Good afternoon, ladies and gentlemen. On behalf of Montega, a warm welcome to today's earnings call of the Bike24 Holding AG, following the publication of the Q1 figures of 2024. Bike24 is represented by the CEO, Andrés Martin-Birner, the CFO, Timm Armbrust, as well as Moritz Verleger from Investor Relations, who will speak in a moment and guide us through the presentation and the results. The floor will be opened for upcoming questions following the presentation. Having said that, I hand over the floor to you, Moritz.
Thanks, Alex. Good evening, good afternoon, good morning from wherever you are joining us virtually today, and welcome to our first quarter 2024 results conference call. Following our first comments on current trading in March during our full year results release, today, we would like to update you on our non-financial as well as sales KPIs, provide a detailed gross margin, inventory, and P&L overview, finishing with the confirmation of our 2024 full year guidance. As always, our presenters today are founder and CEO, Andrés Martin-Birner, and the CFO, Timm Armbrust. Andrés, the stage is yours.
Thank you, Moritz, and also a warm welcome from my side. As always, please allow me to start with the general update on the first quarter of this year before I hand over to Tim for the business update, and I'm finishing with a general summary and the confirmation of our 2024 guidance. It's promising to see that we managed to increase our absolute gross profit by 4%, despite total sales being down 11% quarter over quarter. The sales decline was in line with what we anticipated already, as we reduced promotional activities significantly throughout the quarter to focus on improved profitability. That said, this is in line with our planning and did not have any impact on our full year guidance. Sales growth improved sequentially over the quarter, which is encouraging to see, especially now that we just started into the cycling season.
Moving on to localized markets. Also, during this first quarter of the year, the strong momentum of the Benelux markets continued and even accelerated versus the fourth quarter, with these markets growing 95% during Q1. Belgium and the Netherlands again outperformed all other markets significantly, with sales growth of 115 and 104%, respectively. Sales in Southern Europe slowed down a little bit as we concentrated our available marketing capacities on the German-speaking countries. Moving on, please allow me to quickly touch on the gross margin development again. Absolute gross profit increased, although the total sales volume was 11% lower than last year. In other words, our Q1 gross margin improvement was 3.6 percentage points to now 25.1%.
This is still below what we managed to achieve in the pre-COVID normalized path, with gross margin of 28%-29%. The improvement shows that market prices, especially in the tech segment, started to normalize also in pre-season times and reversed over capacities in tech SKUs. We made strategic price adjustments across all product segments based on demand and supply, and we are confident that margins in tech will continue to recover further throughout the year. Tim will speak about the details later on. In terms of balance sheet positions, we managed to keep two important positions stable during the quarter, despite the first quarter of each year being an intake quarter for seasonal inventory with corresponding cash outflow. Although we indeed replaced old merchandise with fresh one, strong cash flow management resulted in stable inventory and cash positions at the end of March 2024.
Lastly, we are confidently confirming our full-year guidance, first published in March this year, which assumes a sales growth of between 1% and 5% and a positive Adjusted EBITDA margin between 0.7% and 4.2%. As already communicated in March, the expected top and bottom line drivers will materialize in the second half of the year. So this was the intro from my side. Timm, now over to you for the financials.
Yeah, thanks, Andrés. So I would now like to share, as always, some details on the financial and non-financial KPIs of this first quarter 2024 with you. Our active customer base was slightly down to 906,000 at the end of March. This was, on one hand, due to the ongoing weakness of the consumer sentiment in the German-speaking country, and on the other hand, due to the absence of strong promotional activities which took place during the first quarter of last year. However, this reduced customer activation in the old markets was partly offset by new customers in the new markets, mainly in the Netherlands, where the number of new customers more than tripled. The repeat order rate was more or less stable at 69%.
The other active customer KPIs, revenue, and average number of orders per active customer, declined by 8% and 6%, respectively. The reason for this is the long-term orientation of these KPIs. They are measured on a 12-month basis and therefore include the very difficult quarters from 2023 and compare them with the strong quarters from 2022. The short-term development of these KPIs shows a much more positive picture, and we have added the respective figures at the note of this slide. The slow recovery in the consumer sentiment can be detected. Let's now focus on top line performance. In our two segments, full bike and tech, the strategic focus on full bikes a couple of years ago continues to pay off.
Even if at a slower pace, we record ongoing growth for the segment, despite the absence of major sales campaigns, and this first quarter being a pre-seasonal quarter. The full bike segment grew 2% to now EUR 9.2 million during the quarter. Tech sales, on the other hand, were down -13% to now just over EUR 40 million. Again, we accepted these negative growth rates to focus on profitable orders only as the time of heavy overcapacities are over. The higher market prices across all channels show the recovery of a certain confidence among market participants to reduce discounts and educate the customer to pay higher prices again, even if that means foregoing certain sales. In total, Q1 revenues were down by 11% to now around EUR 49 million.
On a positive note, I would like to share some more details on the gross margin development over the last couple of months. As already mentioned, our gross margin increased 3.6 percentage points to 25.1% during this first quarter. However, as shown on the right-hand side of this slide, we already record sequential and consistent gross margin improvement since July of last year. So in terms of profitability, July 2023 can be described as an inflection point, because gross margins increased since then and continue to increase. We expect this positive year-over-year development to continue for the remainder of this year. When looking at the different geographies, we posted a decline of -9% during the first quarter at the DACH market.
Here, too, the reason is the unnaturally high basis for comparison due to the aggressive discounting last year. However, and this is encouraging for future quarters, total gross profit in these countries was up by 9% despite lower sales. Within localized markets, the Benelux countries, which were localized during the first quarter of the previous year, recorded a stunning growth rate of 95%. This was, however, more than offset by the temporary weakness of our southern European countries, Italy and Spain, as marketing activities were reduced significantly. On aggregate, localized markets were slightly down by -4%. Nonetheless, in line with the DACH development, total gross profit here was up 22%. The rest of the European Economic Area showed a decline of -18% and shows how important localization is. Revenue in rest of world were down -40%. This is a non-strategic segment.
The development depends predominantly on the exchange rate of the euro, as well as the transportation rate for private customers in the respective country. Let's now turn to the balance sheet and with that, particular inventory. While we managed to decrease inventory significantly by the end of March 2023, we successfully kept it stable at now EUR 71 million during this first quarter. As already mentioned, this is a success, particularly because Q1 was and is a heavy intake quarter for the upcoming summer season. However, with targeted selling and marketing campaigns, we managed to reduce older stock with still satisfactory margins, and at the same time, take on new seasonal products. In terms of profitability, we show a completely different picture compared to last year. As already mentioned, gross margin across all tech segments increased significantly, mostly because of strategic price adjustments and less promotional activities.
It's definitely worth mentioning again that also total gross profit is up by 4%, despite total sales being down 11%. We continue to see these improvement margins going into this second quarter as well. Performance marketing costs were flat at 1.4% in total sales, as we reduced marketing activities in Southern Europe and allocated these resources to the more profitable German-speaking country, as well as supporting the ongoing localization in the Benelux countries. Given the focus on the German-speaking countries, selling costs decreased by 0.4 percentage points to now 9% of total sales, as a higher share of sales from these countries directly convert into lower shipping costs. Personal costs were negatively impacted by lower capitalization of IT expenses. Compared to the previous quarter, the projects could not be capitalized and are posted under personal expenses.
On a positive note, I would like to emphasize that the cash out for our digital platform is 36% lower than in the previous year. In total, we recorded a negative adjusted EBITDA margin of 3%. This was, however, already backed into our original plan, and we expect sequential improvement going forward. That's from my side now, Andrés, back to you.
Thank you, Timm. Before moving on to the outlook, I would like to give you a brief recap of our start into the year. While we indeed still see temporary weaknesses across the vast majority of markets, it continues to be remarkable what we are achieving in Western Europe. Belgium and the Netherlands record triple-digit growth rates and confirm that our business model also works in all the cycling-savvy countries. Second, it's encouraging to see that we already managed to increase our margins even during pre-seasonal times. This will give our teams, as well as the industry as a whole, great tailwinds for the important peak season, which just started. Lastly, and as Tim already outlined, with Q1 being a heavy intake quarter with the sourcing of many seasonal products, we managed to keep healthy balance sheet positions, especially in terms of inventory and cash.
However, we were still able to take on fresh product to continue delivering on our full service value proposition. To finish, let's look ahead. We already expected to start the year with negative sales growth, mainly due to reduced promotional activities, especially at the beginning of the quarter. We organized a huge discounting campaign in January 2023, and this sales driver was missing in this quarter. On the other hand, it led to significantly improved margins throughout the quarter. With better gross margins, we also expect to see sequentially improving adjusted EBITDA margins, as some cost centers which incurred during 2023 are either phased out or reduced over time, resulting in operating leverage. Lastly, in line with our communication in March, these improvements will materialize sequentially, but with a focus on the second half of the year.
With that, thank you for your attention, and we are now open for questions.
Thank you very much, first of all, for your presentation. Coming now to the Q&A session, you have either the opportunity to ask your questions by audio line or alternatively by chat, and we will read it out for you. If you are dialed in via phone, please press the star combination and sign star, and then star six to unmute yourself. We will start with the first question from Nils Scharwächter. Please go ahead.
Good day. I hope you can hear me.
Yes, we hear you well.
Perfect. Thanks for the presentation, also from my side. And I, I only have one question actually, regarding the inventory level. As you already mentioned that Q1 is typically an intake quarter, I was wondering, which proportion of the current inventory level is due to new products, for preparation towards the high season. Can you maybe say something about that?
Yeah, I think it's difficult to give you an exact percentage number. Because the reason is that the lifetime of these products is very long. But what I have to say, and that I think the very important thing here, is that despite we managed to keep the absolute inventory level stable, our availability for the customer is increasing compared to last year significantly. Yeah. So if you look at the customer and onto our webshop and would like to order products, then there is a big positive shift into availability for new products and also for, I think, products that are on the market for many years, that are available and directly be fulfilled by Bike24.
Perfect. That helps. I mean, it's, it's part of your secret sauce, the point of availability and, and wide product assortment.
Right. Yeah. 100%. Thanks for that. And that is also our main focus. Yeah, so that's the KPI with the availability that we really control on a regular basis. That's why we made so much effort in, yeah, ordering more frequently, on the one hand, so that saves working capital but also increase the availability.
Totally understandable. Yeah. Maybe a second one. I mean, I look on the calendar, it's beginning of May, so the Q2 is running. And just a small question: is the high season starting, like, in line with your expectation, or can you maybe say a sentence to that? Thanks.
So no, I thought there is, it's really in our plans, yeah, how April is almost finished. Yeah, so we don't have 100% certainty of the figures. But as an e-commerce player, you see very early what happens. So the weather condition was, I would say, sometimes difficult in the last weeks, but it was very cold. But still, you see a big improvement compared to last year. On the one hand, still on the gross margin level, on the gross profit level, but also, it's not comparable, the revenue development as in the first quarter. And so we see a slight growth in April compared to last year.
Perfect. Sounds good. And, I keep my fingers crossed, and, yeah, that's so much. Thanks.
Thank you for your question, Nils. We received another question in the chat. In the meantime, a kind reminder, if you have still open topics you would like to address, kindly let us know your questions. Can you give us some insight into the delivery channels? Are there any shortages of impact components?
So when I catch this question, we see not really a big shortage in delivery of parts, accessories and clothing, and also in bikes. So it's, I would say, it really normalizes when I compare to the COVID time. Yeah.
Thank you. And another question from Lucas Spang. Lucas, please go ahead.
Yes. Hi, good afternoon, gentlemen. I would like to start with a question regarding the outlook. So you now start with a revenue decline, and you said that top and bottom line will be more heavily or more pronounced by the second half of the year. But can y ou give us a little bit more color regarding the quarterly development until the end of the year? Because I think the main question from investors' perspective is, how much back-end loaded will be 2024?
Yeah. Thanks, Lucas, for the question. So, and to give you a little bit more transparency here. So last year you saw that in the slides, how we managed the gross margins, we increased prices end of May. Yeah, and that had a directly impact on the revenue, beginning of June. So there was a then a significant decrease, 2023, continuing on compared to 2022. So that's also the reason why it's a little bit backloaded, the quarter, the year 2024, because it's much easier to beat the previous year figures from Q3 onwards.
Okay. But do you expect still in Q2 a revenue decline or-
No.
Possible to beat that?
We expect by the increase of revenues.
Okay. And then on the financial situation, you now moved your the bigger part of the short-term debt through long-term debt, but there's still nearly EUR 10 million in short-term debt. Is there any kind of covenants or something like this, as you had in the past, that you must be adjusted EBITDA positive in the quarter or something like this? Or how is the conversation with the banks on the short-term part?
Yeah. So the short-term part, maybe as explanation is the regular down payment each quarter of EUR 2 million. Yeah, so that's EUR 8 million in total. Then you see another balance sheet position, also the interest payment that we have provisioned for end of March, and that we have to pay in June. And on top of that, there is also an IFRS effect in the short term from the bank loan that the effective interest method, but that's very complicated. That's also only a small part of that. So that's really a regular already agreed, yeah, the short-term liability. On the other hand, regarding the positive EBITDA margin or EBITDA governance, yes, we will, this will take in Q4 this year.
But until that, we have only a minimum liquidity covenant that we agreed with the bank. And there we have more than comfortable enough headroom.
So can you repeat the part of phase that in, in Q4?
No.
I didn't get that.
From Q4 onward, we have also a covenant on EBITDA level, on adjusted. But until Q4, it's only minimum liquidity.
All right. Thank you very much. In the meantime, we did not receive further questions. It appears that everything is answered for the moment. To all participants, thank you very much for dialing in and your interest. I hand over to you, Robert, for some final remarks before closing.
Thank you, Alex, for the moderation. And, in case anyone still has follow-up questions, feel free to reach out to the IR mailbox, and we will respond accordingly. Thank you very much, and a good rest of the afternoon.
Thank you very much. Bye-bye.