Business news : Accell Group Foresees More Sales, Less Profit in Second Half

Accell Group said it expects higher revenue in the second half of 2012, driven both organically as well as through acquisitions and through growth in all product groups and key countries. Over the full year 2012 Accell Group also expects higher turnover compared to 2011. Net operating result will come in lower in 2012 compared to 2011.

“During the summer, the weather conditions were better than last year in most countries in which Accell Group sells bicycles and bicycle parts," said René Takens, CEO of Accell Group. "This led to a continuation of first half year growth in almost all countries. We also saw a slight growth in the Netherlands. Sales of bicycle parts & accessories have increased, both organically and through acquisitions. Turnover from the small scale fitness activities remained stable while the result improved due to cost savings.

The new bicycles collection for 2013, which was presented in September, was well received by the majority of dealers, Takens said. It included several innovations for electric bikes and sports bikes such as the e:i shock system for mountainbikes presented in June, the automatic acceleration systems for electric bikes of Winora and the F3 series of Koga.

The company said that "taking into account the customary effects related to the development of the seasonal sales," its financial position had not signficantly changed in recent months. In order to finance seasonal credit requirements, factoring agreements have been conducted for parts of the accounts receivable.

The sales of electric bikes and innovative sports bikes continued to develop well, while sales of traditional bikes are under pressure. With the approach of winter, Accell anticipates selling less stock at higher discounts. On the other hand, Accell Group will have to pass on higher costs at several of its companies via price increases. Relative operating costs remain similar to 2011.

"The seasonal nature of Accell's business, generally results in a substantially lower profit in the second half of the year compared to the first half," the company said. "Moreover, the number of exceptional items in 2011 as well as in 2012 (costs of acquisitions), is considerable."

Full-year outlook: higher sales, less profits

Takens said that the integration of Raleigh and Diamondback, which were acquired in April, is "at full speed." However, integration and financing costs and higher input costs will reduce Accell's net operating results in the second half, which is normally less profitable, and result in lower results for the full year compared to 2011.

While the current economic situation, particularly in Europe, makes it difficult to project results, Accell Group expects a higher turnover and a decrease in net profit for the full year 2012 as compared to 2011. The net operating profit (net profit excluding exceptional items) in the second half year is expected to come in lower than last year (H2 2011: € 4.4 million) mainly due to a partial pass on of cost increases and a limited contribution and financing costs of acquisitions.

The company said its medium- to long-term outlook remains positive given the structural demand for bicycles for mobility, health and physical exercise. In particular, this will continue to drive sales of higher-end electric bikes and innovative sports bikes. For the longer term Accell Group expects a continuation of growth of turnover and net operating result.

About Accell Group :
Accell Group is active internationally in the mid-range and higher segments of the market for bicycles, bicycle parts & accessories and fitness equipment. The group is the European market leader in bicycles. Accell Group’s best known brands are Atala, Batavus, Diamondback, Ghost, Haibike, Hercules, Koga, Lapierre, Loekie, Raleigh, Redline, Sparta, Tunturi, Winora and XLC.

( SportsOneSource Media )