Earnings call transcript: Bike24 Holding sees record Q4 2024 revenue

Bike24 Holding AG (BIKE) reported a robust financial performance in Q4 2024, with a notable 7% increase in revenue, marking its strongest quarterly growth since Q3 2022. This growth comes amid a challenging year for the broader German bicycle market, which saw a 10% decline. The company’s stock price surged by 19.3% following the announcement, reflecting investor optimism about its strategic initiatives and financial health. According to InvestingPro data, the stock has shown strong momentum, trading near its 52-week high with impressive returns over the past three months.

Key Takeaways

• Bike24 achieved its highest bike sales in company history during Q4 2024.
• The company’s adjusted EBITDA margin improved to 2.4%, up from -1.3% in the previous year.
• Cost-cutting measures are expected to save €2.3 million in 2025.
• The company repaid €8 million in bank loans, enhancing its financial stability.
• Revenue from localized markets in Benelux grew by 26%.

Company Performance

Bike24’s performance in Q4 2024 was a bright spot in a year marked by a declining German bicycle market. The company focused on the bike enthusiast segment, avoiding the entry-level market, which helped drive record sales. Localization efforts in Finland and Poland have also contributed to the company’s growth. Despite market challenges, Bike24’s core DACH market saw an 8% revenue increase, with localized markets like Benelux and Southern Europe showing significant growth.

Financial Highlights

• Q4 2024 Revenue: Increased by 7% year-over-year.
• Full Year 2024 Revenue: Showed stable growth with progressive quarterly improvements.
• Adjusted EBITDA Margin: Improved to 2.4% from -1.3%.
• Net Working Capital: Reduced by 19%.
• Inventory Levels: Reduced by 14%.

Outlook & Guidance

For 2025, Bike24 has set a revenue guidance of €232-242 million, indicating a 37% increase. The company anticipates mid-teens growth in Q1 2025 and aims to return to double-digit annual growth rates. However, it remains cautious about full-year predictions due to macroeconomic uncertainties. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels, though analyst targets suggest potential upside. Subscribers can access 10+ additional ProTips and comprehensive valuation metrics through InvestingPro’s detailed research reports.

Executive Commentary

"We are focusing more on the very profitable bike enthusiasts," said Tim Ambrus, CFO. This strategic focus is expected to sustain the company’s growth momentum. CEO Andreas Martin Werner remarked, "We are carefully optimistic about the full year," reflecting a balanced view of the opportunities and challenges ahead.

Risks and Challenges

• The German bicycle market’s overall decline poses a risk to future growth.
• Overcapacity in the e-bike and mountain bike segments could pressure margins.
• Macroeconomic uncertainties may affect consumer spending and market dynamics.

Bike24’s strategic focus on high-value segments and cost management initiatives position it well to navigate these challenges. The company’s localization strategy and focus on the bike enthusiast market are key drivers of its positive outlook.

Full transcript - Bike24 Holding AG (BIKE) Q4 2024:

Andreas Martin Werner, Founder and CEO, BIKE24: Welcome to today’s earnings call presentation for the fourth quarter. My name is Andres Martin Werner. I’m the founder and CEO of BIKE24.

At my side, as always, is Tim Ambrus, the CFO of BIKE24. Let me now to start with the general update on the fourth quarter of this year before I hand over to Tim for the business update, finishing with a general summary, the BIKE24 twenty twenty five guidance, and then Q and A session. The fourth quarter was very successful overall and clearly shows again the positive trend. Despite the difficult market environment, we achieved a revenue growth of plus 7% and an adjusted EBITDA margin of plus 3.2%. This was the strongest sales growth since Q3 twenty twenty two.

On the other hand, our focus on profitability is also paying off. We achieved this result due to a significantly better gross margin, strict cost discipline, and a more focused marketing strategy. In particular, the continuous improvement of our offering for our customers led to growth in all core markets: DACH plus 8%, Spain, Italy, France and Benelux these are localized countries with sales growth of plus 10%. And rest of Europe plus 8%. Especially sales growth in Benelux remains strong at 26% in the second year of localization.

Moving on to our assortment segments. Our core pack segment recorded sales growth of plus 8%, which once again demonstrates the importance of the expert enthusiast spike market. On the other hand, despite the difficult market environment here it means that current reports show that German bicycle market has fallen by 10% in 2024 we were still able to generate robust sales growth of plus 3%. This was the highest sales of full bikes in the fourth quarter than ever before. In terms of inventory, we made further progress toward a healthier position.

Especially pack inventory was reduced significantly versus December 2023 by 16%. To look ahead, for the financial year 2025, we expect further top and bottom line improvements. In particular, supported by strong pack sales, we anticipate sales growth of between 232 and €242,000,000 which means growth of between 37%, and an adjusted EBITDA of between 7 and 12,100,000.0 Euro. We therefore expect the positive trend of the last few quarters to continue, And we consider the results of the last few weeks with double digit sales growth to be promising. So this was the intro from my side.

Tim, over to you, Fylde Financials.

Tim Ambrus, CFO, BIKE24: Yeah. Thanks, Andreas. And also a warm welcome from my side. So let me start by walking you through the financial figures for the fourth quarter of twenty twenty four. Overall, we increased our revenues in Q4 by 7%.

This continues the positive trend we have seen in previous quarters. While growth in Q3 was still at 3%, we were now able to accelerate it significantly. The development in the PEC segment is especially promising. With an 8% increase in sales, this was the most dynamic category. This was mainly driven by significant improved product availability.

Especially during Black Friday, we were able to present our customers with very attractive offers. The bike segment also grew by 3%. That’s a strong result, especially when considering that the overall market in our core market Germany declined by 10% for the full year. Looking at the regional development, we recorded clear growth in all markets. The only exception was the small non strategic West of World region, where revenues continued to decline.

This is mainly due to increasingly restrictive distribution strategies by some brands in those markets. However, since this region represents only around 3% of our total revenues, its impact on Bike twenty four’s overall performance is tiny. Let’s now take a closer look to our key regions. In our core market DACH, we increased revenues by 8%. This is primarily the result of shifting our customer mix back towards enthusiast.

Also, the number of customers remained stable. We increased average revenue per customer by 8%. This proves that our positioning and our secret sauce, assortment, availability, fast delivery, attractive pricing, and expert customer support continue to work well. In our localized markets, Fourth Italy, Spain, and the Benelux countries, the picture is intentionally different. So equally positive, as we are still in the early stage of market development with a clear focus on winning new customers.

Our efforts working well. The number of active customers increased by 11%, while average revenue per customer remained more or less stable. As a result, we achieved 10% revenue growth in this region. As Andreas mentioned earlier, the development in the Benelux region is especially noteworthy with plus 26%. In the West Of Europe, meaning countries without a localized web shop, that mainly honor via our .com domain, we also saw strong growth plus 8% revenue in Q4.

This was mainly driven by improved product availability and ongoing inventory reductions across the market. As a result, customers are increasingly returning to platforms like BIK24 that offers a full product portfolio of the bike industry. Before we move on the full year numbers for 2024, let’s take a brief look at the P and L for the quarter four. We improved our adjusted EBITDA margin from minus 7% to plus 3.2%. Part of this improvement is due to one off effects related to provisions for aged inventory.

But the operational improvements are clearly visible. We increased our gross margin by 2.2 percentage points on an operational basis. We also made progress on the cost side in every area. Let me highlight a few points. Marketing costs were further reduced relative to revenue despite 8% sales growth.

Personal costs improved by 4.3 percentage points year over year. This reflects the results of our resizing to the current company size of the past eighteen months. Fewer employees combined with rising revenues lead to a strong leverage effect. To sum up, Q4 was a very successful quarter. Revenue growth, improved margins and optimized costs clearly show we are on a solid path to operational recovery.

While we haven’t yet reached our EBITDA target, this was a very meaningful step forward. Let’s now turn to the full year 2024. Overall, BAIC24’s revenue in 2024 was stable, but the turnaround is clearly visible. Q1 still declining revenues, Q2 plus 1%, Q3 plus 3% and Q4 plus 7%. This means we managed to stabilize and accelerate the business quarter by quarter.

We also made visible progress on the balance sheet. Net working capital was reduced by 19%. This was mainly driven by the consistent sell through of excess inventory, allowing us to reduce our stock level by 14%. As a reminder, at the peak of the crisis in the bicycle market, we had over $90,000,000 in inventory. This had a direct impact on our free cash flow.

In combination with improved operating results, inventory reductions and lower investments significantly boosted free cash flow. We used most of the free cash flow to deleverage the company, repaying a total of €8,000,000 in bank loans. The full year profit and loss statement also clearly shows BAG twenty four has achieved its operational turnover. Adjusted EBITDA margin improved from minus 1.3% to plus 2.4%, in absolute terms from minus €2,900,000 to plus €5,300,000 Gross margin increased by 3.1 percentage points Performance marketing and sales costs decreased significantly related to revenues Personal costs were also reduced, also partly offset by salary increases. One important note here: The personal measures decided in November 2024 are only reflected in one twelfth of the annual figures.

For for 2025. We expect these measures to have a positive effect on personal costs of €2,300,000 With that, I conclude the business update and hand it back to Anwes.

Andreas Martin Werner, Founder and CEO, BIKE24: Thank you, Tim. Following an already successful third quarter, we were also able to increase sales and profit in the fourth quarter. It shows that our focus on profitability is paying off. The known reasons are the improved gross margins, the supply and costs, and our improved marketing approach. The fact that we were able to increase sales in all focus markets is a good sign of a trend we rose.

We are also pleased to report the highest sales of bikes we have ever had in the fourth quarter. Our continued focus on our working capital and improvements in our operating business have generated strong free cash flow in 2024. As a result, what Tim also mentioned, we were able to reduce last year the bike ’24 step by €8,000,000 Our strategic focus over the last years of rolling out our business model to other European countries that means driving forward localization and investing more in the full bike assortment is showing sustainable success. This is also demonstrated by the results in January and February with double digit sales growth and even accelerated growth in March. To finish, let’s look ahead.

With a return to substantial growth in Q4 last year and the promising results of the last few weeks, we anticipate a sales growth between €233,000,000 and €242,000,000 for 2025. We also expect adjusted EBITDA to improve this year, primarily thanks to operating leverage and cost savings. Overall, we expect to improve our profit with adjusted EBITDA of between €7,000,000 and €12,100,000 I would now like to thank you to you for your attention. And now we are open for your questions.

Moderator: Yes. Thank you for the presentation. And we will now move on to the Q and A session. For a dynamic conversation, we kindly ask you to ask questions in person via the audio line. To do so, click the raise your hand button.

And if you’re dialed in by phone, please use the key combination star nine followed by star six. And if you’re not able to speak freely today, you can also place your question in our chat box. So I’ll wait a few seconds for the first questions to come in via the audio line. And, yes, mister Specht, you should be able to speak now.

Mr. Specht, Analyst: Hello? Can you hear me?

Moderator: Yes. We can hear you. But maybe you speak a little bit louder.

Mr. Specht, Analyst: Okay. Three questions from my side. I honor the massive turnaround on the Q4 figures you, let’s say put in the front to us. But if I look at the early localized markets France, Italy, Spain on a yearly basis as they are quite significantly down. Do you expect this not to repeat in this year or do we need some more marketing spend in these markets to come back on a growth track?

That would be the first question. And then I would be interested in the pack full year growth figure. And then if I look at the customer development, you showed a decline over the full year, which was, let’s say, balanced towards the revenue line by higher basket size. Do you believe this pattern can continue or would you rather believe it would be worse to invest into new customers going forward?

Tim Ambrus, CFO, BIKE24: Yes. Thanks, Mr. Shveit for the question. Maybe I will start with the first question. So fourth, Italy and Spain, guess we saw a decline on a full year basis.

But as we also mentioned in previous calls, it says we changed our marketing strategy in that region significant. Yeah. We put the focus more on bike enthusiasts. Yeah. Because what we saw is with too much spending in this region on marketing, we acquire customers that we are not able to convert in really sticky customers.

Yeah. So we more, before we looking more for head terms like I would like to buy a bike and to make advertisement on that. Now we are more specific and attracting more the enthusiast customers and that pays out. So from beginning Q3, we turned it around and also in Q4, it was not a significant growth but in that regions we are already growing on the customer base size. So we promising that, that was the right decision and looking forward to the 2025 figures there.

The second question, it was related to pack full year. Could you elaborate what you are looking for?

Mr. Specht, Analyst: You showed the growth figure for the fourth quarter, but I would be interested how pack sub segment works for the full year.

Tim Ambrus, CFO, BIKE24: It was minus 1% overall. Mhmm. So we had a little bit more a little slightly goes on 3% in, in the bike segment, and pack segment was down minus 1%.

Mr. Specht, Analyst: Mhmm. And then maybe on the on the mix customer and basket size, would you still expect a slight decline this year on the customer side as well? No, I think

Tim Ambrus, CFO, BIKE24: I’m not 100% sure if it will be a decline or if it will be stable or small increase. But still, what I told you about Fritz, it’s overall our strategy that we’re more focusing on the very profitable bike enthusiast, yeah, and moving a little bit to marketing expanded away from, I would say, the entry and mid market segment and that we will see also that trend in 2025. But we also give you, I think, a slide ahead of the Q1 figures and also the customer growth of of new customers compared to last year is very good and is double digit at the moment.

Mr. Specht, Analyst: Okay. Thanks a lot.

Moderator: Thank you. And we move on to the next participant. Mr. Spang, you should be able to speak now.

Mr. Spang, Analyst: Yes. Hi, good afternoon, gentlemen. First, on the outlook for 2025, coming from the strong gross profit margin increase in 2024, you now said that you also expect operating leverage effect for 2025. So, what should we expect in terms of gross margin in 2025? That would be my first question.

Andreas Martin Werner, Founder and CEO, BIKE24: Of course, we first, we are a little bit depending on the market environment. And we have to look to the market price development in our core regions. This is, of course, the point what we are looking for. But, of course, the the main very important thing is to increase gross margins. And when we see there is a chance or opportunity to do this, then then we, we do this for this year.

And especially what you see or what we saw last year is the pressure on the full bike segment regarding the margins. And this is the point or the segment where we see the over capacities in the market. And this is a little bit too early what the season brings. Yeah. Of course, the first few weeks started very well.

And for us, it’s not 100% clear what are the over capacities in the industry or of competitors. And this is the main point of this depending on this gross margin issue. We see better gross margins in the PEC segment because they are all, I would say, 90% of the over capacities are over. But, yeah, 20%, as you know, of our revenue is coming from bikes. And this is the thing because we are not 100% have the transparency from the market.

Mr. Spang, Analyst: Do you think that you can make the next big step towards the 30% this year? Or will it take another, I don’t know, one, two, three years?

Tim Ambrus, CFO, BIKE24: No. We don’t expecting a big step in gross margin. We’re expecting a positive step, yeah, towards the 30% again, but not a big one. Yeah. There are still the uncertainty in the market is still there.

Yeah. So that will be again a step forward, but not a big

Mr. Spang, Analyst: one. Okay. And then regarding your statements for the first month of twenty twenty five, so you said that you experienced a double digit revenue increase in January and February and a significant increase in March. So, what numbers should we have in mind if you if we talk about Q1 in special service? Is it more on the low double digit area or is it possibly in the mid single digit or mid double digit is a very big range.

Tim Ambrus, CFO, BIKE24: Mid teens. Can we say that? Mid teens. That’s good.

Mr. Spang, Analyst: And then also regarding your statements for the first month, I was wondering because if we hear from other consumer brands, not on the bike, in the bike area, but for classical consumer goods, these statements are completely different to yours. So, what do you think or why do you think the bike area is in the first month? We will see how this will develop in the rest of the year, but at the beginning of the year different to other consuming areas.

Andreas Martin Werner, Founder and CEO, BIKE24: Okay. Maybe I can add something else for what Tim mentioned. So it’s clear for us. The year started very well and I think also a little bit better than expected. But on the other hand, you have to see in our core market, I would say the season started very early.

We had sunny weather in March of around two weeks, and this is really a tailwind for bike 24. And it’s always a tailwind when the season starts very well. That is also the the reason why we it’s a little bit early to say how what what the full year, affect us. That’s why that is also the reason why we are a little bit careful with the with the full year guidance. But, it’s sure that we will that we will finish the first quarter with a double digit low double digit growth.

But, and I see that is the that is really the the trend reversal, and it’s higher than the last quarter, in Q4. And we are looking very optimistic for the full year. But to be on the other hand, we are careful because the macroeconomic conditions are unclear. The consumer sentiment is unclear for us how it will develop. And that’s why we are a little bit careful for the full year.

I think in the May, we have a clearer view of the full season.

Tim Ambrus, CFO, BIKE24: But I would like to also add that we also did our homework. It’s not only the weather. It’s also I already mentioned during the presentation. It’s our availability of products. We are really compared to last year more attractive for the bike enthusiasts and that is also one of the main driver for the revenue growth revenue growth especially in January and February.

And in March, as Anders mentioned, also the positive weather comes into account.

Mr. Spang, Analyst: Yeah. Okay. Thanks.

Moderator: Thank you very much. And we move on to the next participant, Mr. Van Spee. You should be able to speak now. Mister Van Spee, you should be able to speak now.

Mr. Van Spee, Analyst: Can you hear me? Hello?

Moderator: Yes.

Mr. Van Spee, Analyst: Perfect. Congratulations to this very impressive numbers. And it’s also great to hear that you expect double digit growth in the first quarter that, especially in relation to last year where you are seeing you had double digit negative growth in the first quarter. Mike, I have three questions. First, could you give more insight for the credit terms?

Do you still have to repay 2,000,000 per quarter? And if are you completely can you do with the cash what do you want to do? I don’t know, invest or do you have to keep a certain amount as security for the bank? The other thing is in your annual report, which is also online, you are doing an interview, and you are talking about cost cutting that you have cut cost in the fourth quarter, and we will see more of that in 2025. And the last thing about Poland, you said you will open Poland.

What do you expect from there?

Tim Ambrus, CFO, BIKE24: Okay. Thanks, Mr. Schonstke, for the question. I would say I will answer the first two questions. So credits, credit facility and the new agreement, we have to repay the debt by €6,000,000 not €8,000,000 so we have there a reduction.

And on top, we get additional operational flexibility, yes? So the minimum liquidity that we have to show that’s including the revolver very important here, not only the cash also the undrawn revolver that’s still 8,500,000.0 was last year between 8,000,000 and 12,000,000. And this year, it’s only 5,000,000. And if we reached a certain threshold in net leverage, then that will be zero. So that will be out of the credit facility.

So overall, I could really say that we have more flexibility that we could really buy products to be successful. We’re still looking sure where we invest, but it’s a different situation than last year, an improved situation. Second one, the costs measure in November, yes, we did a reduction in personal expenses. And I also mentioned that during the presentation that, that was in 2024 only one twelve, the effect in the figures. But for 2025, that saves us up to 2,300,000 personal expenses.

This will be also, I think, netted a little bit with salary increases, but overall we will see a reduction in salaries and personal expenses for 2025. And the third question I hand over to Anders about Poland.

Andreas Martin Werner, Founder and CEO, BIKE24: Yes. I think I can I can answer this this questions regarding to Poland and to our localization? As you know, we also localized or we do the localization for for Finland. In both countries, we roll out March. So what we expect is, to be honest, a little bit comparable to to our localization for other countries or regions in Europe.

So I would say high double digit growth rates and over average growth rates compared to to other countries we are localized. So but on the other hand, it’s really very early to say what or how big is the impact to our business. To be honest, we that and that it’s clear that we’ll first localize the big countries in in the big cycling nations in in Europe with France, Italy, Spain, Benelux. So, the countries are, yeah, are really smaller. But on the other hand, it’s a part of our strategy.

And I think there’s many, many customers we can achieve with our assortment also in Finland and in Poland.

Mr. Van Spee, Analyst: Thank you very much. Thank you.

Moderator: Thank you. And we have a question in our chat box. I will read this out to you. Are the non DACH activities still loss making? And if so, can you give an indication of the level of startup losses?

How long do you expect it will take for the non DACH activities to breakeven?

Tim Ambrus, CFO, BIKE24: No. The non DACH activities are positive, yeah, from the beginning. Yeah. The good thing in our business model is we only have very small investments in the beginning, 100,000 to 200,000 case per country only for the translation. Everything else is doing automatically translation, so all the products.

And we ship from from the from the warehouse to Barcelona. So we are, from beginning, profitable. Yeah. For sure, regarding the shipping cost, if you send a parcel to a customer in Germany, or a parcel to a customer in Spain, that’s for us very cheap here because we have a local warehouse there. But the difference is only a little bit more investing in marketing and higher shipping expenses.

The West is the same, pricing is the same, gross margin is the same. So we are profitable also in all other countries with the first order.

Moderator: Thank you very much. And we will now move on to our participants via audio line. We have a user and I will give him the possibility to speak.

Matthias Miebel, Analyst, Copbank: Hello. This is Matthias Miebel calling from, from Copbank. I, I have a question regarding your focus on the bike enthusiasts. Can you give us any like numbers on how big you think the TAM for bike enthusiasts is in your targeted markets? And within that subgroup, given that you are financially constrained right now, can you, like, fully exploit the growth potential there?

Or or, you know, is there is there under targeted growth potential in those, in the subgroup of bike enthusiasts?

Tim Ambrus, CFO, BIKE24: So, there are no exact numbers. Yeah. What is the part of the market of bike enthusiasts? So it’s really little bit guessing. So what our internal discussion discussing also with external people from the markets, it’s around about 25% of the market is the enthusiast.

And what we see is that that market is growing. So we have that mega trends that’s still fully intact. Yeah. It’s on the one hand, it’s overall the investment in cycling infrastructure. Yeah.

A lot of governments investing in cycling infrastructure that make biking more attractive. And that leads that, yeah, more customers cycle to, to work, for example. And an enthusiast is not anyone who only, take races or, go with the mountain bike. No. It’s not also an enthusiast.

It’s someone who use the bike very often, yeah, and looking for high quality bikes. On the other side, I think other side also, the health and fitness trend is still there. And, the main part or main driver of this mega trend is an active lifestyle. And also, they are back to before and the products we sell come into account. And, that’s the reason why the, yeah, bike enthusiast market is so attractive.

Yeah. It’s growing, and also in the future is growing. And on top of that, what is very, yeah, positive about that market, the customers spend a lot of money and not only one time each for years. Yeah. We see the customer very often our platform, our average customer as an existing customer, buy at Buy 24, three times a year.

Yeah. And that helps to keep the marketing cost very low. And that’s why we see that market or that part of the market so attractive.

Matthias Miebel, Analyst, Copbank: And maybe as a follow-up on this, this focus is also for the pullback segment. But you say there is oversupply in pullbacks, and given your history that you used to do only pack, not pullbacks. And what is so, if you excuse my English, so fucked up with the with the, let’s say, value chain in full bikes. Like a personal anecdote, I tried to buy a cube bike in the, like, let’s say, like, €4,000 range, and it was not available on bike 24. It was not available at the local cube

Andreas Martin Werner, Founder and CEO, BIKE24: shop.

Matthias Miebel, Analyst, Copbank: And and also, you know, I was wondering, this bike had like a number two ranking in the newspaper tour, so why is it not available? What is the supply chain in, let’s say, race bikes, why is it not balanced? What is the problem since after COVID?

Andreas Martin Werner, Founder and CEO, BIKE24: Yeah. It’s but when you look to a specific bike model, it’s, yeah. Sometimes it’s it’s not so easy to to

Matthias Miebel, Analyst, Copbank: It’s not an example. Like a a very common mid class bike. It’s not like super

Andreas Martin Werner, Founder and CEO, BIKE24: Yeah. Yeah. That’s clear. But the to be honest, the when you see the supply chain or development of a bike, so it’s it’s it’s not it’s not like fast fashion. Yeah.

So, when they do the planning and I’m not I’m not the the manufacturer. So, sometimes it’s also for the for the industry very hard to predict what what the models, with a high demand for the next season. They try it, but when you see the the numbers or the statistics for the bike manufacturers, yeah, they they are a little bit same behavior like bike twenty four. Yeah. So they are a little bit careful.

Yeah. They they have also the the issues or had the issues with with cash and overcapacities and overstock. And that is the reason why I think they’re very careful. And I think for the industry as a whole, is it good to see, gaps. Yeah.

Because so the price level is maybe increasing a little bit more. And I would say the demand when the demand is okay and the availability is a little bit lower, so, we expect that these gross margins are higher. So that is on the I would say it’s it’s it would be a good trend. On the other hand, to be honest, I think the main overcapacity problems we see in our industry is the e bike market and a little bit the bio bike MTB market. So when you see bike manufacturers focusing on gravel, on race or road bikes, they are in a really better situation than maybe a company with a concentration only to to e bikes or to cheap bio MTBs.

So that is a little bit the difference. So we we see it a little bit positive when we have gaps and and the demand is high. And on the other hand, it’s it’s, yeah, regarding to the to the supply chain, it’s it’s very hard to predict the demand of a of a bike.

Matthias Miebel, Analyst, Copbank: And for you, Mortally, you you you still think that, you know, selling full bikes, taking them on your balance sheet, taking the risk of you have to basically call what what people will want, in six months or nine months is is is a good model for you. You think and it’s tying up a lot of capital as well. So you think that the fallback is still nonnegotiable for your business model?

Tim Ambrus, CFO, BIKE24: Yes. It still it still has a time in our right? It adds a place in our business model. Yeah. I think we communicated that what our target level is 25% of our revenues.

Yeah. We know how attractive the tech segment is. But also in the bike segment, what’s very attractive, it’s due to the e bike shift. The average price is very high. Yeah.

So in the end, maybe from the from from the gross margin level, it will not reach the pack level. But on the other side, due to the high ticket prices on the EBITDA margin, it’s in normal market circumstances, it’s more profitable than PEC. And I think that compensate a little bit maybe a little bit longer time, lead time in the warehouse. And on the other side, we sell roundabout a little bit more than 20,000 bikes. And in Germany alone, it’s only five it’s at 5,000,000.

Yeah? So still with that, we we focus on a very specific bike segment going not into the entry level, going to the high tickets where the user know what kind of bike I would like to have, what is my size, where the online player or the e commerce player comes into place. Yeah. We will not expand to bikes the entry level, where I think that’s not a good business model for an ecommerce company.

Matthias Miebel, Analyst, Copbank: And is there, you know, in your thinking, is there also the, you know, a marketplace model that that could, you know, reduce your your risk for, let’s say, unwanted inventory sitting on your on your policy?

Tim Ambrus, CFO, BIKE24: Now we are really in the strategic discussions. Yeah. So, I think we, happy to answer your questions and your thinking on the bike market in a in a separate call. What I can say is that, at the moment, we are not looking to be a marketplace. We’re discussing that sometimes, but at the moment, our focus really bringing Bikes24 back on track.

Yeah. It’s now back on track and stick with the Coward business model.

Matthias Miebel, Analyst, Copbank: And one final question on the financing side. During, you know, the run up to the to the prolongation of your of your credit. Have you considered raising equity?

Tim Ambrus, CFO, BIKE24: Not at the current share price.

Matthias Miebel, Analyst, Copbank: Very good. Thank you. Go back in the line.

Moderator: Welcome. Okay. Thank you. And one question out of our chat box. I will read it out.

Do you provide midterm sales and margin ambitions? So the question on your target numbers.

Andreas Martin Werner, Founder and CEO, BIKE24: Yeah. To to be honest, when when we look back back to the history, so we were able, we were we were able to grow in a on a double digit growth rate year by year till 2022 and 2021. Sorry. So this is this is really the what we are focusing for the midterm that we have again double digit growth rates in the nearest future, I would say.

Moderator: Okay. Thank you. And one of participants, Antonio Theodart, you should be able to speak now.

Antonio Theodart, Analyst: Hi. Thank you for the presentation and the excellent results. Can you hear me well?

Andreas Martin Werner, Founder and CEO, BIKE24: Yes.

Mr. Spang, Analyst: Yes.

Antonio Theodart, Analyst: Can you hear me?

Tim Ambrus, CFO, BIKE24: Yes. We can hear you. We can hear you. Antonio?

Antonio Theodart, Analyst: Yeah. I can hear you well. Sorry about that. Okay. So two questions, please.

The first one is, what’s the sustainable free cash flow, 25, 20 six, given that it is 10,500,000 what’s achieved in part of this inventory reduction? And my second question, more specific to the last question is 2026, what’s your target in EBITDA and growth rate? If you can be a little more specific about what range do you expect?

Tim Ambrus, CFO, BIKE24: Yeah. So, from the fee cash flow perspective, I think we are with this current goal double digit as you mentioned, we will not see a further reduction in inventories this year. But we think that at the moment that we not have to invest in inventory as well. So both sides we will keep it stable that our target. So then in the end, the free cash flow is fully driven by the operational EBITDA cash flow.

So that’s regarding the free cash flow. And

Antonio Theodart, Analyst: So sorry. So you would say it was a single digit growth. I mean, would stay around single digit growth, that’s free cash flow. How should we?

Tim Ambrus, CFO, BIKE24: Single digit growth if the EBITDA, I think it could also be a little bit less than this year because we don’t have inventory reduction. We will keep the inventory reduction stable. And one part of the free cash flow is around about SEK10 million inventory decrease. And on the other side, we’re aiming for $7,000,000 to $12,000,000 EBITDA operating EBITDA. So free cash flow will be this year with the still expected low EBITDA margins more or less stable to give you an indication.

And for 2026, we not published that figure as what we expect in EBITDA margin. We will also see in 2026 another step forward back to the high single digit EBITDA margins, but it will not jump to 9% or something else.

Antonio Theodart, Analyst: So not 9% to 9% because if I remember correctly, your goal in 2026 was 9% or that’s no longer the case?

Tim Ambrus, CFO, BIKE24: In 2020, I don’t know when was that goal?

Antonio Theodart, Analyst: Maybe I was from previous notes, but so I shouldn’t think about twenty, twenty six, nine percent, like maybe less optimistic.

Ingo Schmidt, Analyst, MONTIGA: Yes.

Antonio Theodart, Analyst: Okay. And for revenue growth in 2026, what should be reasonable?

Andreas Martin Werner, Founder and CEO, BIKE24: Today, it’s really hard to predict. Yeah. Because we are so so early in the season. So I think, it’s when we are in the in the in the midpoint of the season, I think it’s really easier for us to predict also for the full year this year. And and also, I think it’s it’s a little bit easier to have a forecast for 2026.

But on the other hand, it’s clear that we are aiming for double digit growth rates because we had it in our historical. We know what we have to do. But the main thing is how the market will recover. And we have a good demand and good weather conditions in Europe, I would say. And we have a good macroeconomic area in the in the world.

So then it’s really possible to to come earlier to this to this growth rates to double digit in 2026. But it’s really it’s not so easy to predict today.

Antonio Theodart, Analyst: Got it. Thank you very much. And congratulations again.

Andreas Martin Werner, Founder and CEO, BIKE24: Thank you.

Moderator: Thank you. And we move on to Mr. Schmidt. Mr. Schmidt, you should be able to speak now and place your question.

Ingo Schmidt, Analyst, MONTIGA: Yes. This is Ingo Schmidt from MONTIGA. Thank you for the presentation, especially for the promising outlook. I have just one question left regarding the outlook, twenty twenty five. How is the estimated revenue increase likely to be distributed between the pack segment and bicycles?

Will it be mostly driven by pack again or do you expect a bigger improvement in the bike segment as well perhaps in the second half of the year?

Andreas Martin Werner, Founder and CEO, BIKE24: To be honest, we are a little bit careful with our predictions in the full bike segment. I think the main driver will be the pack segment because we have we see here the rebound or the trend reversal a little bit heavier than to the pack segment. For for the for the full bike segment, it’s more, I would say, to to to maintain or to keep the our market share and and our revenue. That’s that’s a thing what we are aiming for for 2025, not to lose revenues in in in full bikes. And and also to to be, yeah, to be profitable and to, I would say, to look a little bit to to to the gross margins level.

That’s what we are looking for. But the main driver will be the PEC segment.

Ingo Schmidt, Analyst, MONTIGA: Okay. Thank you.

Moderator: Thank you. And in the meantime, we have received no further questions. I’ll wait for some seconds. No. Ah, well, we have one in our chat box.

I will read this out. Would you view another reason for stronger growth being your increased TAM due to the localization? In fact, doesn’t this even argue for at least as bright a future than the past pre 2022 double digit growth era?

Tim Ambrus, CFO, BIKE24: Yes. Sure. That’s the main reason for the localization, but it’s still too early. Yeah. We’re coming out from the I think from the baddest market situation in the bike industry.

Yeah. And there are, I think, positive signs at the sky at the moment. But,

Andreas Martin Werner, Founder and CEO, BIKE24: we are little we are really careful, yeah, to this to this situation because it could also be a one off. Yeah. That the early this season started very early. And, yeah, and and what we also predict is that ’25 to ’25, and we can confirm it that there are many new products in the market. So it’s a good demand for these new products.

But for us, it’s good to see how developed the last few weeks. But we don’t know how the consumer sentiment will develop in the coming few weeks. I think in the for us, the season is, I would say, additional, or in addition, March and April because of the of the weather situation. I think in the April or May, we have a really better view on the season and on our market situation.

Moderator: Okay. Thank you very much. So no further questions in our chat box and via the audio line. So we therefore come to the end of today’s earnings call. Thank you for joining in this lively conversation.

And should further questions arise at a later time, please feel free to contact investor relations. A big thank you to you gentlemen for your presentation and the time you took to answer the questions. I wish you all a lovely remaining week. And with this, I hand over again to Andres and Tim for some final remarks.

Andreas Martin Werner, Founder and CEO, BIKE24: Yeah. Thank you, all from Tim and Mai for the participation of our earnings call today. Thank you for your attention. Thank you for your questions. And, yeah, we will see, you again, I hope.

And have a nice day. Bye bye.

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