Accell Group NV, which sells Raleigh, Diamondback, LaPierre and Haibike bicycles in the United States, said leaner inventories, higher sales of e-bikes and premium sport bikes and acquisitions will result in higher net sales, organic sales and net income in the second half of 2014, compared to the same period last year.
The Dutch company said that based on development through October, it expects sales to increase in all of its key markets.
Accell CEO René Takens said favorable weather conditions prevailed in most the markets where Accell operates, while growing sales of electric bikes and high-end sports bikes continue to enhance margins compared with a year ago. In Europe, the acquisition of Comet in Spain and the pending acquisition of Cycle Service Nordic in Denmark will also fuel growth in sales of bicycle parts and accessories in Europe.
“Based on the above, we expect sound growth in turnover and profit for the full year 2014, Takens said.
Results from Comet will be consolidated in Accell Groups results from Nov. 1 on. Accell remains in talks with Cycle Service Nordic, a profitable distributor of bicycle parts and accessories in Scandinavia with annual sales of around €13 million and a workforce of about 40.
Accell Group expects higher organic sales growth in the second half compared to the first half of 2014, thanks in part to a reduction in the number of bicycles from older production years being sold at a discount. The ratio of operating costs to sales will be comparable to the level reported in the second half of 2013. Total trade working capital is lower than in 2013, due to the reduction of inventories and the divestment of the Hercules bicycle business and fitness activities.
Accell Group expects full year 2014 net profit to significantly increase compared to 2013, due to a higher operating result, lower financing costs and lower restructuring costs. In 2013 Accell Group reported net income fell 18 percent to €19 million ($25 mm) on revenue of €849.0 million ($1.12 bn), after restructuring charges of €3 million. In North America, sales sales increased 16 percent to €129 million ($170mm), or twice the pace of growth companywide.