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Affalterbach, April 29, 2020 – In 2019, HWA AG achieved sales of €113.6 million, compared to €101.2 million in the previous year. EBIT was negative €8.4 million, down from positive €6.5 million in 2018. HWA AG generated a loss of €8.9 million after tax. One of the reasons for the significantly negative financial result was an extraordinary write-down of the investment in the joint venture VYNAMIC GmbH, which reduced the consolidated financial result by almost €4 million. Within the context of the joint venture and the activities of HWA AG for the DTM project 2019, HWA AG incurred costs which have not yet been compensated by the DTM partners. This is why, for the time being, the loss incurred by HWA AG through the DTM project is borne by HWA AG alone. The Board of Management of HWA AG is asserting claims for damages against the partners in the DTM project. No other negative effects from the DTM campaign are to be expected in 2020.

Irrespective of its involvement in the DTM in 2019, the company has developed very positively. All other car racing activities of HWA AG in Formula E, Formula 2, and Formula 3 were successful. In the vehicles/vehicle components segment, the business continues to be positively influenced by the successful collaboration with the customer racing activities of Mercedes-AMG GmbH, which again saw a very positive development in 2019. The vehicles/vehicle components segment has been achieving strong growth rates for many years. In 2019, business was influenced by the continued delivery of Mercedes-AMG GT vehicles, still robust after-sales services, and other customer projects.

Even before Covid-19, HWA AG forecast a significant slowdown of sales for 2020. On the cost side, the Management Board continues to expect a substantial reduction in costs. Against the backdrop of losses incurred in 2019, HWA AG had already implemented a general cost-cutting programme, which is paying off in the current economic situation. At this point in time, the Board of Management therefore still considers the EBIT target for 2020 of approximately €5 million to be achievable. However, this will also depend on the further course of the pandemic over the next months. Traditionally, the business of HWA AG is weaker in the first six months of a year and mainly driven by a strong second half of the year. Provided that the economic environment stabilises to some extent in the coming months, HWA AG has good chances of achieving the targets. In 2020, HWA AG expects the vehicles/vehicle components segment to be driven by the continuation of Mercedes-AMG GT4 deliveries and the production of the AMG GT3 MY 2020. Furthermore, the company is working on other projects outside Daimler AG that should also contribute to sales. In principle, the spare parts and service business will continue to grow due to the large number of vehicles now in the market, although the current situation regarding Covid-19 may have a significant influence on sales.

The two business units of HWA AG are divided into four sub-segments, with the car racing segment covering activities in Formula E, Formula 2, and Formula 3. The high-growth vehicles/vehicle components segment includes development projects such as the Mercedes-AMG GT customer racing vehicles and their production. In addition, there are the global spare parts supply and engineering services for the racing teams of AMG customer racing. In future, HWA AG would also like to advance development in the field of "green racing," including the development of alternative powertrains and, thus, the reduction of vehicle emissions.

Generally, HWA AG intends to devote more attention to future-oriented projects in the fields of future technologies and green technology. Partly as a result of these investments, HWA AG is currently implementing a capital increase with subscription rights, which serves to further finance the company's growth.

Contact

Investor Relations
HWA AG
Marc Schimmelpfennig
Benzstraße 8
71563 Affalterbach
Phone: + 49/ (0) 7144/ 8717- 279
Fax: + 49/ (0) 7144/ 8718- 111
ir@hwaag.com
www.hwaag.com

About HWA AG

HWA AG is an independent, 360 engineering specialist in the fields of automobile racing and high-performance cars. Formed in 1998 by Hans Werner Aufrecht, the company is based in Affalterbach (Germany) and employs around 300 highly-qualified members of staff. HWA AG offers all its products and services under the corporate slogan ENGINEERING SPEED: The company's objective is to develop the best possible high-quality solutions, in order to get its partners and customers to their destination quicker. The portfolio of services ranges from designing all vehicle components to assembling complete cars, together with the relevant logistics, after-sales and support services.