“For the third year in a row, the bicycle manufacturer has struggled to recover on the stock market.
The stock’s turbulent run can be explained by a number of missed deadlines. Despite signs of a turnaround in business and profitability in the first half of 2024, Euro- Cycles continues to suffer from the ups and downs of the economic climate”.
This is what the trader and stock market analyst Tunisie-Valeurs (T.V.) wrote on January 8, 2025 in its “Stock market balance sheet for 2024 and prospects for the stock market”.
Paper versus ground
Deciphering his analysis based on hard data, T.V explains that “after a euphoric period in 2020-2022, following the COVID-19 pandemic in the bicycle industry, the bicycle ‘bubble’ in Europe has deflated: new bicycles are no longer such a dream.
Raw material inflation, rising transport costs, overstocking, competition from second-hand bikes, tighter financial conditions and the ongoing conflict in Ukraine, with all its negative consequences for the European economy and consumer morale, are just some of the challenges facing the bicycle industry in general and Euro-Cycles in particular in 2023-2024.
With their feet firmly on the ground, the management of Euro-Cycles remained more positive.
“Despite the subdued short-term outlook, the management team is calm about the future.
According to the management, the company has everything it needs to return to cruising speed, starting with privileged relations with its partners, proximity to the European market, a state-of-the-art production tool that is moving towards greater integration, and development projects with higher added value, such as connected bikes and cargo bikes,” the analyst admits.
“We were all in love with it, we felt like we were growing wings on our bikes”
To their credit, the TV analysts admit that “although sales of new bicycles came to a halt in 2023, Europeans have never been so keen on cycling as a means of transport. In the short term, economic operators in the sector are facing difficulties due to cyclical factors.
In the medium term, however, the outlook is positive, as evidenced by the number of cyclists using cycle paths across Europe. Thanks to the environmental policies adopted by governments in developed countries to encourage the use of bicycles, cycling as a mode of transport will remain a real “game changer” in the mobility revolution that most cities around the world are experiencing”.
The analysts conclude by telling investors: “We are convinced that Euro-Cycles is well equipped to overcome the current economic difficulties. The group’s medium and long-term growth potential is assured. However, given the current valuation, our watchword is ‘wait and see’.
And like Yves Montand in his song “La bicyclette”, Habib Essayeh has clearly grown wings and has succeeded in his remontada.
Last March, Euro-Cycles, the Tunisian manufacturer of bicycles for Europe, announced that its annual accounts for 2024 would show a turnover of 119,631.190 MTD, compared with 109,209.273 MTD in 2023, an increase of 9.54%.
Habib Essayeh and Mohamed Rekik’s company also announced a net profit of 9.617,51 MTD compared to MTD 5.354,450 at the end of 2023, an increase of 79.61%.
The fact remains that this fully exporting Tunisian industrial company with a capitalisation of 135 MTD, which was listed on the TSE by a firm fixed-price offer in June 2013, has experienced moments of instability and an erratic curve (see screenshot of the Mac Sa website), even if it is still above the launch price.
