KTM Bicycle Reports Significant Revenue Drop Amid Market Adjustments

The bicycle manufacturing sector is currently grappling with high inventory levels, and KTM Bicycle in Mattighofen has experienced a notable decline in revenue. Despite the downturn, the company remains optimistic about its financial standing. The firm's managing director highlighted the shift towards market consolidation after three decades of continuous revenue growth.

In the fiscal year 2023/24, ending July 31, KTM Bicycle's revenue plummeted from 601 million euros to 425 million euros due to a substantial drop in demand for bicycles. This information was disclosed in the company's recently published financial statements. The company emphasized its independence from KTM AG, which is part of Pierer Mobility.

The net profit also decreased significantly, dropping from 67 million euros to 33.9 million euros. The pre-tax profit was halved to 41.6 million euros, and the decision was made not to distribute dividends, allowing the owners to reinvest the profits back into the business. The workforce also saw a reduction, with employee numbers falling from 419 to 381.

According to the management report, the revenue for the fiscal year was largely supported by a robust order backlog from the previous year. However, the inventory level at the end of the fiscal year surged to 113,000 units, an increase from 89,146 units in the prior year. Since the beginning of the year, the company has successfully reduced its inventory by approximately 40 percent.

Despite the challenges, the managing director expressed satisfaction with the company's performance compared to industry peers facing losses and potential insolvencies. He noted that the company had been able to maintain favorable pricing strategies, even as the Austrian bicycle market witnessed an average price drop of 400 euros for e-mountain bikes over the past year.

For the current fiscal year 2024/25, the company anticipates similar revenue and profit levels as seen in the previous year. KTM Bicycle has shifted to a single-shift operation, having previously operated on two shifts. This change has been in effect for the past 18 months.

Looking ahead, the company plans to showcase its new gravel and racing bike offerings, innovative gear systems, and fresh color options at the upcoming Eurobike trade fair in Frankfurt at the end of June. There has been a noted improvement in relationships with retailers recently, which offers some optimism for the market's recovery.