The company’s growth in sales and profits so far this year will allow the Accell Group to fully repay its “Go-C” credit facility, issued during the Covid-19 pandemic, before the end of 2021. In this context, the Dutch company has also converted its existing revolving credit facility (“RCF”) from seasonal to full-year availability.
“Go” stands for “Garantie Ondernemingsfinanciering.” It is a guarantee granted by the Dutch government for corporate financing that secures 50 percent of medium-sized and large loans contracted with the banks. Because of the pandemic, the Dutch government has launched “Go-C,” a special version of this program under which its guarantee covers between 80 and 90 percent of the loans, depending on the turnover of the company being aided..
By returing its remaining Go-C facility of €69 million before the end of 2021, the group be able to resume dividend payments, among other things. In line with a change in seasonal patterns, Accell has also reached an agreement with its banking syndicate to convert an existing RCF arrangement from seasonal to full-year availability for the remaining term. In banking, RCF refers to a loan that the debtor can repeatedly draw within the loan term up to the maximum amount of a credit line in varying amounts - even if full or partial repayments have been made in the meantime - like a revolving credit line.
The financial reorganization comes after the company posted excellent results for the 11-month period through November, generating a 32.1 percent increase in operating profit to €107 million, or a margin of 8.3 percent of sales. Because of a high comparative base in the second half of 2020 and continued headwinds from global component shortages, net sales grew by only 4.4 percent to €1.287 billion during the 11-month period. After a first half in which sales rose by only 3 percent, revenues accelerated in the subsequent five months, rising by 5.8 percent as compared to last year, when sales had jumped by 38.2 percent from the corresponding 2019 period, thanks to better availability of components from Asia.
Ton Anbeek, CEO of Accell Group, commented, “Given the limited availability of components, we saw good sales and continued strong profit growth in the second half of 2021 through November… Overall, we are well on track to achieve our 2022 goals.” Nevertheless, component shortages persisted, mainly caused by lockdowns in certain Asian countries such as Vietnam. However, several key Asian component suppliers resumed production in September and October. Production levels at Accell’s own manufacturing facilities have been stable in recent months and, although still lagging behind market demand, have been above the levels seen in the first half of 2021.
According to the group, “low customer inventories combined with favorable secular trends as electrification, bicycle infrastructure investments, government fiscal stimulation and subsidies are expected to drive continued strong demand.” Order books are well filled, it said, but the global shortage of components will continue.
