Double Digit Rise in (Electric) Bike Sales for Accell Group in First Half Year

HEERENVEEN, the Netherlands - Accell Group NV saw its bike sales rise with 22 percent during the first half of the year while its e-bike sales increased by 26 percent.

René Takens, Chairman of the Executive Board, reported today that the holding company’s turnover was up 9 percent at 373.0 million euro, compared with 342.4 million euro in the first half of 2010. Net profit rose by 13 percent to € 27.3 million from € 24.1 million in the same period last year.

Key developments

Despite the big growth in total bike sales Accell Group had problems on its home market and with its fitness division. Results on its home market, the Netherlands, couldn’t keep up with the overall performance of the company and dropped 2%. The turnover in fitness equipment dropped 33%.

Accell Group’s total turnover increased thanks to both organic growth (3%) and acquisitions (6%). Total turnover from the bicycle business rose by 10% and the sales of bicycle parts and accessories was up 14%. The bicycle season began early in many countries but slowed down in June due to reduced consumer spending.

The integration of Accell Bisiklet in Turkey and Atala (50% stake) in Italy is progressing well. In June, Accell Group acquired Vartex, a smaller distributor of bicycles and bicycle parts and accessories in Sweden. The turnover from the fitness business, which Accell has streamlined in recent years, decreased in the first half due to changes in the distribution structures and lower sales. The gross margin was good at all product groups.

Turnover breakdown (amounts x € million)

Geographically                         Per product group

The Netherlands 138 (-/-2 %)       Bicycles 290 (+10%)
Germany 104 (+17%)                  Parts & accessories 73 (+14%)
France 30 (+8 %)                        Fitness 10 (-/-33%)
Rest of Europe 69 (+10%)
Outside Europe 32 (+47%)

Total 373                                     Total 373

Bicycles / bicycle parts & accessories

In the bicycles / bicycle parts & accessories segment, turnover rose by 11% to € 363.1 million in the first half of 2011, compared with € 328.1 million in the first half of 2010. The acquisition of Accell Bisiklet (Turkey) led to a rise in the number of bicycles sold to 709,000, from around 580,000 in the same period last year, while the average selling price fell to € 410. The segment result increased by 9% to € 45.0 million.

Electric bikes sales rose by 26%, while sales of sports bikes were up 14%. Sales of traditional bicycles fell by 3%. Organic turnover growth came in at 3% for bicycles and 14% for bicycle parts & accessories.

Bicycle turnover in the Netherlands decreased slightly. Accell Group sold fewer traditional bicycles, but this was largely offset by a rise in electric bikes sales. Turnover from bicycle parts & accessories rose once again.

In Germany, bicycle and bicycle parts turnover came in 18% higher. Sales of electric bikes increased by more than 50% in Germany, due to the strong interest in the market for these products. Accell Group also saw a rise in sales of Ghost, Hai Bike and Winora innovative sports bikes. Turnover from bicycle parts & accessories continued to develop positively in Germany.

Bicycle turnover fell slightly in France, due to increased competition and a modest market decline. Turnover from bicycle parts & accessories grew strongly in France.

Turnover was up in other countries, both in Europe and beyond. The addition of Accell Bisiklet boosted sales primarily in Turkey, Finland and Italy. Turnover was also up in Belgium and Austria, while sales were down in Spain and the United Kingdom.

Turnover in Southeast Asia increased, but is still limited. Turnover at SBS in North America fell slightly due to a decrease in sales of bicycles, while the sale of bicycles parts continued to grow. Due to fluctuations in exchange rates, the conversion to euro’s had a negative impact of around € 1 million on turnover.

Fitness

Turnover in this small segment is now € 10.1 million (3% of Accell Group’s total turnover), compared to € 14.3 million in the first half of 2010. The drop in turnover was due to the transfer of the distribution in Germany and the United Kingdom to third-party distributors in 2010. In the past distribution was handled by the fitness division’s own local organisations. Turnover derived from these new distributors is considerably lower in 2011. Accell Group continued to phase out the activities in North America in the first half of 2011. The fitness business now only has own distributors in the Benelux area and Scandinavia. Deliveries in other countries are to third-party distributors.

Outlook

At today’s press conference, René Takens, Chairman of the Executive Board of Accell Group, reported further that it remains difficult to predict economic conditions for the second half of 2011. “Accell Group’s products enjoy a great deal of interest from consumers. Cycling and fitness activities are fun, easy and healthy. Cycling is also inexpensive. Many national and regional governments in Europe and beyond are currently encouraging the use of bicycles as an alternative mode of transport. Accell Group is convinced that cycling and physical exercise will continue to increase in popularity in the coming years. This will have a positive impact on the demand for bicycle parts and accessories, as well as the demand for new bicycles and fitness equipment. 

“As a result of further product development and continued interest, sales of electric bikes will continue to grow. In addition to being market leaders in electric bicycles, Accell Group’s companies are importa players in the markets for high quality sports bikes. Accell Group will continue to expand this position in the coming years, with its current positioning in the mid-range and higher market segments as a strong starting point.

“Based on current market conditions, Accell Group expects to book a higher operating result (excluding one-off gains and charges, such as the additional restructuring costs of the fitness activities) in the second half of 2011 compared with the second half of 2010. Taking this into account, Accell Group reiterates its forecast for the full-year 2011 of a further rise in turnover and result, barring economic developments and unforeseen circumstances.”