Restructuring necessary

Production to be cut back, cash injection needed

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13.11.2024 05:30

Pierer Mobility AG has recently had one record year after another. Now, however, the motorcycle manufacturer seems to be stuck in crisis mode. It was announced that the heart of the Mattighofen-based company, KTM AG, needs a financial injection for 2025. There is talk of a three-digit million sum. Production will also be cut back.

The Executive Board is currently working on securing the financing of KTM AG, specifically on bridging financing in the three-digit million range - this was announced by Pierer Mobility AG late Tuesday evening.

KTM AG responsible for more than 95% of sales to date
This means that in the 2025 financial year, at least 100 million euros will have to be injected into the company that was previously responsible for more than 95 percent of the Group's turnover. A huge chunk that shows just how much pressure the motorcycle manufacturer has come under.

Who will secure the financing? According to the company, talks are underway with the core shareholder Pierer Bajaj AG as well as with existing financial creditors. The negotiations and deliberations on the next steps to be taken are apparently at an early stage.

Production will be reduced
The fact is: KTM AG not only needs a huge cash injection to secure liquidity, but also needs to be put back on a stable operational and financial footing. In order to further reduce stock levels, the brakes are now also being applied to production.

A motorcycle power in Europe

With around 382,000 motorcycles sold in 2023 and an annual turnover of 2.7 billion euros, Pierer Mobility, which acts as the holding company of KTM AG, is one of the leading motorcycle manufacturers in Europe. In addition to KTM, the Mattighofen-based company also owns the Husqvarna, GasGas and MV Agusta brands. At the end of June 2024, the number of employees was stated to be more than 6000. The KTM X-Bow, a high-performance sports car, and electric bikes from the Husqvarna and GasGas brands are also part of the network.

Savings are being made in administration 
What the reduction in production means for the workers employed there is not specified. One thing has already been made clear: savings will be made in administration. "The overhead area will be significantly adjusted once again," says the Pierer Mobility statement, which refers to a "far-reaching restructuring".

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The aim is to stabilize costs and sales at a redimensioned level from the 2025 financial year and thus create the basis for sustainable competitiveness and profitability.

Die Pierer Mobility AG über die Pläne für die KTM AG

Executive Board downsized, jobs cut
Pierer Mobility AG first caused a stir on October 21 when the sales and earnings forecasts for this year had to be cut and the Executive Board was reduced to two members (Stefan Pierer, Gottfried Neumeister). Prior to this, it was announced at the end of August that a further 200 employees would have to be let go.

In October, there was talk of consolidating and not wanting to cause further unrest among the workforce. This will be difficult with the announcement of the restructuring and the need for liquidity ...

This article has been automatically translated,
read the original article here.

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