Pierer Mobility Group get rid of four executives, expects to “fall short of expectations”

The Pierer Mobility Group has announced that it will reduce the size of its board of directors from six executives to two.

The downsizing by two-thirds of the board of directors will see only Pierer Mobility Group (PMG) CEO, Stefan Pierer, and Co-CEO, Gottfried Neumeister, remain on the company’s executive board.

Perhaps most strikingly, it means that Hubert Trunkenpolz — who represents the ‘T’ in KTM — will be removed from the board.

Trunkenpolz has been on the board since 2018 and was made chairman of the board in 2023. Trunkenpolz is also a member of the KTM (Shanghai) Moto Co. Ltd. supervisory board.

Another casualty, Alex Pierer, was appointed to the board in 2023 but has also been managing director of Pierer Innovation AG since 2018, and was on the Pierer Industrie AG supervisory board from 2015–2018. He also has a position on the supervisory board of Pankl Racing Systems AG, which also falls under the Pierer Mobility Group umbrella.

Florian Kecht was appointed to the board in 2023 too, as was Rudolf Wiesbeck, who has been COO of KTM AG since 2022. Wiesbeck also has positions on the supervisory boards of KTM Components AG, Leoni AG, and Pankl Racing Systems AG.

The reason for the reduction in the board size appears to be the continuing financial underperformance of PMG. In particular, the Austrian company is blaming recession in Germany, and high cost of living in the US.

“The European economy is stagnating, with the important German market in particular in recession,” a Pierer Mobility Group statement reads.

“In the USA, consumer purchasing power remains low due to the high cost of living and the long period of expensive consumer credit.”

The PMG statement continues, saying that it has experienced a decline in registrations in the US of 6.3 per cent in the period from January–September 2024. In addition, it reports that September has been its worst month for registration growth in the US since January of this year, with a decline of 14.3 per cent.

As a result, Pierer Mobility Group concludes that “rapid recovery cannot be expected.”

The European picture is less negative for PMG, with registrations at a similar level to 2023, but the statement says that this is down to “increases in the low-price segment. However, they show a slowdown in momentum.”

The announcement of the executive board’s downsizing comes after it was announced earlier in the year that PMG would be cutting staff and production volumes in its European facilities and looking to further its utilisation of its non-European industrial partners such as Bajaj Auto in India and CFMoto in China.

Part of PMG’s plan to recover its finances in 2024 was destocking its inventories, and the latest statement confirms that the destocking process is continuing.

“Despite the slight reduction in inventories, further destocking remains an important objective,” the statement reads.

“However,” it adds, “Pierer Mobility remains clearly committed to supporting dealers and suppliers as a strategic partner in these difficult times.”

This has resulted in increased debt and interest expenses, the statement says: “As a result of measures taken in this regard, working capital and consequently the company's net debt and interest expenses increased.”

Such is the severity of the circumstances in which PMG now finds itself, it says that it is also revoking its 2024 guidance.

“As a result of these circumstances,” the statement reads, “Pierer Mobility will fall short of expectations in terms of revenue and earnings, as well as with regard to the reduction in working capital and net debt in the current financial year, and is revoking its guidance for the 2024 financial year.

“A new review of non-cash value adjustments will also be carried out by the end of the year.”