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Strength in E-Bikes Fuels Derby's Growth

Published August 29, 2011

CLOPPENBURG, Germany (BRAIN)—Derby Cycles sold 73,000 electric bicycles in the first nine months of the year, a jump of nearly 86 percent from the same time period last year, according to an earnings report released by the company on Monday.

Nearly all of that business was generated in Germany with about 59,000 electric bicycles sold in that country, a rise of 87 percent. That’s a number expected to increase exponentially in the next several years.

The report quoted numbers compiled by the German Two-Wheel Association (ZIV) that tallied 200,000 e-bikes sold in Germany in 2010, a six-fold increase since 2005 when just 25,000 units were sold. E-bikes now represent 4 percent of the German market, Europe’s largest.

“The ZIV forecasts that electric bicycles will account for a 10 to 15 percent market share in Germany in the medium term,” the report said.

Overall, Derby sold 413,000 bicycles in the first three quarters of its fiscal year, up 16 percent from last year. Revenue rose from 144.1 million euros ($208 million) to 198.8 million euros ($288 million).

Germany continues to be Derby’s strongest market with sales of 132.9 million euros ($192 million) coming from its home country. The rest of Europe accounted for 28.6 percent of sales, or 58.8 million euros ($85 million), with Austria, France, Great Britain and Spain leading the way.

Sales from international markets outside the EU rose to 7.2 million euros ($10.4 million), up from 3.2 million euros ($4.6 million), the bulk of which came from Derby’s Focus USA subsidiary, the report said.

The season starting in May reported a positive trend over the entire third quarter fueled by a strong spring. For this reason, Derby is retaining its forecast of 220 to 240 million euros ($347 million) for the entire year with margins between 8 and 9 percent despite volatility on capital markets in August and the rising cost of materials.

“The company also regards its launch of direct sales in the United Kingdom and Australia, and its joint venture with electro-drive developer Daum Forschung und Entwicklung GmbH, as an ideal basis for the further expansion of the technology and market leadership of Derby Cycle AG,” the report said.

Derby owns Kalkhoff, Focus, Rixe, Univega and is a licensee for Raleigh in much of Europe. It is Germany’s largest bike manufacturer.

—Nicole Formosa
nformosa@bicycleretailer.com

Topics associated with this article: Earnings/Financial Reports

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