Despite Double-Digit Profit Growth Accell Group Had Tough 2010

AMSTERDAM, the Netherlands - Last year Accell Group NV again had a great business in e-bikes. And, as shown here by CEO René Takens, it won the Dutch ‘e-Bike of the Year 2011 Award’. Yet, it was a tough year for the ‘mother’ of Batavus, Koga, Sparta, Winora, Hai Bike, Ghost, Lapierre, Atala, Redline, Tunturi and XLC.
 
Last Friday Accell Group presented an 11% rise in net profits for 2010. However, a closer look at the financial results shows that the holding had a wearisome year due to declining bike sales and a 5% drop in revenues made on its biggest market.

Tax benefits and lower interest charges resulted in the 11% higher net profits compared to 2009. Net income stood at €36.4 million compared to €32.7 million in 2009.

As said the higher profits were not the result of an increase in bike sales. In fact the revenues made with the sale of new bicycles dropped 2% while in terms of units it dropped 4%. Accell Group’s subsidiaries in and outside Europe sold 37,000 less bikes in 2010 compared to 2009. The total number of sold bicycles stood last year at 949,000 (was in 2009: 986,000).

The financial figures further indicate that revenues made by the Accell companies on its biggest (home)market were under considerable pressure. They fell 5% to €225 million. This drop was caused by bad weather conditions in 2010, less sales in city and kids bikes and changes made in the ‘Bike-to-Work’ government subsidy scheme.

Contrary to the sale of city and kids bikes; Accell was again successful with its high-priced e-bikes. According to CEO Takens, the company saw its e-bike revenues grow by 5% in 2010. 30% of the holding’s total turnover was in 2010 made with the sale of electric bicycles. Next to e-bikes also road racing, MTB as well as so-called life-style (transport)models sold well. Including electric bikes 60% of the total revenue made with bicycle sales came from such models.

The increased sale in e-bikes, sporty and life-style model came at the expense of regular city bikes which used to be the bread & butter of, in particular, the Dutch Accell dealers. CEO Takens said: “Sale of this segment dropped considerably. We are faced with an increased competition through internet channels as well as at department stores. It is becoming more and more difficult to offer bikes in this segment that really stand out from the ones sold at department stores.”        

On the outlook for this year the Accell Group says in its financial report that: “The willingness at dealers to build up stock in anticipation of the sales season, remains low as they count on availability at suppliers. Such a trend requires greater adaptability of the organization in order to sustain further growth of the financial results.”