KTM Power Sports AG - Investments

KTM Power Sports AG is a public limited company according to Austrian law seated in Mattighofen, Austria and having the following business address: Stallhofnerstr. 3, 5230 Mattighofen. The company's ID in the commercial register is FN 107673v. The shares of KTM Power Sports AG (ISIN: AT0000645403) are listed in the Prime Market of Vienna Stock Exchange under the symbol KTM.

Information about KTM Power Sports AG is available on the company's website www.ktm.com.

The equity capital of KTM Power Sports AG equals EUR 6,892,643 and is divided into 6,892,643 common shares with a nominal value of EUR 1. The distribution of ownership is as follows:

KTM Power Sports AG is the holding company of the KTM-Group, which, besides KTM-Sportsmotorcycle AG and KTM-Sportcar GmbH, consists of 17 sales subsidiaries as well as 5 joint ventures. KTM Power Sports AG is one of the internationally leading companies in the manufacturing of motor sports vehicles. The operative core company, KTM-Sportmotorcycle AG, develops and manufactures offroad and street motorcycles suitable for racing. KTM-Sportcar GmbH builds the light-weight sports car X-Bow, which represents KTM’s first step into the automotive field.

The operative KTM-Sportmotorcycle AG has been fully consolidated since December 2004.

Following the motto “Ready-to-Race”, KTM-Group offers experienced motorcycle-riders high performance motorcycles and sport motorcycles which can be used for racing without further modifications or as equipment for adventurous leisure time activities. KTM manufactures in Mattighofen off-road and street motorcycles under the brands "KTM" and "Husaberg". In addition to the motorcycles KTM-Group also manufactures and promotes brand accessories (spare parts, technical accessories and apparel) and small motorcycles (Sportminicycles) and suspension elements (spare parts, technical accessories and components), which are being marketed under the brand "WP Suspension".

In the business year from Sept. 1, 2006, until Aug. 31, 2007 the KTM-Group sold worldwide 90,306 motorcycles; revenues amounted to EUR 566.1 million in the respective period. 1,778 persons - in average - have been employed in the KTM-Group in the business year 2006/07.

The business strategy of KTM Power Sports AG includes actions aiming at (i) increasing the global market share of the KTM-Group through strengthening its position in the core markets, (ii) enlarging the product range and expanding the distribution network on a qualitative and quantitative level as well as (iii) increasing sales revenues and profits of the KTM-Group's brands through promotion and development of the motorcycle accessories market. Especially the following measures are planned: development of new street motorcycles and ATVs (All Terrain Vehicles) as well as extension of the offer of related products.

The cooperation with Polaris Industries Inc., started in the business year 2004/05, was has begun successfully on the operational and technical level and will be consistently continued. An engine supply contract has been signed and synergies in purchasing and in the technical cooperation have been achieved. KTM Power Sports AG's management expects the technical cooperation between the two companies to continue to be strong in the coming years.

The KTM sports car concept “X-Bow” has been showcased for the first time at the Geneva International Motor Show beginning of March 2007. The extremely positive feedback at this world premiere has turned the balance in order to prepare the series production. The “Sports Car” division shall be developed to another important business segment of the KTM-group in the medium-term. KTM-Sportcar GmbH has been founded for this purpose.