Accell Group has announced its strategic and financial update for 2018, which has seen the company focus on its core European business while running the US side as a separate and “non-core” pursuit.
According to the bicycle company, the main reason for this is to hone in on the elimination of profit dilution and become more performance focused and consumer-centric. A review of the US business will now be conducted in the next six to nine months, while Accell Group explores possible future options for the entity. A sale is one of those options, next to right-sizing to a standalone profitable business.
The “core” business saw a growth of 1% from November 2017 to November this year, totalling 6% YTD. The business’ earnings before interest (EBIT) is estimated to be around €51 million, which includes a €7 million higher expenditure compared to the previous year. However, the Group EBIT performance for the full year including US activities and extraordinary expenses will be around €31 million.
Accell Group has also produced an update on its “Lead Global, Win Local” strategy, unveiled in March, announcing that it now has a strategic brand portfolio established in each region, and is currently rolling out its three-pillar omni-channel strategy with e-commerce platforms and experience centres. The Group’s central procurement team is now fully in place, with 75% of all components now sourced centrally. The company now has a 10% higher order portfolio in The Netherlands, while also establishing standardised product platforms and complexity reduction targets at -40%.
Ton Anbeek, CEO of Accell Group, said: “Now that our management board is complete, we are stepping up the pace in executing our growth strategy. We’ve invested time and money in our move towards an even more focused and consumer-centric company. This allows us to bring our innovations more in line with consumer trends and demand.
“We can see that for our core business we are effective in the majority of the markets where we operate, resulting in growth and good margins. While considering future options for the US will require our attention, we expect these measures to free up management time, allowing us to focus more on the further execution of our growth strategy. “looking at the underlying results of the company, we are confident that we are taking the right steps.”
Accell Group has also reconfirmed its objectives for 2022 (excluding the US business), in which the company is aiming for €1.4-1.5 billion turnover through organic, e-commerce growth and acquisitions, with added value/turnover of more than 31%.
On 8 March next year, the company will host an analyst meeting where a concrete status update will be given on all strategic initiatives. A general meeting of shareholders will take place the following month, 24 April.
Accell is currently being pursued by PON Holdings – owner of Cervelo, Santa Cruz, Gazelle, Derby Cycle and others. PON resumed its move last month, aiming to gain a new partial tender offer for a minority stage in the group.