Compliance and risk

Accell Group is active in a significant number of countries. Global trade and political developments affect the markets in which Accell Group operates. This may involve trade barriers in the form of protectionism or geopolitical and social tensions, but Accell Group’s results may also be affected by general economic conditions and the economic outlook of the countries in which the Company is active. Especially, the conditions in the Group’s key purchasing markets also play a major role in the Company’s results.

As a result, the Company is potentially exposed to numerous risks and trends. Accell Group has a system to identify, analyse, monitor, manage and control risks. The Company distinguishes between strategic, operational, compliance and financial risks. Strategic risks are related to Accell Group’s strategic choices, while operational risks are related to operational activities, compliance risks are related to applicable laws and regulations, and financial risks are related to financial markets and general market developments. For more detailed information on financial risks, see section 4.13 in the consolidated financial statements.

Risk events and trends in 2020

COVID-19 obviously has had a big impact, not only on our business but also with substantial economic and geopolitical implications. This has had an effect on Accell’ s results and risk profile. Disruption in our supply chain (with a side effect on delayed innovations) and shop closures in lockdown periods dominated the first half year of 2020. A strong recovery in sales has had a positive impact on Accell Group’s result. However given the overall uncertainty and volatility of COVID-19 especially with regards to the supply chain, the risk profile has increased.

The COVID-19 pandemic still causes a great deal of uncertainty though, both from a (short term) demand perspective (governments forcing the closure of bikes shops), as well as from a supply perspective (high global demand leading to longer lead times and higher pricing in combination with logistical disruptions).

Risk awareness and culture

Employees are aware of and responsible for risks while carrying out their day-to-day work. They must abide by the applicable general code of conduct and comply with all applicable laws and regulations and policies. Accell Group continuously enhances employee risk awareness through various initiatives, including targeted communications and training. The responsibility for implementing control measures is delegated to employees with responsibility for risk management in a specific area (for example, a process, a system, an asset, or information). Accell Group stimulates a culture in which weak areas in its risk management programmes or control measures are reported transparently and dealt with effectively.

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Governance (lines of defence)

The Board of Management has final responsibility for the effective control of risks. The risk control and compliance oversight functions established by management are the second line of defence, an independent assurance is the third line of defence (see table).




First Line

Management carries primary responsibility for daily risk management when performing business activities. In addition, management maintains a system of internal risk management and control system designed to deal with these risks.

Operational managers and the regional management teams and/or operating companies.

Second Line

Supports management in overseeing, advising on, development, and monitoring of the effectiveness of risk management processes and systems. Furthermore, the second line sets the risk management framework, internal policies, and procedures.

Risk management and Internal Control, Financial Control, Quality, Compliance and Legal Affairs (Group functions).

Third Line

Provides assurance that the structure and the operational effectiveness of the internal management measures, including risk management activities are independently evaluated.

Internal Audit (Group function).


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To be able to evaluate the effectiveness of measures, the Group departments (second line) regularly inform and advise the Board of Management about the progress and outcomes of the various risk management programmes. Internal Audit reports independently to the Board of Management and to the Audit Committee on the effectiveness of the risk management and internal control framework, policies and procedures.


First line management are pro-actively advised on any required improvements. An annual internal audit plan is presented to the Board of Management and approved by the Audit Committee. Engagements carried out are summarised in a report presenting the conclusions and highlighting any findings, risks, and related recommendations. For audits, a three-point grading scale is used to express the impact of the findings and the level of action required from either local management or the Board of Management. Business management is required to follow up on recommended actions and this follow-up is monitored within a desired timeframe depending on risk impact and a period for corrective action. Internal Audit also carries out specific ad-hoc investigations at the request of the Board of Management or the Audit Committee. The Audit Committee informs the Company’s Supervisory Board. The role of the Audit Committee and their report on 2020 is described in the Supervisory Board Report section of this Annual Report.

The Board of Management reviews key risks on a regular basis from all regions and key central functions. Based on the risk analysis, the Board of Management implements and maintains internal risk management and control systems. Where relevant, these systems are integrated in Accell Group’s operating processes to ensure that employees are conversant with these systems. The Board of Management monitors the operation of the systems. This monitoring covers the material control measures related to our key risks.

Risk Management Framework

To safeguard the quality of the Company’s financial reporting and operational controls, Accell Group has an internal risk management and control system in place.

This risk management framework comprises the following components:

  • Identifying and weighing the risks associated with the various strategic options and formulating realistic objectives and related control mechanisms.
  • Identifying and evaluating the main strategic, operational, financial and compliance risks and the potential impact on the company.
  • Developing a coherent system of measures to control, limit, avoid or transfer risks. The risk management system is tailored to the size and structure of the Company.


Accell Group deploys a risk management approach that identifies and mitigates risks at all levels of the organisation. The Board of Management determines the level of risk acceptance and decides on risk mitigation. 

Accell Group’s risk management framework does not provide absolute certainty that all risks can be prevented or mitigated adequately and in time. The purpose of the risk management framework is to provide a reasonable level of assurance regarding the effectiveness of internal controls pertaining to strategic, financial, compliance and operational risks that may affect the organisation’s objectives.

Risk appetite

The approach Accell Group has chosen to deal with these risks has been determined per risk category:

  • Strategic risk: with the ambition ‘to become market leader in the mid and higher segment of the bicycle and parts & accessories market in every country in which we operate in a consumer-centric and socially responsible way’, taking and accepting strategic risks in a balanced manner is inevitable.
  • Operational risk: Accell Group accepts low to zero risks in the field of product safety. In addition, Accell Group applies high safety standards to ensure a safe working environment in its operations - factories and warehouses. Reporting on safety is part of the reporting cycle. Other operational risks are considered in view of the (day-to-day) business.
  • Compliance risk: Accell Group’s risk appetite in this area is zero and our ambition is full compliance with legal and regulatory requirements.
  • Financial risk: Accell Group is averse to risks that could endanger the integrity of finance and reporting, and we have a prudent financing strategy and a strict credit policy.

in 2020 Accell Group made various improvements in the risk management process:

  • Given the importance of the risk management framework, Accell Group appointed a dedicated Internal Control manager in 2019 and another FTE will be added to support the internal control department in 2021.
  • In 2020, Accell Group installed an anonymous whistle blower line. for receiving reports from employees on wrongdoing and to report (alleged) Code of Conduct breaches. The advantage of such an external service provider is that employees are able to report any Code of Conduct breaches anonymously.
  • Established a Policy House that contains group policies and provides online access to all employees.
  • Established monthly dashboarding of certain operational, compliance and financial risks.
  • Updated various policies, such as Tax and Treasury.
  • Continued to embed various IT-related controls (such as access to data and systems).


COVID-19-related additional risk management

The COVID-19 outbreak exposed Accell Group to operational and financial risks and to risks related to the health and safety of our people. Within our risk framework, we took the following additional control and governance measures to assess, mitigate and monitor these risks:

  1. In March 2020, the Board of Management initiated daily updates with regional teams to get updates on health, safety, sales, government measures and cash and working capital positions. Following the recovery in sales from May, we reduced this frequency  (to monthly updates in the second half of the year). If needed, the frequency of these governance calls will be increased.
  2. In March 2020, the Board of Management initiated weekly updates on the supply situation, looking at future orders linked to demand, capacity (at Accell Group and suppliers) and working capital.
  3. From March till July 2020, the Board of Management held weekly meetings with the Supervisory Board, with updates via a dashboard on health and safety, demand, cash (including additional financing) and the supply chain. In H2 2020, the COVID-19 situation and dashboard updates were part of the regular Supervisory Board and Audit Committee agenda.

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Improvements planned for 2021

The Company is planning the following actions and/or improvements for 2021 on Accell Group's risk control system:

  • More detailed guidance on behavior related to our Code of Conduct, that goes beyond the compliance with legal and regulatory framework and will include a training and communication programme. This will be part of an overall compliance programme that will be started in 2021, in which also topics as competition, GDPR etc. will be included.  
  • Further roll out and embedding of the Accell Internal Control Framework:
    • Accell Group has appointed internal control coordinators which monitor the control activities. An important part of the internal control coordinators’ activities is to further establish the Accell Internal Control Framework and to oversee the annual testing of the internal controls.
    • As part of the internal control framework, IT controls will be strengthened and embedded (e.g. segregation of duties with systems).
  • Recruitment of a data privacy officer, who together with the Information and Security manager will drive the further embedding of cyber security and data privacy related actions.
  • Systems and Data: Accell Group will continue to optimise Data Management especially on components; we will perform various upgrades on the current ERP systems.


Key risks and mitigation of these risks

The Board of Management has identified the largest risks on the achievement of Accell's objectives and strategy, on the basis of probability of occurrence and/or impact. Risks have been categorised as strategic, operational, financial and compliance risks. Social and environmental risks have been integrated in these categories with a view to integrated reporting. The following overview represents the key risks, including the mitigating measures, to which the company is exposed. Some risks may only be listed once, while they may fit into more than one risk category.


Strategic risks

Market: Offline to online


Consumer purchasing behaviour is shifting from off line (traditional bike retail) to online, a trend that has been accelerated by COVID-19. There is a risk that Accell will lose market share as a result of changes in distribution channels.

Risk acceptance

The Company is prepared to accept a moderate level of risk, as long as this does not threaten the Company’s market share.


Mitigation of the risk

Accell Group wants to ensure that its products are available via all channels, both offline and online:

  • In 2020, we continued the roll-out of D2C platforms across regions. 
  • In addition to this, Accell Group strengthened partnerships with online players, both in bikes and the parts and accessories business.
  • Selective distribution contracts mitigate the risk of channel and price conflicts.
  • Where needed, Accell Group will also explore M&A as an opportunity to capture new business models and channels.
  • Accell Group will drive strong availability in the offline channel through the dealer network and continue to roll out click & collect across countries.





The bicycle sector is marked by competition between existing providers and new providers entering the market. There is a risk that Accell Group is unable to predict the behaviour of (potential) consumers sufficiently or is unable to respond effectively, leading to loss of market share.

Risk acceptance

The company is prepared to accept a moderate risk level, as long as the strategic long-term goals are not threatened as a result.


Mitigation of the risk

Accell Group has identified various actions:

  • Through market research and market visit reports, Accell Group spends a great deal of time gaining understanding of the latest trends. The outcome of this is used in a consistent and sharp positioning for our brands, which is visible through our brand portfolio (e.g. innovations) and brand communications (online and offline).
  • Accell Group continues to invest in innovation to differentiate itself from the competition.
  • Availability, managed through the S&OP process, is a key enabler for Accell Group to drive sales and stay ahead of the competition.
  • If necessary, Accell Group will also explore M&A as an opportunity to capture new segments and meet changed customer needs. 





Defects in products may result in injury to and claims from end users. These can result in financial damage and/or damage to the Company’s reputation. 

Risk acceptance

Consumers’ safety must not be endangered under any circumstances.
Accell Group maintains a high product quality and safety standards.



Mitigation of the risk

Accell Group takes great care to ensure the quality and safety of its products. Quality is embedded in the innovation teams as part of the design phase and is embedded at each factory and overseen by a group quality director, who drives following actions:

  • The use of standards on quality and compliance across Accell Group and applied in product development, production and logistics.
  • Test and control systems.
  • Recall scenarios in place.
  • Actively collecting feedback from dealers and consumers (also through newly implemented CRM tooling).
  • Reporting through quality dashboarding (to among others the Board of Management).
  • Accell Group will expand the number of test centres.

In addition, Accell Group maintains close contacts with government bodies and advocacy groups to safeguard and improve the safety of bicycles.
Accell Group has insurance policies in place to cover general, product and recall liability.




Given (increased) lead times in the bike business, in combination with model changes (innovations), there is a risk of shortages or surpluses of bike stock. Planning of supply has become more difficult, given longer lead times from suppliers (as a result of increase in global demand driven by COVID-19). This means there is a risk of over or undersupply of bikes, resulting in increased Trade Working Capital or loss of market share.

Risk acceptance

The Company is prepared to accept a moderate risk level, as long as the strategic long-term goals are not threatened as a result.



Mitigation of the risk

Accell Group uses seasonal production and sales plans and aims to continuously improve the predictability of its sales. This is based on the Sales and Operational planning process. In 2020 a review of the S&OP has taken place in light of the changed circumstances. Adjustments will be rolled out in 2021 to further improve availability considering the circumstances in the supply markets.

Accell has taken several steps to improve this planning and it will continue these improvement efforts:

  • Reduce complexity and focus forecast on fast running models.
  • Establish Golden rules and introduce key performance indicators in individual target setting.
  • Drive data harmonisation and improved planning tools & systems.




The IT systems are of vital importance to day-to-day operations. IT systems and the information they contain may be exposed to risks related to the continuity of functionalities. The materialisation of this risk could have an impact on Accell Group’s reputation, revenues and costs, and thus its results. 

Risk acceptance

Low to none
The secure functioning of the IT systems is crucial for continuing the day-to-day business of Accell Group.


Mitigation of the risk

Accell Group has created a new IT roadmap, with a three-year view. We have installed an IT steering committee for the approval of initiatives based on the Company’s strategy and to prioritise in the event of conflicts. The roadmap includes but is not limited to the following topics:

  • To eliminate the risk of old local systems, Accell Group has embarked on local ERP upgrades (low impact and sizeable). Local upgrades are planned for Accell Bisiklet, Raleigh UK and Winora Group.
  • Data readiness - proper master data management is a prerequisite.
  • Change management - adoption has been prioritised in the programme.
  • Governance - locally led projects, Group IT director and Internal Audit in steering committees.
  • Accell Group has also set up an IT expert review group, to make sure experts are involved in the sizing of the projects.




Failure to implement or update technologies, processes and practices designed to protect networks, computers, programmes and data from attack, damage, or unauthorised access. 

Risk acceptance

Zero to low
Accell is averse to risks that could jeopardise Accell’s networks, computers, programs and data.


Mitigation of the risk

The measures include but are not limited to the following topics:

  • Security rules aimed at reducing the risks linked to current and new technologies.
  • The access controls to IT applications and to the computer files at each workstation are secured via single sign on for all devices for all employees with two-factor authentication.
  • In 2020, Accell Group introduced a gamified cybersecurity training that works by sending simulated phishing attacks. These teach employees how to avoid the traps that could potentially lead to cash or information losses. All our staff involved in the payment process, from approval to the actual payment, must enrol in this programme.
  • In late 2020, Accell Group started an external security review and this will continue in 2021, to highlight current deficiencies and to create an action plan to mitigate these risks.




Given the increase in environmental exposure, Accell Group evaluates its vulnerability, preparedness for and response to managing emerging and unforeseen environmental risks, such as flooding or earthquakes. Accell Group could be exposed to earthquake risks in the Asia region, (especially Taiwan) and in Turkey near the Aegean Sea. The above could impact future production capacity/supply.

Risk acceptance

Accell Group aims to limit the impact of unforeseen malfunctions on its business operations.
The risk of natural disasters will always be present, in spite of continuous efforts designed to limit such risks.

Mitigation of the risk

The measures include but are not limited to the following topics:

  • Local disaster prevention plans are in place for each factory, consisting amongst other of fire protection measures, battery storage rooms, safety and evacuation training.
  • An emergency sourcing plan is part of the day-to-day business and faces challenges due to COVID-19. Accell Group will continue to develop this plan across its factories, including paint shops and assembly facilities. This also entails supply restore timings and alternative usages of components within reasonable timeframes.
  • Furthermore, Accell Group has set up a disaster recovery plan for all major IT disruptions in its primary data centre.
  • Accell Group has insurance policies in place to cover property damage and business interruption and marine cargo risk.





Accell Group is committed to compliance with laws and regulations in the various countries in which it operates, as it can be held liable for the consequences of non-compliance. Changes in law and regulations could mean that products, services, policies and/or procedures are not adapted (or not adapted quickly enough) potentially exposing Accell Group to risks such as fines, sanctions and loss of customers, profits and reputation. Given Accell Group’s multi-jurisdictional presence, the risk profile has increased since there is a mix of international laws and regulations, like for example import duties, anti-dumping rules, the UK Bribery Act, Trade Sanctions, Export Controls and Brexit that have to be monitored and complied with.

Risk acceptance

The Company is averse to non-compliance with applicable law and regulations, since this could adversely affect Accell Group’s reputation and expose it to financial losses.


Mitigation of the risk

Accell Group has established policies and procedures aimed at compliance with applicable laws and regulations:

  • We have a Code of Conduct that goes beyond the compliance within the legal and regulatory framework by providing guidance on behaviour.
  • We adapt to local situations by building strong local entities and developing an appropriate approach to coping with dilemmas within the boundaries of applicable laws and responsible conduct.
  • Management carries out regular reviews to identify risks and to ensure that adequate systems are in place to manage those risks. We analyse and assess changes in applicable laws and regulations and, when necessary, we make appropriate changes.
  • We have laid down the basic rules for the directors of our companies in management regulations (last update effective 1 January 2019), pertaining to matters such as the mandatory involvement of the Board of Management in important decisions and documenting the authorisation of the same.
  • We have provided finance staff with guidelines and instructions, including controls, pertaining to the structure and maintenance of the financial administration and reporting systems. The guidelines and instructions comply with prevailing IFRS standards.
  • Each year, the directors of Accell Group’s local companies sign a Letter of Representation, a detailed statement pertaining to matters such as the integrity of their annual financial reports, the existence and functioning of their internal control systems and compliance with applicable laws and regulations, as well as the Accell Group Code of Conduct.





The Company’s turnover, profit and cash flow are subject to exchange rate fluctuations in (partly) non-functional currencies. This pertains primarily to the US dollar and to a lesser extent the Japanese yen, the British pound, the Taiwanese dollar, and the Chinese yuan. Changes in interest rates also affect the company’s results and cash flow. 

Risk acceptance

The Company is prepared to accept a moderate impact of external developments on its financial position.


Mitigation of the risk

Accell Group seeks to minimise the impact of foreign exchange fluctuations: 

  • Accell Group hedges 75%-100% of its forecast purchases (or sales) in foreign currencies for one year ahead following a monthly rolling approach.
  • The average hedge rates approximate the average market rates.
  • All derivatives used have an underlying economic basis. This principle is applied strictly to prevent potentially speculative positions.

With regards to interest rate risk, Accell Group partly hedges its long-term floating rate debt with an interest rate swap and cap. The shorter tenor term debt (GO-C) is not hedged.




The company is partly financed via a bank facility, which is used to absorb the impact of seasonal fluctuations in working capital, or to finance (smaller) acquisitions. There is a risk that the company will not be able to obtain the required financial resources or will be unable to obtain those resources in time to meet its financial obligations, which may endanger the growth of the Company. 

Risk acceptance

Low to none
The Company is averse to accept risks which could jeopardise the strategic long-term goals.


Mitigation of the risk

Accell Group mitigates this risk with a long-term financing facility, which has been agreed with a consortium of banks:

  • The facility is in line with the characteristics of the company and provides the financing parties with sufficient transparency and security.
  • The conditions of the committed facility are explained in more detail in section 4.9 of the notes to the financial statements of this annual report.
  • Accell Group reviewed its loan facilities in early 2020, which led to a rebalancing between the term loan and the seasonal facility.
  • Given the uncertainty and volatility at the start of the COVID-19 outbreak, Accell Group used scenario planning to identify liquidity risks. Additional liquidity (€ 115 million) was arranged in time to prevent any adverse risks to the Accell Group.