Company News
Wels, June 14, 2024
Sales fell short of expectations due to persistently high interest rates in the U. S. The U. S. and the volatile market environment in Europe.
In the current monetary year, the momentum of PIERER Mobility’s main motorcycle markets in the U. S. and Europe slowed significantly. Due to the latest interest rate decisions in the US, interest rates are expected to remain high, which will have a negative effect on sales forecasts in the US market. Sales figures in Europe also remain volatile. Overall, PIERER Mobility’s sales figures this year will be below expectations after 3 years of above-average success.
This means that brokers will have to reduce their inventories and therefore continue to tie up abundant capital. Therefore, PIERER Mobility Group continues its efforts to strengthen its corridor structure through extended payment terms and superior discounts. These measures have already led to strong growth. Management expects current capital and related capital commitment to continue to increase in 2024. This is expected to have a significant negative effect on EBIT and the monetary result in the current monetary year.
Motorcycle production prices in Europe have risen due to high wages and emerging costs, similar to regulations and bureaucracy, which is straining competitiveness. Production volumes are particularly low at the Mattighofen production site. At the same time, the company is strengthening tariff control. throughout the Group.
With the increase in sales over the past ten years, the number of employees at the motorcycle subsidiary KTM AG has more than doubled. In view of the change of location and the market situation, the number of workers had to be adjusted. The labor force after years of increased employment is painful, but mandatory to maintain and ensure the competitiveness of the production site.
Supply chain expansion in India and China
Another priority in 2024 is to increase the power of product progression. The aim will be to align and prioritise activities in line with the Group’s premium logo strategy and optimise progression processes. Subsequently, joint studies and progression with strategic partner Bajaj Auto in India and JV partner CFMOTO in China will be expanded at the respective locations.
Realignment of the bicycle division
During the coronavirus pandemic, the demand for bicycles increased rapidly, leading to an overheating of the bicycle market and supply chain disruptions. As a result, our own inventories, as well as those of our suppliers and distributors, have reached record levels. The overall relief of these stocks continues, while at the same time there is great pressure on price promotion.
Due to the developments described above, the ordinary impairment and restructuring needs in 2024 will result in a particularly negative result in the Bicycles segment.
The realignment of the bicycle segment initiated in fiscal year 2023 with a premium segment will be systematically implemented and completed in 2024.
For the 2024 financial year, Control expects a decrease in sales from 10 to 15 in the motorcycle and bicycle divisions due to the evolution of the current market.
In the motorcycle segment, the controlling believes that the cost savings achieved in the current financial year can offset the negative effects of the decline in sales to such an extent that balanced to slightly positive EBIT can be generated. The expansion of the broker network to the logo strategy will be key issues in 2024.
In contrast, in the Bicycles department, the control expects a particularly negative EBIT of -110 to -130 million euros for the 2024 financial year, which is basically due to the ordinary impairments and restructuring desires mentioned above. The restructuring of the Bicycles department is therefore complete.
About the group
PIERER Mobility AG is the corporate holding company of Europe’s leading manufacturer of motorized two-wheelers and generates a complete diversity of premium logos, including KTM, GASGAS, Husqvarna and MV Agusta Motorcycles. With its cutting-edge strength, PIERER Mobility is a pioneering generation leader in electric two-wheeled mobility through its motorcycle logos. In the bicycle sector, it is in the high-end segment. In the bicycle sector, it is in the high-end segment. The diversity of premium logos also includes high-performance parts under the WP logo and the special high-performance KTM X-BOW sports cars.
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Email: ir@pierermobility. com
Website: www. pierermobility. com