Sales improved for Accell Group in the third quarter, largely due to higher sales of electric bikes. However, the company did not release any exact figures for this quarter, but only provided a trading update. It said that higher discounts to reduce seasonal inventories of regular bikes put downward pressure on third-quarter results, and as a consequence, it now expects an increase in turnover and profits for the full year to be around the same level as in 2015, when revenues grew by 11.8 percent to €986.4 million and net profit gained 32.7 percent to €58.5 million.
The Dutch holding company said that market conditions for bicycle sales in the third quarter were comparable to those in the first half of the year, with weather conditions having a negative impact on bike sales in many countries. Turnover in electric bikes continued to increase, led by performance bicycles. However, this strong growth occurred partly at the expense of sports bikes, which is a trend that Accell is seeing in most of its sales markets. This development contributed to a decline in turnover from regular bikes.
Revenues increased for both bicycles and bicycle parts in the third quarter, with most countries in Europe contributing to the growth. However, sales in the U.K. were down, partly because of the decline of the British pound following the Brexit vote. In the U.S. revenues declined due to difficult conditions in the specialist retail trade, with two large multi-sport chains declaring bankruptcy. However, Accell said it is now seeing the first effects of its new omni-channel strategy, which is expected to compensate the lower revenues from specialist retailers in the U.S.
The company also had to face higher costs this quarter. Due to lower sales in the summer months, a larger number of bicycles was 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 warranty costs, especially related to e-bikes, and a stronger yen, which raised the purchase prices for gear group sets and electric motors.
Looking back at the six months ended June 30, the company saw sales gain 10.0 percent over the year-ago period to €629.7 million. Germany was Accell's biggest market, with revenues up by 20.0 percent to €160 million, followed by the Netherlands, with sales of €136 million - up by 1.0 percent over the year ago period. The rest of Europe saw turnover increase by 16.0 percent to €238 million, while North America registered a 9.0 percent drop in revenues to €73 million.