Accell Group Has Good First Half

HEERENVEEN, The Netherlands (July 21) - Accell Group today announces that it once again increased turnover and profit in the first half of 2005. Turnover in the first half of the year rose to € 213.8 million, up 5% compared with € 204.3 million in the first six months of 2004. A good sales mix combined with a higher margin resulted in an increase of net profit to € 9.6 million, up 26% from € 7.6 million in the first half of 2004. Earnings per share came in at € 1.10, up 22% from € 0.90 reported in the first six months of 2004. René Takens, Chairman of the Executive Board of Accell Group: “We once again succeeded in significantly improving our results in the first half of the year. Organic turnover remained at the same level as in the first half of 2004. In view of the high sales levels in that period and given the reluctance among consumers to spend their money, this proves that persisting with our strategy is the route to success. In the first half of the year, we have deliberately opted for returns at expense of the lower price ranges. This loss of turnover was compensated by growth in our core sector, which is on average positioned in the higher end of the market.” In the past six months, turnover increased through the consolidation of acquisitions made in the second half of 2004. Excluding those, Accell Group’s turnover was at the same level as in the strong first half of 2004. In total, Accell Group sold fewer bicycles in the first half of this year than in the comparable period of last year. The total stood at about 500,000 units. Especially in France the company was hit by the increased pressure on prices by Hypermarkets. The focus on returns meant sales in the lower market segments lagged. However, the average price of the bicycles sold by Accell Group was higher. This can be attributed to factors such as a continuing strong demand for the electrically driven Sparta ION. About 17,000 ION’s were sold during the first six months of 2005; a 56% growth compared to last year. Based on these developments, the gross margin increased and Accell Group was able to book a further improvement in results. The trading activities in bicycle parts and accessories also recorded an increase in turnover, both organically and through the consolidation of Julius Holz in Germany, which has now been merged with Wiener Bike Parts. Turnover in the fitness activities also developed positively. The acquisition and creation of a new inhouse sales organisation in key markets, such as the United Kingdom, Germany and North America, made a key contribution in this respect. For the full year Accell Group expects further positive results and an increase in the earnings per share of approximately 10%.