Accell Group N.V.'s net profits rose 33% to 24.4 million ($33.5mm) on a 10.3% increase in turnover to 476.1 million ($655.8mm), the Netherlands-based cycling company reported.
Both numbers represented records for the maker of bikes, bike parts and fitness gear.
In 2007, the good weather in the first half of the year contributed to higher bicycle sales,” said Rene Takens, chairman of the Accell Group executive board. “Accell Group also benefited from the growing demand for electric bikes in the first half of the year.”
Takens said Accell's operating margin increased as a result of the extra bicycle sales and a positive product mix.
Approximately 73% of the company's sales came from bicyles, while 18% came from bike parts and the remainder from fitness.
Turnover, or sales, of bicycle/bicycle parts and accessories increased 11.5% while unit sales of bicycles rose 3% to 943,000. In dollar terms, the average selling price for bicycles rose by $38.36, or 8.3%, to $502.79.
In the United States, turnover grew at the company's Seattle Bike Supply operation, which began distributing Batabus bikes in addition to Lapierre bikes made by Accell Group. Seattle Bike also made progress exporting its Redline BMX bikes to Europe.
“The outlook for 2008 is also positive for Accell Group and, barring unforeseen circumstances, we expect further growth in turnover and net profit from ordinary operations,” said Takens.
Takens said that while organic growth accounted for 70% of sales growth in 2007, the company is looking for more acquisitions like one it announced Wednesday. Accell announced it had signed an agreement to acquire Ghost Mountainbikes GmbH, a German maker of higher-end moutain and racing bicycles. Based in Waldsassen, Ghost Mountainbikes booked turnover of around 25 million ($34mm) in 2007.
Ghost sells its products throughout Europe and will be consolidated into the Accell Group by March 1. The current Ghost management will remain in place after the takeover. It is expected that the acquisition will make an immediate contribution to Accell Groups earnings per share.
“This is fully in line with our strategy of managing top brands such as Lapierre, Koga and Hai,” Takens said. “At the time, we are seeing an increase in the use of bicycles both as a solution to mobility problems (CO2-free mobility) and for recreational purposes. For these purposes, consumers are willing to invest in durable top products.”
