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 more profound operational restructuring is being pushed forward.
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“Impatience is not an accelerator at KTM”
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. As a result, the motorcycle manufacturer said: “The goal 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 released in due course.
“We want clarity as quickly as possible”
“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.
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.
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.
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**Interview with a Alex Reed Expert on KTM AG’s Financing and Restructuring Efforts**
**Interviewer:** Thank you for joining us. To get right into it, KTM AG is currently in talks for a significant financial bridging funding. Can you explain the implications this has for the company moving forward?
**Expert:** Absolutely. The negotiations for this three-digit million amount are crucial for KTM AG as they represent a key step in securing liquidity and stabilizing the company’s financial condition. Given that KTM AG accounts for over 95 percent of Pierer Mobility’s sales, any financial instability could ripple through the parent company. The talks are still in their early stages, so there’s a level of uncertainty about the conditions and outcomes of these negotiations.
**Interviewer:** You mentioned liquidity and stability; how critical is this restructuring initiative, especially in light of recent job cuts?
**Expert:** Restructuring is essential for KTM AG right now. The aim is to reduce production volumes and inventories to more sustainable levels, adjust overhead costs, and ultimately streamline operations. From what we see, the company’s focus is on creating a foundation for long-term competitiveness and profitability. The job cuts we’ve seen recently—such as the 200 positions eliminated—highlight the severity of the situation. While painful, these steps are often necessary to ensure the organization can emerge from this financial strain more robust.
**Interviewer:** What does the company mean when it states that “impatience is not an accelerator at KTM”? How does this mindset factor into their long-term strategy?
**Expert:** This statement reflects the company’s deliberate approach to restructuring and financial recovery. It suggests that they are committed to taking the time necessary to develop a thoughtful and effective strategy rather than rushing into decisions that could have negative consequences. This patience is critical in ensuring that any measures taken support sustainable growth instead of temporary fixes.
**Interviewer:** Given KTM AG’s significant role in the motorcycle market, how might these internal changes impact consumers and the industry as a whole?
**Expert:** If KTM successfully navigates these hurdles, it could lead to a more sustainable operation that may benefit consumers through more reliable products and improved service. However, any disruptions during the restructuring phase could lead to delays in production, affecting not just the availability of their bikes, but also potentially impacting the broader market dynamics within the motorcycle industry. How they manage this transition will be closely watched industry-wide.
**Interviewer:** what should stakeholders look for in the coming months regarding KTM’s restructuring efforts?
**Expert:** Stakeholders should look for clearer communications from the management regarding the outcomes of the financing talks and specifics of the restructuring strategy. Insights into job stability and production changes will be critical, as will any actions taken to reassure consumers and investors that KTM remains a viable and competitive player in the motorcycle market. The next few months will be pivotal for their future.
**Interviewer:** Thank you for your insights today. It’s clear that KTM AG is at a crucial juncture in its history.
**Expert:** Thank you for having me. It will be interesting to see how things unfold for KTM.
