Andrés Martin-Birner and CFO Timm Armbrust, who will start with the presentation shortly. After the presentation, we will move forward with the Q&A session. With this, let's start. Andrés, please, the stage is yours.
Thank you, Franziska. Hello, and welcome to today's earnings call presentation for the Q2. My name is Andrés Martin-Birner, and I am the founder and CEO of Bike24. At my side, as always, is Timm Armbrust, the CFO of Bike24. Let me now start with the general update on the Q2 of this year before I hand over to Tim for the business update, finishing with a general summary, the confirmation of our 2024 guidance, and the Q&A session. The Q2 was very successful overall and clearly shows a positive trend. We achieved an adjusted EBITDA margin of +4.2%, which is significantly higher than in Q2 2023. Our focus on profitability is therefore paying off. We achieved this result thanks to a better gross margin overall, strict cost discipline, and more focused marketing.
In addition to the positive EBITDA, we also achieved slight sales growth of around 1%. In particular, the strong sales growth of around 8% in our core region, DACH, gives me great confidence. Moving on to localized markets. Also, during the first and this Q2 of the year, the strong momentum of the Benelux markets continued. Southern Europe, that means France, Italy, and Spain, slowed down a bit as we concentrated our available marketing capacities on the German-speaking countries. Our other strategic pillar, Full-bike segment, also generated robust sales growth of +10%. Despite a difficult market environment, we were once again able to score points with our customers with a good, wide, deep, and balanced product assortment.
In terms of balance sheet positions, the improved EBITDA and our continued improved inventory position resulted in a strong free cash flow generation and stable cash position at the end of June 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 of between 0.7% and 4.2%. This was the intro from my side. Tim, now over to you for the financials.
Thanks, Andrés. I would now like to share some details on the financial and non-financial KPIs of the Q2, 2024, with you. Our active customer base was slightly down to 903,000 at the end of June. It is important to mention that the mix in the customer base has improved. The KPIs on the current and the next slide relate to the last 12 months prior to the reporting date. Therefore, the customer base at the end of June 2023 includes a large number of bargain hunters who only purchased massively discounted products during the second half year of 2022. The individuals now included in the customer base as of June 2024 correspond more to the Bike24's core customer, the bike enthusiast.
This customer is, on a last 12-month base, 12% more profitable than the year before, and that includes the weak quarters Q3 and Q4, 2023. Based only on Q2, 2024, versus Q2, 2023, the customers are more than 25% more profitable in average. The repeat order rate was more or less stable, with 69%. The other active customer KPIs, revenue and average number of orders per active customer, declined by -4% and -5%. The main driver for this is the mix effect in the regions, and again, 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 compared them with the strong sales quarters from 2022. The short-term development of these KPIs, too, shows a much more positive picture.
As an example, the average revenue per customer, Q2 2024, versus Q2 2023, is +2.8%. We will therefore also see an improvement in the last 12 months-based KPIs in the near future. Let's now focus on top-line performance in our two segments, full-bike and PAC. The strategic focus on full-bikes a couple of years ago continues to pay us off. We record ongoing significant growth for this full-bike segment, this quarter by 10%, despite the headwind in the markets. PAC sales, on the other hand, were flat. We accepted this revenue development to focus on profitable orders only, as the times of heavy overcapacities are over. That focus, together with the higher market prices in the PAC segments, helps to increase the gross profit for PAC sales by 10%.
In total, Q2 revenues were up by 1.5% to now around EUR 64 million. When looking at the different geographies, the development of our results in the core market is very positive. By refocusing on our core customers and the slight recovery in consumer sentiment in Germany, we were able to increase sales by 8%. As a reminder, this is still the most profitable customer. Within localized markets, the Benelux countries, which were localized during the Q1 of the previous year, recorded a double-digit growth rate of 14%. It is important to note that the previous year's sales were already based entirely on a localized web store. This shows that Bike24 can also gain market share in the following year of localization with its offering and market positioning.
This was, however, more than offset by the temporary weakness of our Southern European countries, France, Italy, and Spain. As part of our focus on profitability, we have significantly reduced our marketing activities in this region. One reason for this is the continued very poor consumer sentiment, particularly in Spain and Italy, as well as the continued overstocking at local competitors. The intensity of discount campaigns in these markets has not decreased. On aggregated level, localized markets were down by -8%. The rest of the European Economic Area showed a decline of -6% year-over-year. That is still negative and showed how important localization is. But compared to Q1, it is a significant improvement. Q1 year-over-year revenue development was -18%, versus -6% now in Q2. Revenues in Rest of World were down -42%.
This is a non-strategic segment, and the development depends predominantly on the exchange rate of the euro, as well as the transportation rates for private customers in the respective countries. Let's now turn to the balance sheet, and with that, in particular, to inventory. While we managed to decrease inventory significantly, whereas at end of June 2023, we successfully kept it almost stable at around EUR 72 million, whereas at end of last year. This is a success, particularly because Q1 and Q2 were and are heavy intake quarters. 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 the PAC segment increased significantly, mostly because of strategic price adjustment and less promotional activity. It's definitely worth mentioning again that also total gross profit is up by 9%, despite total sales being only up by 1.5%. Performance marketing costs in relation to sales have improved significantly. As already mentioned, we have concentrated on the bike enthusiasts in our core market and reduced marketing activities in Southern Europe. In Southern Europe, we would have had to fight against very price-aggressive local competitors, also, our inventory situation did not require this. This would have resulted in high customer acquisition cost, with only a very small chance of repeated sales by these customers.
Given this focus on the German-speaking countries, selling costs decreased by 1.4 percentage points to now 8.3% of total sales, as a higher share of sales from these countries directly convert into lower shipping costs. Personal costs were flat, despite negatively impacted by lower capitalization of IT expenses and the ongoing wage inflation. In total, we recorded an Adjusted EBITDA margin of 4.2%. I hope you agree that this is a big step in the right direction, even if we are still a long way from the profitability that Bike24 can achieve in a growing and intact market. That is for my side now. Andrés, back to you.
Thank you, Tim. Before moving to the outlook, let me say some words. First, the whole team did a great job in the last few months. The passion for bike is unbroken, and we see a robust demand, and Bike24 is able to meet this customer wishes. Second, it's encouraging to see that we managed to increase our margins quarter by quarter compared to the previous year. This will give our team as a whole great tailwinds for the second half of the year. Lastly, and as Tim already outlined, we managed to keep healthy balance sheet positions, especially in terms of inventory and cash. So we were therefore able to continue delivering on our full service value proposition, broad and deep assortment, high availability, fast delivery, and an exceptional customer service. Let me briefly summarize. Our focus on profitability is paying off....
We have already made great efforts to this end in the past quarters, but the good result is now clearly visible. The reasons are significantly improved margins, discipline on costs, and an improved marketing approach. Our continued focus on our working capital and improvements in our operating business have generated significant free cash flow. As a result, we were able to reduce the Bike24 debt by EUR 4 million as planned. In addition to the strong business in the DACH region and the Benelux region, sales of full bike in particular are growing sustainably. We see that our most important customer group, the enthusiasts, are giving our business the necessary tailwind, and that we can gain further market share here.
Lastly, and I am pleased to confirm again 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 of between 0.7% and +4.2%. With that, thank you now for your attention, and we are now open for questions.
Yeah, thank you so much, Andrés, and thank you so much, Timm, for the insightful presentation. We're now moving forward with the Q&A session. And to keep the session engaging, we kindly ask you to post your question via the audio line. To do so, just use the Raise Your Hand button. If you're dialed in via phone, you can use this with the key combination star nine followed by star six. And if speaking freely is impossible for you today, you can always use the chat. And we've got a first question from Mr. Wolfgang Specht. Mr. Specht, you should be able to speak now.
Yes, hello, good afternoon. Thanks for the insights. Three questions from my side. First of all, you showed us, let's say, the drawdown of your stock in your storage, which is obviously encouraging, but how do you see the overcapacities, let's say, in the broader market or at your competitors? That would be interesting. Then, on your back office and logistics capacities, can you give us some insight? You cut down a lot of your back office. Is this now cut down to the bone, or would you even be in need to ramp up some capacities here, in case the company comes back on a decent growth track?
And also maybe a word on your logistics capacities would be-
Yeah
... would be interesting. Then finally, although it's early time for refinancing, we noticed that with working capital management and operating cash flow, you are well able to repay your current liabilities, the EUR 2.5s that are fixed for each quarter. What do you expect going into negotiations for prolongation or for new conditions next year? Do you believe you will be in a much better position given the current development?
Maybe I can catch the first questions. The question about the PAC segment or about our overcapacities or the overstock issue in our market. So what we see on the one hand, I mentioned that we see a robust demand, but we also see, of course, many promotional activities, but especially in the bike segment and especially also in the retail sector. And as you know, around 80% of our revenues came from the PAC segment, so from parts, accessories and clothing. And what we see there is that this segment really stabilizes at a good level.
On the other hand, we also see that many new products came in the market in the last few weeks, and we see that many new customers are interested in these new products, and this is very visibly encouraging customers to buy. So that's the point what we see. And so, the main point is that our PAC segment stabilizes on a very good level, and we do not see such high overstock problem in the market. Tim, you have to unmute.
Thanks, Andrés. Yeah, so I will take the next two questions. So first of all, maybe very easy, the logistics capacities. Yeah, we still have enough capacities, as maybe you know, as we opened the warehouse in Spain two years ago, for sure, each of the warehouse, so we have two warehouses overall. Each of the warehouse has a capacity of EUR 250 million-EUR 300 million, yeah? So we have enough headroom for the upcoming growth in the coming years, and there is no major investment necessary, yeah, in for Bike24. I think that's very important. The warehouse in Barcelona is up and running, but on a low capacity, so we have enough space to grow there.
Secondly, yes, with the number of FTEs going down, the personnel costs are flat year-over-year, despite the local inflation, but around about 10% less personnel in the head office compared to the peak season or what-
... around a year ago, but we did it still very carefully, yeah? So we don't cut any jobs that have strategic relevance, yeah. For example, we don't cut job in the consulting in the customer service. We don't cut jobs in our IT department, who are responsible to developing and bringing up to date our IT platform, and all other key positions are still there. So we feel very comfortable with the, with the manpower we have at the moment, and it's also possible with that manpower to grow significantly in the coming years. Your last question regarding financing. For sure, I think we showed our partners or our financing partners that we have the liquidity more than under control, yeah.
We have enough headroom to all the governance that we have agreed with the banks, and we start to negotiate the next term of the financial agreement in autumn. But before, it's very difficult to comment on that question, yeah, to be honest.
Thanks a lot.
Yeah, thank you so much, Mr. Specht, for the question, and also for answering. We've got another question from Tim Kruse. You should be able to speak now.
Yes. Hi, good afternoon from Hamburg. Two questions from my side. Maybe looking forward a bit, I mean, congrats on the good achievements in Q2. Maybe there's sort of some light on the horizon. So Andrés, I'll be interested to hear what your expectations are going forward, maybe next season, next year. Would you expect that then maybe to be a normalized season already? And then, maybe as a follow-up there, a gradual increase in demand or sort of a jump to prior levels we've seen in e-commerce and your growth rates in the past? That would be interesting. And then the second question for Tim, on net working capital development. Would be great if you could give a bit of an insight what you expect year-end, how that position will develop.
Okay. The first question, maybe when we look first back to the last few weeks, so I can tell you first that the Q3 started very well, and that's motivating the team, of course, and see that the Q2 was not only quarter in this year. So we can see really a continuation of the trend from the Q2 with rising incoming orders, and this was in July and also in the first few days of August. On the second, what I mentioned, that we see a robust demand in our industry.
So I would say the demand is okay for us. When you see the whole industry or the whole market, so you see that in a difficult environment, we are able to increase margins and also that we are able to grow. But it's a little bit early to see what will happen next year. Yeah, we do a lot of work, we do a lot of efforts to start very well, but it's a little bit too early. But the main thing, when you see our focus on profitability, these are the gross margins, and there we see really a better point what we are now. And that's why, yeah, the focus on profitability we will have also next year.
And then to see a little bit opportunistic to how to handle, if there's a tailwind or if there's a headwind, but we can handle today with both things. And a little bit depends on the whole European market, yeah. Also, political issues, maybe in Europe, consumer sentiment. It's a little bit early to say, but on the other hand, what I also mentioned, many, many new products will come next year. And of course, this is visibly encouraging customers to buy. And on the other hand, the overstock issue, mainly in the PAC segment, is over, and that's why we look very, very positive, also for the next year.
Yeah, Tim, thanks for the second question. So regarding inventory, for sure, we now start with July, with the sales season, yeah. As always, the first of July, you start selling off concentrated the summer seasonal products like clothing, jerseys, and everything else, but it's really short sleeve jerseys. And then we will have a-- So that the inventory goes down then, but it's been end of Q3, going up a little bit. Yeah, that's our expectation, because then it's already a heavy intake quarter for the winter season. Yeah, but end of the year, we will see lower inventory levels than now, yeah. It will be not significantly, not EUR 10 million, but you could expect an inventory level below EUR 70 million end of year.
Okay, so it would be fair to assume that that cash position should be stable or even slightly positive, if things go right?
Yeah, sure. But, yeah, from a free cash flow perspective, yes, but we still will decrease the debt level of Bike24 for EUR 2 million per quarter, yeah? And that, on the other hand, yeah, lowers the cash level.
Okay. All the best. Thanks, guys.
Yeah, thank you so much for the question, Tim, and also for answering the questions. This is a reminder for you, if you would like to ask a question, you can use the Raise Your Hand button and ask this through the audio line. You can also use the key combination star nine followed by star six or the chat. And I'm gonna wait a couple more seconds as we have no further questions yet. So I think this looks like it is for today. So thank you so much everyone, for participating and for the intentions. Thank you so much for the presentation, and if any other questions arise in the future, please do not hesitate to contact Timm Armbrust. And now I'm gonna give the word to Andrés for some final remarks. Thank you so much, and have a good day.
Yeah. Thank you also from my side and Tim's side for the participation of our Q2 earnings call. Thank you very much for your attention, and have a nice day, and we see you again. Bye-bye.