The Accell Group’s half year results have painted a picture of what could have been for the cycling giant, which reported net sales up 3.3% and greater profitability.
Headwinds on supply, as felt by the entire industry, did “hamper further uplift”, according to this morning’s statement, within which CEO Ton Anbeek expressed regret that the group could not have gone even further on its increase in trade in the face of continued supply pressure on upstream component makers.
“Despite lockdowns and closed bike shops in various countries in the first four months of the year, demand for bikes and parts & accessories remained strong across Europe and across segments.
“As stated before global supply chain constraints for critical components have limited product availability and therefore impacted our bicycle sales in H1. Our added value rebounded thanks to lower discounts and pricing actions taken, which have more than offset increases in material prices and additional supply chain expenses. Combined with our continued focus on cost management this has resulted in a substantial EBIT increase and further margin expansion.
“Our new and innovative bike collections again received multiple international recognitions and awards, such as Bike of the Year for the Batavus Dinsdag and design & Innovation awards for our Haibike AllMtn 7, Lapierre Overvolt and Koga Pace. We also continued our digital roll out at pace with the launch of new Lapierre and Sparta websites.
“Overall demand for our bicycle brands and products remains high across Europe. This clearly reflects the increased recognition of the underlying positive impact of cycling on health, business and the environment. We are well on track to meet our 2022 targets.”
The group’s net sales hit €699.1 million, with EBIT of €61.1 million, which rose 35% on the higher sales booked. EBIT margin was up 208 basis points at 8.7%. As a result, net profits tallied 44.2 million, up a staggering 54.3% driven mainly by higher EBIT.
Meanwhile, parts and accessories sales increased by 29.3% with strong sales via bike shops and online portals responsible. The own-label XLC banner brought in a 40.1% growth year-to-year.
The Accell Group has a negative free cash flow of €71.9 million as a result of cash out on building up inventory.
Forward looking, order books are “well filled”, but constraints of the global supply chain will linger. “Sales levels both on bikes as well as on P&A will be strongly dependent on the timely arrival of certain components, particularly from the Asia region where the spread of the Delta variant has been prompting new lockdowns recently,” offered Accell.