Dutch Gazelle Had Financially Tough 2010
The figures speak for themselves in Gazelle’s 2010 annual report. And they shed a totally different light on what CEO Bert Pist told Bike Europe when he left the much discussed Dutch bike maker last month. He resigned with saying: “My job is done. I am leaving a strong Gazelle.” Strong is not the word that springs to mind when overlooking the 2010 financials of Gazelle Holding BV. On the contrary….
DIEREN – The figures speak for themselves in Gazelle’s 2010 annual report. And they shed a totally different light on what CEO Bert Piëst told Bike Europe when he left the much discussed Dutch bike maker last month. He resigned with saying: “My job is done. I am leaving a strong Gazelle.” Strong is not the word that springs to mind when overlooking the 2010 financials of Gazelle Holding BV. On the contrary…
Money wise Gazelle’s 2010 performance wasn’t that bad at all. Turnover dropped only 2.9% from 138,5 million euro in 2009 to 134,5 million in 2010. That wasn’t the main issue. The 2010 financial report of Gazelle Holding BV makes very clear what the real problems were. This is firstly a severe drop in gross profit and secondly big payments for ‘goodwill’ and interest.
Increased selling and distribution expenses at a lower turnover made Gazelle’s gross profit drop by 22.9%; from 29,959,000 euro to 23,071,000 euro. Minus all costs this turned into a big operating loss of 4,065,000 euro. In 2009 Gazelle scored a net operating profit of 3,300,000 euro.
At Bike Europe’s last month’s interview with Bert Piëst (click here for the full text) we asked him about the operating loss (at that time we didn’t had the Gazelle’s 2010 financial report, but got reports on it from various reliable sources). He said then: “This is nonsense. Gossip.”
The operating loss of somewhat over 4 million euro results in a heavy net loss of 17,7 million euro. The big amortization of goodwill and interest are to blame for that. The amortization of goodwill amounted to close to 7 million euro and the interest expenses stood at 6,7 million (almost three quarters of a million more than in 2009 which is 12.6% plus).
The total net loss of 17,753,000 euro is almost double that of Gazelle’s 2009 net loss of 9,163,000 euro. Such big net losses erode the group equity of Gazelle Holding BV. End 2009 that stood at somewhat over 20 million euro; the 2010 annual report shows a group equity of 2,251,000 euro.
Bike Europe asked Gazelle for comments on this news. Jeroen Walraven who succeeded Bert Piëst as Gazelle CEO last month, said: “The 2010 operating loss was caused by problems with our previous generation of electric bikes. This brought about high service costs and claims. The same happened with the implementation of the SAP system. But that’s all behind us now. Our results over the first three months of this year paint a different picture. Gazelle new e-bike generation is doing very well which results in a 10% increase in market share and in an substantial increase in turnover. So clearly different to what the 2010 financials reflect.”