HWA AG: STRATEGY FOR OPTIMIZATION AND REALIGNMENT
Jan 31, 2017
At the core of the program is a stronger focus on the Company’s key competencies, which the Management Board has identified as development services, race car operation, testing and assembly, as well as aftersales and customer motorsport services.
The Company is currently facing significantly changed market and competitive conditions. In motorsport, the DTM regulations have evolved, resulting in a greater standardization of components and reduced freedom in vehicle development. At the same time, the Vehicles/Vehicle Components segment remains highly competitive and price-sensitive despite robust economic conditions and strong current demand.
HWA AG, which currently operates with a high degree of vertical integration, must respond constructively and with a long-term perspective to these developments. Due to the changed market environment, some manufacturing areas can no longer be operated economically.
The reorganization program, which has already entered the implementation phase, primarily aims to significantly reduce the level of in-house manufacturing and to decrease internal capacities in selected areas that will be outsourced in the future.
As part of the program, the current workforce of approximately 320 employees is expected to be reduced by around 10 to 15 percent.
Through this concentration on its core competencies, combined with the strong commitment and specialization of its employees in motorsport, HWA AG believes it will be well positioned for the future once the measures have been completed.
In an ad hoc announcement dated December 12, 2016, HWA AG already informed the market that it would no longer achieve its EBIT margin target of 4 to 6 percent for the 2016 financial year.
The costs associated with the current restructuring package were not included in that assessment and may result in a one-time negative effect in 2016 due to the need to recognize provisions.
However, it is still too early to provide specific figures regarding the amount of any provisions. The same applies to a forecast for the 2017 financial year.
HWA AG intends to publish its outlook for 2017 no later than the release of its 2016 annual results at the end of April.
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 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 aspects of the program, 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. For example, 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 project, the Mercedes-AMG GT3, has been delivered to customer teams around the world since December 2015.
HWA AG also possesses extensive expertise in the development, production and support of Formula 3 racing engines.