Years of confusion due to the sharing of the most famous Czech brand between two independent companies are coming to an end. From the end of 2029, there will be only one Škoda in the Czech Republic – the larger one, which manufactures cars in Mladá Boleslav.
It has been known for more than a year that the carmaker bought the last package of protection rights from Pilsen engineering companies and that the shared Škoda brand is its only for the future. Because of this, the Pilsen Škoda Group will have to change its name over the next six years and invent new names for its trams and locomotives as well.
However, it was not yet known how much they got rid of the famous brand in Pilsen and how much the owners of the Pilsen company from the PPF investment group earned from it. None of the parties wanted and does not want to comment on the number. However, from Škoda Group’s accounting records, it can be deduced that the purchase price must have been at least four billion crowns.
The PPF Group thus has back a large part of the money it paid for the entire enterprise in Pilsen at the beginning. She bought it in 2017, i.e. when it was still managed by the founder Petr Kellner. Even then the price was secret. However, it was then possible to read from PPF’s accounting statements that Kellner paid between seven and eight billion crowns to the original owners, headed by the head of the company Tomáš Krsko.
The sales price of the brand was derived by the editors of SZ Byznys retrospectively from the annual report of Pilsen Škoda and from subsequent questions regarding how to properly value the company for the Czech Elite ranking of the most valuable domestic companies.
One of the main criteria of the ranking was operating profit EBITDA, which Škoda Group reported at an exceptionally high level of 5.3 billion crowns last year. In the annual report, however, it qualified this indicator with a note that a truer picture of real profitability shows an adjusted EBITDA of 1.2 billion “without the effect of the profit from the sale of the ŠKODA brand”.
The difference amounts to 4.1 billion, and this is only “profit from sales”. The transaction price may actually have been a little higher, since the “profit” should be the resulting net item after deducting the costs that were associated with the transaction.
Part of last year’s agreements was an information embargo concerning the price. Neither of the parties therefore wants to comment on it even now. “The PPF Group and Škoda Auto announced the transaction in June 2022 via press releases. The parties to the transaction have agreed to refrain from any further comments beyond the published information,” PPF spokesman Leoš Rousek said in response to additional questions about the price for the brand. Škoda Auto spokesman Tomáš Kotěra gave an almost identical answer.
The Škoda brand is an existential question for the car manufacturer from Mladá Boleslav. At the same time, four billion correspond to its sales for roughly a week, so the amount appears to be relatively low. However, this is related to what was actually sold. Škoda Auto already owned the car brand from earlier times. Newly, only historical trademarks and rights to use the trademark with the protective arrow logo on other types of products, such as rolling stock or advertising items, were the subject of trade.
Pilsen Škoda gave them up last year on the grounds that it can do without the brand in the future, because, as the Chairman of the Supervisory Board and Investment Director of PPF Stanislav Kuba stated, “we want to be a company offering not only individual means of mass transport, but complete solutions for modern mobility”. . So the calculation won, that the consolidation of rights and the definitive order in the ownership of the brand will be worth more to Škoda Auto than what they are able to extract from the winged arrow in Pilsen.
End of all disputes
In its annual report, Škoda Auto linked the purchase of the rights to the fact that it was a step that preceded the publication of the new corporate identity and logotype change last year. Both sides also emphasized last year that part of the agreement was the settlement of all trademark disputes and lawsuits. None of the parties stated what exactly the disputes were and how serious they were.
Plzeňská Škoda will be allowed to use the trademarks until 2029 on the basis of a license and will also have the freedom to complete orders under the original brand. Last year, PPF justified the sale by saying, among other things, that “the funds obtained will primarily contribute to reducing Škoda Group’s debt.”
The Škoda brand originates from Pilsen thanks to the founder of the engineering works, Emil Škoda, who did business under his name as early as the 19th century. Cars were originally manufactured in Boleslav under the Laurin & Klement brand. In 1925, Škoda bought the Boleslav manufactory, and both companies operated as part of one group until nationalization and division under communism.
Škoda registered the logo with a winged arrow as a trademark exactly one hundred years ago, on December 15, 1923. But who was behind its idea remains unknown.
It was probably the sales director Tomáš Maglič. “He was apparently inspired by a painting of an Indian, which decorated his office in Škoda Plzeň from around 1918 to 1919,” says the Škoda Auto archive.