The Accell Group has reported ‘very strong’ net sales from July till October, with a 38% increase versus the same period last year.
This brings YTD net sales growth to 16%. Consequently, the group has revised its guidance upwards and is now expecting EBIT for 2020 to exceed prior-year EBIT.
Ton Anbeek, CEO 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 and accessories, we are also capturing more of the online opportunity and are making great digital progress through brand platform renewals and a group CRM rollout.
“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.”
Demand across Europe for bikes and for parts and accessories has remained ‘strong’, the group said. 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.
Moreover, the pandemic and 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 as electrification, bicycle infrastructure investments, Government fiscal stimulation and subsidies provide a bright outlook for the entire bicycle market in the coming years,” stated the Accell Group.
“It remains difficult to predict the further course and consequences of the pandemic,” it added. “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, the group said.
In addition, Accell is currently investigating with its advisors the valuation of the 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.
Read the November issue of BikeBiz below: