Accell Group NV, the Dutch company that sells Raleigh, Diamondback, LaPierre and Haibike bicycles in the United States, expects to book higher sales in all of its key markets in the second half of 2014, compared to the same period last year based on developments through October. Also net profit is expected to increase in the second half year, compared to 2013.
The positive trend of the first half year has continued into the second half year,” said René Takens, CEO of Accell Group. “Following a good first half, the weather conditions have also been favorable in the second half in most of the countries where Accell markets its products. The margin is developing positively as in particular more electric bikes and high-end sports bikes are being sold. The acquisition of Comet in Spain and the expected takeover of Cycle Service Nordic in Denmark lead to a further strengthening of our position in the field of bicycle parts and accessories in Europe. Based on the above, we expect sound growth in turnover and profit for the full year 2014.
Accell Group recently completed the earlier announced acquisition of Comet in Spain. The Spanish company will be consolidated in Accell Groups results from Nov. 1 on. Furthermore, Accell Group is in talks with Cycle Service Nordic, a profitable distributor of bicycle parts and accessories in Scandinavia with annual sales of around €13 million. The company has a workforce of around 40 people.
Based on the developments outlined above and the current market outlook, Accell Group expects higher organic sales growth in the second half compared to the first half of 2014. Added value is expected to be slightly higher than in 2013, partly due to a reduction in the number of bicycles from older production years to be sold at a discount. The ratio of operating costs to sales will be comparable to the level reported in the second half of 2013. The total trade working capital is lower than in 2013, due to the reduction of inventories and the divestment of the Hercules 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.