Bike24 Holding AG

Quarterly Report • Nov 6, 2024

QUARTERLY STATEMENT Q3

SEPTEMBER 30, 2024

Table of content

At a glance ..... 3
Business performance ..... 4
Revenue and earnings position ..... 5
Net assets and financial position ..... 6
Forecast report ..... 8
Consolidated financial statements
Consolidated income statement and statement of comprehensive income ..... 10
Consolidated balance sheet ..... 11
Consolidated cash flow statement ..... 12
Consolidated statement of changes in equity ..... 13

Business performance

Despite the persistently tense consumer sentiment and the continued overcapacity in the bicycle market, BIKE24 was able to improve its profitability while at the same time achieving sales growth. While the focus in the first quarter was still partly on clearing out inventory, BIKE24 noticed an improvement in demand and a recovery in market prices from the second quarter onwards. The path taken since July 2023 of foregoing significant price reductions across a large part of the product range was thus continued.

The recovery of the business took place in all regions of the European Economic Area in the third quarter. Revenue in the DACH region increased by $2.7 \%$ compared to the third quarter of 2023, in the localized markets of Spain, Italy, France, Belgium, the Netherlands and Luxembourg by an average of $6.4 \%$ and in the rest of Europe by $12.5 \%$. Only revenue with customers outside the European Economic Area fell by $36.1 \%$ in the third quarter of 2024 compared to the same period of the previous year. This has no material impact on the BIKE24 Group's total revenue due to the small share of revenue generated in this region.

The customer mix at BIKE24 has changed as a result of the change in pricing strategy. The total number of active customers fell by $4.5 \%$ to 908 thousand as at September 30, 2024. The number of active customers is measured on a twelve-month basis (at least one order in the last 12 months), meaning that customers who opportunistically ordered from BIKE24 during the period from October 1, 2022 to June 30, 2023 to take advantage of the high discounts are no longer counted as active as at the reporting date of September 30.

Revenue and Earnings position

BIKE24 generated revenue of EUR 176.0 million in the first nine months of 2024. The gross margin improved by 1.9 percentage points (pp) to $26.9 \%$ in the nine-month period. This means that BIKE24 was able to increase its gross margin in the last three quarters compared to the same period of the previous year. This is due in particular to the adjusted pricing policy since the third quarter of the previous year and the recovery of market prices in the parts and accessories segment. BIKE24 also achieved sales growth in the last two quarters.

Despite growth in the second and third quarters of 2024, the decline in sales from the first quarter of 2024 could not be compensated. Overall, the decline in sales in the first nine months was $1.8 \%$ compared to the same period of the previous year (9M 2023: EUR 179.3 million). This is due to the continuing reluctance to consume and the late start to the cycling season in spring 2024.

At EUR 20.5 million, personnel expenses are slightly above the previous year's level (2023: EUR 19.6 million) due to higher wage costs.

Other operating expenses decreased to EUR 25.5 million (2023: EUR 27.2 million), mainly due to lower distribution costs (9M 2024: EUR 15.4 million; 9M 2023: EUR 16.7 million), which can be explained by lower shipping costs due to a shift in revenue (DACH share increased, rest of the world decreased).

Adjusted EBITDA increased by $5.1 \%$ to EUR 2.5 million in the third quarter (Q3 2023: EUR 2.4 million) and by $827.6 \%$ to EUR 3.7 million in the first nine months of 2024 (9M 2023: EUR 0.4 million). The result before tax, depreciation and amortization (EBITDA) improved by EUR 3.5 million to EUR 1.1 million (9M 2023: EUR - 2.4 million). The adjustment for special effects in the amount of EUR 2.7 million (9M 2023: EUR 2.8 million) primarily comprises expenses for the extension of the syndicated loan agreement and consulting costs for an IT system changeover that took place on September 1, 2024. The (unadjusted) operating result (EBIT) amounted to EUR - 11.3 million after EUR - 14.2 million in 2023.

The extension of the loan agreement in the first quarter of 2024 led to a one-off effect in interest expenses of EUR 0.6 million. In the previous year, the adjustment of the loan agreement and the resulting modification of the contractual payments led to a one-off effect of EUR 2.3 million in interest expenses. After deducting interest and taxes, the group generated a net result of EUR - 10.1 million after EUR - 15.0 million in the first nine months of 2023.

Net assets and financial position

Net assets

Non-current assets decreased by 6.1\% to EUR 140.1 million compared to December 31, 2023 (EUR 149.2 million). Of the investments in non-current assets amounting to EUR 1.9 million, EUR 0.8 million relates to investments in tangible assets, in particular for conversion measures in connection with the expansion of office space at our location in Dresden. Investments are offset by depreciation and amortization in the amount of EUR 12.3 million. The increase in financial assets of EUR 0.3 million is due to a strategic investment in a company.

Current assets fell by 1.6\% to EUR 95.8 million compared to December 31, 2023 (EUR 97.4 million). In particular, the planned reduction in inventories through the reduction of excess inventories and optimized purchasing management led to a decrease in inventories of EUR 4.1 million. There was an increase of EUR 1.3 million in other assets. This was due to higher VAT receivables. Trade receivables also increased by EUR 1.3 million to EUR 2.6 million. At EUR 18.3 million, Cash and cash equivalents were at the same level as at the comparative reporting date of December 31, 2023 (EUR 18.4 million).

On March 15, 2024, the existing syndicated loan agreement was extended until April 30, 2025 with slightly adjusted conditions. Regular quarterly repayments have been due since December 31, 2023. As of September 30, 2024, the total amount of Liabilities to banks of EUR 33.3 million is therefore recognized as a current liability.

Within current liabilities, trade payables increased by EUR 6.7 million to EUR 13.9 million. Liabilities were comparatively low as of December 31, 2023 due to the lower level of incoming goods at the end of the year, which is common in the industry. As of September 30, trade payables are in line with normal seasonal levels.

Other financial liabilities increased slightly by 5.4\% to EUR 1.9 million and relate exclusively to lease liabilities. Other liabilities, which primarily relate to provisions for personnel costs and VAT liabilities to foreign tax authorities, increased by EUR 2.5 million to EUR 15.1 million.

Equity decreased by 7.2\% to EUR 128.2 million compared to EUR 138.1 million as of December 31, 2023. The equity ratio fell to 54.3\% (December 31, 2023: 56.0\%).

Net assets and financial position

Financial position

BIKE24 generated a positive operating cash flow of EUR 9.3 million from operating activities in the first nine months of 2024, compared to EUR 1.1 million in the same period of the previous year. The main drivers of this development are the positive result for the period after adjustments of EUR 1.2 million (previous year: EUR - 2.1 million) and the reduction in trade working capital of EUR 11.0 million.

At EUR 1.9 million, the cash outflow for investing activities was significantly lower than the previous year's figure of EUR 5.2 million. Investments in tangible assets mainly relate to conversion measures in connection with the expansion of office space at our Dresden site. As in the previous year, additions to intangible assets this year mainly relate to own work capitalized.

BIKE24 recorded a cash outflow of EUR 7.4 million from financing activities after a cash outflow of EUR 1.3 million in the same period of the previous year. In addition to the repayment of the loan, the cash outflow also relates to the payment of lease liabilities. The cash outflow in the same quarter of the previous year relates exclusively to the payment of lease liabilities.

Cash and cash equivalents therefore amounted to EUR 18.3 million as at the reporting date compared to EUR 18.4 million at the end of the 2023 financial year, ensuring sufficient solvency. BIKE24 also has a credit line with a total volume of EUR 42.0 million, of which EUR 32.0 million had been drawn as of September 30, 2024. A further EUR 1.5 million is reserved under a guarantee.

Forecast report

In the first nine months of 2024, the company continued to drive forward its focus on profitability. A significant reduction in discount campaigns still had a negative impact on revenue growth in the first quarter, but led to improved profitability in all three quarters and simultaneous revenue growth in the last two quarters.

Despite the ongoing macroeconomic challenges, the company is confident that demand at BIKE24 will increase significantly compared to the same period of the previous year, particularly in the last quarter of 2024, while prices will rise at the same time. The reason for this is seen in particular in the optimized merchandise situation, but also in future targeted sales campaigns. The company's forecast of revenue growth of between $1 \%$ and $5 \%$ and a positive adjusted EBITDA margin of $0.7 \%$ to $4.2 \%$ for the financial year 2024 remains unchanged, even though revenue growth is expected to be at the lower end of the forecast.

Dresden, November 5, 2024

Andrés Martin-Birner
Management Board

Timm Armbrust
Management Board

CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 1 TO
SEPTEMBER 30, 2024

IN ACCORDANCE WITH THE
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS),
AS ADOPTED BY THE EUROPEAN UNION,
FOR BIKE24 HOLDING AG

I. Consolidated income statement and statement of comprehensive income

II. Condensed consolidated interim statements of financial position

III. Consolidated cash flow statement

IV. Consolidated statement of changes in equity

in EUR k unaudited	Subscribed capital	Nominal value treasury shares	Capital reserves	Retained Loss	Total equity
Balance as of January 1, 2024	44,166	$-1$	180,087	$-86,165$	138,087
Share-based compensation	-	-	212	-	212
Result for the period	-	-	-	$-10,089$	$-10,089$
Other comprehensive income after taxes	-	-	-	-	-
Comprehensive result	-	-	-	$-10,089$	$-10,089$
Balance as of September 30, 2024	44,166	$-1$	180,299	$-96,254$	128,210
in EUR $k$ unaudited	Subscribed capital	Nominal value treasury shares	Capital reserves	Retained Loss	Total equity
Balance as of January 1, 2023	44,166	$-1$	180,007	$-5,762$	218,410
Share-based compensation	-	-	287	-	287
Issue of employee shares	-	-	-	-	-
Result for the period	-	-	-	$-15,011$	$-15,011$
Other comprehensive income after taxes	-	-	-	-	-
Comprehensive result	-	-	-	$-15,011$	$-15,011$
Balance as of September 30, 2023	44,166	$-1$	180,294	$-20,773$	203,686

CONTACT

Bike24 Holding AG, Breitscheidstraße 40, 01237 Dresden
inßbike24.net