Accell Group, a leading European bicycle company with well-known brands such as Diamondback, Haibike, Koga and Raleigh, has announced that its ‘Lead Global. Win Local’ strategy is starting to pay off in its core markets (excluding North America).
The company has reported that its second half 2018 net turnover growth accelerating to 10.4%, bringing full-year core turnover growth to 6.1%. EBIT (earnings before interest and taxation) came in at €54 million, and excluding one-offs at €58.9 million.
The non-core North American business ended the year at a negative EBIT of €21.0 million – bringing total group EBIT at €33.0 milion. Accell Group added that the strategic review with regard to its North American business, as announced in December 2018, is in progress. Conclusions on the future of the North American business are expected in Q3 2019 at the latest.
Total group net income stood at €1.1 billion in 2018, up 2.4% year on year. Total net profit for Accell Group increased from €10.5 million to €20.3 million in 2018.
Accell Group adds that it has taken important steps in improving its operating model and operational performance, based on its ‘Lead Global. Win Local’ strategy. 2019 will show continuation on the implementation of this strategy.
‘Lead Global. Win Local’
- Central teams now fully in place and operational. Key senior management appointed.
- Further cross-regional roll-out of popular and fast-growing sport brands, such as as Haibike, Ghost and Lapierre.
‘Winning at the point of purchase’
- Strategic brand portfolio per region established through 10 sharpened brand positionings.
- Selective distribution contracts rolled out by mid-2019.
- Improvement in availability of products/brands as key driver for further growth.
‘Consumer centric omni-channel’
- 3-pillar omnichannel strategy with e-commerce platforms and experience centres being rolled-out in 2019.
- First single brand platforms will go live in H1 2019.
Ton Anbeek, CEO of Accell Group said “2018 was an important transition year, a year in which a strong foundation for the future of Accell Group was laid. After the announcement of the sharpened strategy ‘Lead Global. Win Local’ in March 2018 we changed the structure of our organisation and made additional costs for the further implementation of the strategy, especially investments in e-commerce, marketing, innovation and IT.
“From August 2018 onwards, all regional and central teams have been up to strength and we are rolling out our omni-channel distribution strategy. In the second half of 2018 revenue growth accelerated and we achieved an improvement in the added value margin for the full year. Looking back on the year, we are satisfied with the progress made and the achieved results, strengthening our confidence in the strategy.”
He continued, “The complexity in our assortment has been reduced by approximately 30% in most regions. Next to that a number of smaller and less efficient locations and entities have been divested. Progress has been made on the roll-out of new e-commerce platforms and experience centres, of which the first will go live in the first half of this year. The acquisition of our mobile bike service Beeline and the purchase of the e-cargo brand Babboe perform in line with the business case, with Babboe showing a strong net turnover in 2018.
“The introduction of the Haibike Flyon, the Lapierre E-Zesty and Xelius are expected to make a major contribution in 2019. The same goes for the KOGA Pace introduced in November 2018 and the Sparta M8B, elected only last week as winner of the ‘E-bike of the Year 2019’ in the Netherlands.
“The decision to focus on our growing core business shows that the strategic and financial targets for 2022 are realistic and within reach. We will finalise our strategic study with regards to North America as soon as possible in order to eliminate profit dilution of the non-core business.”
Accell Group expects continued growth in 2019 in its core business, ‘driven by a strong consumer interest in especially e-bikes and cargo bikes and strong innovations like the winning ‘E-bike of the year 2019’ in Netherlands with the Sparta M8B.’
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 head office is located in Heerenveen (the Netherlands). Accell Group shares are traded on the official market of Euronext Amsterdam and are included in the Amsterdam Small Cap index (AScX).
In 2018, Accell Group sold around 1.1 million bicycles and recorded turnover of over €1 billion.