Accell revises annual forecast upwards, sales rise 38% in Q3

The Accell Group has today posted results for the period July through October, during which net sales continued the Covid-19 led boom, registering 38% up like-for-like against the year prior.

Equating to a 16% year-to-date net sales growth, despite the shutting down of production capacity earlier in the year, the group now expect to surpass forecasts for the year, in part thanks to continued demand. Accell suggested that some of the sales volume lost during any H1 lockdowns has quickly shunted into the following quarters.

Ton Anbeek, CEO of the Accell Group commented: “The continued strong growth in the past months is a very positive development which demonstrates more than ever that cycling is moving the world forward. In both bikes and parts & accessories we are also capturing more of the on-line opportunity and are making great digital progress through brand platform renewals and a group CRM roll out. In addition, we continue to take actions in order to mitigate the ongoing effects of the supply chain distortions. Following a recent strategy progress review and as things stand today, we remain confident that we are on track to reach our 2022 targets.”

A perceived change in political will to cater for bicycles in Europe was referenced in the statement, with a indirect nod seemingly given to having the European Commission’s Vice President Frans Timmermans on board as a champion for cycling as part of the referenced Green Deal.

The forward looking statement comes with a caveat. Despite news of a vaccine nobody really knows how virus will move from here, or whether further closures will be required. With that in mind, FY 2020 EBIT is expected to come in higher than last year’s tally.

Production remains impacted, according to the statement, with longer supplier lead times creating a few bottlenecks on the high consumer and dealer demand. In tandem, tighter measures exist to keep staff safe on assembly lines and in offices.

Helping the business along is the likelihood of a deferred tax asset valuation that, in line with new Dutch corporate income tax proposals, could lead to a one-of tax gain in the region of €10 to €20 million.

Accell’s share price has now recovered to its pre-pandemic levels and is now trading at €25.10.