Europe’s leading bike producer Accell Group has announced that net sales ‘continued to be very strong from July till October coming in at +38% versus the same period last year and bringing YTD net sales growth to 16%.’
Consequently, Accell has revised its guidance upwards and now expects EBIT (earnings before interest and tax) for 2020 to exceed prior-year EBIT.
Demand across Europe for bikes and for parts & accessories has remained strong. As the pandemic- related lockdowns in March and April forced many bike shops across Europe to close for business, sales volumes have also partly shifted from H1 into H2 2020.
The company notes that the pandemic and the EU Commission’s Green Deal have pushed interest in cycling and the use of bicycles as a solution to many societal and urban problems like obesity, pollution and congestion.
Favourable secular trends and bike market drivers include: electrification, bicycle infrastructure investments, government fiscal stimulation and subsidies. These ‘provide a bright outlook for the entire bicycle market in the coming years.’
Ton Anbeek, CEO at Accell Group, said “The continued strong growth in the past months is a very positive development, which demonstrates more than ever that cycling is moving the world forward. In both bikes and parts & accessories we are also capturing more of the online opportunity and are making great digital progress through brand platform renewals and a group CRM roll out.
“In addition, we continue to take actions in order to mitigate the ongoing effects of the supply chain distortions. Following a recent strategy progress review and as things stand today, we remain confident that we are on track to reach our 2022 targets.”
A release from Accell notes that it remains difficult to predict the further course and consequences of the pandemic. Despite the new lockdowns across Europe, bike shops for now remain open and cycling is allowed in most countries.
Due to the increased (consumer and dealer) demand, lead times at component suppliers are longer, which will cause continued supply chain disturbances. Accell has further tightened measures at its production and office locations to safeguard the health and safety of employees as well as to secure factory and warehouse output.
Based on the YTD sales growth and the context as provided above, FY 2020 EBIT is now expected to come in higher than FY 2019. This guidance excludes any potential Covid-19 related major disruptions such as mandatory bike shop closure or factory and warehouse shutdowns.
In addition, Accell is currently investigating with its advisors the valuation of a deferred tax asset (driven amongst others by the proposed new legislation on Dutch corporate income taxes). This could potentially lead to a one-off tax gain of €10-20 million in 2020.
Well-known bicycle brands in Accell’s portfolio include: Haibike, Winora, Ghost, Batavus, Koga, Lapierre, Raleigh, Sparta, Babboe and Carqon. XLC is its brand for bicycle parts and accessories. Accell Group employs approximately 3,400 people across 18 countries. Its bikes and related products are sold to dealers and consumers in more than 80 countries. In 2019, it sold around 943,000 bicycles and recorded a turnover of over €1.1 billion.
