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Accell: Costs to cut into full-year profits

Published November 14, 2012

HEERENVEEN, Netherlands (BRAIN) — The Accell Group is anticipating higher sales during the second half of the year, and for full-year revenue to exceed 2011’s numbers. However, the increases will likely not offset costs associated with the acquisitions of Raleigh and Diamondback, the company noted in a press release. Accell Group expects these costs to temper net profits.

Accell Group owns an array of European bike brands and also U.S. brands Currie Technologies and Seattle Bike Supply. It acquired Raleigh and Diamondback in April.

Company CEO René Takens said favorable summer weather led to growth in sales in the third quarter in most countries where it sells bikes and parts, including the Netherlands. Inventory levels at the end of September were in line with market demands. But a number of its brands face cost increases that they will have to pass on in 2013 model year bikes.

“Sales of bicycle parts and accessories have increased, both organically and through acquisitions,” said Takens. “The integration of the acquisitions is at full speed. The synergy effects are yet limited… Due to partial pass on of cost increases and acquisition effects the net operating result will not exceed that of 2011.”

Still, Accell’s long-term outlook remains positive given the growth in electric bikes—particularly in Europe—as well as high-end sports bikes. The economic troubles in Europe complicate Accell’s ability to forecast revenues for the full year. But it expects net operating profit in the second half to be down from last year’s 4.4 million euros.

In 2011, revenue for Accell Group totaled 626.5 million euros and net profit was 40.3 million euros.

More: Company Press Release

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