Favourable weather and e-bikes help net profit hit €27.5 million in first half of 2014 for Accell, up 13%

Sunshine helps profits rise for Raleigh owner

Accell Group saw net profit reach €27.5 million in H1 2014, up 13 per cent compared with the €24.5 million in H1 2013.

The Group saw an organic increase in turnover of 4 per cent, taking total turnover to € 506.2 million, compared with €503.8 million in H1 2013.The sale of Hercules (Germany) limited turnover rise, Accell said, as did currency exchange and as a result of the decision to no longer serve the mass market in North America.

Operating profit rose 7 per cent to €38.2 million, from €35.6 million in H1 2013.

In the Netherlands, Accell is planning a a Bicycle Experience Centre in Ede, Holland, named ‘De Fietser’, which will be the largest in the Netherlands and it will include the country’s longest bicycle test track (500 metres).

Bike sales down, but average prices rise
In bicycles/P&A, turnover rose slightly in H1 2014 to € 497.4 million, from €494.6 million H1 2013.

The number of bicycles sold came in at 1,018,000 in H1 2014, compared with 1,115,000 bicycles sold H1 2013 – an organic fall, according to Accell, with the average sales price rising 10% thanks to the greater share of electric bikes and higher-end sports bikes in total turnover. On an organic basis, the average price of the bikes sold came in 12% higher. The segment profit rose to € 45.4 million, from € 43.2 million in the first half of 2013.

E-bikes boom while traditional bikes slide
The strong market for electric bikes meant a 14 per cent rise in e-bike sales for Accell – largely in the Netherlands and Germany but also thanks for e-bike launches is the US, the UK, Italy and France. The growth in the sales of electric bikes partly offset the sales of traditional and sports bikes, which fell one per cent. Sports bikes sales were down 14%, partly due to the sale of Hercules and the decision to no longer serve the mass market in North America.

Global sales stats
Early indications see the Dutch bicycle market having increased 3% in the start of 2014, with the same figure quoted for turnover in Germany came in 3%. Turnover from P&A increased by 6% in H1 2014.

In North America, turnover fell 14%, largely through that decision to terminate deliveries to the mass market in Canada and the USA. Turnover in the Raleigh brand to specialist stores fell partly due to the long severe winter on the east coast of the United States. Turnover in P&A dropped as a result of the decline in the market in the first half and the termination of a part of the distribution of Shimano products.

In the other European countries, turnover was up 9%, with key countries being France, Belgium and the UK. The turnover increase in these countries comes from both bicycle and parts & accessories.

Turnover in countries outside Europe accounts for 4% of total turnover. Around half of this is realised in Turkey, where turnover declined due to political unrest, while in euro terms turnover declined due to the lower value of the Turkish lira. The remaining turnover outside Europe comes largely from Asian countries and Australia.

Summary from the boss

“We enjoyed a good first half in terms of turnover and sales, partly due to favourable weather conditions in Western Europe, where we book more than half of our turnover," said René Takens, Chairman and CEO of the Board of Accell Group. "The growth in demand for electric bikes and high-end sports bikes was particularly strong. We improved our profitability as a result of a better product mix and cost reduction, due to the previously announced reorganisations in the Netherlands and North America. We were also able to make a substantial reduction in our working capital utilisation, which in turn reduced our financing costs. In Germany, our second home market, we further sharpened the focus of our brand portfolio through the divestment of Hercules, which will enable us to concentrate even more clearly on the differentiating potential of our other German brands Winora, Ghost and Haibike. Partly due to the loss of the Hercules turnover, the total rise in turnover was limited in the first half 2014, but organically turnover increased by 4%.

"Turnover in electric bikes once again increased significantly in the Netherlands and Germany. In the course of the current bicycle season we also launched new electric bikes in France, the United Kingdom, Italy and the United States. We will be adding even more models to our ranges in these countries in the new 2014-2015 bicycle season.

"As we announced earlier this week, we have reached agreement on the divestment of our fitness activities. For the second half of 2014, we expect an organic increase of turnover and result, barring unforeseen circumstances.”

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