HWA AG PUBLISHES 2019 ANNUAL RESULTS
Apr 29, 2020
The significant negative result was primarily due to an impairment of the Company’s investment in the joint venture VYNAMIC GmbH, which had a negative impact of approximately EUR 4 million on consolidated earnings. In connection with the joint venture and HWA AG’s activities relating to the DTM project in 2019, the Company incurred costs that have not yet been compensated by the partners involved in the DTM project.
As a result, HWA AG is currently bearing the losses from the DTM project on its own. The Management Board is pursuing claims for damages against the partners involved in the DTM engagement. No further negative effects from the DTM project are expected in 2020.
Independent of its DTM involvement in 2019, the Company’s overall business developed very positively. Other motorsport activities, including Formula E, Formula 2 and Formula 3, made positive contributions to HWA AG’s performance.
Within the Vehicles/Vehicle Components segment, business continued to benefit from the successful cooperation with Mercedes-AMG GmbH in its Customer Racing activities, which also developed very positively in 2019. The Vehicles/Vehicle Components segment has achieved strong growth rates for many years. Business in 2019 was driven by the continued delivery of Mercedes-AMG GT vehicles, a robust aftersales business and additional customer projects.
Even before the outbreak of COVID-19, HWA AG had anticipated a significant decline in revenue for 2020. On the cost side, the Management Board continues to expect substantial relief.
Following the losses incurred in 2019, HWA AG implemented a broad cost-reduction program, which is proving beneficial in light of the current economic environment. Therefore, the Management Board currently still considers its 2020 EBIT target of approximately EUR 5 million achievable, although this will depend on the further course of the pandemic in the coming months.
Traditionally, the first six months of the year tend to be weaker for HWA AG, with business performance heavily dependent on a strong second half. Provided that economic conditions stabilize over the coming months, the Company believes there is a good chance of achieving its targets.
In the Vehicles/Vehicle Components segment, HWA AG expects continued deliveries of the Mercedes-AMG GT4 and production of the AMG GT3 MY 2020 during 2020. In addition, the Company is working on further projects outside Daimler AG that are expected to contribute to revenue growth.
The spare parts and service business is expected to continue growing due to the increasing number of vehicles operating in the market. However, the COVID-19 situation may have a significant impact on revenue development.
HWA AG’s two business divisions are divided into four sub-segments. The Motorsport division includes Formula E, Formula 2 and Formula 3 activities. The growth segment Vehicles/Vehicle Components includes development projects such as Mercedes-AMG GT Customer Racing vehicles, their production, worldwide spare parts supply and engineering services for AMG customer racing teams.
Going forward, HWA AG intends to advance development in the field of “Green Racing,” including alternative powertrain technologies and the reduction of vehicle emissions.
More broadly, HWA AG plans to increasingly focus on future-oriented projects in the areas of Future Technologies and Green Technology. To support these investments, the Company is currently conducting a rights issue capital increase aimed at financing its continued growth.
Contact:
Investor Relations
HWA AG
Marc Schimmelpfennig
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
HWA AG is an independent 360-degree engineering specialist in the fields of motorsport and high-performance vehicles. Founded in 1998 by Hans Werner Aufrecht, the company is headquartered in Affalterbach, Germany, and currently employs around 300 highly qualified professionals.
All products and services of HWA AG are guided by the principle ENGINEERING SPEED. The company’s mission is to develop the highest-quality and most effective solutions to help its partners and customers achieve their goals faster. The service portfolio ranges from the design and engineering of all vehicle components to the development and production of complete vehicles, complemented by logistics, aftersales and support services.