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Following a ‘disappointing’ 2013, Dorel’s financial results bounced back in 2014.
The Group saw revenue up ten per cent to US$2.7billion, with net income up 9.5 per cent to UD$12,147,000. The recently rebranded Sports Division saw revenue up 14.6 per cent in 2014 to US$1,053,183,000.
Dorel is owner of Cycling Sports Group, Cannondale, GT, Schwinn, Mongoose, Caloi, IronHorse and Sugoi.
To provide some context, that’s another of the industry’s big players reporting a strong 2014 – Accell saw profits up in 2014, citing the good weather as a key factor in the rise.
Martin Schwartz, Dorel President & CEO, said: "Results for Dorel Sports were strong as the segment recovered from a disappointing 2013. The revitalized management team delivered solid earnings as it refocused on its strong brands and successful new product introductions."
The Sports Division saw increases in both the IBD and the mass merchant channels, driven partly by improved weather conditions with a "rebound in the global bike market when compared with prior year".
The IBD channel was a strong contributor to organic sales increases, particularly in Europe and Asia. For the full year, organic sales were up eight per cent after removing the impact of foreign exchange and acquisitions.
Schwartz added: "Overall performance in 2014 was better than the previous year. This is a tribute to our executive teams in all three segments as we maintained a strict focus on the businesses even while planning the future of the Juvenile segment and rebuilding Dorel Sports."
OUTLOOK
"Over the last decade Dorel has truly become a global company, particularly in the Dorel Juvenile and Dorel Sports segments. Today, just over half of our net income is derived from outside North America. We believe this is the right long-term vision for the growth of the Company.
"However, the recent meteoric rise in the value of the US dollar has significantly reduced our margins in our markets outside the US. This difficult situation is expected to impact us for at least the first half of 2015. We are working to adjust to these new exchange rates, which is made more challenging by continued currency rate fluctuations. Until we see some stability in the currency market, our visibility on earnings will remain difficult."
"For Dorel Sports we believe that the second half of the year will see growth in the (IBD) channel. This expectation is based on the planned introduction in July of our innovative new bicycle model year line-up, as well as a stabilization of margins in our markets outside of the US. In addition, we anticipate another solid year in our mass market bike business."
