Our 2019 season is underway, and our first major event just wrapped up in Austin, TX at the Circuit of the Americas.
We’ve been flat out since September of last year preparing for the biggest Marketing & Motorsport push in the history of FCP Euro. Things are all starting to come together, and I’d like to bring everyone up to speed.
The first race weekend of the season was eventful, to say the least. Although both Nate Vincent and Michael Hurczyn finished on the podium for both races, it wasn't without challenges. Mechanical issues stemming from the added stresses of the new sequential transmissions meant our team had to scramble to make Nate's car ready for race one. Miraculously, the #72 made it on the grid at the very last moment, but that wasn't the end of the issues. Electrical gremlins showed their face at the last possible moment resulting in the #72 having to start from the back of the grid. Even starting all the way at the back, Nate was able to battle his way through the field to finish in third place behind Michael Hurczyn. If you would like to watch the coverage, you can view it on the World Challenge YouTube channel.
FCP Euro Company Update
FCP Euro ended 2018 with $47 Million in revenue, up from $30 Million in 2017. That’s over 50% growth, and we are showing no signs of slowing down! Our forecast for 2019 is $70 Million, and we’ve recorded $5 Million of product revenue for January which is by far the highest in the history of the company.
We also continue to improve financially as we’ve recently secured $7 Million of capital and we are projecting over $4 Million of EBITDA for 2019.
What's most impressive is our employee growth. We have officially hit 100 employees, and the investments were made directly into content, marketing, catalog, and motorsports all to support our 2019 initiatives and ensure a breakout year for FCP Euro and our partners.
2019 Partners
In 2019, FCP Euro welcomes Corteco, a brand of the Freudenberg Group, alongside LIQUI MOLY as Premier Partners.
After promoting Sachs Performance in 2018, ZF Aftermarket has increased participation to an Official Partner to expand the promotion across the Sachs, TRW, and Lemforder Brands.
Bosch and Akebono join ZF Aftermarket as Official Partners for the 2019-2020 seasons and 034Motorsport continues as a Technical Sponsor. Eibach is supplying the Springs for the ZF Racing Dampers. Zimmermann is working on manufacturing brake discs which should be on the cars for the VIR race in late April.
Heinlein Racing Development (HRD) is our logistics and race support provider again in 2019. DeadPedal, our 2019 content partner, is again producing the Amazon Prime Video documentary series The Paddock season 2.
Fueling all of our efforts is Boston Brew Company with their nitro cold-brew coffee, the next time you visit the Milford, CT headquarters we welcome you to enjoy a cup with us.
Website & Catalog
2019 will deliver significant enhancements to brand management and key product integration with the catalog department focusing its efforts on consolidating the catalog to better position our partner's components.
As much as we have been building the catalog we have been optimizing, removing and consolidating less preferential brands to highlight OE suppliers like Corteco, Sachs, Lemforder, and Bosch. We have been standardizing our processes through Q1 to ensure listings remain consistent and uniform, integrating our content and enhancing the shopping experience by providing more information on our product pages.
Along with the data coming into the catalog from our suppliers, we are also leveraging tools like Periscope to share our sales and product performance information with vendors and manufacturers. This allows them to get weekly updates on their brand's performance within the FCP Euro ecosystem identifying trends within and across product categories. The catalog team also is now using catalog build-outs to relay information back to suppliers for suggestions and additions to their product offering.
We are also working on creating site enhancements that will make the shopping experience more tailored to the shopper such as updating our site taxonomy making sort structure better and creating better and easier site search criteria helping the customer land on the right product every time.
Marketing and Social
In 2019, FCP Euro is laser-focused on enhancing the experience we deliver to our customers.
Marketing at FCP Euro represents two primary pillars in customers interactions with our brands: parts shopping on FCPEuro.com and engagement via FCP Euro’s marketing channels. Thanks to your support, we’re off to a great start in improving both areas.
We started the year with an extremely compelling New Years sale, and our reach has been growing steadily across all marketing channels since.
Your brand’s reach is growing with us as you’re included in multiple touch points a day via inclusion in our social posts, blog articles, and emails.
In January, we launched “make landing pages” as digital hubs of content and products specific to the makes our customers own: audi.fcpeuro.com, bmw.fcpeuro.com, mercedes.fcpeuro.com, porsche.fcpeuro.com, volvo.fcpeuro.com, vw.fcpeuro.com. We’re actively driving visitors to these pages which include products and content surrounding your brand.
In addition to this, we’ve set out to build a page specific to your brand on the core FCP Euro website. Each of these pages serves as the destination we’ll use to educate the market on the value they receiving by choosing your products. As of this writing, three of these pages have soft launched within our OE Academy (corteco.fcpeuro.com, bosch.fcpeuro.com, sachs.fcpeuro.com) with TRW & Lemforder slated for launch soon. In addition to this, we’re currently designing a fluids academy featuring LIQUI MOLY and a performance academy featuring 034Motorsport.
Lastly, each of your brands is proudly displayed on the 2019 season relaunched race.fcpeuro.com. We highly recommend you check it out if you haven’t already!
Be sure to follow us on our social channels to keep up to date with our activity and see how we are representing our partners' brands:
Content
FCP Euro is expanding on what was delivered last year from a content perspective both in terms of quality and quantity.
Last year, we were able to document the entire 2018 season of professional motorsports through our video series "The Paddock" which is now featured on Amazon Prime in addition to the traditional YouTube and Facebook outlets.
This year for The Paddock season two, we're taking the same approach but adding additional, bespoke pieces of content on top of the regular Paddock programming to increase uploads, views, watch time, and syndication with the ultimate goal of growing our audience beyond what we already have.
In parallel, we are supporting FCP Euro’s cataloging efforts with more repair, diagnosis, and product review videos across all makes and models. We're simultaneously posting all of this video content to our blog, which has a much greater conversion path than the traditional outlets on YouTube and Facebook.
Last but not least, the team is continuously recruiting for new hires that'll be able to support and expand our current coverage across all the different makes, models, and brands.
Apparel
The team has a new look for 2019 inspired by a retro GTI interior pattern. We will be providing key partner stakeholders with Team Jackets in 2019 and Crew Shirts in Q2.
Due to popular demand, we will be offering our team apparel for sale to the public through our website. It will be exciting to see FCP Euro team wear out in the wild.
Motorsport
After a successful first season of professional racing and a 3rd place finish, FCP Euro is taking aim at the team championship. With our new and returning partners, we have the support needed to achieve this goal.
One of the first investments we made into this goal was the upgrade on both VW Golf TCRs to have sequential gearboxes. It was apparent last year that the streetcar based DSG gearbox didn’t have the performance to fight for top spots against cars with racing-specific transmissions. With the added performance of our new gearboxes and our experience we gained from last year, we are positioned to have a strong fight for the top positions.
New for 2019, we decided to use Andy Blackmore Design for our livery. This allowed us to have a new twist to the traditional FCP Euro livery while also ensuring that all partners are adequately represented.
One thing that has changed for 2019 is that the Pirelli World Challenge has been rebranded as three separate series all under the SRO’s Blancpain GT World Challenge America. The three groups are Blancpain GT, GT4 America, and TC America. For 2019 we will be competing in TC America.
Upcoming Events & Event Calendar
With over 30 events planned in 2019, FCP Euro’s “Year of the Experience” is set to create a massive impact on the enthusiast community. Every partner is welcome and encouraged to join the FCP Euro team and any and all events. Fan Activation is a vital component to our collective growth. If you would like to join us at any of these events or invite our team to join you, please coordinate with our Event Director, Nathan Brown - nathan.brown@fcpeuro.com.
Our race schedule can always be found on race.fcpeuro.com, and our full calendar can be viewed on our Facebook page. More dates are being added routinely as we get finalized dates from the show promoters.
|
Event |
Location |
Date |
|
TC America Rounds 1 & 2 |
Circuit of the Americas Austin, TX |
3/1-3/3 |
|
TC America Rounds 3 & 4 |
Streets of St. Petersburg, St. Petersburg, FL |
3/8-3/10 |
|
FCP Euro at the UC3 Car Show |
Rentschler Field East Hartford, CT |
4/14 |
|
TC America Rounds 5 & 6 |
VIRginia International Raceway Alton, VA |
4/26-4/28 |
|
New England Dust Off |
Thompson Motorsports Park Thompson, CT |
4/28 |
|
FCP Euro Cars & Coffee |
FCP Euro, Milford, CT |
5/19 |
|
FCP Euro Experience Center Grand Opening |
FCP Euro, Milford CT |
5/19 |
|
GRIDLIFE Midwest 2019 |
Gingerman Raceway South Haven, MI |
5/30-6/2 |
|
TC America Rounds 7 & 8 |
Sonoma Raceway, Sonoma, CA |
6/7-6/9 |
|
2019 FCP Euro Vendor Awards |
FCP Euro, Milford, CT |
9/13 |
Customer Experience Center Build-Out
Last year we set out with a vision for the future of FCP Euro that included a dedicated motorsports facility, 24 Hour customer pickup, a content studio, additional warehousing space, and a community space to hold over 150 employees and guest. That vision is just about to come to reality by April 1st.
With framing, drywall and electrical nearly completed the expansion is moving into the final phases of construction. Finishes, lighting, paint, and flooring being among the next steps.
The distribution expansion is virtually complete with areas of the wall due to come down in the upcoming weeks allowing the team the space to construct racking for over 100 new overstock pallet locations.
Inside the content studio, the custom CNC wall has been constructed and is awaiting utility installation before drywall can be installed.
It is expected that a certificate of occupancy will be in hand by mid-April at which point we will be starting the transition into this gorgeous new facility in preparation for the grand opening on May 19.
You can see the details as we have documented the progress throughout the way in our Customer Experience Center Expansion series on YouTube.
Inventory
The 2019 plan for inventory is to invest the capital needed to achieve our sales growth and partner targets. We have implemented a plan to increase our inventory levels from $5 Million to $8 Million by year end. Additionally, we have released fully-customizable and downloadable dashboards for our partners, giving them vital access to outbound sales data by product and category.
In the plan we utilized two strategies with our key partners this month:
- Go Wide Strategy We took the number of stocking SKUs from around 9,000 and increased this to 16,000. We were able to do this by lowering the threshold for what was a stocking SKU, rather than wait for a SKU to appear on twelve orders, we took that down to four orders over a twenty-four week period. The impact that you will see here is more items on our stock orders on a consistent weekly basis.
- Go Deeper Strategy With the available capital we removed all thresholds we had on our stocking SKUs in terms of who we would buy them from and increased the padding on our top movers. This has allowed us to scale up inventory with our partners in February landing inventory here before the spring rush and season kickoff.
Currently, we have increased our inventory value by over $1M and are now sitting on $5M of inventory, and we still have $4M in open purchase orders to be received which is expected to flow into the facility over the next 60 days.
Thank You to All of Our 2019 Partners
We’ve had tremendous progress in Q1 as we prepare for the Spring selling season. We’re incredibly grateful for your involvement, guidance, and support as we make history as the fastest growing eCommerce company in the automotive aftermarket. We look forward to welcoming you to our new facility here in Milford and joining you at AAPEX, SEMA, and PRI later in the year.
Sincerely,
Scott & Nick
