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Strong e-bike business drives further revenue growth at MIFA in FY 2012
- Revenues up 10.7 % to EUR 111.3 million (previous year: EUR 100.5 million)
- E-bike share of total revenues grows to 30.0 % (previous year: 12.5 %)
- Service business grows to EUR 4.3 million (previous year: EUR 1.6 million)
- Extraordinary effects from successful takeovers burden results
MIFA Mitteldeutsche Fahrradwerke AG (WKN A0B95Y, ISIN DE000A0B95Y8), Germany's largest manufacturer of bicycles in terms of sales, has published its financial figures for the 2012 financial year.
Booming demand for electricity driven bikes boosted MIFA's revenues in the 2012 financial year. At 47,000 e-bikes, MIFA sold around 75.6 % more units than in the previous year (27,000). At the same time, the average sales price per e-bike increased by 52.2 % to EUR 711 (previous year: EUR 467). Revenues generated with e-bikes consequently rose to EUR 33.4 million (previous year: EUR 12.6 million), corresponding to an increase in its share of total revenues to 30.0 %, compared with 12.5 % in the previous year. The rising proportion of e-bikes sold also boosted the overall average sales price per bicycle by more than 30 % to EUR 204 (previous year: EUR 156). Despite the total drop in the number of bicycles sold - 546,000 in the 2012 financial year, compared with 644,000 in the previous year - total revenues were up by 10.7 % to EUR 111.3 million (previous year: EUR 100.5 million), with the international share standing at 21.1 %.
As far as sales of conventional bicycles are concerned - which fell in line with expectations - MIFA sold a total of 499,000 units in 2012 (previous year: 617,000), reflecting a 19.2 % decline. Firstly, this is due to weaker demand for bicycles in Europe in the year under review due to weather conditions. The number of bicycles sold in Germany 2012 lay below the four million level for the first time since the year 2000, according to the German Two-Wheeler Industry Association (ZIV). Secondly, the decline results from MIFA's stronger focus on margins. Thanks to the higher average sales prices also achieved for conventional bicycles, revenues in this area consequently fell at a slower rate of 14.7 % to EUR 73.6 million (previous year: EUR 86.3 million).
Along with the sale of e-bikes, MIFA's service business also contributed to the revenue growth. MIFA operates the largest bicycle service network that spans the whole of Germany, consisting of one call centre and numerous local operations. The "Service and replacement parts" area contributed EUR 4.3 million to total revenues in the year under review (previous year: EUR 1.6 million). MIFA aims to further expand its service business in the future, as technological progress in bicycle construction is also making aftersales service more important.
MIFA realised two successful acquisitions in the year under review, through which it aims to further expand its high-margin business with e-bikes and its own brands in the specialist dealer area: "We regard 2012 as a year of new beginnings when we made decisive strategic preparations for our future growth," commented Peter Wicht, MIFA's CEO. The acquisition of Berlin-based e-bike manufacturer Grace in March was followed by the takeover of the Bavaria-based cult bicycle forging company Steppenwolf in August 2012. These corporate acquisitions fed through to extraordinary expenses which were not yet offset by any notable revenue in the financial year elapsed. Although the 32.7 % gross profit margin was slightly above the previous year's 32.6 %, it was offset by extraordinary personnel expenses and other operating expenses for the relocation of operations to Sangerhausen, and the integration of Grace and Steppenwolf, which totalled EUR 2.0 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) consequently stood at EUR 4.2 million, compared with EUR 7.3 million in the previous year.
After adjusting for extraordinary items, EBITDA amounted to EUR 6.3 million, and the adjusted EBITDA margin stood at 5.7 %, compared with 7.2 % in the previous year. Expenses for depreciation, amortisation and impairment charges were up year-on-year from EUR 2.6 million to EUR 3.4 million due to the first-time capitalisation of assets from both takeovers. Adjusted operating earnings (EBIT) amounted to EUR 2.9 million accordingly (previous year: EUR 4.6 million). Below the line, extraordinary items from the acquisitions and year-on-year 32.7 % higher personnel expenses of EUR 15.9 million fed through to a EUR 1.0 million loss in MIFA's 2012 financial year. When excluding extraordinary items, the Group generated adjusted net profit of EUR 1.1 million (previous year: EUR 2.0 million).
With the inclusion of the GRACE and Steppenwolf specialist dealer brands into its product range, MIFA is aiming for a significant revenue and margin gains in the medium term: "We aim to double our revenues to EUR 200 million in the coming four to six years, and boost the EBIT margin to 7 to 9%," is how Peter Wicht is pointing the way forward. "GRACE and Steppenwolf are already broadly represented among specialist dealers. We will become ever more present in this high-margin sales channel in the future - also and especially with e-bikes. In doing so, we will retain our core business, the sale of bicycles to wholesalers and retailers, as an essential element of our strategy. Our GRACE and Steppenwolf premium brands also benefit from our production and logistics' advanced degree of automation through high quality standards. In addition, volume effects in purchasing and production impact all our brands positively." MIFA also anticipates further growth impulses from its business with industrial customers. The e-bike produced by automotive manufacturer smart has already been manufactured at Sangerhausen since September 2012.
Michael Hecken, Grace's co-founder and head of MIFA's marketing and strategy areas since March 2012, has a clear message especially where the e-bike market's potential for MIFA is concerned: "The e-bike market is currently where the mobile phone market was in 1995. As an integrated vehicle builder, we aim to reach the design-conscious "Apple Generation" over the coming years." Given these prospects, MIFA is also already optimistic for the current financial year: "We are currently assuming that we will grow our revenues further in the 2013 financial year to between EUR 120 million and EUR 130 million, generating an EBIT margin between 4 and 5 %," comments Peter Wicht.
MIFA's complete annual report will be published on 16 April 2013 at www.mifa.de under the Investor Relations area.
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