News Article

Drastic Changes Announced with 2018 To Be Transitional Year for Accell

Home

HEERENVEEN, the Netherlands – Next to its financial 2017 results Accell Group also made clear last Friday that the holding company and all its subsidiaries are to change drastically in the 2018-2022 period. And these changes are already starting this year as 2018 is marked as an important transitional year.

Drastic Changes Announced with 2018 To Be Transitional Year for Accell
Accell Group has renewed its strategy which is now built on six strategic pillars. – Photo Bike Europe

That drastic changes are (urgently) needed has become clear on the basis of the 2017 financial results of Amsterdam stock market listed Accell Group. Last year the company suffered again deteriorating results on two of its major markets; the Netherlands and North America. Rapidly growing online sales which is disrupting Accell’s relations with IBDs, is hampering its business in these markets. In  the Netherlands turnover dropped 9.4% while in North America sales declined by 14.4%.

Deteriorating results

Despite the revenue drop in these two markets Accell’s net turnover increased slightly in 2017 with 1.9% to € 1,069 million (2016: € 1,048 million). The company’s operating result declined by 37.1% to € 38.0 million (2016: € 60.4 million). The decline is explained by the events in North America which had a negative impact of € 13.1 million. Accell’s net profit declined 67.5% to € 10.5 million in 2017 (2016: € 32.3 million). The number of bicycles sold dropped by 12% to 1,278,000 in 2017 (2016: 1,457,000). This drop is explained by Accell as “Increased focus on sales of more expensive and high-grade (e)-bikes while, particularly in North America, sales volumes of (regular) bikes showed a strong decline compared to the previous year. The primary reason for this was the loss of sales volume and turnover from large multi-sports retail chains as well as a slight decline in turnover from IBDs as a consequence of the revised distribution strategy.”

Growth and profitability ambitions

These financial results point to drastically needed changes. What Accell Group plans to do in this respect is typified by CEO Ton Anbeek as “We will accelerate our strategy roll out and reduce the complexity of the group in order to better and faster anticipate changes in the market. As such, we can add more value for dealers and consumers and at the same time realise our ambitions for growth and profitability.”

That growth has to bring Accell to a net turnover of around € 1.5 billion by 2022. The company’s financial objectives also include:

  • Added value of more than 31%
  • EBIT margin of around 8%
  • Working capital of less than 25% of turnover
  • ROCE of more than 15%

Strategic pillars

For realizing these goals Accell Group has renewed its strategy which is now built on six strategic pillars. These are named by Accell as:

  1. Lead global. Win local
  2. Winning at the point of purchase
  3. Consumer-centric omni-channel business model
  4. Innovation
  5. Centralised and integrated Parts & Accessories business
  6. Fit to compete

Roll-out starts in 2018

Later this year Accell will start to the roll-out of initiatives related to the named six strategic pillars. The company lists then as:

  • Realisation of central management and coordination of commerce policy, the innovation programme and production allocation within the group
  • Focus on large-scale innovations combined with less fragmented and higher marketing budgets
  • Determination per country of a strategic brand portfolio for marketing and sales via and with dealers, and with emphasis on avoiding channel conflicts
  • Per country, focus on perfect execution of plans geared towards maximisation of customer satisfaction and improved utilisation of opportunities in the local market
  • Formation of six key regions (DACH, Benelux, Southern Europe, UK & Ireland, Scandinavia and North America), which together represent almost 100% of turnover
  • Focus on e-bikes supported by digital platforms, experience centres and mobile bike service
  • Centralisation and increased integration of parts and accessories with bicycle activities in each region
  • Accelerated implementation of the centrally-managed supply chain with an emphasis on further rationalisation, standardisation and reduction of complexity
  • Accell Group further notes “The investments and costs associated with the implementation of the strategy come to a total of € 30 – € 40 million, on top of the € 7 million spent on this front in 2017. The aim is to realise € 60 – € 80 million in structural savings on an annual basis in 2022.”

 

 

Comment on this article