedded in all areas and regularly performed, and reports the audit findings to the supervisory board. Furthermore, the strategic level is reviewed to determine whether there is a structured systems approach and whether the

Group management report and management report of Porsche SE

respective controls and reviews are performed in strategic risk management.

Internal control system including internal control system of Porsche SE relevant for the financial reporting process

Risk management at the level of the significant investments

The investments of Porsche SE generally have their own independent risk management system to monitor and manage risks at their level.

Management of the risks at Volkswagen is located at the level of Volkswagen AG. The task of Volkswagen AG's risk management is to identify, manage and monitor existing risks at the level of the Volkswagen Group. Volkswagen AG has implemented its own group-wide risk management system and is responsible for handling its own risks. At the same time, however, Volkswagen AG is required to ensure that Porsche SE as the holding company - within the scope of the legally permissible exchange of information - is informed at an early stage of any risks potentially jeopardizing the investment's ability to continue as a going concern. This information is provided, inter alia, in management talks and by forwarding risk reports. Volkswagen AG's auditor examines the risk early warning system with respect to its fundamental suitability of being able to identify risks that might jeopardize the continued existence and assesses the functionality of the risk early warning and monitoring systems in accordance with Sec. 317(4) HGB. For additional information on the structure of the risk management system at the level of Volkswagen AG, we refer to the explanations in the section "Risk management system of the Volkswagen Group".

PTV AG is responsible for handling its own risks via an independent group-wide risk management system. The implementation of an integrated risk management system was at an advanced stage as of the reporting date. Regular management meetings and regular reports on the economic situation aim to ensure that Porsche SE is informed about any significant risks at the level of PTV AG.

The aim of Porsche SE's internal control system is to manage the organizational risks as part of operational risk management.

The internal control system defines uniform measures to manage the organizational risks. Based on a comprehensive process map, a suitable organizational structure is derived for the entire company and the individual process steps, responsibilities and interfaces are derived by the respective process owner for the key processes. Controls are defined for processes and interfaces of particular relevance, compliance with which is generally monitored using the dual control principle. These measures are documented in process overviews, guidelines and checklists.

The accounting-related internal control system aims to ensure the compliance and legality of internal and external accounting and financial reporting. It comprises measures aimed at ensuring complete, correct and timely transmission of the information required for authorizing for issue the separate and consolidated financial statements as well as the combined management report for Porsche SE.

Opportunities and risks of the Porsche SE Group

Organizational risks

Organizational risks comprise risks resulting from the lack of a definition or insufficient compliance with processes. The internal control system serves to manage these risks. Porsche SE distinguishes between the risk areas "Financial reporting/ accounting", "Business operations" and "Compliance".

With regard to the risk area "financial reporting/ accounting", for the Porsche SE Group's accounting that is essentially organized along decentralized lines, the IFRS accounting manual of Porsche SE ensures uniform recognition and measurement based on the accounting policies applicable at the Porsche SE Group. Accounting duties are performed by the individual group companies. The financial statements of the group companies are prepared using standard software. Issuing formal instructions such as a group-wide time schedule as well as set reporting packages for the respective group companies ensures the timely and uniform reporting of the units included in the consolidated financial statements. The components of the reporting packages required to be prepared for the Porsche SE Group are set out in detail and updated regularly to reflect changes to the legal requirements. Upon receipt, they are subjected toan extensive analysis and plausibility check. Depending on the matter at hand, significant developments are addressed in discussions with the group companies.

The reporting packages are processed in a certified consolidation system. Extensive checks performed manually and by the system aim to ensure the completeness and reliability of the information processed in the consolidated financial statements. For all accounting-related processes, the principle of dual control and plausibility checks form the basis of the internal control system. Furthermore, the consolidated financial statements as well as the figures and information reported by the group entities are subjected to variance analyses and analyses of the composition of individual items. Suitable selection processes and regular training measures aim to ensure that employees involved in the accounting process are appropriately qualified.

The combined management report is prepared - in accordance with the applicable requirements and regulations - centrally but with the involvement of the group companies.

With regard to the risk area "business operations", all departments of Porsche SE have analyzed each of their operating processes and interfaces and also defined controls for processes and interfaces of particular relevance and monitor that they are being complied with.

Group management report and management report of Porsche SE

With regard to the management of risks from the risk area "compliance", Porsche SE has established a compliance organization, and thus a compliance management system, that is specifically tasked with preventing breaches of laws or other provisions and company-internal guidelines and regulations. In this connection, a compliance council was also set up, which comprises executives from the key departments. In addition to the adjustment of internal guidelines, the compliance council's meetings in the fiscal year 2020 primarily addressed general compliance-relevant regulations.

Risk assessment for organizational risks

The organizational risks of the Porsche SE Group are regularly subjected to an overall risk assessment using the categories low, medium or high. The three identified risk areas "financial reporting/accounting", "business operations" and "compliance" are each considered low as of the reporting date.

Entrepreneurial risks

In the area of entrepreneurial risks, the Porsche SE Group primarily faces opportunities and risks from investments, risks from financial instruments as well as legal and tax opportunities and risks. These are considered in terms of their potential influence on the earnings and liquidity situation of the Porsche SE Group. The focus of risk management is primarily on negative variances from expectations regarding the development of the group result after tax or net liquidity of the Porsche SE Group.

Opportunities and risks from investments

In connection with any existing and future investments, Porsche SE generally faces opportunities and risks regarding the effects on its result and/or net liquidity. This includes the risk of a need to recognize impairment losses, with a corresponding negative impact on the result of Porsche SE, the risk of a decrease in dividend inflow, the risk of burdens on profits from changes in the market value of equity instruments accounted for at fair value as well as the risk of burdens on profits attributed to Porsche SE in the consolidated financial statements under the equity method. However, there are also corresponding opportunities from positive development in these areas. Porsche SE is currently exposed to significant risks from the investments in Volkswagen AG and PTV AG as well as the venture portfolio comprising the non-controlling interests in technology companies.

To detect a possible impairment at an early stage, Porsche SE regularly analyzes key figures on the business development of the investments in Volkswagen AG and PTV AG in particular and, if applicable, monitors assessments made by analysts. Porsche SE carries out impairment testing if there is a specific indication that these assets may be impaired, or otherwise annually. Porsche SE's valuations are based on a discounted cash flow method and are performed on the basis of the most recent corporate planning prepared by the management of the respective investment, which is adjusted to reflect the current information available, where necessary. A weighted average cost of capital is used to discount cash flows. On occasion, in addition to the discounted cash flow method, valuations are also performed using multiples.

With regard to the investment in Volkswagen AG, there is an increased risk of the result attributable to Porsche SE as part of equity accounting falling short of expectations on account of the Volkswagen Group not developing as planned (referred to below as the risk area "Result contribution Volkswagen"). According to Volkswagen, the most significant risks at the level of the Volkswagen Group arise from a negative trend in markets and unit sales, with regard to quality and cyber security, and from an inability to develop products in line with demand and requirements, especially in view of e-mobility and digitalization. Non-fulfillment of CO2-related requirements also constitutes a risk. The Volkswagen Group continues to be exposed to risks from the diesel issue. Negative effects, for example resulting from supply bottlenecks, may arise for 2021 if efforts to contain the Covid-19 pandemic are not successful in the long term. The assessment of risks at the level of the Volkswagen AG is based on the report on risks and opportunities in the 2020 group management report of Volkswagen AG.

As regards the recoverability of the investment in Volkswagen AG, impairment testing was performed in the fiscal year 2020 due to the proportionate market capitalization being below the carrying amount accounted for at equity. As the impairment test is based on the current planning of the Volkswagen Group, the risks described above of an unexpected development which might lead to an impairment in the value of the investment also exist here. The risk of an impairment loss needing to berecognized through profit or loss is referred to below as the risk area "Impairment Volkswagen". As part of the impairment test, sensitivity analyses regarding key measurement parameters were performed. As the value in use of the investment in Volkswagen AG was significantly higher than the carrying amount in each of the scenarios considered in the sensitivity analysis, the risk of a need to recognize an impairment loss is considered to be unlikely on the basis of the current information.

There is also the general risk of a significant decrease in dividend inflow from Volkswagen AG (referred to below as the risk area "Dividend inflow Volkswagen"), which would in turn affect the net liquidity of the Porsche SE Group. Such developments are not currently expected.

Since fully including the PTV Group into the consolidated financial statements of Porsche SE, there is a general risk of the goodwill identified in the course of the purchase price allocation being impaired through profit or loss (referred to below as the risk area "Impairment risk PTV"). The goodwill is tested for impairment annually and if there is any indication that the goodwill may be impaired. As of 31 December 2020, the impairment test was performed as scheduled. As a result, there was no need to recognize an impairment loss for goodwill. Due to the higher difference between the determined value in use and the carrying amount of the cash-generating unit, the likelihood of occurrence of the risk area "Impairment risk PTV"

has decreased compared to the prior year. A future need to recognize an impairment loss for the goodwill is currently considered unlikely.

In light of the positive development of the non-controlling interests in technology companies in the fiscal year 2020 and the associated increase in the carrying amount of these investments, the reporting was expanded to include the risk area "Result contribution venture portfolio". Opportunities and risks mainly arise from changes in market value, which have a full impact on the result of the Porsche SE Group. The performance of technology companies in disruptive markets is in general subject to increased uncertainty.

Risks from financial instruments

In its business activities Porsche SE is exposed to risks arising from the use of financial instruments. Significant risks resulting from such activities are referred to below as the risk area "Risks from financial instruments". The financial instruments currently used at Porsche SE in particular comprise cash and cash equivalents, time deposits and securities.

The use of financial instruments as part of liquidity management gives rise to counterparty risks. To mitigate the counterparty risks, Porsche SEmonitors the creditworthiness of counterparties and spreads the investment of liquidity across various counterparties. With the exception of the market price risks in the venture portfolio presented in the section on opportunities and risks from investments, further risks from using financial instruments are currently classified as insignificant for Porsche SE.

A hold harmless declaration to the deposit guarantee fund agency of the Association of German Banks is in place for the benefit of Volkswagen Bank GmbH, which Porsche SE issued in 2009.

Legal risks

Porsche SE is involved in legal disputes and administrative proceedings both nationally and internationally. As of 31 December 2020, this primarily relates to actions for damages concerning the stake building of the investment in Volkswagen AG and the allegation of market manipulation as well as legal proceedings because of alleged nonfeasance of capital market information or alleged incorrect capital market information in connection with the diesel issue. Where such risks are foreseeable, adequate provisions are made in order to account for any ensuing risks. The amount of the provisions for legal risks recognized in the reporting year corresponds to the attorneys' fees

and litigation expenses anticipated for the ongoing proceedings. The company believes that thus far these risks have not had a sustained effect on the economic position of the group. However, due to the fact that the outcome of litigation can be estimated only to a limited degree, it cannot be ruled out that very serious losses may eventuateThe tax field audit is still being performed for the assessment periods 2009 to 2013. New findings of the tax field audit for the periods 2009 to 2013 could result in an increase or decrease in tax provisions and interest or any refunds already received might have to be partially paid back.

that are not covered by the provisions already made, During the assessment periods 2006 to 2009,which would result in a correspondingly negative impact on the result and liquidity.

For the status of the legal proceedings and for current developments, reference is made to the section "Significant events and developments at the Porsche SE Group".

Tax opportunities and risks

The contribution of the holding business operations of Porsche SE to Volkswagen AG as of 1 August 2012 is generally associated with tax risks. To safeguard the transaction from a tax point of view, and thus avoid tax back payments for the spin-offs performed in the past, rulings were obtained from the competent tax authorities. Porsche SE implemented the necessary measures to execute the contribution transaction in accordance with the rulings received and is monitoring compliance with them.

Porsche SE was initially the legal successor of Porsche AG and later the ultimate tax parent and thus liable for tax payments. As part of the contribution of the business operations, Volkswagen AG agreed to refund to Porsche SE any tax benefits - for example, in the form of a refund, tax reduction or tax saving, a reversal of tax liabilities or provisions or an increase in tax losses - of Porsche Holding Stuttgart GmbH, Porsche AG and its legal predecessors and subsidiaries which pertain to assessment periods up to 31 July 2009. In return, under certain circumstances Porsche SE holds Porsche Holding Stuttgart GmbH, Porsche AG and their legal predecessors harmless from tax disadvantages that exceed the obligations from periods up until and including 31 July 2009 recognized at the level of these entities. If the total tax benefits exceed the total tax disadvantages, Porsche SE has a claim against Volkswagen AG to payment of the amount by which the tax benefits exceed the tax disadvantages. The amount of tax benefits and tax disadvantages to be taken into

account is regulated in the contribution agreement. The risks arising at the level of Porsche SE, for which provisions were recognized in prior years and payments were made, will in some cases lead to tax benefits at the Volkswagen Group that are expected to partly compensate the tax risks of Porsche SE. However, the provisions in the contribution agreement do not cover all matters and thus not all tax risks of Porsche SE from the tax field audits for the assessment periods 2006 to 2009. The existence and amount of a possible reimbursement claim against Volkswagen AG can be reliably determined only following completion of the tax field audit for the assessment period 2009. Based on the findings of the completed tax field audit for the assessment periods 2006 to 2008 and the information available for the assessment period 2009 when these financial statements were prepared, it is estimated that Porsche SE has a compensation claim against Volkswagen AG in the low triple-digit million-euro range. Future findings may lead to an increase or decrease in the possible compensation claim.

Risk assessment for entrepreneurial risks

The methodology for regularly assessing entrepreneurial risks remained unchanged in the past fiscal year. A risk assessment is performed for each of the significant entrepreneurial risks of the Porsche SE Group using risk categories "Low", "Moderate" and "High". This involves assessing the risk of falling short of the forecast corridor communicated for the result after tax and/or the net liquidity of Porsche SE Group. Compared to the prior year, the forecast corridor for the group result after tax of Porsche SE has increased, while the forecast corridor for the group net liquidity of Porsche SE remains unchanged.

The risk assessment of a risk area includes the potential impact of the risk area as well as its likelihood of occurrence. A risk area under examination is allocated to one of the categories low, moderate or high based on its potential impact. The allocation is generally based on the potential impact that a risk area under examination can have on the result after tax and/or the net liquidity of the Porsche SE Group in terms of whether it negatively deviates from the corresponding forecast value. Considered individually as of the reporting date, risk areas categorized as high based on their potential impact generally have the potential to impact the key performance indicators result after tax and/or net liquidity of the Porsche SE Group by more than half of the forecast corridor.

Group management report and management report of Porsche SE

The likelihood of occurrence is allocated using the categories unlikely, moderately likely and highly likely.

The risk assessment of the significant entrepreneurial risks of the Porsche SE Group using the risk categories remains unchanged compared to the prior year. The likelihood of occurrence of therisk area "Impairment risk PTV" has now been categorized as unlikely (prior year: moderately likely). The reporting was expanded to include the risk area "Result contribution venture portfolio" in the risk category "Low". As of the reporting date, the risk assessment is as follows:

Risk category "Low"

Risk category "Moderate"

Risk category "High"

Overall statement on the risks faced by the Porsche SE Group

The overall risk exposure of the Porsche SE Group is made up of the individual risks relating to the significant investments and the specific risks of Porsche SE presented. The risk managementsystem aims to ensure that these risks are addressed adequately. Based on the information currently available, the board of management has not identified any risks which could endanger the ability of the Porsche SE Group to continue as a going concern.

Report on opportunities and risks of the Volkswagen Group

Risk management system of the Volkswagen Group

In this section, the objective and structure of the Volkswagen Group's risk management system (RMS) and internal control system (ICS) are explained and its systems described with regard to the financial reporting process. Volkswagen AG has implemented its own group-wide risk management system and is responsible for handling its own risks. The following is based on extracts from the Report on Risks and Opportunities in the 2020 group management report of Volkswagen AG.

Objective of the risk management system and internal control system at Volkswagen

Only by promptly identifying, accurately assessing and effectively and efficiently managing the risks and opportunities arising from its business activities can the Volkswagen Group ensure its long-term success. The aim of the RMS/ICS is to identify potential risks at an early stage so that suitable countermeasures can be taken to avert the threat of loss to the Company, and any risks thatmight jeopardize its continued existence can be ruled out. Assessing the likelihood of occurrence and extent of future events and developments is, by its nature, subject to uncertainty. The Volkswagen Group is therefore aware that even the best RMS cannot foresee all potential risks and even the best ICS can never completely prevent irregular acts.

Structure of the risk management system and internal control system at Volkswagen

The organizational design of the Volkswagen Group's RMS/ICS is based on the internationally recognized COSO framework for enterprise risk management (COSO: Committee of Sponsoring Organizations of the Treadway Commission). Structuring the RMS/ICS in accordance with the COSO framework for enterprise risk management ensures that potential risk areas are covered in full. Uniform group principles are used as the basis for managing risks in a standardized manner. Opportunities are not recorded.

Another key element of the RMS/ICS at Volkswagen is the three lines model, a basic element required by, among other bodies, the European Confederation of Institutes of Internal Auditing (ECIIA). In line with this model, the Volkswagen Group's RMS/ICS has three lines designed to protect the company from significant risks occurring.

The minimum requirements for the RMS/ICS, including the three lines model, are set out in guidelines for the entire group.

The RMS/ICS was further developed in the past fiscal year. The IT risk management system called "Riskradar" was introduced at all brands and significant group companies of the Volkswagen Group in 2020. In this way, Volkswagen has increased process and data security and reduced its manual workload through automated workflows and end-to-end system support for the analysis of data. At the same time, risk awareness at the company is further intensified, risk transparency is improved and risks can be analyzed with end-to-end system support. The ICS has been standardized for high-risk business processes at significant companies. Volkswagen will continue to develop its RMS/ICS in the future.

First line: Operational risk management

The first line comprises the operational risk management and internal control systems at the individual group companies and business units. The RMS/ICS is an integral part of the Volkswagen Group's structure and workflows. Events that may give rise to risk are identified and assessed locally in the divisions and at the investees. Countermeasures are introduced immediately, the remaining potential impact is assessed, and the information incorporated into the planning in a timely manner. Material risks are reported to the relevant committees on an ad hoc basis. The results of the operational risk management process are incorporated into budget planning and financial control on an ongoing basis. The targets agreed in the budget planning rounds are continually reviewed in revolving planning updates. At the same time, the results of risk mitigation measures are promptly incorporated into the monthly forecasts regarding further business development. This means that the board of management also has access to an overall picture of the current risk situation via the documented reporting channels during the year.

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The operational risk management and internal The operational risk management and internal control system also includes compliance with the control system also includes compliance with the so-called Golden Rules in the areas of control unit so-called Golden Rules in the areas of control unit software development, emission classification and software development, emission classification and escalation management. These rules are the escalation management. These rules are the minimum requirements in the organization, minimum requirements in the organization, processes and tools & systems categories. processes and tools & systems categories.

Second line: Identifying and reporting systemic Second line: Identifying and reporting systemic and acute risks using group-wide processes and acute risks using group-wide processes

In addition to the ongoing operational risk In addition to the ongoing operational risk management, the Group Risk Management management, the Group Risk Management department sends standardized surveys regarding department sends standardized surveys regarding the risk situation and the effectiveness of the the risk situation and the effectiveness of the RMS/ICS to the significant group companies and RMS/ICS to the significant group companies and units worldwide (regular Governance, Risk & units worldwide (regular Governance, Risk & Compliance (GRC) process) each year. Compliance (GRC) process) each year.

Calculation of risk score

Likelihood of occurence

As part of this process, each systemic risk inherent As part of this process, each systemic risk inherent to the process or inherent to the business that is to the process or inherent to the business that is reported is recorded and assessed in the RICORS reported is recorded and assessed in the RICORS IT system. The risk assessment is made by

IT system. The risk assessment is made by multiplying the criterion of likelihood of occurrence multiplying the criterion of likelihood of occurrence (Prob) by the potential extent of the damage. The (Prob) by the potential extent of the damage. The extent of the damage is calculated from the criteria extent of the damage is calculated from the criteria of financial loss (Mat) and reputational damage of financial loss (Mat) and reputational damage (Rep) and criminal relevance (Penal). A score (Rep) and criminal relevance (Penal). A score between 0 and 10 is assigned to each of these between 0 and 10 is assigned to each of these criteria. The measures taken to manage and control criteria. The measures taken to manage and control risk are taken into account in the risk assessment risk are taken into account in the risk assessment (net perspective). The result is a risk score that (net perspective). The result is a risk score that expresses the risk.

expresses the risk.

Risk score

Potential extent of damageScore Prop

The score for a likelihood of occurrence of more The score for a likelihood of occurrence of more than 50% in the analysis period is classified as high; than 50% in the analysis period is classified as high; for a medium classification, the likelihood of for a medium classification, the likelihood of occurrence is at least 25%. For the criterion of occurrence is at least 25%. For the criterion of financial loss, the score rises in line with the loss; financial loss, the score rises in line with the loss;

the highest score of 10 is reached when the the highest score of 10 is reached when the potential loss is upwards of €1 billion. The criterion potential loss is upwards of €1 billion. The criterion of reputational damage can have characteristics of reputational damage can have characteristics ranging from local erosion of confidence and loss ranging from local erosion of confidence and loss of trust at local level to loss of reputation at of trust at local level to loss of reputation at

regional or international level. Criminal relevance is classified based on the influence on the local company, the brand or the group.

In addition to strategic, operational and reporting risks, risks arising from potential compliance violations are also integrated into this process. Moreover, the effectiveness of key risk management and control measures is tested and any weaknesses identified in the process are reported and rectified.

All Volkswagen Group companies and units selected from among the entities in the consolidated group on the basis of materiality and risk criteria were subject to the regular GRC process in fiscal year 2020.

Quarterly risk reports are produced in addition to the annual risk assessment. These depict the Volkswagen Group's acute - short to medium-term - risk situation. The assessment of risks from this quarterly risk process (QRP) is conducted in the "Riskradar" IT system similarly to that of the annual regular GRC process. All group brands as well as Porsche Holding Salzburg, Volkswagen Financial Services AG and Volkswagen Bank GmbH are included in the QRP.

In addition, significant changes to the risk situation that can arise in the short term, for instance from unexpected external events, are reported to the board of management as required. This isnecessary if, among other things, the risk may lead to potential financial loss of over €1 billion.

Based on the feedback from the annual regular GRC process and quarterly risk surveys, the overall picture of the potential risk situation is updated and the system's effectiveness assessed.

A separate Group Board of Management Committee for Risk Management examines the key aspects of the RMS/ICS every quarter. Its tasks are as follows:

· to further increase transparency in relation to significant risks to the group and their management,
· to explain specific issues where these constitute a significant risk to the group,
· to make recommendations on the further development of the RMS/ICS,
· to support the open approach to dealing with risks and promote an open risk culture.

Risk reporting to the committees of Volkswagen AG depends on materiality thresholds. Systemic risks from a risk score of 20 and acute risks from a risk score of 40 or potential financial loss of €1 billion or more are regularly presented to the board of management and the audit committee of the supervisory board of Volkswagen AG.

Third line:

Review by Group Internal Audit

Group Internal Audit helps the board of management to monitor the various divisions and corporate units within the group. It regularly checks the risk early warning system and the structure and implementation of the RMS/ICS and the compliance management system (CMS) as part of its independent audit procedures.

Risk early warning system in line with the KonTraG

The company's risk situation is ascertained, assessed and documented in accordance with the requirements of the German Act on Control and Transparency in Business (KonTraG). The requirements for a risk early warning system are met by means of the RMS/ICS elements described above (first and second line). Independently of this, the external auditors check both the processes and procedures implemented in this respect and the adequacy of the documentation on an annual basis. The plausibility and adequacy of the risk reports are examined via spot checks in detailed interviews with the divisions and companies concerned together with the external auditors. The auditor examines the risk early warning system integrated in the risk management system with respect to its fundamental suitability of being able to identify risks that might jeopardize the continued existence and assesses the functionality of the risk early warning and monitoring systems in accordance with Sec. 317 (4) HGB.

In addition, scheduled examinations as part of the audit of the annual financial statements are conducted at companies in the financial services division. As a credit institution, Volkswagen Bank GmbH, including its subsidiaries, is subject to supervision by the European Central Bank, whileVolkswagen Leasing GmbH as a financial services institution and Volkswagen Versicherung AG as an insurance company are subject to supervision by the relevant division of the German Federal Financial Supervisory Authority (BaFin). As part of the scheduled supervisory process and unscheduled audits, the competent supervisory authority assesses whether the requirements, strategies, processes and mechanisms ensure solid risk management and solid risk cover. Furthermore, the Prüfungsverband deutscher Banken (Auditing Association of German Banks) audits Volkswagen Bank GmbH from time to time.

Volkswagen Financial Services AG operates a risk early warning and management system. Its aim is to ensure that the locally applicable regulatory requirements are adhered to and at the same time to enable appropriate and effective risk management at group level. Important components of it are regularly reviewed as part of the audit of the annual financial statements.

Monitoring the effectiveness of the risk management system and the internal control system

To ensure the effectiveness of the RMS/ICS, Volkswagen regularly optimizes it as part of its continuous monitoring and improvement processes. In the process, it gives equal consideration to both internal and external requirements. External experts assist in the continuous enhancement of the RMS/ICS on a case-by-case basis. The results culminate in both regular and event-driven reporting to the board of management and supervisory board of Volkswagen AG.

Risk management and integrated internal control system in the context of the financial reporting process within the Volkswagen Group

IFRSs and the Volkswagen IFRS Accounting Manual are transmitted to the Volkswagen Group in encrypted form. A standard market product is used for encryption.

The accounting-related part of the RMS/ICS that is relevant for the financial statements of Volkswagen AG and the Volkswagen Group as well as its subsidiaries comprises measures intended to ensure that the information required for the preparation of the financial statements of Volkswagen AG, the consolidated financial statements and the combined management report of the Volkswagen Group and Volkswagen AG is complete, accurate and transmitted in a timely manner. These measures are designed to minimize the risk of material misstatement in the accounts and in external reporting.

Main features of the risk management and integrated internal control system in the context of the financial reporting process

The Volkswagen Group's accounting is essentially organized along decentralized lines. For the most part, accounting duties are performed by the consolidated companies themselves or entrusted to the group's shared service centers. In principle, the audited financial statements of Volkswagen AG and its subsidiaries prepared in accordance withThe Volkswagen IFRS Accounting Manual, which has been prepared in line with external expert opinions in certain cases, is intended to ensure the application and assessment of uniform accounting policies based on the requirements applicable to the parent of the Volkswagen Group. In particular, it includes more detailed guidance on the application of legal requirements and industry-specific issues. Components of the reporting packages that are required to be prepared by the group companies are also set out in detail there, and requirements have been established for the presentation and settlement of intragroup transactions and the balance reconciliation process that is based on these.

Control activities at group level include analyzing and, if necessary, adjusting the data reported in the financial statements presented by the subsidiaries, taking into account the reports submitted by the auditors and the outcome of the meetings on the financial statements with representatives of the individual companies. These discussions address both the plausibility of the single-entity financial statements and specific significant issues at the subsidiaries. Alongside plausibility checks, other

control mechanisms applied during the preparation of the single-entity and consolidated financial statements of Volkswagen AG include the clear delineation of areas of responsibility and the application of the "four eyes" principle.

The combined management report of the Volkswagen Group and Volkswagen AG is prepared - in accordance with the applicable requirements and regulations - centrally but with the involvement of and in consultation with the group units and companies.

In addition, the accounting-related internal control system is independently reviewed by Group Internal Audit in Germany and abroad.

Integrated consolidation and planning system

The Volkswagen consolidation and corporate management system (VoKUs) enables the Volkswagen Group to consolidate and analyze both Financial Reporting's backward-looking data and Controlling's budget data. VoKUs offers centralized master data management, uniform reporting, an authorization concept and the required flexibility with regard to changes to the legal environment, providing a future-proof technical platform that benefits Group Financial Reporting and Group Controlling in equal measure. To verify data consistency, VoKUs has a multi-level validationsystem that primarily checks content plausibility between the balance sheet, the income statement and the notes.

Opportunities and risks of the Volkswagen Group

This section outlines the main risks and opportunities arising in the business activities of the Volkswagen Group from the Volkswagen Group's perspective. In order to provide a better overview, the risks and opportunities have been grouped into categories. At the beginning of each risk category, the most significant risks are stated in order of their importance as identified by Volkswagen using the risk score from the regular GRC process and the quarterly risk process (QRP).

The risks from the regular GRC process and the QRP reported to the board of management and the audit committee are incorporated into the assessment of the Volkswagen Group's risk categories. The risk categories are plotted based on the average scores.

Average scores of the risk categories

Likelihoodofoccurence

high > 50 %medium > 25 %low< 25 %





1	3 2
5
4

98765

2 3 4 5 6 7 8 9

10 11 12 13 14 15 16 17 18 19 20

low

medium

Potential extent of damage

(weighted score of financial loss, reputational damage and criminal relevance)

Risks from the macroeconomy, the sector, markets and salesResearch and development risksOperational risksEnvironmental and social risksLegal risksFinancial risksRisks from mergers & acquisitions and/or other strategic partnerships/ investments

high

Volkswagen uses analyses of the competition and the competitive environment in addition to market studies to identify not only risks but also opportunities that have a positive impact on the design of its products, the efficiency with which they are produced, their success in the market and its cost structure. Where they can be assessed, risks and opportunities that Volkswagen expects to occur are already reflected in its medium-term planning and its forecast. The Volkswagen Group therefore reports on internal and external developments as risks and opportunities that, based on information available to the Volkswagen Group at the time its management report is authorized for issue, may result in a negative or positive deviation from its forecast or targets.

Risk categories at the Volkswagen Group

The category "Risks and opportunities from the macroeconomy, the sector, markets and sales"

fall in customer demand, production and supply chains. For this risk category, the likelihood of occurrence is classified as high (prior year: medium) and the potential extent of damage is classified as medium (prior year: medium) by Volkswagen. From the Volkswagen Group's perspective, the most significant risks from the regular GRC process and the QRP in this category lie in restrictions on trade and increasingly protectionist tendencies resulting in a negative trend in markets and unit sales.

The category "Research and development risks" contains risks arising from research and development as well as risks and opportunities from the modular toolkit strategy. For this risk category, the likelihood of occurrence is classified as high (prior year: high) and the potential extent of damage is classified as medium (prior year: medium) by Volkswagen. The most significant risks from the regular GRC process and QRP result from the inability to develop products in line with demand and requirements, especially with regard to e-summarizes macroeconomic risks and opportunities, mobility and digitalization. sector-specific risks and market opportunities/

potential, sales risks as well as other factors. Under other factors, Volkswagen describes the risk in particular that the Covid-19 pandemic could intensify, due to reasons such as changes in the virus. All areas of the Volkswagen Group are affected by the pandemic, especially sales due to a

"Operational risks and opportunities" summarizes risks from particular events in the Volkswagen Group's procurement and production network, risks and opportunities from Procurement and Components, production risks, risks arising from long-term production, quality risks, IT risks and

Group management report and management report of Porsche SE

risks from media impact. Risks from particular events in the Volkswagen Group's procurement and production network currently describes in particular the risk, that the spread of the coronavirus may result in supply risks in procurement and significantly disrupt production. As a consequence, bottlenecks or even outages in production may occur at Volkswagen, thus preventing the planned volume of production from being achieved. For this risk category, the likelihood of occurrence is classified as high (prior year: high) and the potential

(prior year: medium) by Volkswagen. The most significant risks from the regular GRC process and QRP result from volatile foreign exchange markets.

Under "Opportunities and risks from mergers and acquisitions and/or other strategic partnerships/ investments", the Volkswagen Group summarizes opportunities and risks from partnerships, risks arising from the recoverability of goodwill or brand names as well as risks from the disposal of equity investments. For this risk category, the likelihood ofextent of damage is classified as medium (prior year: occurrence is classified as medium (prior year: high)medium) by Volkswagen. The most significant risks from the regular GRC process and QRP lie particularly in the area of cyber security and new regulatory requirements for IT, in quality problems, and in volatile procurement markets.

and the potential extent of damage is classified as high (prior year: high) by Volkswagen. The most significant risks from the regular GRC process and QRP are linked to the cooperation with other partners.

The risk category "Environmental and social risks" include personnel risks as well as risks from environmental protection regulations. For this risk category, the likelihood of occurrence is classified as medium (prior year: medium) and the potential

Risk assessment of Volkswagen AG regarding the diesel issue

An amount of around €1.9 billion (€2.9 billion) wasextent of damage is classified as medium (prior year: included in the Volkswagen Group's provisions formedium) by Volkswagen. The most significant risks from the regular GRC process and QRP arise from non-fulfillment of CO2-related requirements.

Risks from litigation and legal risks in connection with the diesel issue as well as tax risks arelitigation and legal risks as of 31 December 2020 to account for the legal risks related to the diesel issue currently known by the Volkswagen Group based on the presently available information and the current assessments of Volkswagen. Where adequately measurable at this stage, contingent liabilitiessubsumed under "Legal risks". For this risk category, relating to the diesel issue were disclosed in thethe likelihood of occurrence is classified as medium (prior year: medium) and the potential extent of damage is classified as medium (prior year: high) by Volkswagen. The most significant risks from the regular GRC process and QRP are associated with the diesel issue.

In the category "Financial risks", the Volkswagen Group includes financial risks, risks arising from financial instruments, liquidity risks as well as risks and opportunities in the financial services business. For this risk category, the likelihood of occurrence is classified as high (prior year: high) and the potential extent of damage is classified as mediumconsolidated notes of the Volkswagen Group in an aggregate amount of €4.2 billion (€3.7 billion), whereby roughly €3.5 billion (€3.4 billion) of this amount results from lawsuits filed by investors in Germany. The provisions recognized, the contingent liabilities disclosed, and the other latent legal risks in the context of the diesel issue within the Volkswagen Group are in part subject to substantial estimation risks given the complexity of the individual relevant factors, the ongoing coordination with the authorities, and the fact that the fact-finding efforts have not yet been concluded. Should these legal or estimation risks materialize, this could result in further substantial financial charges. In

particular, adjustment of the provisions recognized in light of knowledge acquired or events occurring in the future cannot be ruled out.

In line with IAS 37.92, no further statements have been made by Volkswagen concerning estimates of financial impact or regarding uncertainty as to the amount or maturity of provisions and contingent liabilities in relation to the diesel issue. This is so as to not compromise the results of the proceedings or the interests of the company.

Overall assessment of the risk and opportunity position of the Volkswagen Group

The Volkswagen Group's overall risk and opportunity position results from the specific risks and opportunities shown above. Volkswagen has put in place a comprehensive risk management system to ensure that these risks are controlled. The most significant risks to the Volkswagen Group across all risk categories arise from a negative trend in markets and unit sales, with regard to quality and cyber security, and from an inability to develop products in line with demand and requirements,especially in view of e-mobility and digitalization. Non-fulfillment of CO2-related requirements also constitutes a risk. The Volkswagen Group continues to be exposed to risks from the diesel issue. Negative effects, for example resulting from supply bottlenecks, may arise for 2021 if efforts to contain the Covid-19 pandemic are not successful in the long term. Taking into account all the information known to the Volkswagen Group at the time of authorizing its management report for issue, no risks exist which could pose a threat to the continued existence of significant group companies or the Volkswagen Group.

Publication of the declaration

Gorofupcmoanmagempenltiarepnorct aend management report of Porsche SE

Publication of the declaration of compliance

Porsche SE has issued the declaration of compliance as required by Secs. 289f and 315d HGB. The declaration of compliance is published atwww.porsche-se.com/en/company/corporate-governance/.

Publication of the declaration of compliance/

Subsequent events

For more information on the agreement covering the key points of a comprehensive realignment of

MAN Truck & Bus SE as well as the approval of Navistar shareholders on the takeover by TRATON, please refer to the details provided in section

"Subsequent events" of the notes to the consolidated financial statements.

With the exception of the litigation developments presented in the section "Significant events and developments at the Porsche SE Group", there were no other reportable events after the reporting date.

Forecast report

Garonupdmaonaguemtelont roepkort and management report of Porsche SE

Forecast report and outlook

Developments in the global economy

Planning is based on the assumption that global economic output will recover overall in 2021, provided lasting containment of the Covid-19 pandemic is achieved. This growth will most likely be sufficient for the economy to recover to approximately its pre-pandemic level. We expect that the expansionary monetary policy of the central banks will remain in place to support this development and therefore consider it currently unlikely that interest rates will rise in the USA and the eurozone. For 2021, the euro is forecast to strengthen against the currencies that are key for the Volkswagen Group.

Porsche SE continues to believe that risks will arise from protectionist tendencies, turbulence in the financial markets and structural deficits in individual countries. In addition, growth prospects will be negatively impacted by ongoing geopolitical tensions and conflicts. Volkswagen anticipates that both the advanced economies and the emerging markets will experience positive momentum. The trend in the automotive industry closely follows global economic developments.

Trends in the markets for passenger cars and light commercial vehicles

Mixed trends in the markets for passenger cars in the individual regions are expected for 2021. Overall, the volume of demand worldwide for new vehicles is expected to be noticeably up on the reporting year, but will not reach the pre-pandemic level, provided successful containment of the Covid-19 pandemic is achieved.

Trends in the markets for light commercial vehicles in the individual regions will also be mixed in 2021; on the whole, a moderate rise in demand for 2021 is anticipated, assuming a successful containment of the Covid-19 pandemic.

Trends in the markets for commercial vehicles

For 2021, a significantly positive development is expected in new registrations for mid-sized and heavy trucks with a gross weight of more than six tonnes compared with the prior year, with variations from region to region, in the markets that are relevant for the Volkswagen Group. A moderate increase in overall demand with regional variations for 2021 is likely in the bus markets relevant for the Volkswagen Group.

Trends in the markets for financial services

It is anticipated that automotive financial services will prove highly important to global vehicle sales in 2021, particularly in the context of the ongoing challenges posed by the Covid-19 pandemic. Demand is expected to rise in emerging markets where market penetration has so far been low. Regions with already established automotive financial services markets will see a continuation of the trend towards enabling mobility at the lowest possible total cost. Integrated end-to-end solutions, which include mobility-related service modules such as insurance and innovative packages of services, will become increasingly important for this. Additionally, it is expected that demand will increase for new forms of mobility, such as rental services, and for integrated mobility services, for example parking, refueling and charging, and that the shift in the European leasing business initiated with individual customers from financing to lease contracts will continue.

In the mid-sized and heavy commercial vehicles category, rising demand is anticipated for financial services products in emerging markets. In the developed markets, it expects to see increased demand for telematics services and services aimed at reducing total cost of ownership in 2021.

Anticipated development of the Volkswagen Group

Volkswagen believes it is well prepared overall for the future challenges pertaining to the automotive business activities and for the mixed development of the regional automotive markets. Its brand diversity, presence in all major world markets, broad and selectively expanded product range, and technologies and services put the Volkswagen Group in a good competitive position worldwide. As part of the transformation of its core business, Volkswagen is positioning its group brands with an even stronger focus on their individual characteristics, and is optimizing the vehicle and drive portfolio. The focus is primarily on its vehicle's carbon footprint and on the most attractive and fastest-growing market segments. In addition, the Volkswagen Group is working to leverage the advantages of its multibrand group even more effectively with the ongoing development of new technologies and the enhancement of its toolkits.

Volkswagen's planning is based on the assumption that global economic output will recover overall in 2021, provided a lasting containment of the Covid-19 pandemic is achieved. Further, these plans are based on the Volkswagen Group's current structures. They do not include the impact of organizational changes, such as the acquisition of additional shares in Navistar by TRATON SE.

The Volkswagen Group anticipates that deliveries to customers will be significantly up on the prior year in 2021 - assuming successful containment of the Covid-19 pandemic - amid continued challenging market conditions.

Challenges will arise particularly from the economic situation, the increasing intensity of competition, volatile commodity and foreign exchange markets, securing supply chains, and more stringent emissions-related requirements.

Volkswagen expects the revenue of the Volkswagen Group and passenger cars business area in 2021 to be significantly higher than the prior-year figure. In terms of operating result for the group and the passenger cars business area, it forecasts an operating return on sales in the range of 5.0% to 6.5% in 2021. For the commercial vehicles business area, Volkswagen anticipates an operating return on sales of 4.0% to 5.5% before restructuring measures amid a significant year-on-year increase in revenue. For the financial services division, Volkswagen forecasts that revenue will be noticeably higher than the prior-year figure and that the operating result will be in line with the prior year.

Anticipated development of the Porsche SE Group

The result of the Porsche SE Group is largely affected by the result from investments accounted for at equity that is attributable to Porsche SE and therefore on the earnings situation of the Volkswagen Group.

The forecast result after tax of the Porsche SE Group is therefore largely based on the Volkswagen Group's expectations regarding its future development. While the result after tax of the Volkswagen Group is included in the forecast of the Porsche SE Group, the forecast of the Volkswagen Group is based only on its operating result. As a result, effects outside of the operating result at the level of the Volkswagen Group do not affect its forecast, although they do have a proportionate effect on the amount of the Porsche SE Group's forecast result after tax.

The expectations of the Volkswagen Group regarding future development were therefore expanded on by the board of management of Porsche SE. This also includes the expectations of the board of management of Porsche SE regarding the profit contributions from investments that are contained in the financial result of the Volkswagen Group.

The following earnings forecast is based on the current structure of the Porsche SE Group and theVolkswagen Group. Effects from any other future investments and divestures of the Porsche SE Group or from future organizational changes at the level of the Volkswagen Group are not taken into account. Based in particular on the Volkswagen Group's expectations regarding its future development and the ongoing existing uncertainties with regard to the Covid-19 pandemic and possible special items in connection with the diesel issue, the Porsche SE Group expects a positive group result after tax of between €2.6 billion and €4.1 billion for the fiscal year 2021.

As of 31 December 2020, the Porsche SE Group had net liquidity of €563 million. The goal of the Porsche SE Group to achieve positive net liquidity remains unchanged as of 31 December 2021. This is expected to be between €0.4 billion and €0.9 billion, not taking future investments and divestures into account.

Stuttgart, 10 March 2021

Porsche Automobil Holding SE The board of management

Glossary

Selected terms at a glance

Gross margin

Gross margin is the percentage of revenue attributable to gross profit of the Volkswagen Group in a period. Gross margin provides information on profitability net of cost of sales.

Equity ratio

The equity ratio measures the percentage of total assets attributable to shareholders' equity as of a reporting date. This ratio indicates the stability and financial strength of the company and shows the degree of financial independence.

Operating result

The revenue of the Volkswagen Group, which does not include the figures for its equity-accounted Chinese joint ventures, reflects the market success of the Volkswagen Group in financial terms. Following adjustment for its use of resources, the operating result reflects the actual business activity of Volkswagen and documents the economic success of its core business.

Operating return on sales

The operating return on sales of the Volkswagen Group is the ratio of the operating result to revenue.

Tax rate

The tax rate is the ratio of income taxes to profit before tax, expressed as a percentage. It shows what percentage of the profit generated has to be paid over as tax.

Return on sales before tax

The return on sales is the ratio of profit before tax to revenue in a period, expressed as a percentage. It shows the level of profit generated for each unit of revenue. The return on sales provides information on the profitability of all business activities before deducting income tax expense.

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Porsche Automobil Holding SE published this content on 23 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 March 2021 09:28:01 UTC.

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