Munich The bicycle boom has been unbroken since the beginning of the corona pandemic. But this has not helped the Bike24 share so far. Since the stock market launch almost a year ago, the price has fallen from 15 to under six euros. Founder and CEO Andrés Martin-Birner said in an interview with the Handelsblatt: “We have a resilient business model, but we find it difficult to buck the general trend on the stock exchanges.”
However, the company is operationally profitable and the business model is very resilient, among other things due to the high proportion of accessories and parts that ensure repeat purchases by customers. The capital markets would also recognize this at some point.
Business was not easy in the first quarter. Martin-Birner says: “War, inflation and supply chains” were the big challenges. Bike24 was able to increase sales by seven percent to almost 62 million euros, primarily thanks to expansion abroad. Last year, revenues rose by around 26 percent to 250 million euros.
Bike24 has forecast an increase in sales of ten to 17 percent for the current year. The adjusted operating return on sales should be nine to ten percent. Martin-Birner confirmed the prognosis. Because of the many uncertainties, however, one will probably end up in the lower range.
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Since the beginning of the corona pandemic, the bicycle industry has experienced an unprecedented upswing. During the lockdown, many people had rediscovered cycling. The sales figures reached new records, many models were sold out for months.
Not just a short-term boom
Sales of e-bikes and bicycles in Germany fell from 5.0 to 4.7 million sales last year. But that was only due to the shortage of parts. For example, because chains and brake levers were missing, new models could only be delivered with a delay.
The industry is convinced that this is not a short-term boom. Burkhard Stork, Managing Director of the Zweirad-Industrie-Verband (ZIV), said: “We have jumped to a new level.”
Bike24 CEO Martin-Birner is also convinced: “The trend towards bicycles is unbroken.” Sales growth is dampened because chains, tires and rear derailleurs are still missing. Although demand was somewhat depressed by the start of the war, it remained very stable overall.
The bicycle industry is now benefiting from the now higher temperatures. Martin-Birner is convinced that high fuel prices could also encourage some drivers to switch.
The CEO founded the online retailer 20 years ago.
(Photo: Bike24/LinkedIn)
All that’s missing is an upswing on the stock market. Martin-Birner believes that Bike24 has been taken into clan a little: Since there are few direct, listed competitors, the company is viewed by the capital markets as an e-commerce specialist.
However, the sector is under a lot of pressure because in times of crisis investors take a particularly close look at whether business models are profitable. “But in contrast to many other online retailers, we have been that since we were founded 20 years ago.”
The fact that only around 23 percent of the shares are currently freely tradable should also play a role at Bike24. Financial investor Riverside currently holds 35 percent of the shares. Other investors include The Capital Group with a good seven percent and Rocket Internet with a good six percent.
Bicycle industry also increasingly interesting for investors
The bicycle industry is also currently benefiting from the trend towards higher-quality bikes – above all because the proportion of e-bikes is increasing. The average sales value last year was 1395 euros. Three years ago it was only 929 euros.
Despite the slight decline in sales, turnover from bicycles sold rose by two percent to 6.6 billion euros last year. Including spare parts and accessories, the industry has a turnover of around ten billion euros.
This also made the bicycle industry increasingly interesting for investors. Bike24 was valued at 660 million euros when it went public. Other companies in the industry also attracted investors. According to reports, the investment company GBL took over the German bicycle manufacturer Canyon, which relies heavily on internet sales, for 800 million euros.
Most recently, the Dutch group Pon Holdings (Gazelle, Urban Arrow) bought the bicycle subsidiary of the Canadian conglomerate Dorel Industries for 700 million euros. Pon Holdings thus secured brands such as Cannondale and Schwinn and doubled sales in the bicycle business to around 2.3 billion euros.
Bike24 is one of the pioneers in the industry. Martin-Birner founded the online retailer together with Lars Witt in Dresden 20 years ago. Today, the company sees itself as “one of the leading e-commerce platforms in continental Europe” for cyclists with a focus on the premium segment. The online shop has so far mainly sold spare parts and accessories, but the proportion of complete wheels is growing rapidly.
Last year, sales increased by around 26 percent to 250 million euros. The operating result (Ebitda) fell by 15 percent to 20.3 million euros, partly because of the costs for the IPO.
Martin-Birner sees particular potential in international expansion. Spain, France and Italy were able to increase sales by around two thirds on average in the first quarter. The construction of the new logistics center in the Barcelona area to supply southern European customers is progressing according to plan. Such warehouses are important for online retailers because customers expect faster and faster delivery.
More: E-bike pioneer Cowboy raises $80 million.