PIERER Mobility posts -27% revenue decline for H1, 2024; unit sales down by -21.2% in "economically volatile and difficult conditions"
The PIERER Mobility Group generated revenue of € 1,007m (-27%) in H1 2024. Around 93% of this was attributable to the Motorcycles segment and 7% to the Bicycles segment. Around 61% of revenue was generated in Europe, 27% in North America (USA, Canada, Mexico) and 12% in other countries.
"Negative, but in line with the current [recently revised] outlook for the 2024 financial year" was the primary verdict. "At € -195m, the operating result (EBIT) in H1 2024 was significantly below the previous year's figure of € 97m.
"The main factor behind the negative result was the Bicycle segment at € -117m, of which around € -75m was attributable to special write-offs/effects. The result in the Motorcycles segment amounted to € -78m. The Executive Board expects that the second half of the year - primarily driven by a higher-margin product mix - will turn the overall result into positive territory for the 2024 full year".
The operating result before depreciation and amortisation (EBITDA) of € -102m (previous year: € 179m) corresponds to an EBITDA margin of -10%. The result for the period amounted to € -172m (previous year: € 53m).
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"The main drivers behind the results for the first half of the year were the decline in sales due to the economic environment (particularly in the USA), expenses in connection with the restructuring of the Bicycles segment, as well as the production and personnel costs in Europe".
H1 2024 Motorcycles segment revenue fell by 27% to € 936m. EBITDA reached € 11m (previous year: € 196m) and EBIT amounted to € -78m (previous year: € 117m).
"The macroeconomic environment remained challenging in H1 2024. In particular, high interest rates in the USA, inflation in many European countries and a slowdown in global economic growth had a negative impact on PIERER Mobility's motorcycle sales in H1 2024, which fell by -21.2% to a total of 147,496 units.
"Around 44% of motorcycles were sold in Europe, 21% in North America, including Mexico, 22% in India and Indonesia, and 13% in the rest of the world. In H1 2024, PIERER Mobility acquired a majority stake in MV Agusta. The integration of the Italian luxury motorcycle manufacturer is going according to plan".
The development of motorcycle registrations in PIERER Mobility's core markets presented a "mixed picture in the first half of the year: a slightly positive trend in overall demand in Europe, driven primarily by the low-price segment (Chinese imports), was offset by a decline in demand in North America as well as in Asia, Australia and New Zealand. In this environment, PIERER Mobility succeeded in maintaining or achieving a market share of over 10% in each of the key markets of Europe, the USA and China".
The company says that "significant improvements expected in H2 2024" as it has "taken measures to improve earnings". Moving forward, these will additionally include "the reduction of an additional 200 employees in the overhead area. Together with the cost reductions and personnel adjustments already made in the first half of the year, this will secure and strengthen the competitiveness of PIERER Mobility AG in the long term.
"The reduction in production volumes by around 25% in 2024 is intended to relieve pressure on the product pipeline and dealer warehouses. This will lead to a significant reduction in capital commitment and therefore also in net debt.
"Another focus is on increasing efficiency in product development. The focus is on aligning and prioritising activities as part of the Group's premium brand strategy as well as streamlining and accelerating development processes. Following on from this, we are leveraging further synergies in research and development with our strategic partners".
The loss-making bicycle division is to be "systematically restructured. The realignment already initiated in the 2023 financial year, with a focus on the premium segment, will be implemented and completed in 2024".
An increase in net debt of € 1,469m was due to the negative result as well as the increased capital commitment - including "the necessary support for the global dealer network. As a result of the packages of measures, working capital, and therefore net debt, will return to a significantly lower level by the end of 2025. The necessary financing requirements have been secured".
PIERER Mobility AG: Economically volatile and difficult conditions led to a negative result in H1 2024, outlook for the full year confirmed:
- Results in H1 2024 negative, but in line with the current outlook for the 2024 financial year
- Significant improvement expected in H2
- Working capital remains at a high level, significant improvements expected at the end of 2024 and in 2025
- Increased net debt, but solid financing structure
- Motorcycle market: challenging market environment - Europe slightly positive, North America, Australia and China declining, India positive
- MV Agusta integration process going according to plan
- Bicycle market: persistent oversupply on the market necessitated value adjustments, focus on the premium segment
- Full-year outlook for 2024 confirmed
