Group and segment results

Group performance

Net turnover came in 1.9% higher at € 1,069 million in 2017 (2016: € 1,048 million). Adjusted for the sale of the parts and accessories activities in North America in 2016, organic turnover growth was 2.7%. Including the adjustment for the effect of currency exchange rates, growth came in at 3.7%.

The added value (net turnover less cost of materials and incoming transport costs) as a percentage of turnover came in at 28.3%. The added value was primarily impacted by the increase in the share of e-bikes, reduced margins on regular bikes and higher discounts. Added value was further pressured by overdue US import duties of on average € 0.8 million per year for the period 2013-2017, resulting in a total one-off charge of € 4 million.

During the transformation of the North American organisation, it came to light that the import classification of hybrid bikes (sports bikes combining the properties of both racing bikes and mountain bikes) had not been applied uniformly during the past years. The new local management discovered that insufficient US import duties on these bicycles were paid, because the allocation of classification codes had not been carried out scrupulously enough. The classification codes currently used are correct and the lack of uniform application in the past does not affect the operational developments. Due to the self-correction, fines do not apply. Legal interest will be charged on the amounts to be repaid, which has been included in the one-off charge. 

Operating costs were 3.8% higher at € 264 million. Operating costs as a percentage of turnover came in at 24.7% (2016: 24.3%). The increase in operating costs was due to € 7 million in (budgeted) extra costs related to the implementation of the strategy. These costs are related to the strengthening of the group organisation, IT projects and the hiring of consultancy services. In addition, Accell Group took an extra charge of € 6 million related to the reorganisation and reduction of inventories in North America in the second half of 2017.

The operating result declined by 37.1% to € 38.0 million (2016: € 60.4 million). The decline is explained by the events in North America which had a negative impact of € 13.1 million, due to a weak operational performance and the aforementioned one-off charges related to the transformation of the local organisation. The remaining part of the decline in operating result is explained by the lower added value and the extra costs associated with the implementation of the strategy. This resulted in an EBIT margin of 3.6%.

The financial expenses of € 8.2 million recorded in 2017 were slightly lower than in the previous year. The extension of the group financing agreed in March 2017 resulted in improved terms and reduced interest expenses. This was offset by the accelerated write-down of the financing costs of the previous refinancing arrangements and a reduced result from the exchange rate differences on positions in foreign currencies. 

The tax rate was higher in 2017 due to the non-cash write-down of existing tax assets in North America (€ 3.8 million) and Finland (€ 1.9 million) and the non-capitalisation of carry-forward losses in North America.

Net profit declined to € 10.5 million in 2017 (2016: € 32.3 million). This translates into net earnings per share of € 0.40 (2016: € 1.24). Excluding the one-off charges in North America (€ 10 million) and the write-down of tax assets (€ 5.7 million), earnings per share came in at € 1.00.

Developments per segment


Net turnover in the bicycle segment was 3.5% higher compared to 2016, largely on the back of an increase in sales of e-bikes, and in particular the e-MTBs of the brands Haibike, Ghost and Lapierre. Accell Group noted strong growth in turnover of these bikes, especially in Europe. Sales of regular bikes declined compared to the previous year, both in sales volume and in turnover. Driven by this development, the share in turnover accounted for by e-bikes in this segment increased to 63% (2016: 55%). 

Partly due to the increased focus on sales of more expensive and high-grade (e-)bikes the number of bicycles sold declined to 1,278,000 in 2017 (2016: 1,457,000). Particularly in North America, sales volumes of (regular) bikes showed a particularly strong decline compared to the previous year. The primary reason for this was the loss of sales volume and turnover from large multi-sports retail chains as well as a slight decline in turnover from the traditional specialist retailers (IBDs) as a consequence of the revised distribution strategy. Accell Group was unable to fully offset this decline in sales volume and turnover through sales via other, new channels in 2017.

The segment result was negatively impacted primarily by the weak performance in North America and the transformation of the local organisation in that region. However, the continued growth in e-bikes and positive developments in Germany had a positive impact on the result. Excluding the poorer results in North America, the Bicycles segment result remained stable.

Parts & accessories

Net turnover in parts & accessories declined in 2017 due to the termination of the parts & accessories activities in North America in 2016. Organic net turnover growth in parts & accessories came in at 0.5%. The growth in turnover was booked primarily in Europe, partly driven by the organic growth of our own XLC brand.

The segment result of this trading activity increased. The higher share of our own XLC brand (in Europe) in turnover made a positive contribution to the segment result on the back of the improved utilisation of procurement benefits.

Developments per region

In the Netherlands, Accell Group booked lower turnover in both bicycles and parts and accessories. Koga was the only Dutch brand to record growth in 2017. Batavus and Sparta recorded lower turnover in both regular bikes and e-bikes, particularly in the first half of 2017. With the implementation of the refined strategy, a new margin structure and the introduction of a selective distribution system, Accell Group has taken a number of significant steps towards creating a level playing field for all dealers on the basis of which the relationship and cooperation with the specialist retailers can be improved.

In Germany, turnover was higher on the back of increased sales volumes in electric bikes. Both the sales of Haibike and Ghost e-MTBs and the sales of Winora’s traditional e-bikes were higher than in the previous year. Sales of regular bikes also declined in Germany. In addition to the higher sales of e-bikes, turnover in parts and accessories was also higher than in 2016.

In the Rest of Europe, increased sales of e-MTBs resulted in higher turnover. The popularity of the e-MTBs of our international brands Haibike, Lapierre and Ghost increased in virtually all European countries, and in particular in France, Austria and Spain. Sales of regular bikes declined in most countries. In virtually all European countries, turnover in parts and accessories was higher than in the previous year. Turnover in Scandinavia and Spain saw a particularly marked increase last year.

In North America, turnover declined. The lower turnover was primarily due to reduced sales via the multi-sports retail channel and the termination of the parts and accessories activities. Positive developments came in the form of higher turnover via new sales channels and growth in the sales of the Haibike, Raleigh and IZIP brands. In the IBD sales channel, turnover was slightly lower than in the previous year as a result of the change in distribution strategy in 2017. This was caused by a changing  sales mix. Dealers bought fewer but more expensive bikes.

Turnover in Other countries was limited and declined due to the economic conditions in Turkey, especially in the first half of 2017. Turnover in Asian countries and Australia was more or less unchanged from 2016.