Accell full-year results top €1 billion as e-bikes hit 41% of turnover

The Accell Group has published its 2016 financials, within which the firm topped €1 billion in turnover for the first time and held its course in line with expectations.

Net turnover grew by 6%, taking the firm to €1.05 billion, something largely attributed to strong sales of electric bikes and electric MTBs.

Net profits were described as “at the same level” as 2015, coming in at €32.3 million and offering earnings and proposed dividend per share of €1.26 and €0.72, respectively.

The group financing arrangement was extended and expanded with a renewed five-year facility of € 375 million in total. This provides continuity of the financing at improved terms.

Electric bike sales led Accell’s charge, while pedal powered sales saw a decline of 11%. Net turnover in the bicycle segment came in 9.3% higher on the back of increased e-bike sales. Sales and turnover of sports e-MTBs of our brands Haibike, Ghost and Lapierre recorded particularly strong growth. Turnover in e-bikes was up 33%. Growing numbers of consumers were shown to be choosing an e-bike to replace non-electric bikes. The turnover contribution from e-bikes increased to 55% in 2016, from 45% in 2015.

The average price per bicycle further increased by 23% to € 536, from € 437 in 2015, on the back of the changing product mix. Due to the strong focus on sales of more expensive and high-quality bicycles, the total number of bicycles sold declined to 1,457,000 in 2016, from 1,642,000 in 2015.

The effects of reorganisations resulted in a drop in staff costs. Staff costs as a percentage of turnover declined to 11.6%, from 12.5%. The operating costs also dropped; as a percentage of turnover, other operating costs fell to 11.7%, from 12.5%. The decline in other operating costs was partly due to a lower sales volume and was realised despite higher marketing and consultancy costs. The higher consultancy costs were largely related to organisational changes in the supply chain and external support for the refinement of the group strategy. In 2016, Accell Group invested in a more integrated management approach. As part of that drive, Accell Group strengthened the competencies at group level in areas such as Supply Chain, Marketing, HR and Finance.

René Takens, CEO Accell Group: “We reached a milestone in 2016. For the first time in its history, Accell Group realised turnover in excess of € 1 billion. One of the main drivers of this turnover record was the constantly growing contribution from e-bikes and bikes in the higher segment of the market in particular. We are clearly benefiting from our leading position in the field of e-bikes, which recorded turnover growth of 33% and now represents 41% of our total turnover. Turnover in e-performance bikes increased by 70% in the year under review. Germany is the biggest driver behind the turnover growth. We are also seeing an increase in turnover from e-bikes in North America. There too we are market leader with our brands, including Haibike, in what is still a limited market with a large number of suppliers. The position of the Raleigh brand among specialist retailers in North America continued to decline in 2016, and we have therefore decided to distribute the brand via multiple channels. Consumers can now buy our products both via specialist retailers and online. Turnover in bicycle parts and accessories in Europe remains stable, and our own XLC brand is constantly gaining ground.

“Our profit was impacted by lower margins on the sales of older bicycle collections, the fact that we did not charge on higher currency exchange rates and two major bankruptcies of multi-sports chains in North America. We see these bankruptcies as confirmation of changes in how consumers are choosing to shop. This change in behaviour played a key role in our decision to refine our strategy, in which we are focussing firmly on consumers. We will use an omni-channel approach to market our products and services in a way that forms the best possible fit with the purchasing preferences of individual consumers.

“Working capital decreased significantly and we are seeing the benefits of a more centrally-managed supply chain on this front. We expect to be able to further reduce our working capital in the coming years.

“Cycling will continue to be popular for mobility purposes, recreational and sports use in the years ahead. We expect to be able to maintain our lead thanks to our high-quality products, plus we expect to be able to add innovations to make cycling for various purposes even more attractive. Based on these trends, we expect to see a continued increase in turnover and operational results in 2017, barring unforeseen circumstances.”