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North America slowdown prompts strategy update & restructuring for Accell Group

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Leading European bike group Accell Group has published its annual results for the 2017 financial year and presented a strategy update for the period 2018-2022.

Ton Anbeek, Chairman of the Board of Directors at Accell Group said, “In 2017, we started the executing of our new strategy in Europe and North America. Unfortunately, the initial results of this strategy were overshadowed by a disappointing performance in North America. Sales via existing distribution channels (IBDs and multi-sport) came under pressure and the contract with a major multi-sport chain was terminated.

“These developments prompted a restructuring, including the replacement of the local management and an adjustment of the North American organisation which also gave rise to a necessary correction on US import levies for the period 2013-2017.”

Financial:

  • Adjusted net turnover up 3.7% at €1069 million, largely on the back of growth in e-(performance) bikes and strong contributions from Germany, Austria, Switzerland (DACH) and France
  • Turnover increase under pressure from reduced bike sales in North America and the Netherlands
  • Operating result 37.1% lower at €38.0 million, primarily due to (1) weak performance and transformation of the organisation in North America (in total €10 million) and (2) extra (budgeted) costs for the implementation of the group strategy
  • High tax rate due to non-cash write-off of tax assets in North America and Finland resulted in net profit of €10.5 million; with a dividend proposal of €0.50 per share

Strategic:

  • Refined strategy with six renewed pillars to form basis for realisation of growth and profit ambitions for 2018-2022; targeting turnover to €1.5 billion and ROCE above 15%
  • Strategy roll-out accelerated with stronger emphasis on reduction of complexity within the group, centralised management of (e-)commerce and innovation, plus use of scale and synergy potential across the value chain and across all regions
  • Additional expenses of strategy execution amount to a total of €30-40 million over the next 5 years, on top of 2017 expenditure
  • Anticipated realisation of €60-80 million in structural savings on an annual basis by 2022
  • 2018 will be key transitional year; announcement of changes in board pending

Accell Group NV focuses internationally on the mid-range and higher segments of the market for bicycles and bicycle parts & accessories. The company claims leading positions in the Netherlands, Belgium, Germany, Italy, France, Finland, Turkey, the United Kingdom and the United States. In Europe, Accell Group is ‘the market leader in the bicycle market in terms of turnover’.

Accell Group’s best known brands are Batavus (Netherlands), Sparta (Netherlands), Koga (Netherlands), Loekie (Netherlands), Ghost (Germany), Haibike (Germany), Winora (Germany), Raleigh and Diamondback (UK, US, Canada), Lapierre (France), Tunturi (Finland), Atala (Italy), Redline (US) and XLC (international).

Accell Group and its subsidiaries employ approximately 3,000 people in 18 countries worldwide. The company has production facilities in the Netherlands, Germany, France, Hungary, Turkey and China. Accell Group products are sold in more than 70 countries. The company’s headquarters are located in Heerenveen (the Netherlands). Accell Group shares are traded on the official market of Euronext Amsterdam and included in the Amsterdam Small Cap index (AScX).

In 2016, Accell Group sold around 1.5 million bicycles and recorded turnover of over €1 billion.

www.accell-group.com

 

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