Leading European bike manufacturer, Accell Group, has reported its first half financial year results for 2017. Net turnover for H1 2017 reached €634.0 million, up +0.7% year-on-year on the first half of 2016.
The company noted that growth was pressured by lower sales in North America, the Netherlands and Turkey. Although, Accell Group saw a growing number of e-bikes in the sales mix alongside lower margins on regular bikes.
The underlying operating result increased slightly. This was helped out by operating costs being down slightly, despite around €5 million in extra costs for the implementation of the company’s strategy. Net profit was lower due to the negative impact of a one-off non-cash write down of €3.8 million on a tax asset related to the group’s North American operations.
Hielke Sybesma, Interim-Chairman of the Board of Directors said “We once again benefitted from our leading position in the field of e-bikes in the past six months. We noted a particularly strong increase in sales of e-performance bikes for active recreation and sports and these now represent about 40% of our turnover in e-bikes.
“Turnover in regular bikes lagged expectations in various countries, in which mainly conditions in North America, the Netherlands and Turkey played a role. Parts & accessories turnover came in higher, partly due in part to greater demand for replacement parts for e-bikes.”
Sybesma continued, “Consumer purchasing behaviour is changing, which has in turn led to a continuing change in distribution channels. In North America due to a deterioration in the retail market sales to multi-sports chains in the first half of the year were disappointing. Our sales via other (online) channels in North America are increasing as a result of the changes in distribution strategy for our brands Raleigh and Diamondback.
“In recent months, we have devoted considerable energy to the implementation of the strategy we announced in March. We are making good progress on the various strategic fronts and we are laying the foundations that will help us achieve our medium-term goals. We are booking particularly solid progress in the fields of supply chain, parts & accessories, portfolio management and IT.
“The Supply Chain Management organization is currently in full swing. A clear effect of this is that the working capital situation continues to improve. However, the costs incurred for the implementation of the strategy are exerting additional pressure on our results. Barring unforeseen circumstances, in the second half of 2017 we expect to record an increase in turnover compared to the same period last year and an underlying operating result5at around the same level as the second half of 2016 (€16 million).”