- Consolidated management report and consolidated financial statements unaudited and subject to change
- Sales revenues grow 2.7 % to EUR 110.7 million (previous year: EUR 107.8 million)
- EBIT at EUR -11.1 million (previous year: EUR -8.0 million); consolidated net loss of EUR -13.2 million (previous year: EUR -9.9 million)
- Declining revenue and negative result anticipated in FY 2014
- Progress in financial and operating reorganisation of MIFA; bicycle manufacturer Hero Cycles Ltd. set to acquire interest as strategic investor

Sangerhausen, 17 September 2014 - According to unaudited IFRS figures, MIFA Mitteldeutsche Fahrradwerke AG (WKN A0B95Y, ISIN DE000A0B95Y8, "MIFA"), Germany's largest manufacturer of bicycles in terms of sales, generated EUR 110.7 million of revenue in the 2013 financial year (previous year: EUR 107.8 million), representing sales revenue growth of 2.7% compared with the restated sales revenue for the 2012 financial year. As published in the ad hoc announcement on 20 March 2014, erroneous stock valuations occurred in previous financial years in the area of raw materials and supplies, as well as finished products. The past financial statements that were affected have now been restated in the current set of financial statements. The restatement of the affected items in the financial statements is set out in the notes to the consolidated financial statements for the 2013 financial year that have been published today.

In line with sales revenues, total operating revenue (revenue plus changes in inventory and other own work capitalised) grew by 6.4 % to EUR 117.0 million (previous year: EUR 110.0 million). Both the cost of materials (EUR 86.6 million; previous year: EUR 81.6 million) and personnel expenses (EUR 17.4 million; previous year: EUR 15.9 million) increased in the year under review due to the further integration of the GRACE and Steppenwolf brands that were acquired in 2012, which also entail comparatively expensive components due to their high value positioning. As part of the integration, further capacities were also added, especially in the areas of research & development and marketing & sales, which were not yet offset by any significant revenue growth in 2013. To these were added the aforementioned restatement effects to the items affected by erroneous valuations in the past, which particularly impacted the level of cost of materials. The cost of materials ratio amounted to 74.0% in the reporting year (previous year: 74.2%), and the personal expense ratio stood at 14.8% (previous year: 14.4%) on the basis of a year-average number of employees of 806 individuals (previous year: 768 employees).

Given an almost unchanged gross profit margin of 26.0% (previous year: 25.8%), the company recorded a result before depreciation, tax, depreciation and amortisation (EBITDA) of EUR -6.7 million (previous year: EUR -4.5 million). After deducting other operating expenses that grew to EUR 20.2 million in the year under review (previous year: EUR 17.5 million), and depreciation and amortisation of EUR 4.4 million (previous year: EUR 3.4 million), the Group reports an operating result (EBIT) of EUR -11.1 million (previous year: EUR -8.0 million). Among other expenses, other operating expenses include costs connected with the commissioning of two new production lines for high-value e-bikes, development expenses, and the costs to issue the corporate bond in August 2013 . The net financial result fell slightly to EUR -2.5 million (previous year: EUR -2.4 million), which, after taking into account corporation taxes on income, fed through to a consolidated net loss of EUR -13.2 million for the 2013 financial year (previous year: EUR -9.9 million). The consolidated net loss for the year increased the loss for the period included in retained earnings to an amount of EUR -29.6 million as of 31 December 2013 (31 December 2012: EUR -16.4 million). Accordingly, MIFA's equity fell to EUR 3.9 million as of the 2013 balance sheet date (31 December 2012: EUR 17.1 million), representing a 4.8% equity ratio (31 December 2012: 21.3%).

"We took office in March and April respectively of this year to encounter a very difficult situation. Since then, however, we have managed to get some things moving. An important strategic investor - Indian bicycle manufacturer Hero Cycles - is about to take a stake in the company. This not only gives us the opportunity to raise urgently needed restructuring capital, but we also gain a strong partner for our operating business. With the planned reorganisation structure that we have just communicated, we can lay the foundation of a profitable future for MIFA," notes Hans-Peter Barth, MIFA's CEO.

The MIFA Managing Board regards the current 2014 financial year as a year of restructuring, and anticipates a decline in revenue and a negative result. Dr. Stefan Weniger, MIFA's Chief Recovery Officer (CRO), comments on the progress that has been achieved on the reorganisation path: "We plan to have concluded the capital restructuring at MIFA by the end of March 2015, at the latest. The important operational restructuring measures are already largely in the implementation stage. Assuming that these measures are realised successfully within the planned timeframe, we already anticipate a slightly positive result by the 2015 financial year."

MIFA's consolidated management report and consolidated financial statements on the 2013 financial year can be downloaded from today from the company's website at within the Investor Relations area.

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