HWA AG EXCEEDS ITS 2017 TARGETS
Apr 26, 2018
Revenue remained stable at EUR 97.5 million, compared to EUR 97.4 million in the prior year. As expected, HWA AG successfully returned to profitability in 2017. EBIT increased significantly from EUR 0.2 million to EUR 2.8 million. The EBIT margin reached 2.9%, slightly exceeding expectations.
Net income improved substantially from EUR 0.3 million to EUR 1.4 million. Following a disappointing 2016 financial year, the development of the Company’s key figures in 2017 was highly encouraging.
In the Motorsport division (DTM and Formula 3 engines), revenue declined as planned compared to the previous year. The Vehicles/Vehicle Components division performed somewhat better than expected, particularly during the second half of the year.
Deliveries of the Mercedes-AMG GT3 remained at a strong level following significant growth in previous years. Cooperation with Mercedes-AMG GmbH continued through a development contract for the Mercedes-AMG GT4. The first deliveries took place during the final weeks of 2017.
Demand for GT4 race cars remains high. With this vehicle, HWA AG addresses an even broader target group of amateur and professional drivers as well as racing teams.
Undoubtedly, the announcement in the summer of 2017 that Daimler AG would discontinue its DTM activities beyond 2018 represented a negative development. However, as previously communicated, this decision had no impact on the Company’s 2017 results. No negative effects are expected for 2018 either.
HWA AG’s management is intensively evaluating alternative motorsport projects to at least partially compensate for the expected decline in DTM-related revenue from 2019 onwards. The Management Board is highly confident that it will be able to report progress on new motorsport projects in the coming weeks.
In recent years, HWA AG has achieved strong growth in the Vehicles/Vehicle Components segment. The Company now generates revenue of nearly EUR 100 million, compared to approximately EUR 60 million five years ago.
This substantial growth requires significantly higher working capital than in previous years. Key drivers of the increased capital requirement include production of the Mercedes-AMG GT3 and GT4, spare parts supply for AMG Customer Racing teams and additional customer projects.
For this reason, the Management Board has decided not to propose a dividend for the 2017 financial year and to continue suspending dividend payments. The Supervisory Board has endorsed this proposal.
HWA AG also announces that the Company prepared consolidated financial statements under German GAAP (HGB) for the first time in 2017. As a result, no prior-year comparative figures are available for the consolidated accounts.
For 2018, the Management Board expects an increase in total Group output. Growth will continue to be driven by the Vehicles/Vehicle Components segment.
Group EBIT is expected to improve significantly compared to 2017. The HWA Group generated revenue of more than EUR 96 million and EBIT of EUR 1.9 million in 2017.
For the parent company financial statements, HWA AG expects stable revenue and a significant increase in EBIT.
Based on current expectations, the outlook for 2018 is positive. The Company intends to continue the positive momentum achieved in 2017.
HWA AG will publish its annual and consolidated financial statements for 2017 in May 2018.
Contact:
Investor Relations / Press
HWA AG
Volker Glaser
Benzstraße 8
71563 Affalterbach
Germany
Phone: +49 (0) 7144 8717-279
Fax: +49 (0) 7144 8718-111
E-mail: ir@hwaag.com
Company Profile of HWA AG
Outstanding performance and an uncompromising will to win – this is the philosophy of HWA AG. For almost five decades, the team has been active in international motorsport and is regarded as one of the most successful organizations in the industry. As a highly sought-after development partner, HWA AG combines its expertise to achieve further success on racetracks around the world.
HWA AG has existed in its current form since 1998. Hans Werner Aufrecht founded AMG, the performance 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 transaction, the motorsport activities, today’s Mercedes-AMG DTM Team, and parts of the Vehicles/Vehicle Components division were separated and transferred to HWA AG.
At the end of 2006, the company was converted from a limited liability company into a stock corporation, and HWA AG was listed on the stock exchange in April 2007.
Today, HWA AG is responsible for Mercedes-Benz’s activities in the DTM touring car championship. Acting as a full-service provider on behalf of Mercedes-Benz Motorsport, HWA AG manages all activities, including the development and construction of Mercedes-Benz DTM race cars as well as operation of the racing team.
The Vehicles/Vehicle Components division focuses on the development and production of vehicles and components for premium automotive manufacturers. HWA AG also possesses expertise in the development, production and support 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. Its successor, the Mercedes-AMG GT3, has been delivered to customer teams worldwide since December 2015. Deliveries of the Mercedes-AMG GT4 began in December 2017.