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Derby starts year with slight sales gains

Published February 24, 2012

CLOPPENBURG, Germany (BRAIN) Feb 24, 11:39 MT— Derby Cycle grew its revenue by 6.6 percent during the first three months of its financial year, according to an interim earnings report released on Friday.

Derby owns Kalkhoff, Rixe, Univega and Focus and holds the license to sell Raleigh in much of mainland Europe.

From Oct. 1, 2011 to Dec. 31, 2011—typically slow months in the seasonal bike business—Derby reported 40.3 million euros ($54.3 million) in revenue, up from 37.8 million euros ($51 million) for the same time period the year before. Operating profit fell 600,000 euros ($806,850), or 67 percent, due to one-time legal expenses accrued in connection with Accell’s attempt to takeover the company last year, as well as the eventual voluntary takeover by Pon Holdings, and Derby’s own merger & acquisition activities. That decrease is also affected by rising warehousing and freight expenses due to Derby’s ongoing international expansion.

The company sold 82,000 bikes during its first quarter, up a slight 1.3 percent from the year before. About 12,000 e-bikes were sold in Germany during that time, an increase of 12.5 percent. Another 2,000 units were sold in other markets. About 70 percent of total sales originate in Germany. Revenue generated outside Germany, but within Europe, fell 3.3 percent to 11.9 million euros ($16 million).

Derby’s Focus USA subsidiary led international markets outside Europe to sales of 2.2 million euros ($2.9 million), a 51.7 percent increase from the year before. That segment now represents 5.5 percent of Derby’s overall sales.

Despite the ongoing European debt crisis and its effects on the economy, Derby is forecasting further sales growth for the remainder of the year.

“Prospects also remain very good for the coming months due to the high pre-order book position at the end of the last financial year, where we registered a 25 percent year-on-year increase as of Sept. 30, 2011,” said Matthias Seidler, CEO of Derby, Germany’s largest bicycle manufacturer in terms of revenue.

Nicole Formosa

Topics associated with this article: Earnings/Financial Reports

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