Pierer Mobility Group Shakes Up Executive Board Amid Financial Struggles, Withdraws 2024 Guidance

Pierer Mobility Group dismisses four top officials, anticipates underperforming

Pierer Mobility Group forecasts disappointing financial outcomes

The Pierer Mobility Group has disclosed plans to downsize its board of directors, cutting the number from six members to just two.

The reduction of the board of directors by 66% will result in just Stefan Pierer, the CEO of Pierer Mobility Group (PMG), and Gottfried Neumeister, the Co-CEO, staying on as members of the company’s leadership team.

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In a significant development, Hubert Trunkenpolz, the individual signified by the 'T' in KTM, is set to be dismissed from the board.

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

Alex Pierer, who joined the board in 2023, has held the role of managing director at Pierer Innovation AG since 2018. Prior to this, from 2015 to 2018, he was a member of the supervisory board for Pierer Industrie AG. Additionally, he serves on the supervisory board of Pankl Racing Systems AG, a company that is a part of the broader 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. Furthermore, Wiesbeck holds membership in the supervisory boards of KTM Components AG, Leoni AG, and Pankl Racing Systems AG.

The decision to decrease the number of board members seems to stem from PMG's ongoing financial struggles. Specifically, the Austrian firm points to the economic downturn in Germany and the elevated living expenses in the US as contributing factors.

"The European economic landscape is experiencing a standstill, especially highlighted by the downturn in Germany's crucial market," states a communication from Pierer Mobility Group.

"In the United States, the buying power of consumers continues to be weak because of the elevated living expenses and the extended duration of costly consumer credit."

The PMG announcement further notes a 6.3 percent decrease in U.S. sign-ups from January to September 2024. Moreover, it highlights that September saw the sharpest drop in new registrations in the U.S. since January, recording a 14.3 percent fall.

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

The outlook in Europe appears more favorable for PMG, as the number of registrations remains on par with the figures from 2023. This stability, according to the report, can be attributed to growth in the budget-friendly sector. Nonetheless, there's an indication of a deceleration in progress.

The disclosure that the executive committee will be reduced in size follows earlier revelations that PMG plans to decrease its workforce and production levels at its European sites, while also aiming to enhance collaboration with its overseas manufacturing associates, including Bajaj Auto in India and CFMoto in China.

As part of its financial recovery strategy for 2024, PMG aims to reduce its stock levels, and recent announcements affirm that this reduction effort is still ongoing.

"The statement emphasizes that, although there has been a marginal decrease in stock levels, continuing to reduce inventory is still a key goal."

"Nonetheless," the statement continues, "Pierer Mobility is unequivocally dedicated to standing by dealers and suppliers as a strategic ally during these challenging periods."

The statement indicates that actions taken have led to a rise in working capital, which in turn has caused the company's net debt and interest expenses to go up.

Given the extreme situation PMG is currently experiencing, the company has announced it is withdrawing its forecast for 2024.

Due to the current situation, Pierer Mobility has announced that it will not meet its anticipated financial targets, including revenue, profit margins, and the goals for decreasing working capital and net debt this fiscal year. Consequently, the company is withdrawing its financial forecast for the 2024 fiscal year.

"By the year's end, a fresh examination of adjustments that don't involve cash value will be conducted."

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