Accell Group N.V reported revenues inched up 0.7 percent in the first half to €634.0 million from €629.7 million.

Net profit declined 22.7 percent to €26.3 million from €34.0 million.

Underlying operating earnings rose 2.4 percent to €59.3 million from €57.9 million. Operating profits excluding one-off gains and charges declined 12.6 percent to €47.5 million from €54.4 million.

Accell Group said the highlights of the quarter included:

  • Organic increase in net turnover of 3 percent, largely on the back of strong growth in the sales of e- (performance) bikes and a steady increase in the sales of parts and accessories (P&A);
  • The growth was pressured by lower sales in North America, the Netherlands and Turkey;
    The added value was impacted by the growing number of e-bikes in the sales mix and lower margins on regular bikes;
  • Operating costs were down slightly, despite around €5 million in extra costs for the implementation of the strategy;
  • The underlying operating result increased slightly;
  • Net profit was lower due to the negative impact of a one-off non-cash write down of €3.8 million on a tax asset related to the North American operations;
  • Working capital once again improved strongly.

Hielke Sybesma, interim-chairman of the board of directors: “We once again benefitted from our leading position in the field of e-bikes in the past six months. We noted a particularly strong increase in sales of e-performance bikes for active recreation and sports and these now represent about 40 percent of our turnover in e-bikes. Turnover in regular bikes lagged expectations in various countries, in which mainly conditions in North America, the Netherlands and Turkey played a role. Parts & accessories turnover came in higher, partly due in part to greater demand for replacement parts fore-bikes. Consumer purchasing behaviour is changing, which hasin turn led to a continuing change in distribution channels. In North America due to a deterioration in the retail market sales to multi-sports chains in the first half of the year were disappointing. Our sales via other (online) channels in North America are increasing as a result of the changes in distribution strategy for our brands Raleigh and Diamondback.”

In recent months, we have devoted considerable energy to the implementation of the strategy we announced in March. We are making good progress on the various strategic fronts and we are laying the foundations that will help us achieve our medium-term goals. We are booking particularly solid progress in the fields of supply chain, parts & accessories, portfolio management and IT. The Supply Chain Management organization is currently in full swing. A clear effect of this is that the working capital situation continues to improve. However, the costs incurred for the implementation of the strategy are exerting additional pressure on our results.”

“Barring unforeseen circumstances, in the second half of 2017 we expect to record an increase in turnover compared to the same period last year and an underlying operating result at around the same level as the second half of 2016 (€16 million).”

Accell Group’s best known brands are Haibike (Germany), Winora (Germany), Batavus (Netherlands), Sparta (Netherlands), Koga (Netherlands), Lapierre (France), Ghost (Germany), Raleigh and Diamondback (UK, US, Canada),
Tunturi (Finland), Atala (Italy), Redline (US), Loekie (Netherlands) and XLC (international).

Photo courtesy Raleigh