Cycling has a long tradition in this country. Legends such as Ferdy Kübler, who was the first Swiss to win the overall classification of the Tour de France in 1950, fuel the enthusiasm for cycling. With Marc Hirschi, a fellow countryman once again provided the high spirits on this year's tour. The man from Berne won the longest stage of the 107th Tour de France.
But "cycling enthusiasts" no longer have to venture out onto the streets in all weathers to unwind their miles. With its products, the US fitness group Peloton ensures that everyone can indulge their biking passion within their own four walls. In 2014, the company launched the first Peloton bike with a touch screen, on which the athlete can select various fitness courses. The success of this idea can best be seen in the development of sales. Over the past six years, consolidated revenues have grown by an average of 100% per year.
But Peloton does not only stand for biking, during this time the company has also developed continuously. From cycling and yoga to dance cardio, which started in March this year, Peloton offers a total of ten fitness variants for the home. The workout with professional dancer Emma Lovewell alone has been completed over one million times by subscribers.
The average monthly workouts per user are rising inexorably. In the fourth quarter of 2019/20 (June 30), the average was 24.7, which is double that of the same period last year. Even though the majority of sports activities still involve pedaling a fitness bike, other leisure sports activities are increasing significantly. The proportion of biking has fallen from 94% to 64% since 2017.
At the same time, the number of people who are motivated by the Peloton media library - which includes courses such as cycling, strength, yoga and stretching - also increases. Fitness subscriptions have increased tenfold since the first quarter of 2018, and workouts have even tripled. The Group's second product, a treadmill, also contributes to this. The Peloton Tread was also introduced in Canada, Great Britain and Germany in the past business year.
The high-end home trainer manufacturer is successful with its concept: In the past quarter, sales tripled to USD 485.9 million, while subscriptions rose by 113% to 1.09 million. Estimates suggest that user numbers rose by 120% to 1.13 million between April and June. In the current September, the company expects to break the 1 million followers barrier on Instagram.
Peloton has set itself a long-term goal of 100 million subscriptions. This is to be achieved through product innovations, concentration on the core US market and regional and digital expansion. The company already owns the largest fitness music library, for example. Athletes who don't just want to sweat at home can also visit the 36,000 square metre Peloton studio in New York. In spring 2021, a similar location is to be opened in London. To meet the rapidly growing demand, the Group is also investing in a new production facility. The New Shin Ji Factory has a capacity of 1.5 million products per year and is scheduled to open in December.
Investors do not have to perspire during cardio training to participate in the success of Peloton. With the new Softcallable Barrier Reverse Convertibles, a double-digit percentage return can be achieved comfortably in idle mode. The fitness stock, which tripled in the current year alone, is therefore welcome to take a breather. The products are equipped with comfortable risk buffers of 45%. The CHF variant offers an attractive interest rate of 17.20% p.a. with a maximum term of one year, and the US dollar-denominated product even has a coupon of 18.40% p.a. Investors would only break into a sweat if the barrier were breached. Then the final fixing of the underlying decides on the profit or loss of the investment. If the underlying asset returns to its starting level, the full nominal value is paid out in addition to the safe coupon. Otherwise, the repayment is based on the performance of the Peloton share.
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