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Better on track performance boosts Williams F1 team's financial results

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Better on track performance boosts Williams F1 team's financial results
Apr 11, 2016, 7:59 AM

Williams announced improved financial results this morning.

Williams announced improved financial results this morning. The company, which also includes an Advanced Engineering business, still posted a small loss, but the turnover was greatly increased thanks to better on track performances in 2014.

Deputy team principal Claire Williams briefed a small group of media, including this site, this morning at the RAC Club in London and said that "Williams is a good barometer of the financial health of F1".

F1 prize money is paid a year in arrears, so Williams benefitted during 2015 from its third place in 2014 and will do so again this season from its similar 2015 championship result. In addition the team also underwent an aggressive sponsor acquisition programme and added several new sponsors during the period including two from Lotus, Unilever and Avenade, while also increasing its activities with title sponsor Martini.

This all led to F1 revenues of £101.5 million, up from £70.2m the year before. The company posted a loss of £0.2m compared to £31.5m the previous year.

Although Williams is one of the teams that receives a bonus payment from F1 Management, due it its long service in F1, it was in a weak negotiating position when those bonuses were agreed in 2012 and thus receives only around $10m, compared to the US $100m that Ferrari receives or the $70m Red Bull and Mercedes get.

Claire Williams said that she expects the renegotiation of those agreements will take place before the expiry of the current deal in 2020 and that Williams was hopeful of getting a more equitable distribution of revenues. She also observed that for 2018 she expects the manufacturers will reduce the cost of the hybrid turbo engines to a level that "will significantly help our budget.'

Although she declined to give figures for that, it is understood that an agreement in principle has been reached on costs for 2018. The figure the FIA had requested was for the costs to come down to around €12m for a season's engine supply per team, rather than the €20m it is currently.

She did note that she felt it unlikely that there would be much of a rebate on engine bills for 2017 as much of the cost has already been incurred by the manufacturers.

Williams

Mike O’Driscoll, Group Chief Executive Officer, said; “Our 2015 financial results represent a major improvement, with strong revenue growth and positive cash flow. Over the past two years we have completely restructured our business, and our results reflect significant progress, both operationally and financially. We were able to continue our resurgence on the track, and balance revenue and expenditure, despite enormous levels of competitive spending in what is sport’s most challenging financial environment. Williams Advanced Engineering continues to make excellent progress and contributes to our overall results.

“Our Formula One team achieved third place in the Constructors’ Championship for the second successive season in 2015, illustrating the clear step change we have made in our racing competitiveness since we began our restructuring. Commercial rights income is paid a year in arrears, and these accounts reflect our much improved third place in the 2014 Constructors’ Championship. Our improved performance on the race track has also enhanced our power in the sponsorship market, with major brands such as Unilever, Avanade, BT and Hackett joining the WILLIAMS MARTINI RACING team during the period. We have also seen a number of our partners increase their commitments to the team, which demonstrates the continued strength of our brand.
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