MIFA Mitteldeutsche Fahrradwerke AG, which makes more bikes in Germany than any other company, attributed a 14.5 percent decline in third quarter sales to dealers requesting later deliveries of new model year bikes, a phenomena being reported by many European bike manufacturers. 

 

MIFA has historically focused on contract manufacturing bikes for the mass channel at its highly automated factory in Sangerhausen, but is moving upmarket. Since raising capital  from existing shareholders in 2012, the company has acquired a controlling interest in Grace, a Berlin company that makes the high-end ebike shown to the right for Daimler Corp.'s Smart subsidiary. In August, 2012 it snapped up the assets of Steppenwolf, a premium brand distributed by independent bike dealers, out of bankrtupcy.

 

For the nine months ended Sept. 30, MIFA reported its revenues reached €97.7 million ($129 mm), which was virtually flat with the €97.6 million reported for the comparable period in 2012. Unit sales for the period also declined, reaching 462,000, down 7.6 percent compared with 500,000 in the same period last year. Sales of conventional bicycles fell by 5.1 percent to €67.0 million ($88 mm) compared with €72.2 million in the first nine months of 2012. However, average sales price of conventional bicycles increased by 2.6 percent to €158 ($208), compared with €154 a year earlier, thanks to the addition of Steppenwolfs mountain, trekking and urban bikes.  

 

E-bike sales, meanwhile, surged 16.2 percent to €30.1 million ($40 mm), or 30.8 percent of total sales, compared to €25.9 million, or 26.5 percent in the first nine months of 2012. As the proportion of high-priced e-bikes grew, the average selling price for e-bikes reached €745 ($980), up 20.7 percent from €617 reach in the nine months ended Sept. 30, 2012. The increase easily offset a 2,000-unit decline in e-bike sales, which dipped to 40,000. That helped lift the company’s consolidated average selling price for all bikes by 8.2 percent to 211€ ($278) from €195 in the comparable period of 2012. 

 

Gross profit margin for the recent nine month period rose 190 basis points to 33.4 percent. Earnings before depreciation, interest and tax (EBITDA) increased from €4.2 million to €7.5 million ($10 mm).  After adjusting the earnings of the previous year for one-off effects from the acquisition and relocation of the Grace and Steppenwolf Sanger Hausen brands, the result for the previous year adjusted EBITDA was €6.9 million. 

 

The EBITDA margin increased 340 basis points to 7.7 percent for the nine month period (7.1 percent in adjusted terms), despite a 12.2 percent increase in the personnel expenses ratio, which reached 12.6 percent. 

 

“The clear improvement in our operating earnings shows that our strategy – 'From volume to margin' – bears fruit,” said MIFA CEO Peter Wicht. “Moreover, Eurobike was very successful for us…so we expect sales growth again in the fourth quarter compared to last year. Against this background, I think the lower end of our revenue target for 2013 remains achievable.”


MIFA is aiming for sales of between €120-130 million and an EBIT margin of 4-5 percent for 2013.