Based on developments to the end of October, leading European bike business Accell Group expects higher turnover in the second half of 2013 in all product groups and overall for its ‘important countries’. Over the full year 2013, Accell Group also expects higher turnover both overall and organically compared to 2012 ‘in markets which are stable or slightly decreasing.’
Operating profit (excluding restructuring charges) is expected to come in at approximately the same level as in 2012.
However, net profit for the full year 2013 is expected to be below the level of last year due to higher financing costs, relative higher taxes and reorganization charges for the Netherlands and North America. For the longer term Accell Group expects a continuation of growth of turnover and operating result. The expectations for a strong overall position for the full year of 2013 follow turnover and profit gains in the first half of the year.
Accell Group NV owns brands such as Raleigh and Van Nicholas, alongside Koga and Lapierre amongst others.
René Takens, CEO of Accell Group: “Developments in recent months show that the bicycle season has not really picked up in full following the bad conditions during spring, despite good weather in the summer months in most countries. Therefore, there is no material impact of sales catching up; and more products were sold at a discount at the end of the season than anticipated. Meanwhile, inventory levels have again normalized.”
He continued, “As our dealers are also encountering the effects of a difficult season, less bicycles of the new model year are currently sold in pre-season sales; dealers are frequently moving orders to the spring. Nevertheless, Accell Group’s turnover will also increase in the second half of the year, which also demonstrates that even during slow economic times the underlying long term trends of more consumer interest for mobility, health and sports are structural.
“We expect turnover to increase organically in the full year 2013 compared to 2012 while margins will be lower. On an annual basis, operating profit is expected to come in at approximately the same level as in 2012.”
Sales of electric bikes and innovative sport bikes continue to develop well, while pressure on sales of traditional bikes has eased. The new bicycles collections for 2014, presented in September 2013, have reportedly been well received by the majority of dealers.
Given the outlined developments and the current market outlook, Accell Group expects a higher turnover for the full year 2013 whereby the added value will be at a relative lower level mainly as a result of granted discounts. Operating costs as a percentage of turnover are at a similar level compared to 2012.
The second half of the year will include a number of exceptional items regarding a previously announced and deployed reorganizations for the Netherlands and North America this year. According to Accell, the reorganizations are on track.
During the course of 2014 the integration of the bicycle production of Batavus and Sparta in the Netherlands will be completed. At the end of June 2013 the production of bicycles in Canada ended and at the end of this year the integration of the companies in the United States will be deployed. The related restructuring costs for the Netherlands and North America amount to a total of net €3.0 million in the second half of the year.
The medium to long term outlook remains positive. Accell notes that there is a structural good demand for bicycles. In particular, this will continue to drive sales of electric bikes and innovative sports bikes in the upper market segment.
