E-bikes and MTBs Drive Dorel’s Growth
MONTREAL, Canada – Costs to restructure at Cannondale and merge its road racing team were two of the minor dark spots for Dorel Industries’ recreational/leisure segment during an otherwise positive third quarter.
The Canadian company behind Cannondale, GT, Caloi and other bicycle brands under its Pacific Cycle division announced revenue for the quarter increased 10.8% to US$ 673 million (542.75 mn euro) compared to US$ 607.3 million (487.77 mn euro) a year ago. Net income for the period rose 75.4% to US$ 19.5 million (15.73 mn euro) compared to US$ 11.1 million (8.95 mn euro) in 2013.
Dorel’s total revenue for the nine months was up 9.7% to US$ 1.98 billion (1.6 bn euro) compared to US$ 1.80 billion (1.45 bn euro) in the prior year. The net income increased by 27.5% to US$ 59.5 million (47.97 mn euro) compared to US$ 46.6 million (37.57 mn euro) year-to-date a year ago.
Solid quarter for Cannondale Sports Group
“The recreation leisure segment had another good quarter,” said company president and CEO Martin Schwartz, during a conference call to announce the third quarter figures. “Globally the Cannondale Sports Group (CSG) had a solid quarter fuelled by strong performance at Cannondale Sports Europe, UK, and Japan. Those regions benefited from a robust bicycle market, good weather, and growth in their markets at the expense of competitors. Growth was also driven by the e-bike and mountain bike categories. CSG’s profitability was affected by the one-time costs associated with merging the Cannondale Pro Cycling and Slipstream Racing teams.”
Caloi acquisition starting to bear fruit
Schwartz also noted the improved performance of Brazilian bike maker Caloi, of which Dorel bought a majority stake in August 2013. “Caloi’s operating profit was positive after losses during the first half and we still expect the bulk of Caloi’s earnings to come during the current fourth quarter.”
Optimistic about the fourth quarter of 2014
“We remain on-track for a much improved year in the recreational/leisure division. Thanks to improved earnings at all three of our major divisions, CSG, Pacific Cycle and Caloi, we fully expect to deliver much better results for the fourth quarter versus last year. Both CSG and Pacific Cycle will build on 2014’s solid year-to-date gains while Caloi will benefit from the addition of the Cannondale, GT and Schwinn brands in the Brazil market,” said Schwartz.
Cannondale Contro e-bike
Based on feedback at recent trade shows for their new products, Schwartz is expecting continued success with 2015 model year products. “At both Eurobike and Interbike our brands received strong dealer and consumer attention. New product lines and technologies were showcased with Cannondale highlighting exciting new road, urban, and triathlon models. One example was the introduction of the Contro. It is available as an e-bike, an increasingly important category for us in Europe and will be in stores this month (November) with up to 4 models available, primarily in Europe.”