1.4
Message from the CEO
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Fast forward in a turbulent year
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The year 2020 was like no other. After a very promising start to the year, the COVID-19 pandemic almost immediately made its mark on society and the economy worldwide. The impact of lockdowns, first in Asia and then in Europe, meant Accell Group faced major challenges across its entire chain. This was followed by the abrupt closure of a majority of stores in Europe in March and April. From May onwards we did see an unexpectedly strong and rapid recovery in demand. ‘Cycling moves the world forward’ was more true than ever before. At a time when it was much needed, the bicycle - as an alternative to public transport and subsidised by various governments – helped to improve the physical and mental condition of large groups of people. This accelerated the already rising demand for bicycles, bicycle parts and accessories. In the end, thanks to this and our efforts on the innovation front, the strong presence of our brands and product offline and online, Accell Group recorded significant turnover growth of some 17% compared with 2019.
At the end of the first quarter of 2020, nobody could have predicted the duration and financial impact of the COVID-19 pandemic. Because of the extremely uncertain outlook, we focused on cash and cost management, the reduction of working capital and addressing various challenges in the supply chain. In addition to this, we increased the company's financial buffer by agreeing an additional credit facility of € 115 million with a consortium of banks. Due to these highly unusual circumstances, we were also forced to withdraw our dividend proposal of € 0.30 per share for 2019. And my fellow directors and I decided to waive our bonuses for 2020.
Significant turnover growth
From May onwards, lockdowns across Europe were lifted and shops started reopening. This resulted in explosive growth in demand for e-bikes and bicycles and a sharp increase in demand for parts and accessories.
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Turnover in the second quarter and the third quarter in particular easily compensated for the lower sales figures in the traditionally busy months of March and April. This higher and persistent consumer demand and the catch-up in orders through November ultimately resulted in an increase in total bicycle sales of around 11% and an increase in sales of parts and accessories of no less than 36%. During the lockdowns, we used digital channels to successfully secure growth, particularly in the sales of bicycle parts and accessories. This helped us to keep people moving by selling products online via our partners and by responding to the growing demand for bicycle repairs.
Accelerated growth trend
Demand for bicycles is looking very healthy for the coming five to ten years. This is due to the electrification of bicycles, European governments’ investments in cycling infrastructure - given an additional boost by the European Green Deal - and thirdly, an increase in government subsidies and tax incentives for the purchase and use of (electric) bikes. In a strange twist of fate, in 2020 a health crisis had the unintended side effect of boosting this long-term trend driving the growing popularity of bicycles and cycling.
‘Fit to compete’
Despite the impact of the pandemic on the company, we made considerable progress last year by improving our innovation planning, our sales and operational planning and our omnichannel strategy. We managed to maintain our strong growth in a number of products, including cargo bikes.
The green alternative
We are convinced that bicycles help move the world forward, as an efficient, environment-friendly means of transport, a healthy way to spend leisure time or a relaxed form of exercise. We are making a tangible contribution to vital (inner) cities and a liveable planet. This is why the bicycle, with the lowest environmental impact per kilometre of any means of transport, is the green alternative par excellence for cars, scooters or public transport.
As a company, Accell Group made a sustainable difference in 2020 with measures such as investments in solar panels, the reduction of our own energy consumption and cutting the amount of plastics in our packaging. We also intend to invest even more in a strong binding culture that values respect and diversity.
In this year of running and standstills, we were able to build more than ever on the resilience, passion, engagement and expertise of our more than 3,100 bike enthusiasts. I would like to take this opportunity to thank you all for your daily efforts and commitment, which I will never take for granted. I would also like to thank our dealers, partners and consumers for their considerable trust and their contributions to Accell Group’s success.
I am looking forward to the coming year. Let’s move forward, together!
Ton Anbeek
CEO Accell Group N.V.