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Accell Reports Increase in Turn-Over Excluding North America

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HEERENVEEN, The Netherlands – Accell Group NV saw its net turnover grow by 2.4% in 2018, while its operating result doubled to 20.5 million euro. Just like in the previous year, Accell reports strong sales in Germany, Austria, Switzerland and France but a weak performance in North America and the Netherlands.

Accell Reports Increase in Turn-Over Excluding North America
Accell already reduced 30% of its SKUs and models while an additional reduction of 10% is targeted by end 2019. – Photo Bike Europe

Accell Group’s publication of the 2018 results came with the announcement that the ‘Lead Global. Win Local’ strategy is starting to pay off in its core markets. North America is no longer regarded as core market. Accell’s core market, which includes the Netherlands, Belgium, DACH and others generated a 6.1% increase in turnover to 1,033 million euro while the EBIT landed at 54.0 million euro.

Strategic review North American business

For Accell Group the North American business declined by 35.6% from 94.8 million euro turn-over in 2017 to 61 million euro in 2018. In December last year Accell Group already announced a strategic review of its North American business. The conclusions on the future of the business are expected in Q3 2019 at the latest.

“The complexity in our assortment has been reduced by 30%”

For 2019 Accell Group expects continued growth in its core business, driven by a strong consumer interest in especially e-bikes and cargo bikes and strong innovations like the winning ‘E-bike of the year 2019’ in Netherlands with the Sparta M8B.

Financial highlights

  • Net turnover growth for the total group is 2.4%; accelerating from 0.3% in the first half to 5.5% in the second half.
  • Total group EBIT in 2018 landed at € 33.0 million and excluding one-offs at € 37.9 million.
  • Net profit increased from € 10.5 million to € 20.3 million mainly thanks to a € 9.5 million revaluation gain on the previous held interest in Velosophy.

Net sales 2018 versus 2017

Source: Accell Group

Performance core business

  • Growth accelerated from 3.2% in the first half to 10.4% in in the second half, ending at a growth rate of 6.1% for the full year.
  • EBIT of core business came in at € 54.0 million (5.2% of net sales), and excluding incidental expenses at € 58.9 million (5.7% of net sales).

Strategic highlights

Accell Group has taken important steps in improving its operating model and operational performance, based on the sharpened strategy. 2019 will show continuation on the implementation of this strategy.

  • Central teams now fully in place and operational. Key senior management appointed.
  • Selective distribution contracts rolled out by mid-2019.
  • Improvement in availability of products/brands key driver for further growth.
  • 3-pillar omnichannel strategy with e-commerce platforms and experience centres being rolled-out in 2019.
  • First single brand platforms will go live in H1 2019.
  • Innovation focussed on urban mobility enabled by Velosophy and its main brand Babboe.
  • Central organisation established and P&A is integrated in local sales teams, driving XLC brand.
  • Complexity reduction of 30% by SKUs and models delivered by end 2018. Additional reduction of 10% targeted by end 2019.
  • Almost € 12 mio contracted savings of which half contributed directly to bottom line. This will continue in 2019.

CEO Ton Anbeek: ‘strong foundation’

Targets for 2022 are within reach

Ton Anbeek, CEO of Accell Group: “2018 was an important transition year, a year in which a strong foundation for the future of Accell Group was laid. After the announcement of the sharpened strategy ‘Lead Global. Win Local’ in March 2018 we changed the structure of our organisation and made additional costs for the further implementation of the strategy, especially investments in e-commerce, marketing, innovation and IT.”

“From August 2018 onwards all regional and central teams have been up to strength and we are rolling out our omni-channel distribution strategy. In the second half of 2018 revenue growth accelerated and we achieved an improvement in the added value margin for the full year. Looking back on the year, we are satisfied with the progress made and the achieved results, strengthening our confidence in the strategy.”

“The complexity in our assortment has been reduced by approximately 30% in most regions. Next to that a number of smaller and less efficient locations and entities have been divested. Progress has been made on the roll-out of new e-commerce platforms and experience centres, of which the first will go live in the first half of this year. The acquisition of our mobile bike service Beeline and the purchase of the e-cargo brand Babboe perform in line with the business case, with Babboe showing a strong net turnover in 2018.”

“The decision to focus on our growing core business shows that the strategic and financial targets for 2022 are realistic and within reach. We will finalise our strategic study with regards to North America as soon as possible in order to eliminate profit dilution of the non-core business.”

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