BIKE LTD.

Designed for Performance

Crafted for Excellence

Board Meeting Report

May 16th , 2019
 EXECUTIVE SUMMARY

This report will present the past and current performance of Apex
Bikes Limited. It will demonstrate how a small company founded $ 3.1M
at the foothills of the Rocky Mountains has managed to create a Profit
strong brand based on products known for its excellent
performance. The Company has maintained sustainable growth $26.01 SHV
over the past years and is planning to continue this steady rise for
the future. North America has proven itself to be one of the most
competitive markets for Bicycle manufacturing in the world.
Despite some ups and downs experienced in the past years I am 4 Products
confident for the future of the company. Apex Bikes Limited is
fortunate with an exceptional team of hardworking executives
who will continue to lead the company towards its full potential.

Vision Mission

The Vision of Apex Bikes Limited is to
become a future market leader for top
quality Bicycles in North America. We aim to
further expand our market share and
steadily increase your shareholder value.
Our mission is to serve our customers by
producing high end bicycles that allow them
to perform at their best and create
continued sustainable growth for our
shareholders.

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FINANCE
ceCE
Shareholder Value (SHV)
30 27.21 27.41
26.01
25 22.76

20
SHV ($)

13.71 13.9
15

10

0
2018 2019 2020 2021 2022 2023
Year

Figure 1: Apex Bikes Ltd. Shareholder Value

➢ Apex’s SHV has an increasing trend over the years, although the company had little
growth over the past 2 years

Gross Margin
40
34.34
35
30.29
30
25.46
GM ($ MIL)

25

20

15 12.26

10 6.23
5

0
2017.5 2018 2018.5 2019 2019.5 2020 2020.5 2021 2021.5 2022 2022.5
Year

Figure 2: Apex Bikes Ltd. Gross Margin

➢ A similar pattern can be seen in Apex’s Gross Margin.

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 Long-Term Debt
3.5

3
Long-Term Debt ($ MIL)

2.5

1.5

0.5

0
2018 2019 2020 2021 2022 2023
Year

Figure 3: Apex Bikes Ltd. Long-Term Debt

➢ All Apex long term debt has been paid in 2021.

Sales Revenue versus Net Income

60

50
Sales & Net Income ($ MIL)

40

30

20

10

0
2018 2019 2020 2021 2022 2023

Year

Sales Revenue Net Income

Figure 4: Apex Bikes Ltd. Sales Revenue & Net Income Comparison

➢ Apex tried to maximize profit by minimizing the gap between sales revenue and net
income.

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 MARKETING
Apex Sales & Market Share Performance

Figure 5: Apex Annual Revenue from 2018 – 2023

➢ Over the past 5 years, Apex managed to steadily grow its annual revenue. However,
in 2022, Apex slightly declined due to strong competition in several markets. A
different trend is captured in Market Share.

Figure 6: Multi-firm Market Share in North America from 2018 – 2023

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Marketing Expenditure

➢ Apex strives to meet consumers need by carefully embedding each segment’s

sensitivity and desired level of index, to our decision.

Figure 7: Apex’s Price & Marketing Figure 8: Apex’s Price & Advertising
Expenditure in Adventurers Market Expenditure in Kids Market

Figure 9: Apex’s Price Figure 10: PR Expenditure

In Commuters Market in Racer Market

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 RESEARCH & DEVELOPMENT

As our mission and vision is to focus on performance, we started our first round of
decisions by developing the highly technical racer bike.

Apex Product Specs

Figure 11: Apex Bikes Ltd. Perceptual Map of Market Segments with all design projects.
All developments have been 100% successful, which lead to a steady reduction in prime
costs.

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 Adventures Modification Racers Modification
Achievement Achievement
$350.00 $500.00
$300.00
$400.00

Prime Cost ($)

Prime cost ($)

$250.00
$200.00 $300.00
$150.00 $200.00
$100.00
$100.00
$50.00
$0.00 $0.00
2019 2022 2023 2019 2021 2023
Year Year

Unit Prime Cost Goal Unit Prime Cost Achieved Unit Prime Cost Goal Unit Prime Cost Achieved

Kids Modification Commuter Modification

Achievement Achievement
70 60
60 50
Prime Cost ($)
Prime Cost ($)

50 40
40
30
30
20
20
10 10
0 0
2020 2022 2020 2021
Year Year

Unit Prime Cost Goal Unit Prime Cost Achieved Unit Prime Cost Goal Unit Prime Cost Achieved

Figure 12: Apex Bike Modification Prime Cost

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 OPERATIONS
A. Quality
Apex strives to increase the quality of their products by investing in quality systems and
product inspections, which result in an increasing trend of quality index.

Quality System Expenditure

4.00
3.50
Expenditure ($ MIL)

3.00
2.50
2.00
1.50
1.00
0.50
-
2018 2019 2020 2021 2022 2023
Year

Figure 13: Quality Systems Expenditure

Inspected Product (%)

Year 2018 2019 2020 2021 2022 2023

Percentage 15% 15% 15% 16% 17% 19%

Quality Index
1
0.9
0.8
0.7
Quality Index

0.6
0.5
0.4
0.3
0.2
0.1
0
2018 2019 2020 2021 2022 2023
Year

Figure 14: Quality Index

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B. PRODUCTION
Overall production efficiency has increased from 2018 to 2022. However, production
efficiency needs further improvement to reduce our idle time.

PRODUCTION EFFICIENCY

93.2%
91.7%
88.7%
85.8%
82.2%
67.3%
EFFICIENCY (%)

2018 2019 2020 2021 2022 2023

YEAR

Figure 15: Production Efficiency

FACTORY CAPACITY
45000
40000
35000
30000
25000
SCU

20000
15000
10000
5000
0
2018 2019 2020 2021 2022 2023
YEAR

Size of the plant Total factory workforce capacity

Figure 16: Workforce and Factory Capacity per Year

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Manufacturing Capacity Usage

Figure 17: Production Efficiency

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 HUMAN RESOURCES
Apex aimed to continuously increase employee motivation and reduce staff turnover rate.
This was achieved through yearly raises in employee salary and training.

Number of Employees & Factory Workforce

140

120
Number of People

100

80

60

40

20

0
2018 2019 2020 2021 2022 2023
Year

Number of Employees Factory Workforce

Figure 18: Apex Employees

Idle Time & Staff Turnover Rate

45.00%
Idle Time & Staff Turnover Rate (%)

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2018 2019 2020 2021 2022 2023
Year

Idle Time (%) Staff Turnover Rate*

Figure 19: Apex Idle Time & Staff Turnover Rate

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 Average Salary Level
$26,000
$25,000
Average Salary

$24,000 $25,000
$24,500
$23,000 $24,000

$22,000 $23,000
$22,500
$21,000 $22,000

$20,000
2018 2019 2020 2021 2022 2023
Year

Figure 20: Apex Average Salary Level

Total Training Expenditure

$250,000
Training Expenditure

$200,000

$150,000

$100,000

$50,000

$0
2018 2019 2020 2021 2022 2023
Year

Figure 21: Apex Training Expenditure

Motivation & Skill Index

1.5

1
Index

Motivation Index
0.5
Skill Index
0
2018 2019 2020 2021 2022 2023
Year

Figure 22: Apex Motivation & Skill Index

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 IN THE FUTURE
In the future Apex plans to focus on increasing their production efficiency.

✓ Apex plans to focus on increasing their production efficiency, especially reduce idle
time to less than 5% within the next 2 years
✓ Potential of launching another product in the leisure market in the next 2-3 years.
✓ Future merger/acquisition was discussed with Cloudsweeper, which could increase
future growth potential
✓ Aim for a minimum increase of 10% in SHV per year

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