In an operational update, Accell Group said that it is raising its guidance after sales from July to October jumped by 38 percent from the year-ago period because of the post-Covid boom in the bicycle sector. Since January, the Dutch company’s revenues have progressed by 16 percent.
The operating profit (Ebit) for the full year is now expected to come in higher than the previous one, unless some potential coronavirus-related major disruptions - such as mandatory bike shop closures or factory and warehouse shutdowns – changes the company’s course.
The owner of Haibike, Lapierre, Batavus, Raleigh and many other bicycle brands said the demand across Europe for bikes and for parts and accessories has remained strong. Lockdowns in the spring forced many bike shops across Europe to close for business, which caused sales volumes to partly shift from the first half into the second half of 2020.
Cycling also gained in popularity as the European Commission’s Green Deal has promoted the use of bicycles as a solution to many societal and urban problems like obesity, pollution and congestion. In the pandemic context, cycling is also seen as a safe transportation mode. Electrification, investments in bike lanes and subsidies further boosted demand.
The management said that the group is making great digital progress through the renewal of brand platforms and the roll-out of a group CRM. In addition, it continues to take actions to mitigate the ongoing effects of supply chain distortions.
Accell said it remains difficult to predict the further course and consequences of the pandemic. Despite the latest lockdowns across Europe, bike shops, for now, remain open and cycling is permitted in most countries. Due to the increased demand, lead times at component suppliers are longer, which is anticipated to cause continued supply chain disturbances.
The group said it is currently investigating with its advisors the valuation of deferred tax assets, following proposed new legislation on Dutch corporate income taxes. This could potentially lead to a one-off tax gain of €10 to €20 million in 2020.
