4.7
Performance
4.7.1 Operating segments
Accell Group identified the following three operating segments: Bikes, Parts and Corporate/Eliminations. The table below provides information on these reportable segments:
Bikes | Parts | Corporate/ Eliminations | Consolidated | |
2020 | 2020 | 2020 | 2020 | |
€ x 1,000 | € x 1,000 | € x 1,000 | € x 1,000 | |
External net turnover | 951,695 | 344,414 | 344 | 1,296,453 |
Inter-segment net turnover | 5,462 | 6,671 | -12,133 | - |
Segment net turnover
|
957,157
|
351,084
|
-11,789
|
1,296,453
|
Other income | 111 | - | 16 | 127 |
Contribution profit
|
93,131
|
26,051
|
-5,227
|
|
Allocated cost central functions | -46,250 | -5,059 | 12,086 | |
Segment profit (loss) before interest and tax
|
46,881
|
20,992
|
6,859
|
74,732
|
Net finance cost | -12,825 | |||
Share of profit (loss) of equity-accounted investees | 1,008 | |||
Result on the sale of subsidiaries | - | |||
Consolidated profit (loss) before tax from continuing operations
|
46,881
|
20,992
|
6,859
|
62,915
|
Segment assets | 882,050 | 141,257 | -143,732 | 879,575 |
Segment liabilities | 399,019 | 107,301 | -2,699 | 503,622 |
Depreciation and amortisation | 14,056 | 5,409 | 5,463 | 24,928 |
Capital expenditure | 9,755 | 1,210 | 672 | 11,637 |
Geographical information
The sales to external customers reported in the geographical segments are based on the geographical location of the company and on the location of the customer. Both are reported for continuing operations thus excluding the net turnover from discontinued operations (see note 4.16.1).
Net turnover based on company location | Net turnover based on location of customer | |||
2020 | 2019 | 2020 | 2019 | |
€ x 1,000 | € x 1,000 | € x 1,000 | € x 1,000 | |
The Netherlands | 314,934 | 260,525 | 264,078 | 222,354 |
Germany | 535,009 | 549,865 | 424,076 | 404,310 |
Other Europe | 427,185 | 276,560 | 591,887 | 464,355 |
Other World | 19,325 | 24,078 | 16,411 | 20,008 |
Total
|
1,296,453
|
1,111,028
|
1,296,453
|
1,111,028
|
Geographical asset information is based on the physical location of the assets at 31 December:
Accounting policies
Operating segments
Operating segments are reported in a manner consistent with the internal reporting to the Board of Management, which is considered to be Accell Group's chief operating decision-maker. The reportable segments Bikes and Parts are the main pillars of Accell Group and are supported by the central functions in the Corporate segment. Both the Bikes and Corporate segements report directly to the Board of Management, with dedicated regional Bikes directors. The Parts segement is managed by one dedicated director, who reports to the Board of Management, and is directly accountable for the functioning of the segment’s assets, liabilities and results. The Board of Management reviews the performance of the segments via monthly internal management reports. The performance of the regional Bikes directors and the Parts director is measured based on contribution profit, as included in the internal management reports. The central functions, which report directly to the Board of Management, include procurement, marketing, innovation & technology (R&D), IT, e-commerce, HR and central G&A. The related cost are allocated to the reportable segments on a reasonable basis.
Unallocated result items comprise net finance expenses, share of profit (loss) of equity-accounted investees and results on the sale of subsidiaries.
Segment capital expenditure is the total cost incurred in the period under review to acquire property, plant and equipment and intangible assets other than goodwill.
Revenue
The majority of Accell Group’s contracts are contracts with customers in which the sale of goods is generally expected to be the single performance obligation. The timing of the transfer of control varies depending on the individual terms of the sales agreement. For sales of bicycles, parts and accessories, transfer usually occurs when the product is delivered to the customer. However, for some international shipments the transfer occurs when the goods are loaded onto the relevant carrier at the port. Generally, the customer has no right of return for such products. Revenue is recognised at the point in time when control of the goods is transferred.
Accell Group provides warranties for general repairs and does not provide extended warranties or maintenance services in its contracts with customers. The warranties serve to guarantee that the bicycle, part or accessory functions as intended and meets the agreed specifications. As such, these warranties are assurance-type warranties that are accounted for under Provisions.
Some contracts with customers include customer programmes and incentives, such as special pricing agreements, promotions, advertising allowances and other volume-based incentives. Accell Group recognises revenue from the sale of bicycles, parts and accessories measured at the consideration received or receivable, net of accruals for customer incentives and returns (if the customer has a right of refund). If revenue cannot be reliably measured, Accell Group defers revenue recognition until the uncertainty is resolved.
Accounting estimates
Accell Group makes estimates in the measurement of discount accruals, included in trade receivables. When customers are given discounts, these reduce the transaction price and consequently the revenue. The conditional discounts in revenue are estimated based on accumulated experience supported by historical and current sales information. Expected sales volumes are determined taking into account (historical) sales patterns and other relevant information. A discount accrual is recognised for expected volume and year-end discounts payable to customers in relation to sales made until the end of the reporting period.
4.7.2 Other income
Other income amounted to € 0.1 million in 2020 and is mainly attributable to rental income (2019: € 12.3 million, mainly a gain of €11.4 million on the sale of the Canadian intellectual property rights of the Raleigh, Diamondback, Redline and IZIP bike brands).
Accounting policy
Other income is reported on an accrual accounting basis, meaning when the revenues are incurred not necessarily when they are received.
4.7.3 Cost of materials and consumables
2020 | 2019 | |
€ x 1,000 | € x 1,000 | |
Materials | 906,690 | 740,732 |
Freight and inbound costs | 15,213 | 16,623 |
Warranty provisioning | 5,448 | 8,544 |
Obsolete raw materials and semi-finished goods | 5,110 | 1,629 |
External assemblies | 2,241 | 1,964 |
Cost of materials and consumables
|
934,703
|
769,493
|
Accounting policy
Cost of materials and consumables are recognised in the same period as the revenues to which they relate e.g. when Accell Group sells goods (bikes or bike parts and accessories) or performs services. Expenses are recognised on an accrual accounting basis, meaning when the expenses are incurred, not necessarily when they are paid.
4.7.4 Personnel costs
Notes | 2020 | 2019 | |
€ x 1,000 | € x 1,000 | ||
Wages and salaries | 122,384 | 122,649 | |
Social security charges | 14,595 | 14,402 | |
Pension contributions | 7,422 | 6,787 | |
Share-based payments | 4.17.4 | 351 | 192 |
Other personnel costs | 4,170 | 6,024 | |
Personnel expenses
|
148,922
|
150,053
|
|
The average number of employees (FTEs) was 3,139 in 2020 (2019: 3,410).
Accounting policy
All expenses are reported on an accrual accounting basis, meaning when the expenses are incurred (services are received), not necessarily when they are paid. For more details on accounting policies regarding pension contributions and share-based payments see note 4.11.3 and note 4.17.4 respectively.
4.7.5 Depreciation, amortisation and impairment losses
Notes | 2020 | 2019 | |
€ x 1,000 | € x 1,000 | ||
Amortisation of intangible assets | 4.10.3 | 3,005 | 2,752 |
Impairment losses on intangible assets | 4.10.3 | 3,936 | - |
Depreciation of property, plant and equipment | 4.10.1 | 8,235 | 8,695 |
Depreciation of right-of-use assets | 4.10.2 | 9,759 | 9,301 |
Gains & losses from lease modifications (remeasurement) | 4.10.2/4.9.1.3 | -8 | -17 |
Capital loss on sale of property, plant and equipment | 4.10.1 | 1 | 10 |
Capital loss on sale of intangible assets | 4.10.3 | - | 5,440 |
Depreciation, amortisation and impairment losses
|
24,928
|
26,181
|
|
Accounting policy
For the accounting policy on amortisation, impairment and divestment losses on intangible assets, see note 4.10.3. For depreciation of property, plant and equipment, see note 4.10.1 and for depreciation of right-of-use assets see note 4.10.2.
4.7.6 Other operating expenses
2020 | 2019 | |
€ x 1,000 | € x 1,000 | |
Selling expenses | 69,954 | 69,630 |
General and administrative expenses | 7,278 | 10,390 |
Lease expenses | 1,757 | 1,729 |
Research & development expenses | 2,051 | 3,134 |
Maintenance and energy | 4,635 | 5,068 |
Audit and consultancy costs | 5,475 | 8,679 |
IT costs | 7,974 | 9,347 |
Other | 15,423 | 7,417 |
Other operating expenses
|
114,546
|
115,394
|
Selling expenses are primarily marketing costs, freight costs, other (outbound) logistics costs, delcredere costs and platform fees. For more details on lease expenses, see note 4.9.1.3.
Other expenses are primarily costs related to provisioning, tools, car costs and facility costs. The increase in the other expenses in 2020 compared to 2019 is mainly caused by additional provisioning for restructuring, legal and inventory related to trading and finished products.
Accounting policy
All expenses are reported on an accrual accounting basis, meaning when goods are received or services are provided, not necessarily when they are paid.
4.7.7 Earnings per share
The calculation of earnings per share and of diluted earnings per share is based on the following data:
2020 | 2019 | |
Net profit accruing to Accell Group N.V.'s shareholders | ||
- from continuing operations (€ x 1,000) | 64,829 | 59,299 |
- from discontinued operations (€ x 1,000) | - | -56,495 |
Total net profit (€ x 1,000)
|
64,829
|
2,804
|
Number of issued shares as per 31 December | 26,805,031 | 26,802,751 |
Weighted average number of basic shares for the earnings per share | 26,804,632 | 26,726,268 |
Potential impact of share options and conditional shares on the issuance of shares under the share-based payments program | 89,237 | 55,291 |
Weighted average number of issued shares (diluted)
|
26,893,869
|
26,781,559
|
Reported basic earnings per share from continuing operations (€ x 1) | 2.42 | 2.22 |
Reported basic earnings per share from discontinued operations (€ x 1) | - | -2.11 |
Total reported basic earnings per share (€ x 1)
|
2.42
|
0.10
|
Reported diluted earnings per share from continuing operations (€ x 1) | 2.41 | 2.21 |
Reported diluted earnings per share from discontinued operations (€ x 1) | - | -2.11 |
Total reported diluted earnings per share (€ x 1)
|
2.41
|
0.10
|
Adjustment factor according to IAS 33 | 1.000 | 1.000 |
Total earnings per share financial year (€ x 1) | 2.42 | 0.10 |
Total earnings per share financial year (diluted) (€ x 1) | 2.41 | 0.10 |