Accell Groups Profit Up 9% In First Half Year

HEERENVEEN, the Netherlands - Accell Group booked a further increase in turnover and profit in the first half of 2010. Turnover was up 3% to € 342 million, compared with € 333 million in the first half of 2009, due in part to the effect of minor acquisitions. Net profit rose by 9% to € 24.1 million from € 22.1 million in the same period of 2009.

René Takens, Chairman of the Executive Board of Accell Group: “In the first half of 2010, we saw a number of important trends continue. Consumer interest in the environment, mobility, health and active recreation remains high. This is leading to greater use of our products. There is particular interest for our innovative sports bicycles and electric bicycles.”

Bad weather in Europe

The first half year was characterized by a very long winter and subsequent bad weather in May. “As a result less traditional bikes were sold”, continues Takens. “Also, the limited financing possibilities of our dealers were apparent. Our dealers have lowered a part of their electric bicycle inventories, while simultaneously sales of electric bicycles to consumers continued to increase.”

“Sales of bicycle parts, accessories and fitness equipment were also up. Despite the limited turnover growth, we are satisfied with our performance given the current market circumstances.”

“We will continue to actively seek acquisition candidates during the remainder of the year. Barring further economic developments and unforeseen circumstances, at this point in time we expect a higher turnover and an increase in net profit of approximately 5-10% for the full year 2010.”

In the segment bicycles and bicycle parts & accessories turnover rose by 2% to € 328.1 million in the first half of 2010, compared with € 321.4 million in the first half of 2009. The number of bicycles sold (circa 580,000) and the average sales price (€ 456 ex-factory) remained stable. Turnover of bicycle parts & accessories rose by 11% to € 64.0 million.

E-Bikes Sales

The sales of electric bicycles to consumers increased by approximately 10%. Due to inventory reductions by dealers, Accell Group supplied dealers with less electric bikes than in the first half of 2009. The sales of repair parts rose substantially. Many consumers who did not buy a new bicycle had their existing bicycles repaired. The turnover development at Accell Group’s companies was in line with general market developments.

Germany

Turnover increased in Germany, due in part to the acquisition of Batavus importer Bäumker in January of this year. The sales of electric bicycles were up in Germany because this product is relatively new to this market compared with the Netherlands. The sales of the innovative sports bicycles of Ghost, Hai Bike and Winora also increased. The turnover in bicycle parts & accessories developed well in Germany and France (from Germany).

France

Sales of the French top brand Lapierre were up, primarily due to exports. The turnover in bicycles and bicycle parts for commercial city projects fell in the first half of this year, because there were relatively few new projects.

Scandinavia

In Scandinavia, the integration of Tunturi and Hellberg, which Accell Group acquired in June 2009, is virtually complete. The integrated organisation will make it easier for these companies to market their products. The bicycles of the acquired Hellberg (Nishiki brand) will also be sold in the Netherlands and Germany. Accell Group is currently examining further export possibilities for this brand.

Sales of bicycles in Scandinavia, Austria, Spain and the UK increased significantly in the first half of 2010. Turnover at SBS in North America rose primarily on the back of increased sales of the BMX brand Redline. For Accell group the downturn in the sales of bicycles in North America seems to have come to an end.

Outlook 2010

Based on the current market conditions and barring unforeseen circumstances and economic conditions, for the full year 2010 Accell Group expects a higher turnover and an increase in net profit of approximately 5-10%.