2023-12-05 18:32:40
Industrialist Stefan Pierer’s Pierer Mobility (formerly KTM Industries) is cutting up to 300 jobs in Austria next year. In a broadcast on Wednesday evening, the company’s board cited “the adverse economic conditions in Europe” as the reason. “In order to secure the profitability of the group, management will implement cost reduction measures in the double-digit million range in the 2024 financial year.” Two brands of bicycles are sold.
Parts of production for individual mid-range models and certain R&D activities will be relocated from the Upper Austrian company to the strategic partner Bajaj Auto in India and to CFMOTO in China. “Among other things, this is intended to take advantage of cost advantages in these regions and to accelerate development and industrialization processes,” writes the company, which recently reported new record sales in the first half of the year. Exactly where and how many job cuts will take place in Austria remained unclear on Wednesday evening.
Politically, company boss Pierer was often the focus of political competitors in the Chancellor’s party as a major ÖVP donor. Corona aid to his company was also particularly critically questioned by some parties. Pierer is also President of the Upper Austrian Industrial Association (IV).
Pierer Mobility sold 190,293 motorcycles in the first half of the year (+16.5 percent). Sales of e-bicycles and bicycles increased by 39 percent to 71,491. At the end of August, business was going well in both divisions, especially in Europe. At that time, personnel was also being increased compared to the previous year. At this point, the company was still optimistic regarding the year as a whole. In the second half of 2023, we are building on further growth in the core areas, both in motorcycles and bicycles.
In the motorcycle sector, the costs for dealers’ inventories had risen sharply due to significantly increased interest rates despite good demand, it was said on Wednesday evening. Pierer Mobility is strengthening its dealer structure through extended payment terms and higher discounts. Suppliers would also be supported “in order to dampen the financial burdens that have increased significantly due to the increased interest rate and to improve their liquidity situation.”
In the broadcast on Wednesday evening, there was particular talk of the board’s decision to sharpen the strategy. This involves focusing on the core brands KTM, GASGAS, Husqvarna and MVAgusta. Due to this decision, the sale of the R Raymon and FELT brands as well as the divestment of the non-e-bicycle division was initiated by the board or, in the case of R Raymon, already completed. At FELT, the time will come in 2024, the company also announced on Wednesday evening. Due to the realignment of the bicycle area, the 2023 balance sheet will have a significant impact on the overall result.
“The bicycle brand R Raymon, founded in 2017, will be continued in the future in a new, independent constellation by Susanne and Felix Puello,” wrote Pierer Mobility in the broadcast. “Furthermore, the sale process of the FELT bicycle brand to a consortium led by Florian Burguet has also been initiated, which is scheduled to be completed in the first half of 2024.” In this context, “Florian Burguet will be leaving the board of Pierer Mobility AG at the end of December.”
Electrically powered bicycles from the Husqvarna and GASGAS brands, however, are being promoted and expanded within the group. The company segments are therefore being reorganized. In addition to the e-bicycle, the new “E-Mobility” segment will in future include all electric powered two-wheelers such as e-motorcycles, e-minis and stand-up scooters.
The board now expects sales growth of 7 to 9 percent for 2023 with an EBIT margin of between 5 to 7 percent. In the first half of the year, when there was even more optimism, sales growth of 6 to 10 percent and an EBIT margin of 8 to 10 percent were expected.
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