Accell Group Forecasts Growth In 2009

HEERENVEEN, the Netherlands – This morning a confident CEO of Accell Group, René Takens (photo) presented double digit profit growth figures over 2008. “Last year our profit increased by 17% and the rise in turnover was 13%.” Bigger news was however what he forecasts for 2009.

Contrary to all other stock market listed companies, Takens expects a further increase in turnover and results in 2009. Although he did not want to elaborate on the growth figures, Takens made explicitly clear that all indicators are positive for Accell Group.

“Our order portfolio for the coming cycling season is currently better filled than last year. We firmly believe that there will be more cycling in 2009 and the years beyond. In these uncertain economic times, it is however difficult to predict the direct relation between bicycle use and bicycle sales. On the other hand, sustainable trends will keep stimulating bicycle sales”.

Asked if Accell Group had received order cancellations from dealers he stated that there had only been some order postponements. Also he said: “We do not see or anticipate a change in the financial position of our dealers.”

The turnover rose by 13%

The year 2008 continued to be successful for Accell Group’s market and brand strategy. The turnover rose by 13% to € 538 million and demand for bicycles in 2008 was good. The electric bicycle was particularly popular, seeing an increase in the number of e-Bikes sold of 40%. Other innovative bicycles in the trekking and ATB segment also sold well. Turnover of parts and accessories was positively affected by a higher demand for maintenance.

In the bicycles / bicycle parts & accessories segment, turnover increased by 16% to € 498.6 million (2007: € 431.5 million). This increase was driven above all by the continuing strong demand for innovative and electric bicycles and sales growth in the Netherlands and Germany. The total number of bicycles sold increased to 974,000 (2007: 943,000) and the average price of all bicycles sold rose to € 415 (2007: € 367) mainly thanks to the higher sales of electric bicycles.

The turnover of the German brand Winora and Hercules rose last year while the sales of the Hai and Ghost sports range have contributed to this growth in turnover. The increase in sales of bicycle parts and accessories in Germany was once again strong. An investment in the warehouse at Winora has further improved the efficiency of the logistical handling of parts sold.

In France sales fell due to the halt in production and deliveries of the brand Mercier to the hypermarchés. Last year Mercier only worked on the assembly of bicycles for Lapierre and the city bicycle projects of JCDecaux. Accell Group is reporting a positive year for Lapierre in France as well as on the export markets.

Exports of mainly sports bicycles to Spain, Austria, Switzerland, Scandinavia (Tunturi) and Belgium (Brasseur) increased. Due to the impact of the financial developments in North America, turnover growth of Seattle Bike Supply (SBS) was less than expected for both bicycles and parts.

Fitness Division Re-organized

René Takens had to report a downturn in the sale of fitness equipment. The turnover decreased by 11.3% to € 39.9 million. Last years this activity was loss making forcing Accell Group to re-organize this division. The production was cut back in Estonia and purchasing is now fully concentrated in Asia. At the same time the R&D and purchasing activities in Finland were terminated, and were centralised at the head office in the Netherlands.

The sales offices and warehouses in Germany, Switzerland and Austria were closed and stock management was transferred to the local distributors. These markets are now managed centrally from the Netherlands. Apart from the head office in the Netherlands, the fitness division currently still has sales outlets, including warehouses, in Finland, the United Kingdom and North America. René Takens announced further measures to be taken for 2009 to improve both turnover and result while in the medium term, all strategic options will be considered including the divestment of Accell loss making fitness division.