Turmoil at Pierer Mobility Group: Board Shake-Up Amid Financial Struggles and Revoked 2024 Guidance

Pierer Mobility Group has announced the departure of four top executives and anticipates failing to meet performance expectations. The company has disclosed an unfavorable outlook for both its revenue and profits.

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

The board of directors is being reduced by two-thirds, leaving only Stefan Pierer, the CEO of Pierer Mobility Group (PMG), and Co-CEO Gottfried Neumeister as the remaining members of the company's executive board.

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In a particularly notable development, Hubert Trunkenpolz, whose name contributes the 'T' in KTM, is set to be taken off the board.

Since 2018, Trunkenpolz has served on the board and was appointed as its chairman in 2023. Additionally, Trunkenpolz holds a position on the supervisory board of KTM (Shanghai) Moto Co. Ltd.

Alex Pierer, who recently joined the board in 2023, has been serving as the managing director of Pierer Innovation AG since 2018. Prior to this, he was a member of the supervisory board of Pierer Industrie AG from 2015 to 2018. In addition, he holds a supervisory board role at Pankl Racing Systems AG, a company that is also part of the Pierer Mobility Group.

In 2023, Florian Kecht joined the board, alongside Rudolf Wiesbeck, who took on the role of Chief Operating Officer at KTM AG in 2022. Additionally, Wiesbeck serves on the supervisory boards for KTM Components AG, Leoni AG, and Pankl Racing Systems AG.

It seems the board is being downsized due to PMG's ongoing financial struggles. The Austrian firm is specifically pointing to Germany's economic downturn and the rising cost of living in the United States as key factors.

According to a statement from Pierer Mobility Group, the European economy is experiencing stagnation, with the German market, a key player, currently in a recession.

In the United States, people are finding it difficult to buy things because living expenses are high and borrowing money has been costly for an extended time.

According to the PMG announcement, there was a 6.3% drop in registrations in the United States from January to September 2024. Furthermore, it reveals that September marked the steepest decline in registration growth in the U.S. since the start of the year, plummeting by 14.3%.

Therefore, Pierer Mobility Group determines that a "quick recovery is unlikely."

In Europe, the situation for PMG appears more stable, as registration numbers remain consistent with those in 2023. The report indicates that this stability is due to growth in the budget-friendly segment. Nonetheless, it also highlights a decrease in overall growth pace.

The news about the reduction in the executive board follows an earlier declaration that PMG plans to decrease its workforce and production levels at its European sites. Additionally, the company aims to enhance its collaboration with non-European industrial partners, including Bajaj Auto in India and CFMoto in China.

As part of their strategy to improve financial health in 2024, PMG aimed to reduce its inventory levels. The newest update indicates that this process is ongoing.

"The statement indicates that even though stock levels have decreased a bit, continuing to reduce them is still a key goal."

The statement emphasizes that Pierer Mobility is firmly dedicated to standing by dealers and suppliers as a strategic ally during these challenging periods.

According to the statement, actions taken have led to a rise in both debt and interest costs: "Due to these measures, the company's working capital, along with its net debt and interest expenses, have gone up."

Due to the seriousness of the current situation, PMG has announced that it is withdrawing its forecast for 2024.

Due to these situations, Pierer Mobility has announced that it will not meet its anticipated goals for revenue and earnings. Additionally, the company will not achieve its targets for decreasing working capital and net debt this fiscal year. Consequently, it is withdrawing its financial forecast for 2024.

"By the year's end, a fresh evaluation of adjustments to non-cash values will be conducted."

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