Financial strength and capital efficiency

The net working capital came in at € 315 million in 2017, 2.9% higher than in 2016. Inventories were up 3.7% at € 334 million. Accounts receivable were € 127 million, compared with € 138 million in 2016. Accounts payable were lower than in the previous year, at € 146 million.

Although working capital was up slightly compared to the previous year, the movements in working capital were positive.  As such, the number of bicycles in stock fell by 8% (24,000) compared to the previous year. The fact that the value of inventories was higher in 2017 than in 2016 was due to the higher average cost price per bicycle, which was 11% higher than in the previous year. The higher cost price was due to the greater share of e-bikes in the inventories. The higher inventories are needed to make sure Accell Group can respond to the greater demand for these bicycles in the first quarter of 2018. In conjunction with these higher inventory of e-bikes, the value of inventories of components is also higher, because the company maintains higher inventories of e-bike components and components for more expensive bikes. In addition, accounts receivable were lower than in the previous year despite higher turnover in the fourth quarter. While Accell Group procured less, accounts payable per year-end 2017 were slightly below the level of 2016, due to the longer payment terms negotiated with suppliers. 

Total net debt, comprising interest-bearing loans, bank credits and cash and cash equivalents, stood at € 161 million at year-end 2017, up from € 147 million at year-end 2016, largely due to the movements in working capital. Excluding one-off charges, EBITDA declined by 22.5% to € 59.1 million. This resulted in a net debt / EBITDA (excl. one-off charges) ratio of 2.7, a worsening compared to the previous year.

Shareholders’ equity stood at € 299 million, which resulted in a solvency ratio of 42.4% (2016: 45.4%). The change in the shareholders’ equity of € 20.1 million was largely due to the result for the period (+€ 10.5 million), dividend payments (-/- € 6.7 million), the valuation of financial instruments (-/-€ 10.3 million) and currency exchange rate differences (-/-€ 13.5 million)