KTM AG is in talks with core shareholder Pierer Bajaj AG as well as with existing financial creditors for bridging financing amounting to a three-digit million amount, said the parent company Pierer Mobility. This is necessary as part of the liquidity planning for 2025; the KTM AG Group was responsible for more than 95 percent of Pierer Mobility’s sales as of June 30, 2024. The talks would be at an early stage.
“Therefore, no concrete statements can yet be made about the outcome of the negotiations, the conditions and the extent of additional financing,” said the Upper Austrian group. In addition to securing liquidity, the board is striving to “put KTM AG back on a stable operational and financial basis.” An even deeper operational restructuring is being pushed forward.
Cutting back on production
The aim is to reduce inventories at KTM AG and dealer level to an economically sustainable level by significantly reducing production volumes. “The overhead area will also be significantly adjusted again,” said Pierer Mobility. The motorcycle manufacturer subsequently said: “The aim is to stabilize costs and sales at a reduced level from the 2025 financial year and thus create the basis for sustainable competitiveness and profitability.” Further information would be published in due course.
“We want clarity as quickly as possible and are working hard on a concept and measures, but all of this is at an early stage,” said a company spokesman. Pierer Mobility did not want to comment on the extent and in which areas there would be job cuts – which had already been announced previously.
Job cuts
Most recently, 200 jobs were cut in August, mainly in Austria, and in the first half of the year 373 positions were cut, 309 of them in Austria, and also in the KTM Forschungs- und Entwicklung GmbH, which previously had 850 employees. At the end of June, the group had around 6,000 employees. Stefan Pierer had already pointed out the increased personnel costs in Europe several times – including in his role as IV President in Upper Austria. In October, Pierer Mobility reduced its board of directors from 6 to 2 people: Pierer and Gottfried Neumeister, who has been co-CEO since September.
Problemfeld „Bicycles“
This year, sales for the first six months of the current financial year fell by 27 percent to 1 billion euros, with a loss for the period of 172 million euros. The operating result (EBIT) amounted to minus 195 million euros in the first half of the year after 97 million euros in the same period of the previous year. The “significant factor” for the negative result was the Bicycles division, with a negative operating result of 117 million euros. The result in the motorcycle sector was minus 78 million. Pierer Mobility already achieved a significantly lower operating result (EBIT) in 2023 due to the restructuring in the bicycle sector. The key figure was 160 million euros in 2023, 32 percent below the previous year’s figure. Sales, on the other hand, rose from 2.44 billion euros to 2.66 billion euros.
Share price
The Pierer Mobility share price fell by around 38 percent by midday today. Florian Beckermann, board member of the Association for Investors (IVA), gave a nuanced statement on this on Wednesday: “Three negative company reports in a short space of time almost inevitably led to a (…) share price catastrophe – shareholders were already alarmed by this. The current restructuring is consistent and shows very clearly that even a captain of industry Pierer is not without risk. A three-digit liquidity requirement for 2025 should now ensure survival.”
