Accell Group Maintains Profit Forecast in Trading Update
In its todays published trading update Accell Group maintains its earlier announced forecast. For the full year 2010, a higher turnover and an increase of
HEERENVEEN, the Netherlands – In its today’s published trading update Accell Group maintains its earlier announced forecast. For the full year 2010, a higher turnover and an increase of 5-10% in net profit compared to 2009 is expected.
CEO Takens: “Turnover grew slightly below the expected level in the period until October, but it continues to rise. Turnover in bicycle parts and accessories increased strongly, although bicycle turnover somewhat lags expectations. Sales of electric bicycles increased both in the market and at Accell Group while total sales of new bicycles in our main markets dropped slightly this year.
“In addition to general economic developments, the weather circumstances in 2010 also surely played a part in this respect. The willingness among dealers to build up inventories also still continues to fall somewhat, because they assume good availability of products from their suppliers. Dealers reacted positively to the new bicycle collections for 2011, which were presented in September of 2010. In the fitness market, we closed down our offices in the United Kingdom and Germany. Sales have been transferred to third party distributors. The results from the fitness segment have improved strongly.”
In its trading update Accell Group further states: “Following a negative impact of the weather conditions earlier in the year, the summer period as well saw bad weather for bicycle sales. This meant that a number of Accell Group companies had greater than usual stock levels at the end of the season, which in turn meant a higher total discount to sell these stocks. Inbound logistics costs rose considerably in the past few months. In addition, very strong currency fluctuations in the change of season and competition have shown that the various cost increases (including logistics costs) cannot be charged on fully. These factors mean that there has been some pressure on the operating margin in recent months.
“Due to somewhat lower than expected turnover and some pressure on the gross margin, operating profit will be lower than earlier expected. A reduction – on balance – of the use of bank credit lines and a drop in interest rates led to lower interest expenses. The application of a number of tax facilities (including the Dutch innovation box) and the positive impact of the legal restructuring of the German activities carried out in 2009 mean that a substantial reduction in the tax burden is expected. Barring unforeseen circumstances and based on the above effects, Accell Group expects a higher turnover and an increase in net profit of 5-10% for the full year 2010, compared to 2009.”