Bajaj Mobility (BMAG) Status Update summary

Market environment and sales outlook

• Global market volatility and high interest rates, especially in North America, are impacting sales and dealer financing, with the US market down 6.1% and company retail down 8%.

• European retail market remains resilient with a 5% increase, despite recession and high interest rates; India shows strong 20% growth, while China faces a 40% market decline.

• LATAM remains stable with 6% growth; overall, sales are challenged by supply chain and distribution pressures, requiring ongoing dealer support and inventory reduction.

Cost reduction and restructuring measures

• A stringent cost-cutting program was initiated, including workforce reduction by over 500 employees so far, targeting a 15% reduction by year-end.

• Production volumes have been reduced, and supply chain activities are being shifted to India and China to mitigate high European costs and supplier bankruptcies.

• R&D activities are also being transferred to Asia, leveraging lower costs and higher productivity.

• The bicycle division restructuring is on track, focusing on premium brands and expected to complete by year-end.

Financial guidance and impacts

• Sales for both motorcycle and bicycle segments are expected to decline by 10%-15% for the year.

• Motorcycle segment EBIT is expected to be slightly positive, aided by cost reductions, while the bicycle segment will incur EUR 110-130 million in impairments and restructuring costs.

• Net debt is expected to remain at last year's level due to continued dealer support and high inventories, with interest payments rising to high double-digit millions.