Thank you, Natalie. Good evening, good afternoon, good morning, too, from wherever you are joining us virtually today, and welcome to our financial year 2021 results conference call. As you probably know, we pre-released top line results and selected customer KPIs on February 1st already. Today, we would like to give you a detailed full 2021 P&L overview, update on our strategic pillars, and give more insights on 2022 as well as medium term guidance, followed by a Q&A. Our presenters today are Founder and CEO Andrés Martin-Birner, joining us virtually, CFO Timm Armbrust, and Chief Marketing and Digital Officer Carsten Wich. Some of you might still know Carsten from the IPO, and we ask him to join us today again to give you an update on our exciting digital strategy and the recently launched marketing campaign.
Let's start with the extended version of our latest promotional video.
Hello. It's great to see again how much interest there is in Bike24's development. We actually offer products that are meant to be fun, to keep fit, and to help people with their daily mobility. It's not always easy at the moment when so much suffering happens not far from us. You can close your eyes to it. Therefore, we made a conscious decision quite early on not to accept and ship any more orders to Russia and Belarus. The two countries accounted for about 2% of sales last year. Now, let's move on to something pleasant, the general update and a look back to 2021. Last year was the best year in the company's history in terms of sales and profit. The results were within our guidance despite a challenging market environment.
Most importantly, we grew significantly faster than the market, which makes us particularly proud. The on-time webshop relaunch was a highlight and exceeded our expectations. Carsten Wich, our Chief Marketing and Digital Officer, will tell you more about it later. We were again able to acquire new customers at record levels, and most importantly, our existing customers are buying more frequently and the shopping baskets are growing. Our bike brand portfolio, a prerequisite for above average growth in the coming years, has increased enormously, and this despite a difficult environment. Of course, there were also issues that were very challenging, the well-known supply chain and delivery problems with bikes. Much more growth would have been possible if we had sufficient quantity. At the same time, there was selective pressure on selling prices for some brands in the apparel and accessories segment because there was good availability.
Our successful IPO was, of course, to invest sustainably in growth, which we are doing. As expected, this led to higher fixed costs in terms of personnel and regulatory costs. Again, of course, we see this fundamentally positive. We use the chance hiring talents, so we use these opportunities, and it's a long-term investment in our growth. Now, let's take a closer look to the results. Almost 821,000 active customers, a significant increase. Furthermore, our shopping baskets are now increasing to around EUR 150 in Q4, and EUR 140 for the full year. After 45% of growth in 2020, now again, we significantly grew by 26% last year. I would like to emphasize how important this value is as we have grown faster than the overall market and gained market share.
In addition to sales, a healthy EBITDA margin has always played a major role for the management team. Once again, we succeeded in achieving this at 12.2% in line with despite normalizing margins and higher costs due to the listing and our investments in headcount hiring. In addition to the main topic, bikes, there's also the further strategic focus, our path to Europe. Now, triple-digit growth in Spain for the fifth quarter in a row. What this means exactly in numbers, Timm Armbrust, our CFO, will now explain to you in the financial update.
Yeah. Thank you, Andrés. First of all, a warm welcome also from my side. I would now like to share with you some details on the results of the year 2021. We have again significantly increased our active customer base. Compared to end of 2020, the customer base increased by 18%. Together with the development of the repeat order rate, this shows that customer loyalty at Bike24 continues to develop positively. This also shows that the cycling trend is here to stay and was not a one-off, or the customers we acquired during COVID are here to stay, and we didn't lose them to offline stores again. However, it is not only the positive development in number of active customers, it is also the development of the customer KPIs. They make us confident for our medium and long-term targets.
The average revenue per customer within 12 months has increased to a record high of EUR 305. Customers order more frequently than in the previous year, again, a record high. The average order value is also higher and now at EUR 140. Let's turn to a more detailed look at our top-line performance. The industry-wide supply challenges have had a clear impact on our growth rates as already expected and communicated. Nevertheless, we were able to achieve a strong growth of 12% in the last quarter despite the lack of bikes in the offering. Without the delivery difficulties, we would have been able to grow much more strongly. Over the year as a whole, we increased our sales by 26%.
After a boom year with growth of 45%, to be able to grow by another 26% shows that our business model is very successful and long-term oriented. I expect that 2021 will be again a year where Bike24 could gain significant market shares. A deep dive by product segment shows that our focus on PAC was and remains the right strategic move. With our PAC sales, we more than offset full bike sales that were behind our expectations. It shows again that COVID was a step up in the bike market. The increased installed base of bicycles in the year 2020 drives the demand for parts, accessories, and clothing in the market every year. The revenue split by regions shows that Bike24 is growing in all major markets. In our core market, DACH, we grew by 24% despite our already high market share.
Here I would also like to remind you again of the exceptional high comparison base. Last year growth in the DACH region was around 61%. On a two-year basis, we were able to increase sales by an average of more than 41% per year. The growth in the European Economic Area is 32%. That shows our ability to win customers even without a localized webshop, only with our bold brand and product offering. The region outside EEA shows under proportional growth, but that is mainly driven by U.K. customers. Due to the Brexit, it was impossible to ship to the U.K. in 2021 with reasonable effort. Adjusted for the U.K., the growth in that region was 33%. Good news here. We are able to serve the customers in the U.K. again since this year.
Last but not least, the performance in our first localized market, Spain. The performance is outstanding. We were able to increase sales by 138% year-over-year. The comparison is for the last six months an already 100% translated webshop for our Spanish customers. That shows how successful Bike24's localization strategy is. Let us now switch to balance sheet items. Our net working capital has increased significantly due to our investment in inventory. There are two drivers behind. First, we had a catch-up effect from the year 2020. Caused by the surge in demand, the inventory level end of 2020 was around EUR 11 million lower than normal. Second, we invested in additional inventory. This reflects our decision to significantly increase our stock range in order to reduce the impact of supply chain challenges.
The inventory increase also impacts the free cash flow performance. Overall, the free cash flow is slightly negative. To show that Bike24 is capable of generating significant cash and that despite the strong growth trajectory, we have included adjusted free cash flow in the chart. To finance the growth in 2021 and prepare for the demand in 2022, we had to build EUR 15.8 million of inventory. In addition, maintenance investments of around EUR 2 million were necessary, especially in logistics and office workplaces. This results in a free cash flow before special items of EUR 12.9 million. The additional inventory build-up due to the delivery situation is already included in this figure. The catch-up effect in inventories for 2020 of EUR 11 million and the expansion investments of EUR 4.6 million were defined as special effects.
The expansion investments are related in particular to investment in our IT platform that's communicated during our IPO. Let's now move to profitability. As expected, the gross margin has normalized in the second half of 2021, as we had an apparent summer sales this year and the normal Black Friday period. Both were almost absent in previous year, as well as a slightly different product mix. Due to the unnaturally high margins in the first half of the year, driven by the combination of very high demand and limited supply, the year 2021 was a record year with a gross margin of 31.6%. As announced, Bike24 increased performance marketing spending to promote the market entry in Spain and to address a wider customer group in DACH. Please allow me to comment. Bike24's marketing spend is still tiny for a fast-growing ecommerce company.
This shows again that Bike24 convinces customers with its wide product portfolio, availability, and services. Alone in 2021, we have served 450,000 new customers. The contribution margin shows the operating results after deduction of costs that are related directly to revenues. This is a very good indicator of how we operate, and business is performing. With 22.8%, it is well above the medium-term target of 21%. On the other side, our investment into talent had a drag on profitability, and some positions simply did not exist last year at this time. It is important to note that these are strategic investments, particularly in our second management level and in teams that deliver very high strategic value to the business. For example, business development international, including online marketing specialists and IT engineering.
These teams are essential for our growth, and we hire them earlier than initially anticipated. Operational and administrative functions, such as logistics, customer service, accounting, and purchasing, are just as effective as in previous year. Overall, Bike24 generates an adjusted EBITDA margin of 12.2%. Now I would like to hand back to Andrés and Carsten, who will give an update on our strategic initiatives.
Thank you, Tim. Back to the agenda and our business update. The entire bike segment has performed very well despite the dominant supply chain problems. We keep getting questions about how big this market is in Europe. Once again, we can see that sustainable growth was possible and there is a great potential. There's still a great potential, especially for the online market, Bike24's market. There's a lot of market share to be gained, both because of the offline to online shift, but of course also within the online market. As a reminder, the mega trends in our industry have not changed, including the trends you know, the trend to e-bike, the trend to be fit and healthy, and the mega trend, green mobility.
We are in the position, you can see, that the online channel is also excellent for complex products, for expensive products, and for bulky products. Our growth is based on a clear strategy and a 100% focus on it. We will again benefit from our clear strategy, given the current situation with high gasoline prices. That should give us another boost. At this point, I would like to pass on to Carsten, our Chief Marketing and Digital Officer. Carsten has been on board for almost two years, and as you know maybe, he previously worked at Mobility in a leading marketing position. It's on you.
Thanks, Andrés. As Chief Marketing and Digital Officer, I'm excited to take our customer experience to a new level. With that, I mean the digital shopping experience on the one hand and stronger brand values on the other. As we are celebrating our twentieth anniversary this year, it is clear that we know our customers better than anyone else in the industry. This goes both ways. Our customers know what we stand for, and we know what they expect from us. Let's start with digital products first and our major milestone, the website relaunch in November. Andrés promised you further insights, and here we go. The relaunch redesigned it into a strong engagement uplift directly after launch. Based on our pilot, customer consumes 50% more content.
The shopping time, so the time a customer spends on our site, increased by 10%, and the bounce rate improved by 30%. Ultimately, you can conclude that the more products the customer is looking at, the more she or he is going to buy at the end. In addition to that, the new webshop provides an even stronger front and back-end performance. With the increased site speed, we could improve our search visibility on Google by 60% over the last months. That means we increased our online footprint organically at no additional cost. These are great results, but of course not the end. We move on improving critical touchpoints like the checkout or the product content to build a best-in-class experience. With the new webshop in the bag, we started our first international image campaign two weeks ago.
In the campaign, the campaign was rolled out in four countries, our major market, Germany, and the localized markets, Spain, Italy, and France. The main goal is to reach new customer groups by building a strong brand across Europe. As 360 campaign, we will cover all touchpoints from out-of-home print, display to YouTube and social media. By including third-party data, we know where potential new customers sit and how to optimize each campaign contact. It's a powerful package for the first image flight. To just give you an impression of the campaign, these are three different campaign themes. One for road bike, one for mountain bike, and urban. The campaign message are, of course, localized. It's a great effort by the whole team.
To sum it up, with the website relaunch, the go-to-market in Italy and France, and the brand campaign, we delivered strong value, and there's more to come. We are already working on the full rollout of the new Bike24 search to improve our conversion rate even further. With the new search, we will anticipate what customers are looking for and suggest relevant product offers. While the bike industry is indeed heavily seasonally driven, customer relationship management will allow us to stay connected with our users all the time. To leverage the buying peaks in an optimal way, we will heavily invest in email marketing automation and also invest in scalable content to guide users in a perfect way. With the growing brand and the competitive product, we of course will have a look into the next markets to localize. With that, I'll hand over to Andrés again.
Thanks, Carsten. Yeah, back to the agenda. In the segment of bikes, as you know, we didn't have a demand issue. We just didn't have enough stock. What was important, we delivered. We laid a very good basis for the future. We could convince new brands to work with us. This makes us confident for the current season and for the years ahead. We were able to get 20 new bike brands for the current season and many more we expect for the next season. In the meantime, we also covered the topic cargo bike, and we were elected from readers by our online bike magazine to Germany's Best Road Bike Online Store. Now more about our localization. The websites for France and Italy went live in January, so fully on schedule and as promised by us. The warehouse construction in Spain is progressing.
We started with hiring, and we expect to ship the first packages in Q3 this year. The AfterStore implementation is scheduled to start in the fall. I mentioned it before. Now here are the figures for our localization topic. Spain grew very successfully again in Q4. Not to forget that the comparable quarter in 2020 had already grown tremendously with 150%. We can obviously convince existing customers and convince many new customers. Our focus is working. 2021 was a very good year despite a partly turbulent environment. Our very good position in the market and our investments were ideal conditions for this. Bike24, of course, is an established player in this market. 2022 is also our anniversary year. We have proven for 20 years that we can grow continuously.
The result of the IPO is a very good basis for future sustainable growth and will take us to a growth dynamic, a whole new level of growth. We delivered what we promised in 2021. We have achieved the original guidance in the midpoint and are certainly one of the few e-com companies to have achieved it. We have plenty challenges, both in bikes and in the top-tier brands and parts brands. Our internationalization strategy is successful. As I mentioned, the local webshops for France and Italy are online, and the warehouse construction of the Spanish fulfillment center will soon be finished. We think that we are able in May this year to report more on Italy and France results. We will continue to invest in localization because we see that the strategy is successful.
Now to the outlook. It's really a complex economic situation. Not all of the external factors that influence our business can be reliably predictable today. We believe in the bike business and all the mega trends. Just look again at the gas prices that will really convince more customers to use the bike more often and for longer distances. We are confident that we can grow by 25% in the coming years with a double-digit EBITDA margin as in the past. This year, we are a bit more cautious. We are confident of growth, and we will remain highly profitable. The challenges in the supply chain exist. We have to deal with a higher inflation, and the geopolitical situation lowers consumer sentiment. We also trust ourselves again to grow faster than the market. Despite higher fixed costs, we will remain highly profitable.
The long-term trend and our targets will not change, but the situation cannot be reliably predicted in the short term. We are confident of growth of 10%-17% this year, provided the situation, especially the geopolitical situation, does not deteriorate further. Thank you for your attention, and now we are open for your questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may click the Q&A button on the left side of your screen and then click the Raise Your Hand button. If you are connected via phone, please press star followed by one on your telephone keypad. If you wish to remove yourself from the question queue, you may press star followed by two or please press the Lower Your Hand button. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may click the Q&A and Raise Your Hand button or press star followed by one at this time. One moment for the first question, please.
Ladies and gentlemen, as a reminder, if you would like to ask questions, please click the Q&A button and then Raise Your Hand button or press star followed by one at this time. The first question is the line of Grace Morley from JP Morgan. Please go ahead. Ms. Morley, you are now live.
Thank you. Hi, this is Grace Morley from JP Morgan. Thank you for taking my question. Perhaps could we just start with your margin guidance for the full year this year and perhaps explain what's driving the margin compression year-over-year in 2022 versus 2021, and perhaps breaking that down the different cost lines in terms of gross margin versus the growth initiatives and the investments in talent you're making. As we look beyond 2022, could you similarly explain kind of your confidence in going back to that double-digit EBITDA margin target and going towards sort of that 12% margin target by 2026? Thank you.
Hi, Grace. Yeah, thank you for your question. Maybe , could you move to or switch to slide 14? I think that's very helpful to answer the question a little bit. I think it's very important to note that despite that we expect a normalizing gross margin and slightly higher marketing costs for 2022, we expect to reach our medium and long-term target of 21% of sales at contribution level. That's very important, and as I said during the presentation, that's a very good indicator how the operational business is working. The reduction in EBITDA is really purely the result of bringing forward investment in talents. As already mentioned, for departments that are adding high strategic value to the future goals of Bike24.
We have significantly increased talent in the engineering, IT engineering, and also in the marketing department and I would say business development for our new geographies. That's nothing that will be in the future increased together with increasing revenues, yeah. That's more like fixed costs that we now put into the business that is really valuable for our future growth, but it will not increase like our revenues in double-digit % over the coming years. To be a little bit more exact, for example, senior management that is around EUR 2 million costs there, and also the IT costs.
We really have a lot of talents that we could hire so that we have an increase this year and that has also an impact on the next year of more than 60%.
Thank you.
The next question is in line of Adriana Glass from Berenberg. Please go ahead.
Yeah. Hi, everyone. I have the follow-up question actually on the point that you just discussed. In total, do you think the decrease in margin is like entirely the hiring? Could you give a EUR minimum figure apart from the EUR 2 million for second management line, for the total, if possible? On the top line, you mentioned that 2% of revenues, I think last year, was coming from Russia and Belarus. That should then also impact the 2022 guidance to that extent, doesn't it? How you think about the underlying markets in 2022, the cycling market.
Apart from how you plan for Bike24 specifically, what's your view of relevant trends for you, for example, sort of split between full bikes and parts, accessories, of the general online market? Thank you.
Maybe, I think Andrés will take the question regarding the market, but I will start with revenues. Yes, around about 2%, our revenues from Russia, Belarus and Ukraine. Yes, it also has an impact on our guidance for sure because that's in the end it's lost revenues. On the other hand, we also that I mentioned that we could ship to U.K. again to reasonable costs. That's U.K. coming back, and that in the end will limit the effect in the region outside the European Economic Area. Your first question, I hope I get it right because I think partly I already answered it in my last answer. Anyhow, so the second management level is for next year around about EUR 2 million personnel expenses, yeah.
We have a lot of new hires there, and that really comes from very famous and very successful companies like Red Bull and for the customer service from Canyon. That really will help us to maintain the goals. The same is for the IT, yeah. With joining Martin Wünnenberg as our now new CTO for more than a year, we really further professionalize our IT set up and are now able to hire talents that help us really to invest in the platform and make it ready for our targets 2026.
Yeah. Maybe the second question or second part of your question, when we look to the market and the forecast for 2022 and maybe the trends, I think I mentioned it, the mega trends, we think that they're all intact. We had, especially in the second half of last year, the development supply problems, as I explained, and this affected the entire industry. We think that the demand remains very good. Of course, we had really high comps last year.
Due to the poor availability last year, the demand has been slightly postponed, and I hope or think that it is postponed to this year, where we can see better delivery situation, especially when we look back to the last 12 weeks. When you see maybe you know it, there was a Fahrrad-Monitor 2021, a representative survey conducted by the German Federal Ministry for Digital and Transport. When you see only according to this survey, 27% of all respondents, and when you extrapolate it, then it's around 60 million are planning to buy a bicycle in the next 12 months. Additionally, cyclists, when you look to the survey, want to use their bikes 40% more often.
We are very optimistic when we look to the market, especially the online market.
Thank you very much. Maybe one more comment from Andrés Martin-Birner on the internationalization, and how the next steps ahead of apart from 2022 can look like for our audience.
As well, will you take the question or should I?
Yeah, you.
Yes, of course. We are very happy with the rollout into France and Italy in January this year. We will really give you detailed information about it in our conference call in May. Anyhow, our plan for our future, we see our localization strategy works very, very good. It's very promising results in all the countries. That's also that we starting to plan the next steps, yeah. In the second half of this year, we start to preparing for the next country or countries. Our discussion so far is that it will be a country in the Benelux. It's a very big market for us, where we see very good opportunities to grow with Bike24.
We're aiming to go online before the start of the season in 2023.
Thank you very much.
We have a follow-up question from Grace Morley. Please go ahead.
Hi. Thank you. Just a couple of follow-ups on revenues and top line, please. Firstly, could you perhaps share in terms of the 10%-17% revenue growth in 2022, what you expect for your PAC or your parts, accessories and clothing segment versus what you expect in terms of growth for your bike segment? Secondly, if we think about the quarterly performance and in particular now that we're at the end of Q1, could you share how we should think about that 10%-17% growth, by quarter and whether we should expect Q1 to maybe be slightly below that given some of the near-term supply chain constraints? Thank you.
You're welcome. First with the budget, we expect growth of around 10% for the parts, accessories, and clothing business, and a significant growth in the bicycle business. What makes us so confident there is that we have the incoming bikes in the first two months was very promising. Also you saw our figures last year that was below expectations. We will see what would be expected. We see in effect that we could bring some revenues that normally would take place in 2021 back to 2022. Regarding quarterly seasonality, maybe some comments on our first quarter. We expect in the first quarter 2022 a high single digit growth, yeah.
Despite the situation, the geopolitical situation and also the stressed supply chains in January and February. January starts extremely good, yeah, heavily supported by our winter sale. February was touched given the beginning of the war and the inflation pressure. March will be more or less in line with last year, given a very tough start to the beginning of the war, but also supported by good weather from mid-March onwards. March last year was the wake-up month of the whole year with a growth rate of more than 90%. Very tough comparables. Overall, we see in 2022, also due to the supply chain, a little bit of backloaded growth during the year. The main reason is there really the supply chain and bicycle.
We now see the first sign that we have good supply, but it takes some time until we could offer all the models. That will help us in the second half of the year, mainly.
Great. That's very helpful. Thank you.
There are no further questions at this time, and I would like to hand back to Marc Talea for closing comments.
Yeah. Thanks, Natalie, and thanks guys for joining. It's great also to see the number of participants increasing every time. This is the first time we released our annual report as a publicly listed company. It's also great to see more and more interest. We are looking forward to speaking to many of you on road show in the next couple of weeks and then speak to you again on May 10th for the Q1 results and an update on France and Italy. Thank you very much and have a good rest of the day.