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MIFA boosts total operating revenue in Q1 2013 - sales revenue and earnings down year-on-year due to long winter
- Weather-related 6.0 % revenue decline to EUR 36.0 million (Q1 previous year: EUR 38.3 million)
- Slight fall in EBIT margin from 7.7 % to 7.1 %
- Booming production for self-service retailers, OEM customers and specialist dealers
- FY 2013 guidance confirmed
MIFA Mitteldeutsche Fahrradwerke AG (WKN/German Securities Number A0B95Y, ISIN DE000A0B95Y8), Germany's largest bicycle manufacturer in terms of sales, generated EUR 36.0 million of sales revenue in the first quarter of 2013, down 6.0 % compared with the prior-year period (EUR 38.3 million). At the same time, total operating revenue (revenue plus changes in inventory and other own work capitalised) grew by 5.4 % to EUR 43.0 million (Q1 previous year: EUR 40.8 million). This divergence between revenue and total operating revenue arises from the long winter of 2012/13: some major MIFA customers delayed the planned delivery of bicycles produced during the winter beyond the 31 March reporting date because of winter weather lasting into April. The number of bicycles produced fell by 13.1 % to 205,000 units (Q1 previous year: 236,000), while the number of bicycles sold was down by 9.1 % to 190,000 units (Q1 previous year: 209,000). The value of changes in inventories almost trebled to EUR 7.1 million (Q1 previous year: EUR 2.5 million); at EUR 84.7 million, inventories stood at a record level as of 31 March (previous year: EUR 57.4 million).
"As long as it's freezing and snowing outside, nobody buys a new bicycle. For this reason, some of our customers have delayed their sales campaigns until the summer months from April/May on, so we will not achieve our planned sales revenues until after the quarter-end," explained Peter Wicht, MIFA's CEO. "But this is just a matter of the realisation of sales revenue over the course of the year: most of our sales volumes for 2013 are subject to fixed agreements, and will be shipped over the course of the year. So it makes no difference to our 2013 sales planning."
The revenue share of e-bikes fell to 22.0 % in the first quarter of 2013 (Q1 previous year: 25.8 %). Although MIFA shipped fewer e-bikes (13,000 units) than in the first quarter of the previous year (19,000 units), the average price per e-bike reported a significant rise of 16.5 % to EUR 607 (Q1 previous year: EUR 521). The average price for conventional bicycles stood at EUR 157, slightly above the previous year's level (Q1 previous year: EUR 148); the number of conventional bicycles sold fell 6.8 % to 177,000 units (Q1 previous year: 190,000). The regional distribution of revenue hardly changed: while MIFA achieved 80.1 % of its revenue in Germany in the prior-year period, the figure amounted to 78.6 % this year.
The gross profit margin of 31.0 % was significantly ahead of the prior-year period's 28.9 %. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell slightly to EUR 3.5 million (Q1 previous year: EUR 3.6 million), in line with a minor drop in the EBITDA margin to 9.5 % (Q1 previous year: 9.6 %) - especially because personnel costs have risen in structural terms since the takeovers of Grace (March 2012) and Steppenwolf (August 2012) as the result of the know-how transfer. The first quarter of 2012 did not yet include the personnel expenditure for both of these companies. At EUR 5.2 million, personnel expenses were 25.0 % higher than in the first three months of 2012 (Q1 previous year: EUR 4.1 million); the personnel expense ratio increased from 10.8 % to 14.3 %. The average number of employees also rose significantly to 1,020 individuals due to the higher business volume (Q1 previous year: 976). Other operating expenses of EUR 4.8 million (Q1 previous year: EUR 4.2 million) primarily comprise freight and handling costs, service expenditure, and rental and lease expenses.
Operating earnings (EBIT) of EUR 2.6 million were also 10.3 % lower than in the previous year's quarter (EUR 2.9 million) - primarily because, at EUR 0.9 million (Q1 previous year: EUR 0.7 million), higher depreciation and amortisation charges were incurred than in the previous year's quarter. This increase arises mainly from the high level of investments realised in the 2012 financial year (EUR 4.4 million) - predominantly in production plants, and in the customer relationships and industrial property rights of Grace and Steppenwolf. At 7.1 %, the EBIT margin (EBIT in relation to sales revenue) was a little lower than in the prior-year period (Q1 previous year: 7.7 %). After deducting the negative net financial result of EUR 0.4 million (Q1 previous year: EUR 0.0 million) and corporation taxes on income of EUR 0.6 million (Q1 previous year: EUR 0.8 million), the Group generated EUR 1.5 million of consolidated net income (Q1 previous year: EUR 2.1 million). The equity ratio of 33.0 % as of 31 March 2013 was significantly higher than a year previously (25.8 %). This is primarily attributable to the capital increase in July 2012.
CEO Peter Wicht takes an optimistic view of the full 2013 year: "We are making daily advances with our strategic reorientation. Production is booming for smart and for our GRACE and Steppenwolf specialist dealer brands. We continue to assume that we will boost our 2013 revenue to between EUR 120 million and EUR 130 million, achieving a 4 to 5 % EBIT margin."
MIFA's report on the first quarter of 2013 can be downloaded as of today from the company's website at www.mifa.de within the Investor Relations area.
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