Both saels and profit increased for the Accell Group during the first half of 2004. Sales rose to 204.3 million ($251.2 mm), a 24% increase over the 165.3 million ($175.7 mm) in 2003. The organic growth amounted to 10%. Net profit increased by 49%, to 7.5 million ($9.2 mm) compared to 1st half 2003 of 5.0 million ($5.5 mm). EPS was to 2.21 ($2.72), a 46% increase over the first half of 2003 at 1.51 ($1.65). It is expected that earnings per share over the entire year 2004 will show a strong rise.
The continuous attention for the positioning of the various brands and the effectiveness of the dealer and consumer marketing have again paid off with success in the first half of 2004. Accell Group's innovative and attractive products effectively reach out to consumer groups. The acquisitions of Tunturi, Juncker and F. van Buuren & Co. have likewise contributed to the growth of both turnover and profits. Margin growth also contributed to better results for Accell Group.
René Takens, Chairman of the Board of Management of Accell Group, commented on these interim results: “In times such as these, when people are reticent about spending money and are more inclined towards saving, it is important to convince them that we offer the kind of product that exactly fits their needs. The people have money, but only if your brand has enough to offer. It has to be more than just a name – and that is exactly what our brands communicate in the market. This is not something that runs by itself – it demands the constant attention of all our people. And looking at these half year results, I have to say we have all succeeded.”
Over the past six months, revenues in the Netherlands grew both autonomously and through acquisitions. Turnover rationalization in Germany led to improvements in results. Bicycle sales in France were once more good, especially in the specialist trade segment. Revenues in other countries were up on 2003 as a result of the Tunturi acquisition.
Trading activities in bicycle parts and accessories grew autonomously in the first half of 2004. In that period, Accell Group also acquired the trading activities of Juncker and F. van Buuren & Co in the Netherlands. In the coming period, creating synergies between these businesses will have a high priority. Accell Group will continue to search for acquisition candidates in the field of bicycle parts that fit with the profile and portfolio of the company.
Accell Group will continue to address demand for high-quality, high-visibility products with a clear value added. Essential elements in that strategy are a focus on expanding the strong brand portfolio, targeted marketing towards both consumers and dealers, and realizing economies of scale through synergies in portfolio management, logistics and procurement. In addition to autonomous growth, we will actively pursue acquisition candidates in the fields of bicycles, bike parts and accessories, and fitness equipment.
The trends in the European markets that were noticeable in the first half of 2004 are not likely to change significantly as the year progresses. This means that in the second half of 2004, consumer confidence is likely to remain depressed. However, based on the current strategy, we should again be able to realize good results. The final result will partly depend on both the consumers' willingness to purchase and on the weather conditions.
For the entire year 2004, and barring unforeseen circumstances, Accell Group expects a strong rise in earnings per share.
