INTERIM FINANCIAL

S TAT E M E N T S
H1 2015
FOR THE FIRST HALF YEAR FROM
JANUARY 1 TO JUNE 30, 2015
O F K T M A G , M AT T I G H O F E N

1
KTM OVERVIEW

in million EUR

EARNINGS RATIOS 1. HY 2015 1. HY 2014

Revenue 515.1 410.3
EBITDA 70.2 52.4
EBIT 50.3 33.6
EBT 44.3 30.1
Net result after tax 33.3 26.2
EBITDA margin 13.6% 12.8%
EBIT margin 9.8% 8.2%

BALANCE SHEET RATIOS 06/30/15 12/31/14 31.03.2015 31.12.2014

Balance sheet total 793.7 694.8
Working capital 1) 146.1 106.8
Equity 346.3 327.6
Equity in % of total assets 43.6% 47.1%
Net financial debt 2) 135.7 87.5
Gearing 3) 39.2% 26.7%

CASH FLOW 1. HY 2015 1. HY 2014 Q1 2015 Q1 2014

Cash flow from operating activities 21.3 5.0
Free cash flow -22.9 -25.3

EMPLOYEES 06/30/15 12/31/14 31.03.2015 31.12.2014

Employees 4) 2,380 2,143

1)
Working Capital = Trade receivables + inventories - trade payables
2)
Net financial debt = Financial liabilities (current, non-current) - cash and cash equivalents - financing receivables
3)
Gearing = Net financial debt / equity including non-controlling interests
4)
Employees including temporary staff and external employees

2
TA B L E O F C O N T E N T S

Interim consolidated management report 4

Economic Environment 4
Business development and Highlights 4
Market development 4
Development of sales 4
Development of revenue 5
KTM Share 5
Annual General Meeting of the shareholders 5
Risk report 6
Related party disclosures 6
Significant events after the balance sheet date 6
Outlook 6

Interim consolidated financial statements 7

Consolidated statement of profit or loss 7
Consolidated statement of comprehensive income 7
Consolidated statement of financial position 8
Consolidated statement of cash flows 9
Consolidated statement of changes in equity 10
Notes to the interim consolidated financial statements 11

Statement of all legal representatives 18

3
I N T E R I M C O N S O L I D AT E D
M A N A G E M E N T R E P O RT
FOR THE 1. HALF YEAR 2015
(CONDENSED)

(1) Economic Environment
According to the International Monetary Fund (IMF) as of July 2015 the global
economic growth will grow further in 2015 by 3.3 %, whereas the prognosis as of
April 2015 showed a growth of 3.5%. For advanced economies, a growth of 2.1 %
is projected for the current year and 2.4% for the next year. For the Euro area, a
development of 1.5 % is projected for 2015. For the year 2016, the IMF anticipates
a global economic growth of 3.8 % and for the Euro area a growth of 1.7 %.
At the beginning of April, Red Bull KTM factory driver Ryan Dungey won the first
450 Supercross world championship title for the Red Bull KTM factory team in the
14th round of the Monster Energy Supercross world championship in Houston.
In May KTM presented the models of the new motocross generation 2016, developed
with a lot of experience, work, information, tests, and research and development.
In the first half year of 2015 KTM started to build a new motorsports building in
Munderfing with planned investments of EUR 13.2 million.

For emerging markets and developing economies, a growth in economic output of The construction of a new logistics center in Munderfing, with investments
4.2 % is projected for the year 2015 and a growth of 4.7 % for the year 2016. For amounting to approximately EUR 30 million, will be completed soon.
China, a growth rate of 6.8 % for the year 2015 and 6.3 % for the year 2016 is pro-
jected, as the prognosis in April already stated. The highest growth rate is expected
for China, with 7.5 % for the current and for the next year.

(3) Market development

(2) Business development and highlights
In the first half year of 2015 KTM reported consolidated revenues amounting to EUR
515.1 million. Therefore, an increase of 25.5 % compared to same period in prior
year could be achieved. Taking into account the 200 Duke, 390 Duke, RC 200 and
RC 390 sold by our partner Bajaj in India 88,531 KTM motorcycles were sold world-
wide in the first half year of 2015 (+25.6 % compared to prior year). In the first six
months of 2015 KTM showed an EBITDA of EUR 70.2 million (+34.0 % compared to
prior year) and an EBIT of EUR 50.3 million (+49.7 % compared to prior year). Net
result could be increased from EUR 26.2 million in prior year to EUR 33.3 million in
the first half year of 2015.
Compared to prior year, the overall European market1 increased by 9.6 % to approx-
imately 304,000 vehicles registered in the first half year of 2015. This increase is
primarily due to the upward trend in the largest European markets such as Germany
(+8 %), the United Kingdom (+22 %) and Spain (+20 %). Registrations of KTM
motorcycles in the overall European market could be increased to 8.1 % (+5 %
compared to prior year).
In the overall US market2 registrations increased, compared to prior year by 5.7 % to
approximately 236,000 vehicles registered in the first half year of 2015. KTM succeed-
ed in increasing its share in the overall US market by 5.7 % to 4.6 %.

The implementation of the global product strategy as well as the expansion into
further Asian and South American markets has been consistently pursued in the
first quarter of 2015.
In March 2015, the prolongation of the contracts of the Executive Board until
February 29, 2020 has been decided.
Since the integration of the brand Husqvarna, KTM AG follows a two brand strategy
for KTM and Husqvarna. Therefore, the sales organization has been realigned.
As the final step of this reorganization, the Supervisory Board concluded in the
meeting in March 2015 to merge KTM Motorrad AG into the listed KTM AG.
In the racing division, KTM factory rider Marc Coma celebrated his fifth title in
the Dakar championship. This is the 14th consecutive title for KTM in the worlds
toughest rally.
(4) Development of sales
In the first half year of 2015 KTM sold 70,491 Fullsize3 motorcycles (+10,896
motorcycles compared to prior year) out of which 24,336 motorcycles (+2,993
motorcycles compared to prior year) were sold in the offroad division and 46,155
motorcycles (+7,903 motorcycles compared to prior year) in the street division.
Sales units of Sportminicycles decreased to 3,139 motorcycles (-1,361 motorcycles
compared to prior year). In the first six months of 2015 KTM sold 18 X-Bows (-15
X-Bows compared to prior year).
By region, sales in North America (USA and Canada), our largest single market,
increased to 12,740 vehicles (+3,847 vehicles compared to prior year).

1)
Motorcycles >120 ccm, excluding Motocross, Scooters and ATVs
2)
Motorcycles >120 ccm, including Motocross, excluding Scooters and ATVs
3)
Motorcycles >120 ccm

4
(5) Development of revenue (6) KTM Share

In the offroad division, revenue rose to EUR 143.1 million (+26.1 % compared to
prior year). Revenue of Sportminicycles decreased to EUR 9.9 million compared
to prior year (-23.7 % compared to prior year).
In the street division, revenue increased to EUR 278.5 million (+34.1 % compared
to prior year).
The KTM share showed a downward trend in the first half year of 2015 closing at
EUR 107.95 on the last trading day (June 30, 2015). Compared to prior year balance
sheet date the share price rose from EUR 135 by 20.0 %. The highest closing price in
a period of six months was EUR 138.40 and the lowest closing price was EUR 104.50.
As of June 30, 2015 the market capitalization for 10,845,000 shares admitted for
trading amounted to EUR 1,170.7 million.

In the related products division, revenue could be increased by 9.7 %, to

EUR 83.6 million. SHARE FIGURES 1. HY 2015
Number of shares outstanding (ultimo 06/30/2015) 10,845,000
By region, sales in Europe increased to EUR 285.4 million (+16.3 % compared Lowest price (in EUR) 99.69
Highest price (in EUR) 140.00
to prior year). In North America revenue increased to EUR 134.5 million
Closing price (in EUR) as of June 30th, 2015 107.95
(+75.8 % compared to prior year). Revenue in other countries decreased
Market capitalization as of June 30th, 2015 (in million EUR) 1,170.7
slightly by 7.7 % to EUR 95.2 million.

TICKER SYMBOLS KTM

Reuters KTMP:VI
Bloomberg KTM AV
ISIN AT0000645403

Contact: Viktor Sigl / Tel.: +43 7742 6000 144 / E-mail: ir@ktm.com

(7) Annual General Meeting of the shareholders

The 27th Annual General Meeting of the shareholders of KTM AG took place on
April 23, 2015 in Mattighofen.

For the business year 2014, the Annual General Meeting decided to distribute a
dividend amounting to 1.50 EUR (prior year: 1.00 EUR) per share.

The members of the Supervisory Board and the Executive Board were discharged.
No changes were made to the composition of the Executive Board and the
Supervisory Board.

REVENUE BY PRODUCTS REVENUE BY REGION

16.2%
PG&A
0.2% 18.5%
X-Bow Rest of the world
1.9%
Sportminicycles
27.8% 55.4%
Offroad Europe

53.9% 26.1%
Street North America

5
(8) Risk report (11) Outlook

The risk report is provided in the consolidated financial statements as of The global product strategy continues to be implemented as a result of planned
December 31, 2014. Since then, there have been no material changes in expansions and is leading to strong rates of revenue and sales growth for the
the evaluation of risks. business year.

(9) Related party disclosures
All products and services rendered and received from related companies and
individuals as stated in the consolidated financial statements as of December
31, 2014 are carried out at arms lengths. In the first half year of 2015 there have
been no material changes regarding transaction partner, volume and nature of the
business realtionship.
The investment volume planned for 2015 continues on a high level. Investments
will continue to focus in particular on new series development projects along with
infrastructure and development investments in motorsport and logistics. The com-
pletion of the construction of the logistics center in Munderfing will be completed
in the third quarter. Production capacities at the main plant in Mattighofen will
also continue to be expanded. The KTM Groups liquidity and financing situation is
marked by long-term loans and a varied portfolio of different financing instruments
with various counterparties. Sufficient liquidity reserves for the planned growth are
thus available.

The Executive Board of KTM AG

(10) Significant events after the balance sheet date July 2015:

There have been no reportable events after June 30, 2015. Chairman of the Executive Board: DI Stefan Pierer e.h.

Members of the Executive Board: DI Harald Plckinger e.h.,

Mag. Friedrich Roithner e.h., Mag. Viktor Sigl, MBA e.h.,
Mag. Ing. Hubert Trunkenpolz e.h.,

DEVELOPEMENT OF THE KTM SHARES IN THE FIRST HY OF 2015 SHAREHOLDER STRUCTURE BY SHAREHOLDER RIGHTS (BY SHARE CAPITAL)

<1,0%
Freefloat and others

130%

120%

110% 51,2%
CROSS Industries AG
100 100%

90% 48,0%
Bajaj Auto
International
80% Holdings B.V.
76
70%

Jn Feb Mrz Apr Mai Juni

KTM AG ATX Prime

6
I N T E R I M C O N S O L I D AT E D
F I N A N C I A L S TAT E M E N T S
FOR THE 1. HALF YEAR 2015
(CONDENSED)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

in million EUR Note 1. HY 2015 1. HY 2014

Revenue (6) 515.1 410.3

Cost of sales -363.4 -293.9
Gross profit (6) 151.7 116.4

Selling and racing expenses (6) -67.3 -55.5

Research and development expenses -6.6 -4.4
Infrastructure and administration expenses -17.9 -14.9
Other operating expenses -9.7 -8.2
Other operating income 0.1 0.1
Result from operating activities (6) 50.3 33.6

Interest income 0.5 0.3

Interest expenses -4.3 -4.0
Other financial result -2.1 0.1
Profit before tax 44.3 30.1
Tax expense -11.0 -3.9
Profit for the reporting period (6) 33.3 26.2

of which attributable to the owners of the parent company 33.2 26.1

of which attributable to non-controlling interests 0.1 0.1

Earnings per share (in EUR) basic = diluted 3.07 2.41

Consolidated statement of comprehensive income

in million EUR Note 1. HY 2015 1. HY 2014

Profit for the reporting period 33.3 26.2

Currency translation 1.2 -0.1
Valuation of cash flow hedges 0.6 0.9
Deferred taxes on valuation of cash flow hedges -0.1 -0.2

Other comprehensive income - Possible

1.7 0.6
reclassification into the income statement

Total comprehensive income (7) 35.0 26.8

of which attributable to the owners of the parent company 34.9 26.7
of which attributable to non-controlling interests 0.1 0.1

7
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

in million EUR Note 06/30/2015 12/31/2014

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment (8) 142.5 124.1
Goodwill 78.6 78.7
Intangible assets (9) 189.7 174.0
Investments accounted for using the equity method 2.9 2.9
Deferred tax assets 3.1 2.5
Other non-current assets (10) 2.0 1.8
418.8 384.1
CURRENT ASSETS
Cash and cash equivalents (11) 76.5 68.8
Trade receivables (12) 106.7 70.3
Inventories (13) 156.0 141.6
Prepayments 3.3 2.9
Other current assets 32.4 27.0
374.9 310.7
Total 793.7 694.8

in million EUR Note 06/30/2015 12/31/2014

EQUITY AND LIABILITIES
CONSOLIDATED EQUITY
Share capital 10.8 10.8
Reserves including retained earnings 334.8 316.2
Equity of the owners of the parent company 345.7 327.1
Non-controlling interests 0.6 0.5
346.3 327.6
NON-CURRENT LIABILITES
Bonds 84.8 84.7
Financial liabilities (14) 113.6 64.0
Employee benefits 13.9 13.5
Deferred tax liabilities 29.2 20.5
Other non-current liabilities (15) 6.8 6.5
248.3 189.2
CURRENT LIABILITIES
Financial liabilities (14) 14.7 8.6
Trade payables 116.7 105.1
Provisions 7.6 6.8
Tax liabilities 6.1 5.9
Prepayments 1.5 1.6
Other current liabilities (16) 52.6 50.2
199.1 178.0
Total 793.7 694.8

8
CONSOLIDATED STATEMENT OF CASH FLOWS

in million EUR 1. HY 2015 1. HY 2014

CONSOLIDATED CASH FLOW FROM OPERATING ACTIVITIES

+ (-) Profit (loss) for the reporting period 33.2 26.1
+ (-) Profit (loss) allocated to non-controlling interests 0.1 0.1
+ (-) Interest expenses/ Interest income 3.8 3.7
- Interest paid -3.6 -3.3
+ Interest received 0.5 0.3
+ (-) Current income tax 3.0 2.1
- Income taxes paid -1.3 -0.8
+ (-) Deferred taxes 8.0 1.8
+ (-) Write-downs (additions) of fixed assets 20.0 18.7
+ (-) Other non cash-effective income and expense 1.6 0.7
Gross cash flow 65.2 49.4

- (+) Increase (decrease) in inventories -11.1 -12.4

Increase (decrease) in trade receivables, prepayments,

- (+) -36.7 -33.8
other current and non-current assets
Increase (decrease) in trade payables, prepayments
+ (-) 4.4 0.5
and other current and non-current liabilities
Increase (decrease) in tax liabilities, deferred taxes
+ (-) -0.5 1.4
and other provisions
-43.9 -44.4
Consolidated cash flow from operating activities 21.3 5.0

CONSOLIDATED CASH FLOW FROM INVESTING ACTIVITIES

- Investments in fixed assets -44.1 -30.9
- Investments in financial assets -0.1 0.0
+ Disposals of fixed assets 0.1 0.6
Consolidated cash flow from investing activities -44.2 -30.3

CONSOLIDATED CASH FLOW FROM FINANCING ACTIVITIES

- Dividend -16.3 -5.6
Increase (decrease) in current and
+ (-) 3.2 11.0
non-current financial liabilities
+ Taking out research loan 45.0 0.0
- (+) Other financing activities 0.1 0.3
Consolidated cash flow from financing activities 32.0 5.6

CONSOLIDATED CASH FLOW

+ (-) Consolidated cash flow from operating activities 21.3 5.0
+ (-) Consolidated cash flow from investing activities -44.2 -30.3
+ (-) Consolidated cash flow from financing activities 32.0 5.6
Change in cash and cash equivalents 9.1 -19.6
+ (-) Effect of exchange rate fluctuations on cash held -1.4 0.1
Cash and cash equivalents at the beginning
+ 68.8 31.6
of the reporting period
Cash and cash equivalents at the end of the reporting period 76.5 12.1
comprising: cash on hand, checks, cash in banks and time deposits

9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in million EUR Attributable to the owners of the parent company Non- Total
Share Reserves Cash flow Foreign Total controlling consolidated
capital including hedge currency interests equity
retained reserve translation
earnings reserve

Balance as of January 1, 2015 10.8 319.4 -3.6 0.4 327.1 0.5 327.6
Currency translation 0.0 0.0 0.0 1.2 1.2 0.0 1.2
Financial instruments 0.0 0.0 0.5 0.0 0.5 0.0 0.5
Other comprehensive income 0.0 0.0 0.5 1.2 1.7 0.0 1.7
Profit of the reporting period 0.0 33.2 0.0 0.0 33.2 0.1 33.3
Total comprehensive income 0.0 33.2 0.5 1.2 34.9 0.1 35.0
Dividend 0.0 -16.3 0.0 0.0 -16.3 0.0 -16.3
Balance as of June 30, 2015 10.8 336.4 -3.1 1.6 345.7 0.6 346.3

in million EUR Attributable to the owners of the parent company Non- Total
Share Reserves Cash flow Foreign Total controlling consolidated
capital including hedge currency interests equity
retained reserve translation
earnings reserve

Balance as of January 1, 2014 10.8 275.0 -2.5 -0.9 282.5 0.4 282.8
Currency translation 0.0 0.0 0.0 0.1 0.1 0.0 0.1
Financial instruments 0.0 0.0 0.6 0.0 0.6 0.0 0.6
Other comprehensive income 0.0 0.0 0.6 0.1 0.7 0.0 0.7
Profit of the reporting period 0.0 26.1 0.0 0.0 26.1 0.1 26.3
Total comprehensive income 0.0 26.1 0.6 0.1 26.8 0.1 26.9
Dividend 0.0 -10.8 0.0 0.0 -10.8 0.0 -10.8
Balance as of June 30, 2014 10.8 290.3 -1.9 -0.8 298.4 0.5 298.9

10
NOTES TO THE INTERIM
C O N S O L I D AT E D F I N A N C I A L
S TAT E M E N T S
FOR THE 1. HALF YEAR 2015
(1) The Company
KTM AG has its registered office in Stallhofnerstrasse 3, 5230 Mattighofen, Austria,
and has been recorded in the commercial register at the Provincial Court as Commer-
cial 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 in the acquisition and holding of stakes in entities
engaging in the development, production and distribution of such equipment. As
of June 30, 2015, the KTM Group comprised 39 subsidiaries, located in Austria,
Switzerland, the U.S., Japan, South Africa, Mexico and India as well as in various
other European countries, which are included within the consolidated financial
statements. Furthermore, the KTM Group has equity holdings 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.
Significant sales markets include the U.S., Germany, Australia, France, Malaysia,
Italy, the United Kingdom, Austria, Spain, and Canada as well as other European
countries.
(2) Principles of financial reporting
The interim financial statements of KTM AG as of June 30, 2015 were prepared in ac-
cordance with the International Financial Reporting Standards (IFRS) as adopted by the
EU considering IAS 34 Interim Financial Reporting. The interim consolidated financial
statements were neither audited nor reviewed by a certified public accountant.
The condensed interim consolidated financial statements do not include all the informa-
tion and disclosures required in the annual financial statements, and should be read in
conjunction with the consolidated financial statements as of December 31, 2014.
The figures in the interim consolidated financial statements are reported in the func-
tional currency of the parent, the Euro. Unless deviations are indicated specifically, all
amounts are rounded to 1,000,000 euros (EUR million), which may give rise to rounding
differences.
Slight differences in totals from adding up rounded amounts and percentages cannot
be excluded due to automated calculation tools.
(CONDENSED)
The accounting and valuation methods used for the consolidated financial statements
as of December 31, 2014 were applied unchanged, in principle, except the change in
presentation as described below. Further information regarding the accounting and
valuation methods are explained in the notes to the consolidated financial statements
for the financial year 2014. The accounting and valuation methods applied therein
constitute the basis for the present interim consolidated financial statements for the
first half year of 2015.
In the consolidated statement of profit or loss of 2015, the depreciation of the cap-
italized development costs is shown under cost of sales instead of research and
development expenses, as they were shown so far. The prior year figures are adopted
accordingly und therefore cost of sales increased whereas research and development
expenses decreased by EUR 10.3 million.
Otherwise, there were no changes in accounting and valuation methods.
The accounting principles of the companies included in the condensed interim consol-
idated financial statements are based on standardized accounting principles. These
principles were fully applied by all consolidated companies.
All further new or amended standards and interpretations that are effective in the
European Union from January 1, 2015 have no significant impact on the consolidated
interim financial statements of KTM AG.
IAS 19 Employee Contributions: Clarification of the allocation of employee contri-
butions or contributions from third parties that are linked to the period of service,
as well as the creation of a facilitation, if the amount of the contributions is
depending on the years of service.
A nnual Improvements 2010-2012: Changes and clarifications of several IFRS.
A nnual Improvements 2011-2013: Changes and clarifications of several IFRS.
11
(3) Scope of consolidation (6) Notes to the consolidated statement of profit or loss

All material subsidiaries under the legal or factual control of KTM AG have been Revenue increased, compared to prior year, by EUR 104.8 million to EUR 515.1
included in the interim consolidated financial statements of KTM AG for the first million (+ 25.5 %).
half year of 2015. Apart from the parent, 39 entities (of which 33 are foreign
entities and six are domestic entities) are therefore included by full consolidation In the first half year of 2015 gross profit rose by 30.3 % to EUR 151.7 million
in the KTM Group. compared to prior year due to an increased business volume resulting in a gross
margin ratio of 29.5 %.
The following table shows the scope of consolidation as of June 30, 2015:
Selling and racing expenses increased by EUR 11.8 million to EUR 67.3 million
Full consolidation At-equity consolidation
(+ 21.3%) compared to prior year.
As of January 1, 2015 39 3
Additions 2 0
Overhead expenses increased in total from EUR 82.8 million in the prior year to
Disposals 2 0
EUR 101.4 million (+22.5 %).
As of June 30, 2015 39 3

The result from operating activities increased to EUR 50.3 million (+ EUR
Husqvarna Motorsports, Inc., Murrieta, US, and Husqvarna Motorcycles SA Pty 16.7 million compared to prior year) due to a positive development of sales and
Ltd, Northriding, South Africa, have been founded in the first half year of 2015 revenue in the first half year of 2015. An EBIT margin of 9.8% (8.2% in prior
and are therefore included in the consolidation scope for the first time. year) could be recorded.

In the first half year 2015, KTM Events & Travel GmbH, in liquidation, was decon- The financial result increased by EUR -2.3 million to EUR -5.9 million compared
solidated and is therefore no longer included in the consolidation scope. to prior year (EUR -3.6 million) due to curreny valution effects.

Furthermore, the number of companies that are included by full consolidation The effective tax rate as of June 30, 2015, increased compared to the same
decreased by one due to the merger of KTM Motorrad AG into KTM AG. period in prior year from 13.0% to 24.8% due to the use of capitalised loss
carryforwards.

The profit for the financial year increased from EUR 26.2 million in prior year to
(4) Estimates EUR 33.3 million.

In the consolidated financial statements, certain estimates and assumptions have

to be made that affect the recognized assets and liabilities, the disclosure of con-
tingent liabilities as of the balance sheet date and the presentation of income and (7) Notes to the consolidated statement
expenses for the financial year. Estimates and assumptions are based on empirical of comprehensive income
values the Executive Board deems appropriate. The amounts actually arising may
differ from the estimates if assumed parameters develop contrary to expectations. The cash flow hedge reserve increased equity by EUR 0.5 million net in the
If new conditions become known, they are duly taken into account and previous reporting period.
assumptions are revised accordingly.
Total comprehensive income increased the groups equity in the reporting period
Estimates and uncertainties in judgements and assumptions are explained in the by EUR 35.0 million.
consolidated financial statements of KTM AG as of December 31, 2014 under note
(4) accounting policies.

Notes to the consolidated statement of financial position

(5) Seasonality (8) Property, plant and equipment

Seasonality effects occur due to a different seasonality of offroad- and street Property, plant and equipment increase by EUR 18.4 million to EUR 142.5 million
motorcycles. In the street segment, there are higher sales in the first half of the due to investments in the logistics center under construction and investments in
year, whereas in the offroad division, the main focus is on the second half of the tools.
year. Due to the increasing importance of the street segment to total revenue,
seasonal effects are straightened over the year to a great extent. Therefore,
management is not expecting a high dependency on seasons.

12
(9) Intangible assets
Intangible assets include, in substance, capitalized development costs as
well as license rights to brands and licenses. In the first six months of 2015,
intangible assets rose by EUR 15.7 million to EUR 189.7 million due to the net
capitalization of development costs and also due to IT investments.
(10) Other non-current assets
Other non-current financial assets include, as reported in the consolidated
financial statement as of December 31, 2014, 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
(11) Cash and cash equivalents
In the first half year 2015, cash and cash equivalents increase
by EUR 7.7 million to EUR 76.5 million.
12) Trade receivables
Trade receivables including receivables due from affiliated and associated
companies increased by EUR 36.4 million to EUR 106.7 million due to seasonal
influences. Taking into account the receivables sold in the first six months
of 2015 in the framework of the ABS transaction, this increase amounts to
EUR 45.0 million.
(13) Inventories
Inventories rose by EUR 14.4 million to EUR 156.0 million compared to prior year due
to an increase in finished goods and merchandise (+ EUR 13.8 million compared to
December 31, 2014). In the first half year 2015, allowances amounting to EUR 27.8
million (EUR 20.4 million in prior year) have been recognized.
(14) Financial liabilities
In the first half year 2015, non-current financial liabilities decreased by EUR 49.6 mil-
lion to EUR 113.6 million due to repayments as scheduled. Current financial liabilities
increased by EUR 6.1 million to EUR 14.7 million due to seasonal influences.
Net Financial Debt increased in the first half year of 2015, compared to December 31,
2014, by EUR 48.2 million to EUR 135.7 million due to seasonality. The gearing ratio
amounts to 39.3% (December 31, 2014: 26.7 %), due to seasonality.
(15) Other non-current liabilities
Other non-current liabilities increased by EUR 0.3 million to EUR 6.8 million
compared to December 31, 2014 and include, in substance, deposits received.
(16) Other current liabilities
Other current liabilities rose by EUR 2.4 million to EUR 52.6 million.
Other current liabilities include, in substance, employee benefits, tax liabilities,
liabilities from derivative financial instruments and liabilities due to sales bonuses
and price discounts.
(17) Notes to the consolidated statement of cash flows
Compared to prior year the free cash flow changed slightly from
EUR -25.3 million to EUR -22.9 million, and is therefore negative due to
seasonality. Whereas cash flow from operating activities rose due to an
increase in net profit (+ EUR 16.3 million), cash flow from investing activities
increased due to high investment measures (+ EUR 13.9 million).
(18) Notes to the consolidated statement
of changes in equity
Total equity rose from EUR 327.6 million as of December 31, 2014
to EUR 346.3 million.
(19) Notes to financial instruments
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. But it does not provide information on
financial instruments not measured at fair value where the carrying amount is a
reasonable approximation of fair value.
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 Fair value
million EUR Carrying amount Fair value
Level 1 Level 2 Level 3 Total
06/30/2015
Loans and receivables
Cash and cash equivalents 76.5 - - - - -
Trade receivables 106.7 - - - - -
Other financial assets 22.4 - - - - -
Sum 205.6

Available for sale

Other non-current financial assets 1.9 - - - - -
Sum 1.9

Held for trading

Other current financial assets - securities 1.5 1.5 1.5 - - 1.5
Sum 1.5

Fair value - Hedging instruments

Other current assets - Derivatives with positive

0.8 0.8 - 0.8 - 0.8
market value (cash flow hedge)

Sum 0.8
Total 209.8

Fair value
million EUR Carrying amount Fair value
Level 1 Level 2 Level 3 Total
12/31/2014
Loans and receivables
Cash and cash equivalents 68.8 - - - - -
Trade receivables 70.3 - - - - -
Other financial assets 22.2 - - - - -
Sum 161.3

Available for sale

Other non-current financial assets 1.8 - - - - -
Sum 1.8

Fair value - Hedging instruments

Other current assets - Derivatives with positive

0.5 0.5 - 0.5 - 0.5
market value (cash flow hedge)

Sum 0.5
Total 163.6

The following table shows the carrying amounts and fair values of the financial But it does not provide information on financial liabilities not measured
liabilities (financial instruments shown on the liabilities side), broken down at fair value where the carrying amount is a reasonable
by class or measurement category according to IAS 39. approximation of fair value.

14
 Fair value
million EUR Carrying amount Fair value
Level 1 Level 2 Level 3 Total
06/30/2015
At amortized cost
Financial liabilities 128.3 130.2 - - 130.2 130.2
Trade payables 116.7 - - - - -
Bonds 84.8 89.5 89.5 - - 89.5
Other current and non-current financial liabilities 27.3 - - - - -
Sum 357.1

Held for trading

Other financial liabilities -
0.2 0.2 - 0.2 - 0.2
Derivatives with negative market value
Sum 0.2

Fair value - Hedging instruments

Other financial liabilities -
Derivatives with negative market value 7.6 7.6 - 7.6 - 7.6
(cash flow hedge)
Sum 7.6
Totoal 364.9

Fair value
million EUR Carrying amount Fair value
Level 1 Level 2 Level 3 Total
12/31/2014
At amortized cost
Financial liabilities 72.6 73.1 - - 73.1 73.1
Trade payables 105.1 - - - - -
Bonds 84.7 89.3 89.3 - - 89.3
Other current and non-current financial liabilities 30.0 - - - - -
Sum 292.4

Held for trading

Other financial liabilities -
0.3 0.3 - 0.3 - 0.3
Derivatives with negative market value
Sum 0.3

Fair value - Hedging instruments

Other financial liabilities -
Derivatives with negative market value 7.6 7.6 - 7.6 - 7.6
(cash flow hedge)
Sum 7.6
Totoal 300.3

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Fair value determination

The following table shows the valuation technique used to determine the fair value as
well as the significant unobservable inputs used.

Financial instruments measured at fair value

Type Valuation technique Significant, unobservable inputs Connection between significant

Foreign currency forwards and
interest rate swaps
Securities held short term
unobservable inputs and
fair value measurement
Market comparison method:
The fair values are based on the market values
determined using accepted methodologies of Not applicable Not applicable
financial mathematics; they are regularly
checked for plausibility
For the valuation of securities held short term,
the current market price at the balance sheet Not applicable Not applicable
date is used.

Financial instruments not

measured at fair value

Type Valuation technique Significant, unobservable inputs

The exchange listed bond is

Bonds measured using the price quoted Not applicable
on the balance sheet date

Loans Discounted cash flows Risk premium for own credit risk

(20) Segment reporting
Given the previous structuring and internal reporting, the KTM Group did not until
2013 consist of one single business segment. The functional areas of R&D, Produc-
tion, Purchasing, and Marketing and the administrative group functions are focused
on a legal company at the single global production location in Austria. Likewise, the
product range and pricing for global sales connected with the bundling of oppor-
tunities and risk from selling motorcycles were established on the basis of a legal
company at the central location. Segment reporting for a single reporting segment
was therefore restricted to cross-segment information as per IFRS 8.31ff.
In 2014 the business volume of the Husqvarna brand measured in terms of consoli-
dated group sales increased sharply after operating activities began in October 2013.
Furthermore, in 2014 the organization was restructured to implement the two-brand
strategy. 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 marketing activities of both brands now take place via two different marketing
entities that are separated in both corporate and staffing terms. The outsourced
processes such as R&D activities, production and purchasing, and the administra-
tive group functions continue to provide services for both brands and therefore also
continue to be centered in corporate terms in one company that are to be 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 almost
identical production processes and is not therefore reported internally to the chief
operating decision-maker.

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 The table below shows segment information for the first half year 2015 and 2014:

in million EUR KTM Husqvarna Konsolidierung Konzern

06/30/2015
External revenue 460.6 54.5 0.0 515.1
Revenue between the segments 38.6 0.3 -38.9 0.0
Revenue total 499.2 54.8 -38.9 515.1

EBIT 47.5 2.7 0.1 50.3

Depreciation 19.6 0.4 0.0 20.0

in TEUR KTM Husqvarna Konsolidierung Konzern

06/30/2014
External revenue 372.7 37.6 0.0 410.3
Revenue between the segments 21.0 2.6 -23.6 0.0
Revenue total 393.7 40.2 -23.6 410.3

EBIT 31.7 1.8 0.1 33.6

Depreciation 18.5 0.2 0.0 18.7

The result in the balance column corresponds to the result in the statement of profit or loss. The reconciliation from the result
before tax is shown in the statement of profit or loss.

The following tables show the cross-segment information or the first half year 2014 and the first half year 2015.

Revenue by region HY 2015 in % HY 2014 in %

Europe 285.4 55.4 % 245.4 59.8 %
North America 134.5 26.1 % 76.5 18.7 %
Other regions 95.2 18.5 % 88.4 21.5 %
Total 515.1 100.0 % 410.3 100.0 %

Revenue by product group HY 2015 in % HY 2014 in %

Offroad-Sportmotorcycles 143.2 27.8 % 113.5 27.7 %
Street-Sportmotorcycles 277.5 53.9 % 205.8 50.1 %
Sportminicycles 9.8 1.9 % 12.9 3.1 %
X-Bows 1.0 0.2 % 1.9 0.5 %
PG&A 83.6 16.2 % 76.3 18.6 %
Total 515.1 100.0 % 410.3 100.0 %

In the first half year 2015 non-current assets of EUR 398.6 million (December 31, (22) Significant events after the balance sheet date
2014: EUR 365.7 million) were allocated to the companys country of origin and EUR
12.3 million (December 31, 2014: EUR 11.2 million) concern third countries. There have been no reportable events after June 30, 2015.

Neither the KTM segment nor Husqvarna report reliance on external customers within
the meaning of IFRS 8.34.

(21) Related Party disclosures

All products and services rendered and received from related companies and
individuals as stated in the consolidated financial statements as of
December 31, 2014 are carried out at arms lengths. In the first half year of 2015
there have been no material changes regarding transaction partner, volume and
nature of the business realtionship.

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S TAT E M E N T O F A L L
L E G A L R E P R E S E N TAT I V E S

We, the executive board of KTM AG, confirm to the best of our knowledge that the condensed interim consolidated financial statements for the first six months of 2015 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 condensed
consolidated management report gives a true and fair view of important events that have occurred during the first six months of the financial year and their impact on the
condensed interim consolidated financial statements, of the principal risks and uncertainties for the remaining six months of the financial year and of significant related party
transactions to be disclosed.

The Executive Board of KTM AG

July 2015

DI Stefan Pierer e.h., Chairman of the Executive Board

Members of the Executive Board:

DI Harald Plckinger e.h.,

Mag. Friedrich Roithner e.h.,

Mag. Viktor Sigl, MBA e.h.,

Mag. Ing. Hubert Trunkenpolz e.h.,

18
INTERIM FINANCIAL
S TAT E M E N T S H1 2015
Editorial deadline: July 24th, 2015
While every care was taken in compiling this 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 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 to deviate from the forward-looking statements given in the report.

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KTM AG
5230 Mattighofen, Austria
www.ktm.com
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