Bike24 Holding AG: Margin improvement initiatives continue to show positive development during third quarter of 2023

Bike24 Holding AG: Margin improvement initiatives continue to show positive development during third quarter of 2023

• Total sales were down -16 percent to EUR 61.1 million in the third quarter due to persistently poor consumer sentiment in the core market DACH
• Localized markets and full-bike segment continue to grow strongly and well above market average with +9 and +26 percent respectively
• EBITDA margin (adjusted) of 3.9 percent shows a continuous improvement versus the first and second quarters as well as the prior year quarter
• Inventories were reduced to EUR 84.8 million and cash and cash equivalents increased to EUR 16.9 million versus prior quarter
• Sales guidance for FY 2023 adjusted from previously -10 to -5 percent to -16 to -11 percent, guidance for adjusted EBITDA margin remains unchanged

Dresden, November 2, 2023. In the third quarter of 2023, Bike24 Holding AG (BIKE24) recorded a decline in sales of -16 percent due to persistently poor consumer sentiment in the core market DACH. In the full-bike segment, sales increased by +26 percent due to the expanded brand portfolio. Adjustments in the pricing strategy resulted in a gross margin of 27.1 percent, a significant increase compared to the prior-year quarter (24.8 percent).

Despite the ongoing macroeconomic challenges, BIKE24 remains confident about the long-term megatrends in the outdoor and cycling markets. Andrés Martin-Birner, founder and CEO of BIKE24, emphasizes: "Even though market conditions are currently difficult, we are firmly convinced that the megatrends surrounding cycling are only temporarily interrupted. The strong growth in the full-bike segment confirms our previous statements that the market has by far not peaked yet."

Ongoing strong growth in full-bike segment

BIKE24 reports a -16 percent decline in revenues to EUR 61.1 million for Q3 2023 (Q3 2022: EUR 72.6 million, 9M 2023: -11 percent to EUR 179.3 million), which is entirely attributable to lower revenues (-23%) in the PAC segment (parts, accessories and clothing). This segment comprises a higher share of discretionary products and is therefore disproportionately affected by the current market situation. A total of EUR 11.5 million (Q3 2022: EUR 10.5 million) was generated in the localized markets which corresponds to +9% growth, mainly due to the above-average performance in the Benelux markets. The six localized countries thus account for 19 percent of total sales (Q3 2022: 15 percent). Sales in the full-bike segment increased by +26 percent to EUR 12.6 million due to the expanded brand portfolio and now account for 21 percent of total sales (Q3 2022: 14 percent).

Significant increase in gross margin due to new pricing strategy

Gross margin increased by 2.3 percentage points to 27.1 percent in the third quarter (9M: 24.9 percent compared to 27.5 percent in the prior-year period) due to adjustments in the pricing strategy.

Adjusted for extraordinary expenses of EUR 573 thousand (9M: EUR 2.8 million), which mainly relate to expenses for the share option program and the planned SAP implementation, earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) amounted to EUR 2.4 million, the same as in the prior-year quarter (9M: EUR 0.4 million compared to EUR 11.5 million in the prior-year period). This corresponds to an adjusted EBITDA margin of 3.9 percent for the third quarter (Q3 2022: 3.3 percent).

Due to the proactive realignment of the procurement policy, inventories were reduced to EUR 84.8 million (June 2023: EUR 90.5 million, September 2022: EUR 96.1 million) and are thus on track to reach a comfortable level by the end of the year. Cash and cash equivalents were increased to EUR 16.9 million (June 2023: EUR 13.3 million) due to disciplined cost control and the sell-out of inventories.

Timm Armbrust, CFO of BIKE24 comments: "We are pleased with the results generated in the third quarter and proud to have improved key items such as inventories and liquidity to a healthy level in a market environment that remains challenging. Even though sales fell short of our initial expectations, selected promotional activities led to inventory reductions and a detailed profitability analysis resulted in significantly better margins."

Sales guidance adjusted to reflect current market environment

As the expected easing of market overcapacities is expected to be delayed further, the management of BIKE24 has adjusted the sales guidance for the financial year 2023. Instead of a revenue decline of -10 to -5 percent, a development of -16 to -11 percent is now expected. Despite the adjusted revenue expectations, the initiatives to increase profitability will continue to be driven forward, so that the forecast of -1 to 1 percent for the adjusted EBITDA margin will be maintained.

The earnings call will take place today at 12 p.m. and can be followed via the following link:

https://montegaconnect.de/event/jxqeuyoz0rn5js9pah68sdtx4pdbjfoi
 

Press Relations:
Olga de Gast
E-mail: presse@bike24.net
+49 151 2705 3924

Investor Relations:
Moritz Verleger
E-mail: ir@bike24.net
+49 151 2414 0166

About BIKE24

BIKE24 is one of the leading e-commerce cycling platforms in continental Europe. Focusing on the premium segment, the online retailer is the one-stop shop for the fast-growing community of bike enthusiasts, promoting green mobility. Founded in 2002, it has become a leading e-commerce company in continental Europe and a global player in this fast-growing market. Led by CEO and co-founder Andrés Martin-Birner, the online store now offers customers 77,000 items from more than 800 brands. This gives BIKE24 the broadest range of branded products in the market in continental Europe. The online bike platform has a presence with eight local online shops in Germany (bike24.de), Austria (bike24.at), Spain (bike24.es), France (bike24.fr), Italy (bike24.it), the Netherlands (bike24.nl), Belgium (bike24.be) and Luxembourg (bike24.lu). In addition, the international shop (bike24.com) supplies customers all over the world.