KTM Announce Massive Loss
Saturday, December 5th, 2009KTM has released details of their accounts which see them having lost 81.4 million Euros. Turnover for KTM was at 454.6 million euros from 64,080 vehicle sales and KTM put the loss down to ‘restructuring’.
“The past fiscal year proved to be the most difficult in KTM’s recent history. However, we responded with strong restructuring measures. In fact, one-off restructuring costs account for 80% of the negative EBIT. Despite the slump in the markets, above all in North America and Europe, we succeeded in maintaining our market position and increasing market shares,” says Stefan Pierer, CEO of KTM Power Sports AG.
Capacities and overheads have been realigned to the reduced market level. In the past fiscal year, KTM had to axe over 450 jobs and used the existing short time working schemes in the period from May through September.
Due to the economic crisis, the original business model of X-Bow serial production was no longer feasible. Marketing and sales activities are now therefore integrated in the Mattighofen plant. KTM has written down all the serial production development costs and production tools totaling 33.1 million euros. In X-Bow production, KTM has opted for a model often used in the high-end sports car sector, namely manufacture to order and customization on request. This has resulted in a shift from serial production to building cars to each individual customer’s specifications
KTM is still expecting the motorcycle market in general to decline in the 2009-10 fiscal year. Thanks to new product developments, particularly in the profitable core segment of off-road competition, a slight increase in sales can however be anticipated. A completely new motocross generation will be rolled out at the end of the 2009-10 fiscal year. The new street models from the cooperation with Bajaj Auto Ltd. were presented to the public at the beginning of November. Given the cost cutting and optimization program, the Management Board is expecting a positive operating result and a substantial improvement in free cash flow.
