The Accell Group has recorded a year-on-year sales growth of 53.1% in June.
This brings H1 net sales to €676.9 million, up 4.0% vs last year, despite the impact of lockdown in March and April.
H1 EBIT came in at €45.1 million (excluding one-offs: €47.5 million), trailing H1 2019 levels by 19.0% (excluding one-offs: 14.7%) with added value margin down 359 bps at 27.6%, mainly due to mix effects and higher costs caused by COVID-19 related disruptions in the global supply chain.
Working capital improved by 243 bps to 29.7% of net sales vs June-end 2019, primarily due to reduced inventories, the Accell Group said, and operating cash flow came in at €129.1 million as a result of the above and as part of the precautionary cash management measures taken in response to the virus outbreak.
Ton Anbeek, CEO, Accell Group: “The strong demand for bikes and P&A across Europe continues. With all countries and shops fully reopened in May and June, we have been able to offset the decline of March and April leading to increased net sales in H1.
“In response to the virus outbreak, our focus has been to manage for cash, reduce working capital and mitigate disruptions in the supply chain. While this led to some pressure on margins, we are pleased that the overall result of focusing on cost and cash in combination with a rebound in sales has led to strong positive cash flow.
“While dealing with the impact of the pandemic on our business, we have also continued our strategic journey with various improvements made in innovation planning and omnichannel. We have seen excellent progress capturing the online opportunity in bike parts and accessories, but also in bikes such as Raleigh in the UK.
“We managed to continue our strong growth in cargo bikes amongst others with the successful launch of the next generation Carqon e-cargo bike. Our ‘fit to compete’ programme showed good progress as well with further complexity reductions, albeit we foresee the associated bottom-line savings not to come through this year due to the current disruptions in the global supply chain.
“The pandemic has boosted interest from consumers and Governments in cycling across Europe as an alternative means of healthy, safe and green mobility. We expect this to positively benefit our business in the mid to long term. For the short term, it remains uncertain which direction the pandemic will take.
“While our first priority remains the health of our people, we are working actively to enhance product availability in H2 and secure a strong supply base in early 2021 for a good start of the next bicycle season. We will do so while maintaining our focus on strict cost and cash control.”
Net turnover came in at € 676.9 million, up 4.0% vs last year, with May (+23.2%) and June (+53.1%) compensating the decline due to COVID-19 in March and April (-26.7% on average). Bicycles ended at -1.6%, where in France and Germany the impact of lockdowns was not fully recovered in May and June. Parts and accessories showed growth in H1 of 27.3%.
Growth in the Benelux (excluding Velosophy) was 5%, driven by strong post lockdown Batavus sales on the back of an attractive brand portfolio and fuelled by a new campaign. Sales in Germany rebounded strongly in May and June, but still lagged YTD 2019 sales levels due to the impact of the German lockdown regime on Accell’s sales in March and April.
In other markets, the Nordics and the UK recorded “very strong growth” fuelled by a steep post lockdown consumer demand rebound, while France also showed strong post lockdown sales. Accell’s cargo bike business Velosophy continued to perform well. Growth came in at 22.3% despite lockdowns hampering sales in various regions. The parts and accessories business had an “excellent” H1 with sales up 27.3% driven by the expansion of online sales partners and “surging” demand for bike parts from repair shops.
Read the July edition of BikeBiz below: