HWA AG ACHIEVES RECORD REVENUE IN 2018
Apr 26, 2019
Affalterbach, April 26, 2019 – HWA AG achieved record revenue in 2018. The Company slightly exceeded its revenue expectations and narrowly met its earnings target. For the first time in the history of the motorsport company, revenue exceeded the EUR 100 million mark.
Group revenue amounted to EUR 101.2 million in 2018, compared to EUR 96.3 million in the previous year. Total output reached a new record level of EUR 112.9 million, compared to EUR 97.4 million in 2017.
As planned, Group EBIT improved from EUR 1.9 million to EUR 5.3 million. This corresponds to an EBIT margin of 4.7% based on total output, slightly below the target level of at least 5%. Group profit after taxes and interest increased from EUR 0.5 million to EUR 3.4 million.
Overall, 2018 was a successful year for HWA AG. Both business segments – Motorsport and Vehicles/Vehicle Components – contributed to the positive business performance.
From a sporting perspective, the Company celebrated a major success in the DTM championship, winning the Drivers’, Teams’ and Manufacturers’ Championships in 2018.
Following more than 30 years of highly successful cooperation with Daimler AG in DTM, the Mercedes-Benz DTM era together with HWA came to an end at the conclusion of the 2018 financial year.
In December 2018, HWA AG made its debut in Formula E. The Vehicles/Vehicle Components segment also continued its growth trajectory. The key drivers remain the ongoing cooperation with Mercedes-AMG GmbH in its Customer Racing activities and the delivery of the Mercedes-AMG GT4.
This race car addresses a broader target group of amateur and professional drivers as well as racing teams, and the project continues to develop successfully.
HWA AG is confident that it can continue the positive trend established in 2018.
The discontinuation of significant revenue streams from DTM activities presents a challenge for 2019. However, the Management Board currently believes that these losses can largely be compensated through new sources of revenue.
Significant contributions are expected from the Company’s involvement in Formula E. In addition, HWA AG competes with its own team in Formula 3 and participates in Formula 2 together with a cooperation partner.
Through the joint venture Vynamic GmbH, HWA AG will also continue to participate in DTM during 2019.
Further revenue growth is expected within the Vehicles/Vehicle Components segment during the current year.
The current motorsport environment remains positive. To date, the Company has not experienced any negative effects from the broader downturn in the automotive industry.
For 2019, HWA AG expects further revenue growth at Group level. This is particularly noteworthy given the complete loss of DTM-related revenue previously generated with Daimler AG.
EBIT at the HWA AG parent company level is expected to improve further. However, at Group level, EBIT will be negatively impacted in 2019 by the proportional consolidation of Vynamic GmbH. The joint venture is expected to report an operating loss during its first year of existence. Positive earnings contributions are anticipated from 2020 onwards, which should have a favorable impact on Group EBIT.
Over the past ten years, HWA AG has increased its total revenue by almost 60%, despite the Motorsport segment generating no growth during that period.
To support continued growth and strengthen the Company’s equity base, the Management Board decided in December 2018 to implement a capital increase of up to 10% of the share capital. This represented the first capital measure since the Company’s listing on the Frankfurt Stock Exchange in April 2007. No capital increase had been conducted at the time of the IPO.
The capital increase was completed in April 2019. A total of 511,500 new shares were placed at a price of EUR 13.87 per share, generating gross proceeds of approximately EUR 7.1 million. Due to the low transaction costs, nearly the entire amount accrued to HWA AG.
The shares were subscribed by Aufrecht GmbH and Dörflinger Management & Beteiligungs GmbH (“DMB”). Aufrecht GmbH is represented by Hans Werner Aufrecht and DMB by Willibald Dörflinger. Both individuals are major shareholders of HWA AG and members of the Supervisory Board.
Based on the Company’s dividend policy of distributing up to 50% of annual profits to shareholders, the Management Board and Supervisory Board will propose to the Annual General Meeting a dividend of EUR 0.37 per share for the 2018 financial year.
HWA AG will publish its annual and consolidated financial statements for 2018 in May 2019.
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
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.