The Upper Austrian Pierer Mobility (formerly KTM Industries) of industrialist Stefan Pierer is expanding due to a drop in sales in the third quarter additional 200 jobs ab.
The Job cuts will take place “primarily in Austria,” Pierer Mobility said on Friday evening in response to an APA inquiry. In the first half of the year, the company had already laid off 373 employees, 309 of whom were in Austria.
Further job cuts at Pierer Mobility
For the first six months of the current 2024 financial year, the listed motorcycle and bicycle manufacturer reported a 27 percent drop in sales to EUR 1 billion and a loss for the period of EUR 172 million after the stock market closed on Friday.
“The main drivers behind the results of the first half of the year were the decline in sales due to the economically volatile and difficult market environment, expenses in connection with the restructuring of the Bicycle segment and the increase in personnel costs in Europe,” said company boss Pierer in a statement.
However, “far-reaching measures” have been launched at an early stage, which will lead to “a significant improvement in results” in the second half of the year.
Falling sales
In the first half of the year, sales in the motorcycle segment fell by 27 percent to EUR 936 million and revenues in the bicycle business fell by 36 percent to EUR 69 million. According to the company, high interest rates in the USA, inflation in many European countries and a slowdown in global economic growth had a negative impact on sales.
In order to improve business results, Pierer Mobility is not only cutting jobs but also reducing production volumes by around a quarter in 2024 and streamlining product development. The loss-making bicycle division is also being restructured. The realignment of the bicycle business with a focus on the premium segment, which was initiated in 2023, is to be completed this year.
For the full year 2024, the Pierer Mobility management board is forecasting a decline in sales of between 10 percent and 15 percent. However, the company expects “a significantly better second half of the year.” In the motorcycle division, the management board assumes that the negative effects of the decline in sales can be compensated for due to the cost savings initiated and that “a balanced to slightly positive EBIT can be generated” in the full year 2024. In the bicycle division, an operating result of -110 to -130 million euros is expected for 2024 due to extraordinary depreciation and restructuring requirements.
Pierer Mobility AG is 74.3 percent owned by Pierer Bajaj AG, of which Stefan Pierer’s Pierer Industrie AG holds 50.1 percent and the Indian partner Bajaj holds 49.9 percent. A further 0.1 percent is held by the Pierer Group company. According to company information, the free float is around 25.6 percent. The share price of Pierer Mobility AG has fallen by over 40 percent since the beginning of the year.