The Netherlands – Accell Group N.V. have realized higher turnover in the third quarter of 2016 compared to the same period of 2015, primarily driven by a higher contribution from E-bikes. Higher discounts to reduce seasonal inventories of regular bikes put downward pressure on third quarter results.
Virtually all countries in Europe contributed to the turnover growth. However, in the US turnover declined due to difficult conditions in the specialist retail trade, the loss of sales via two large multi-sports chains (due to bankruptcy) and the divestment of the bicycle parts activities. In the UK, turnover was also down in the third quarter, partly as a result of the decline of the British pound following the Brexit vote.
Rene Takens, Chairman of the Accell Group Board of Directors commented “The market conditions for bicycle sales in the third quarter were comparable to those in the first half of the year. Weather conditions had a negative impact on bike sales in many countries. Turnover in E-bikes continued to increase, in particular E-performance bikes. The strong growth of E-performance bikes is partly at the cost of sports bikes, which is a trend we are seeing in most of our sales markets. This development contributed to the decline in turnover from regular bikes.”
Due to lower sales in the summer months a greater number of bikes were sold at a discount at the end of the season, which had a negative impact on the added value. In addition, the cost of materials was impacted by higher guarantee costs (primarily related to electric bikes) and a stronger Yen, which raised the purchase prices of gear group sets and electric motors.
Due to the seasonal nature of the company’s activities, profit is generally substantially lower in the second half of the year than in the first half. One-off costs as a result of the write-down of bad debts due to two bankruptcies and the reorganisation in the US will have a negative impact on the results in 2016. Barring unforeseen circumstances and based on the developments in the past few months, Accell Group expects an increase in turnover for the full year 2016 and a result around the same level as 2015.
