Pierer Mobility Group Announces Major Executive Shake-Up and Withdraws 2024 Financial Guidance Amid Economic Challenges

Pierer Mobility Group dismisses four senior leaders, anticipates underperforming targets

Pierer Mobility Group announces disappointing forecast for sales and profits

The Pierer Mobility Group has declared its intention to downsize its executive board, cutting the number of directors from six to two.

The reduction of the board of directors to one-third of its original size will result in only Stefan Pierer, the CEO of Pierer Mobility Group (PMG), and Gottfried Neumeister, the Co-CEO, continuing as members of the company's executive board.

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In a significant move, it has been decided that Hubert Trunkenpolz, the individual behind the 'T' in KTM, will no longer serve on the board.

Since 2018, Trunkenpolz has served on the board, ascending to the position of board chairman in 2023. Additionally, Trunkenpolz holds a position on the supervisory board of KTM (Shanghai) Moto Co. Ltd.

In a recent development, Alex Pierer, who joined the board in 2023, has concurrently been serving as the managing director of Pierer Innovation AG since 2018. His previous role includes a tenure on the supervisory board of Pierer Industrie AG from 2015 to 2018. Additionally, he holds a seat on the supervisory board of Pankl Racing Systems AG, a company that is part of the Pierer Mobility Group.

In 2023, Florian Kecht also joined the board, alongside Rudolf Wiesbeck, who has served as the Chief Operating Officer of KTM AG since 2022. Additionally, Wiesbeck holds roles on the supervisory boards of KTM Components AG, Leoni AG, and Pankl Racing Systems AG.

The decrease in the number of board members is seemingly due to the persistent financial struggles faced by PMG. Specifically, the company from Austria attributes this downturn to the economic downturn in Germany, and the elevated living expenses in the US.

"The European economic growth is at a standstill, especially highlighted by the recession in the crucial German market," states a communication from Pierer Mobility Group.

"In the United States, the buying ability of consumers continues to be weak as a result of the elevated cost of living and the prolonged duration of costly consumer loans."

The PMG announcement further mentions that there has been a decrease in U.S. sign-ups by 6.3 percent during the timeframe of January to September 2024. Moreover, it highlights that September witnessed the most significant drop in new registrations in the U.S. since the start of the year, falling by 14.3 percent.

Consequently, Pierer Mobility Group has determined that a swift rebound is not anticipated.

The situation in Europe appears somewhat more positive for PMG, as their registrations remain stable compared to 2023. This stability is attributed to growth in the budget-friendly segment, though there is a noted deceleration in progress.

The news of the executive board's reduction follows earlier statements that PMG would be reducing its workforce and output levels at its European sites, while also increasing its reliance on its international industrial partners, including Bajaj Auto in India and CFMoto in China.

As part of its financial recovery strategy for 2024, PMG aimed to reduce its stock levels, and the most recent announcement verifies that this reduction in inventory is still ongoing.

"The statement highlights that, although there has been a minor decrease in stock levels, continuing to reduce these inventories significantly remains a key goal."

"Nonetheless," it continues, "Pierer Mobility is firmly dedicated to backing its dealers and suppliers as a key ally during these challenging periods."

The statement highlights that actions taken have led to higher debt and interest costs, noting, "Due to the steps implemented, there's been a rise in working capital which has subsequently elevated the company's overall debt and interest charges."

Given the critical situation PMG is currently facing, the company has announced it is withdrawing its financial projections for 2024.

Due to these conditions, according to the announcement, Pierer Mobility will not meet its projected financial targets, including revenue, profit margins, and the anticipated decrease in working capital and overall debt for this fiscal year. Consequently, the company is retracting its financial forecasts for the 2024 fiscal year.

"An updated examination of adjustments that don't involve cash values is planned to be completed before the year's conclusion."

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