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Accell Accelerates Strategy Changes as 2017 Results See Growth in Turnover but Drop in Profit

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HEERENVEEN, The Netherlands – Accell Group NV saw in 2017 its net turnover grow by 3.7%, but its operating result drop with 37.1%. Against strong sales of e-MTB’s in Germany, Austria, Switzerland and France stood a weak performance in North America and the Netherlands. Under the new leadership of CEO Ton Anbeek the company is accelerating its new (omni-channel) strategy roll-out.

Accell Accelerates Strategy Changes as 2017 Results See Growth in Turnover but Drop in Profit
Under the new leadership of CEO Ton Anbeek the company is accelerating its new (omni-channel) strategy roll-out. - Photo Bike Europe

In the earlier today published financial results of Europe’s biggest bike company Accell also announces changes in its Board of Directors. CFO Hielke Sybesma is leaving the company as of 1 May 2018. COO Jeroen Snijders Blok resigns from the Board of Directors at his own request as of 25 April 2018, while retaining his current activities. The responsibility for the production sites has recently been transferred to Jeroen Both (CSCO). Also a new Chief Commercial Officer has been appointed. This is Jeroen Hubert who is responsible for marketing, innovation, (e)commerce and retail/experience centers. He has previously worked at Pepsico, Friesland Campina, Wehkamp and Ikea.

Financial highlights

  • Adjusted net turnover up 3.7%1 at € 1,069 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; dividend proposal of € 0.50 per share

Strategic highlights

  • Refined strategy with six renewed pillars to form basis for realisation of growth and profit ambitions for 2018-2022; turnover to € 1.5 billion and ROCE above15%
  • 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 all regions
  • Additional expenses of strategy execution amount to a total of € 30 – € 40 million over the next 5 years, on top of the 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

CEO comments

Ton Anbeek, Chairman of the Board of Directors “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. In Europe, we benefited from our leading position in the field of e-bikes. Sales of e-performance bikes for active recreation and sports saw a particularly strong increase and we also recorded a further increase in the order file for 2018.”

“Turnover of regular bikes declined but this was compensated by the higher turnover of e-bikes. In addition to e-bikes sales, we also recorded an organic increase in the turnover of parts & accessories, partly on the back of growth in our own XLC brand. The higher turnover in Europe translated into a higher underlying operating result for our European businesses. In 2017, we incurred extra costs of € 7 million for the roll-out of our strategy. As part of this drive, we raised the supply chain organisation to full capacity and we are making considerable headway in the field of parts & accessories, portfolio management and IT. We have refined the strategy and translated it into a concrete roadmap for the period 2018 – 2022, including related goals and guidance for required investments and anticipated savings. Our ambition is to become market leader in the mid and high end of the e-bike market in a consumer centric and socially responsible way. For this, 2018 will be an important transitional year. We will accelerate our strategy roll out and reduce the complexity of the group in order to better and faster anticipate changes in the market. As such, we can add more value for dealers and consumers and at the same time realise our ambitions for growth and profitability.”

 

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