Williams’ earnings drop following 2017 Bottas pay-off | 2018 F1 season

Williams’ earnings fell in the first half of this year compared to the same period last year when its revenues were boosted by a one-off payment for releasing Valtteri Bottas to Mercedes.

Williams Grand Prix Engineering, the company responsible for operating the Williams Formula 1 team, registered earnings before interest, tax, depreciation and amortisation of £200,000 from overall revenues of £60.7m for the first sixth months of 2018 according to the listed group’s report for the period. Last year’s equivalent figures were £10.1m and £65.5m respectively.

RaceFans understands that the 2017 result included a one-off payment in compensation for allowing Bottas to join Mercedes. His services were required following Nico Rosberg shock departure at the end of 2016, despite having two years left on his contract.

The team’s year-on-year operating revenues – mainly the team’s share of the F1 prize money “pot” disbursed by commercial rights holder Liberty and sponsorship income – remained largely consistent between 2017-18.

However several financial concerns are looming for the team. Its current performance downturn – it presently lies 10th in the constructors’ classification with little hope of progressing this season – points to a reduction in approximately £15m in FOM revenues for next season. That will be compounded by the exit of Martini, its title sponsor since 2014, at the end of this year.

“We have delivered a solid set of financial results in what has been a challenging half year for our Formula 1 operations, whilst continuing to demonstrate growth in our Williams Advanced Engineering business,” said Mike O’Driscoll, Group Chief Executive Officer.

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WAE, which feeds off the F1’s team’s technologies, reported of turnover and EBITDA of £21.5m/£2.2m respectively for the January-June 2018 period (its 2017 figures were £19.9m and £3.4m respectively), with the company’s conference and heritage centres making marginal contributions.

According to its recently-filed full-year 2017 report, WGPE recorded an operating profit of £8.2m off total revenues of £126.7m. The sale of fixed property contributing an exceptional £7.3m, resulting in an operating profit for the year of £14.7m after interest charges.

During 2017 WGPE’s reported average head count was 98 in administration (an increase of eight over 2016), 482 in research and development (down from 594), and 44 marketing (up from 35), totalling 624 staff (719). According to a company spokesperson the year-on-year reduction in R&D staffing is due to internal transfers to WAE, which “transferred to its own entity.”

“The pace of change in Formula 1 remains unprecedented,” the filings state. “Despite our continuous investments in people, and our technical and production facilities, there remains a gap to the leading teams. Our programme of targeted investments will continue, and we will remain focussed on keeping costs balanced and under control to remain on a solid financial footing.

“Our financial prudence is not unique within the sport; however, the front runners, with whom we are aiming to compete, continue to benefit from inflated commercial rights income on top of significantly larger budgets for investment and development,” the statement added.

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