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3.2 Financial position

Accell Group’s balance sheet total stood at € 729.7 million at year-end 2015 (2014: € 631.8 million). Total working capital amounted to € 337.7 million in 2015 (2014: € 269.2 million); working capital as a percentage of turnover came in at 34.2% (2014: 30.5%).

The value of inventories increased due to the higher cost prices in general and due to the increase in the number of more expensive bikes, which are subject to a longer than average turnover time. The value of the parts in stock was up in 2015, due to higher costs prices and accelerated production planning to ensure improved availability for the market. The total value of inventories stood at € 338.7 million at year-end 2015 (2014: 244.5 million). Accell Group is planning to take measures to reduce inventory levels.

Accounts receivable stood at € 134.6 million at year-end 2015 (2014: € 133.3 million). With the influence of higher cost price of the goods in transit and higher inventories of goods the total trade accounts payable increased to € 135.6 million at year-end 2015 (2014: € 108.5 million).

Capital employed rose to € 530.3 million in 2015 (2014: € 461.2 million). The return on capital employed stood at 11.0% at the end of the financial year (2014: 9.6%).

Shareholders’ equity amounted to € 305.9 million at year-end 2015 (2014: € 281.1 million). In addition to the net profit recorded in 2015, the shareholders’ equity was also impacted by the payment of a cash dividend of € 8.7 million (2014: € 7.2 million).

Due to the rise in the balance sheet total, the solvency rate had fallen to 41.9% at year-end 2015, (2014: 44.5%). Net debt (the total in loans, bank credits and cash positions) rose to € 200.0 million at year-end 2015 (2014: € 152.3 million).

Net cash flow from operating activities came in at a negative € 19.0 million in 2015 (2014: € 38.2 million positive). The operating cash flow before working capital and provisions was 29% higher at € 68.9 million in 2015 (2014: € 53.3 million). The cash flow from working capital amounted to € 68.3 million negative (2014: € 2.8 million positive), due to higher inventories and accounts receivable. Accounts payable were also higher than the previous year. The free cash flow came in at € 31.1 million negative (2014: € 38.3 million positive).
 

Earnings per share and dividend

Earnings per share on the basis of the weighted average number of outstanding shares (year-end 25,116,249 shares) came in 22% higher at € 1.29 in 2015 (2014: € 1.06). Due to the issuance of 398,702 shares for the payment of the stock dividend for the 2014 financial year, the correction factor for the earnings per share from previous years is 0.9842.

For the 2015 financial year, Accell Group shareholders will be asked to approve the payment of an optional dividend of € 0.72 per share (2014: € 0.61), to be paid out in cash or shares. This results in a pay-out ratio of 56%. Based on the closing price at year-end 2015 (€ 21.07), the dividend return amounts to 3.4%.

In proposing to pay out this dividend, Accell has taken into account that the incidental cost will not result in a lower dividend.
 

Outlook

Cycling is highly popular, for mobility, environmental awareness and health reasons. Bicycles are now lifestyle products and popular among young people. Thanks to the introduction and continued development of electric bikes, users now have a serious alternative for mobility. Numerous national and regional governments in Europe and elsewhere continue to promote the use of bicycles as an alternative mode of transport. These developments will have a positive impact on the demand for bikes, bike parts and accessories.

Accell Group will continue to expand its market positions. The company’s current position in the middle and higher segment provides a strong basis for growth and will generate synergy benefits in the short and long term. As an extension of this strategy, the expansion of its bicycle parts and accessories business will further strengthen Accell Group’s proposition. In addition to this, Accell Group will continue to actively look for potential ways to increase its scale in 2016, both organically and via acquisitions that fit the group’s profile and (brand) portfolio. These acquisitions will also have to be complementary and add value to the group in terms of returns and synergies in the short term. Accell group expects the favourable underlying trends, combined with the improved macro-economic conditions and higher consumer confidence to have a positive impact on its results. Further increases in scale and the utilisation of synergy and efficiency benefits on fronts such as purchasing, production, development and marketing will boost the group’s competitive strength and its profit potential.

In line with these expectations and barring unforeseen circumstances, Accell Group expects to record a further increase in turnover and results in 2016.