The sale of e-Bike and e-Cargo products have driven a net turnover increase for the Accell Group in 2019, which added 7.5% in overall volume to reach €1,111 million within the firm’s annual results.
An 11% growth in e-Bike sales and 47% uptick in electric cargo bike volume led the charge against a backdrop of slipping bicycle sales, down 13% in value. Traditional bike sales now only represent 16% of Accell’s net turnover, the report revealed.
Another statistic and one that will not please investors is the profit year-on-year, which resgistered at just €2.8 million in 2019 versus €20.8 million in 2018.
Added value was up 53 bps to 30.7%, linked to supply chain savings offsetting inflationary costs, while earnings before interest and taxes came in 16.6% higher year-on-year at €60.0 million. However, excluding one-offs, EBIT decreased 2.6% to €54.8 million.
Despite some positives, investors did not react well to the numbers. At the day’s low, Accell Group shares were down 7.6% on the day. Among other less positive signs in the numbers, this could be linked with the loss on discontinued operations, which weighed in at €56.5 million. Operating expenses also increased to 26.2%, up from 25% in 2018.
There is no reason to be concerned, according to CEO Ton Anbeek, who explained that the group was “on track” with its ‘Lead Global, Win Local’ strategy.
He said: “In 2019, we booked higher top line growth, a higher added value and a solid EBIT. Excluding one-offs, EBIT was slightly behind last year due to additional – yet planned – investments and costs made under our strategic agenda and transition roadmap. We completed the disposal of the North American business (discontinued operations) which allows us to now fully focus on executing our strategy.
“Our supply chain team continued to create material efficiencies and delivered another €13 million in structural savings in 2019, which come on top of the €12 million of supply chain savings realised under our strategic plan in 2018. That said, trade working capital increased due to substantially higher inventories caused by delayed introductions of new innovative bike models and lower sales than forecasted in the second half of 2019. As a result, average working capital for the year was up 70 bps. Improvement plans are being executed on sales and operational planning as well as on innovation processes in order to reduce TWC levels again.
Parent to Haibike, Koga, Raleigh and Batavus, the Accell Group’s figures included reference to the parts and accessories sales, that rose by 6.8% over 2018, while other ‘Core’ business grew 9% like-for-like.
Anbeek added: “While entering 2020, we have the majority of additional expenses under our strategic agenda now behind us. We are bringing a number of delayed innovations to the markets in the upcoming bike season, including our next generation e-MTB Haibike Flyon. In addition, we introduce several new innovative models this season, including our new e-cargo bike Carqon with an unique carving mechanism for greater stability and comfort. In combination with continued growth momentum in both our B2C and B2B markets we believe to be well on track to meet our medium term financial targets.”