KTM AG Annual Report 2015

Transcription

KTM AG ANNUAL REPORT 2015
KTM AT A GLANCE
EURk
2011
2012
2013
2014
2015
Change
EARNINGS RATIOS
Revenue
EBITDA
EBIT
EBT
Net result after tax
EBITDA margin
EBIT margin
526,801
64,495
31,009
19,109
20,818
12.2%
5.9%
612,008
67,838
36,716
25,145
25,317
11.1%
6.0%
716,390
87,694
54,886
46,923
36,509
12.2%
7.7%
864,636
112,599
75,377
70,636
57,162
13.0%
8.7%
1,022,487
141,524
95,105
85,421
63,924
13.8%
9.3%
18.3%
25.7%
26.2%
20.9%
11.8%
–
–
BALANCE SHEET RATIOS
Balance sheet total
Working capital1
Equity
Equity in % of total assets
Net financial debt2
Gearing3
485,775
99,333
219,775
45.2%
124,995
56.9%
521,351
81,269
254,522
48.8%
99,315
39.0%
571,435
86,074
282,843
49.5%
82,365
29.1%
694,799
106,836
327,575
47.1%
87,475
26.7%
848,933
122,051
379,814
44.7%
97,164
25.6%
22.2%
14.2%
15.9%
–
11.1%
–
70,348
33,077
71,673
15,572
83,240
25,187
79,649
9,914
118,104
23,802
48.3%
140.1%
1,755
1,702
1,849
2,143
2,515
17.4%
CASH FLOW
Cash flow from operating activities
Free cash flow
EMPLOYEES
Employees as at December 314
Employees including temporary staff and external employees
EBIT
EMPLOYEES
4
+18.3 %
Gearing = Net financial debt / equity including non-controlling interests
+26.2 %
Net financial debt = Financial liabilities (current, non-current) – cash and cash equivalents – financing receivables
3
+17.4 %
Working capital = Trade and other receivables + inventories – trade and other payables
2
REVENUE
1
2015
ANNUAL
REPORT
FINANCIAL YEAR FROM
JANUARY 1 TO DECEMBER 31, 2015
KTM AG, MATTIGHOFEN, AUSTRIA
KTM GROUP
KTM AG has been listed on the Vienna Stock Exchange since
The most recent example of KTM’s innovative strength is a feature
December 2003 and constitutes the ultimate group parent of the
both novel and unique in the motorcycle industry. The models
KTM group. The most important equity holdings of KTM AG
in the ADVENTURE range are the first motorcycles ever to boast a
are KTM Sportmotorcycle GmbH and Husqvarna Motorcycles
standard ABS that is fully functional even while cornering. What
GmbH. As the core operating company, KTM AG is the backbone
makes this possible is MSC, the motorcycle stability control system
in which trend-setting sports motorcycles with the KTM and
developed in collaboration with BOSCH. This groundbreaking tech-
Husqvarna brands are developed and produced for offroad and
nology gives us the edge over our competitors all over the world
street use.
in terms of safety and driving dynamics.
The brands are marketed via KTM Sportmotorcycle GmbH and
The company has successfully established Naked Bikes as the
Husqvarna Motorcycles GmbH, two direct subsidiaries of KTM AG,
driving force in the segment. With a unique range between
and its 29 domestic and foreign marketing companies.
125 and 1,300 ccm, KTM is present on asphalt in all segments
and offers the latest vehicles in the market.
The KTM group’s sales activities are supported globally by
over 2,200 independent dealers and importers as well as two
Successfully expanding the series to also produce smaller engine
joint ventures in New Zealand and Dubai.
capacities moreover demonstrated the great potential that can be
tapped here. The 125 DUKE, the 200 DUKE, and the 390 DUKE
KTM sees itself as a driver of innovation. The motorcycles
convinced thousands of riders, young and young-at-heart alike,
conceived, developed and produced in the development center in
of the benefits offered by the versatile Naked Bikes. Develop-
Mattighofen are not just READY TO RACE but in fact are also
ment work was resolutely pursued, bringing a modern interpretation
champion bikes, as demonstrated impressively by numerous race
to ultra-lightweight, fully clad Supersport models with small or
wins. With great commitment, KTM works on new concepts, tech-
medium engine capacities.
nologies and models, using racing sport as a platform for pioneering
technological innovation. KTM has been extremely successful
Apart from achieving strong growth in the street segments, the
in the most important offroad racing series, the US Supercross
KTM group also continued to enhance its unchallenged dominance
World Championship, as well as on asphalt.
in competitive offroad motorcycles, particularly as a result of full
integration of the long-established Husqvarna brand.
004
KTM GROUP
CONTENT
018
046
History
KTM 2016, 1190 Adventure R Action Utha, Photo: Schedl R.
Investor Relations
059
038
KTM 2016, 1290 Super Duke GT
Action Italy, Photo: Schedl R.
Consolidated Financial Statements
KTM 2016, 1290 Super Duke GT Action Italy, Photo: Schedl R., Rider: Jo Bauer
Quality
006 Foreword
046 Investor Relations
008 Report of the Supervisory Board
050 Corporate Governance Report
018 History
022 Sales Markets
059 Consolidated Financial Statements
024 KTM Vision
059 Consolidated Management Report
026 Group Structure
077 Consolidated Income Statement
078 Consolidated Statement of
028 The KTM Group as a Sales Organization
Comprehensive Income
030 KTM Group: Goals and Strategy
079 Consolidated statement of Financial Position
032 Husqvarna Motorcycles:
080 Consolidated statement of Cash Flows
Goals and Strategy
082 Consolidated statement of Changes in Equity
034 Employees
083 Notes
036 KTM Motorsport
140 Annex
038 Quality
143 Auditor’s Report
040 Research & Development
145 Statement of all Legal Representatives
044 KTM Technologies
146 Other Information
0 05
“Record employment
at the Mattighofen location”
“EBIT significantly increased”
“Highest sales and revenue
levels in the company’s history”
“Strengthening of
the Austrian location”
006
FOREWORD BY THE CHAIRMAN
OF THE EXECUTIVE BOARD
LADIES AND GENTLEMEN,
OUTLOOK
In particular markets, the economic conditions are still difficult.
In North America, a significant increase for the motorcycle
THE PAST FINANCIAL YEAR 2015 WAS THE BEST YEAR
FOR KTM IN ITS ENTIRE CORPORATE HISTORY. KTM
HAS BEEN THE FASTEST GROWING MOTORCYCLE BRAND
IN THE WORLD FOR YEARS NOW.
market is expected for the next year. In Europe, a positive trend
is expected. Concerning the emerging markets in South America
and Asia, there are numerous uncertainties. In the mediumterm we expect the main chances for growth in Asian markets.
HIGHEST SALES AND REVENUE LEVELS
In 2016, the brand KTM will introduce a new generation of
IN THE COMPANY’S HISTORY
Enduro motorcycles to the market.
By consistently implementing the global product and brand strategy on all continents, KTM successfully increased both revenue
For the brand Husqvarna, a significant growth is expected for
and sales figures, achieving new record levels for the fifth year
the financial year 2016. From 2017 on, the tradition brand
in a row in 2015. With 183,170 motorcycles sold worldwide by the
will introduce a large range of street motorcycles to the market.
KTM and Husqvarna group brands in 2015, sales were up 15%
on the preceding year. Revenue was up in the same period by 18%
In the mid-term we set the goal to increase our annual sales
to EUR 1.02 billion.
to 250,000 units.
EBIT SIGNIFICANTLY INCREASED
In financial year 2016 we planned extensive investments of
KTM saw a sharp rise in earnings in addition to revenue and
more than EUR 100 million for infrastructure and the development
sales. With EBIT of EUR 95.1 million, KTM achieved record
of new models at the location in Mattighofen and Munderfing. Our
earnings in 2015.
motorsports team receives a new motorsports building in Munderfing with investments amounting to more than EUR 12 million.
STRENGTHENING OF THE AUSTRIAN LOCATION
With investment of about EUR 110.9 million in 2015, KTM
The expenses for research and development will increase further
invested 30% more than in 2014 in Mattighofen and Munderfing
to reach a research ratio of about 7%. Furthermore, there will
and thus further expanded and strengthened the Austrian location.
be more investments for IT and infrastructure as a new ERP System
will be implemented in 2016.
RECORD EMPLOYMENT AT THE MATTIGHOFEN LOCATION
At the end of the year KTM had 2,515 employees worldwide,
For 2016 KTM expects further increases in revenue and sales
thus a new record. In 2015 headcount increased by 372, of
and a consistent profitability.
whom 339 were new employees in Austria.
The Executive Board would like to thank all employees for
Mattighofen, March 2016
the great dedication and commitment with which they have contributed to this successful development.
Stefan Pierer
CEO
0 07
(F.L.T.R.) HUBERT TRUNKENPOLZ, VIKTOR SIGL, STEFAN PIERER, FRIEDRICH ROITHNER, HARALD PLÖCKINGER
EXECUTIVE BOARD
SUPERVISORY BOARD
Stefan Pierer
Josef Blazicek
Friedrich Lackerbauer
Chairman of the Executive Board
Chairman of the Supervisory Board
Employee Representative
Harald Plöckinger
Rajiv Bajaj
Horst Resch
Friedrich Roithner
Deputy Chairman of the Supervisory Board
Employee Representative
Viktor Sigl
Ernst Chalupsky
Hubert Trunkenpolz
Srinivasan Ravikumar
008
KTM GROUP
REPORT OF THE
SUPERVISORY BOARD
JOSEF BLAZICEK
IN THE FINANCIAL YEAR 2015, THE SUPERVISORY BOARD
OF KTM AG HELD FOUR MEETINGS ON MARCH 3, ON JUNE 17,
ON SEPTEMBER 16 AND ON NOVEMBER 25, EACH TIME
IN MATTIGHOFEN, THUS FULFILLING ITS DUTIES REQUIRED
BY LAW AND UNDER THE ARTICLES OF INCORPORATION.
net profit proposed by the Executive Board and recommended to the
Supervisory Board that KPMG Austria GmbH Wirtschaftsprüfungsund Steuerberatungsgesellschaft, Linz, be proposed for appointment as independent auditors for the financial year from January 1,
2016 to December 31, 2016 at the Annual General Meeting. In
addition, the Audit Committee also reviewed the corporate governance
The Executive Board of KTM AG regularly reported to the Super-
report for the financial year 2015 and informed the Supervisory
visory Board on business development and the economic state
Board that it did not reveal any reasons for objection.
of the corporation, including its associated companies. The annual
financial statements and the management report for the financial
The Supervisory Board concurs with the Audit Committee’s report
year 2015 as well as the consolidated financial statements and
and consequently also with the results of the final audit. After
consolidated management report for the financial year 2015 were
obtaining the final results of its review of the management report
audited by KPMG Austria GmbH Wirtschaftsprüfungs- und Steuer-
and consolidated management report, the annual financial statements,
beratungsgesellschaft, Linz, and did not give any reasons for
including the proposed appropriation of net profit and consolidated
objections. The auditors certified that the accounting and annual
financial statements, and its management review, the Supervisory
financial statements as of December 31, 2015 are consistent with
Board also raised no objections. The Supervisory Board also concurs
the applicable laws, that the annual financial statements give, in all
with the Executive Board’s proposed distribution of net profit.
material respects, a true and fair view as possible of the company’s
net assets, financial position and results of operations in accor-
Having been accepted by the Supervisory Board, the annual
dance with generally accepted accounting principles, and that the
financial statements can be deemed approved pursuant to sec. 96 (4)
management report is consistent with the annual financial state-
of the Austrian Stock Corporation Law (AktG). The Supervisory
ments. Further, the auditors certified that the consolidated financial
Board acknowledged the consolidated financial statements and the
statements give a true and fair view in all material respects of the
consolidated management report for the financial year 2015.
group’s net assets and financial position as of December 31, 2015,
as well as of the results of operations and cash flows for the past
The Supervisory Board recommends that KPMG Austria GmbH
financial year in accordance with the International Financial Report-
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz,
ing Standards (IFRS), and that the other details in the consolidated
be appointed as independent auditors for the financial year from
management report do not misrepresent the group’s situation.
January 1, 2016 to December 31, 2016.
In its report to the Supervisory Board, the Audit Committee concurred
with the results of the final audit. After reviewing the management
report and the annual statements for the financial year including the
proposed appropriation of net profit, the consolidated management
report and the consolidated financial statements for the financial year
2015, and reviewing the management, the Committee did not raise
Josef Blazicek
any objections. The Audit Committee agreed with the appropriation of
REPORT OF THE SUPERVISORY BOARD
009
KTM 2016, 1290 Super Duke Special Edt. Action Misano Circuit, Photo: Schedl R., Rider: Ranseder Michael
KTM 2016, SX Shoot Action Hungary, Photo: Schedl R., Rider: Romain Biela
HQV 2016, 701 Enduro Action, Photo: Schedl R., Rider: Resch Roland
HQV 701 Vitpillen Studio Shoot, KISKA 2016
82
YEARS HISTORY
1934 1992 NEW BEGINNINGS
STEFAN PIERER
TAKES OVER
KTM
EARLY BEGINNINGS 25 year old Hans Trunkenpolz
opens a fitter’s and car workshop in the Upper
Austrian town Mattighofen. A first approach to the founding of what
is later known as KTM.
1953 KTM – KRONREIF TRUNKENPOLZ MATTIGHOFEN
In 1953 the three letters “KTM” appeared for the
first time to represent Kraftfahrzeuge Trunkenpolz Mattighofen.
Since the mid-1950s, when the associate Ernst Kronreif joined the
company, the meaning of the initials is clearly defined as “Kronreif
Trunkenpolz Mattighofen”.
1954 KTM NONSTOP – PARIS TO VIENNA In autumn
1954, a KTM attracted attention because a board
with the magic number “1000” was pinned at the handlebars
of the R125 Tourist. To make the performance and reliability of
a motorcycle known to the public, long distance races were pretty
popular in the 1950s. Therefore, on September 30, 1954, three
125 ccm Tourist and three riders, among them KTM boss Hans
1953
Trunkenpolz, stood at the outskirts of Paris. The destination
was Vienna, a distance of 1,300 kilometers. Not only the distance,
the timing was also pretty ambitious by the standards of the time.
The group at least wanted to keep pace with the “Arlberg-Express”,
a train that needed 24 hours for the same distance. And it worked
out – the train’s time was even beaten by more than two hours.
A KTM Tourist that was faster than the express train from Paris to
Vienna should be the right motorcycle for normal tourists.
1984 AUSTRIA SETS A SIGNAL – KINI & KTM ARE
CHAMPIONS! Heinz Kinigadner becomes a national
sports hero as the Tyrolean wins for the first time a world championship title in Motocross for Austria – on an Austrian manufactured
KTM race bike. Repeating the win in 1985 finally left a first massive
footprint in the international offroad world.
018
KTM GROUP
1984
2001 FIRST DAKAR VICTORY –
SINCE THAT ONLY KTM RIDERS
HAVE WON THIS EVENT
1998 LC8 – A NEW DIRECTION OF POWER It was 1998
when KTM began researching into its first
multi-cylinder engine and, after many different configuration types,
they decided on a 75 degree V-twin. This engine was announced
at the 2000 INTERMOT Show in Cologne, Germany, shown in a
prototype called the “LC8 Adventure”.
1999 1992
1992 NEW FACTORY With a rapidly increasing model
range with diverse engine types requiring more
replacement parts, a new KTM factory was opened on the outskirts
of the small Austrian town of Mattighofen. The main factory
building houses the four main production lines, assembling all the
offroad machines and street bikes from 690 ccm and above. A
cordoned off production line is where special prototype bikes and
customer race machines, such as the 450 RALLY and RC 250 R,
are produced.
NEW BEGINNINGS In the beginning of 1992,
Stefan Pierer and his CROSS Industries Company
took over KTM and set about not only resurrecting the Austrian
brand that began in 1953, but taking it to new levels of success.
Just 24 years later they are consistently the biggest European motorcycle brand, are the dominant figure in two-wheel offroad machines
1999
and have over 260 World Championships in the trophy room –
including 15 consecutive Dakar victories – and are now selling more
of its street motorcycles than offroad.
EXC – READY TO RACE FOR EVERYONE Although the KTM trophy
cabinets are already bursting with Motocross and Supercross silverware, Enduro is the heart of KTM; responsible for the majority of its
world championships and always at the top of the global Enduro sales
chart. Why? Because, since 1992, KTM has always provided customers
2001 FIRST DAKAR VICTORY The Dakar Rally is unique
in its difficulty for both rider and machine.
True endurance; the event is long in terms of duration and riding
with its EXC machine - either two-stroke or four-stroke - that is ready
distance an often features terrain as varied as the landscape. For
to fight for victories straight from the showroom. Upgraded each year,
the biggest offroad brand, the Dakar acts a great test of its
this is READY TO RACE and this mentality will never change.
1994 machines. KTM first won the Dakar Rally with Italian Fabrizio Meoni
in 2001. Since that first victory, only KTM-mounted riders have
TAKING TO THE STREET Take an LC4-powered
won this event – 15 consecutive wins is a feat no other manufacturer
620 Enduro, chopped it up with an angle grinder
has accomplished.
and fit some 17-inch wheels in it. This is the origins of how, in
1994, KTM took to the asphalt for the first time in its rebirth and
the 620 DUKE was unleashed; bringing Supermoto on the street
to the world’s riding masses. That mono-wheeling, tire-squealing bike
quickly set an attitude for KTM and, as most of us know, reputations
can last a lifetime – 22 years and counting, to be precise.
HISTORY
019
19
2003
2003 A NEW ADVENTURE Although not the first KTM
to carry the ’Adventure’ banner (that was
the LC4-powered 640, back in the mid-nineties), in 2003 the brand
established itself as a serious player in the Travel Enduro market
with the arrival of its first multi-cylinder contender. The LC8-powered
950 ADVENTURE changed perceptions that bikes in this sector
didn’t have to be big and cumbersome. Almost 90% the same
machine that won the 2002 Dakar Rally, the 950 – later becoming
the 990 – was pivotal for the future of KTM and introduced many
more riders to the brand.
2008 A UNIQUE SUPERBIKE ARRIVES Never one to follow
the crowd, the arrival of KTM’s first true Super-
bike, the RC8, tore-up the rulebook in terms of design and handling
performance. Distinctive looks matched with an equally individual
riding experience has seen the RC8 remain a firm favorite with
two-wheel purists. The capabilities of the RC8 R were demonstrated
2008
when it clinched the IDM Superbike Championship in 2011 in the
hands of Martin Bauer, a class where engine tuning is very minimal.
UNBELIEVABLE – A KTM CAR After an energy loaded development
ended with another big scoop: The presentation of the KTM
X-Bow underlined KTM’s philosophy – translating the brand’s core
values even onto four wheels. This unique supersport car showed
straight away its READY TO RACE approach and demonstrated the
impressive learning curve in all development disciplines.
2011 SMALLER CAPACITIES, BIGGER OPPORTUNITIES
Since 2007, KTM has been cooperating with
the Indian Bajaj Group to focus on the joint development of entry-
level, 125 to 390 ccm street motorcycles. Produced in India
and distributed under the KTM brand by both companies, the first
model released from this partnership was the 125 DUKE in
2011, which quickly became the biggest selling machine in its
class in Europe. The 200 DUKE followed in 2012, allowing KTM
to enter the Indian market and is the first KTM model ever to
be offered worldwide. Since then, the 390 DUKE was released and,
in 2014, the Supersports RC 125, RC 200 and RC 390 began
production.
020
KTM GROUP
2014 THE RESTART OF
HUSQVARNA. REUNION OF
HUSABERG AND HUSQVARNA
2013 SETTING NEW STANDARDS IN SAFETY In cooperation with BOSCH, KTM developed the MSC
(Motorcycle Stability Control) and therewith is the first brand worldwide to present an ABS that works even while cornering at deep
lean angles. MSC supports the rider together with the combined
antilock braking system C-ABS (Combined ABS) and the lean angle
dependently working motorcycle traction control MTC (Motorcycle
Traction Control) in a multitude of ways – of course just within
the limits of physics. Fitted to the 1190 ADVENTURE and later the
1290 SUPER ADVENTURE, these models are not only the most
versatile of all Travel Enduros, but also the safest motorcycles in
the world.
2014 THE BIG PICTURE – THE RESTART OF HUSQVARNA
Following the acquisition of Husqvarna Motor-
cycles in early 2013, and the subsequent reunion of the Husaberg
brand into the newly established Husqvarna Motorcycles GmbH
company, 2014 was the first complete financial year for the “new”
Husqvarna Motorcycles.
2013
2015 KTM GOES ELECTRIC Although a long-running project
and partially developed in public at its E-Cross
Center, as the leader of offroad motorcycling KTM has also set a new
bar for electric bikes in its typical manner with the release of the
innovative FREERIDE E-SX, E-XC and E-SM available in 2015. Despite
lacking petrol power, these bikes are still built to the company’s
READY TO RACE mantra boasting high-specification components and
incredible performance.
2014
With a full line-up of Motocross and Enduro models and a continued,
strong commitment to offroad competition, Husqvarna immediately
set a record year with 16,377 bikes sold and a revenue of more than
100 million euros. These were the best ever results in the 111-year
history of Husqvarna Motorcycles.
In late 2014, with the unveiling of the VITPILEN 401 and SVARTPILEN 401 concept-bikes at the international motorcycles exhibition
EICMA, Husqvarna confirmed its decision to re-enter the street
segment, giving a glimpse of what the future will hold for the iconic
Swedish brand.
2015
HISTORY
0 21
9.6%
MARKET SHARE OF KTM + HUSQVARNA
6.2%
€
512.2 M
REVENUE IN EUROPE
MARKET SHARE OF KTM + HUSQVARNA
€
301.7 M
REVENUE IN NORTH AMERICA
€
208.6 M
REVENUE IN OTHER COUNTRIES
KTM SALES COMPANIES
SALES MARKETS
CKD PRODUCTION
022
KTM GROUP
SALES MARKET
KTM SALES COMPANIES
AND SALES MARKETS
WORLDWIDE
SALES MARKETS
0 23
KTM VISION
KTM 1290 Super Duke GT 2016 Action Highway Frankfurt, Photo: Schedl R., Rider: Jo Bauer
KTM IS A PREMIUM MANUFACTURER
OF HIGH-PERFORMANCE VEHICLES
FOR BOTH OFFROAD AND STREET USE.
THANKS TO CONTINUOUS INNOVATION
AND DIFFERENTIATED PRODUCT DESIGN,
EVERY VEHICLE BUILT IS OF THE
HIGHEST QUALITY. KTM’S CLEAR VISION
IS TO BECOME THE BIGGEST MANUFACTURER OF SPORT MOTORCYCLES
WORLDWIDE.
The KTM offering is a diverse and everexpanding product range that now covers all
essential engine capacity categories and
performance classes (125 to 1,300 ccm).
The small-engine street motorcycles – developed in cooperation with our Indian partner
Bajaj – open up a new, global segment
for KTM. In March 2011 KTM began with
its launch of a complete naked range, which
was implemented successfully between
2011 and 2013. In 2015 the introduction
0 24
KTM GROUP
KTM 2016, 690 Duke R Action Still Misano, Photo: Schedl R.
KTM cultivates a close relationship with
of the KTM 1290 SUPER DUKE GT at
in 2015, we reached a significant milestone
EICMA signalled a decisive move into the
for our global offroad programme, as well
its customers through a well-trained network
sports-tourer segment.
as for our North American market visibility
of dealers passing on customer feedback
and credibility. A central element of our
and potential market trends directly to the
The KTM 200 and 390 DUKE models
corporate strategy involves directly taking
factory. Their professionalism and customer
are important steps in implementing our
the successful technology that originates
focus are vital to our success. KTM strives
global product strategy and expanding
from racing and incorporating it into serial
to further advance its creation of a sustain-
it into emerging markets. With these,
products. The multi-regional KTM RC Cup
able partnership with its dealers, which
and the RC models also developed in 5/5
series was established to uncover, challenge
is grounded in fairness and trust. Due to the
collaboration with Bajaj and launched
and fast-track new street-racing talent.
constant qualitative growth in product range
in 2014, our street product range offers
It was a successful follow up to KTM’s
and specially-developed store concepts,
re-entry into the street world championship
KTM dealers can run a profitable business
a wide variety to young buyers.
in 2012 which, with a racing engine
solely by selling KTM products and asso-
developed completely by KTM, has resulted
ciated services. After all, KTM has a wide
1190 ADVENTURE and R models in 2013,
in class dominance. This expansion in the
range of products and accessories, the
the ADVENTURE range was expanded to
street and racing fields fits seamlessly
highest quality components and some of
After the launch of the travel enduro KTM
include the KTM 1290 SUPER ADVENTURE
with our global product and sports strategy.
the fastest motorcycles onroad and offroad.
as well as the KTM 1050 ADVENTURE;
KTM’s hundreds of world championship
We are a leader in various segments within
these were presented to the global public
titles are an ever-growing and impressive
the world of READY TO RACE, so if you
for launch in 2015. The ADVENTURE range
testament to the unwavering commitment
want to race to win, then there’s no other
brings a new higher performing dynamic
to the sport of racing. It also sets the tone
choice – it has to be KTM.
to the segment, with a wide array of options
for KTM’s return to the premier MotoGP
to suit any customer’s needs. Ensuring
class in the near future. Essential elements
that every bike in KTM’s arsenal is 100%
of KTM’s long-term growth-planning strategy
READY TO RACE.
are to extend our product range and to open
Our successful involvement in offroad
our strategy focuses on research & develop-
up new niches and markets. Accordingly,
racing all over the world further strength-
ment to keep our performance edge,
ened the KTM brand and consolidated our
while developing our distribution network
leading market position. By winning
through new strategic regional partnerships,
KTM’s first premier-class Supercross title
and optimizing – all while we invest heavily
in our global brand and build it up.
KTM VISION
0 25
GROUP STRUCTURE
INSIGHT
INTO KTM AG
KTM AG HAS BEEN LISTED ON THE VIENNA
The sales companies KTM Sportmotorcycle
STOCK EXCHANGE SINCE DECEMBER 2003
GmbH and Husqvarna Motorcycles GmbH
AND CONSTITUTES THE ULTIMATE GROUP
distribute the respective brands’ motor-
PARENT OF THE KTM GROUP. SINCE THE
cycles and spare parts directly to European
INTEGRATION OF THE BRAND HUSQVARNA,
dealers and global importers. The markets
KTM AG CONSEQUENTLY FOLLOWS A
in the United States, Mexico, South Africa,
TWO BRAND STRATEGY FOR “KTM” AND
Japan, and Greece are served via local
“HUSQVARNA”. THEREFORE, THE SALES
stock-carrying sales subsidiaries. The two
ORGANIZATION HAS BEEN REALIGNED. AS
companies in turn hold participations in a
THE FINAL STEP OF THIS REORGANIZATION,
total of 29 domestic and foreign marketing
THE SUPERVISORY BOARD CONCLUDED
companies that provide marketing and
IN THE LATEST MEETING TO MERGE KTM
related services in the local markets for
MOTORRAD AG INTO THE LISTED KTM AG.
KTM Sportmotorcycle GmbH and Husqvarna
Motorcycles GmbH.
The most important equity holdings of
KTM AG are KTM Sportmotorcycle GmbH,
KTM Sportcar GmbH distributes the X-Bow
Husqvarna Motorcycles GmbH, KTM
super sports car.
Sportcar GmbH, KTM Technologies GmbH,
KTM Immobilien GmbH, and the minority
KTM Technologies GmbH provides services
interest in Kiska GmbH.
in vehicle and product development along
with consultancy, particularly in light-
KTM AG develops and manufactures motor-
weight construction and fiber composites
cycles of the brand “KTM” and “Husqvarna”
for group companies and third parties.
and the super sports car X-Bow and comprises all central group functions.
The KTM group’s land and buildings are
bundled in KTM Immobilien GmbH.
Kiska GmbH is a design company that
provides development and design services
for KTM.
0 26
KTM GROUP
GROUP STRUCTURE (SIMPLIFIED)
KTM AG
CH
KTM
KTM
KTM
KTM
KTM
Husqvarna
Kiska
Racing AG
Technologies
GmbH
Immobilien
GmbH
Sportmotorcycle
GmbH
Sportcar
GmbH
Motorcycles
GmbH
GmbH
100%
AUT
74%
AUT
99.61%
AUT
100%
AUT
100%
AUT
100%
AUT
26%
KTM
Sportmotorcycle
India Private Ltd.
IND
100%
KTM
Husqvarna
Sales companies
Sales companies
GROUP STRUCTURE
0 27
THE KTM GROUP
AS A SALES ORGANIZATION
KTM 2016, Headquarter
028
BUILDING PREMIUM-QUALITY
PERFORMANCE VEHICLES IS ONLY
HALF THE TASK. CONNECTING
CUSTOMERS WITH THESE VEHICLES
IS EQUALLY IMPORTANT.
customers.
The two brands of KTM group demand top
Every area of the business and customer
organization. Every year the KTM group
invests heavily in growing this area through
further development, training and
optimization of the services offered to our
performance in all areas. This especially
touch point shows that the organization truly
includes our authorized dealers, who provide
lives and reflects the respective brands.
KTM and Husqvarna customers with nothing
Whether it is the sale of vehicles, clothing
less than first-class service. So customer
and accessories, premium performance parts
intimacy is critical to the success of the
or original spare parts. KTM group insists
KTM GROUP
29
INTERNATIONAL SALES SUBSIDIARIES
KTM Dealer Showroom
on high levels of customer service – both
This keeps us close to the action, in tune
This ensures that all KTM and Husqvarna
in the workshops and showrooms, as well as
with developments and in touch with market
dealers have one valuable thing in common:
with dealers providing advisory services
progression, while allowing appropriate
each and every one of them lives the spirit
and information on the many topics relevant
products and experiences to be provided
of the brands at all times.
to building an authentic motorcycle experi-
through KTM and Husqvarna Motorcycles
ence. A detailed understanding of the
dealers.
larger sales and marketing process is of vital
importance – and through ongoing training,
In partnership with 29 international sales
KTM provides internal staff with an ’inside
subsidiaries and two additional joint
out’ perspective.
ventures in New Zealand and Dubai, KTM
Commercial business development places
2,200 dealers and importers worldwide on
the point of sale at the center of the brand
behalf of both KTM Sportmotorcycle GmbH
experience. The KTM group remains
and Husqvarna Motorcycles GmbH.
group staff service and attend to over
in close contact with all dealers via the KTM
and Husqvarna subsidiaries.
HQV Dealer Showroom
THE K TM GROUP AS A SALES ORGANIZATION
029
YEARS EXPERIENCE
6
KTM GROUP
GOALS AND
STRATEGY
SINCE KTM’S FOUNDATION IN 1953,
THE KTM GROUP HAS GAINED
MORE THAN 60 YEARS OF EXPERTISE
IN THE TWO-WHEELED WORLD.
contrast between the two brands, they share
Starting out as an offroad-only motorcycle
differentiated profiles of the KTM group’s
strong histories of success and innovation,
while taking very different approaches. This
new sibling rivalry within the KTM group
has benefitted both tremendously. The clearly
producer, KTM group progressed to be
brands and their continuity are mainstays
an innovative manufacturer of street motor-
of the group’s success. Having KTM group
cycles and now also premium sport cars.
products and related services used globally,
Today, driven by the passion of its employ-
and growing rapidly, is another important
ees, KTM has already become the biggest
factor of the continued vision.
European manufacturer, with a 9.6%
market share in Europe and a 6.0% share
in the US, as well as achieving a one billion
Euro revenue. To accomplish this vision,
the company’s consistent long-term
strategy is built on three pillars including
brand, globalization and innovation.
The KTM group’s corporate success is
grounded in strengthening the core values
of its two primary brands and communicating them appropriately. Every product will
always deliver on the promise implicit in
the READY TO RACE philosophy for KTM and
PIONEERING SINCE 1903 for Husqvarna
Motorcycles. Despite a marked brand
030
KTM GROUP
Concept Study X-Bow GT4
Geared for the future, KTM group success-
new product ranges outside of its traditional
fully markets products that were developed
core motorcycle business. The experience
with a great deal of craftsmanship. With a
gained in terms of lightweight vehicle
long history and strong interest in motorsport,
construction is invaluable in developing new
we constantly strive to develop our overall
vehicle concepts. Additionally, KTM group
product range and to increase our competi-
intends to take a leading developmental
tiveness and penetration into global markets;
role in electric powertrain innovation. The
we do this by identifying developing trends
experience gained from our research project
and defining new ones. Innovation and the
to develop an innovative high-power
highest development standards are crucial
electric motorcycle in the KTM FREERIDE-E
to achieving this vision.
proved the potential of electric powertrains.
Building on this research, KTM group is
The unveiling of KTM’s latest sports car, the
developing technology that supports alter-
KTM X-Bow GT4 model, proved that KTM
native forms of mobility in urban settings.
group is capable of developing and evolving
K TM GROUP: GOALS AND STR ATEGY
0 31
YEARS EXPERIENCE
11
HUSQVARNA MOTORCYCLES
GOALS AND
STRATEGY
SINCE HUSQVARNA MOTORCYCLES JOINED
THE KTM GROUP IN 2013, IT HAS ACHIEVED
EXCEPTIONAL SUCCESS IN A VERY SHORT
TIME. IT HAS REINFORCED THE PAST
HERITAGE OF PIONEERING WHILE HIGHLIGHTING THE PREMIUM-QUALITY CONSTRUCTION
AND SWEDISH ROOTS OF THE BRAND’S
NEWEST MOTORCYCLES. THIS HAS BOLDLY
RETURNED HUSQVARNA MOTORCYCLES
TO THE SPOTLIGHT, AS A LEADING FIGURE IN
INTERNATIONAL OFFROAD MOTORCYCLING.
AFTER JUST ONE YEAR IN THE KTM GROUP,
HUSQVARNA MOTORCYCLES ACHIEVED
RECORD SALES NUMBERS IN 2014 AFTER
A 111-YEAR LONG HISTORY, IMPROVING
ON THIS WITH ANOTHER RECORD-BREAKING
YEAR IN 2015.
compass, we are proud to keep blazing new
trails, and make enjoyable riding experiences
more accessible to existing motorcycle
enthusiasts, as well as exposing new users
to the exhilaration and liberation of discovering the motorcycle lifestyle.
A strong focus in the ongoing commitment
to innovation and progression is a resurgence of Husqvarna Motorcycles’ presence
in street motorcycling. The credibility of
being a pioneering brand, combined with a
very accessible, understated and approachable brand personality, allows Husqvarna
Motorcycles to open up and tap into a much
wider and more mainstream target audience. The upcoming VITPILEN ’real street’
HQV 701 SUPERMOTO Studio Shoot, KISKA 2016
range is a bold first step in this entirely
The brand promise of PIONEERING SINCE
new approach.
Despite the bold move into the innovative
new street motorcycling direction, 2015 was
1903 means that Husqvarna Motorcycles
is committed to leading, innovating and
To meet the growing demand for the brand
still enormously successful for Husqvarna
pioneering. Never resting or blending into
globally, Husqvarna Motorcycles has a
Motorcycles in global competition. Along
the crowd, Husqvarna Motorcycles constantly
strong focus on the development of its dealer
with several world championship titles added
has its sights set on the distant horizon,
network. Despite a strong initial surge for
in 2015, Husqvarna Motorcycles has made
seeking newer, better and more sensible ways
Husqvarna Motorcycles in the offroad market
a bold return to competition in the North
to create authentic motorcycles that deliver
globally, there are still many untapped
American market. The Rockstar Energy
real and rewarding riding experiences. With
markets, areas and customer segments that
Husqvarna Factory Racing team returned the
the core values of PREMIUM, PIONEERING
we will access through this ever-expanding
iconic Swedish brand to the premier class
and SWEDISH ROOTS as the brand’s guiding
global network.
in both Supercross and Motocross, with Jason
0 32
KTM GROUP
HQV, Rider: Mathias Bellino
Anderson claiming a stunning 2nd place in
were substantial. Introducing the produc-
trajectory to become Europe’s third-largest
Husqvarna Motorcycles’ very first Supercross
tion street-legal 701 SUPERMOTO and
motorcycle producer – with the aim of doing
so by 2020.
main event in 2015. The brand’s renewed
701 ENDURO bikes in 2015 provided further
competitive success reflects its victorious
evidence of Husqvarna Motorcycles’ deter-
heritage, as Husqvarna Motorcycles now sets
mination to progress innovative motorcycle
Yet the vision of growth extends beyond
its sights on ambitious new goals far beyond
designs beyond mere concepts – and actually
simply wanting to step outside of Husqvarna
the traditional boundaries of competition.
realize them as standard production models.
Motorcycles’ traditional offroad territory –
For 2017 the next step will be realized
and the vision includes strengthening
with the arrival of the first two VITPILEN
Husqvarna motorcycles, parts and accesso-
FUTURE VISION:
A BOLD RETURN TO THE STREET!
production models.
ries distribution - spreading our footprint
In line with Husqvarna Motorcycle’s claim
A strong commitment to continuing the
“PIONEERING SINCE 1903” – the future-
long tradition of progressive thinking and
through an ever-increasing network.
focussed vision keeps the brand’s sights set
pioneering actions will be reflected as
firmly ahead. A bold re-entry into the street
much in the creation of leading motorcycles,
motorcycling segment will continue
as it will in outstanding ways of identifying,
the tradition of progressive and pioneering
satisfying and engaging with the rapidly-
motorcycle development.
expanding customer base.
At the annual EICMA bike show in Milan,
Pioneering will continue in every area of the
Husqvarna revealed the VITPILEN and
Husqvarna Motorcycles brand. As a first step,
SVARTPILEN 401 concept bikes in 2014,
the upcoming segment-redefining VITPILEN
followed up by the VITPILEN 701 in 2015.
and SVARTPILEN production models will
In both years the response and interest
set Husqvarna Motorcycles on a blazing
HUSQVARNA: GOALS AND STR ATEGY
033
EMPLOYEES
WORLD CHAMPION
SEEKS NEW TALENT
KTM 2016, Production Mattighofen
AS OF DECEMBER 31, 2015,
THE GLOBAL NUMBER OF EMPLOYEES
STOOD AT 2,515, UP 372 ON THE
PRIOR YEAR. THIS REPRESENTS AN
INCREASE OF 17%. ON AVERAGE,
THERE WERE 401 EMPLOYEES
WORKING OVERSEAS. THE PROPORTION
OF WOMEN REMAINED CONSTANT
RELATIVE TO THE PRIOR YEAR AT 21%.
evaluation platform kununu.com awards
its TOP COMPANY quality mark to employers who can demonstrate a high level
of employee satisfaction. The mark can
only be obtained from good ratings posted
by employees on the online platform.
The OPEN COMPANY quality mark honors
employers who treat their staff members
in an open and appreciative way. KTM’s
kununu company profile offers insights into
As of 2015, KTM is also a proud holder of
our day-to-day work, actively encourages
the kununu TOP COMPANY and OPEN
employees to rate us, comments on
COMPANY quality marks. Leading employer
the ratings made and thus testifies to our
openness to dialog.
034
KTM GROUP
2,515
EMPLOYEES WORLDWIDE AT THE
END OF THE YEAR DECEMBER 31, 2015
THE REGION’S LARGEST
TRAINING CENTER
satisfies the company’s requirement for
Training apprentices is an important
specialized staff and at the same time
aspect of our employment strategy. KTM
helps enable young people to have a good
now has the largest training center in the
start to their professional life.
jobs in one of our departments. This
Braunau region. As of December 31, 2015,
we employed 94 apprentices, who follow
The keystone for training apprentices
the vocational training programs for pro-
is our own training workshop. In this way
cess technicians, motor vehicle technicians,
basic training of all technical apprentice-
metals technicians, machinery engineers,
ship areas is guaranteed. In addition,
CAD designers, mechatronics engineers,
apprentices are trained in different tech-
business administrators, office administra-
nical departments. Great store is placed
tors and IT engineers. It is a central goal
on the technical and teaching qualifications
The personal development of apprentices
of the company to continue to employ
of those training the apprentices along
in addition to technical training is important
apprentices when they have completed their
with their social skills. Six more employees
to the company. Social skills training
training. In 2015 all 16 employees who had
completed their training as apprentice
therefore takes place along with feedback
completed training were given permanent
trainers in 2015.
sessions.
SOCIAL COMMITMENT
To help our employees return to the workplace after starting a family, children
NEEDS-BASED FURTHER TRAINING
FOR QUALITATIVE GROWTH
design. Technical seminars were attended
at various specialist suppliers and also
tional care in the KTM crèche in groups
Our performance is assisted by needs-
offered internally. KTM’s internal portfolio
of not more than nine children. In this way
based further training. Different topics in
of training courses was also expanded in
the company makes an important contri-
different formats are offered and imple-
2015. Annual employee meetings are held
bution to reconciling work and family.
mented in a manner that is targeted toward
to form the basis for performance-oriented
the various groups. Examples of this are:
cooperation and a structured needs
Managers from the production area
analysis.
aged between one and three receive educa-
As a voluntary additional social benefit,
the company has taken out an endowment
attended a training session that combines
and whole life insurance policy with a term
employee management and workplace
of 15 years for all employees.
EMPLOYEES
0 35
260
MORE THAN
WORLD CHAMPIONCHIP TITLES
036
KTM GROUP
KTM Team Shoot 2016, Ryan Dungey
KTM MOTORSPORT
Marc Coma, Dakar 2015
DRIVER TITLES 2015
MOTOCROSS
WHEN KTM WAS RELAUNCHED IN
THE EARLY 1990, THE READY TO RACE
MOTTO EMBODIED THE NEW SELFCONFIDENCE OF THE BRAND. CLEAR
OBJECTIVE: EVERY MOTORCYCLE
ROLLING OFF THE PRODUCTION LINE
OF THE MATTIGHOFEN WORKS
MUST BE READY FOR THE RACETRACK
RIGHT FROM THE START.
85 ccm:
Raivo Dankers (NED)
250 SX US East:
Marvin Musquin (FRA)
450 MX US:
Ryan Dungey (USA)
450 SX US:
Ryan Dungey (USA)
ENDURO
SuperEnduro:
Taddy Blazusiak (POL)
E2:
Antoine Meo (FRA)
Erzberg &
Red Bull Romaniacs:
Jonny Walker (GBR)
RALLY
The READY TO RACE philosophy is still the
In 2015, KTM celebrated another signifi-
creed that drives the KTM motorsport
cant milestone in its history. The US factory
Rallye Dakar:
Marc Coma (ESP)
division which, with its many factory teams,
team brought both the AMA 450 Super-
Cross Country Rallies:
Matthias Walkner (AUT)
works all over the world on the very highest
cross championship and the US Pro MX
level, racking up World Championship titles
Series title back to Austria. These incredible
nonstop. Every employee working in the
victories were an ideal platform for both
KTM motorsports division is fully committed
the brand and its bikes, catapulting KTM
to racing. They are 100% committed to
into the international limelight. But that
the task of achieving wins for KTM and,
was not all: KTM factory riders also made
as a team, work together just as well as the
their mark on the Rally, SuperEnduro,
smoothly running racing motorcycles they
Hard Enduro and traditional Enduro race
build and service. The KTM factory riders
series. In the Moto3 class, the battle
likewise give their best on the racetrack, not
for the title went all the way down to a fierce
just for themselves and their team but for
head-to-head duel in the final round.
MANUFACTURER’S TITLES 2015
MOTOCROSS
MX2, Supercross
ENDURO
SuperEnduro, E2
RALLY
Cross Country Rallies
everyone at KTM.
KTM MOTORSPORT
0 37
KTM 2016, 1290 Super Duke GT Action Italy, Photo: Schedl R., Rider: Jo Bauer
»
AS A MANUFACTURER OF PREMIUM PRODUCTS,
»
THE GLOBAL ASSEMBLY LOCATIONS are professio-
we at KTM have set ourselves the goal of manu-
nally served by a team of high-quality QM staff.
facturing products that are innovative, in line with
They make sure that the know-how for manufactur-
market requirements, safe, and, most importantly,
ing in these locations is passed on and ensure
of high quality. The entire process of producing
the quality of the vehicles produced there by imple-
a vehicle – from product idea to market analysis
menting a KTM-compliant quality management
to design studies, design and development,
system.
cooperation with suppliers, the procurement of
components for series production, parts produc-
»
tion, the assembly of engine and vehicle, right
engines are developed and manufactured by
to packing and dispatch – is mapped by a
KTM and guarantee the identity of motorcycles with
process-oriented quality management system and
the KTM and Husqvarna Motorcycles brands.
controlled using the KTM process management
AS KEY COMPONENTS OF THE MOTORCYCLES, the
system.
»
»
product quality and high level of engineering
THE IMPRESSIVE TRACK RECORD IN RACING is
the best evidence of KTM’s and Husqvarna’s high
WE ACHIEVE HIGH PRODUCT QUALITY due to
production-oriented design, the use of analytical
and statistical calculation methods, comprehensive checking and testing, compliance with
relevant approval rules, by a focus on process
quality and by targeted communication as well as
by implementing training measures at KTM and
at the suppliers.
competence.
RESEARCH & DEVELOPMENT
AS A PREMIUM MANUFACTURER IN
A NICHE SEGMENT, WE PUT A SPECIAL
FOCUS ON THE AREA OF RESEARCH
AND DEVELOPMENT. INNOVATIVE
PRODUCTS AND TECHNICAL ADVANCES
ENABLE US TO MEET THE EXPECTATIONS OF OUR CUSTOMERS AND OPEN
UP NEW MARKETS.
KTM places a high value on the early recognition of motorcycle trends, on research
and development regarding engineering and
functionality and on researching customer
wishes so as to achieve innovative product
development close to the market. In this
context, KTM not only operates in its original
core markets but is also developing new
products in new segments and niches of
040
KTM GROUP
382
EMPLOYEES (ANNUAL AVERAGE)
IN RESEARCH & DEVELOPMENT
the market as soon as it identifies them
production for the 701 ENDURO and
In 2015 we employed an average number
and they become usable for the KTM brand.
701 SUPERMOTO added two important new
of 382 people (17.5% more than the
models to the Husqvarna range, success-
prior year and 16.1% of the total headcount)
The technologies and design methods
fully bringing KTM’s sister brand back onto
in our Research and Development depart-
we use undergo constant development, and
the streets.
ment. In operating terms, disregarding
standards are continuously improved. As
KTM also entered the highly technology-
development expenses, 6.7% of total revenue
a rule, new developments are first deployed
driven sports touring segment with the
was invested in research and development.
in motorsport, with the experience gained
KTM 1290 SUPER DUKE GT, presented for
forming a basis for the subsequent transition
the first time at EICMA 2015. Featuring a
the effects of capitalizing and amortizing
our products’ technical and functional
to serial production.
large number of safety and assistance
systems, semi-active suspension and an
In accordance with the KTM development
innovative side case system, it represents,
policy, the first vehicles in the newly
alongside the KTM 1290 SUPER ADVEN-
developed Motocross generation underwent
TURE, the pinnacle of the KTM product
their final endurance tests in motorsport
range.
activities in 2015. In the course of this,
we succeeded in winning every title in the
While a wide-ranging portfolio of Motocross
prestigious US Supercross series for the
models was presented during the course
first time.
of 2015, the focus in the offroad segment
lay principally on developing new KTM
The financial year just ended saw a multi-
and Husqvarna Enduro platforms for series
tude of key projects in the offroad and
production.
street areas. For instance, the start of series
0 41
0 42
KTM GROUP
DURING 2015, NUMEROUS R&D PROJECTS WERE TAKEN FORWARD AT VARIOUS
STAGES FROM CONCEPT DEVELOPMENT TO THE START OF SERIES PRODUCTION AND
SUCCESSFULLY COMPLETED:
»
Series production of the new KTM and
» Series development of a new 2-stroke
Husqvarna Motocross generations, which
offroad engine platform for use in future
are redefining the motocross segment
Motocross and Enduro models.
thanks to their equipment, the low weight
that derives from the use of innovative
» Series development of the next stage
technology and the handling benefits that
of our 690 ccm single-cylinder engine,
which impressively combines high 55 kW
accrue as a result.
(75 PS) performance with further advances
» Series production of the KTM 1290
in engine smoothness.
SUPER ADVENTURE, which sets a new
standard in the premium touring segment
» Development of a new motorcycle plat-
thanks to its multitude of innovative
form based on a revolutionary 2-cylinder
safety features and the semi-active suspen-
engine design, which will make a
sion developed in cooperation with WP.
substantial contribution toward opening
up new market segments.
» Series production of the KTM 1050
ADVENTURE, ridable with an A2 driving
» Development of innovative lighting
license, which forms an alternative
systems in LED technology to increase the
to the KTM 1190 ADVENTURE as an
level of safety and durability under extreme
entry-level model in the 2-cylinder touring
conditions.
segment.
» Concept development of new EMS systems
» Series production of the first two
to ensure that the KTM and Husqvarna
Husqvarna street models, the 701 ENDURO
model ranges comply with future emission
and 701 SUPERMOTO, each featuring a
regulations (Euro IV and Euro V).
700 ccm single cylinder engine.
» Concept development of a model equipped
» Series development of new KTM and
with an alternative drivetrain system
Husqvarna Enduro generations, based on
to meet the requirements of urban mobility
Motocross models tried and tested in the
scenarios.
international motorsport environment, which
impress thanks to their low weight, innovative technologies and functional design.
043
4
HIGHLY QUALIFIED ENGINEERS
KTM TECHNOLOGIES
KTM AG HOLDS 74% OF THE KTM
TECHNOLOGIES GMBH, WHICH PROVIDES
PROFESSIONAL ENGINEERING AND
ADVISORY SERVICES. THE COMPANY’S
SERVICES FOCUS ON DESIGN AND
PRODUCT DEVELOPMENT ALONG WITH
TECHNOLOGY DEVELOPMENT OF LIGHTWEIGHT CONSTRUCTION SOLUTIONS
BASED ON COMPOSITES.
construction vehicle concepts for the
mobility of the future, from the e-Bike via
the urban vehicle to the hybrid super
sports car. KTM Technologies is active
in projects in both the two-wheel and the
four-wheel sectors and can in its new
developments draw on extensive experience
in both these worlds.
With its specialist know-how, KTM Tech-
Following the trend toward lightweight
nologies is also a closely interconnected
construction, the company has since its
development partner in design, series,
formation developed very dynamically and
and motorsport developments for KTM AG.
with commercial success. Starting with
An example of this is the highly functional
fewer than ten employees, the team
and ultralight roadbook tower using
has now expanded to more than 40 highly
carbon composite technology and found
qualified engineers. Today many leading
in the 450 Rally, winning bike in the 2014
automotive manufacturers and renowned
Rallye Dakar. For KTM Sportcar GmbH,
companies from other branches of industry
KTM Technologies is continuing to develop
are its customers and the company has
the X-Bow CFK super sports car and is
gained an outstanding reputation as a
currently working jointly with Reiter Engineer-
partner in innovation and technology. This
ing on a new GT4 racing car. The X-Bow is
is based on broad automotive and light-
also a good example of the multidisciplinary
weight construction know-how and use of
skills of KTM Technologies, which include
the latest development tools and methods.
a high-performance simulation department
Recently, activities have centered on
in addition to standard construction and
the development of innovative lightweight
development. Static and dynamic structural
044
KTM GROUP
KTM X-Bow
design and aerodynamic simulation (CFD)
of design and development into one process
KTM Technologies is therefore also com-
are among the most important areas
with interdisciplinary and holistic project
missioned as a consultant, for example for
of expertise, as are the multiple possibilities
teams has developed into a unique selling
technological direction setting, appraisals
offered by the process simulation of various
point for both companies.
and advising on technological matters.
With its own technology center, KTM
As a think tank and technology driver,
Technologies ensures a close connection
KTM Technologies has a large network in
manufacturing procedures.
Also based at the company’s premises in
Anif near Salzburg is the affiliated company
between innovative product concepts and
various industrial branches and cooperates
KISKA, with which very close cooperation
material- and production-oriented execution.
closely with universities and research
is maintained. The two companies have
It thus engages in technology develop-
institutions. This interconnection means
jointly developed an integrated design and
ment with the emphasis on lightweight con-
that KTM Technologies always has its finger
technology process with which functional
struction and carbon composite technology
on the pulse and is developing the
and innovative product concepts can
independently and on behalf of external
products and technologies of the future!
be developed very effectively with first-class
customers. Given its broad expertise over
design. The full integration and synergy
the complete product development process,
KTM TECHNOLOGIES
0 45
KTM 2016, 1190 Adventure R Action Utha Photo: Schedl R.
INVESTOR
RELATIONS
KTM AG endeavors to practice a policy
of transparent, swift and comprehensive
information to and communication
with capital market participants as well as
the general public. At regular intervals
information is therefore provided on
the economic position as well as on the
future development of KTM.
INVESTOR RELATIONS
It is the firm belief of the Investor Relations team at KTM AG that
confidence in the company and in the products can only be ensured
by a policy of transparent, swift and comprehensive information
and communication. Accordingly, we endeavor to provide investors,
analysts and the general public with comprehensive insights into
the current economic position as well as the future development.
On our website (http://company.ktm.com/) a comprehensive pool
of information on the company and on our products is offered to all
INFORMATION ON THE KTM BOND IN SUMMARY
ISIN
Market
AT0000A0UJP7
Vienna Stock Exchange,
Second Regulated Market
Issue volume
Denomination
Maturity
Coupon
Issue price
EUR 85,000,000
EUR 500
2012 to 2017
4.375%
101.389%
who are interested.
THE KTM SHARE
THE KTM BOND
DEVELOPMENT
In April 2012, the EUR 85 million bond (2012–2017) of KTM AG
was successfully placed. The initial offering price was 101.389%.
The KTM share (ISIN: AT 0000645403) is listed on the
The bond is listed on the Second Regulated Market of the
Third Market (MTF) of the Vienna Stock Exchange.
Vienna Stock Exchange and was issued with a fixed coupon paying
interest at 4.375%. Interest is payable semi-annually as of
In 2015 the KTM share price recorded a sharp rise. On the
October 24 and April 24; the first payment of interest was made
last trading day (December 30, 2015) of the financial year 2015,
on October 24, 2012. On the last trading day (December 30, 2015),
the closing price was EUR 122.00 (prior year: EUR 135.00).
the closing price was EUR 104.25 (prior year: EUR 105.07).
Market capitalization on the last trading day of the financial year
2015 amounted to EUR 1,323.09 million (10,845,000 shares
admitted to trading).
In the financial year 2015, 10,845,000 shares of stock, and
thus the entire capital stock of KTM AG, were admitted to trading
on the Vienna Stock Exchange.
DEVELOPMENT OF THE KTM SHARE (JANUARY 1 TO DECEMBER 31, 2015)
KTM AG
ATX (indexed)
130%
110%
90%
70%
1/1/15
048
1/31/15
2/28/15
3/31/15
4/30/15
KTM GROUP
5/31/15
6/30/15
7/31/15
8/31/15
9/30/15
10/31/15
11/30/15
12/31/15
Further share-related information can be found on the company’s
website at http://company.ktm.com/ and on the website of the
Vienna Stock Exchange at www.wienerboerse.at.
OWNERSHIP STRUCTURE
In CROSS Industries AG, holding 51.28% of the voting rights
directly and indirectly through CROSS KraftFahrZeug Holding GmbH,
The Executive Board of KTM AG will propose to the Annual
and Bajaj Auto Ltd., holding 47.99% of the voting rights (through
General Meeting to pay out a dividend of EUR 2.00 per share for
Bajaj Auto International Holdings Ltd.), KTM AG has two stable core
the financial year 2015.
shareholders. The free float is below one percent.
GENERAL INFORMATION ON THE KTM SHARE
< 1%
Free float
Investor Relations Officer: Viktor Sigl
Phone: +43 7742 6000-144
E-mail: [email protected]
Symbol
ISIN
Listing
Number of shares
Original capital
Reuters
Bloomberg
KTM
AT0000645403
Vienna Stock Exchange, Mid Market
10,845,000
EUR 10,845,000
KTMP.VI
KTM AV
FINANCIAL CALENDAR 2016
Apr. 11, 2016
1
Date of evidence of “Annual General Meeting”
Apr. 21, 2016
Annual General Meeting
Apr. 25, 2016
Ex-Dividend date
Apr. 26, 2016
Date of evidence of “Dividend” (Record Date)
Apr. 28, 2016
Dividend payment date
Aug. 18, 2016
Publication of Interim Financial Statements
PERFORMANCE FIGURES OF THE KTM SHARE
Number of shares (as at December 31)
Average number of shares outstanding
Earnings per share
Dividend per share
Dividend yield (closing price)
Highest price
Lowest price
Closing price
P/E ratio (closing price)
Market capitalization per ultimo
51.28%
CROSS Industries AG
10,845,000
shares
47.99%
Bajaj Auto
International
Holdings B.V.
EUR
EUR
%
EUR
EUR
EUR
EUR
EURm
2015
2014
2013
10,845,000
10,845,000
5.89
2.001
1.64%
140.0
99.69
122.00
20.71
1,323.09
10,845,000
10,845,000
5.26
1.50
1.11%
141.00
61.00
135.00
25.67
1,464.08
10,845,000
10,845,000
3.36
1.00
1.59%
62.85
47.00
62.85
18.71
681.61
Proposal to the Annual General Meeting
INVESTOR REL ATIONS
0 49
CORPORATE
GOVERNANCE REPORT
FOR THE FINANCIAL YEAR 2015 OF KTM AG, MATTIGHOFEN, AUSTRIA
050 Adherence to the Austrian Code of Corporate Governance (ÖCGK)
051 Members of the Corporate Bodies and Their Remuneration
056 Measures to Promote Women
056 Audits and External Evaluation
01. ADHERENCE TO THE AUSTRIAN
CODE OF CORPORATE GOVERNANCE (ÖCGK)
The Austrian Corporate Governance Code provides Austrian stock
C-Rule 18: No separate internal audit department has been set up
corporations with a framework for managing and monitoring their
in the light of the company’s size. However, the company has
company. The Code aims to establish a system of management and
established an internal controlling and reporting system enabling
control of companies and groups that is accountable and geared
the Executive Board to identify risks and quickly implement an
to creating sustainable, long-term value. It is designed to increase
appropriate response. The Supervisory Board, particularly the Audit
the degree of transparency for all stakeholders of a company.
Committee, is regularly informed about the internal control
mechanisms and risk management, throughout the group. Further
The Code is based on the provisions of Austrian stock corporation,
information on risk management can be found in the consolidated
stock exchange, and capital market law, the EU recommendations
financial statements as of December 31, 2015.
regarding the responsibilities of members of Supervisory Boards
and the compensation of company directors as well as the
C-rule 31: (Fixed and variable Executive Board remuneration):
OECD Principles of Corporate Governance. Since 2002, the Code
This rule is not complied with, since the publication of Executive
has undergone a number of revisions.
Board compensation divided into fixed and variable, performance-
The present Corporate Governance Report is based on the most
for all shareholders.
related remuneration is considered to be sufficient information
recent amendment of the Code, which was adopted in January 2015.
The Code can be accessed by the public at www.corporate-
C-Rule 36: The Supervisory Board strives to continually improve
governance.at.
its organization, work procedures and efficiency. An explicit
self-evaluation did not take place in the financial year under review.
KTM AG is fully committed to the Austrian Code of Corporate Governance in its current version. This commitment by KTM AG is voluntary
C-Rules 41 and 43: As the Supervisory Board of KTM AG
and aims to boost shareholder confidence and to constantly optimize
consisted solely of four members, a Remuneration and Nomination
the high internal legal, behavioral and ethical standards of KTM AG.
Committee has not been set up, as it would not lead to an increase
The company is further obligated to fulfill the standards of the
in efficiency of the Supervisory Board’s work. The tasks of the
Code due to the listing of its bond on the Vienna Stock Exchange.
Remuneration and Nomination Committee are fulfilled by the entire
Supervisory Board.
The Corporate Governance Report of the financial year 2015 is publicly
available on the homepage of the company (company.ktm.com) in
C-Rule 58: Two Supervisory Board members failed to attend more
the section Investor Relations » Corporate Governance » Governance.
than half of the Supervisory Board meetings within the financial year.
This voluntary self-imposed obligation means that it must explain
C-Rule 62: In accordance with C-Rule 62 of the Austrian Code of
non-compliance with the so-called C-rules (“comply or explain”),
Corporate Governance, the company commissions an external
which go beyond the legal requirements. In line with this part
evaluation of compliance with the C- and R-rules of the Code regularly
of the Austrian Code of Corporate Governance, KTM AG explains its
every three years. Said evaluation has not been conducted due to
non-compliance with C-Rules of the Code as follows:
the lack of added value for the shareholders.
05 0
KTM GROUP
C-Rule 83: This rule is not complied with, since the assessment
KTM AG also informs its shareholders about all issues and develop-
of the functionality of risk management takes place within the internal
ments of relevance to the company through corporate news. The
reporting and is communicated directly to the Executive Board.
financial calendar points out important dates. Comprehensive information is published on the website under the section “Investor
KTM AG endeavors to abide not only by the minimum requirements
Relations”, and is thus available to all shareholders at the same time.
but also by all of the Code’s R-Rules (“Recommendations”).
The company has issued a total of 10,845,000 ordinary shares. There
The company is committed to the principle of transparency and the
are no preferential shares or restrictions on these ordinary shares.
goal of providing a true and fair view for the benefit of all share-
Accordingly, the principle of “one share – one vote” fully applies.
holders. All relevant information is published in our annual report,
The Austrian Takeover Act ensures that every shareholder will receive
half-year reports, on the corporate website and within the context of
the same price for the shares in the case of a takeover bid (public
our ongoing press relations work. Reports are prepared in accordance
with the Internationally Recognized Accounting Principles (IFRS).
tender offer). The shareholder structure is depicted in the section
“Development of the KTM share” of the annual report.
02. MEMBERS OF THE CORPORATE BODIES
AND THEIR REMUNERATION
The boards of KTM AG consist of the Executive Board, the Super-
COMPOSITION OF THE EXECUTIVE BOARD
visory Board and the Annual General Meeting. The Executive
The Executive Board of KTM AG consists of five members (Rule 16):
and Supervisory Board cooperate at regular intervals based on
open and transparent discussion.
Stefan Pierer (CEO) (born on November 25, 1956)
• First-time appointed: October 11, 1996
• Appointed until: February 29, 2020
WORKING PROCEDURES OF THE EXECUTIVE BOARD
The Executive Board of KTM AG or the individual Executive
• Chairman of the Executive Board, Company and Product Strategy,
Research and Development, Motorsports, Quality Management
Board members, respectively, act on the basis of the
laws, the Articles of Association and the Executive Board’s
After graduating from the Montan-University (Business and Energy
rules of procedure, laid down by the Supervisory Board, that
Management) in Leoben, Austria, Stefan Pierer began his career
governs the rules of the cooperation between the Executive
as a sales assistant at HOVAL GmbH in Marchtrenk in 1982, where
Board members as well as the allocation of the duties within
he continued on as a sales manager and authorized signatory for
the Executive Board.
upper Austria. In 1987 he founded the CROSS group in which
Coordination within the Executive Board occurs during regular
He has been shareholder and member of the Executive Board
meetings, but also in the form of an informal exchange of infor-
of the KTM group since 1992. In 2011 he established Pierer
mation. Matters discussed at the Executive Board meetings
Industrie AG, in which he is sole shareholder and Chairman of the
include the current operations and the company strategy. Also
Executive Board.
he acts as majority shareholder and member of the Executive Board.
discussed are any current or outstanding measures to be implemented by the relevant Executive Board members. The rules
Further main functions within the superior Pierer group:
of procedure requires the Executive Board or the individual
• Chairman of the Executive Board of CROSS Industries AG
Executive Board members to provide extensive information and
• Chairman of the Executive Board of Pierer Industrie AG
reporting to the Supervisory Board and define an extensive
• Chairman of the Supervisory Board of Pankl Racing Systems AG
catalogue of measures and legal transactions which require the
• Chairman of the Supervisory Board of WP AG
approval of the Supervisory Board.
Mandates in Supervisory Boards or similar functions in other
foreign and domestic companies, not included in the consolidated
financial statements: Chairman of the Supervisory Board of
ATHOS Immobilien Aktiengesellschaft
CORPOR ATE GOVERNANCE REPORT
051
Harald Plöckinger (born on March 23, 1961)
After graduating from the Johannes Kepler University in Linz,
• First-time appointed: April 3, 2007
Austria, with a degree in Business Administration, he started his
professional carrier at KPMG in the field of financial auditing and
• Responsible for Logistics, Business Development,
Business Interface Bajaj, Production and Purchasing
tax consultancy. In 2005, after completing his tax consultancy
examinations and an MBA program at the University of Toronto,
Canada, Viktor Sigl joined voestalpine AG to become head
Since 2004 Harald Plöckinger has been member of the Executive
of Corporate Tax & Finance Advisory. Before joining the KTM group,
Board within the KTM group and since 2007 he is a member
he was commercial director in the field of international industrial
of the Executive Board of KTM AG. He started his career at the
assembly.
BMW group in the engine development division. Between 1990
and 2004 he was an authorized officer, head of production,
head of strategic planning and subsequently managing director
of Bombardier-Rotax.
financial statements: None
Hubert Trunkenpolz (born on May 17, 1962)
• Member of the Supervisory Board of WP AG
• Responsible for Sales, Trade Marketing and Customer Service
Hubert Trunkenpolz has been a member of the Executive Board
within the KTM group since 2004 and since 2007 he is a member
Friedrich Roithner (born on March 10, 1963)
of the Executive Board of KTM AG. He started his career at
• First-time appointed: January 1, 2011
ISA Audivisual Communication Corp. as marketing manager and
subsequently at TRUMAG as managing director. He has been
• Responsible for Group Financing and Risk Management
at CROSS group since 1992.
After graduating from the Johannes Kepler University (Business
Administration) in Linz, Austria, Friedrich Roithner started
his career at Ernst & Young GmbH. After three years he switched
to Austria Metall AG, where he was working until 2006 (since
2002 as a member of the Executive Board). Since 2007 Friedrich
Roithner is part of the management team at the CROSS group.
WORKING PROCEDURES OF THE SUPERVISORY BOARD
In the financial year 2015, the Supervisory Board diligently per-
formed the duties incumbent upon it under Austrian law, the Articles
• Member of the Executive Board of CROSS Industries AG
of Association, the Austrian Code of Corporate Governance, and
• Member of the Executive Board of Pierer Industrie AG
the Rules of Procedure. All members of the Supervisory Board and
• Deputy Chairman of the Supervisory Board of WP AG
its committees are independent according to the terms of the
• Member of the Supervisory Board of Pankl Racing Systems AG
Austrian Code of Corporate Governance and were properly represented
• Member of the Supervisory Board of All for One Steeb AG
in the relevant meetings. The Supervisory Board held a total of
four meetings last year, once every quarter (C-Rule 36 of the ÖCGK).
Furthermore, there were two meetings of the audit committee.
In accordance with the Articles of Association, the Supervisory Board
Viktor Sigl (born on June 29, 1974)
an Audit Committee in order to comply with legal requirements.
has elected a Chairman and a Deputy Chairman and has appointed
• First-time appointed: March 23, 2012
No contracts requiring approval by the Supervisory Board were
• Responsible for Finance, Treasury, Controlling,
concluded between the company and members of the Supervisory
Legal and Insurances, Human Resources, IT and Organization
052
KTM GROUP
Board (C-Rule 49 of the ÖCGK).
Furthermore, the audit committee monitored the accounting
Srinivasan Ravikumar (born on May 22, 1957)
processes (including the preparation of the consolidated financial
• Member of the Supervisory Board
statements) and the work of the auditor (including the audit of
• First-time appointed: September 26, 2012
the consolidated financial statements) as well as the effectiveness
• End of the current term of office: Annual General Meeting,
of the system of internal control, the risk management system and
which decides on the financial year 2015
the audit system. The independence of the auditor (group financial auditor) was reviewed and monitored in particular as regards
Further mandates in Supervisory Boards or similar functions in
the additional services given to the audited company.
other foreign and domestic companies, listed on a stock exchange:
None
For further information on the Supervisory Board’s work methods,
please refer to the Supervisory Board report.
Friedrich Lackerbauer
• Labor representative, assigned since January 12, 2006
COMPOSITION OF THE SUPERVISORY BOARD
The Supervisory Board of the company consists of six members
and is comprised as following:
None
Josef Blazicek (born on February 15, 1964)
Horst Resch
• Chairman of the Supervisory Board
• Labor representative, assigned since January 12, 2006
None
CROSS Industries AG, Pankl Racing Systems AG,
BEKO HOLDING AG, All for One Steeb AG (Germany)
COMMITTEES OF THE SUPERVISORY BOARD
AND THEIR MEMBERS
The Audit Committee of the company consists of three members
Rajiv Bajaj (December 21, 1966)
and is comprised as follows:
• Deputy Chairman of the Supervisory Board
• First-time appointed: November 30, 2007;
re-appointment: April 26, 2011
• Srinivasan Ravikumar, Chairman
• Josef Blazicek, Deputy Chairman
• Friedrich Lackerbauer, Member
In accordance with the Stock Corporation Act the Supervisory Board
of KTM AG established an Audit Committee to perform its super-
visory and control functions.
Bajaj Finance Ltd., Bajaj Auto Holdings Ltd., Bajaj Finserv Ltd.,
Bajaj Holdings & Investment Ltd.
The Audit Committee is responsible for the auditing and preparation for the approval of the annual financial report, the proposed
Ernst Chalupsky (born on May 5, 1954)
distribution of net income and the management report, as well as the
• Member of the Supervisory Board
auditing of the consolidated financial statements and the corporate
• First-time appointed: April 16, 1999;
governance report. The committee also deals with the management
re-appointment: April 20, 2012
letter written by the financial auditor as well as with the auditor’s
report as to the efficiency of the risk management. The audit
committee makes a proposal for the selection of the auditor and
presents the proposal of the Supervisory Board to the Annual
General Meeting for voting. In line with C-Rule 81a of the ÖCGK, the
audit committee must also establish a mutual line of communica-
CROSS Industries AG
tion with the financial auditor in a meeting.
05 3
The Audit Committee of KTM AG held two meetings in the financial
a direct investment in the company or who represent the interests
year 2015, in which a representative of the auditor also participated.
of such a shareholder.
Since the Supervisory Board consists of no more than six members,
Criterion 6: The Supervisory Board member is not a close family
the tasks of the Remuneration and Nomination committee are
member (direct descendant, spouse, common law spouse, parent,
fulfilled by the entire Supervisory Board.
uncle, aunt, sibling, niece and nephew) of a member of the
Executive Board or of people, who fulfill one of the other criteria
described above.
INDEPENDENCE OF THE SUPERVISORY BOARD
A member of the Supervisory Board shall be deemed as indepen-
According to C-Rule 54 of the Austrian Code of Corporate Gover-
dent if said member does not have any business or personal
nance, the Supervisory Board of the company shall include at least
relations with the company or its executive board that constitute
one independent member delegated by the shareholders who is
a material conflict of interests and is therefore suited to influence
not a shareholder with a share of more than 10% or who represents
the behavior of the member.
such a shareholder’s interests. This requirement of C-Rule 54 of
the Austrian Code of Corporate Governance has been achieved since
Ernst Chalupsky is shareholder and managing director of Saxinger,
no member of the Supervisory Board is a shareholder with a share
Chalupsky & Parnter Rechtsanwälte GmbH. The KTM group
of more than 10% or who represents such a shareholder’s interests.
is advised by Saxinger, Chalupsky & Partner Rechtsanwälte GmbH
concerning legal affairs. The consulting services were used on
The members of the Supervisory Board of KTM AG admit to the
standard terms and conditions.
criterions of independence according to Rule C-53 of the Austrian
Code of Corporate Governance and declare themselves independent.
The independence of the Supervisory Board members is defined
by following guidelines:
REMUNERATION REPORT
Criterion 1: The Supervisory Board member was not a member
In the determination of the total remuneration with regard to
of the Executive Board or a top executive of KTM AG or a subsidiary
the members of the Executive Board, the supervisory board ensures
of the company in the previous five-year period.
proportionality between the tasks assumed of and performance
delivered by the individual member of the executive board,
Criterion 2: The Supervisory Board member did not maintain any
between the situation of the company and the ordinary remunera-
business ties with the company in the previous year, which may be
tion and undertakes that long-term incentives with regard
considered significant in scope for a Supervisory Board member.
to a sustained corporate development are taken into account.
This also applies to related party transactions with companies
in which the Supervisory Board member has a considerable economic
The remuneration of the Executive Board members consists
interest. Approval of individual transactions by the Supervisory Board
of fixed and variable components. The variable income component
pursuant to C-Rule 48 of the Austrian Corporate Governance Code
is dependent on the achievement of certain financial key figures
does not automatically disqualify the Supervisory Board member as
and/or specific project milestones. The relevant targets for the
being independent.
calculation are mutually determined between the company and the
management yearly.
Criterion 3: The Supervisory Board member was not an auditor
of the company, a shareholder or employee of the auditing company
The members of the Executive Board are eligible for a company
car. An accident insurance provides insurance cover in case of
over the prior three years.
death or disability. Personal liability insurance covers the legal liability
Criterion 4: The Supervisory Board member is not a member of
of the Executive Board members that result from personal injuries,
the Executive Board of another company, in which a member of the
material damages or financial losses of third parties. An insurance
Executive Board of KTM AG serves on its Supervisory Board.
cover exists for claims for damages due to financial losses of third
parties or of the company due to breaches of duties of executive
Criterion 5: The Supervisory Board member has not been on the
bodies of the company. The company bears the expenditures
Supervisory Board of the company for more than 15 years. This does
for those insurances. For group internal mandates and functions no
not apply to Supervisory Board members, who are shareholders with
additional remunerations are granted.
05 4
KTM GROUP
In the case of premature termination without a compelling reason
The amount of the total remuneration of the Supervisory Board
the fixed salary shall be paid out for the contractual period.
member is resolved within the framework of the Annual General
The members of the Executive Board render their services on
27th Annual General Meeting on April 23, 2015 the total remunera-
the basis of employment contracts liable to income tax. No further
tion for the short financial year 2014 for the Supervisory Board was
agreements with the Executive Board exist, regarding occupa-
resolved in the amount of EUR 19k. For the financial year 2015
tional pension plans. According to contract the Executive Board
the total remuneration of the Supervisory Board was recognized in
members are eligible for a voluntary severance pay, however
the income statement in the amount of EUR 24k. Members of
Meeting for the respective preceding financial year. Within the
fundamentally they are submitted to the system of “Abfertigung
the Supervisory Board that are elected into the Supervisory Board or
Neu” (new severance pay). Furthermore, secondment contracts
leave during a financial year receive the remuneration corresponding
between KTM AG and CROSS Industries AG for Mr. Stefan Pierer
with the duration of their actual affiliation within the Supervisory
and Mr. Friedrich Roithner are in effect.
Board pro rata temporis.
No stock option plans or similar share-based remuneration
The Executive Board will propose a total remuneration in this
systems exist. A D&O insurance exist, which covers Executive Board
amount to the 28th Annual General Meeting on April 21, 2016. The
and Supervisory Board as well as the management of the group
individual distribution should be divided as follows, subject to the
companies.
approval of the Annual General Meeting (see table below).
In the financial year 2015 the total remuneration of the Executive
Additional to the annual expense allowance the Supervisory Board
Board members amounted to EUR 1,328k (prior year: EUR 1,302k).
members get a compensation for their cash expenses for their
For performance-related remuneration, liabilities amounting to
actually accrued expenses. The Supervisory Board members are
EUR 4,605k have been determined (prior year: 3,714k). The most
furthermore covered by a manager liability insurance of the company
important calculation parameter of the variable remuneration
up to a certain upper limit, which covers the personal liability of
is – apart from the individually agreed performance-related target
the Supervisory Board members in case of a negligent breach
achievement – the development of the EBIT.
of duties in exercising their activity as body of the company. In the
financial year 2015 no further (other) compensation has been paid
After the expiration of the agreed contact duration, individual board
out to members of the Supervisory Board. Other business relation-
members receive a non-recurring severance pay. As of Decem-
ships with Supervisory Board member did not exist.
ber 31, 2015, liabilities for Executive Board severance pay amounting to EUR 1,017k are in effect (prior year: EUR 2,087k).
In the financial year 2015, the company granted
SUPERVISORY BOARD MEMBER
REMUNERATION
2015
REMUNERATION
2014
JOSEF BLAZICEK
Deputy Chairman of the Audit Committee
EUR 16k
EUR 11k
RAJIV BAJAJ
Deputy Chairman of the Supervisory Board
No remuneration
No remuneration
ERNST CHALUPSKY
Member of the Supervisory Board
EUR 8k
EUR 8k
SRINIVASAN RAVIKUMAR
Chairman of the Audit Committee
No remuneration
No remuneration
FRIEDRICH LACKERBAUER
Member of the Audit Committee
No remuneration
No remuneration
HORST RESCH
No remuneration
No remuneration
EUR 24k
EUR 19k
TRUE Management & Investment GmbH, which falls
within Mr. Trunkenpolz’ remit, an arm’s length loan due
December 31, 2015 with the option of extension until
February 28, 2018. At the reporting date, receivables
amount to EUR 120k. Apart from that, no other
credits, loans or advances have been granted to any
member of the Executive Board or Supervisory Board.
The KTM AG Executive Board proposes a remuneration of EUR 3k for the Chairman of the Supervisory
Board for each attended meeting, EUR 2k for Supervisory Board Members and EUR 3k for the Chairman of
the Audit Committee in the financial year 2015. Due
to their significant interest in, and their capacity as
shareholders of, KTM AG, Mr. Rajiv Bajaj and Mr. Srinivasan Ravikumar do not receive compensation for
their function as members of the Supervisory Board.
TOTAL
055
03. MEASURES
TO PROMOTE WOMEN
It is not anticipated that a woman will be appointed into the
Executive Board for the time being as it is not planned to enlarge
the Executive Board and existing contracts will not expire for
a number of years. Equal treatment of female and male employees
and equal career chances are a matter of fact for KTM AG. A
specific program to promote the career advancement of women
has not been set up.
04. AUDITS AND
EXTERNAL EVALUATION
KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz, was appointed by the 27th Annual General Meeting
to serve as the auditors of the consolidated financial statements
and annual financial statements of the company for the financial
year from January 1, 2015 until December 31, 2015. In addition to
this function, KPMG and partner offices around the world also
sporadically perform tax and financial consulting service on behalf
of the group. Expenditures for the auditor consist of: audit consolidated financial statements EUR 200k (prior year: EUR 197k),
other auditing services EUR 14k (prior year: EUR 13k) and other
services EUR 24k (prior year: EUR 91k).
THE EXECUTIVE BOARD OF KTM AG
Stefan Pierer
Chairman of the Executive Board
Harald Plöckinger
Friedrich Roithner
Viktor Sigl
Hubert Trunkenpolz
05 6
KTM GROUP
KTM 2016, Headquarter
057
KTM 2016, 1290 Super Duke GT Action Italy, Foto: Schedl R.
CONSOLIDATED
MANAGEMENT REPORT
NON-FINANCIAL PERFORMANCE
060 Course of business and
INDICATORS
financial position
066
066 Employees
MATERIAL EVENTS THAT OCCURRED
067 Research and development
DURING THE FINANCIAL YEAR
068 Racing
060
061 Market development
068 Financial instruments
062 Development of revenue by region
069 Quality
062 Sales by region
069 Risk report
062 Development of revenue
069 Sustainability
by product group
063 Sales by product group
063 Production by product group
071 Events after the reporting date
071 Disclosures pursuant
to sec. 243a UGB
072 Outlook
FINANCIAL PERFORMANCE
INDICATORS
064
064 Performance analysis
064 Analysis of the
statement of financial position
066 Liquidity analysis
066 Investments
CONSOLIDATED
MANAGEMENT REPORT
AS AT DECEMBER 31, 2015 OF KTM AG, MATTIGHOFEN, AUSTRIA
1. COURSE OF BUSINESS AND FINANCIAL POSITION
According to the January 2016 assessment of the International Monetary Fund (IMF), the global economy will recover more weakly than
had been assumed in the January 2015 forecast. The IMF expects to see a 3.4% rise in global economic output in 2016, with growth of 2.1%
being forecast for industrial nations in both 2016 and 2017. For the Eurozone, however, expansion of only 1.7% is being forecast over these
two years. Growth of 2.6% is anticipated in the USA. The IMF forecasts global growth of 3.6% in 2017.
Forecast economic output for emerging and developing countries remains at 4.3% for 2016 and 4.7% for 2017. The biggest growth is
expected in India, which is forecast to grow by 7.5% in both 2016 and 2017.
MATERIAL EVENTS THAT OCCURRED DURING
THE FINANCIAL YEAR
The financial year 2015 will go down as another record year in KTM’s history.
By consistently implementing the global product strategy and expanding into all continents, KTM yet again successfully increased both revenue
and sales figures to new record levels. KTM has been among the world’s fastest growing motorcycle brands for a number of years.
In the 2015 financial year, KTM increased revenue to EUR 1,022.5 million (up 18.3% compared to the prior year) and sales to 152,181 vehicles
(up 8.3% compared to the prior year). Once sales of the DUKE 200, DUKE 390, RC 200 and RC 390, sold in India by our partner Bajaj, are
included, 183,170 KTM and Husqvarna vehicles were sold worldwide in 2015. Revenues consequently broke through the EUR 1 billion barrier
for the first time.
In March 2015, the Supervisory Board resolved to extend, ahead of their expiry, the current contracts of the Executive Board until
February 29, 2020.
Since the Husqvarna brand was integrated into the KTM group, KTM AG has followed a consistent two-brand strategy based on the KTM and
Husqvarna brands. The sales and marketing organization has been restructured accordingly. As the final step in this reorganization program, the
Supervisory Board resolved at its March 2015 meeting to spin-off the operating business of KTM Motorrad AG from the listed company KTM AG.
New products
In 2015, KTM again brought several new models to the market. These included a new Motocross generation as well as the new 1290 SUPER
DUKE GT and the new 690 DUKE and 690 DUKE R, which were unveiled at the EICMA motorcycle fair in Milan.
In the Husqvarna brand, the focus over the next few years will be on developing a variety of street motorcycles, as well as on continuing to
expand and develop the offroad models. The first street bikes – the 701 ENDURO and the 701 and 450 SUPERMOTO – went on sale in 2015.
A new Motocross generation was also launched during the course of the year 2015.
060
K TM CONSOLIDATED MANAGEMENT REPORT
New subsidiaries
A new sales subsidiary, Husqvarna Motorcycles SA Pty. Ltd., Northriding, South Africa, was established during 2015 in order to intensify
sales and marketing activities.
A separate company, Husqvarna Motorsports, Inc., Murrieta, was also founded in order to provide support to Husqvarna motorsports
activities in the USA.
Investments
In August 2015, Oberbank Mattigtal Immobilien GmbH completed the construction of the logistics center in Munderfing. Costing a total
of around EUR 27 million, the center has a floor area of 30,000 m² and is leased by KTM Immobilien GmbH. The company has an option
to purchase the building on expiry of the 15-year lease term.
The construction of a new motorsport building has begun in Munderfing, completion of which is scheduled for the first half of 2016.
The expected construction costs are approximately EUR 12 million.
Motorsport successes
In racing, KTM factory rider Toby Price celebrated his first Dakar title at the start of 2016. This represents KTM’s 15th consecutive victory
in the world’s toughest offroad race.
In October 2015, Austrian KTM factory rider Matthias Walkner won his first Cross Country Rallies world championship.
In early April, Red Bull KTM factory rider Ryan Dungey sealed the Red Bull KTM factory teams first ever 450 Supercross world title in just
the 14th round of the Monster Energy Supercross World Championships in Houston.
2. MARKET DEVELOPMENT
The overall European market1 was up 10.7% on the preceding year, with 494,108 vehicles registered. The increase was due mainly to
the growth in the largest European markets such as Germany (+7.7%), Italy (+14.6%), Spain (+21.8%) and the United Kingdom (+21.0%).
Amid a difficult market environment, KTM brand vehicles succeeded in gaining additional market share in key markets such as Austria
(up by 1 percentage point from the prior year) and Finland (up by 3.2 percentage points). KTM has a share of 8.4% of the total European
market.
Husqvarna’s market share grew in Sweden (up by 1 percentage point from the prior year), Austria (up by 1.4 percentage points) and Finland
(up by 0.6 percentage points). Husqvarna has a share of 1.1% of the total European market.
Registrations in the overall U.S. market2 went up 4.1% in 2015 compared to 2014, rising to 419,864 vehicles.
KTM succeeded in increasing its share of the overall U.S. market to 5.2%, a rise of 0.4 percentage points from the prior year.
Husqvarna increased its market in the U.S. by 0.2 percentage points to 0.8%.
1
2
Motorcycles ≥ 120 ccm excluding Motocross, scooters and ATVs, including electric motorcycles
Motorcycles ≥ 120 ccm including Motocross, excluding scooters and ATVs, including electric motorcycles
COURSE OF BUSINESS AND FINANCIAL POSITION
0 61
3. DEVELOPMENT OF REVENUE BY REGION
Group revenue increased by 18.3% from EUR 864.6 million in the prior year to EUR 1,022.5 million. Revenue in North America rose 49.7%
from the prior year to EUR 301.8 million; this corresponds to 29.5% of total revenue. In Europe, revenue was up 10.9% on the preceding
year, rising to EUR 512.2 million; Europe thus accounted for 50.1% of total revenue. Revenue in other countries rose by 3.6% compared to the
prior year, to EUR 208.5 million. The percentage of total revenue earned in the other countries was 20.4%.
Group revenue by region
2015
Europe
North America
Other countries
Total
EURk
%
2014
EURk
512,160
301,767
208,560
1,022,487
50.1%
29.5%
20.4%
100.0%
461,807
201,522
201,307
864,636
Change
%
10.9%
49.7%
3.6%
18.3%
4. SALES BY REGION
Accounting for 20.6% of sales in the financial year 2015, the U.S. remained the largest single market for KTM. Europe accounted for 45.2%
of sales, with the strongest sales markets being Germany (11.3%), France (5.9%), the United Kingdom (5.4%), Italy (5.1%) and Spain (3.7%).
Overall, 68.2% of total sales were generated in the ten most important countries worldwide.
5. DEVELOPMENT OF REVENUE BY PRODUCT GROUP
Motorcycles (including Sportminicycles and X-Bows) represent 83.8% of total revenue, this percentage remaining essentially constant
relative to the prior year (82.5%). Revenue in the offroad segment increased 22.5% from the prior year, to EUR 425.4 million. In the street
segment, revenue went up 18.6% from the prior year, to EUR 390.6 million. Revenue from parts, garments and accessories (PowerWear and
PowerParts) and other rose by 9.6% relative to the prior year to EUR 165.3 million.
Group revenue by product group
2015
Offroad sport motorcycles
Street sport motorcycles
Total full size
Sportminicycles
X-Bow
Parts, garments and accessories and others
Total
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EURk
%
2014
EURk
Change
%
425,359
390,616
815,975
41.6%
38.2%
79.8%
347,359
329,263
676,622
22.5%
18.6%
20.6%
37,951
3,214
165,346
1,022,487
3.7%
0.3%
16.2%
100.0%
34,463
2,665
150,886
864,636
10.1%
20.6%
9.6%
18.3%
6. SALES BY PRODUCT GROUP
In 2015 KTM sold 152,181 vehicles, including 152,114 motorcycles (up 8.2% on the preceding year) and 67 X-Bows (up 28.8%).
In the offroad segment, 71,854 motorcycles were sold (up 13.9% on the preceding year). Compared to the prior year, sales in the Motocross
segment rose 19.5% to 22,674 motorcycles and sales in the Enduro segement by 11.5% to 49,180 motorcycles (including Freeride).
In the street segment, 67,917 motorcycles were sold (up 3.3% on the preceding year).
In the Sportminicycle segment, sales went up 5.3% from the prior year, to 12,343 motorcycles.
Sales by product group
Units
2015
%
2014
Units
Change
%
Total full size
71,854
67,917
139,771
47.2%
44.6%
91.8%
63,061
65,737
128,798
13.9%
3.3%
8.5%
Sportminicycles
Total motorcycles
12,343
152,114
8.1%
100.0%
11,724
140,522
5.3%
8.2%
X-Bow
Total
67
152,181
0.0%
100.0%
52
140,574
28.8%
8.3%
7. PRODUCTION BY PRODUCT GROUP
In the financial year 2015, 115,419 motorcycles were manufactured at the Mattighofen production site. Compared to the prior year, this
constitutes an increase of 13,654 units, or 13.4%. Taking into account the small-engine KTM models produced by our partner Bajaj Auto Ltd.
in India, 156,652 KTM vehicles (up 8.0%) were manufactured worldwide.
Production by product group
2015
Units
%
2014
Units
Change
%
Total full size
72,519
30,877
103,396
62.8%
26.8%
89.6%
62,723
27,237
89,960
15.6%
13.4%
14.9%
Sportminicycles
Total motorcycles
11,976
115,372
10.4%
100.0%
11,757
101,717
1.9%
13.4%
X-Bow
Total
47
115,419
0.0%
100.0%
48
101,765
(2.1%)
13.4%
COURSE OF BUSINESS AND FINANCIAL POSITION
063
FINANCIAL PERFORMANCE INDICATORS
8. PERFORMANCE ANALYSIS
Net revenues rose in 2015 by 18.3% to EUR 1,022.5 million (prior year: EUR 864.6 million). This was attributable to the increase in volumes.
Approximately 95% of revenues were earned outside Austria.
Production costs increased from the prior year, rising 17.3% to EUR 720.5 million; the gross margin increased by 0.6 percentage points
compared to the prior year and is now at 29.5%.
Overheads went up EUR 31.9 million from the prior year to EUR 206.9 million (+18.3%).
Expenses for selling and marketing rose EUR 12.1 million from the prior year (+13.4%). Net expenses on motorsport increased EUR 6.1 million
compared to the prior year, to EUR 29.7 million (+25.8%). This is attributable to the rise in sales volume as well as to wide-ranging motorsport activities.
Expenses for infrastructure and administration went up EUR 4.1 million to EUR 36.7 million (+12.6%).
Operating development expenses in the financial year 2015 rose EUR 13.9 million from the prior year, to EUR 64.7 million (+27.3%).
Net development expenses were EUR 40.9 million (prior year: EUR 31.4 million), due to the higher net capitalization of development costs
(EUR 20.9 million, a rise of 18.8% compared to the prior year) and the inclusion of research subsidies (EUR 7.0 million, a rise of 37.3%
compared to the prior year).
Other operating expenses of EUR 21.6 million chiefly comprise warranty costs, which increased by EUR 4.1 million from the prior year,
to EUR 21.6 million (+23.6%).
Thanks to the growth in revenues and volumes, EBIT rose to EUR 95.1 million, an increase of EUR 19.7 million over the previous year’s result
of EUR 75.4 million.
The effective tax rate rose from 19.1% in 2014 to 25.2% at December 31, 2015, owing to the utilization of capitalized loss carry forwards.
The financial result improved by EUR 5.0 million in 2015 compared to the prior year, to EUR –9.7 million. This was due mainly to foreign
currency losses arising on the revaluation of bank deposits. Interest expenses were EUR 8.8 million (prior year: EUR 8.0 million). Interest
income was EUR 1.3 million (prior year: EUR 0.8 million).
9. ANALYSIS OF THE STATEMENT OF FINANCIAL POSITION
The balance sheet total rose by 22.2% compared to the prior year, to EUR 848.9 million.
Non-current assets went up EUR 65.2 million (+17.0%) to EUR 449.3 million (52.9% of total assets). Property, plant and equipment rose
by EUR 37.1 million due to investments in the logistics center, in the motorsport building currently under construction and in tooling.
Intangible assets rose by EUR 27.0 million, due mainly to the net capitalization of development costs (EUR 20.9 million) and to investments
in IT infrastructure, which primarily concerned the scheduled implementation of a new ERP system as well as the global Dealer.Net platform
for dealers.
064
Trade receivables, including receivables from affiliated and associated companies, went up EUR 17.8 million to EUR 88.2 million (+25.3%).
Taking into account the receivables sold last year and this year under ABS arrangements, there was a rise in receivables by about
EUR 24.0 million (+20.1%).
In the past financial year 2015, inventories rose EUR 19.7 million to EUR 161.3 million (+13.9%) due to the increase in sales volume. The
increase was essentially due to a rise in finished goods, merchandise and spare parts (up by EUR 18.5 million relative to December 31, 2014).
Other current assets increased by EUR 1.7 million to EUR 28.7 million and are essentially comprised of receivables due from tax offices,
prepayments made on inventories and valuations of derivative financial instruments.
The balance sheet total was made up of the following items on the liabilities side:
The bond issued in 2012 with a nominal value of EUR 85.0 million is due in April 2017. The transaction costs incurred in connection
with the bond issue are offset against the nominal value. The change in the carrying amount by EUR 115k compared to the prior year is due
to the transaction costs being amortized to profit or loss over the remaining term to maturity.
Non-current financial liabilities of EUR 125.5 million include long-term investment facilities and research and development loans. The
EUR 61.5 million increase resulted mainly from taking out a research loan of EUR 45.0 million. In addition, long-term liabilities under finance
leases of EUR 20.9 million were recognized.
Employee benefit liabilities of EUR 14.9 million comprise claims for severance and anniversary bonus payments. Actuarial losses, current
service costs and interest expenses led to a EUR 1.4 million increase in the total liability.
Deferred tax liabilities went up EUR 17.2 million, to EUR 37.7 million. The change was caused by the recognition of additional deferred
tax liabilities of EUR 5.2 million in relation to capitalized development costs and by the utilization of loss carryforwards of EUR 10.6 million
that had previously been recognized as deferred tax assets.
Other non-current liabilities amounting to EUR 6.8 million are mainly made up of sureties received; the total amount rose slightly
by EUR 0.3 million relative to the prior year.
Current financial liabilities went down by EUR 2.5 million to EUR 6.1 million.
Trade payable, including payables to affiliated and associated companies, went up EUR 105.1 million to EUR 127.5 million as at the
reporting date.
Provisions amounting to EUR 8.9 million (prior year: EUR 6.8 million) essentially comprise provisions relating to guarantees and
warranties. Compared to the prior year, provisions relating to guarantees and warranties showed an increase by EUR 1.7 million on account
of the increase in sales volume.
The other current liabilities are essentially comprised of employee benefits, discounts and dealer bonuses as well as of liabilities
arising due to derivative financial instruments being measured as of the reporting date. Other current liabilities rose by EUR 3.1 million
to EUR 53.3 million.
Owing to the substantial capital expenditure, net indebtedness rose to EUR 97.2 million (prior year: EUR 87.5 million). Gearing was 25.6%.
Equity rose by EUR 52.2 million from the prior year. The movement resulted mainly from the 2015 profit (EUR 63.9 million), payment
of the dividend for 2014 (EUR 16.3 million) and the movement in the cash flow hedge reserve (EUR 4.3 million). The equity ratio as of
December 31, 2015 was thus 44.7% (prior year: 47.1%).
FINANCIAL PERFORMANCE INDICATORS
065
10. LIQUIDITY ANALYSIS
Group operating cash flow rose to EUR 118.1 million, an increase of EUR 38.5 million relative to the prior year. There was an increase of
EUR 4.9 million on the preceding year in cash flow from profit and loss items, while working capital rose by EUR 33.5 million.
Net of disposals, investments increased from EUR –69.7 million to EUR –94.3 million. Free cash flow therefore increased from
EUR 9.9 million to EUR 23.8 million in net terms.
The consolidated cash flow from financing activities was EUR 27.4 million (EUR 23.8 million in the prior year), which resulted mainly from
the dividend of EUR 16.3 million paid out in 2015 and the taking out of a research loan of EUR 45.0 million.
Cash rose by EUR 49.6 million to EUR 118.4 million, thus reaching a substantially higher level than in the prior year (prior year:
EUR 68.8 million).
11. INVESTMENTS
Considerable capacity and expansion investments were undertaken in the period under review in addition to the usual high investments
in series development projects and buying tools. Construction of the KTM logistics center in Munderfing was completed in 2015 and work
was begun on the construction of a new motorsport building in Munderfing.
In total, EUR 110.9 million (prior year: EUR 84.4 million) was invested in property, plant and equipment and intangible assets during
2015. Of this, EUR 43.5 million related to capitalized development costs, EUR 14.6 million to the KTM logistics center and EUR 6.6 million
to the motorsport building currently under construction. A further EUR 9.7 million was invested in IT infrastructure.
NON-FINANCIAL PERFORMANCE INDICATORS
12. EMPLOYEES
During 2015, KTM employed an average of 2,380 employees (prior year: 2,056), of whom 401 worked outside Austria. Revenue per
employee rose by 2.2% EUR 429.6k (prior year: EUR 420.5k).
Revenue
Employees (average)
Revenue per employee
066
EURk
EURk
2015
2014
1,022,487
2,380
429.6
864,636
2,056
420.5
13. RESEARCH AND DEVELOPMENT
In the Research and Development department, KTM employed 382 persons on average (16.1% of the total headcount) in the financial
year 2015. About EUR 68.8 million was invested in research and development in the financial year 2015, which translates to 6.7% of total
revenue (+0.4 percentage points compared to the prior year).
The financial year just ended saw a multitude of key projects in the offroad and street areas. For instance, the start of series production
for the 701 Enduro and 701 Supermoto added two important new models to the Husqvarna range, successfully bringing KTM’s sister brand
back onto the streets.
KTM also entered the highly technology-driven sports touring segment with the KTM 1290 Super Duke GT, presented for the first time
at EICMA 2015. Featuring a large number of safety and assistance systems, semi-active suspension and an innovative side case system,
it represents, alongside the KTM 1290 SUPER ADVENTURE, the pinnacle of the KTM product range.
While a wide-ranging portfolio of Motocross models was presented during the course of 2015, the focus in the offroad segment lay principally
on developing new KTM and Husqvarna Enduro platforms for series production.
During 2015, numerous R&D projects were taken forward at various stages from concept development to the start of series production
and successfully completed:
p Series development of the new KTM and Husqvarna Motocross generations, which are redefining the motocross segment thanks to
their equipment, the low weight that derives from the use of innovative technology and the handling benefits that accrue as a result.
p Series development of the KTM 1290 SUPER ADVENTURE, which sets a new standard in the premium touring segment thanks to
its multitude of innovative safety features and the semi-active suspension developed in cooperation with WP.
p Series development of the KTM 1050 ADVENTURE, ridable with an A2 driving license, which forms an alternative to the
KTM 1190 ADVENTURE as an entry-level model in the 2-cylinder touring segment.
p Series development of the first two Husqvarna road models, the 701 Enduro and 701 Supermoto, each featuring a 700 ccm single
cylinder engine.
p Series development of new KTM and Husqvarna Enduro generations, based on Motocross models tried and tested in the international
motorsport environment, which impress thanks to their low weight, innovative technologies and functional design.
p Series development of a new 2-stroke offroad engine platform for use in future Motocross and Enduro models.
p Series development of the next stage of our 690 ccm single-cylinder engine, which impressively combines high 55 kW (75 PS) performance
with further advances in engine smoothness.
p Development of a new motorcycle platform based on a revolutionary 2-cylinder engine design, which will make a substantial contribution
toward opening up new market segments.
0 67
p Concept development of innovative lighting systems in LED technology to increase the level of safety and durability under extreme
conditions.
p Concept development of new EMS systems to ensure that the KTM and Husqvarna model ranges comply with future emission regulations
(Euro IV and Euro V).
p Concept development of a model equipped with an alternative drivetrain system to meet the requirements of urban mobility scenarios.
14. RACING
When KTM was relaunched in the early 1990s, the motto READY TO RACE embodied the new self-confidence of the brand. Clear objective:
Every motorcycle rolling off the production line of the Mattighofen works must be ready for the racetrack right from the start.
The Ready to Race philosophy is still the creed that drives the KTM motorsport division which, with its many factory teams, works all over
the world on the very highest level, racking up World Championship titles nonstop. Every employee working in the KTM motorsport division is
fully committed to racing. They are 100% committed to the task of achieving wins for KTM and, as a team, work together just as perfectly
as the smoothly running racing motorcycles they build and service. The KTM factory riders likewise give their best on the racetrack, not just for
themselves and their team but for everyone at KTM.
In 2015, KTM celebrated another significant milestone in its history. The US factory team brought both the AMA 450 Supercross championship and the US Pro MX Series title back to Austria. These incredible victories were an ideal platform for both the brand and its bikes,
catapulting KTM into the international limelight. But that was not all: KTM factory riders also made their mark on the Rally, Super Enduro,
Hard Enduro and traditional Enduro race series. In the Moto3 class, the battle for the title went all the way down to a fierce head-to-head duel
in the final round. In January 2016, KTM factory rider Toby Price took first place in the Dakar Rallye, thus securing KTM’s 15th consecutive
victory in this prestigious event.
The Husqvarna brand also enjoyed an impressive return to international racing in the 2015 season, competing with talented riders in major
international competitions on both sides of the Atlantic. The Rockstar Energy Husqvarna factory team marked Husqvarna’s first ever entry in
the US Supercross championships. The team also took part in the US Pro MX championships, where it achieved some very notable successes.
In the MXGP World Championships, German Max Nagl won several day stages before injury brought his season to a premature end. Among
many other successes, special mention should also be made of our victory in the E3 category at the WEC World Enduro Championships as well
as Graham Jarvis’ victory in the famous Red Bull Scramble at the Erzberg Rodeo.
Overall, we won eleven world titles in 2015 across a very wide range of racing series, bringing our total number of world title successes
to over 260.
Both brands’ commitment to motorsport also benefits KTM AG from a technological viewpoint, as motorsport know-how has a direct influence
on the development of series production models. KTM AG’s motorsport expenses in 2015 were EUR 29.7 million (prior year: EUR 23.6 million),
representing 2.9% (prior year: 2.7%) of total revenue.
15. FINANCIAL INSTRUMENTS
Regarding the use of financial instruments and the related risk management goals, please refer to the related explanations in the notes to
the Consolidated Financial Statements.
068
16. QUALITY
KTM uses a process-oriented quality management system for all activities, from product idea to market analyses to design studies, design
and development, cooperation with suppliers, the procurement of components for series production, parts production, the assembly of engine
and vehicle, right to packing and dispatch.
Product quality: The high quality of the products is accomplished due to production-oriented design, the use of analytical and statistical
methods of calculation, comprehensive checking and testing, compliance with relevant approval rules, a focus on process quality, communication and training measures at KTM and at the suppliers.
Process quality: KTM was given certification by the auditors of TÜV Süd LG Österreich, that it more than meets the requirements of
EN ISO 9001:2008 and of the Kraftfahrbundesamt (KBA), the German federal authority for motor vehicles and transport.
17. RISK REPORT
Regarding the risk report, please refer to the explanations in the notes to the Consolidated Financial Statements.
18. SUSTAINABILITY
Commitment to sustainability
Strategic leadership, focusing on the development of key competencies, continuously improving the work processes, working in partnership
with employees and suppliers and maintaining a process-oriented quality management system allow KTM to create added value both for the
company and for the shareholders. With an average workforce of 2,380 in Austria, KTM is one of the region’s biggest employers.
KTM uses every opportunity to respond to the demands regarding sustainability that any modern company endeavors to comply with.
For instance, the factory and administrative buildings are constructed in a resource-conserving and energy-efficient manner, the cooling of test
chambers and toolshop is controlled using groundwater, and for the manufacturing of fabricated materials and finished products various
materials are sorted by type and reusable containers are used.
Suppliers
The production company in Mattighofen largely sources its requirements from the local procurement market (about 28% within a radius
of 100 km, about 33% within a radius of 200 km, about 41% within a radius of 300 km, and about 48% within a radius of 400 km);
KTM therefore plays an active role in adding and maintaining value at the regional level.
Recycling and packaging
As a manufacturing company, KTM is aware of the responsibility it has vis-à-vis the environment. The motorcycle logistics system on reusable
metal plates, which was specially developed by KTM and obviates the need for additional packing material, is regarded as an innovative
example for the entire industry.
0 69
Employees
KTM aims to offer its employees a path towards personal development. It is the experience and expertise, creativity, passion for innovation,
and productivity of our staff that really allows KTM to achieve its corporate goals.
With a view to continuously enhancing the qualifications and competence of its staff, KTM constantly invests in their education and training.
KTM incurred expenses of EUR 993.4k in this regard in 2015 (prior year: EUR 653.2k) In Mattighofen, apprentices are being educated
in the fields of mechanical engineering, automotive and production engineering and mechatronics, and as commercial employees, with the goal
of integrating them in the respective areas of responsibility and offering them employment with KTM in the long term after their final exam.
As of the reporting date, KTM employed 94 apprentices, and we persist in our clear commitment to sustainable inhouse apprentice training.
In addition, KTM offers employees the possibility of in-service training for passing their final apprenticeship exam. In this way, KTM makes
it possible for employees who have no formal training to be integrated into the world of work and continue their personal development.
By establishing an in-house toddler group in February 2012, KTM demonstrated its social commitment. This is also intended to facilitate
reentry into the world of work.
Health and safety
To achieve constant improvement in the area of health and safety, KTM, among other things, implements preventive measures regarding
general workplace safety, fire protection and safety of machinery and organizes various seminars on health- and safety-related topics, health
promotion in the workplace as well as measures for ensuring suitable workplaces (including lighting, height requirements, positioning of
work equipment, use of tools or aids).
Production safety
In designing and constantly improving its work processes, KTM takes care to offer its employees a safe work environment. This includes
constant training and instruction measures, the regular maintenance of production facilities, and high-tech methods and equipment.
Quality management
The challenge of manufacturing products that are innovative, high-quality, in line with market requirements and, most importantly, safe, is
mastered by KTM using a comprehensive and process-oriented quality management system certified to ISO 9001:2008. This system controls
each and every process, from product idea to market analysis to design studies, development, design, cooperation with suppliers, procurement
of components, parts production, assembly of engine and vehicle, dispatch, right to sales and customer service. Particular focus is placed
on the continuous improvement process, which ensures consistent and sustainable improvement of the quality of products and services.
Product safety
On average 515 motorcycles per day are assembled in Mattighofen, Austria. Each and every vehicle component is checked by experienced
KTM staff according to an inspection plan. Moreover, every KTM motorcycle undergoes a complete functional check at a testing station after
assembly. Intensive inproduction product audits of engines and vehicles ensure a high-quality standard during the production process.
Only then are KTM products ready to be shipped all over the world.
070
The development work performed by our KTM staff is put to the test on the racetrack by our factory teams as early as during the prototype
phase. Additionally, a testing and endurance testing program spanning all phases of prototype and series production ensures that the
series-manufactured product meets the highest standards of quality and safety. Only proven innovative designs make the transition to series
production, and they deservedly bear the motto “READY TO RACE”.
Environmental indicators
All of KTM’s offroad carburetors (EXC models) comply with the Euro III standard, the European emissions standard for motorcycles. The
standard applies not only to new, but also to existing vehicle types. Compliance with the new standard is made possible primarily by the use
of fuel injection systems.
Wings for Life
KTM supports the spinal cord research foundation “Wings for Life” set up by Heinz Kinigadner in all marketing matters. “Wings for Life”
is a non-profit organization aiming to promote and speed up research and medical-scientific progress towards finding a cure for paraplegia
induced by spinal cord injuries.
Corporate governance
The KTM AG corporate governance report forms an integral part of the annual report, available online at http://company.ktm.com/investorrelations/reports.html. Further information on corporate governance may be found online at http://company.ktm.com/investor-relations/
corporate-governance.html.
19. EVENTS AFTER THE REPORTING DATE
Regarding the important events which have occurred after the reporting date, please refer to the explanations in note 31 to the Consolidated
Financial Statements. Other events which have occurred after the statement of financial position date and are material for the measurement of
assets and liabilities have either been reflected in these financial statements or are not known.
20. DISCLOSURES PURSUANT TO SEC. 243A OF THE AUSTRIAN COMMERCIAL CODE (UGB)
As of December 31, 2015, the capital stock amounts to EUR 10,845,000 and is subdivided into 10,845,000 bearer shares having a
par value of EUR 1.00 each. The shares grant the rights that are usually due to stockholders under the Austrian Stock Corporation Act. These
include the right to payout of the dividend resolved upon at the General Meeting as well as the right to vote at the General Meeting. All the
shares are admitted for trading on the Vienna Stock Exchange; since August 2012 the shares of KTM AG have been included in the Third
Market, which is operated as a MTF (Multi Trading Facility) by Wiener Börse AG.
Each of the following shareholders held more than 10% of the capital stock on the statement of financial position date and at the time of
drawing up the financial statements:
p CROSS Industries AG (directly and indirectly through CROSS KraftFahrZeug Holding GmbH): 51.28%
p Bajaj Auto Ltd. (through Bajaj Auto International Holdings B.V.): 47.99%
p Free float: < 1%
071
For the ability of the Executive Board to issue shares, please refer to the details of the authorized capital given in the notes to the
Consolidated Financial Statements under note 20, Consolidated equity.
In the event of a change of control, Executive Board members Harald Plöckinger, Viktor Sigl, and Hubert Trunkenpolz are entitled unilaterally
to terminate their appointments under retention of all claims. These appointments expire on February 29, 2020. The same right applies
with respect to CROSS Industries AG, which has entered into a secondment agreement with KTM AG with regard to Mr. Friedrich Roithner.
This agreement also expires on February 29, 2020. For the purposes of these agreements, a change of control is present if CROSS Industries
AG, Wels, according to the definition of sec. 22 (2) of the Austrian Takeover Act (Übernahmegesetz), neither directly nor indirectly holds at
least 50% of the voting rights in KTM AG. No agreements are in place between the company and any Supervisory Board members or employees
providing for compensation to be due in case of a change of control.
There are no other important agreements which would be affected by a change of control or public takeover bid.
21. OUTLOOK
The general economic climate remains very difficult in some markets. Although we expect the North American motorcycle market to enjoy
significant growth in the coming year and are also relatively bullish with regard to Europe, the emerging markets in South America and
Asia are marked by numerous uncertainties. Nevertheless, we regard Asian markets as representing the biggest growth opportunities over the
medium-term.
In 2016, we expect the KTM group to continue growing in both revenue and volume terms while sustaining current levels of profitability.
Among other things, a new Enduro generation will be launched for the KTM brand in 2016.
We expect further substantial growth for the Husqvarna brand for 2016. From 2017, this historic brand will bring a full range of street
motorcycles onto the market.
We have set ourselves the medium-term goal of increasing annual sales to 250,000 units.
Motorsport
As previously announced, KTM will make its debut in the MotoGP racing series in 2017. The team will be unveiled in August 2016 at the
Austrian Grand Prix, which will be held at the Red Bull Ring in Spielberg.
072
Commitment to Austria
In 2016, extensive capital expenditure of over EUR 100 million will again be made in infrastructure and model development at the
Mattighofen and Munderfing sites. A new building is being built at Munderfing at a total cost of over EUR 12 million, which will provide a
new home for our motorsport team.
Research and development expenditure will continue to grow substantially, to reach approximately 7% of revenues. Substantial investments
are also being made in the IT infrastructure, and a new ERP system is being implemented in 2016.
In 2016, work will begin on the construction of the KTM Experience in Mattighofen, which will include a museum and demonstration
workshop, at a cost of approximately EUR 25 million. Completion is scheduled for fall 2017.
It is planned to hire another 120 employees in 2016.
Adequate financial position
Over the last year, the KTM group again improved its treasury and financial position. Major financing instruments were committed and
optimized for the long term. Working capital management was further improved and will remain an area of focus during the coming
year. Sufficient liquidity is therefore available to fund the planned growth, from a portfolio of different financing instruments with a range
of counterparties.
Mattighofen, February 16, 2016
The Executive Board
Stefan Pierer
Harald Plöckinger
Viktor Sigl
Hubert Trunkenpolz
Friedrich Roithner
OUTLOOK
073
Antoine Meo KTM 450, Rallye Dakar 2016, Photo: Kin M.
CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED
NOTES TO THE CONSOLIDATED
INCOME STATEMENT
FINANCIAL STATEMENTS
077
083
083 The company
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
083 Principles of financial reporting
078
and accounting policies
096 Notes to the consolidated
OF FINANCIAL POSITION
079
income statement
103 Notes to the consolidated
statement of financial position
OF CASH FLOWS
116 Other notes
080
ANNEX TO THE NOTES TO THE
OF CHANGES IN EQUITY
082
CONSOLIDATED FINANCIAL STATEMENTS
140 Schedule of equity holdings
AUDITOR’S REPORT
143
STATEMENT OF ALL
LEGAL REPRESENTATIVES
145
140
076
K TM CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED
INCOME STATEMENT
EURk
Note
2015
2014
Revenue
Cost of sales
Gross profit
5
1,022,487
(720,477)
302,010
864,636
(614,292)
250,344
Selling and racing expenses
Research and development expenses
Infrastructure and administration expenses
Other operating expenses
Other operating income
Result from operating activities
6
(132,345)
(16,385)
(36,747)
(21,637)
210
95,105
(114,245)
(11,044)
(32,626)
(17,353)
302
75,377
1,304
(8,759)
(2,363)
822
(8,024)
1,833
10
133
85,421
628
70,636
11
(21,497)
63,924
(13,474)
57,162
63,856
57,037
68
125
5.89
5.26
Interest income
Interest expenses
Other financial result
Share of the profit of associates
accounted for using the equity method
Profit before tax
Tax expense
PROFIT FOR THE FINANCIAL YEAR
6
6
6
7
8
9
Of which attributable to the owners of the parent company
Of which attributable to non-controlling interests
EARNINGS PER SHARE (EUR)
Basic (= diluted)
12
The following notes to the consolidated financial statements form an integral part of the consolidated income statement.
CONSOLIDATED INCOME STATEMENT
077
CONSOLIDATED
STATEMENT OF
COMPREHENSIVE INCOME
EURk
Note
Profit for the financial year
Currency translation of foreign subsidiaries
Currency translation of associates accounted
for using the equity method
Currency translation of net investments in foreign operations
Deferred tax on currency translation
of net investments in foreign operations
Valuation of cash flow hedges
Deferred taxes on the valuation of cash flow hedges
Other comprehensive income –
Possible reclassification into the income statement
Recognized actuarial losses
Deferred taxes on the recognized actuarial losses
Other comprehensive income –
No reclassification into the income statement
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Of which attributable to the owners of the parent company
Of which attributable to non-controlling interests
15
20
20
24
2015
2014
63,924
57,162
425
1,266
(5)
366
0
0
(91)
5,795
(1,449)
0
(1,391)
348
5,042
223
(280)
70
(2,411)
603
(210)
(1,808)
4,832
68,756
(1,585)
55,577
68,687
55,451
68
125
The following notes to the consolidated financial statements form an integral part of the consolidated statement of comprehensive income.
078
CONSOLIDATED
STATEMENT OF
FINANCIAL POSITION
AS AT DECEMBER 31, 2015 OF KTM AG, MATTIGHOFEN, AUSTRIA
EURk
ASSETS
Non-current assets
Tangible assets
Intangible assets
Investments accounted for using the equity method
Deferred tax assets
Other non-current assets
Current assets
Cash and cash equivalents
Inventories
Trade receivables
Prepayments
Other current assets
Note
Dec. 31, 2015
Dec. 31, 2014
13
161,239
279,780
3,064
3,595
1,575
449,254
124,138
252,755
2,920
2,480
1,801
384,094
118,406
161,295
88,202
3,100
28,678
399,680
848,933
68,812
141,566
70,349
2,941
27,038
310,705
694,799
10,845
368,688
379,532
281
379,814
10,845
316,213
327,058
517
327,575
84,845
125,480
14,935
37,742
6,764
269,766
84,729
63,956
13,516
20,492
6,509
189,203
6,107
127,445
8,863
1,389
2,234
53,315
199,353
848,933
8,608
105,078
6,760
5,867
1,554
50,153
178,021
694,799
14
15
11
16
28
17
18
19
ASSETS
LIABILITIES
Consolidated equity
Share capital
Reserves including retained earnings
Equity of the owners of the parent company
Non-controlling interests
Non-current liabilities
Bonds
Financial liabilities
Employee benefits
Deferred tax liabilities
Other non-current liabilities
Current liabilities
Trade payables
Provisions
Tax liabilities
Prepayments
Other current liabilities
20
20
20
21
21
24
11
22
21
23
25
22
EQUITY AND LIABILITIES
The following notes to the consolidated financial statements form an integral part of the consolidated statement of financial position.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
079
CONSOLIDATED
STATEMENT
OF CASH FLOWS
EURk
Note
Consolidated cash flow from operating activities
+(–)
Profit (loss) for the financial year
+(–)
Profit (loss) allocated to non-controlling interests
+(–)
Interest expenses (interest income)
–
Interest paid
+
Interest received
+(–)
Current income tax
–
Income taxes paid
+(–)
Deferred taxes
+
Depreciation/Amortization of fixed assets
–
Non-cash results from investments accounted
for using the equity method
–(+)
Other non-cash income (expenses)
–(+)
–(+)
(+)–
(+)–
Change of inventories
Change of trade receivables, prepayments,
other current and non-current asset
Change of trade payables, prepayments
and other current and non-current liabilities
Change of tax liabilities,
deferred taxes and other provisions
080
26
2015
2014
63,856
68
7,455
(8,759)
1,304
6,636
(8,324)
14,861
46,419
57,037
125
7,202
(7,331)
822
6,219
(2,819)
7,255
37,222
(60)
(3,589)
119,866
(498)
9,700
114,933
(14,632)
(22,156)
(14,207)
(17,478)
26,522
7,247
556
(1,762)
(2,897)
(35,284)
118,104
79,649
EURk
Consolidated cash flow from investing activities
–
Investments in tangible and intangible assets
(payments-out)
–
Investments in financial assets (payments-out)
+
Disposals of fixed assets (payments-in)
Consolidated cash flow from financing activities
–
Dividends to owners of the parent company
–
Dividends to non-controlling interests
–
Acquisition of non-controlling interests
+
Taking out of research loan
–
Repayment of investment loans
+(–)
Taking out (repayment) of promotional loans
–
Repayment of liabilities from finance leases
+(–)
Taking out (repayment) of other current loans
+(–)
Other financing activities
Note
2015
2014
13, 14
(94,761)
(312)
771
(94,302)
(69,568)
(477)
310
(69,735)
20
(16,268)
(150)
(100)
45,000
(2,370)
6,495
(388)
(5,000)
148
27,367
(10,845)
0
0
30,000
(2,372)
2,071
0
5,000
(99)
23,755
118,104
(94,302)
27,367
51,169
79,649
(69,735)
23,755
33,669
(1,513)
(62)
68,812
118,406
3,506
0
31,637
68,812
118,406
68,812
Consolidated cash flow
+(–)
+(–)
+(–)
Change in liquid funds within the group
+(–)
Effect of exchange rate fluctuations
+(–)
Consolidation-related changes in funds
+
Opening balance of liquid funds within the group
CLOSING BALANCE OF LIQUID FUNDS WITHIN THE GROUP
2
Comprising: cash on hand, checks, cash in banks and time deposits
The following notes to the consolidated financial statements form an integral part of the consolidated statement of cash flows.
CONSOLIDATED STATEMENT OF CASH FLOWS
0 81
CONSOLIDATED
STATEMENT OF
CHANGES IN EQUITY
EURk
Share
capital
Reserves
including
retained
earnings
Revaluation
reserve
Cash flow
hedge
reserve
Foreign
currency
translation
reserve
Total
Noncontrolling
interests
Total
consolidated
equity
As at January 1, 2014
Currency translation
Financial instruments
Actuarial losses
10,845
0
0
0
0
257,796
0
0
(1,808)
(1,808)
17,235
0
0
0
0
(2,539)
0
(1,043)
0
(1,043)
(887)
1,266
0
0
1,266
282,450
1,266
(1,043)
(1,808)
(1,585)
393
0
0
0
0
282,843
1,266
(1,043)
(1,808)
(1,585)
Total comprehensive income
0
0
57,037
55,229
0
0
0
(1,043)
0
1,266
57,037
55,452
125
125
57,162
55,577
0
(10,845)
0
0
0
(10,845)
0
(10,845)
10,845
302,180
17,235
(3,582)
379
327,058
517
327,575
Actuarial losses
0
0
0
0
0
0
(210)
(210)
0
0
0
0
0
4,346
0
4,346
695
0
0
695
695
4,346
(210)
4,832
0
0
0
0
695
4,346
(210)
4,832
Total comprehensive income
0
0
63,856
63,645
0
0
0
4,346
0
695
63,856
68,687
68
68
63,924
68,756
0
55
0
0
0
55
(155)
(100)
0
0
0
0
0
0
(150)
(150)
0
10,845
(16,268)
349,614
0
17,235
0
764
0
1,075
(16,268)
379,532
0
281
(16,268)
379,814
Dividends to owners
of the parent company
As at December 31, 2014
(= January 1, 2015)
Purchase of shares
in subsidiaries
Dividends to
non-controlling interests
Dividends to owners
of the parent company
082
Attributable to the owners of the parent company
NOTES TO THE
CONSOLIDATED FINANCIAL
STATEMENTS
I. THE COMPANY
KTM AG has its registered office in Mattighofen, Stallhofnerstrasse 3, Austria, and has been recorded in the commercial register at the
Provincial Court as Commercial Court of Ried im Innkreis under file number FN 107673 v.
KTM AG engages in the development, production and distribution of motorized vehicles for recreational purposes (power sports), in particular
under the KTM and Husqvarna brands, and holds stakes in entities engaging in the development, production and distribution of such equipment. As of December 31, 2015, the KTM group includes 39 subsidiaries, located in Austria, the United States, Japan, South Africa, Mexico,
and India and in various other countries of Europe and Asia, which are included within the consolidated financial statements. Furthermore,
the KTM group has equity holdings inter alia in general importers that are based in important distribution markets (New Zealand and Dubai)
as well as in various flagship stores in Austria and Germany.
Major sales markets include the USA, Germany, Australia, France, the UK, Italy, Spain, Austria, Canada, Malaysia and other European countries.
The company is part of the same group as Pierer Konzerngesellschaft mbH, Wels (ultimate group parent) and its affiliates, and is included
within that group parent’s consolidated financial statements. These consolidated financial statements shall be filed with the Provincial Court as
Commercial Court of Wels under file number FN 134766 k and are the consolidated financial statements for the largest scope of consolidation.
The consolidated financial statements for the smallest scope of consolidation are drawn up by CROSS Industries AG, Wels, and shall be filed
with the Provincial Court as Commercial Court of Wels under file number FN 261823 i.
II. PRINCIPLES OF FINANCIAL REPORTING
AND ACCOUNTING POLICIES
1. PRINCIPLES OF FINANCIAL REPORTING
The consolidated financial statements as of December 31, 2014 and December 31, 2015 were prepared in accordance with the International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in accordance with the interpretations
of the International Financial Reporting Interpretations Committee (IFRIC) insofar as they are applied in the European Union. The additional
requirements stipulated by sec. 245a para. 1 of the Austrian Commercial Code (UGB) were also met in this context.
The figures in the consolidated financial statements are reported in the functional currency of the group parent, the euro. Unless deviations
from the general rule are indicated specifically, all amounts are rounded to 1,000 euros (EURk), which may give rise to rounding differences.
NOTES / PRINCIPLES OF FINANCIAL REPORTING AND ACCOUNTING POLICIES
083
The group financial statements were approved by the Executive Board on February 16, 2016 (prior year: February 11, 2015) for review
by the Supervisory Board, for submission to the Annual General Meeting and for subsequent publication. Within the scope of the review,
it is required to perform, the Supervisory Board may require changes to be made to the consolidated financial statements.
The following amendments to existing IFRSs and new IFRSs and IFRICs have been passed by the IASB and adopted by the European
Commission. Their application consequently became mandatory as from January 1, 2015 or June 17, 2014:
p IFRIC 21 Levies
p Annual improvements (2011–2013 cycle)
The first-time adoption of the indicated IFRS did not cause any major changes compared to the prior year. The accounting and valuation
methods were not changed.
Future amendments to financial accounting principles
The IASB and the IFRIC have passed further standards and interpretations, application of which was not mandatory during the 2015 financial
year and/or which have not yet been adopted by the European Commission. These are the following standards and interpretations:
Standard / amendment
IASB date
of application
Endorsement
by EU
EU date
of application
Jan. 1, 2018
Jan. 1, 2018
Jan. 1, 2019
No
No
No
–
–
–
Jul. 1, 2014
Jul. 1, 2014
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
Yes
Yes
Yes
Yes
Yes
Yes
Feb. 1, 2015
Feb. 1, 2015
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
Yes
Yes
Jan. 1, 2016
Jan. 1, 2016
Jan. 1, 2016
No
–
Unspecified time
No
–
New standards and interpretations
IFRS 15: Revenue from Contracts with Customers
IFRS 9: Financial Instruments
IFRS 16: Leases
Amended standards and interpretations
IAS 19: Defined Benefit Plans: Employee Contributions
Annual Improvements to IFRS 2010–2012
IAS 1: Disclosure Initiative
IAS 27: Equity Method in Separate Financial Statements
IAS 16 and IAS 41: Bearer Plants
Annual Improvements to IFRS 2012–2014
IAS 16 and IAS 38: Clarification of Acceptable Methods
of Depreciation and Amortisation
IFRS 11: Accounting for Acquisitions of Interests in Joint Operations
IFRS 10, IFRS 12 and IAS 28: Investment Entities:
Applying the Consolidation Exception
IFRS 10 and IAS 28: Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture
The standards with material effects on the KTM group are explained briefly below.
p IFRS 15 defines when and at what amount revenues should be recognized. In addition, preparers of financial statements must provide
recipients of financial statements with more informative and more relevant details than before. The standard provides a single, principles-based,
five-stage model to be applied to all contracts with customers. First-time application will lead to adjustments in internal processes and
documentation, as well as to additional disclosures in the notes. However, no material effects on the net assets, financial position or earnings
performance of KTM AG are expected.
084
p IFRS 16 governs the accounting treatment of leases. IFRS 16 governs the recognition, measurement and disclosure in the financial
statements and notes of leases. The standard specifies a single accounting treatment for lessees. This model requires the lessee to record
all assets and liabilities under lease arrangements in the statement of financial position except where the lease is for a term of 12 months or
less or the asset is of low value (in which cases application is optional). Lessors must continue to discriminate between finance leases
and operating leases in their financial statements. The effects on the KTM group financial statements are being examined. It is expected that
the recognition of leases in the statement of financial position will lead to an increase in the carrying values of property, plant and equipment
and of financial liabilities.
p In June 2014 the IASB published IFRS 9 Financial Instruments, which amends the provisions governing the recognition and measurement
of financial assets, the impairment provisions, and the provisions on hedge accounting. The effects of IFRS 9 on KTM are still being investigated.
The new impairment provisions, recognition of expected loss, and the simplifications of hedge accounting particularly affect KTM. No major
changes are expected as regards classification and measurement of financial instruments.
p Other amended standards and interpretations are either irrelevant to the KTM group or have no material impact.
The financial reporting of the entities included within the consolidated financial statements is based on the uniform financial reporting provisions.
These provisions were applied by all the entities included. All subsidiaries prepare their financial statements as at the same date as the group
financial statements.
The financial statements of all major domestic and foreign entities included in the Company’s financial statements by full consolidation for which
an audit is required by national regulations or was performed voluntarily were audited by independent certified public accountants, and
unqualified audit opinions were issued on them.
2. SCOPE OF CONSOLIDATION
The scope of consolidation is based on application of IFRS 10 and 11. All material subsidiaries are fully consolidated in the consolidated
financial statements in addition to KTM AG. Subsidiaries are companies controlled by the group. The group controls a company if it is exposed
to fluctuating returns as a result of its commitment in the company or has rights to such returns and has the ability to influence these returns by
using its power of disposition over the company. The financial statements of subsidiaries are included in the consolidated financial statements
from the moment control begins and until the moment control ends.
A materiality threshold is set in the group to determine the scope of consolidation. Companies whose business is dormant or of low volume
and that are insignificant for the presentation of a true and fair view of the net assets, financial position and earnings performance are not
consolidated but are reported as other non-current assets and measured at amortized cost or written down for impairment. The total statement
of financial position assets, total net assets and total profit/loss of these companies comes to less than 1% of the consolidated total.
Accordingly, 39 companies were fully consolidated in the KTM group, in addition to the group parent. The entities included in the consolidated financial statements are specified in the schedule of equity holdings as of December 31, 2015 (see annex to the notes to the financial
statements).
An associate is a company on which the group has significant influence. Significant influence is the possibility of participating in the financial
and business decision-making processes of the company in which the participation is held. In this respect there is neither control nor joint
control of the decision-making processes. The results, assets, and liabilities of material associates are consolidated in these financial statements
using the equity method. Under the equity method, investments in associates are included in the consolidated statement of financial position
at cost, adjusted for changes in the group’s share of the profit or loss and other income of the associate after the acquisition date. Three
associates are measured under the equity method in the KTM group.
085
The reporting date for all companies included in the KTM AG group financial statements is December 31, 2015. Where an associate
accounted for using the equity method prepares its financial statements as at a different date, an interim set of financial statements is prepared
for consolidation purposes.
Changes in the scope of consolidation in 2015 were as follows:
Full consolidation
As at January 1
Additions
Disposals
As at December 31
In Austria
Abroad
At equity measurement
2015
2014
2015
2014
39
2
2
39
38
1
0
39
3
0
0
3
3
0
0
3
6
7
1
1
33
32
2
2
Husqvarna Motorsports, Inc., Murrieta, USA, and Husqvarna Motorcycles SA Pty Ltd, Northriding, South Africa, were established during
the first half of 2015 and have thus been included in the scope of consolidation for the first time.
KTM Events & Travel Services AG (in liquidation) was deconsolidated in 2015 and is thus no longer included in the consolidated financial
statements of KTM AG.
Due to the loss of control, a loss on deconsolidation of EUR 146k was recognized in the income statement under other operating expenses.
Control of cash totaling EUR 62k was also lost.
KTM AG received no remuneration in relation to the deconsolidation of KTM Events & Travel Services AG during 2015.
The table below shows the main groups of assets and liabilities disposed of:
EURk
Intercompany trade receivables
Intercompany trade payables
Equity
62
684
8
40
8
706
The number of fully consolidated entities also reduced by one company due to the transfer of the operating business of KTM Motorrad AG
to KTM AG and the subsequent merger of KTM Immobilien GmbH into KTM Motorrad AG. KTM Motorrad AG was subsequently transformed into
a GmbH and renamed KTM Immobilien GmbH.
086
An abridged representation of the KTM group structure looks as follows:
KTM AG
KTM Technologies
GmbH
KTM Immobilien
GmbH
KTM Sportmotorcycle GmbH
KTM Sportcar
GmbH
Sales
companies
Husqvarna
Motorcycles GmbH
Sales
companies
KTM AG is listed and forms the ultimate group parent of the KTM group. Following the transfer to KTM AG of the operating business of
KTM Motorrad AG during 2015, the corporate object of KTM AG now covers the development and production of motorcycles under the KTM and
Husqvarna brands and of the X-Bow supercar. All group head office functions such as procurement, quality management, logistics, motorsport,
finance and accounting and human resources are contained within KTM AG. It holds direct equity interests in the material group companies
located in Austria and controls most of the KTM group’s financing arrangements.
The sales companies KTM Sportmotorcycle GmbH and Husqvarna Motorcycles GmbH distribute the two brands’ motorcycles and spare parts
directly to European dealers and global importers. Markets in the United States, Mexico, South Africa, Japan and Greece are served via
local sales subsidiaries which carry their own inventories. The two companies in turn hold participations in a total of 22 domestic and foreign
marketing companies that provide marketing and related services in the local markets for KTM Sportmotorcycle GmbH and Husqvarna Motorcycles GmbH.
KTM Sportcar GmbH markets the X-Bow supercar.
KTM Technologies GmbH provides services in vehicle and product development along with consultancy, particularly in lightweight construction
and fiber composites for group companies and third parties.
The KTM group’s land and buildings are bundled in KTM Immobilien GmbH.
3. CONSOLIDATION METHODS
Equity consolidation: New acquisitions are consolidated for the first time using the acquisition method in accordance with IFRS 3. This means
that at the acquisition date, i.e. the date when the power to exercise control is obtained, the remeasured identifiable assets and liabilities of
the acquired business entity are contrasted to the consideration paid and, if applicable, to the amount reported for the non-controlling interests
and the fair value of the interests already held at the acquisition date. Any positive balance is capitalized as goodwill; any negative balance
is recognized as an income item, “Gain on a bargain purchase”, in the consolidated income statement after reassessing the values reported.
Any acquisition-related costs are recognized as an expense.
Transactions with owners of non-controlling interests that do not result in a loss of control are recognized directly, and exclusively, in equity
without any restatements of the assets and liabilities of the company or its goodwill.
0 87
With the equity method, the interests in associates are recognized in the consolidated statement of financial position at their cost of acquisition
plus any changes in the group’s portion of the net assets of the associate after the acquisition. The goodwill related to an entity measured by
the equity method is comprised in the carrying amount of the investment and is not amortized separately.
All receivables and liabilities, expenses and income resulting from the settlement of accounts among the included entities, as well as all intra
group results from intragroup sales of inventories were eliminated. During the financial year just ended, no material results arose from intragroup
sales of property, plant and equipment or intangible assets.
Deferred taxes from consolidation are recognized in the consolidation procedures that impact profit or loss.
Currency translation: In the separate financial statements of the consolidated entities, any transactions made in foreign currency are posted
at the exchange rate valid on the transaction date. On the statement of financial position date, foreign currency items are translated at the
closing rate at the end of the respective reporting period. Any and all differences in rates are recognized in the separate financial statements
as expenses or income in the period in which they arise.
The group currency is the euro. The subsidiaries located outside the euro zone are regarded as entities that are economically independent.
In line with the concept of the functional currency, the assets and liabilities shown in the separate financial statements of these entities,
including any goodwill reported and any value adjustments resulting from initial consolidation, were translated using the mean rate of exchange
valid on the statement of financial position date, and the items of the consolidated income statement were translated using the weighted
average rate of exchange of the financial year. Any foreign exchange gains or losses resulting from such currency translation are recognized
in other comprehensive income. Foreign exchange differences arising on non-current financial receivables that represent net investments in
foreign operations are recognized in other comprehensive income.
The exchange rates used for translating the currencies of material effect for the consolidated financial statements saw the following development:
Year-end rate
CHF
JPY
USD
ZAR
MXN
Weighted
average rate
Dec. 31, 2015
Dec. 31, 2014
2015
2014
1.0835
131.0700
1.0887
16.9530
18.9145
1.2024
145.2300
1.2141
14.0353
17.8679
1.0646
133.6310
1.1046
14.2805
17.6706
1.2127
140.5025
1.3211
14.3406
17.6453
4. ACCOUNTING POLICIES
The financial reporting of the entities included within the consolidated financial statements is based on uniform accounting policies. These
policies are identical to those of the financial year 2014, except for the standards applied for the first time.
The consolidated statement of financial position is divided between non-current and current assets. The consolidated income statement
is subdivided according to the cost of sales method. The consolidated statement of cash flows is drawn up according to the indirect method.
As a matter of principle, any and all current assets and liabilities are realized or discharged within a period of twelve months after the statement
of financial position date or within an operating cycle, as the case may be. All other assets and liabilities are realized or discharged outside this
period of time as a matter of principle.
088
To increase the utility of the consolidated financial statements, some individual items and presentations have been reclassified as of
December 31, 2015. Additionally, the notes have been partly reordered and disclosures in the notes have been adapted and/or enhanced.
p In the consolidated income statement, amortization of capitalized development costs are disclosed from 2015 onwards under cost
of sales, rather than under research and development expenses as previously. The prior year figures have been restated accordingly, leading
to an increase of EUR 20,380k in cost of sales and a corresponding reduction in research and development expenses.
p Certain items in the group statement of financial position have been condensed in order to improve clarity and informativeness. Goodwill
is disclosed under intangible assets. Details are provided in note 14, Intangible Assets.
p The title of the “Deferred tax” item disclosed under non-current assets has been changed to “Deferred tax assets”.
p The definition of operating lease expenses is standardized group-wide. This item now also includes long-term rents for land and buildings
on third party land. Prior year disclosures under note 29, Leases have been restated accordingly.
Consolidated income statement
Revenues, minus cash discounts, customer bonuses, and rebates, are recognized after the passing of the risk or, as the case may be, after
the time when performance was rendered. The regulations of IAS 11 concerning make-to-order production (percentage-of-completion method)
are not applicable due to the nature of the products made.
Other operating income is realized when economic benefit is likely to arise from the underlying contract and a reliable determination of
the income has been made.
Interest income is realized pro rata temporis taking into account the effective yield, and dividend income is recognized when the right
to dividend payment arises.
Consolidated statement of financial position
Property, plant and equipment are recognized at acquisition or production costs less depreciation. Depreciation is determined by the straightline method and is based on the following expected useful lives:
Useful life
Buildings
Machinery/tools
Office furniture and equipment
10 to 50 years
2 to 10 years
3 to 8 years
The costs of self-constructed property, plant and equipment comprise direct costs including an allocation of production overheads (indirect
materials and indirect labor). Financing costs resulting from the direct attribution of borrowings and/or from the application of an average interest
rate to the expenses incurred, are not capitalized due to the absence of qualifying assets as defined in IAS 23.
089
If property, plant, and equipment are financed by leasing contracts in which the material opportunities and risks devolve to the lessee, they
are recognized as finance leasing. They are recognized at the lower of the fair value or present value of the minimum lease payments to
be expected in the future. They are reported under property, plant, and equipment; the corresponding payment obligations are reported under
financial liabilities. Depreciation takes place on a straight-line basis over the economic useful life or, if shorter, over the term of the leasing
contract. Lease payments are divided into interest and redemption components. The interest component of lease payments is recognized
directly in the consolidated income statement.
The KTM group determines whether a property is regarded as an investment property for the purposes of IAS 40 on the basis of the following
criteria. In accordance with IAS 40.5, an investment property is a property which KTM owns or leases under a finance lease to earn rental
income or to achieve capital appreciation or both. This definition excludes properties that are held for use in the production or supply of goods
or services or for administrative purposes and properties that are held for sale in the ordinary course of the entity’s business or are in the
process of construction or development for such sale.
Goodwill is not amortized but subjected to an annual impairment test. The two brands “KTM” and “Husqvarna” are seen as cash-generating
units at KTM. The corporate assets of the cash-generating unit are compared with the value in use. Where the latter is lower, an impairment
charge is made accordingly, unless the fair value (net of costs to sell) is higher. The value in use is calculated using the discounted cash flow
method assuming a pre-tax WACC of 10.08% (prior year: 10.47%).
The cash flows used in the impairment test are based on the most recent medium-term planning figures approved by the Supervisory Board.
Medium-term planning usually entails a planning horizon of five years. Beyond the detailed planning horizon, cash flows for the fifth financial
period planned in detail are used as the basis for calculating a perpetuity value. The assumption is made that the business will be a going
concern and no growth discount is applied. Medium-term planning is based on internal assumptions concerning future development of sales,
prices, and costs, the future opening up of new markets, and the composition of the product mix. The assumptions are based mainly on
the wealth of experience gained over many years and management assessments.
The utility values calculated are checked for plausibility using the multiples method and scenarios are computed regarding the discount rate
and budgeted future EBITs. Management has determined, as in the prior year, that no plausible change in the material assumptions could cause
the carrying value to exceed the recoverable amount.
Intangible assets, if acquired for valuable consideration, are capitalized at cost and are measured less amortization.
Unless stated separately, the amortization period for software and licenses is three to five years.
For intangible assets generated internally, the production period is subdivided into research, development and model update phases. The costs
incurred during the research and model update phases are immediately recognized in profit or loss. Expenditures incurred during the development phase are capitalized as intangible assets if the developed product or process meets certain requirements confirming the future benefit of
such expenditure, i.e. primarily if technical feasibility and marketability have been achieved. Intangible assets generated internally are measured
at cost less amortization and write-downs. Amortization is effected using the straight-line method and is based on a useful life of five years.
Capitalized development costs that can be clearly attributed to specific products or procedures are amortized from the commencement of series
production.
090
Intangible assets of indeterminate useful life, such as the “KTM” brand (recognized at a value of EUR 61,103k in the course of the initial
purchase price allocation), are not amortized but are instead subjected to an annual impairment test. Any necessary impairment is accounted
for in profit and loss. The Executive Board assumes an indeterminate useful life for the “KTM” brand because the rights are not subject to
any restrictions as to time, in law or by contract in the relevant markets and because the sustained public awareness of the brand indicates that
there has been no loss of economic value. The KTM brand is attributed to the KTM cash-generating unit.
Brand measurement is based on fair value less disposal costs and measurement takes place on the basis of the relief from royalty method.
The royalty rate in the amount of 1.5% of the revenues, which forms the basis for measurement, was derived from comparable publicly available license agreements. The impairment test as at December 31, 2015 was performed analogously to the goodwill impairment test on
the basis of the current five-year planning figures. An asset-specific cost of capital of 12.1% (prior year: 14.0%) was taken as the discounting
rate. This was made up of the group pre-tax WACC of 9.1% (prior year: 11.0%) plus a risk premium for the brand of 3.0% (prior year: 3.0%).
The risk premium was derived on the basis of the WACC-to-WARA concept.
The value-determining parameters that are material when measuring the “KTM” brand are the discount rate, the royalty and the budgeted
revenues. Sensitivity analysis for these parameters indicates, as in the prior year, that no plausible change in the material assumptions could
cause the carrying value to exceed the recoverable amount.
Deferred taxes items are included to account for future tax effects expected to result from business transactions that have already been
recorded either in the consolidated financial statements or in the tax accounts of the KTM group (temporary differences). Deferred taxes relating
to tax loss carry forwards are calculated taking into account their timely realizability. Deferred tax assets and deferred tax liabilities are reported
on a net basis if they are subject to the same tax jurisdiction and have similar terms. Deferred taxes items for the differences between the
tax base of fully consolidated interests or interests measured at equity and the corresponding consolidated equity are created only if realization
in the foreseeable future is probable. The calculation is based on the income tax rate customary in the respective country at the time when the
difference in value is expected to be reversed.
Purchases and sales of any and all financial instruments are recognized as of the respective settlement date.
Primary financial instruments
Securities (held for trading) are measured at their fair value as at the reporting date. Generally, the stock-exchange prices as at the reporting
date are taken as fair values. Changes in measurement are recognized in profit and loss.
Other financial assets (financial assets available for sale) are measured at their fair value on the statement of financial position date. As a
matter of principle, the stock-exchange prices valid as of the statement of financial position date are recognized as the fair value; changes in the
measurement are recognized in other comprehensive income, provided such changes are material. Other non-current financial assets include
equity instruments that are not quoted in an active market and whose fair value cannot be reliably measured. These are accounted for at cost
less impairment. There is currently no plan to dispose of these participations.
Impairment losses are recognized for financial assets if there is objective evidence. Such objective evidence includes, for instance, financial
difficulties, insolvency, breach of contract or considerable delay in payment by the obligor or issuer. In the case of an investment in an equity
instrument, a significant or prolonged decline in the fair value below its cost is objective evidence of impairment. The group regards a decline
by 20% as significant and a period of nine months as prolonged.
0 91
Cash and cash equivalents include cash on hand and in banks, checks and time deposits with a fixed term of not more than three months
(calculated from date of acquisition) and are measured at the fair value they have as of the statement of financial position date.
Receivables and other assets upon initial recognition are measured at fair value and in subsequent periods are measured at amortized cost.
Foreign currency receivables are recognized in the amount translated at the closing rate at the end of the respective reporting period,
less necessary impairment losses to be recorded on account of identifiable risks. Financial receivables are classified as “Loans and receivables”
and measured at amortized cost.
Individual value adjustments of financial assets will only be made if they are regarded as uncollectable or partly uncollectable. Individual value
adjustments are deemed indicated in the case of financial difficulties, insolvency, breach of contract or considerable delay in payment on
the part of the customer. The individual value adjustments consist of numerous separate items none of which is material if considered on its
own. Financial assets will only be derecognized directly if the contractual rights to receive payments on the financial assets no longer exist (in
particular in the case of insolvency). If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed either directly
or by adjusting the allowance account.
Financial liabilities are measured at amortized cost. Financial liabilities are classified as “Other financial liabilities”. Any difference between the
amount received and the repayment amount is distributed over the time to maturity by means of the effective interest method and recognized
in the financial result. The issuing costs incurred in connection with bonds are recognized as an expense over the time to maturity.
Liabilities are measured at amortized cost. Liabilities denominated in foreign currencies are translated at the exchange rate ruling on the
reporting date.
Derivative financial instruments and hedges
The group enters into derivative financial instruments (foreign currency forwards and interest rate swaps) to hedge the foreign currency and
interest rate risk. The objective behind the use of derivative financial instruments is offsetting the diversity of cash flows from future transactions.
Expected revenues in foreign currencies serve as the basis for planning future cash flows.
In accordance with IAS 39, derivatives are generally measured at market values. The KTM group applies the rules for cash flow hedge accounting defined by IAS 39 to these derivative financial instruments. Fair value hedge accounting is not applied within the KTM group.
A cash flow hedge is present if variable cash flows from recognized assets and/or liabilities or forecast transactions that are subject to a market
price risk are being hedged. If the requirements for a cash flow hedge are met, the effective portion of the change in the market value of hedging
instruments has to be recognized directly in the consolidated equity, but is not recognized in profit or loss before the transaction constituting
the hedged item has occurred. Where foreign currency hedging instruments are used, subsequent changes in the market value of the derivatives
are recognized in profit and loss. From that date, the change in the market value can be compared to the end-of-period closing rate of the
foreign currency trade payables or foreign currency trade receivables. Any changes in earnings that may be caused by the ineffectiveness of the
derivative financial instruments are recognized in profit or loss in the consolidated income statement.
The application of hedge accounting requires certain conditions to be met. For one thing, documentation of the hedging relationship must
be available and, for another, the effectiveness of the hedge, to be determined by periodical measurements, must lie between 80% and 125%.
By testing the effectiveness of the hedge, the effective offsetting of unrealized losses and unrealized gains is documented.
092
To measure the effectiveness of a currency hedge, the hedged items and the hedging transactions are grouped together in so-called maturity
bands according to the hedged risk. The maturity bands should not cover more than one quarter-year. The hedging relationship is tested
prospectively by comparing the material conditions (maturity, etc.) of the hedged item and the hedging transaction. Hedge effectiveness is
measured retrospectively using the dollar offset approach. This involves comparing and assessing the changes in the fair value of the hedged
item and the changes in the fair value of the hedging transaction.
In the case of interest rate hedges, prospective effectiveness is measured using a sensitivity analysis, and retrospective effectiveness testing
is performed using the dollar offset approach.
Hedging transactions that do not meet the criteria for hedging instruments within the meaning of IAS 39 qualify as trading transactions and
are classified as “at fair value through profit or loss” (held for trading). Changes in the market value are recognized in their full amount in profit
or loss in the current period and shown in the financial result.
Derivatives are measured at fair value. The fair value is the market value and is determined using accepted methods of financial mathematics.
This is based on market data available as at the reporting date (interest rates, exchange rates etc.). Forward currency contracts are measured
using the closing rate on the reporting date. In the case of positive market values, the credit rating of the counterparty is included in the
measurement by means of a credit value adjustment (CVA). In the case of negative market values, a debit value adjustment (DVA) is deducted
in order to account for the own risk of default. Special models are used to estimate the measurement. They are checked for plausibility by
means of bank valuations.
Inventories are measured at the lower of cost or net realizable value on the reporting date. Net realizable value is the estimated proceeds less
estimated selling costs. Inventories are measured using the average cost method based on an examination of expected turnover, with allowances
being made for limited usability. The economic value of existing inventories is also reviewed on a case-by-case basis and additional allowances
are made as required for slow-moving items or items with limited possibilities of sale.
Costs of acquisition include all costs that were incurred in order to bring the object to its required condition and to the relevant location.
Costs of conversion comprise direct material and production costs based on normal capacity usage, plus appropriate portions of materials and
production overheads. Administrative overheads and selling costs on the other hand do not form part of the costs of production. Interest on
borrowings is not capitalized as the inventories do not constitute qualifying assets according to IAS 23.
The obligations relating to social capital consist of obligations relating to severance pay and anniversary bonuses. KTM AG is obligated by
law to make severance pay upon termination by the employer or upon retirement to all employees in Austria whose employment relationship
commenced before January 1, 2003. This defined benefit obligation depends on the number of years of service and on the employee’s
relevant remuneration at the time of the event giving rise to the severance pay, and it amounts to between two and twelve monthly remuneration payments. For all employees in Austria who joined after December 31, 2002, KTM AG pays a monthly 1.53% of their remuneration
into a staff severance pay fund that invests the contributions on an account maintained for the employee; at the end of the employment
relationship, the amount thus accumulated is paid out or the claim thereto is passed on. KTM AG is only obligated to pay contributions which
are recognized as expenses in the financial year for which they were paid (defined-contribution obligation).
Defined benefit obligations in respect of severance pay and anniversary bonuses are measured according to the projected unit credit method
prescribed by IAS 19 (employee benefits), based on actuarial reports. Within the scope of this benefit/years of service method, both the
conditional benefits known as of the statement of financial position date and the increases in salaries to be expected in the future are taken into
account. This method is used to determine the present value of the defined benefit obligation (DBO), which is compared where required to the
fair value of the plan assets as at the reporting date.
0 93
KTM AG is obligated under collective-bargaining agreements to pay its employees in Austria anniversary bonuses upon attaining a certain
number of years of service (from 25 years of service upwards) (defined benefit obligation). In accordance with IAS 19, the actuarial result
continues to be recognized directly in the consolidated income statement. The interest result is recognized under “Other financial result”.
Any differences (actuarial gains or losses) resulting at year-end between the projected severance payment obligations and the actual value of
the benefits are taken directly to other comprehensive income, net of any deferred taxation.
Provisions are made if a liability is owed to third parties as a result of a past event, a claim is likely to be asserted, and a reliable estimate
of the amount expected to become payable is possible.
Provisions relating to warranties are made in profit or loss at the time when the products are sold.
Government grants are taken into account as soon as there is assurance that they will be received by the KTM group and that the group can
comply with the requirements that are imposed. As a matter of principle, subsidies are accounted for in the consolidated income statement on
the basis of a direct connection with the corresponding costs that are to be compensated by means of the subsidies.
Investment grants from public funds which cannot yet be allocated to expenses incurred and/or which must be repaid are stated in the
consolidated financial statements under non-current liabilities.
During 2015, KTM AG entered into a revolving facility for the financing of trade payables (supplier finance program) with an Austrian bank.
Under this program, the bank offers suppliers the option to have accounts receivable from KTM AG discounted at the bank and paid out in
advance of the due date. As the financing costs are based on the good credit rating of the KTM group, the program offers participating suppliers
a low-cost way to obtain early settlement of their KTM AG receivables and thus optimize their working capital. KTM AG settles the liability on
the due date by paying the invoiced amount to the bank.
The program has been reviewed for compliance with civil law and with the stipulations of IAS 39. KTM AG remains legally bound by the original
obligation, as from its point of view only the identity of the creditor changes while the content of the obligation remains unaltered. Furthermore,
the program does not cause any new (additional) obligation to arise on the part of KTM AG to the bank. As the program leads to no substantial
quantitative or qualitative changes in the contractual terms (as per the criteria set out in IAS 39.40 and IAS 39 AG 62), the payables concerned
(EUR 34,338k; prior year: EUR 0k) are disclosed under trade payables and the cash flows under cash flow from operating activities.
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or
nonoccurrence of one or more uncertain future events not wholly within the control of the entity. Furthermore, a contingent liability is a present
obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.
Estimates and uncertainties in judgments and assumptions
In the consolidated financial statements, certain estimates and assumptions have to be made that affect the recognized assets and liabilities,
the disclosure of contingent liabilities as of the statement of financial position date and the presentation of income and expenses for the
financial year. Estimates and assumptions are based on empirical values that the Executive Board deems appropriate. The amounts actually
arising may differ from the estimates if assumed parameters develop contrary to expectations. If new conditions become known, they are
duly taken into account and previous assumptions are revised accordingly.
094
p Assumptions are made in particular to assess the recoverability of goodwill and intangible assets of indeterminate useful life. Goodwill
of EUR 78,566k (prior year: EUR 78,723k) was recognized at the reporting date, along with the KTM brand, which is valued at EUR 61,103k
(prior year: EUR 61,103k) Annual checks by means of impairment testing as well as the sensitivity analysis are described in the chapter on
accounting policies.
p Deferred tax assets on tax loss carry forwards not subject to expiration are recognized based on the assumption that sufficient taxable income
will be generated in the future to be able to use the tax loss carry forwards. In the case of uncertainties in the assumptions, corresponding value
adjustments are recorded. Only tax loss carry forwards arising in Austria are recognized in the KTM group. As of December 31, 2015, deferred
tax assets of EUR 0k (prior year: EUR 10,648k) were recognized in relation to loss carry forwards.
p In cash flow hedge accounting, assessments are made regarding the occurrence of future cash flows. The planning of future cash flows is
derived from sales planning and order volume planning, is checked for achievement of objectives on a monthly basis and checked for plausibility
using past experience. In line with the internal guideline on currency hedges, foreign currency hedges are generally entered into on a rolling
basis and cover a period of up to twelve months. The hedge ratio of the individual currencies is determined based on the planning uncertainty
in the respective market, on the volatility of the currency and on hedging costs. Based on the importance of the individual currencies (volume,
relevance for the result), they are aggregated by type, and different methods are applied accordingly. But the hedge ratio per currency must not
exceed 80% of the foreign currency exposure. Details of sensitivities in relation to currency and interest rate risks are provided in note 28.2,
Financial Risk Management.
p Furthermore, estimation uncertainty exists with the recognition and measurement of obligations relating to social capital. Assumptions
are made concerning the following factors: empirical values and demographic assumptions such as the retirement age of women/men
and employee fluctuation as well as financial assumptions such as the discount rate and future wage and salary trends. Liabilities for severance
pay entitlements of EUR 12,627k (prior year: EUR 11,645k) were disclosed as at the reporting date. For further details, refer to note 24,
Employee Benefits.
p Regarding provisions, estimates have been made in order to assess probabilities and determine the expected amount for measuring the
obligation. These assumptions essentially concern provisions relating to guarantees and warranties. Based on past experience, a direct connection was established, per product group, between the guarantee and warranty expenses incurred and the revenues. The Executive Board,
on the basis of longstanding experience, expects this relationship to remain stable. The average percentage of guarantee and warranty expenses
in the revenues is checked several times a year and adjusted if necessary. The amount recognized as a provision is therefore derived
as an average percentage, determined over a three-year observation period, of the guarantee and warranty expenses in the revenues. As at
December 31, 2015 provisions for guarantees and warranties of EUR 8,088k (prior year: EUR 6,360k) were recorded. An average increase in
the guarantee cost percentage of 10% would lead to an increase in the provision of EUR 685k (prior year: EUR 636k). Details of movements
in the guarantee and warranty provisions are provided in note 25, Provisions.
The following judgments were made in respect of the application of accounting policies in the KTM group.
p Inclusion of group companies in the scope of consolidation: Evaluation of whether a controlling influence exists within the meaning of
IFRS 10. Further details are provided under note 16, Other Non-current Assets.
p Finance leases: Evaluations were made with respect to the criteria for classification as a finance lease. Further details are provided under
note 13, Property, Plant and Equipment and note 29, Leases.
0 95
p Derecognition of receivables in connection with ABS agreements: Evaluations were made with respect to the conditions for derecognition
under IAS 39. Further details are provided under note 28, Financial Instruments.
p Investment Property: Evaluating the finance lease relationship recognized under Buildings, as described in note 29, Leases, required
assumptions to be made regarding whether the property in question was an investment property as per IAS 40.
The logistics center is predominantly used by the KTM group itself. A small portion is rented to third parties outside the group. These subleases
to non-group lessees concern companies which have long-term relationships with the KTM group for the supply of goods or services, and
represent an outsourced part of the KTM value chain. As the subleasing does not serve the purpose of earning rental income, but is instead
carried out in the interests of the operating business, the section that is rented to non-group third parties is disclosed under property, plant and
equipment and is not regarded as investment property.
p Supplier finance: Assessments were made regarding the disclosure of liabilities in relation to the supplier finance program. Further details
are provided under note 4, Accounting Policies.
III. NOTES TO THE CONSOLIDATED INCOME STATEMENT
5. REVENUE
Revenue by region
EURk
Austria
Other Europe
North America
Other countries
2015
2014
43,986
468,174
301,767
208,560
39,358
422,449
201,522
201,307
1,022,487
864,636
2015
2014
425,359
390,616
37,951
3,214
857,141
347,359
329,263
34,463
2,665
713,750
165,346
1,022,487
150,886
864,636
Revenue by product group
EURk
Sportminicycles
X-Bows
Total – vehicles
Parts, garments and accessories as well as other revenues
less revenue reductions
096
6. PRESENTATION OF EXPENSES BY FUNCTION
The expense items shown in the consolidated income statement according to the cost of sales method can be classified by their function
as follows:
Cost of sales
EURk
Cost of materials and cost of purchased services
Personnel expenses
Depreciation and amortization relating to property, plant and equipment
and to intangible assets
Amortization of capitalized development costs
2015
2014
640,895
42,415
540,198
35,342
12,925
24,514
(273)
720,477
9,412
20,380
8,960
614,292
Cost of sales includes income from foreign currency translation differences of EUR 13,968k (prior year: EUR 8,347k), measured at fair value
through profit and loss. These exclude differences arising on the measurement of financial instruments.
Selling and racing expenses
EURk
Personnel expenses
Sponsorship income and contributions
2015
2014
12,059
48,029
16,912
40,341
3,432
76,351
(7,527)
132,345
2,513
60,809
(6,330)
114,245
2015
2014
4,884
10,394
2,885
6,558
1,401
6,693
(6,987)
16,385
1,380
5,289
(5,067)
11,044
Research and development expenses
EURk
Personnel expenses
Subsidies
Expenses disclosed under research and development expenses comprise research costs and non-capitalizable development costs.
Personnel expenses before the effects of capitalizing development costs were EUR 30,064k (prior year: EUR 24,714k).
As of 2015, amortization charged to capitalized development costs is disclosed under cost of sales. The prior year figures have been restated
accordingly, leading to an increase of EUR 20,380k in cost of sales and a corresponding reduction in research and development expenses.
NOTES / NOTES TO THE CONSOLIDATED INCOME STATEMENT
0 97
Infrastructure and administration expenses
EURk
Personnel expenses
Rental and leasing expenses
Insurance expenses
2015
2014
282
14,539
309
12,076
3,747
5,459
2,087
10,634
36,747
3,112
6,169
2,037
8,923
32,626
Sponsorship income and contributions are deducted from the corresponding expenses, as are subsidies.
Total personnel expenses for 2015 before the effects of capitalizing development costs were EUR 119,162k (prior year: EUR 97,431k).
Expenses for the auditor of the financial statements
The expenses attributable to the financial year 2015 for the auditor of the financial statements, KPMG Austria GmbH Wirtschaftsprüfungsund Steuerberatungsgesellschaft, amount to EUR 200k (prior year: EUR 197k). Expenses in relation to other assurance services were EUR 14k
(prior year: EUR 13k). Expenses in relation to miscellaneous audit-related advisory services were EUR 24k (prior year: EUR 91k).
Employees
Employees (annual average)
Manual workers
Clerical staff
Employees as at December 31
Manual workers
Clerical staff
In Austria
Abroad
Employee numbers as stated include contract workers and external staff.
098
2015
2014
1,009
1,371
2,380
863
1,193
2,056
1,062
1,453
2,515
866
1,277
2,143
2,100
1,761
415
382
7. OTHER OPERATING EXPENSES
Other operating expenses of EUR 21,637 (prior year: EUR 17,353k) comprise customer service, guarantee and warranty expenses of
EUR 21,491k (prior year: EUR 17,351k) and miscellaneous expenses of EUR 146k (prior year: EUR 2k). Miscellaneous expenses in 2015
include the loss arising on the deconsolidation of one subsidiary.
8.OTHER OPERATING INCOME
Other operating income of EUR 210k (prior year: EUR 302k) includes income from the sale of fixed assets of EUR 185k (prior year: EUR 182k)
and miscellaneous other operating income of EUR 25k (prior year: EUR 120k).
9. OTHER FINANCIAL RESULT
The item other financial result consists of the following elements:
EURk
Foreign exchange valuation of bank deposits
Valuation of securities
Impairment of non-current financial assets
Interest expenses for employee benefits
Income from other investments
2015
2014
(1,617)
157
(710)
(258)
64
(2,363)
3,107
0
(981)
(328)
35
1,833
2015
2014
102
31
133
574
54
628
10. SHARE OF THE PROFIT OF ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
EURk
Kiska GmbH, Anif, Austria
KTM New Zealand Ltd., Auckland, New Zealand
099
11. TAX EXPENSE
The group’s tax expense and tax income are attributable to current taxes and deferred taxes as follows:
EURk
Current taxes
Austria
Abroad
Deferred taxes
Austria
Abroad
Consolidation level
2015
2014
3,416
3,220
6,636
3,314
2,905
6,219
16,534
340
(2,013)
14,861
21,497
9,828
(122)
(2,451)
7,255
13,474
Income taxes comprise taxes on income payable in each country as well as deferred taxes. The Austrian companies of the KTM group are
taxed at a corporate income tax rate of 25%. The calculation of foreign taxes is based on the laws and regulations that are in force or have been
adopted in the individual countries. The tax rates applicable to foreign entities vary from 8.7% to 38.0%.
The expected tax expense (derived from applying the group tax rate of 25% to the profit before tax of EUR 85,421k (prior year: EUR 70,636k))
and the actual tax expense disclosed are reconciled as follows:
EURk
Expected tax expense
Effects of foreign tax rates
Non-temporary differences
Investment allowances
Utilization of loss carry forwards
Change in valuation allowances against losses carried forward
Withholding tax
Taxes in relation to prior periods
Equity accounting
Other
10 0
2015
2014
(21,359)
(714)
(1,328)
1,467
(208)
0
222
281
17
125
(21,497)
(17,659)
(578)
(951)
1,155
14
4,153
72
74
125
122
(13,474)
The following loss carry forwards within the KTM group have been recognized as assets:
EURk
Dec. 31, 2015
KTM AG, Mattighofen, Austria
Dec. 31, 2014
Loss carried
forward
Deferred
tax assets
Loss carried
forward
Deferred
tax assets
0
0
42,593
10,648
Loss carry forwards recognized as assets relate exclusively to taxes payable to the Austrian tax authorities at the level of the group parent,
KTM AG. Under current Austrian law, they may be carried forward indefinitely. Under Austrian corporation tax law, the annual offset is limited
to 75% of taxable income.
All remaining loss carry forwards were utilized during the year.
Total deferred tax assets and liabilities were calculated from the following statement of financial position items:
EURk
Deferred tax assets
Receivables and other current assets
Inventories
Financial assets
Losses carried forward
Employee benefits
Provisions
Liabilities
Deferred tax liabilities
Receivables and other current assets
Intangible assets
Property, plant and equipment
Other
Of which deferred tax assets
Of which deferred tax liabilities
Dec. 31, 2015
Dec. 31, 2014
0
6,676
446
0
2,221
2,044
1,454
12,841
732
4,721
367
10,648
3,365
1,609
671
22,113
(1,134)
(43,614)
(2,140)
(100)
(46,988)
(34,147)
0
(38,332)
(1,682)
(111)
(40,125)
(18,012)
3,595
2,480
(37,742)
(20,492)
Deferred tax assets include amounts for remaining sevenths of write-downs of participations to going concern value pursuant to
sec. 12 para. 3 no. 2 of the Austrian Corporate Tax Act (KStG) in the item financial assets, in the amount of EUR 1,787k (prior year: EUR 1,468).
During the year under review, sevenths of EUR 391k (prior year: 427k) arising from partial write-downs were released. Deferred tax assets were
recognized for all remaining sevenths in accordance with sec. 12 of the KStG, as the requirements set out in IAS 12.34 ff. were met.
The temporary differences in the item “Intangible assets” result mainly from development costs (which are not capitalizable for tax purposes)
and the quasi-permanent differences resulting from the recognition as an asset of the “KTM” brand.
101
As at December 31, 2015 (as at the previous year end), it was to be assumed either that under current tax regulations the differences
between the value for tax purposes of equity interests in consolidated subsidiaries and the proportion of equity recognized in the consolidated
IFRS financial statements (outside-basis differences), which arise largely from retained profits/uncovered losses, will remain untaxed in the
foreseeable future, or that their reversal can be controlled by the group.
It was also to be assumed either that the differences between the value for tax purposes of equity interests in holdings accounted for using
the equity method and the carrying value of those holdings (outside-basis differences) will remain untaxed in the foreseeable future, or that
their reversal can be controlled by the group.
In accordance with IAS 12.39, no deferred tax was recognized in connection with the temporary differences of EUR 34,556k (prior year:
EUR 119,095k) arising in connection with holdings in subsidiaries and financial investments accounted for using the equity method.
Movements in deferred taxes are as follows:
EURk
Deferred tax (net) as at January 1
Deferred taxes recognized in the income statement
Deferred taxes recognized in other comprehensive income
Foreign currency translation
Reclassification
Deferred tax (net) as at December 31
2015
2014
(18,012)
(14,861)
(1,471)
197
0
(34,147)
(16,698)
(7,255)
951
240
4,750
(18,012)
In 2014, a provision for tax audit risks of EUR 4,750k was reclassified as a tax liability. This provision was utilized in full during 2014 and 2015.
12. EARNINGS PER SHARE
In accordance with IAS 33, earnings per share were calculated based on the consolidated profit after taxes attributable to the owners of the
group parent and the annual average figure of shares of stock outstanding. As of December 31, 2014 and December 31, 2015, the number of
shares outstanding was 10,845,000. The undiluted (= diluted) earnings per share are calculated as follows:
Owners’ share in profits of the parent company
Annual average shares outstanding
Undiluted (= diluted) earnings per share
10 2
EURk
unit
EUR
2015
2014
63,856
10,845,000
5.89
57,037
10,845,000
5.26
IV. NOTES TO THE CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
13. PROPERTY, PLANT AND EQUIPMENT
The tables below provide a breakdown of property, plant and equipment along with movements during the 2015 and 2014 financial years:
EURk
Land
Buildings
Machinery
Fixtures
and fittings
tools and
equipment
Advance payments made
and assets
under
construction
Total
COST OF ACQUISITION
AND PRODUCTION
Additions
Transfers
Disposals
10,484
4
0
0
13
10,501
67,709
7,581
805
(281)
812
76,626
12,388
1,742
57
(1,247)
5
12,945
152,971
11,461
6,792
(3,362)
888
168,750
7,274
21,892
(9,504)
(328)
11
19,343
250,827
42,680
(1,851)
(5,217)
1,728
288,165
Additions
Transfers
Disposals
10,501
543
(23)
(332)
12
10,700
76,626
18,089
12,421
(78)
817
107,874
12,945
10,650
117,343
(9,471)
7
131,475
168,750
10,183
(106,832)
(16,779)
991
56,313
19,343
18,228
(22,909)
(173)
25
14,514
288,165
57,692
0
(26,834)
1,853
320,876
19
0
0
0
2
21
19,975
2,307
0
(142)
230
22,371
11,266
987
0
(1,247)
4
11,010
120,418
12,625
0
(3,150)
732
130,625
0
0
0
0
0
0
151,678
15,920
0
(4,539)
968
164,027
21
0
(21)
0
0
0
22,371
3,006
21
(30)
247
25,615
11,010
11,430
83,203
(9,452)
6
96,197
130,625
6,175
(83,203)
(16,529)
756
37,825
0
0
0
0
0
0
164,027
20,611
0
(26,010)
1,009
159,637
10,480
54,255
1,935
38,125
19,343
124,138
10,700
82,259
35,278
18,488
14,514
161,239
ACCUMULATED DEPRECIATION
Additions
Transfers
Disposals
Additions
Transfers
Disposals
Carrying amounts
as at December 31, 2014
Carrying amounts
as at December 31, 2015
During 2015, certain assets were reclassified between machinery and fixtures & fittings. Machinery used for production purposes is now
disclosed under machinery in line with uniform group rules.
NOTES / NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
10 3
Additions to buildings include assets of EUR 14,588k held under finance leases which had no cash flow effect in 2015. For more details, please
refer to note 29, Leases. Additions to property, plant and equipment also include investments of EUR 7,657k (prior year: EUR 5,370k) which
had not yet had any cash flow effect as of the reporting date.
The application of IAS 36 did not result in any impairment losses or reversals of impairment losses in respect of property, plant and equipment
during 2015.
14. INTANGIBLE ASSETS
The tables below provide a breakdown of intangible assets along with movements during the 2015 and 2014 financial years:
EURk
Goodwill
Development
costs
Concessions,
industrial
property rights
and similar
rights and
benefits as well
as licenses
derived
thereform
Advance
payments
made and
assets under
construction
Total
COST OF ACQUISITION AND PRODUCTION
Additions
Transfers
Disposals
95,977
0
0
0
8
95,985
129,427
35,499
0
(19,656)
0
145,271
89,227
2,616
51
(49)
145
91,989
0
3,567
1,800
(24)
0
5,343
314,631
41,683
1,851
(19,729)
153
338,589
Additions
Transfers
Disposals
95,985
0
0
(121)
(43)
95,821
145,271
43,469
0
(31,368)
0
157,372
91,989
3,368
114
(4,172)
17
91,316
5,343
6,364
(114)
0
0
11,593
338,589
53,201
0
(35,661)
(26)
356,102
ACCUMULATED AMORTIZATION
Additions
Transfers
Disposals
17,261
0
0
0
1
17,262
53,001
17,860
0
(17,933)
0
52,928
12,822
2,908
0
(128)
41
15,643
0
0
0
0
0
0
83,084
20,768
0
(18,061)
42
85,833
Additions
Transfers
Disposals
17,262
0
0
0
(7)
17,255
52,928
22,548
0
(31,400)
0
44,076
15,643
3,260
0
(3,876)
(36)
14,992
0
0
0
0
0
0
85,833
25,808
0
(35,275)
(43)
76,323
Carrying amounts as at December 31, 2014
Carrying amounts as at December 31, 2015
78,723
78,566
92,343
113,296
76,346
76,324
5,343
11,593
252,755
279,780
10 4
Additions to intangible assets include additions of EUR 1,153k (prior year: EUR 1,855k) that had not yet had any cash flow effect as of
the reporting date.
An impairment charge of EUR 715k was recorded against development costs in relation to an asset which was not available for use, due to
the termination of the project. In addition, one project available for use was subjected to an impairment charge of EUR 912k owing to changes
in the assumptions made regarding future sales and the resultant impairment to value.
Capitalized goodwill results from equity consolidation and breaks down as follows:
EURk
Goodwill in the KTM cash-generating unit
Dec. 31, 2015
Dec. 31, 2014
78,566
78,723
In accordance with IAS 36 Impairment, the goodwill disclosed is not amortized but is tested for impairment on an annual basis. Testing in
2015 did not reveal a need to record an impairment loss. For the method of calculation, see the accounting policies section.
By an assignment agreement dated September 17, 2013, KTM AG acquired the license right for the use of the Husqvarna brand from Pierer
Industrie AG for EUR 10,000k. The license right is being amortized over its remaining useful life of 12 years.
Another intangible asset is the value of the “KTM” brand. This was recognized at EUR 60,000k in the consolidated financial statements
of KTM AG following the capital increase effected in December 2004 and the ensuing full consolidation of the KTM group, and subsequently
increased by EUR 1,103k in 2010 due to a payment on account made to KTM Kühler GmbH, Mattighofen; the brand value is subjected to
an annual impairment test in accordance with IAS 36. As of December 31, 2015, this test did not reveal a need to record an impairment loss.
For the method of calculation, see the accounting policies section.
15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments in associates included under the equity method are regarded individually as immaterial.
Associates comprise strategic minority interests in KTM New Zealand Ltd., Auckland, New Zealand, and KTM Middle East Al Shafar LLC,
Dubai, United Arab Emirates, and a holding in Kiska GmbH, Anif, Austria.
KTM New Zealand Ltd. and KTM Middle East Al Shafar LLC function as general importers for products with the KTM and Husqvarna brands
in their respective markets.
Kiska GmbH is a design business that provides development and design services for KTM.
The reporting date of Kiska GmbH is March 31. The reporting date of KTM New Zealand Ltd is June 30. The reporting dates were set when
the companies were founded or at any rate before the equity interests were acquired by KTM. A change in the accounting date is not sought
on account of materiality considerations. For the purposes of accounting under the equity method, unaudited interim financial statements
at December 31 were used.
105
The amount of holding in Kiska GmbH has increased by 1.1% to 26%. The percentage interests in the remaining associates otherwise
were unchanged during 2015.
Movements in carrying values are as follows:
EURk
Carrying value of holding as at January 1, 2014
Share of net profit for the year
Dividend distribution
Carrying value of holding as at December 31, 2014 (= January 1, 2015)
2,422
628
(129)
2,920
Share of net profit for the year
Foreign currency translation reported in other comprehensive income
Dividend distribution
Acquisition of holdings in entities accounted for using the equity method
Carrying value of holding as at December 31, 2015
133
(5)
(78)
94
3,064
16. OTHER NON-CURRENT ASSETS
EURk
Non-consolidated subsidiaries and financial investments
not accounted for under the equity method
Other non-current financial assets
Dec. 31, 2015
Dec. 31, 2014
1,575
0
1,575
1,762
39
1,801
The following information is provided in relation to non-consolidated structured entities:
During 2014, KTM Immobilien GmbH entered into a property lease as lessee. The lessor is Oberbank Mattigtal Immobilienleasing GmbH.
This is a project company whose sole purpose is the construction of the KTM logistics center in Munderfing. It is 90% owned by Oberbank
Leasing Gesellschaft mbH, with the remaining 10% being held by KTM Immobilien GmbH (carrying value of holding: EUR 49k).
The lease is treated as a finance lease in the KTM group financial statements. See note 29, Leases.
As KTM Immobilien GmbH has no power of decision over the relevant returns, the lessor company is excluded from the scope of consolidation
of KTM AG due to lack of control, in accordance with IFRS.
The 10% holding in Oberbank Mattigtal Immobilienleasing GmbH represents a financial interest in an equity instrument. It is measured in
accordance with IAS 39 and recognized at amortized cost due to its non-marketability.
No intention or obligation currently exists to provide financial or other assistance to Oberbank Mattigtal Immobilienleasing GmbH.
10 6
17. INVENTORIES
EURk
Dec. 31, 2015
Dec. 31, 2014
Raw materials and supplies
Work in progress
Finished goods and merchandise
18,098
13,105
130,091
161,295
17,798
12,190
111,578
141,566
Inventories (gross)
Write-down
Inventories (net)
187,220
(25,925)
161,295
164,683
(23,117)
141,566
Inventories of EUR 110,683k (prior year: EUR 103,697k), excluding raw materials and supplies, were recognized at their net recoverable value.
18. RECEIVABLES
Receivables are broken down as follows:
EURk
From third parties
From affiliates
From associates
From non-consolidated associates and non-consolidated subsidiaries
Dec. 31, 2015
Dec. 31, 2014
82,291
43
3,581
2,287
88,202
65,080
54
3,158
2,057
70,349
The gross value of third-party trade receivables is stated net of individual allowances of EUR 1,908k (prior year: EUR 1,696k). No general
allowances were made.
The allowances to receivables developed as follows:
EURk
Exchange rate differences
Additions
Utilization
Reversals
1,784
4
468
(416)
(144)
1,696
Exchange rate differences
Additions
Utilization
Reversals
44
540
(267)
(105)
1,908
Expenses for the complete derecognition of trade receivables amounted to EUR 300k (prior year: EUR 126k).
107
19. OTHER CURRENT ASSETS
Other current assets consist of the following elements:
EURk
Dec. 31, 2015
Dec. 31, 2014
Receivables arising from derivative financial instruments
Receivables arising from financing activities
Subsidies
Deduction of receivables of ABS financing
Securities
Other
Other current financial assets
3,553
862
4,575
2,842
1,636
5,028
18,497
466
1,007
7,281
3,281
0
5,790
17,825
Advance payments for inventories
Receivables due from tax offices
Other current non-financial assets
3,477
6,704
10,181
28,678
4,839
4,374
9,213
27,038
20. CONSOLIDATED EQUITY
Movements in consolidated equity are shown in the Consolidated Statement of Changes in Equity (see on page 082).
As of December 31, 2015, the nominal capital was EUR 10,845k, divided into 10,845,000 bearer shares having a par value of EUR 1.00
each. The shares grant the rights that are usually due to stockholders under the Austrian Stock Corporation Act. These include the right to
payout of the dividend resolved upon at the General Meeting as well as the right to vote at the General Meeting.
The number of shares outstanding remained unchanged during 2015 at 10,845,000.
All shares were paid up in full. The nominal capital shown in the consolidated financial statements is equal to the figure reported in the separate
financial statements of KTM AG.
A dividend of EUR 1.50 per share (prior year: EUR 1.00) was paid during 2015. The total amount paid was EUR 16,268k (prior year:
EUR 10,845k).
The revaluation reserve arose in 2005 in the course of the gradual acquisition of the former KTM group GmbH. The amount derived from the
increase in the after-tax value of the KTM brand attributable to the portion of the shares already owned by the group parent company (formerly
CROSS Holding AG, now KTM AG) before control was obtained.
10 8
The cash flow hedge reserve (after taxes) developed as follows:
EURk
Elimination of hedging relationship (recognition in operating income)
Realization of underlying transaction (recognition in financial result)
Addition
Realization of underlying transaction (recognition in operating income)
Realization of underlying transaction (recognition in financial result)
Addition
(2,539)
981
383
(2,407)
(3,582)
1,904
1,132
1,310
764
As of December 31, 2015 ineffective components of the derivative financial instruments classified as cash flow hedges yielded a net result
(after tax) of EUR 0k (prior year: EUR 0k)
The currency translation adjustment item encompasses all exchange rate differences arising on translation of the annual financial statements
of consolidated subsidiaries that were drawn up in foreign currency.
Net investments in foreign subsidiaries of KTM AG include a loan of USD 3,863k to KTM North America, Inc., USA, with no fixed date
for repayment. As repayment is neither planned nor likely in the foreseeable future, foreign currency translation effects are recognized in other
comprehensive income.
Movements in the currency translation adjustment item were as follows:
EURk
(887)
1,266
379
Currency translation of financial investments accounted for using the equity method
Net investments in foreign operations
425
(5)
275
1,075
10 9
Non-controlling interests comprise the following:
Group company
Co-shareholders
KTM Technologies GmbH,
Anif, Austria
KTM Immobilien GmbH
(formerly: KTM Motorrad AG),
Mattighofen, Austria
Kiska Holding GmbH
CROSS Industries AG
CROSS KraftFahrZeug
Holding GmbH
CROSS Industries AG
Capital share 2015
Capital share 2014
%
EURk
%
EURk
26.00
0.00
26.00
0.00
24.80
25.10
24.80
25.10
0.39
0.00
62.40
0.00
0.00
1.00
0.00
0.35
Transactions with holders of non-controlling interests
By way of a sale and purchase agreement dated October 7, 2015, KTM AG acquired a 23.9% shareholding with a nominal value of
EUR 23,900.00 in KTM Technologies GmbH, Anif, from CROSS Industries AG, Wels, for a purchase price of EUR 100k. The effects of this
transaction and the change in the proportion of the equity attributable to the shareholders during the year under review were as follows:
EURk
Dec. 31, 2015
Carrying value of non-controlling interest
Purchase price paid
Difference recorded in equity
155
100
55
Capital management
Capital management is aimed at maintaining an adequate capital base in order to remain able to achieve a return for the shareholders that is
in line with the company’s risk situation, to further develop the future of the company and to generate benefits for other stakeholders, too. Only
the consolidated equity entered in the books according to IFRSs is regarded as capital by the Management. As of the reporting date, the
consolidated equity ratio was 44.7% (prior year: 47.1%).
To control the management of capital, primarily the key figures net financial debt, gearing and working capital are used.
Net financial debt is as follows:
EURk
Bonds
Non-current financial liabilities
Current financial liabilities
Receivables from financing activities
Net financial debt
110
Dec. 31, 2015
Dec. 31, 2014
84,845
125,480
6,107
216,432
84,729
63,956
8,608
157,294
(118,406)
(862)
97,164
(68,812)
(1,007)
87,475
21. BONDS AND FINANCIAL LIABILITIES
A five-year bond (ISIN AT0000A0UJP7) with an issue volume of EUR 85,000k was successfully placed on April 24, 2012. The bond
is listed on the Second Regulated Market of the Vienna Stock Exchange with a denomination of EUR 500.00 and was issued with a fixed
coupon paying interest at 4.375%.
Group companies’ liabilities to banks are secured by pledges recorded in the land register and duly filed with a value of EUR 29,052k
(prior year: EUR 29,052k).
Composition of financial liabilities:
EURk
Dec. 31, 2015
Bonds
Non-current financial liabilities
Research loans
Promotional loans
Liabilities from finance leases
Investment loans
Current financial liabilities
Promotional loans
Investment loans
Liabilities from finance leases
Other
Dec. 31, 2014
Nominal
value
Carrying
value
Nominal
value
Carrying
value
85,000
84,845
85,000
84,729
75,000
17,154
20,908
12,417
125,480
75,000
17,154
20,908
12,417
125,480
30,000
11,770
7,376
14,810
63,956
30,000
11,770
7,376
14,810
63,956
2,161
2,386
862
698
6,107
216,587
2,161
2,386
862
698
6,107
216,432
1,050
2,364
194
5,000
8,608
157,564
1,050
2,364
194
5,000
8,608
157,293
Dec. 31, 2015
Dec. 31, 2014
6,248
516
6,764
5,998
511
6,509
22. OTHER NON-CURRENT AND CURRENT LIABILITIES
Other non-current liabilities essentially comprise the following:
EURk
Security deposits = Other non-current financial liabilities
Sundry other non-current non-financial liabilities
Other non-current liabilities
111
In substance, other current liabilities essentially comprise the following:
EURk
Current employee benefits
Liabilities to tax authorities
Other current non-financial liabilities
Dec. 31, 2015
Dec. 31, 2014
22,040
1,363
23,403
17,392
774
18,166
2,604
7,956
Liabilities from derivative financial instruments
Of which derivatives held for trading
144
343
2,460
7,613
Sales bonuses
Price discounts
Sundry other current financial liabilities
Other current financial liabilities
13,398
8,818
5,092
29,912
11,761
5,198
7,072
31,987
53,315
50,153
Of which derivatives held as cash flow hedges
Current employee benefits mainly include liabilities for unconsumed vacations, liabilities for employee bonuses, liabilities to district health
insurance funds, and wage and salary liabilities.
23. TRADE PAYABLES
Trade payables are broken down as follows:
EURk
To third parties
To affiliates
To associates
Dec. 31, 2015
Dec. 31, 2014
121,468
2,293
3,684
127,445
87,015
14,225
3,838
105,078
24. EMPLOYEE BENEFITS
The obligations relating to social capital include claims of the employees that become due upon their retirement at the age fixed by law or when
they have served a certain number of years in the company and that thus constitute benefits similar to pensions. These benefits were calculated
in accordance with the provisions of IAS 19.
The obligations relating to social capital consist of obligations relating to severance pay of EUR 12,627k (prior year: EUR 11,645k) and
obligations to pay anniversary bonuses of EUR 2,308k (prior year: EUR 1,871k). The present value of the defined benefit obligations is reported
in the consolidated statement of financial position. Liabilities relating to social capital are not financed through a fund.
112
Net liability under defined benefit plans in respect of severance pay developed as follows:
EURk
As at January 1
Current service cost
Interest expenses
Severance payments
Actuarial loss
Other
As at December 31
2015
2014
11,645
713
226
(95)
280
(142)
12,627
8,591
544
291
(241)
2,411
50
11,645
2015
2014
1,151
37
(908)
280
169
42
2,200
2,411
2015
2014
2.00%
2.50%
62 years
2.00%
3.00%
62 years
The actuarial loss is made up of the following factors:
EURk
Change in expected values
Change in demographic assumptions
Change in financial assumptions
Actuarial loss
The measurement of the obligation is based on the following assumptions:
Discount rate
Trend in wages and salaries
Retirement age women/men (with transitional provisions)
The discount rate was determined taking into account the very long average terms and the long average remaining lifespans. The discount rate
is the market yield on high quality, fixed-interest corporate bonds at the end of the reporting period.
Employee fluctuation as determined on a company-specific basis has been accounted for based on age and time of service. The actuarial
measurements are based on country-specific mortality tables. The chosen retirement age is the retirement age fixed by law in each country.
113
A sensitivity analysis of the claims to severance pay calculated on the basis of actuarial principles showed a change in actuarial parameters
to have the following effects in the financial year 2015:
Change in
assumption
2015
Discount rate
0.5%-points
0.5%-points
Change in DBO
Parameter
decreases
Parameter
increases
7.3%
(6.6%)
(6.6%)
7.2%
A sensitivity analysis of the claims to severance pay calculated on the basis of actuarial principles showed a change in actuarial parameters
to have the following effects in the financial year 2014:
Change in
assumption
Change in DBO
Parameter
decreases
Parameter
increases
7.8%
(7.0%)
(7.1%)
7.7%
Dec. 31, 2015
Dec. 31, 2014
Within the next 12 months
Between 2 to 5 years
Between 6 to 10 years
More than 10 years
696
2,501
2,907
16,451
451
2,040
2,913
16,935
Total expected payments
22,555
22,338
2015
2014
1,871
195
37
0
198
7
2,308
1,237
125
43
(7)
462
9
1,871
2014
Discount rate
0.5%-points
0.5%-points
The following table shows the expected amounts for the defined benefit plans over the next several years:
EURk
The obligations relating to claims to anniversary bonuses developed as follows:
EURk
As at January 1
Current service cost
Interest expenses
Anniversary bonus payments
Actuarial loss
Other
As at December 31
The weighted average durations of the obligations for severance pay and anniversary bonuses at December 31, 2015 were 14 and 16 years
respectively (prior year: 15 and 17 years).
114
For employees of Austrian group companies whose employment commenced on or after January 1, 2003, contributions amounting to 1.53%
of their wages or salaries, as the case may be, were paid into a staff severance pay fund set up by law. Total contributions of EUR 920k were
paid during the year (prior year: EUR 738k).
25. PROVISIONS
Current provisions developed as follows:
EURk
Provisions
relating to
guarantees
and
warranties
Provisions
for litigation
Total
current
provisions
Utilization
Reversals
Additions
4,655
(4,655)
0
6,360
6,360
610
(250)
(60)
100
400
5,265
(4,905)
(60)
6,460
6,760
Utilization
Reversals
Additions
(6,360)
0
8,088
8,088
(50)
(220)
645
775
(6,410)
(220)
8,733
8,863
The KTM group makes provisions relating to guarantees and warranties. The amounts of expected expenses are primarily based on earlier
experience. For more details, see under estimates and uncertainties in judgments and assumptions.
26. CASH FLOW STATEMENT
The changes in the statement of financial position items presented in the cash flow statement cannot be directly inferred from the statement of
financial position since effects that did not influence payments and other business transactions that did not influence payments are neutralized.
Other non-cash income and expenses were broken down as follows:
EURk
– Profits/+ losses from the disposal of intangible assets and property, plant, and equipment
+ Addition/– reversal of employee benefits
– Remaining other non-cash income/+ expenses
2015
2014
341
1,209
(5,139)
(3,589)
2,069
1,880
5,751
9,700
Other noncash income/expenses include mainly measurements of foreign currency receivables and payables and impairment losses on
receivables and inventories.
115
V. OTHER NOTES
27. RISK REPORT
Risk principles
As a group of companies doing business on a global scale, the KTM group faces a multitude of possible risks that are monitored by means
of a comprehensive risk management system. The Executive Board and Supervisory Board are periodically informed about risks that may have
a major impact on the group’s business operations. Management takes timely action to avoid, minimize, and hedge risks.
An internal control system adapted to the company’s needs and incorporating basic principles such as segregation of duties and dual control
has been integrated into the financial reporting process. Internal and external audits ensure that the processes are continually improved
and optimized. Furthermore, a uniform reporting system is in place throughout the group, for the ongoing management and control of the risk
management process.
Continuous growth depends on a variety of factors, such as demand behavior, product development, changes in foreign exchange rates,
the general economic setting in the individual markets, prices of goods purchased from others, or employee development.
Annual model planning: The assessment of the market situation as well as annual model planning have a major impact on the development of the
group’s revenue and income. Increased market research activities and a model policy reflecting the resulting findings are means of responding to
a market environment characterized by rapidly changing situations. Group reporting processes continued to be refined in the financial year 2015
so that the Executive Board is informed even sooner, and more comprehensively, about the degree of target achievement and about changes
concerning markets and competition.
Industry-specific and operational risks
Restrictions relating to motorcycling: The revenue of the KTM group depends, inter alia, on the possible offroad uses of its motorcycles and
is therefore considerably influenced by the national legal framework regulating offroad motorsport, motorcycle registration and rider’s licenses in
the countries where the vehicles are sold.
Technical innovation, racing: Technical innovation and the introduction of new products make a significant contribution to KTM’s competitive
positioning. To this end, new trends must be identified promptly. To counteract the risk, our own products’ innovative capacity must be ensured.
KTM therefore places a high value on the early recognition of motorcycle trends, on research and development regarding engineering and
functionality and on researching customer wishes so as to achieve innovative product development close to the market. Racing achievements are
not only an important marketing instrument for the company but also form the basis for product development and set standards for series
development. Valuable experience is gathered whenever products can be tested in racing conditions at racing events. Before being introduced
into series production, all technical innovations are moreover subjected to comprehensive testing by the quality management system so as to
eliminate, to the greatest extent possible, any technical defects that could have a negative effect on earnings development.
116
Product liability risk: In its business environment, the KTM group is also exposed to claims for damages raised because of accidents and
injuries. This applies especially to the U.S., where claims asserted in product liability cases involve higher amounts of liability. Corresponding
insurance has been taken out to hedge these risks.
Procurement risk: In view of the current developments on the national and international markets, the procurement risk faced by the KTM group
mainly involves the timely introduction of suitable measures to ensure the supply of parts if suppliers become insolvent or supply bottlenecks
materialize. KTM is therefore exposed to this risk only indirectly. To minimize risk and ensure the availability of materials, KTM places great
emphasis on using predetermined criteria to carefully select new suppliers and on sustainably collaborating with existing suppliers and/or further
developing such cooperations in stable supplier relationships with a long-term approach.
As the quality of KTM’s products is strongly determined by the quality and characteristics of the subcomponents to be sourced, particular
attention is paid to the creditworthiness, operating facilities and production processes of suppliers. The continuous availability of parts is
ensured by appropriate monitoring.
Market related risks
Cyclical risk: The focus of activities of the KTM group is on the motorcycle industry. The sales opportunities for motorcycles are determined
by the general economic trend prevailing in the countries and regions where motorcycle manufacturers do business. As these last years
have shown, the motorcycle industry is generally a cyclical industry and is moreover subject to strong fluctuations regarding demand. This risk
is counteracted by relevant market research and market forecasts, which are then taken into account in the planning process.
Competition and pricing pressure: The market for motorcycles in the industrialized countries is characterized by intense competition; KTM’s
strongest competitors are four Japanese and three European manufacturers and, on a slightly smaller scale, a U.S. manufacturer, with some
of them having the benefit of greater financial resources and higher sales figures and market shares. The street motorcycle market is moreover
characterized by high pricing pressure, and new competitors are trying to enter the market by relying on a low-price strategy. Due to KTM’s
successful market strategy, market leadership was achieved in Europe.
Sales risk: The largest individual sales markets of the KTM group are the European market and the U.S. market. A slump in these markets
could have a negative impact on the business activities of the KTM group. Entering new markets essentially involves a cost risk for the
KTM group as, in some of these markets, the trend of sales as well as the political framework conditions are difficult to assess. By collaborating
with its strategic partner Bajaj Auto Ltd., India, KTM continues to work steadily towards the implementation of a global product strategy.
Financial risks
As regards the financial risks (currency risks, interest rate risks, default risks as well as liquidity risks), reference is made to the relevant
explanations given under note 28.2.
NOTES / OTHER NOTES
117
Other risk factors
Risks due to the legal framework: As the KTM group markets its motorcycles in a large number of countries, it is exposed to the risk of changes
in national regulations, terms of licenses, taxes, trade restrictions, prices, income and exchange restrictions as well as to the risk of political,
social and economic instability, inflation and interest rate fluctuations.
Motorcycles registered for road use must comply with corresponding provisions concerning noise and exhaust gas emissions in order to be
approved for marketing in the respective country. The possible offroad uses of motorcycles are also considerably influenced by the national legal
framework in the countries where the vehicles are sold. To counteract the risk, the respective regulations specific to the given country are
analyzed in detail prior to market entry and continue to be monitored on an ongoing basis so as to be able to respond to any changes in a timely
manner.
Compliance: In accordance with the requirements of sec. 234(b) of the Austrian Commercial Code, a corporate governance report was drawn up.
In this regard, please refer to the publication in the annual report of KTM AG and/or to the KTM website.
Business and environmental risk: Although risk cannot be fully excluded as regards forces of nature, KTM tries to minimize the risk of production processes being affected, by providing appropriate contingency plans and insurance.
Personnel-related risks: Especially with regard to the growth course, risks may arise if key staff leave the company. Efficient personnel
management as well as the constant pursuit of personnel development programs are designed to counteract the risk of managerial staff leaving
the company.
The risk of a shortage of skilled staff is minimized by a comprehensive apprentice training program in our own apprentice workshop. The aim
is to recruit employees from the region and to retain them in the long term.
28. FINANCIAL INSTRUMENTS
28.1. Classification and fair value
The fair value of a financial instrument is determined by means of quoted market prices for an identical instrument in active markets (Level 1).
If no quoted market prices in active markets are available for the instrument, the fair value is determined by means of valuation techniques for
which the material parameters are based only on observable market data (Level 2). In all other cases, the fair value is determined on the basis of
valuation techniques for which at least one material parameter is not based on observable market data (Level 3).
Reclassifications from one level to another are taken into account at the end of the reporting period. There were no transfers between levels
in the financial year.
The following table shows the carrying amounts and fair values of the financial assets (financial instruments shown on the assets side), broken
down by class or measurement category according to IAS 39. Nevertheless, it does not provide information on the fair value or measurement
level of financial assets not measured at fair value, where the carrying amount is a reasonable approximation of fair value or where the asset is
an equity instrument measured at acquisition cost.
118
EURk
Carrying
Fair value
amount
DECEMBER 31, 2015
LOANS AND RECEIVABLES
Trade receivables
Other financial assets
AVAILABLE FOR SALE
HELD FOR TRADING
Other current assets –
securities
OTHER NON-CURRENT
FINANCIAL ASSETS
Derivatives with positive
market value (cash flow hedge)
Total
DECEMBER 31, 2014
LOANS AND RECEIVABLES
Trade receivables
Other financial assets
AVAILABLE FOR SALE
OTHER NON-CURRENT
FINANCIAL ASSETS
Derivatives with positive
Total
Fair value
Level 1
Level 2
Level 3
Total
118,406
88,202
13,307
219,915
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,575
1,575
–
–
–
–
–
–
1,636
1,636
1,636
–
1,636
–
–
1,636
3,553
3,553
226,680
3,553
–
–
–
3,553
–
3,553
68,812
70,349
17,359
156,519
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,801
1,801
–
–
–
–
–
–
466
466
158,786
466
–
–
–
466
–
466
NOTES / OTHER NOTES
119
Receivables sold in connection with the current ABS program are derecognized in accordance with the rules under IAS 39. Under the
ABS program, receivables insured on a revolving monthly basis are sold up to a maximum volume of EUR 75,000k (prior year: EUR 50,000k).
As at the reporting date, trade receivables of EUR 55,067k (prior year: EUR 48,926k) had been sold to third parties. The agreement was
entered into in 2012 and amended in 2014 and 2015. It runs until 2022. KTM continues to bear a risk from credit risk-related defaults up
to a contractually stipulated amount. As at December 31, 2015, the maximum ensuing risk of loss was EUR 385k (prior year: EUR 342k).
The expected loss is recorded as a liability and expensed at the time of sale. The carrying amount of the ongoing commitment was EUR 385k
(prior year: EUR 342k) as at December 31, 2015. It is disclosed under other current liabilities. The carrying amount represents the fair
value of the ongoing commitment. Income of EUR 43k (prior year: EUR 96k) and accumulated expenses since the start of the transaction of
EUR 385k (prior year: EUR 342k) were recognized during the period under review. The volume is not subject to any material fluctuations.
The following table shows the carrying amounts and fair values of the financial liabilities (financial instruments shown on the liabilities side),
broken down by class or measurement category according to IAS 39. But it does not provide information on the fair value or level of financial
liabilities not measured at fair value where the carrying amount is a reasonable approximation of fair value.
EURk
Carrying
Fair value
amount
DECEMBER 31, 2015
AT AMORTIZED COST
Finance lease liabilities
Trade payables
Bonds
Other current and non-current
financial liabilities
HELD FOR TRADING
Other financial liabilities –
Derivatives with
negative market valuet
FAIR VALUE –
HEDGING INSTRUMENTS
Derivatives with negative
Total
12 0
Fair value
Level 1
Level 2
Level 3
Total
109,817
21,770
127,445
84,845
111,651
–
–
88,613
–
–
–
88,613
–
–
–
–
111,651
–
–
–
111,651
–
–
88,613
33,556
377,435
–
–
–
–
–
–
144
144
144
–
–
144
–
144
2,460
2,460
380,038
2,460
–
–
–
2,460
–
2,460
EURk
Carrying
Fair value
amount
DECEMBER 31, 2014
AT AMORTIZED COST
Trade payables
Bonds
Other current and non-current
financial liabilities
HELD FOR TRADING
Derivatives with
negative market value
FAIR VALUE –
HEDGING INSTRUMENTS
Total
Fair value
Level 1
Level 2
Level 3
Total
64,994
7,570
105,078
84,729
65,507
–
–
89,310
–
–
–
89,310
–
–
–
–
65,507
–
–
–
65,507
–
–
89,310
30,029
292,400
–
–
–
–
–
–
343
343
343
–
–
343
–
343
7,613
7,613
300,356
7,613
–
–
–
7,613
–
7,613
Fair value determination
The table below shows the measurement technique used to determine the fair value as well as the significant unobservable input factors used.
Type
measured at fair value
Forward exchange
contracts and
interest rate swaps
Securities
Measurement
technique
Significant
unobservable
input factors
Connection between
significant unobservable
input factors and
measurement at fair value
Market comparison method:
The fair values are based
on the market values
determined using recognized valuation models;
they are regularly checked
for plausibility
Securities are measured
at the current quoted price
on the reporting date
Not applicable
Not applicable
Not applicable
Not applicable
NOTES / OTHER NOTES
121
Type
not measured at fair value
Bonds
Measurement
technique
Significant
unobservable
input factors
Connection between
significant unobservable
input factors and
measurement at fair value
The closing price
on the statement of
financial position
date is used to
measure listed bonds
Discounted cash flows
Not applicable
–
Risk premium
for own credit risk
–
Set-off of financial assets and liabilities
The group enters into set-off agreements with banks in connection with derivatives. Generally, the amounts owed by each counterparty
on a single day with regard to all outstanding transactions in the same currency according to such agreements are aggregated into a single net
amount payable by one party to the other. In certain cases – e.g. when a credit event such as a default occurs – all outstanding transactions
under the agreement are terminated, their value as of termination is determined and only a single net amount is payable for settling all
transactions. These items are not set off in the statement of financial position, as such, since the net set-off of multiple transactions under
the same framework agreements does not generally occur.
KTM has paid a one-off security deposit of EUR 4,707k in relation to the Munderfing logistics center (disclosed as a finance lease)
and has made ongoing monthly deposit payments totaling EUR 53k to the lessor.
According to the terms of the lease contract, these deposits will be returned to the lessee on termination of the lease. In accordance with
IAS 32.42, the deposit is therefore set off against the liability under the finance lease.
The tables below show financial assets and liabilities that have been offset along with amounts that are subject to a set-off agreement but
which have not been set off as they do not fulfill the criteria for set-off prescribed under IFRS.
EURk
FINANCIAL ASSETS 2015
Other receivables
Other financial assets –
Derivatives with positive market value
Foreign currency forwards
Total
12 2
Financial
assets
(gross)
Offset
on-balancesheet
amounts
(gross)
Recognized
financial
assets
(net)
Effect
of master
set-off
agreements
Net
amounts
4,760
(4,760)
0
0
0
3,553
8,313
0
(4,760)
3,553
3,553
(1,143)
(1,143)
2,410
2,410
EURk
FINANCIAL LIABILITIES 2015
Derivatives with negative market value
Interest rate swaps
Total
EURk
FINANCIAL ASSETS 2014
Other receivables
Other financial assets –
Derivatives with positive market value
Total
EURk
FINANCIAL LIABILITIES 2014
Derivatives with negative market value
Interest rate swaps
Total
Financial
liabilities
(gross)
Offset
on-balancesheet
amounts
(gross)
Recognized
financial
liabilities
(net)
Effect
of master
set-off
agreements
Net
amounts
26,530
(4,760)
21,770
0
21,770
1,317
1,287
2,603
29,134
0
0
0
(4,760)
1,317
1,287
2,603
24,374
(1,143)
0
(1,143)
(1,143)
174
1,287
1,460
23,231
Financial
assets
(gross)
Offset
on-balancesheet
amounts
(gross)
Recognized
financial
assets
(net)
Effect
of master
set-off
agreements
Net
amounts
4,707
(4,707)
0
0
0
466
5,173
0
(4,707)
466
466
(466)
(466)
0
0
Financial
liabilities
(gross)
Offset
on-balancesheet
amounts
(gross)
Recognized
financial
liabilities
(net)
Effect
of master
set-off
agreements
Net
amounts
12,277
(4,707)
7,570
0
7,570
5,371
2,585
7,956
20,233
0
0
0
(4,707)
5,371
2,585
7,956
15,526
(466)
0
(466)
(466)
4,905
2,585
7,490
15,060
NOTES / OTHER NOTES
123
The table below shows the net profit or loss from the financial instruments by IAS 39 measurement category. The results shown include net
gains/losses, total interest income/expenses and impairment losses:
EURk
From
interest
From
subsequent
fair value
measurement
From value
adjustment
From
gain (loss)
on disposal
Net result
(total)
2015
Loans and receivables
Available for sale
Fair value – Held for trading
At amortized cost
Total
1,304
64
(144)
(7,393)
(6,169)
0
0
356
0
356
(435)
(710)
0
0
(1,145)
(300)
0
0
0
(300)
569
(646)
212
(7,393)
(7,258)
2014
Loans and receivables
Available for sale
Fair value – Held for trading
At amortized cost
Total
822
35
(391)
(6,573)
(6,107)
0
0
207
0
207
(324)
(981)
0
0
(1,305)
(126)
0
0
0
(126)
372
(946)
(184)
(6,573)
(7,331)
Changes in allowances and the derecognition of loans and receivables are disclosed in other operating expenses for the relevant overhead areas.
The remaining components of the net result are included in financial income and expenses.
28.2. Financial risk management
Principles of financial risk management
The KTM group is subject to credit, market and liquidity risks regarding its assets, liabilities and planned transactions. Financial risk management is aimed at controlling and limiting those risks. The Executive Board and the Supervisory Board are periodically informed about risks that
can have a major impact on the group’s business operations.
The principles of financial risk management are laid down and monitored by the Supervisory Board as well as by the Executive Board. Group
Treasury is responsible for their implementation. To protect itself against the financial risks described below, the KTM group uses derivative
financial instruments with the objective of safely hedging the cash flows from operating activities against fluctuations of exchange rates and/or
interest rates. With foreign currency hedges, the hedging horizon generally comprises the current open items as well as any transactions planned
for the next twelve months. In exceptional cases, strategic hedge positions involving longer time periods may be entered into in consultation
with the Supervisory Board.
124
Currency risks
As an enterprise doing business on a global scale, the KTM group is influenced by the general situation of the world economy, such as the
change in currency parities or the developments on the financial markets. As the US dollar represents the highest individual foreign currency
risk faced by the KTM group, the development of the US dollar exchange rate is of particular importance to the development of the group’s
revenue and income. Approximately 25% of revenues were earned in US dollars in 2015 (prior year: 24%). Such currency shifts can for the most
part be offset, at least over a model year, by taking currency hedging measures and employing hedging strategies; for the financial year 2016,
the US dollar business was hedged by means of positions involving EUR/USD rates ranging from 1.0765 to 1.1240.
The group is exposed to further currency risks if financial assets and liabilities are settled in a currency other than the local currency of the
respective company. The companies of the group predominantly do their invoicing in local currency and largely take out financing in their local
currency. Investments are primarily made in the local currency of the investing group company. For these reasons, most resulting currency
positions will be closed out naturally.
Regarding the currency risks of financial instruments, sensitivity analyses were performed which show the effects that hypothetical changes in
the exchange rates have on profit or loss (after taxes) and on the consolidated equity. The relevant balances as of the reporting date and foreign
currency purchases and sales budgeted for 2016 were used as a basis. It was assumed that the risk faced on the statement of financial position
date essentially represents the risk present during the financial year. The group tax rate of 25% was used as the tax rate. Furthermore it was
assumed in the analysis that all other variables, in particular the interest rates, remained constant. The currency risks of financial instruments
that are of a monetary nature and denominated in a currency deviating from the functional currency were included in the analysis.
Currency risks from euro positions in subsidiaries the functional currency of which is different from the euro were attributed to the currency
risk of the respective subsidiary’s functional currency. Risks from foreign currency positions apart from the euro were aggregated on group level.
Exchange rate related differences due to the translation of financial statements into the group currency were left out of consideration.
A sensitivity analysis is conducted for currency risk. In this respect effects of changes in the exchange rate of ±10% are shown on profit and
loss, other income, and equity.
The KTM group bases the analysis on the following assumptions:
p For the sensitivity of profit and loss, the group’s bank balances, receivables, and payables are considered, as are future inpayments
and outpayments in foreign currency that are not entered in the statement of financial position in the functional currency of the group company.
Likewise, the open derivatives of the cash flow hedge whose underlying transaction has already been realized on the statement of financial
position date (recognized as income) are used. Exposure taking account of derivative currency hedges can be extracted from the table below.
p For the sensitivity of other income, open derivatives of the cash flow hedge whose underlying transaction has not yet been realized on the
statement of financial position date (not recognized as income) are considered. The nominal amount of open derivatives corresponds to the
exposure.
NOTES / OTHER NOTES
125
EURk
Exposures
EUR – USD
EUR – GBP
EUR – CAD
EUR – JPY
EUR – CHF
Other
Sensitivity of profit or loss
(receivables and liabilities)
Sensitivity of other
comprehensive income
(by cash flow hedge derivatives)
Sensitivity of equity
31,063
6,158
15,351
(31,963)
3,534
23,662
Sensitivity
Dec. 31, 2015
Exposures
Devaluation
of EUR
by 10%
Revaluation
of EUR
by 10%
(2,603)
(514)
(1,279)
2,664
(294)
(2,009)
2,130
421
1,047
(2,179)
240
1,644
(4,036)
8,930
4,895
Sensitivity
Dec. 31, 2014
Devaluation
of EUR
by 10%
Revaluation
of EUR
by 10%
(6,510)
(513)
(1,008)
2,797
(217)
(2,889)
5,326
420
824
(2,288)
177
2,365
3,302
(8,340)
6,824
(7,307)
(4,005)
6,322
(2,018)
(5,172)
1,652
78,075
6,148
12,090
(33,558)
2,602
34,667
+ Expenses / – Income
Interest rate risks
Financial instruments on both the assets side and the liabilities side to some extent carry interest at variable rates. Thus the risk consists in
rising interest expenses and falling interest income resulting from an adverse change in market interest rates.
The KTM group has refinanced part of its debt at variable rates and is thus exposed to the risk of interest rate fluctuations on the market.
Regular monitoring of the money and capital markets and the use of interest rate swaps (fixed interest rate payer swaps) serve to respond to this
risk. Under the interest rate swaps entered into, the entity receives variable interest payments and, in return, pays fixed interest on the notional
amounts of the contracts entered into.
Interest rate risks thus result mainly from primary financial instruments carrying interest at variable rates (cash flow risk). Regarding the interest
rate risks of these financial instruments, sensitivity analyses were performed which show the effects that hypothetical changes in the market
interest rate level have on profit or loss (after taxes) and on the consolidated equity. The relevant balances as of the statement of financial
position date were used as a basis. It was assumed that the risk faced on the statement of financial position date essentially represents the risk
present during the financial year. The group tax rate of 25% was used as the tax rate. Furthermore it was assumed in the analysis that all other
variables, in particular the exchange rates, remained constant.
For interest rate risk, exposures are presented at the statement of financial position date in the form of carrying amounts as follows:
EURk
DECEMBER 31, 2015
Financing volume ABS program
Financial liabilities and finance lease liabilities
Bonds
Total
126
Fixed
interest rates
Variable
interest rates
Non interest
bearing
Total
1,620
0
(62,963)
(84,845)
(146,189)
88,146
(55,067)
(68,623)
0
(35,544)
28,640
0
0
0
28,640
118,406
(55,067)
(131,586)
(84,845)
(153,093)
EURk
DECEMBER 31, 2014
Financing volume ABS program
Financial liabilities and finance lease liabilities
Bonds
Total
Fixed
interest rates
Variable
interest rates
Non interest
bearing
Total
0
0
(6,640)
(84,729)
(91,369)
68,735
(48,926)
(65,924)
0
(46,116)
77
0
0
0
77
68,812
(48,926)
(72,564)
(84,729)
(137,408)
A sensitivity analysis was conducted for interest rate risk. In this respect changes in the interest rate of ±50 basis points are shown on profit
and loss, other income, and equity.
EURk
Sensitivity of profit or loss (receivables and liabilities)
Sensitivity of other comprehensive income
(by cash flow hedge derivatives)
Sensitivity of equity
Sensitivity
Dec. 31, 2015
Sensitivity
Dec. 31, 2014
Decrease of
interest level
by 50 basis
points
Increase of
interest level
by 50 basis
points
Decrease of
interest level
by 50 basis
points
Increase of
interest level
by 50 basis
points
(144)
144
(288)
288
(406)
(551)
398
542
(688)
(976)
666
954
+ Expenses / – Income
Default risks (credit risks)
As regards receivables due from customers, the risk of default may be rated as low as ongoing checks of the creditworthiness of new and existing
customers are performed and collateral is requested. Likewise, the default risk is to be regarded as low for the other financial instruments shown
on the assets side, as the counterparties are debtors of optimum creditworthiness. The default risk on derivative financial instruments with
positive market value is limited to their replacement cost; as all the counterparties are banks of good creditworthiness the default risk can be
classified as low.
Default risks are largely hedged in the KTM group, by means of credit insurance on the one hand and bankable security (guarantees, letters
of credit) on the other hand. The default risks and related controls are defined in internal guidelines.
On the assets side, the amounts reported also represent the maximum default risk. In addition, there are no general set-off agreements, with the
exception of the set-off agreement described under note 28.1 to the consolidated financial statements.
NOTES / OTHER NOTES
127
The carrying amounts of the receivables consist of the following elements:
EURk
Carrying
amount
Of which:
neither
impaired nor
past due
as of the
closing date
Of which: not impaired as of the closing date and
past due within the following time bands
Of which:
impaired
Up to
30 days
30 to
60 days
60 to
90 days
More than
90 days
88,202
13,307
101,509
73,951
13,307
87,258
8,210
0
8,210
722
0
722
271
0
271
3,352
0
3,352
1,696
0
1,696
70,349
17,359
87,708
58,097
17,359
75,456
8,849
0
8,849
1,221
0
1,221
333
0
333
125
0
125
1,724
0
1,724
DECEMBER 31, 2015
Trade receivables
Other financial receivables
Total
DECEMBER 31, 2014
Trade receivables
Other financial receivables
Total
As regards the existing portfolio of (trade and other) receivables that are neither impaired nor past due, there are no signs as of the closing
date indicating that the debtors will not meet their payment obligations. There are no concentration risks. For a reconciliation of the allowance
to the portfolio of trade receivables, see note 18.
Liquidity risks
It is a material objective of financial risk management in the KTM group to ensure solvency and financial flexibility at all times. Factors contributing to liquidity risks include, in particular, proceeds from revenues being below the planning assumptions due to weaker demand. For
this purpose, the group maintains a liquidity reserve in the form of unused credit lines (cash credits and guarantee credits) and, if needed, in
the form of cash in banks of a high creditworthiness. Top priority is given to ensuring liquidity over the short and medium term. Another major
control parameter is the maximization of free cash flow by cost-cutting measures, proactive working capital management and reduced investment expenditure. From today’s perspective, sufficient commitments have been given concerning the creditworthiness of our strategic financing
partners and thus the hedging of current liquidity reserves.
Noncurrent liquidity requirements are met by the issuance of corporate shares and bonds and by taking out bank loans.
128
The contractually agreed (undiscounted) cash flows (payments of interest and principal) as well as the remaining terms to maturity of the
financial liabilities consist of the following elements:
EURk
DECEMBER 31, 2015
AT AMORTIZED COST
Trade payables
Bonds
Other current and
non-current financial liabilities
HELD FOR TRADING
Derivatives with
FAIR VALUE –
HEDGING INSTRUMENTS
Total
Carrying
amount
Cash flows 2016
Cash flows 2017 to 2020
Cash flows as from 2021
Interest
fixed
Interest
Revariable demption
Interest
fixed
Interest
Revariable demption
109,817
21,770
127,445
84,845
1,055
0
0
3,719
626
5,245
393
862
0 127,445
0
0
2,538
0
0
1,178
1,499
1,410
0
0
96,173
3,610
0
85,000
0
0
0
0
71
2,230
0
0
8,399
17,298
0
0
33,556
377,435
0
4,774
0
27,309
1,019 160,861
0
3,716
0
921
2,909 185,704
0
0
0
2,301
5,327
31,024
144
144
141
141
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,460
2,460
380,038
786
786
5,701
0
0
1,019
1,317
1,317
162,178
863
863
4,579
0
0
0
0
2,909 185,704
0
0
0
0
0
2,301
0
0
31,024
0
0
NOTES / OTHER NOTES
Interest
fixed
Interest
Revariable demption
12 9
EURk
DECEMBER 31, 2014
AT AMORTIZED COST
Trade payables
Bonds
Other current and
non-current financial liabilities
HELD FOR TRADING
Derivatives with
FAIR VALUE –
HEDGING INSTRUMENTS
Total
Carrying
amount
Cash flows 2015
Cash flows 2016 to 2019
Cash flows as from 2020
Interest
fixed
Interest
Revariable demption
Interest
fixed
Interest
Revariable demption
64,994
7,570
105,078
84,729
110
0
0
3,719
768
8,414
143
194
0 105,078
0
0
205
0
0
4,896
2,172
534
0
0
42,833
816
0
85,000
69
0
0
0
150
1,039
0
0
13,747
6,560
0
0
30,029
292,400
0
3,829
0
911
24,031
137,717
0
5,101
0
0
2,706 128,649
0
69
0
1,189
5,998
26,305
343
343
183
183
0
0
0
0
126
126
0
0
0
0
0
0
0
0
7,613
7,613
300,356
1,264
1,264
5,276
0
5,371
0
5,371
911 143,088
1,131
1,131
6,358
0
0
0
0
2,706 128,649
152
152
221
0
0
1,189
0
0
26,305
0
0
Interest
fixed
Interest
Revariable demption
28.3. Derivatives and hedges
The following derivative financial instruments used as hedging instruments are employed as of December 31, 2015:
EURk
DECEMBER 31, 2015
USD
JPY
CAD
GBP
CHF
SEK
MXN
DKK
PLN
NOK
CZK
ZAR
Interest rate swaps (payer)
13 0
Nominal
amount
in 1,000
local
currency
Fair value
EURk
Exposures
EURk
Up to 1 year
1 to 5 years
67,000
2,160,000
37,470
32,860
18,590
117,000
56,500
6,030
12,750
16,480
132,000
0
74,000
(817)
403
1,505
700
236
(117)
181
2
63
87
(7)
0
(1,143)
81,199
25,728
34,263
48,520
20,843
19,842
8,884
2,661
7,591
6,931
7,848
0
0
67,000
2,160,000
37,470
32,860
18,590
117,000
56,500
6,030
12,750
16,480
132,000
0
44,000
0
0
0
0
0
0
0
0
0
0
0
0
30,000
Maturity of
EURk
DECEMBER 31, 2014
USD
JPY
CAD
GBP
CHF
SEK
MXN
DKK
PLN
NOK
CZK
ZAR
Nominal
amount
in 1,000
local
currency
Fair value
EURk
Exposures
EURk
Up to 1 year
Maturity of
1 to 5 years
37,600
2,050,000
22,300
31,830
20,470
66,000
0
6,850
13,360
11,950
108,850
121,000
74,000
(2,915)
(443)
(265)
(1,450)
(180)
230
0
1
42
84
26
(35)
(2,242)
85,057
24,949
25,663
47,273
20,137
18,368
0
1,751
7,144
5,404
7,178
14,809
0
37,600
2,050,000
22,300
31,830
20,470
66,000
0
6,850
13,360
11,950
108,850
121,000
0
0
0
0
0
0
0
0
0
0
0
0
0
74,000
In cash flow hedge accounting, both variable future cash flows arising from non-current liabilities with maturity dates up to 2020 and future
operating cash flows (receipts as well as payments) planned for the next twelve months are hedged.
EURk
Nominal
amount
in 1,000
local
currency
Fair value
EURk
Maturity of
Up to 1 year
1 to 5 years
DECEMBER 31, 2015
11,000
(145)
11,000
0
DECEMBER 31, 2014
11,000
(343)
0
11,000
In the case of the following derivative financial instruments no hedging relationship could be established:
Forward currency transactions
The KTM group enters into foreign currency forwards essentially to hedge intended future revenue and cost of materials denominated in
foreign currency against the risk of exchange rate fluctuations.
NOTES / OTHER NOTES
131
Interest rate swaps
At December 31, 2015, payer interest rate swaps of EUR 85,000k (prior year: EUR 85,000k) were held to reduce the volatility of variable
interest payments on loans. Of these, interest rate swaps with a nominal value of EUR 11,000k (prior year: EUR 11,000k) and with a negative
market value of EUR 145k (prior year: EUR 343k) were classified as “held for trading”.
29. LEASES
Finance leases
Buildings include one asset held by the KTM group under a finance lease. The asset in question is the logistics center at the Munderfing site,
which was completed in 2015. After expiry of the contractual term of 15 years, there will be a pre-emptive tender right to acquire the building
at residual value.
The carrying value of assets held under finance leases is as follows:
EURk
Buildings
Payments
on account
and assets
under
construction
DECEMBER 31, 2015
Acquisition and construction costs
Accumulated depreciation
Carrying value
27,050
360
26,690
0
0
0
DECEMBER 31, 2014
Acquisition and construction costs
Accumulated depreciation
Carrying value
0
0
0
12,405
0
12,405
The present value of the minimum lease payments is as follows:
EURk
2015
2014
Minimum
lease
payments
Present
value
Minimum
lease
payments
Present
value
Up to 1 year
Up to 1 to 5 years
More than 5 years
1,129
4,516
24,918
30,563
1,118
4,272
19,815
25,204
338
1,350
12,305
13,993
331
1,251
10,157
11,739
Deducting interest payments
Deducting deposits
Carrying value of lease obligations
(4,034)
(4,760)
21,770
132
(1,716)
(4,707)
7,570
Payment obligations under finance leases are disclosed in the consolidated statement of financial position under financial liabilities (see note 21).
Interest on finance leases of EUR 135k was recorded in 2015 (prior year: EUR 0k).
The logistics center is predominantly used by the KTM group itself. A small portion is let to third parties outside the group. Payments of
EUR 1,796k and EUR 784k are expected from third parties and affiliates respectively in the next few years.
The option exists to extend each of the contracts for a further five years at the end of the current term.
Operating leases
The KTM group makes use of operating leases, which are not recognized in the consolidated statement of financial position, mainly for the use
of property, machinery, IT equipment and the vehicle fleet. The leases provide for payments mainly based on variable rentals.
Lease payments of EUR 10,962k (prior year: EUR 11,906k) were classified as expenses during 2015. The reported operating lease expenses
from operating leases do not include any payments under subleases recognized as expense items or any material conditional rent payments.
Future obligations under operating leases are as follows:
EURk
Up to 1 year
2 to 5 years
More than 5 years
Dec. 31, 2015
Dec. 31, 2014
9,097
32,075
11,914
53,086
7,754
29,490
10,288
47,532
The definition of operating lease expenses is standardized group-wide. This item now also includes long-term rents for land and buildings
on third party land. Prior year figures have been restated accordingly.
Material operating leases are as follows:
p Land and buildings: The rental agreements/leases have remaining terms of up to 43 years.
p IT infrastructure and equipment: The rental agreements/leases have terms of up to 5 years.
p Vehicles and machinery: The rental agreements/leases have a remaining term of 6 years.
In some cases, the contracts may optionally be terminated after expiry of a minimum term. There are no price adjustment clauses.
NOTES / OTHER NOTES
13 3
30. SEGMENT REPORTING
Information by business segment
During 2014, organizational restructuring measures relating to the implementation of the KTM group’s two-brand strategy were completed.
In 2014, therefore, internal reporting to the chief operating decision maker underwent a separation into the KTM and Husqvarna business
segments. Thus, at December 31, 2014, the requirements of IFRS 8.5 are for the first time implemented for a second business segment.
The KTM group is divided by brand into two business segments, KTM and Husqvarna. The marketing activities of both brands now take place
via two different marketing entities that are separated in both corporate and staffing terms. The two business segments are defined as follows:
p KTM segment
The KTM segment comprises KTM AG along with the KTM subsidiaries specializing in the sale of KTM street and offroad motorcycles,
as well as the X-Bow supercar and in motorsport.
Upstream processes such as R&D, production and purchasing, along with group administrative group functions, continue to provide services
for both brands and therefore also continue to be centered in corporate terms in one company which is allocated to the KTM business
segment. A division of property, plant, and equipment between the two brands is not possible because of the single production location and
near-identical production processes. No such division is therefore reported internally to the chief operating decision maker.
p Husqvarna segment
The Husqvarna segment comprises Husqvarna Motorcycles GmbH and the Husqvarna subsidiaries. Husqvarna sells Husqvarna motorcycles
and is involved in motorsport.
The accounting policies for both reporting segments are the same as the group-wide accounting policies. No difference therefore exists
between the measurement of the profit/loss or of the assets and liabilities of the segments and the equivalent figures for the group.
Intersegmental revenues are recorded at arm’s-length transfer prices.
The table below shows segment information for 2015:
EURk
2015
External revenues
Revenues between segments
Total revenues
EBIT
Amortization and depreciation
Share in result of companies accounted
for under the equity method
13 4
KTM
Husqvarna
Consolidation
Group
878,382
116,077
994,459
144,105
1,499
145,603
0
(117,576)
(117,576)
1,022,487
0
1,022,487
84,034
46,179
12,139
240
(1,068)
0
95,105
46,419
147
0
0
147
The table below shows segment information for 2014:
EURk
2014
External revenues
Revenues between segments
Total revenues
EBIT
Amortization and depreciation
Share in result of companies accounted
for under the equity method
KTM
Husqvarna
Consolidation
Group
763,872
75,827
839,699
100,764
5,431
106,195
0
(81,258)
(81,258)
864,636
0
864,636
67,638
37,158
7,375
64
(364)
0
75,377
37,222
628
0
0
628
The operating results as per the total column agree to the operating results disclosed in the income statement. They can therefore be reconciled
to the profit before tax by referring to the income statement.
The tables below show overall consolidated data for 2014 and 2015:
EURk
Revenue by region
Europe
North America
Rest
Revenue by product group
Sportminicycles
X-Bows
Parts, garments and accessories as well as other revenues
less revenue reductions
2015
2014
EURk
%
EURk
%
512,160
301,767
208,560
1,022,487
50%
30%
20%
100%
461,807
201,522
201,307
864,636
53%
23%
23%
100%
425,359
390,616
37,951
3,214
42%
38%
4%
0%
347,359
329,263
34,463
2,665
40%
38%
4%
0%
165,346
1,022,487
16%
100%
150,886
864,636
17%
100%
During 2015, non-current assets of EUR 426,602k (prior year: EUR 365,715k) were attributable to the home country of the business,
while EUR 14,416k (prior year: EUR 11,217k) related to other countries.
Neither the KTM segment nor Husqvarna report reliance on external customers within the meaning of IFRS 8.34.
31. EVENTS AFTER THE REPORTING DATE
Events that occurred after December 31, 2015 and are material for the measurement of the assets and liabilities have either been reflected
in these financial statements or are not known.
NOTES / OTHER NOTES
135
32. RELATED PARTY DISCLOSURES
CROSS Industries AG, Wels, which is controlled by Stefan Pierer (and Rudolf Knünz until October 2014), holds 51.28% of the voting rights
in KTM AG, Mattighofen, directly and indirectly through CROSS KraftFahrZeug Holding GmbH, Wels, and is de facto the controlling shareholder
of KTM AG, Mattighofen.
Stefan Pierer serves as Chairman of the Executive Board of KTM AG, Mattighofen.
Rudolf Knünz formerly served as Deputy Chairman of the Supervisory Board of KTM AG (to May 22, 2014) and chairman of the Audit
Committee of KTM AG (to May 22, 2014).
In the financial year 2015, the fixed total compensation paid by group companies to the Executive Board members of KTM AG in consideration
of their services as managing directors and Executive Board members in the KTM group amounted to EUR 1,328k (prior year: EUR 1,302k).
Liabilities of EUR 4,605k (prior year: EUR 3,714k) have been recognized in relation to variable remuneration. Furthermore, no pension expenses,
in the form of contributions to pension funds and provisions for pensions, were posted in the financial year 2015. Following the expiration
of the agreed term of contract, individual Members of the Executive Board receive a one-off payment (severance pay). During 2015, severance
pay of EUR 2,090k (prior year: EUR 0k) were paid to Members of the Executive Board. As at December 31, 2015, accounts payable to
Members of the Executive Board stood at EUR 1,017k (prior year: EUR 2,087k).
At the General Meeting in April 2016, it will be proposed that the remuneration to be paid to the Supervisory Board for the financial year 2015
(payout in the financial year 2016) shall amount to a total of EUR 24k (prior year: EUR 19k).
There are no stock option plans.
KTM AG entered into long-term secondment agreements with CROSS Industries AG regarding Executive Board members Stefan Pierer and
Friedrich Roithner.
By an assignment agreement dated September 17, 2013, KTM AG acquired the license right for the use of the Husqvarna brand from
Pierer Industrie AG for EUR 10,000k. The license right is being amortized over its remaining useful life of 12 years and is periodically tested
for impairment. Pierer Industrie AG is a subsidiary of Pierer Konzerngesellschaft mbH (ultimate group parent company). Stefan Pierer is the
owner of Pierer Konzerngesellschaft mbH and also Chairman of the Executive Board of KTM AG. A valuation was performed in order to verify
the measurement of the license right and the acquisition was approved by the Supervisory Board of KTM AG The transaction was thus carried
out at arm’s length.
Furthermore, there was an offset of a group allocation from CROSS Industries AG to KTM AG of EUR 1,000k (prior year: EUR 800k).
Rajiv Bajaj, Deputy Chairman of the Supervisory Board, is the Managing Director of Bajaj Auto Ltd., Pune, India. Srinivasan Ravikumar, a
member of the Supervisory Board, is a director of Bajaj Auto International Holdings B.V., Amsterdam, Netherlands, and President of Business
Development and Assurance at Bajaj Auto Ltd. Bajaj Auto International Holdings B.V., Amsterdam, Netherlands, a subsidiary of Bajaj Auto Ltd.,
Pune, India, held 47.99% of KTM AG as at December 31, 2015. As at December 31, 2015, accounts receivable from Bajaj Auto Ltd.,
Pune, India (including receivables from payments made in advance) stood at EUR 227k, while accounts payable to the same company stood
at EUR 2,735k (prior year: receivables of EUR 4,422k and payables of EUR 476k). Bajaj Auto International Holdings B.V. has granted KTM
Motorrad AG a short-term arm’s-length, interest-bearing loan of EUR 5,000k due on March 31, 2015.
13 6
Cooperation with the Indian Bajaj group has been in place since 2007. The Bajaj group is India’s second largest manufacturer of motorcycles
and three wheelers, selling approximately 3.81 million units in the last financial year (reporting date: March 31, 2015). The cooperation
focuses on the joint development of entry-level street motorcycles, which are produced in India and distributed under the “KTM” brand by
both companies in their respective core markets.
The WP group and Pankl group are subsidiaries of Cross Industries AG and act as suppliers of automotive parts to the KTM group. WP is also
charged rent at arm’s length rates for use of the KTM logistics center. The Wethje group, which is included as an associate in the consolidated
financial statements of Cross Industries AG, likewise acts as a supplier to the KTM group.
Arm’s-length deliveries of motorcycles and spare parts are made to KTM New Zealand Ltd. and KTM MIDDLE EAST AL SHAFAR LLC, two
general importers in the KTM group accounted for under the equity method. Arm’s-length deliveries of motorcycles and spare parts are made
to KTM dealers in which the KTM group holds minority investments and which are accounted for as other non-current financial assets.
Wohnbau-west Bauträger Gesellschaft m.b.H., a direct subsidiary of Pierer Konzerngesellschaft mbH, provided services as general contractor
in relation to the planning and construction of the KTM logistics center in Munderfing on behalf of Oberbank Mattigtal Immobilienleasing
GmbH, with which KTM Immobilen GmbH has concluded a lease contract on arm’s-length terms. In 2014 KTM Immobilien GmbH
made payments on account of EUR 4,835k to Oberbank Mattigtal Immobilienleasing GmbH. Construction services supplied by Wohnbau-west
Bauträger Gesellschaft m.b.H. in 2015 amounted to EUR 14,730k (prior year: EUR 7,570k). Oberbank Leasing Gesellschaft mbH and KTM AG
respectively own 90% and 10% of Oberbank Mattigtal Immobilienleasing GmbH. In 2014 KTM AG purchased the interest held by Cross
Industries AG at its book value of EUR 474k.
Mattighofen Museums-Immobilien GmbH, established in 2015, is owned by Pierer Konzerngesellschaft GmbH (51%) and KTM Immobilien
GmbH (49%). Receivables stood at EUR 17k as at December 31, 2015 (prior year: EUR 0k).
Pierer Industrie AG holds 100% of Moto Italia SRL and 25.07% of All for One Steeb AG. In 2014 the KTM group purchased spare parts
for the Husqvarna brand from Moto Italia for EUR 4.6 million. For the future sales of these spare parts, a division of margins was agreed that
was fulfilled in 2014 ahead of schedule with a payment to Moto Italia SRL of EUR 1.3 million. No transactions took place in 2015.
All for One Steeb AG provided IT consultancy services to the KTM group for EUR 5,000k (prior year: EUR 2,292k).
KTM AG has granted an interest-bearing loan to TRUE Management & Investment GmbH, which is within the sphere of influence of Hubert
Trunkenpolz, a Member of the Executive Board. The loan has a maturity date of December 31, 2016, subject to annual extension options
whereby it may be extended up to a final date of February 28, 2018. Loan receivables of EUR 120k (prior year: EUR 140k) were recognized
as at the reporting date.
No other loans or advances have been granted to Members of the Executive Board or the Supervisory Board of KTM AG as of the
reporting date.
Gerald Kiska serves on the Supervisory Board of CROSS Industries AG, Wels, and acts as managing shareholder of Kiska GmbH, Anif,
in which KTM AG, Mattighofen, holds an interest of 26.0%. Mr. Kiska also serves as chief executive officer of KTM Technologies GmbH, Anif.
Expenses of EUR 12,064k were incurred in relation to Kiska GmbH, Anif during the year (prior year: EUR 7,087k). As of December 31, 2015,
accounts payable to Kiska GmbH stood at EUR 3,681k (prior year: EUR 3,773k).
NOTES / OTHER NOTES
137
By way of a sale and purchase agreement dated October 7, 2015, KTM AG acquired a 23.9% shareholding with a nominal value of
EUR 23,900 in KTM Technologies GmbH, Anif, from CROSS Industries AG, Wels, for a purchase price of EUR 100k.
Other material transactions with related parties and the amount of the outstanding balances with related parties (pooled at group level) were
as follows:
EURk
2015
Other subsidiaries not included in the scope of consolidation
CROSS Industries AG, Wels, Austria
WP AG, Munderfing, Austria
Wethje Carbon Composites GmbH, Hengersberg, Germany
Pankl Racing Systems AG, Kapfenberg, Austria
Bajaj Auto Ltd., Pune, India
TRUE Management GmbH, Thalheim bei Wels, Austria
Pierer Konzerngesellschaft mbH, Wels, Austria
Other entities
Revenue
Expenses
Receivables
Liabilities
11,788
7,791
54
4
1,101
0
0
0
18
647
355
21,759
12,064
941
115
6,024
119,905
672
7,482
74,493
4
725
1,551
223,975
3,591
1,788
0
0
31
0
0
227
0
0
95
5,733
3,669
102
8
2,418
492
86
1,054
2,735
0
0
132
10,695
Material transactions with related parties and the amount of the outstanding balances with related parties (pooled at group level) were as
follows in the preceding year:
EURk
2014
Other subsidiaries not included in the scope of consolidation
CROSS Industries AG, Wels, Austria
WP AG, Munderfing, Austria
Wethje Carbon Composites GmbH, Hengersberg, Germany
Pankl Racing Systems AG, Kapfenberg, Austria
Bajaj Auto Ltd., Pune, India
TRUE Management GmbH, Thalheim bei Wels, Austria
Pierer Konzerngesellschaft mbH, Wels, Austria
Other entities
Revenue
Expenses
Receivables
Liabilities
10,913
7,405
4
8
163
20
0
3,800
0
0
130
22,443
7,087
0
4
4,304
94,427
373
5,450
71,604
155
366
314
184,083
3,155
5,100
29
0
25
0
0
4,422
140
0
0
12,872
3,774
0
0
216
12,465
136
1,356
5,476
0
111
44
23,578
All supplies and services were and are agreed at arm’s-length prices.
13 8
33. CORPORATE BODIES OF KTM AG
The following individuals were Members of the Supervisory Board in 2015:
p Josef Blazicek, Chairman
p Rajiv Bajaj, Deputy Chairman
p Ernst Chalupsky
p Srinivasan Ravikumar
p Friedrich Lackerbauer (Employee representative)
p Horst Resch (Employee representative)
The following persons were Members of the Executive Board with collective power of representation in 2015:
p Stefan Pierer, Chairman
p Harald Plöckinger
p Friedrich Roithner
p Viktor Sigl
p Hubert Trunkenpolz
Mattighofen, February 16, 2016
The Executive Board
Stefan Pierer
Harald Plöckinger
Viktor Sigl
Hubert Trunkenpolz
Friedrich Roithner
NOTES / OTHER NOTES
139
SCHEDULE OF
EQUITY HOLDINGS
ANNEX TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF KTM AG, MATTIGHOFEN, AUSTRIA
EURk
Company
Affiliated companies
KTM Immobilien GmbH
(formerly: KTM Motorrad AG), Mattighofen, Austria
KTM North America, Inc., Amherst, Ohio, USA
KTM-Motorsports, Inc., Amherst, Ohio, USA
KTM-Sportmotorcycle Japan K.K., Tokyo, Japan
KTM-Racing AG, Frauenfeld, Switzerland
KTM Sportcar GmbH, Mattighofen, Austria
KTM Motorcycles S.A. Pty. Ltd.,
Northriding, South Africa
KTM Sportmotorcycle Mexico C.V. de S.A.,
Lerma, Mexico
KTM South East Europe S.A.,
Elefsina, Greece
KTM Technologies GmbH, Anif, Austria
KTM Sportmotorcycle GmbH, Mattighofen, Austria
KTM-Sportmotorcycle India Private Limited,
Pune, India
Husqvarna Motorcycles GmbH, Mattighofen, Austria
KTM-Sportmotorcycle GmbH,
Ursensollen, Germany
KTM Switzerland Ltd., Frauenfeld, Switzerland
KTM Sportmotorcycle UK Limited,
Brackley, United Kingdom
KTM-Sportmotorcycle Espana S.L.,
Terrassa, Spain
KTM Sportmotorcycle France SAS,
Saint Priest, France
KTM Sportmotorcycle Italia s.r.l., Gorle, Italy
KTM-Sportmotorcycle Nederland B.V.,
Malden, Netherlands
KTM Sportmotorcycle Scandinavia AB,
Örebro, Sweden
KTM-Sportmotorcycle Belgium S.A.,
Wavre, Belgium
KTM Canada Inc., St-Bruno, Canada
KTM Hungária Kft., Törökbálint, Hungary
14 0
Initial
consolidation
date
Dec. 31, 2015
Interest
in %
Consolidation
type
Interest
in %
Consolidation
type
Sep. 1, 1999
Sep. 1, 1993
Sep. 1, 2000
Sep. 1, 2002
Jan. 28, 2003
Mar. 1, 2005
99.61
100.00
100.00
100.00
100.00
100.00
FC
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
100.00
FC
FC
FC
FC
FC
FC
Mar. 1, 2009
100.00
FC
100.00
FC
Jun. 1, 2009
100.00
FC
100.00
FC
Nov. 1, 2010
Dec. 1, 2009
May 1, 2011
100.00
74.00
100.00
FC
FC
FC
100.00
50.10
100.00
FC
FC
FC
Jun. 1, 2012
Jan. 1, 2013
100.00
100.00
FC
FC
100.00
100.00
FC
FC
Dec. 31, 2013
Dec. 31, 2013
100.00
100.00
FC
FC
100.00
100.00
FC
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
Dec. 31, 2013
100.00
100.00
FC
FC
100.00
100.00
FC
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
Dec. 31, 2013
Dec. 31, 2013
100.00
100.00
100.00
FC
FC
FC
100.00
100.00
100.00
FC
FC
FC
Dec. 31, 2014
EURk
Company
KTM Central East Europe s.r.o.,
Bratislava, Slovakia
KTM Österreich GmbH, Mattighofen, Austria
KTM Nordic Oy, Vantaa, Finland
KTM Sportmotorcycle d.o.o., Marburg, Slovenia
KTM Czech Republic s.r.o., Pilsen, Czech Republic
KTM Sportmotorcycle SEA PTE. Ltd.
(formerly: KTM Sportmotorcycle Singapore PTE Ltd.),
Singapore, Singapore
Husqvarna Motorcycles Italia S.r.l.,
Albano Sant’Alessandro, Italy
Husqvarna Motorcycles Deutschland GmbH,
Ursensollen, Germany
Husqvarna Motorcycles Espana S.L.,
Terrassa, Spain
Husqvarna Motorcycles UK Ltd.,
Brackley, United Kingdom
Husqvarna Motorcycles France SAS,
Saint Priest, France
HQV Motorcycles Scandinavia AB,
Örebro, Sweden
Husqvarna Motorcycles North America, Inc.,
Murrieta, USA
Husqvarna Motorsports, Inc., Murrieta, USA
Husqvarna Motorcycles S.A. Pty. Ltd.,
Northriding, South Africa
KTM Events & Travel Service AG,
Frauenfeld, Switzerland1
Associated companies
KTM New Zealand Ltd., Auckland, New Zealand
Kiska GmbH, Anif, Austria
KTM MIDDLE EAST AL SHAFAR LLC,
Dubai, United Arab Emirates
1
Initial
consolidation
date
Dec. 31, 2015
Interest
in %
Consolidation
type
Interest
in %
Consolidation
type
Dec. 31, 2013
Dec. 31, 2013
Dec. 31, 2013
Dec. 31, 2013
Dec. 31, 2013
100.00
100.00
100.00
100.00
100.00
FC
FC
FC
FC
FC
100.00
100.00
100.00
100.00
100.00
FC
FC
FC
FC
FC
Jan. 1, 2014
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 31, 2013
100.00
FC
100.00
FC
Dec. 1, 2013
Apr. 1, 2015
100.00
100.00
FC
FC
100.00
–
FC
–
Apr. 1, 2015
100.00
FC
–
–
–
100.00
–
100.00
FC
–
–
26.00
26.00
AE
AE
26.00
24.90
AE
AE
–
25.00
AE
25.00
AE
Disposal due to deconsolidation, see note 2, Scope of consolidation.
Dec. 31, 2014
FC: Full consolidation
AE: At equity
AC: At cost
SCHEDULE OF EQUITY HOLDINGS
141
EURk
Company
Initial
consolidation
date
Interest
in %
Consolidation
type
Interest
in %
Consolidation
type
–
–
–
–
–
100.00
100.00
76.00
100.00
26.00
AC
AC
AC
AC
AC
100.00
100.00
100.00
100.00
26.00
AC
AC
AC
AC
AC
–
–
–
26.00
26.00
26.00
AC
AC
AC
26.00
26.00
26.00
AC
AC
AC
–
10.00
AC
10.00
AC
–
–
49.00
51.00
AC
AC
–
–
–
–
KTM Australia Pty Ltd., Perth, Australia1
KTM Finance GmbH, Frauenfeld, Switzerland1
KTM Wien GmbH, Mattighofen, Austria1
KTM do Brasil Ltda., Sao Paulo, Brazil1
KTM Braumandl GmbH, Wels, Austria2
Project Moto Rütter & Holte GmbH,
Oberhausen, Germany2
MX – KTM Kini GmbH, Wiesing, Austria2
KTM Regensburg GmbH, Regensburg, Germany2
Oberbank Mattigtal Immobilienleasing GmbH,
Linz, Austria
Mattighofen Museums-Immobilien GmbH,
Mattighofen, Austria2
KISKA, Inc., Murrieta, USA1
1
2
Not fully consolidated, because of immateriality.
Not included at equity because of minor importance.
EURk
KTM Australia Pty Ltd. (formerly: KTM-Sportcar Australia Pty Ltd.),
Perth, Australia1
KTM Finance GmbH, Frauenfeld, Switzerland
KTM Wien GmbH, Mattighofen, Austria
KTM do Brasil Ltda., Sao Paulo, Brazil
KTM Braumandl GmbH, Wels, Austria
Project Moto Rütter & Holte GmbH, Oberhausen, Germany
MX – KTM Kini GmbH, Wiesing, Austria
KTM Regensburg GmbH, Regensburg, Germany
Oberbank Mattigtal Immobilienleasing GmbH, Linz, Austria
Mattighofen Museums-Immobilien GmbH, Mattighofen, Austria
KISKA, Inc., Murrieta, USA
2
FC: Full consolidation
AE: At equity
AC: At cost
Net result
Dec. 31, 2015
Dec. 31, 2014
2015
2014
(6)
(6)
17
(27)
738
149
183
59
24
4,742
–
–
0
17
0
(3)
(243)
63
65
28
(5)
22
–
–
2
97
787
2
2
2
2
4,742
87
203
Latest annual financial statements available are of August 31, 2015
Not yet available
142
Dec. 31, 2014
(Negative) Equity
Company
1
Dec. 31, 2015
2
(6)
(289)
2
2
2
2
103
(13)
111
AUDITOR’S
REPORT
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
We have audited the accompanying consolidated financial statements of KTM AG, Mattighofen, Austria, for the fiscal year from 1 January
to 31 December 2015. These consolidated financial statements comprise the consolidated balance sheet/consolidated statement of financial
position as of 31 December 2015, the consolidated income statement/consolidated statement of comprehensive income, the consolidated
statement of cash flows and the consolidated statement of changes in equity for the fiscal year 2015 and a summary of significant accounting
policies and other explanatory notes.
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The Company’s management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the EU, and the additional requirements pursuant to section 245a
UGB (Austrian Commercial Code) and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance
with Austrian Standards on Auditing. Those standards require that we comply with International Standards on Auditing – ISA. In accordance with
International Standards on Auditing, we are required to comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Group’s preparation
and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
AUDITOR’S REPORT
14 3
OPINION
Our audit did not give rise to any objections. In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of the Group as of 31 December 2015 and its financial performance and its cash flows for the year then ended in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the EU.
REPORT ON THE MANAGEMENT REPORT FOR THE GROUP
Pursuant to statutory provisions, the management report for the Group is to be audited as to whether it is consistent with the consolidated
financial statements and as to whether the other disclosures are not misleading with respect to the Company’s position. The auditor’s report also
has to contain a statement as to whether the management report for the Group is consistent with the consolidated financial statements and
whether the disclosures pursuant to section 243a UGB (Austrian Commercial Code) are appropriate.
In our opinion, the management report for the Group is consistent with the consolidated financial statements. The disclosures pursuant to
section 243a UGB (Austrian Commercial Code) are appropriate.
Linz, 16 February 2016
KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed by:
Mag. Ernst Pichler
Wirtschaftsprüfer
(Austrian Chartered Accountants)
This report is a translation of the original report in German, which is solely valid. The consolidated financial statements together with our auditor’s opinion may only be
published if the consolidated financial statements and the management report are identical with the audited version attached to this report. Section 281 paragraph 2 UGB
(Austrian Commercial Code) applies.
14 4
STATEMENT OF ALL
LEGAL REPRESENTATIVES
We confirm to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities,
financial position and profit or loss of the group as required by the applicable accounting standards and that the consolidated management
report gives a true and fair view of the development and performance of the business and the position of the group, together with a
description of the principal risks and uncertainties the group faces.
We confirm to the best of our knowledge that the separate financial statements give a true and fair view of the assets, liabilities, financial
position and profit or loss of the parent company as required by the applicable accounting standards and that the management report gives a
true and fair view of the development and performance of the business and the position of the company, together with a description of the
principal risks and uncertainties the company faces.
The Executive Board
Stefan Pierer
Harald Plöckinger
Viktor Sigl
Hubert Trunkenpolz
Friedrich Roithner
STATEMENT OF ALL LEGAL REPRESENTATIVES
145
OTHER
INFORMATION
FINANCIAL CALENDAR 2016
Apr. 11, 2016
Date of evidence of “Annual General Meeting”
Apr. 21, 2016
Annual General Meeting
Apr. 25, 2016
Ex-dividend date
Apr. 26, 2016
Date of evidence of “Dividend” (record date)
Apr. 28, 2016
Dividend payment date
Aug. 19, 2016
Interim Financial Statements
for the first half-year 2016
INVESTOR RELATIONS
VIKTOR SIGL
Stallhofnerstrasse 3
5230 Mattighofen, Austria
Phone: +43 7742 6000-144
E-Mail: [email protected]
14 6
KTM GROUP
IMPRINT
Owner and publisher:
KTM AG, Stallhofnerstrasse 3, 5230 Mattighofen, Austria
Registered at the Regional Court Ried im Innkreis:
FN 107673 v
Concept and design: KTM, marchesani_kreativstudio
Photos: KTM archives, Husqvarna archives
While every care was taken in compiling this annual report
and checking that the data it contains is correct, slight differences
in totals from adding up rounded amounts and percentages,
typographical errors and misprints cannot be excluded.
This report and the forward-looking statements it contains were
prepared on the basis of all the data and information available
at the time of going to press. We wish to point out, however,
that various factors may cause the actual results deviate from the
forward-looking statements given in the report.
Printed in accordance with the printing products directive of the
Austrian ecolabel “Das Österreichische Umweltzeichen” (UW-No 922).
147
KTM AG
Stallhofnerstrasse 3
5230 Mattighofen, Austria
E-MAIL: [email protected]
WEBSITE: www.ktmgroup.com

KTM AG Annual Report 2015

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