Accell Group: 18% increase in Profit – But Tunturi Looses Production

HEERENVEEN, Netherlands - Accell Group N.V. realized a net profit of € 15.5 million over 2005 (2004: €13,2 million), which constitutes an 18% increase. The forecast of a 10% increase issued in November was amply exceeded with an increase in net earnings per share by14% to € 1.75 (2004: € 1.54). Turnover increased by 8% to € 369.3 million (2004: € 341,1 million). René Takens, Chairman of Accell Group s Executive Board: “Thanks to excellent sales figures in November and December, we amply achieved our 2005 expectations and exceeded the performance realised in our top year 2004. In spite of increasing pressure on the margins, our operational margin improved from 6.7% to 7% of turnover thanks to higher sales and further cost control. A clear indication that our business model, a combination of branding power and intelligent distribution, combined with an innovative edge, flexibility and optimal use of synergy benefits, works well. For2006, we expect further growth in turnover and operational results. This growth will be driven mainly by building on our fitness activities and the intended acquisition of Seattle Bike Supply, which we consider an important step in being able to benefit from the increasing interest in bicycles and fitness in North America as tools to stay in shape.” On the other end of the scale, Finnish Tunturi looses the production facility. Fitness machines will be assembled in Estonia, while Tunturi bicycles will come from the Hungarian Accell factory. In Turku, Finland, R&D and packaging will remain the activities. Another less positive result, is the development of the French market: while LaPierre continues to be a quality flagship, Mercier, as a mass-brand has a far more difficult position. The hollowing out of the French bike market, by the very cheap supermarket models, is taking it’s toll on the mid-range suppliers. Mercier’s total turnover reached €10 million in 2005. For more details on the Accell figures 2005, please see our March issue.