HWA AG: optimisation and realignment strategy

Affalterbach, 31 January 2017 – In recent weeks, the Management Board of HWA AG has scrutinised the internal business processes and adopted a programme to optimise and realign individual business areas. The Supervisory Board approved this concept.

At the heart of the concept is the greater concentration of the company’s activities on its core competencies, which the Management Board has defined in development services, the deployment, testing and construction of racing vehicles, after sales and services in motor and customer sport.

The company is currently confronted by major changes in market and competitive conditions: In motor racing, the DTM regulations have evolved, resulting in the standardisation of components and the reduction of freedom in vehicle development. Despite robust economic performance and currently very good demand, the Vehicle/Vehicle Components segment is fiercely competitive and accordingly price-sensitive.
HWA AG, which is currently manufacturing with a high level of vertical integration, must respond constructively and in a forward-looking manner. Some of the manufacturing areas can no longer operate economically due to the altered conditions.

The adopted reorganisation concept, which is already being implemented, will result chiefly in a significant reduction of vertical integration and the downsizing of internal capacity in certain areas that will be contracted out in the future. The current headcount of 320 is to be reduced by around 10 - 15% as part of the programme.

Because of the concentration and focus on HWA AG’s core competencies and the marked commitment and specialisation of employees in the racing sector, the company believes it will be well equipped for the future once the measures are completed.

In an ad hoc disclosure dated 12 December 2016, HWA AG already announced that its annual targets with regard to the EBIT margin (target level of 4% to 6%) for 2016 would no longer be reached. The expenses for the new package of measures were not included and could potentially result in a negative one-time effect due to necessary provisions in 2016. However, it is too early for specific figures and the amount of any provisions. The same is true of a forecast for 2017. At the latest, HWA AG will communicate a forecast for 2017 alongside the publication of the annual figures for 2016 at the end of April.

Investor Relations/Press

Volker Glaser
Benzstrasse 8
71563 Affalterbach, Germany
Tel.: + 49/ (0) 7144/ 8717- 279
Fax: + 49/ (0) 7144/ 8718- 111

HWA AG profile:

Top performance and determination to win – that is the philosophy of HWA AG. The team has been active in international motorsport for nearly five decades and is one of the most successful teams of all time. As a sought-after development partner, HWA AG bundles its expertise for more victories on the racetrack.

HWA AG has existed in its current form since 1998. Hans Werner Aufrecht founded AMG, the customisation specialist for the Mercedes-Benz brand, in 1967. At the end of 1998, Aufrecht sold the original AMG Motorenbau- und Entwicklungsgesellschaft mbH to Daimler AG. As part of this sale, the motor racing business units, today’s Mercedes-AMG DTM team and parts of the vehicles/vehicle components unit were spun off and transferred to HWA AG. At the end of 2006, the company was converted from a limited liability company to a stock corporation; HWA AG was floated on the stock market in April 2007.

Today, HWA AG’s motor racing segment is responsible for the popular DTM touring car racing series. On behalf of Mercedes-Benz Motorsport, HWA AG takes on all activities as a full-service provider, including the development and construction of Mercedes-Benz DTM racing cars and the operation of the racing team. The vehicles/vehicle components business unit includes the development and production of vehicles and components for automotive manufacturers in the premium segment. HWA AG has further expertise in the development, manufacture and servicing of Formula 3 racing engines. The GT3 racing version of the Mercedes-Benz SLS AMG was developed and produced by HWA AG in close cooperation with Mercedes-AMG. The follow-up project, the new Mercedes-AMG GT3, has been delivered to customer teams all over the world since December 2015.