Accell Group has recorded a steep post lockdown sales rebound, recording year-on-year growth of 51% in June despite the impact of lockdowns in March and April.
This growth brought net sales for the first half of the year to €676.09 million, up 4% on last year. EBIT for the period came in at €45.1 million trailing H1 2019 levels by 19%, with added value margin down 359 bps at 27.6%, mainly due to mixed effects and higher costs caused by Covid-related disruptions in the global supply chain.
Reduced inventories saw Accell’s working capital improve by 243 bps to 29.7% of net sales vs June-end 2019 while operating cash flow came in at €129.1 million.
“The strong demand for bikes and P&A across Europe continues,” said Ton Anbeek, Accell Group CEO. “With all countries and shops fully reopened in May and June we have been able to offset the decline of March and April leading to increased net sales in H1. In response to the virus outbreak our focus has been to manage for cash, reduce working capital and mitigate disruptions in the supply chain.
“While this led to some pressure on margins, we are pleased that the overall result of focusing on cost and cash in combination with a rebound in sales has led to a strong positive cash flow.”
Amid the pandemic, Accell has continued in its strategic journey to improve its innovation planning and omnichannel processes. The group saw ‘excellent progress’ in capturing online opportunities in bike parts and accessories, as well as bikes such as Raleigh in the UK, while also seeing strong growth in cargo bikes throughout the period.
Accell’s ‘fit to compete’ programme also showed good progress during the period, although the group foresees the associated bottom line savings not to come through this year due to disruptions in the global supply chain.
Location-wise, Accell saw 5% growth in the Benelux market driven by strong post lockdown Batavus sales on the back of a new campaign for the brand. Germany rebounded strongly in May and June, but still lagged year-to-date behind 2019 sales levels due to the region’s strict lockdown regime in March and April.
Meanwhile, the Nordics and the UK recorded strong growth fueled by a steep consumer demand rebound after lockdown restrictions started to lift, while France also showed strong post lockdown sales.
Growth came in at 22.3% despite lockdowns hampering sales in various regions, while the group’s parts and accessories business saw H1 sales up 27.3% as a result of expanding online sales partners and a surge in demand for bike parts from repair shops.
Anbeek continued: “The pandemic has boosted interest from consumers and governments in cycling across Europe as an alternative means of healthy, safe and green mobility. We expect this to positively benefit our business in the mid-to-long term. For the short term, it remains uncertain which direction the pandemic will take.
“While our first priority remains the health of our people, we are working actively to enhance product availability in H2 and secure a strong supply base in early 2021 for a good start of the next bicycle season. We will do so while maintaining our focus on strict cost and cash control.”