HEERENVEEN, Netherlands (BRAIN) — Accell Group expects revenue for full-year 2013 to be up compared with 2012 despite lower preseason sales and rampant product discounting at the end of the season.
The Dutch company, parent of Raleigh, Currie Technologies, Seattle Bike Supply and an array of European bike brands, said in a statement that it expects overall margins to be lower but operating profit to match 2012 levels. Net profit is expected to come in lower as a result of higher financing costs, higher taxes and reorganization costs related to changes in its operations in the Netherlands and North America.
Accell doesn’t report quarterly earnings, but will release its full-year financial results next February.
In a press release Tuesday, René Takens, CEO of Accell Group, said, “Developments in recent months show that the bicycle season has not really picked up in full following the bad conditions during spring, despite good weather in the summer months in most countries. Therefore, there is no material impact of sales catching up and more products were sold at a discount at the end of the season than anticipated. Meanwhile, inventory levels have again normalized.”
Inventory levels are at 2012 levels thanks to discounting and adjustments in planning, the company said.
Takens said model-year 2014 bikes were well received by dealers, but the company expects they will delay orders until next spring, a result of the “difficult season.”
Meanwhile, the restructuring of Accell’s operations in the Netherlands and North America are on track. It expects the integration of bike production of Batavus and Sparta in the Netherlands to be completed next year and the integration of its U.S. brands to be completed by the end of the year. Both reorganizations will cost 3 million euros ($4.06 million), an expense that will be absorbed in the second half and will impact the company’s net profit.
“The medium- to long-term outlook remains positive,” the company stated. “In particular, sales of electric bikes and innovative sports bikes in the upper market segment will continue to thrive.”
Accell Group owns Batavus, Sparta, Koga, Loekie, Ghost, Haibike, Hercules, Winora, Raleigh, Diamondback, Lapierre, Tunturi, Atala, Redline and XLC and has production facilities in the Netherlands, Germany, France, Hungary and Turkey. The company reported revenue of 772.5 million euros ($1.046 billion) in 2012.
Accell Group is traded on the NYSE Euronext in Amsterdam and included in the Amsterdam Small Cap Index (AScX). Its stock performance is tracked on BRAIN’s Industry Stock Chart.
