SEAT not resting! Recording high operating profit driven by high CUPRA performance

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SEAT S.A. presented its 2023 results alongside its strategy for the upcoming years. Last year, according to International Accounting Rules (IFRS), operating profit reached a record 625 million euros, rising 592 million euros (2022: 33 million euros). This represents an improvement in return on sales of 4.1 percentage points, from 0.3% to a positive 4.4%.  Annual turnover also reached an historic 14.333 billion euros, 31.0% more than 2022 (10.941 billion). These results confirm the strength of the company and the success of its ongoing transformation strategy.

“We leave behind a year in which SEAT S.A. posted the best financial results in its 73-year history, ensuring that our company continues on its path towards a more profitable future,” said Wayne Griffiths, CEO of SEAT and CUPRA.  “2023 has been a year of huge contrasts for the automotive industry and for our company, as we continued to navigate a sea of uncertainty while undergoing the biggest transformation in our history.”

2023: Confirmation of SEAT S.A.’s strength  

After facing several challenges in recent years, including the rising cost of raw materials, inflation and the impact of war, supply chain stabilisation in 2023 led to an increase in production and deliveries. This allowed SEAT S.A. to deliver 519,176 cars (2022: 385,592), rising 35.3% compared to the previous year. CUPRA once again broke records with 230,739 deliveries, up 50.9% compared to 2022 (152.896). The SEAT brand, meanwhile, returned to double-digit growth with 288,437 deliveries (2022: 232,696; +24.0%).

“In 2023, SEAT S.A. took a big step on its journey of transformation: we aimed to make a significant improvement, and that’s what we managed to do. We have reached all-time records in turnover, operating profit and operating cash flow. This perfectly reflects the positive effects of the CUPRA brand’s volume growth and the SEAT brand’s volume recovery, as well as the importance of the progress we have made with our Performance Improvement Program,” said David Powels, Vice-President for Finance and IT at SEAT S.A.

Under Spanish Accounting Rules (IAS), SEAT S.A.’s operating profit reached a record 505 million euros, rising 619 million euros (2022: -114 million euros). This represents an improvement in return on sales of 4.7 percentage points, from a negative 1.1% to a positive 3.6%.  Annual turnover reached an all-time high of 14.169 billion euros, 35.0% more than 2022 (10.513 billion). Profit after tax increased 480 million euros to 548 million euros (2022: 68 million euros).

Moreover, EBITDA reached its highest level in five years to 1.125 billion euros, representing a 123% increase from the 505 million euros registered in 2022. SEAT S.A.’s investment strategy continued in 2023, reaching a total of 5.3 billion euros over the past five years. The 44% increase in R&D investment, with a total of 939 million euros, shows SEAT S.A.’s commitment to bringing future CUPRA and SEAT products to the market.

Investing in the SEAT brand 

Looking to the future, SEAT S.A. has the right strategy in place to maintain the company’s profitable growth. The SEAT brand will play a key role in this and the company will launch improved plug-in hybrid and fuel-efficient cars throughout the SEAT brand until the end of the combustion era.  The Arona and Ibiza will receive facelifts in 2025 and in the coming months, the brand will launch an updated and improved version of the SEAT Leon, featuring technical and technological upgrades. Furthermore, the Ateca will also be updated and its lifecycle extended.

 

“We want to get the SEAT brand back to where it belongs, continuing the double-digit growth from last year with new investments in the brand and its models. We are also looking at what we can deliver in the electric world under the SEAT brand. When it comes to SEAT, I promise you that the best is still to come,” added Wayne Griffiths.

A new chapter for CUPRA

Driving the ongoing transformation of SEAT S.A., CUPRA is entering a new chapter in its history. 2024 marks the beginning of its biggest product offensive to date with the launch of its new heroes for a new era. This year sees the launch of the CUPRA Tavascan, the brand’s second all-electric model, and the CUPRA Terramar, its electrified SUV. CUPRA also announced new and updated versions of its Leon and Formentor models, which will be presented in the upcoming weeks.

CUPRA also confirmed the next major step in its globalization by confirming it will launch in the United States.

“By the end of the decade CUPRA will be entering the U.S. market. We plan to launch with the battery electric version of the Formentor and a bigger electric crossover SUV. That crossover SUV will be produced at Volkswagen Group factories in the North America region, including Mexico. Initially, CUPRA will launch in selected states in the East and West coasts and the Sun Belt states. This will be done through a new distribution model,”announced Wayne Griffiths.

The brand will also accelerate its global expansion this year with the opening of new CUPRA City Garages in Istanbul, Vienna and Manchester, all aimed at fulfilling its ultimate ambition to become a truly global brand.

Martorell’s electrification journey continues 

SEAT S.A. is committed to the electrification of Spain and as part of the Future: Fast Forward project, continues to make progress on its ambition to turn the country into a hub for electric mobility in Europe. The company is already building its battery system assembly plant in Martorell and in September it will start the transformation of Line 1 at its facilities ahead of production of the CUPRA Raval and Volkswagen ID.2aII.

Addressing the challenges of market acceptance of electric vehicles in Spain, Wayne Griffiths stated that “informing customers that electric vehicles are part of the solution to sustainable mobility, not part of the problem is key, together with improvements to taxation and incentives for the purchase of electric vehicles and the boosting of charging infrastructure.”

Rising inflation, high interest rates, political instability and conflicts anticipate a challenging year ahead. However, buoyed by the return to growth of the SEAT brand and with upcoming launches for the CUPRA Leon and Formentor, and the brand new CUPRA Tavascan and Terramar, 2024 looks set to be another landmark year for the company.