Accell Group, the Dutch-based company behind Haibike, Lapierre, Batavus, Raleigh and many other bicycle brands, said that its turnover accelerated across the board in 2019 outside North America, where it is no longer operating directly. Excluding divestitures, the group’s revenues increased by 7.5 percent last year to €1,111 million, with contributions from all regions, after rising by 6.1 percent in 2018, despite a slower progress in the second half due to delayed product launches.
In the summer of 2019, the group sold its loss-making U.S. business – including the Diamondback, Redline and IZIP brands and the related trademark rights outside Canada – to the Alta Cycling Group, a portfolio company of Regent LP. The Canadian brand registrations of Raleigh, Diamondback, Redline and IZIP were sold to Canadian Tire Corporation. In addition, Accell’s Beeline operations were bought by a group of investors led by the StrataFusion Group in October 2019. Accell agreed to sell its Raleigh, Haibike and Ghost bicycles in the U.S. through the Alta Cycling Group.
The deal caused Accell to book a net loss from discontinued operations of €56.5 million, which led to a net income of only €2.8 million for the year, down from €20.3 million in 2018. The group’s net profit from its continuing operations rose by 52 percent to €59.3 million. The gross margin increased by 0.53 percentage points to 30.7 percent and the operating profit (Ebit) rose by 16.6 percent to €60.0 million.
The company is now concentrating on its European core businesses. It has adopted a more focused use of its three large manufacturing facilities in Europe: low-cost production in Turkey, e-bikes in Hungary and a flexible facility for the efficient production of smaller runs in the Netherlands.
Last year’s growth was driven by sales of e-bikes, which rose by 11 percent, and e-cargo bikes, which jumped by 47 percent. Sales of traditional bikes declined by 13 percent, and now only represent 16 percent of the total turnover. The management said that the growth was held back by the delayed introduction of a number of new innovative bike models. Volumes also declined due to lower sales of traditional bicycles in Turkey. In all the main regions, volumes stabilized or increased.
Sales in the Benelux region grew faster than in other markets, rising by 7.3 percent to €220.3 million, thanks to improved product availability and the introduction of various new e-bike models. In the DACH region (Germany, Austria and Switzerland), revenues inched up by 1.8 percent to €429.0 million, weighed down by the delayed launch of the Haibike and Ghost e-MTB models. Other European markets progressed by 9.0 percent to €161.4 million, driven by strong sales of Raleigh and Lapierre bikes and growth in Finland and Denmark.
The management said that efficiencies in the supply chain delivered €13 million in structural savings in 2019, which came on top of the €12 million in supply chain savings realized under its strategic plan in 2018. On entering 2020, the management said it believed that the majority of additional expenses under its strategic agenda are now finished.
In the upcoming bike season, the company will launch, among other new products, the next generation e-MTB Haibike Flyon.
The group said it expects further growth in sales and Ebit under normal conditions, but warned that the full impact of the coronavirus outbreak on its business is still unclear.