Affalterbach, 14 April 2015 – HWA AG’s results for 2014 were below original expectations – revenues were higher and in line with budget, but both EBIT and net profit were significantly lower than in 2013.
The revenue growth was principally attributable to the motor racing business. Following several years of restrictions, at the end of the 2013 season the ban on race car development was lifted. Under the current DTM regulations the manufacturers are once again free to carry out extensive development work on their cars. In the 2014 season Mercedes-Benz raced seven rather than six cars in the DTM, which accounted for HWA AG’s overall increase in revenues. The reduced earnings were also attributable to the motor racing business: the high additional expenses depressed both EBIT and net profit. DTM is top level motor sport and very competitive in nature, and HWA AG invested heavily in development activities in order to exploit the possibilities to the full. Following a disappointing start to the last season, at Hockenheim, unbudgeted additional expenditure was required in order to achieve permanent improvements in sporting performance and the competitive position. These expenses were of course a drag on HWA AG’s financial performance.
Sales of vehicles and vehicle components remained stable at a satisfactory level. The business performance was satisfactory, and in line with Management Board expectations.
Total revenues climbed from EUR 56.0m to EUR 64.1m. EBIT dropped considerably, from EUR 5.7m to EUR 1.4m, and the profit for the year declined correspondingly from EUR 3.9m to EUR 0.7m. Cash flows from operating activities were very satisfactory, increasing from EUR 0.7m to EUR 5.1m. With an equity ratio of more than 50%, HWA AG’s finances are stably based. The Supervisory Board adopted and approved the annual financial statements on 25 March 2015.
Looking forward to the Annual General Meeting on 17 June 2015 and in the light of the reduced earnings last year, the Management and Supervisory Boards resolved not to distribute a dividend for 2014. Instead, the whole of the retained earnings as at the end of financial 2014 – EUR 17,287,133.64 – will be carried forward into 2015. HWA AG’s dividend policy remains in principle unchanged: to pay out a minimum of 50% of annual earnings to its shareholders. For financial 2015, the Management Board plans to resume payment of dividends.
HWA AG has a stable basis on which to develop a positive sporting and business performance in 2015. The main emphasis in 2015 will be on refocusing the DTM project, and on the development contract for the new Mercedes-AMG GT3. For the motor racing business, it is obviously still too early to predict what the year will bring. Only once the season has started will it be clear whether the DTM team’s sporting performance is sufficiently competitive, or whether additional investments will be necessary. The outlook for 2015 in the vehicles and vehicle components business is encouraging, and the overall outlook for the year is positive. The Management Board is expecting revenues to grow and earnings to improve.
This press release with the final results for financial 2014 replaces the publication of results originally announced for 22 April 2015. HWA AG will be publishing its Annual Report for 2014 in May.
HWA AG was founded in 1998 as a spin-off from AMG, which was established in 1967 by Hans Werner Aufrecht as the Mercedes Benz customisation specialist. Towards the end of 1998 Hans Werner Aufrecht sold a majority interest in AMG Motoren- und Entwicklungsgesellschaft mbH, as it then was, to Daimler AG. In the process of disposal, motor racing – what is today the AMG-Mercedes team in the German Touring Car Championship (DTM) – and parts of the vehicles and vehicles components business were spun off and transferred to HWA AG. In the motor racing business, HWA AG acts as a full service provider to Daimler AG Motorsport in the DTM. It is responsible for the whole process of development and construction of the racing cars, including the engines, together with all other activities involved in the racing team’s operations. In its vehicles and vehicles components business, it develops and builds cars and vehicle components for the automobile industry. Since 2003 HWA AG has been producing and servicing racing engines for the Formula 3 Euroseries and the British Formula 3 Series.