Accell Group: Time To Accelerate

Investment research
Accell Group Global Markets

Equity Research
Leisure Products/The Netherlands
Time to accelerate
31 August 2020 Accell is on track to achieve its 8% EBIT margin target in FY22, which,
coupled with working capital improvements, would give an attractive FCF
yield (c.10%). Optimised design, planning and production should add
BUY value. Market trends are very positive (robust growth in e-bikes and cargo
Target Price (12m): EUR 28.5 bikes), fuelled by Covid-19, creating a positive sales mix and further
Price (28-August-20): EUR 23.60 value, though 2H20 will be hurt by supply chain issues. As a result of
Exp. Performance: +20.8% improving EBIT margin and gains in NWC, our DCF points to upside and a
Exp. Dividend Yield: +0.0% share price of EUR 28.5. We initiate coverage with a Buy rating.
Exp. Total Return: +20.8%
Design/planning/production progress
Increased use of standardisation and web analytics, closer cooperation
between the design and planning department and customers and an
Analysts optimized production footprint are adding value. FY20 is still being affected
impacted by Covid-19, but FY22 should to show underlying progress with
Martijn den Drijver
+31 20 628 0042 added value improving to 32.1% (vs FY19’s 30.7%).
Martijn.den.Drijver@nl.abnamro.com
On-line strategy taking form (Click and Collect, Go Live)
Hugo Lisboa Lago
The Click and Collect (and Go Live) model is key, despite not being a material
+31 20 628 2157
hugo.lisboa.lago@nl.abnamro.com top-line or added-value driver in the near term. Consumers are moving on-
line, and the model boosts Accell’s on-line presence while allowing it to
maintain a healthy relationship with its distribution network.
Market and sales trends positive
The growing popularity of e-bikes and cargo bikes (for their ease of use), the
focus on a more healthy life style (across all ages) and the impact of Covid-
19 (resulting in a reluctance to use public transport) should pave the way for
buoyant market growth the near and medium term (ABNe FY19-FY24 bike
market CAGR of >10%) with Accell maintaining or increasing market share.
EBIT margin target in sight, working capital to improve
With normal operational leverage from higher volume and the improved
design/planning and production driving added value, Accell is expected to
achieve its 8% EBIT margin target in FY22, with solid improvements in net
working capital.
Valuation shows upside
We value Accell using a DCF model for the combined Bike and Parts
businesses, which results in a target price of EUR 28.5/share. This valuation
and our investment case underpin our initiation of coverage with a Buy rating.
Fundamentals Year To December 2018 2019 2020E 2021E 2022E
Market Cap (EURm) 631 Sales (EURm) 1,094 1,123 1,171 1,277 1,382
Average Daily Volume (EURm) 1.1 EBITDA (EURm) 45.3 86.1 72.1 114 135
Number of Shares (m) 26.7 EBIT (EURm) 33.0 60.0 46.6 90.6 111
Free Float (%) 57.0 EPS (fully diluted EUR) 0.76 2.21 0.93 2.21 2.82
DPS (EUR) 0.28 0.32 0 0 0
52 Week High (EUR) 29.3
52 Week Low (EUR) 12.5
EV / EBITDA (x) 14.4 11.1 11.3 6.7 5.2
3 Month Performance (%) 3.5
EV / EBIT (x) 19.2 17.4 17.0 8.3 6.3
6 Month Performance (%) (5.2)
P/E (fully diluted x) 24.7 11.7 25.4 10.7 8.4
12 Month Performance (%) 5.1
Equity FCF Yield (%) 6.7% (2.9%) 14.6% 9.4% 11.1%
Reuters Symbol ACCG.AS ROCE (%) 5.7% 8.9% 5.8% 11.0% 12.7%
Bloomberg Symbol ACCEL NA Net Debt / EBITDA (x) 2.2 2.3 2.6 1.4 1.2
Website www.accell-group.com
Source: Factset, ABN AMRO Equity Research Source: Factset, ABN AMRO Equity Research
IMPORTANT: PLEASE READ DISCLOSURES AND DISCLAIMERS, INCLUDING THE ANALYST CERTIFICATION, BEGINNING ON PAGE
This document is classified as Confidential by ABN AMRO

2 | Accell Group | 31 August 2020 ABN AMRO
Executive Summary
Investment case summary
EBIT margin target 8% to be achieved Accell is on track to achieve an 8% EBIT margin target in FY22, which, coupled
with working capital improvements and stable capex (some expansion capex is
planned for FY24), results in attractive FCF yields (c.10%). Optimisation of
design, planning and production is set to improve on a higher degree of
standardisation, closer cooperation between Accell’s design and planning
departments and customers, an increased application of web and search
analytics and an enhanced production footprint, all boosting added value (used
by Accell as a proxy for gross margin).
Favorable market outlook Market trends remain very positive due to robust growth in e-bikes (with new age
groups becoming interested, underpenetrated countries opening up) and cargo
bikes (due to ease of use, B2C/B2B solutions). We also expect Accell to benefit
from the expansion of local brands across its platform, adding to a positive sales
mix. All of these developments are fuelled by Covid-19 as consumers remain wary
of public transport and opt for alternatives, with bikes being the sole sustainable
and healthy option, particularly as both employers and (local) governments
encourage their use.
On-line strategy taking shape The on-line strategy is taking shape in the form of Click and Collect (to be
introduced in the Netherlands in FY21) and Go Live (solid introduction in the UK),
allowing Accell to increase its on-line presence while maintaining a healthy
relationship with its distribution network.
Working capital to improve Working-capital improvements are expected from standardisation, reducing
SKUs, improved planning of production and, in general, a shift in the consumer
decoupling point, allowing Accell more flexibility. Seasonality, however, is very
likely to ensure, given the industry’s characteristics. As such, we expect
improvements in working capital as a percentage of sales, though seasonal
patterns will remain.
2H20 results still affected The second half of FY20 will nevertheless still be hampered by supply-chain
issues (availability of components) as all bike brands are clamouring for parts.
This, combined with still-higher inbound logistical costs, explains our caution on
EBIT for 2H which we expect to more or less break even.
Strong rebound in FY21 For FY21, we assume continued strong market growth and a further improvement
in sales mix (e-bikes and cargo bikes vs standard bikes). Taking into consideration
the improvements in value add from standardisation and improved design,
planning and production, as well as production footprint rationalization, we
assume EBIT will stage a robust recovery, assuming of course that no Covid-19
disruptions, which we assume will have cost Accell some EUR 24m of EBIT in
FY20.
DCF shows upside As a result of the improving EBIT margin (we expect the 8% target to be achieved
in FY20) and, thus, robust FCF, our DCF model clearly points to upside, whereas
a relative valuation also shows that Accell, despite having no exposure to larger
markets outside Europe, is clearly undervalued. We therefore initiate coverage
on Accell with a Buy recommendation and a target price of EUR 28.5/share.

ABN AMRO 31 August 2020| Accell Group |3
Contents
Executive Summary...............................................................2
1. Investment case .............................................................4
2. Accell at a glance .........................................................13
3. Accell Bikes Division ......................................................15

3.1. Market dynamics..................................................................16
3.2. Competition .......................................................................20
3.3. Other trends.......................................................................22
3.4. Distribution ........................................................................24
4. Accell Parts & Accessories division .....................................25
5. Our forecasts ...............................................................29

5.1. Profit and loss account ..........................................................29
5.2. Balance sheet .....................................................................32
5.3. Cashflow ...........................................................................34
6. Valuation....................................................................35
6.1. DCF model shows upside ........................................................35
6.2. Relative valuation: Accell is clearly undervalued ...........................36
7. Company overview ........................................................37

7.1. A deep dive into Accell’s brands ...............................................38
7.2. Accell’s bike components suppliers ...........................................39
8. Key risks ....................................................................40
9. Corporate Governance and Remuneration.............................41
10. ESG...........................................................................43
11. Appendices .................................................................45

11.1. Overview of Accell and financial covenants..................................45
Financial Statements ...........................................................46

1. Investment case
Positive market trends…
More than healthy market growth The bicycle market has been growing healthily in the last three-to-five years (see
graph below left) and this looks set to continue. Key drivers are increased leisure
time, the focus on a healthy lifestyle across ages and the growing popularity of
e-bikes and cargo bikes (ease of use for consumers in daily life and leisure,
multiple applications in B2C businesses).
Figure 1: Benelux market (in value, EURm) Figure 2: Central & Southern market (in value, EURm)
p
3.500 14.000
3.000 12.000
10.000
2.500
8.000
2.000
6.000
1.500
4.000
1.000
2.000
500
0
2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY
0
2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY Other countries Central Europe
Source: ABN AMRO Equity Research Source: ABN AMRO Equity Research
…also fuelled by Covid-19
Health aspect and fear of public Covid-19 has made consumers reluctant to use public transport, fuelling demand
transport also key drivers for bikes even further. Indoor sports (fitness) have also lost their appeal, also
triggering demand for mountain and racing bikes. This is confirmed by the latest
sales figures for April, shown below, and for May (though the latter are not yet
available across the board).
…as well as government incentives

Fiscal stimuli and improved Cities and municipalities are encouraging the use of bikes by improving cycling
infrastructure infrastructure (bike lanes and parks, etc,) creating safer conditions for both
leisure and commuting. Governments are also supporting the use of bikes (for
consumers) and cargo bikes (for B2C and B2B purposes).
Figure 3:Bicycle stimuli by Accell’s principal European countries
Netherlands Germany France UK Italy Spain Belgium EU

 EUR 20 m to  EUR 120m
 EUR 20 m to  23 cents per
 Leasing tax  EUR 350 for purchase for
purchase km if cycle
benefits e-bike bikes and conventional
bikes and on business
 Reimbursem purchase; EUR 50 and
EUR 50  Aid of 50% travels  EUR 5
ent of 19 leasing vouchers for electrical
Government vouchers for to purchase  Different billion E-
cents per km schemes repairs bicycles
subsidies repairs bicycles until bike bike
business  EUR 2.500  London  Some cities access
 EUR 1.200 EUR 500 subsidies
travel done for cargo offers up to offer EUR
for the depending
by bike and bike GBP 1000 600 for
purchase of on the
car purchase for an e- cargo bike
a cargo bike region
cargo bike purchase
 Increased
 Investment
bike paths in
in bike
larger cities,  EUR 2.2
 Investment  Investment parking and
Paris – 650 billion for  Increased
in bike in bike cycle paths
City planning  EUR 20m km cycling bike paths in
parking and parking and  Brussels
 EUR 200 m infrastructur larger cities
cycle paths cycle paths turned into
budget to e until 2025
20km/h
fund cycling
zone
projects
Source: ABN AMRO Equity Research, Bloomberg

Strong brands regionally, but also expanding at a European level
Recognizable brands with top-three Accell has a number of very strong brands that either dominate their segment
positions (Haibike in mountain biking in the DACH area) or have top-three positions in local
markets. Some brands with a strong local presence, such as Lapierre and Koga in
the street racing segment and Haibike in the e-mountain biking segment, lend
themselves to expansion via the Accell platform.
These leading brands and strong market positions also make Accell very
attractive for buying groups (one-stop shopping) and dealers that want to source
bikes across the various segments. Building recognizable and well-known brands
also helps to entice customers with less clear preferences in terms of colour and
components (gear shifters, lighting) who are more focused initially on price.
Figure 4:Accell’s bicycle brands
Source: ABN AMRO Equity Research, Accell Group
Significant innovation
Creation of new categories Although R&D in absolute terms appears low (EUR 1-3m annually), Accell is
spending in line with peers when we compare R&D as a percentage of sales.
Moreover, its brands have been very innovative from the point of view of
introducing new features or even creating new categories. A prime example is
the first e-mountain bike (E-MTB), Haibike, creating this segment. Carqon was
also the first model with a step-in/step-out door in the Cargo Bike segment.
Figure 5:Haibike newest E-mountain bike Figure 6:Carqon cargo bike launched in 2020
Source: Accell Group Source: Accell Group

Close relationship with dealers/buying groups allows for…
Knowledge sharing… Accell has a key account management team that is in constant contact with the
large buying groups in its main regions, including Dynamo Retail Group (NL), ZEG
(NL+G) and Jobrad (G) as well as the larger dealers (with large or multiple stores,
such as Het Zwarte Fietsenplan in the Netherlands). These groups have the same
goal as Accell, which is to properly assess market demand to optimize sales. As
a result, information is shared on a monthly basis, both digitally and via regular
discussions.
…improved design, planning and production…
Benefits Accell and its customers This constant dialogue with key customers over evolving demand is supported by
website analysis (tracking of customer behaviour on the Accell brand website)
and search-engine analysis (which customer is looking for which type of bike).
These elements allow for a better assessment of demand, which in turn permits
improved planning, the capture of all available demand, and fewer discounts on
unsold bikes at the end of the season (a key goal). Accell also plans to centralize
production at its larger sites (there are still three smaller sites spread over two
countries), which will result in economies of scale.
Figure 7: Overview of planned margin-enhancing measures
Measures being taken Description Level of completion Comments
 Improve forecasted production by

Search engine optimization 75%  Gradual process
identifying consumer trends
 Collect feedback only from largest

Input from dealers 50%  Gradual process
dealers
Use focused consumer  Improve forecasted production by

75%  Limited additional improvements
panels knowing consumer trends
Production
 Reduce production complexity to

Increase standardization 25%  Additional benefits expected
prevent industry hold-ups
 Create more consistency and

 Improved gross marign, mainly
Centralization of production direction for innovation, marketing 50%
in P&A
and distribution.
 Reduce production complexity to

Reduced number of SKUs 25%  Additional benefits expected
prevent inventory hold-ups
Distribution Pocurement
Reduced number of  Increase purchasing power to

50%  Gradual process
suppliers reduce components costs
 Reduce margin dilution from  Improved gross margin, limited

Click and collect model 25%
retailers brands being offered through cc
Establish direct line to  Improve margins by reducing

10%  In early phase
consumer intermediaries
…driving improvements in added value…
Various programmes in the Improving planning and manufacture and production footprint optimisation are
execution phase only two elements of the margin-enhancing plan. Standardisation is another, as
it allows for more efficient processes at various levels (assembly, warehousing)
and should permit higher volumes per model so the company can extract higher
volume-based discounts. There’s still a fair amount of work to do here, however.
For example, the Batavus still has 130 possible different configurations vs 60 for
the Gazelle. Standardisation also has other positive effects, such as fewer
moulds, which is a material saving given that the average cost of a mould is USD
100k.

A further element in the enhancement plan is the near-shoring of certain

suppliers in Central and Eastern Europe, which should allow for some benefits to
the company in terms of delivery speed, though it will also give rise to various
costs. As a result, we forecast that added value will improve from 30.7% in FY19
to 32.1% in FY22 (Accell target: >31%).
Figure 8:Accell added-value bridge
33,0%
32,0% 0,20%
0,30%
0,60%
31,0%
0,30%
0,5%
30,0%
32,1%
2,9% 31,6%
29,0% 2,4%
30,7%
28,0%
27,8%
27,0%
Source: ABN AMRO Equity Research
…and working capital

Figure 9: Inventory days Figure 10: NWC as % of sales during explicit forecasting period
190 33%
32%
180 183 31%
31%
170 172 171 29%
165 29%
160 163 162
27% 28%
27%
150 27%
26%
25%
140
23%
130
120 21%
FY 19a FY20e FY21e FY22e FY23e FY24e FY 18a FY 19a FY20e FY21e FY22e FY23e FY24e
Source: Accell Group, ABN AMRO Equity Research Source: Accell Group, ABN AMRO Equity Research
The measures that Accell is taking and plans to implement (including

standardisation, use of families of frames, reduction of SKUs and measures to
allow for customer decoupling further down the process), will all benefit working
capital. As the graphs above show, we assume that, after FY20, both inventory
days and NWC as percentage of sales will improve, although seasonality will
remain a feature of the industry.
Online strategy taking shape (Click and Collect and Go Live)
Platform benefits to show Accell is rolling out on-line models such as Click and Collect (Benelux in FY21)
and Go Live (UK) using its platform, with more countries to follow. The company
is relatively cautious on e-commerce, which is understandable given the
somewhat reluctant stance of dealers, in particular. But by gradually rolling out
these initiatives and fine-tuning them where necessary, Accell is increasing its
on-line presence while maintaining a healthy relationship with its distribution
network. While we do not assume this will lead to material market-share gains
or significantly better added value, it is nevertheless progress.

Solid top-line growth is forecast
FY19-FY24 sales CAGR 7% (bikes and Thanks to strong brands, innovation and close relationships with dealers and
P&A combined) buying groups, we assume that Accell can at least maintain its market share, if
not increase it slightly as smaller brands can’t invest as much in product
innovation and marketing (not in our model currently). As the market is expected
to post a CAGR of more than 10%, our top-line forecast of a 7% CAGR appears
very reasonable, particularly as the percentage of e-bikes and cargo bikes
continues to rise, as the graphs below show. However, this is due to Accell’s
substantial exposure to the Benelux market, which is forecast to grow at a lower
rate than its remaining markets.
Figure 11:Accell’s sales development per segment (EURm) Figure 12 Bicycle sales per type (inner ring FY17, outer FY24)
1,800
1,600
FY24
1,400
12% FY19
1,200
1,000 21%
8%
800
75%
600 4%
80%
400
200
0
E-bikes P&A Trad bikes Cargo Cargo Traditional bikes E-bikes
Source: Accell Group, ABN AMRO Equity Research Source: Accell Group, ABN AMRO Equity Research
EBIT margin target to be achieved
FY22 EBIT margin 8.0% Based on operational leverage from volume growth and factors driving added
value, we forecast that Accell will achieve its 8% EBIT margin target in FY22.
EBIT margin expansion will be hampered somewhat in FY24, when we expect an
expansion of capacity expansion, though this will reverse in subsequent years.
Figure 13:Accell’s turnover and EBIT margin (LHS: EURm)

1,800 9.0%
1,600 8.0%
1,400 7.0%
1,200 6.0%
1,000 5.0%
800 4.0%
600 3.0%
400 2.0%
200 1.0%
0 0.0%
Sales EBIT margin

p P P
Source: Accell Group, ABN AMRO Equity Research
However, further improvement is possible

Adding 40 bps EBIT margin That said, there are still a number of factors that are likely to improve that
should allow the company to drive EBIT margins higher, perhaps even to around
9%. These are further supplier consolidation, the adoption of automotive-style
platforms for similar bikes and improvements in quality control and the after-
sales service.

Accell is still occasionally plagued by recalls (in frames or, more recently, brakes
on the Batavus front-mounted engine at Batavus) due to errors in production. As
repairs and re-fits are more expensive than providing a new bike in the event of
frame issues, and because of difficulties experienced by the company in handling
claims, customers with legitimate issues has sometimes been given a completely
new bike. By improving quality control, such mishaps can be eliminated, further
driving gross profitability and thus EBIT margin.
But 2H20 will be hampered by supply chain issues and WC outflow

Negative cash outflow in 2H20 Normally, seasonality means that the second half shows substantially lower
profitability but substantially higher cash inflow as working capital declines.
However, 2H20 will be slightly different, with Accell likely to continue to show
relatively strong sales. However, inventory in the channel and at Accell is low,
and needs replenishing, which means working capital, and thus a cash outflow,
whereas 2H generally shows cash coming in. The following chart shows that
inventory in 2Q20 was already below normal in 3Q.
Figure 14: Normal 1Q-4Q FY18-19 vs actual 1Q20 and 2Q20

Production peak
70,0% Production peak Delivery peak Orders new year Inventory new season
Cash out Production peak
60,0% Cash out Cash in Cash in Cash out
Cash in
50,0%
40,0% 40,9%
34,6%
30,0% 27,9%
30,0% 33,0%
29,0%
20,0%
10,0% 19,6% 17,4% 18,6% 17,3%

12,2% 12,2%
0,0%
Q1 Q2 Q3 Q4 Q1 Q2
-18,1% -14,2% -12,9% -15,7% -15,5%
-10,0% -20,8%
-20,0%
-30,0%
Receivables Inventory Payables
But sufficient liquidity

EUR 297m of liquidity at 1H20 This unusual 2H cash-flow feature and Covid-19-related uncertainty (possible
second wave) also explain why Accell opted for an additional GO-C programme
loan (EUR 115m, of which EUR 60m is drawn, with the remainder available until
1Q21). Moreover, the company is forbidden to distribute cash dividends for as
long as any amount under the GO-C is outstanding, therefore we expect Accell
to resume dividend distribution in FY23. In addition, Accell has extended its usual
seasonal working-capital RCF from July to December, and has renegotiated
covenants with its bank consortium (until mid and end FY21, depending on the
covenant). Thanks to such action, the company has sufficient liquidity and
headroom to weather the current storm.
Strong EBIT rebound in FY21

Strong rebound in FY21 In FY21, we assume continued strong market growth and a further improvement
in sales mix (e-bikes and cargo bikes vs standard bikes), as well a growth in the
P&A business (increase in installed base plus higher utilisation). Taking into
consideration the improvements in value add from standardisation and improved
design, planning and production, as well as the production-footprint
rationalization, we assume EBIT will recover substantially. This is of course
assuming no Covid-19-related hiccups. We assume that Covid-19 will have cost
Accell some EUR 24m of EBIT in FY20.

Positive catalysts
Evidence of margin expansion

1H21 first touch point We will not be able to assess whether Accell has made material progress on
measures such as standardisation, production-foot print optimisation,
centralisation of marketing and procurement, planning and production
optimisation (less discounts) and reduction of SKUs until the company’s 1H20
results presentation, as no quarterly updates are planned. If added value moves
in the right direction and opex is contained, it will be clear that Accell is on the
right track, and its EBIT margin target is in reach.
Continued high growth, or an acceleration of bicycle-market expansion

Positive market data (e)bikes A key factor in achieving the EBIT margin target is operational leverage from top-
penetration line growth and sales mix. If government stimuli and the threat of Covid-19 result
in changing consumer behaviour, meaning more bike sales in countries with little
biking culture or a strong pick up in e-bikes in more mature markets (as new age
groups adopt e-bikes), Accell’s shares will benefit.
Accell gaining ESG recognition

Appealing from an ESG standpoint The company’s equity story is one of growth and operational leverage combined
with self-help programs driving EBIT margin and cash flow. It’s also one of
sustainability, lowering the carbon footprint, leading healthier lifestyles and
electrification. Corporate governance is solid (although management has little
skin in the game). In other words, Accell is attractive from an ESG perspective.
Take-over offer by PON

Highly speculative As PON has made an offer for Accell in the past, there is still a possibility,
however small, that it will do so again. The rationale that applied then, combing
multiple strong brands and extracting material synergies from combined
activities (cost savings at various levels), therefore still applies. However, we
think the chances of PON making another move are small.
Production-footprint rationalisation
Possibly accelerated Accell still has some room to improve its production footprint. There are three
smaller production locations, and we assume that two of these will eventually
be closed, with production moving to the larger facilities in Germany, Turkey or
the Netherlands. Given that Accell has sufficient capacity in its larger facilities,
an acceleration in the execution of this part of the strategy (announcements late
FY20, execution FY21 ABNe) could drive added value to 31% earlier than is
currently factored into our model.

Negative catalysts
Possible second wave Covid-19

Disruption of demand and supply Several countries in Europe are re-imposing Covid-19 restriction measures as
infections creep up again. If infections continue to increase and additional
measures are imposed, this could have a negative impact on both inbound and
outbound logistics, disturbing both manufacturing and distribution. In China,
where most of the key suppliers of Accell are situated, the picture is less clear,
but the same principle applies that if infections increase to critical levels (from
a healthcare capacity perspective), additional measures may impact production
levels, and thus the supply of components to Accell.
High growth now may be demand brought forward

Overestimation of near term growth It is clear that the popularity of bikes is increasing, with new age categories
discovering the e-bike in more mature countries as consumers in low bike-
penetration countries (re)discover both standard and e-bikes. We think that bike-
market growth will continue in the near and medium term. However, it is possible
that Covid-19 has brought demand forward, which could imply that market
growth in FY211 could be lower than we currently assume, particularly if a
vaccine is found.
Dutch e-bike helmet regulations

Could negatively impact e-bike sales On June 30, two authorities that advise the Dutch government (the Centraal Plan
in NL Bureau and the Planbureau voor de Leefomgeving) issued and presented a report
to the country’s parliament. In the report, the two organizations suggest that
provinces, municipalities and cities invest more in bicycle facilities (primarily
bike lanes and parking facilities close to train stations), which is positive.
However, because of the increase in bike usage, they also call for the mandatory
use of helmets for children under the age of 12 and for all e-bike riders, in order
to reduce fatal incidents. The legislation would be similar to that of countries
such as France, Croatia and Austria. Several lobby organizations have signaled
that the introduction of such a law would reduce the appeal of a healthy and
sustainable means of transportation, which is not logical. At the moment, the
Dutch government has not indicated whether it will follow the suggestions of the
CPB and PBL. If it does, it could have an impact on e-bike sales in the
Netherlands.
Medium term: revision or circumvention of EU anti-dumping regulations

Cheap imports could impact market The current EU anti-dumping regulation against Chinese e-bike imports has been
share in effect since January 18, 2019 (and ends in 2024) as the Chinese government
supported local e-bike companies via subsidies, among other means. As a result,
the EU imposed significant import duties on e-bikes imported from China or
assembled from mainly Chinese parts in Europe or other regions. Although very
effective, as Chinese imports as percentage of total imports has declined from
700k units in FY18 to less than 100k units in FY19, appeals by the Chinese
manufacturers may eventually result in amendments. Another related risk is that
Chinese manufacturers partner with distributors/manufacturers from other
countries, rebrand the essentially Chinese bikes and then export them to Europe
(see Chin Haur from Indonesia and its cooperation with Fushida).

Valuation
DCF suggests TP of EUR 28.5 using Our DCF model assumes continued solid organic top-line growth after the explicit
WACC of 8.3% forecast period of c. 5%, which then falls to the perpetual growth rate of 1% in
FY29, when we calculate terminal value (EBIT margin in terminal-value year of
8%). We apply a WACC of 8,3% (beta of 1.5x and perpetual growth of 1.0%). Based
on these assumptions, our DCF model suggests a fair value per share of EUR 28.5.
Peer multiples show Accell is We would normally carry out a sum-of-the-parts valuation for the bikes and the
undervalued parts & accessories businesses. However, we opted for a relative valuation using
bike manufacturers, parts manufacturers and bike-accessory manufacturers due
to insufficient disclosure by various peers on their profitability.
However, exposure to the Chinese (and possibly other markets, including North
America) appears to skew the valuations of peers such as Merida (FY21 EV/EBITDA
of 27x) while Swedish company MIPS, a bike helmet manufacturer, is valued at
an FY21 EV/EBITDA of 38x. Excluding the highest value (MIPS) and the lowest
values (Dorel) and Merida (China exposure), we obtain an average FY21
EV/EBITDA of 14.0x. Applying this to Accell results in a fair value per share of
EUR 51, or a price target of EUR 55. Although we are not arguing here that Accell
should be valued at this level, the calculations do portray it as currently
undervalued.
ABN Amro vs. consensus

Although, according to Bloomberg (ANR function), there are four analysts
covering Accell, there is only one set of estimates. It therefore makes no sense
to compare our estimates with Bloomberg consensus.

2. Accell at a glance
Accell Group designs and markets bike in key European markets, complemented
by a parts and accessories wholesale business. The group had FY19 sales of EUR
1.11bn and EBIT of EUR 60.0m. The company is one the largest global players
focusing on the mid to high end market segments, with well-known brands such
as Raleigh, Haibike and Koga, and very strong local brands such as Sparta,
Batavus and Lapierre, to name just a few.
Figure: FY19 sales by segment

e s
Figure 15: FY19 EBIT by segment
e s
Figure 16: FY19 Sales per geography
e s
11% 2%
24% 23%
25%
Netherlands
FY19 FY19 FY19 Germany

Bikes P&A Bikes P&A
EUR 1,111m EUR 74m EUR 1,111m Other Europe
Other countries
76%
89% 50%
Source: Accell Group Source: Accell Group Source: Accell Group
Figure 17: FY19 Accell sales per bike type Figure 18: Historical sales per segment (EURm) Figure 19: Forecast sales per region (EURm)
600
1.200
1.000 500
21%
800 400
Trad Bikes
4% 600
FY19 Cargo
300
EUR 845m
400
E-bikes 200
75% 200
100
0
2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY
0
Bikes P&A FY18 FY19 FY20e FY21e FY22e FY23e FY24e
Central Europe Benelux Other Europe & World
e s e s e s
1) Source: Accell Group 2) Source: Accell, ABN AMRO Equity Research 2) Source: Accell, ABN AMRO Equity Research
Figure 20: Forecast added value and margin Figure 21: Accell forecast ROIC and WACC Figure 22: Term-loan covenant
600 33% 16.0% 3.5
32% 14.0% 3
500
31% 12.0%
2.5
400
30% 10.0%
2
300 29% 8.0%
1.5
28% 6.0%
200
1
27% 4.0%
100 0.5
26% 2.0%
0 25% 0.0% 0
FY18 FY19 FY20e FY21e FY22e FY23e FY24e FY16 FY17 FY18 FY19 FY20e FY21e FY22e FY17 FY18 FY19 FY20e FY21e FY22e
Gross profit Gross margin ROIC ROIC WACC Term loan/EBITDA Covenant
p p e s
e s e s
Source: Accell, ABN AMRO Equity Research Source: Accell, ABN AMRO Equity Research Source: Accell, ABN AMRO Equity Research

Division
Traditional bikes E-bikes P&A
Key financials (values for bikes represent bicycle segment total)

As % of sales (FY19) 16% 56% 25%
CAGR FY12-19 (non-LFL) ~6.2% ~ 6.2% 2.8%
EBITDA margin (FY19) not disclosed not disclosed 3.91%
Operating margin (FY19) ~5,4% ~5,4% 3.1%
% of total assets (FY19) 86% 86% 14%
% of total liabilities (19) 78% 78% 22%
Company characteristics
Batavus, Sparta, Lapierre, Batavus. Sparta, Lapierre,
Brands XLC
Haibike, Winora, Raleigh Haibike, Winora
Global player with popular First-mover leading the e-bike Second largest P&A company
Company angle
brands segment in Europe in the world
M aintain market share and Increase presence in Europe M aintain position and keep
Company strategy
seize innovation opportunities and maintain leader postion innovation in products
1. Benelux High Very High HIgh
Exposure
2. DACH Very High Very High High

3. Rest of Europe M edium Low to medium M edium
• Large portfolio • One of largest players

• Large product portfolio
Strengths • Quality • Large portfolio
• Reputation
• Innovation • Fast delivery
• Limited innovation
• Production planning issues • Low profitability
• Production planning issues
Weaknesses • High prices • Small amount of premium
• Long supply chain
• Long supply chain products
SWOT
• Reduced innovation in the • Growing number of people

• Increase in bike market
Opportunities segment who use it to commute
• Increased technology
• M ore people looking for bikes • Elderly segment penetration
• Safety issues
• Growth of E-bikes • Standardization of bike parts
Threats • Other electric mobility
• Business seasonality • New online players
alternatives
Industry dynamics
Global market growth 2 4% - 6% CAGR Around 15% CAGR 5% CAGR
Gazelle, Union, Cortina, Gazelle, Van M oof, Stella,

Key competitors Hartje, BBB, AGU, Kruitbosch
Giant, Kalkhoff, Cube, Canyon Giant, Kalkhoff
Competitive rivalry High High M edium

Porter 5 forces
Supplier power Low Low to M edium Low

Buyer power M edium M edium M edium
Threat of substitution M edium M edium Low
Threat of new entry Low Low to M edium M edium

3. Accell Bikes Division
Accell bicycles
Characteristics Sales by segment and geography (FY19)
Company overview
Sales (FY19) % of Group: ~75%
Established brands in the cargo, traditional 21%
Description
and e bike segment. Trad Bikes
Increase sales in largest growth drivers, 4%
Company strategy electric and cargo bikes, and differentiate FY19 Cargo
EUR 845m
from competitors through innovation
Independent dealers and large buying E-bikes
Key customers
groups 75%
Operating margin Around 6-7%
Batavus, Sparta, Raleigh, Koga, Lapierre,

Segment brands 4%
Haibike, Winora, Ghost, Babboe and Carqon
19% 26%
Headcount ~2.610 FTE (Group total) Benelux
FY19 DACH
Strengths Established industry player: strong brand
EUR 845m Other core
Weaknesses Inefficient production planning
SWOT
Velosophy
Opportunities Increasing demand for bicycles

51%
Threats New players in the e-bike segment
Global plants
Heerenveen (NL)
Nottingham (UK)
Tószeg (HUN)
Manisa (TUR)
Dijon (France)
Production plants
Waldassen (GER)
Sennfeld (GER)
Industry dynamics
Bicycle industry Market post-covid CAGR forecast (FY19-24)
Industry characteristics Consolidated 12% 11,4%
Global market size ~EUR 25bn 10%

8,8%
Key competitors Pon, Giant, Cube bicycles, M erida, Dorel 8% 7,5%
Competitive rivalry High

Porter 5 forces
6%
Supplier power Low

4%
Buyer power Low
2%
Threat of substitution M edium
0%
Threat of new entry M edium/Low Benelux Central Europe Other countries

3.1. Market dynamics
Many drivers for bike-market growth The use of bikes continues to rise, both in typical biking countries (the
Netherlands, Germany and the Nordics) and other countries where bike
penetration is substantially lower (mainly Southern and Eastern Europe). This is
due to a number of factors, including urbanisation, adoption of a healthier
lifestyle, the negative association (and cost) of cars and, more recently, the
Covid-19 pandemic.
Urbanization More and more people are moving to cities. Three out of five people across the
world are expected to live in a city by the year 2030. This should lead to an
increase in mobility issues in urbanized areas, resulting in greater problems in
the areas of traffic safety and congestion. Regulation and infrastructure will need
to be designed to respond more effectively to these problems and discourage the
use of cars in metropolitan areas, promoting the use of bicycles.
Adoption of healthier life styles Consumers are becoming more critical and are making more conscious choices.
They attach greater value to a healthy balance of work and free time. They also
want to be fitter and stay fitter for much longer, and use their free time to
exercise and play sports. Consumers nowadays are more concerned that brands,
products and services are a good fit with their personal and social identity.
Healthy, green and socially responsible are even more important factors when
consumers look to meet their needs in terms of mobility, sports and recreation,
with the bicycle becoming a lifestyle item.
Figure 23:Bicycle as a commuting vehicle Figure 24:Increasing traffic jams in urban centres
Bikes are a sustainable alternative to Bikes are increasingly seen as a cheap and healthy alternative to cars and public
cars transport. Traffic jams, a growing interest in environmental issues, rising fuel
prices and high parking costs have all contributed to the rise in biking as a daily
means of transportation. According to a study by research agency SD Worx, the
average commute to work is 29 km in the EU, with close to 80% of the workers in
the study travelling fewer than 40 km to their workplace every day. The average
commuting distance by bicycle is 10 km, while by e-bike the distances can reach
20-25 km. As a result, we argue that, in a large number of these cases, bikes and
e-bikes could be used to commute to work, alleviating car traffic. Moreover, a
scientific study showed that 62% of commuters would switch from their current
mode of transport if they could use an e-bike to get to work.

Figure 25: Types of commute to work in European cities from 2014-2017 Figure 26: Average time lost in traffic in European cities in 2017
120
100
80
60
40
20
Car Foot Bicycle Public transport Not specified
Source: ABN AMRO Equity Research, OECD Source: ABN AMRO Equity Research, European Commission
Fear of public transport due to Bikes were always seen as an alternative to public transport. In a study
Covid-19 commissioned by BOVAG (the Dutch branch organisation focusing on mobility) in
2017, half of public-transport passengers interviewed indicated that they were
looking for alternative means of transport. Of this group, 57% would opt for a
bicycle. Due to the Covid-19 risk associated with public transport, this trend is
accelerating. A recent survey by Capgemini in Germany has shown that the desire
for individual mobility is increasing, with 76% of the public surveyed deeming
public transportation unsafe or very unsafe due to the Covid-19 risk. A bike is a
healthy, socially-distant, low-risk alternative for a significant portion of those
generally using public transport for commuting and other purposes.
Governments encourage use of bikes Governments, provinces, cities and the European commission (Road
Infrastructure Safety Management Directive) are all encouraging the use of bikes
for both commuting and other purposes. The French and Italian government
implemented specific Covid-19-related measures of EUR 20m and EUR 120m,
respectively, to stimulate biking (e-bike subsidies essentially), and the list of
cities that are extending the amount of cycling infrastructure is increasing by the
day.
Figure 27: Bicycle stimuli by Accell’s principal European countries
Netherlands Germany France UK Italy Spain Belgium EU

 EUR 20 m to  EUR 120m
 EUR 20 m to  23 cents per
 Leasing tax  EUR 350 for purchase for
purchase km if cycle
benefits e-bike bikes and conventional
bikes and on business
 Reimbursem purchase; EUR 50 and
EUR 50  Aid of 50% travels  EUR 5
ent of 19 leasing vouchers for electrical
Government vouchers for to purchase  Different billion E-
cents per km schemes repairs bicycles
subsidies repairs bicycles until bike bike
business  EUR 2.500  London  Some cities access
 EUR 1.200 EUR 500 subsidies
travel done for cargo offers up to offer EUR
for the depending
by bike and bike GBP 1000 600 for
purchase of on the
car purchase for an e- cargo bike
a cargo bike region
cargo bike purchase
 Increased
 Investment
bike paths in
in bike
larger cities,  EUR 2.2
 Investment  Investment parking and
Paris – 650 billion for  Increased
in bike in bike cycle paths
City planning  EUR 20m km cycling bike paths in
parking and parking and  Brussels
 EUR 200 m infrastructur larger cities
cycle paths cycle paths turned into
budget to e until 2025
20km/h
fund cycling
zone
projects
Source: ABN AMRO Equity Research, Bloomberg

Changing sales mix driving market There are a number of trends visible in the type of bikes European consumers
growth are using, the key ones being an increase in the use of e-bikes and cargo bikes
and the declining popularity of traditional bikes.
E-bike still gaining popularity This sales-mix change, due to the materially higher average selling price of e-
bikes and cargo bikes, led to the bicycle market returning to growth from around
FY16. Although Figure 28 shows the Dutch market, the trend exemplifies the
situation that has emerged at European level. Figure 29 shows how the e-bike
category has grown in the FY14-FY18 period, and this trend is ongoing.
Figure 28:Bicycles sold in NL per type (units) and market value (EURm)
P
Figure 29: Bicycle EU 28 (‘000 units)
1.600.000 1.400
1.400.000 1.200
1.200.000
1.000
1.000.000
800
800.000
600
600.000
400
400.000
200.000 200
0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
City bikes Hybrids Kid bikes Electric bikes Other Market Value
P P
Source: Bovag, ABN AMRO Equity Research Source: ABN AMRO Equity Research, EURO Bike
Penetration to grow substantially In fact, the same trend is visible in all European countries, meaning that there is
significant growth in the number of e-bikes sold, although some countries are
much further ahead in terms of penetration. In the Netherlands, traditionally a
biking country, e-bikes represent over 40% of sales in terms of units. Germany is
not far behind, while Belgium, due to specific fiscal subsidies, is even further
ahead. Although the lack of bicycle lanes, higher commuting distances and less
familiarity will mean that the penetration levels of the Netherlands and Belgium
(densely populated, extensive bike lanes and road networks coupled with fiscal
stimuli) won’t be achieved near term in countries like Spain, Italy, France and
Portugal, the e-bike category is growing in double digits across the board. E-Bike
expansion in Spain in FY19 was 28% vs. 12% for France and 13% in Italy.
Figure 30: Penetration growth in the Netherlands
Source: Bovag, ABN AMRO Equity Research
New fast growing categories Also, new segments also being created within the e-bike category. As mentioned
earlier, the Accell brand Haibike was the first to create an e-mountain bike,
while e-cargo bikes are also gaining in popularity as people carriers but also in
the logistical sector (parcel delivery, food delivery, inner-city logistics). To
capture this part of the market, Accell is investing substantially in Babboe and
Velosophy (with the Carqon brand), with attractive models (see below).

Figure 31:Babboe bicycle Figure 32:Carqon bicycles
Source: Accell Group Source: Accell Group

3.2. Competition
Figure 33:Accell key statistics vs. main peers
Bicycle manufacturers Parts Manufacturer

Key stats
Country Netherlands Taiwan Taiwan Canada Japan

Fiscal year ending Dec 2019 Dec 2019 Dec 2019 Dec 2019 Dec 2019
Sales 1110 1948 864 811 3000

Gross margin 31% 21% 14% 20% 55%
EBITDA Margin 8% 10% 7% 5% 24%
EBIT Margin 5.4% 7.5% 6.1% 5,8% 19%

NWC as a % of sales 31% 42% 10% 20% 25%
Countries >80 >50 77 >100 >100
Number of bikes sold 900k >6m ~3m ~700k n.a.
Number of brands 12 1 0 3 n.a.
2,500 Revenues (EURm) 12.0%

EBIT margin (%)
2,000 10.0%
1,500 8.0%
6.0%
1,000
4.0%
500
2.0%
0 0.0%
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Giant Accell Merida Dorel Industries Giant Accell Merida Dorel Industries
Source: ABN AMRO Equity Research, Accell Group, Giant, Merida, Dorel
Consolidated market Key competitors in the European bike market are the bicycle division of PON
(Dutch, not listed, part of the PON group), Cube (German, not listed), Giant
(listed in Taiwan), CycleEurope (Swedish, not listed), Decathlon (French, not
listed), Merida (Taiwanese, listed) and Dorel (US, listed). As there is no
independent source (such as GfK or Frost & Sullivan) for market data at European
level, accurate figures in terms of market share are missing, though we assume
that the companies mentioned here have a market share of more than 60%.
Accell to maintain or expand market Our assumption is that Accell’s market share will remain stable or will slightly
share increase as smaller independent competitors don’t have the capacity to continue
to invest in R&D and marketing. With strong brands such as Sparta (medium-high
price bracket), Batavus (mid-priced), Koga (upper premium), Winora (economy
model), Lapierre (premium street racer), Haibike (market leader in regular and
electric mountain bikes) and Babboe and Carqon in the cargo bike market, Accell
has robust positions in all key segments.

Figure 34:European bicycle market overview (bars represent unit sales in millions)
5.000
4.500
4.000 FY14
3.500 FY19
3.000
2.500
2.000
1.500
1.000
500
0
E-bike as % of 11.4%
41.4% 31.6% 50.7% 38.9% 36.6% 14.6% 11.8% 3.8% 13.7%
new BIKES (FY19)
Specialized IBDs, lar ge Lar ge outlets Specialized
Distribution Mostly IBD and Mostly IBD and Mostly IBD and Mostly IBD dealer s and Big r etailer s,
outlets and ,specialized dealer s, IBDs
channels online online online and online online online
IBDs, online
online dealer s
City bikes, e- Mountain and E- City bikes, e- City e-bikes City bikes, Spor ty bikes, Spor t bikes,
City bikes, e- Road bikes, City bikes, e-
Market profile bikes and and tr ekking cycling bikes cycling bikes, cycling bikes,
MTB, City bikes bikes and bikes and MTB city bikes and bikes and
car go bikes and car go bikes car go bikes bikes and low er cost low er cost spor ty e-
cycling bikes car go bikes
bikes bikes bikes
Average bike Ar ound EUR

EUR 1.243 EUR 981 EUR 1559 EUR 1585 EUR 3188 EUR 566 EUR 523 EUR 654 EUR 1764
price 346
Largest
competitors
Some successful new but small There have been relatively successful new market entrants, such as Stromer
market entrants (Swiss), Move Bikes (Germany), Orbea (Spain), Easybike and Moustache Bikes
(France) and Van Moof, Qwic and Stella (all in the Netherlands). The common
theme with these new entrants is the use of the internet as both a source of
information, a marketing tool and prime distribution channel, much like Canyon
in the street racing-bike segment.
Some of the companies mentioned have been taken over by private equity funds
(Stella) or have received a cash injection (Van Moof), meaning that there is
additional cash available to improve distribution and marketing. This mean that,
even though their sales volume is still modest, their market shares are set to
grow. That said, we don’t think these companies will have a meaningful impact
on the market share of Accell in the near and medium term as they lack the
capital to invest in assembly/production and R&D.

Figure 35: Overview of brands active in the Netherlands (light-blue circle represents pedal assist, dark-blue circle throttle and green speed pedelec)
EUR / bike
10.000
9.000
8.000
7.000
6.000
5.000
4.000
3.000
2.000
1.000
0
200 300 400 500 600 700 800 900 1.000 1.100 Wh
Battery capacity
3.3. Other trends

Bike leasing gaining popularity With the publication of the 2019 tax bill in the Netherlands came more clarity on
the use of bicycles made available by employers. The pro-sustainability fiscal
measures include a proposal which determines the value of the private use of an
employer-provided bicycle supported by a flat rate. From January 1, 2020 the
addition of 7% of the original new value of the bicycle is proposed. This will
simplify the taxing of bicycles made available by employers, which will therefore
become more attractive to employees. The leasing companies, such as
LeasePlan, also offer bicycle configuration, delivery to work/home/shop, service
and maintenance (national network), damage and theft insurance, roadside
assistance and replacement transport, which makes it attractive to customers as
they don’t have to pay for an after-work service themselves. In theory, this
should also motivate even more people to use a higher priced bike. Similar but
even more advantageous fiscal measures are in place in Belgium.
Automotive companies entering the In other European countries, car dealerships are also engaged in bicycle selling
bike space and leasing activities. While, in the Netherlands, this has always been a quite a
sensitive concept, the past three years have seen multiple partnerships between
auto retailers and bicycle manufacturers, mainly in the bike leasing, as seen in
the graph below. There are some examples also of Friesland Lease cooperating
with Cortina through LeaseFiets. According to LeaseFiets, most private-lease
contracts are for a 36-month duration. LeasePlan is teaming up with
Fietsenwinkel to create service-lease offering to be rolled out under the
'Hellorider' label, and the plan is to acquire about 20% of the business e-bike
bicycle market next year, or 30,000 e-bikes. Some online brands, such as Van
Moof and Stella, are also rolling out their own bike-leasing concepts.

Figure 36:Car companies entering the bicycle-leasing market
Car retailers Car leasing companies
2020
Co-operation
Investment
2019
Co-operation Part of IBG Group

2019
2019
Co-operation
Investment
2019
2019
Co-operation
Rise of bike sharing schemes Bike-sharing schemes, which usually involve low-quality bikes sourced from Asia,
are globally gaining in popularity rapidly and serve millions of people, mainly in
Europe, Asia and North America. Several companies (such as Mobike, Nextbike
and Donkey Republic) offer bicycles in countries on multiple continents. oBike
and OfO, two well-known former international bike-sharing businesses, went
bankrupt, which shows how difficult it is to be profitable in this segment. Local
bike-sharing operators in cities such as Beijing, Shanghai, New York, Paris,
London and Barcelona appear to be more successful. However, these operations
are often (partially) funded by local municipalities to relieve public transport
and reduce carbon emissions. Lately P2P bike-sharing services (AirBnb-type bike
renting) as Spinlister and Listnride have joined the scene. Overall, the global
bike-sharing industry generates annual revenue of around EUR 5bn operating
around 30 million bikes.
May be a threat to Accell in the In the Netherlands, Accell’s most important market, there are two major bike-
medium term sharing providers, OV-fiets and Donkey Republic. There are several other bike-
sharing services across the country, most of them local companies, and a few
some large, international players, such as Mobike. At present, there’s no threat
to Accell’s market share from most of these services (which use low-quality
bikes), as prices per month are still high and more suitable for short-term usage.
Swapfiets (owned by PON) has also introduced an on-line app-based subscription

platform to the Dutch market. This company has grown considerably, mainly in
large cities with a large student base, and while it is currently making substantial
losses, the concept is an interesting one set to expand and mature into a
completely new part of the bicycle market. As such, we see it as a medium-term
threat unless Accell associates itself with similar initiatives.
Figure 37:Bike-sharing schemes active in the Netherlands

Donkey Republic Mobike Flick bike Go About HTM Fiets Keobike OV fiets Swapfiets
Bike sharing Bike sharing Bike sharing Bike sharing Bike sharing
Type of service P2P bike sharing P2P bike sharing Bike leasing
service service service service service; rental
No. countries 13 19 4 1 2 1 1 4
No. Bikes in NL 2.000 unknown 1.000 600 500 550 20.000 +100k
Pay per day EUR 13 EUR 12 EUR 48 EUR 20 EUR 5 EUR 3 EUR 3.85 n.a.
Pay per month EUR 35 EUR 12 EUR 16 EUR 22.40 EUR 16 EUR 24 EUR 30.8 16.5/19.5/75
Bike supplier unknow Foxconn unknown unknown Accell Felua group Accell Pon

3.4. Distribution
Dealers and buying groups key The distribution of bikes in the European market is still handled by retailers or
distribution partners dealers, varying from small independent ‘mom-and-pop’ stores to companies
with multiple shops in a specific region or even operating at national level.
Buying groups representing either independent dealers or branded franchise
organisations are also a key distribution tool, representing some 30-40% of sales
(higher in the Netherlands, lower in the other regions). The latter includes
companies like ZEG (representing 960 independent retailers), Dynamo Retail
Group (representing 830 retailers and franchise organisations, such as Profile and
BikeTotaal), Bike & Co (over 700 retailers), Halfords (over 700 stores) and
Independent Bike Group. On-line sales are currently still modest for the industry
as a whole (<5% ABNe), but are obviously growing. This growth is hampered
somewhat by some reluctance among retailers and dealers who fear they will
lose sales and margin to OEM on-line activities.
Accell cautiously rolling out ‘Click Nonetheless, OEMs such as Accell are starting to increase orders through the
and Collect’ and similar models ‘Click and Collect’ model, where consumers order their bike on-line and have
the option to either pick it up at a nearby specialized retailer or have it delivered
by the retailer to their home. We assume this cautious approach on the part of
Accell mutually supports both parties. The benefit to the OEM is a better margin
and direct contact with the end consumer, and the benefit to the retailer is the
ability to sell parts and accessories and gain customers that need will
maintenance and other services.
As part of our due diligence, we visited over 20 local bike shops in the
Netherlands and learned that the average bike shop serves consumers within a
500m to 1km radius in a city centre and up to 5km in city outskirts or smaller
villages. The dealers/retailers indicated that they see an increase the number of
new customers that visit their store as a result of ‘Click and Collect’ while the
existing client base remains loyal as most shops offer discounts on post-purchase
services and repairs, increasing customer retention. This evidence is anecdotal,
but still positive.
Optimal distribution in on-line still to Competitors such as Gazelle and Cube bicycles are starting to roll out their own
be decided shops and use experience centres where they can sell bicycles directly to
consumers. Gazelle has five such centres in the Netherlands, while Cube has
close to 40 in Germany and Austria. Although this may make it look as though the
competition is slightly ahead of the curve relative to Accell (which only has 1
experience centre) the jury is still out on the benefits of investing in such
centres, due to a high fixed-cost base, vs. the delta in terms of volume (if any).

4. Accell Parts & Accessories division
Accell Parts & Accessories

Characteristics Sales by region (FY19)
Company overview
Sales (FY19) EUR 265.5m, ~24% of group sales
4% Netherlands
Distribution of bike parts and accessories
Description with a total product range of over 85,000 Germany
articles, covering all price categories 33% 39%
FY19
EUR 237m Other
Europe
Company strategy Increase offering while improving margins
Other
24%
countries
Retailers, big buying groups and online
Key customers
players
Parts: Wheels, pedals, handles, lights, bells 267 263
249
266
End product examples Accessories: Helmets, shoes, clothing, 237
locks, pumps and more 198

183
193
Headcount ~2.610 FTE (Group total)

Strengths Extensive number of products
Weaknesses Large number of suppliers
SWOT
201 2 201 3 201 4 201 5 201 6 201 7 201 8 201 9
Opportunities Growth in the bicycle market Parts & accessories
Threats Brands with own parts and accessories

European distribution sites
Turku (FIN)
Varberg (SWE)
Odense (DEN)
Nottingham (UK)
Distribution sites
Apeldoorn (NL)
Sennfeld (GER)
San Sebastian (Spain)
Industry dynamics
Parts & accessories P&A pr o ducers in Eur ope
Italy
Industry characteristics Consolidated
5% Romania
European market size ~EUR 10bn 5%
6%
28% Germany
Key competitors Hartje, BBB, AGU, Kruitbosch
8% France
Competitive rivalry M edium
Porter 5 forces
Hungary
Supplier power Higher
14% Portugal
Buyer power M edium 17%
17% Czech
Threat of substitution Low Republic
Netherlands
Threat of new entry M edium

Top 2 player in Europe Accell is one of the largest players in the European P&A market, only surpassed
by Hartje in terms of sales, according to the company. It operates an
international private label, XLC, with products sourced from multiple suppliers,
offering more than 85,000 items to a diverse customer base, including on-line
and off-line players. The P&A segment is responsible for more than 23% of the
company’s sales.
Figure 38:Accell comparison with main competitors in Benelux and Central Europe
Source: ABN AMRO Equity Research, Accell Group, Hartje, BBB, AGU, Kruitbosch
M&A in the FY12-FY19 period has resulted in a consolidated industry although

Accell mainly grew organically, as the picture below shows.
Figure 39:Consolidation in the bicycle P&A market

Growth rates to remain high The P&A division posted revenue growth of 27% in 1H20, driven mainly by Covid-
19, although Accell also indicated that it had also gained new on-line customers.
Given that bike sales are up, and that the installed base is therefore increasing
as average usage per bike is probably also rising, we expect growth to continue,
though not at the 1H level.
Digitization results in higher ASP Consumers are demanding more and more digital products, smart solutions that
enable digital networking and navigation, to complement their bikes. Innovations
in bicycle parts include helmets that navigate for cyclists via a smartphone app,
or allow them to speak in a cycling group via an integrated Bluetooth intercom,
among many others. Although more of a medium-term driver, we do expect an
increase in the price of bike accessories, which will further drive performance
for the P&A division.
Extensive distribution network The company has more than 10 strategic distributors in various geographies,
creating an extensive network that only competitors such as Hartje can match.
Accell has been developing its network over the years, acquiring Comet S.L.,
market leader in the Spanish bicycle parts and accessories segment, in FY14, and
Vartex in Sweden in FY11. It now also has strategic distribution units in Germany,
Denmark and Finland.
Less seasonality than the Bike Sales of parts and accessories exhibit a flatter pattern when compared with
segment bicycles, but statistics show that there is also a higher seasonal peak in spring
and summer affected by weather, combined with various country-based
differences. On the other hand, as stated, the bicycle industry has a fixed
seasonal pattern that is mostly determined by seasons and weather variations.
The P&A segment acts as something of a hedge for Accell in the second half of
the year, providing a stable source of revenues all year long.
Supplier rationalization underway The segment sells a large number of parts and accessories, ranging from helmets
and clothing to wheel hubs and chains. The large quantity of suppliers and
resulting complexities will likely to hamper the company. By limiting the number
of suppliers and thus increasing per-supplier volume per suppliers, better
procurement terms should be feasible, driving added value.
Operational leverage driving margins Although the contribution to profit from P&A is lower than that of the bikes
division (3.1% in FY19 vs. 7.4% for bikes), margins are improving due to
operational leverage. EBIT margin in 1H20 amounted to 4.6% vs. 2.8% in 1H19. As
we expect further robust growth (volume and ASP), we forecast that margin will
improve further. We assume that the company will be able to increase EBIT
margin to around 5.5% in the forecast period on account of its substantial market
presence and distribution network and operational leverage impact on higher
volume.
Extensive distribution and a wide Accell’s main P&A competitors in the Benelux countries are BBB, AGU and
product range compared to Kruitbosch. Kruitbosch and Hartje could be considered more as distributors of
competition bike parts from well-known brands, while XLC, BBB and AGU distribute and sell
their own private labels. AGU is stronger on the clothing and accessories sub-
segments as it supplies the Jumbo-Visma cycling team. The closest competitor
to XLC is BBB, Pon’s P&A brand. Both source components from branded suppliers,
rebranding them using their proprietary label. BBB also has extensive
international reach, with strong specialised technological products, such as Nano
and DashBoards, where bikers can view their travel statistics, while XLC’s array
of products is wider.


5. Our forecasts
5.1. Profit and loss account
Figure 40: Accell forecasted P&L

FY18a 1H19a 2H19a FY19a 1H20a 2H20e FY20e FY21e FY22e FY23e FY24e
Revenues 1,094.3 682.6 428.4 1,111.0 676.9 493.9 1,170.8 1,277.3 1,382.0 1,470.6 1,561.2
COGS -769.8 -471.3 -298.2 -769.5 -490.0 -357.5 -847.5 -873.8 -938.4 -998.6 -1,055.7
Gross margin 324.5 211.3 130.2 341.5 186.9 136.4 323.3 403.5 443.5 472.0 505.5
Gross margin (%) 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
SG&A -556.3 -566.2 -531.3 -506.3 -127.9 -123.3 -251.2 -289.2 -308.8 -327.0 -347.2
EBITDA 46.4 58.4 30.0 88.4 59.0 13.1 72.1 114.3 134.8 145.0 158.3
EBITDA margin (%) 0.0 0.1 0.1 0.1 0.1 0.0 0.1 0.1 0.1 0.1 0.1
D&A 12.3 11.4 14.8 26.2 13.1 12.3 25.5 23.7 23.8 24.0 26.7
EBIT 33.0 46.5 13.4 60.0 45.1 0.7 46.6 90.6 111.0 121.0 131.6
EBIT margin (%) 3.0% 6.8% 3.1% 5.4% 6.7% 0.1% 3.9% 7.1% 8.0% 8.2% 8.4%
Adj. EBIT 34.0 46.5 8.4 54.9 47.5 0.3 47.8 91.9 112.4 122.5 133.2
Adj. EBIT margin (%) 3.1% 6.8% 2.0% 4.9% 7.0% 0.1% 3.9% 7.1% 8.0% 8.2% 8.4%
Net financial expense 2.9 -4.0 -4.9 -8.9 -6.0 -5.9 -11.9 -9.7 -7.9 -7.2 -6.8
Pre-tax profit 35.9 42.5 8.6 51.1 39.1 -5.2 33.9 80.9 103.1 113.8 124.8
Income tax -15.6 -12.8 21.0 8.2 -10.5 1.4 -9.1 -21.7 -27.6 -30.5 -33.4
Income tax (%) -0.4 -0.3 2.5 0.2 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3
Net profit 20.3 29.7 29.6 59.3 28.6 -3.8 24.8 59.2 75.5 83.3 91.4
EPS
Basic 1.0 -0.2 0.8 1.1 1.1 -0.1 0.9 2.2 2.8 3.1 3.4
Diluted 1.0 -0.2 0.8 1.1 1.1 -0.1 0.9 2.2 2.8 3.1 3.4
We pencil in FY20-24 sales CAGR of 7%, and EBIT CAGR of 17%, underscoring both
the growth in the market and Accell’s strong position therein, as well as
operational leverage and the effects of other margin-enhancing measures such
as ‘Fit to Compete’). In this chapter, we highlight the key assumptions
underpinning our estimates.
Figure 41: Revenue forecast (EURm) per category

p
Figure 42: Forecast development of EBIT margin (%)
1.800 140 9%
1.600 120 8%
1.400
100 7%
1.200
80 6%
1.000
800 60 5%
600 40 4%
400 20 3%
200
0 2%
0 2015 2016 2017 2018 2019 2020e 2021e 2022e 2023e 2024e
2018 FY 2019 FY 2020 FY 2021e 2022e 2023e 2024e FY FY FY FY FY
Central Europe Benelux Other countries Velosophy P&A EBIT EBIT EBIT margin EBIT margin (%)
Revenues  Benelux: Accell has a strong market position in this key market. We expect it
2%
to be able to boost sales in mid-single digits as e-bikes (helped by awards for
23% Sparta M8B and Batavus Finex) and cargo bikes (Carqon) increase their
25%
penetration. Growth in Belgium is expected to be somewhat lower as fiscal
measures have already resulted in e-bikes having the highest penetration in
FY19
EUR 1,111m Europe, although Covid-19 will also have a positive effect in this market.
 Central: In Germany, we expect strong, high-single-digit growth as

penetration hasn’t reached the peak seen for e-bike sales, 32% of new-bike
50%
sales, while the Netherlands and Belgium are more mature in the e-bike
Netherlands segment. We also assume that the new models that have been introduced
Germany (which were delayed in FY19) will positively impact sales, to include the
Other Europe
Other countries
Haibike Flyon.

 For Austria and Switzerland we expect similar growth with an even stronger
impact on sales (and sales mix) from the mountain bike segment. This positive
view has been underlined by Accell’s statement that the order book for model
year FY21 ‘looks promising’.
 Other: We also forecast significant growth for the “Other” region, which
includes the UK, France, Spain, Italy and the Nordic countries (Sweden,
Denmark, Finland, Norway). This expansion is driven by further penetration
of bikes in the more southern countries and continued growth in the
penetration of e-bikes elsewhere. The key driver for e-bike growth in these
countries is the government’s investment in cycling infrastructure and an
increased awareness of the sustainability and health benefits of commuting
by bicycle.
Blended Average Selling Price (EUR)  Traditional bikes: With 16% of FY19 sales, this division will record the slowest
1800
growth, mainly due to the change in consumer demand and Accell’s increased
1600
1400
focus on the electric and Cargo Bike segments.
1200
1000
 E-bikes: As the picture on the left shows, we assume that the proportion of
800 sales from e-bikes will continue to increase, as penetration in new age groups
600 (25-55 year olds) in more mature countries accelerates and that of traditional
400
2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY age groups (55+) increases in less mature countries. Government incentives,
Benelux Central Europe Other countries
subsidies and investments in bike lanes, as well as the rise of private leasing,
represent additional drivers for the expected growth in e-bikes.
 Velosophy: We anticipate that Accell’s cargo segment will fare very well in
the near, medium and even longer term. Cargo-bike popularity is driven by
the same trends as that of e-bikes (urbanisation, lifestyle, sustainability,
reluctance to use public transport for health reasons), though the B2B and
B2C segment is also set to grow substantially due to the rise of last-mile
delivery for parcels and food. Accell launched a further cargo brand, CarQon
in FY20, its response to Pon’s Urban Arrow, and so far it appears to be doing
well, supported by innovation, quality and pricing. These bikes are mostly
sold on-line at present, but we anticipate turnover will increase as they start
to be sold through retailers and as customers become more aware of the
brand.
 P&A: Parts and Accessories represent around 27% of the company’s sales,
though have lower margins than bicycles. We forecast this segment’s turnover
will see a CAGR of 8.1% in the FY19 to FY24 period, driven by growth in the
installed base, increased usage and modest market share gains (from smaller
competitors).
Added value  Accell sources most components and some parts (with frames representing
the highest percentage in terms of bill of materials) from Asia, while most
33,0%
bike parts from Eastern Europe. The company has three major factories in
32,0%
Turkey, Hungary and the Netherlands, as well as three smaller locations. We
31,0%
assume that two of these smaller locations will eventually be closed, with
30,0%
29,0%
volumes moving to the larger entities, driving added value in FY21 and
28,0%
particularly FY22. In FY20, the added value will decline materially (from 30.7%
27,0% in FY19 to 27.9% in FY20, ABNe) due to sales mix (delays affecting high-margin
26,0% models), higher discounts in 1H (due to Covid-19), disruptions in the supply
2017 FY 2018 FY 2019 FY 2020e 2021e 2022e 2023e 2024e
Added value (%) Added value (%)

chain (materially higher inbound and outbound logistical costs) and lower
utilisation levels.
 However, as the outlook for FY21 is very positive, and we assume that
incidental discounting and supply disruptions won’t have much of an impact
(if any), we forecast solid added-value growth in FY21 and thereafter, also
supported by standardisation, reduction in SKUs and improved planning and
production.
 The increase of the ‘Click and Collect’ and the Go Live model (to be
introduced in the Netherlands in FY21) will also contribute to the added-value
improvement as dealers become less involved in bike sales.

EBIT
Bike sales and EBIT margin  Bike segment EBIT: The Bike segment’s operating profit (after holding cost
1,200 10%
9% allocations) has been pretty volatile in recent years, fluctuating from 8.1% in
1,000 8%
7%
FY15 to 6.1% in FY18. FY20 will still be impacted by the issues mentioned in
800
600
6%
5%
the added-value segment, offset by some cost savings at SG&A level, including
400
4%
3%
reduced outbound logistical costs. As a result, we forecast an EBIT margin of
200 2% 4.1%. However, as added value is set to improve in FY21-FY23 (‘Fit to
1%
0 0% Compete’) and Accell benefits from the centralisation of procurement,
FY15a FY16a FY17a FY18a FY19a FY20e FY21e FY22e FY23e FY24e
Sales EBIT margin (%)

marketing and other functions (also ‘Fit to Compete’), offset by increased
Source: ABN AMRO Equity Research advertising/promotion for regional brands (Haibike France, Lapierre Benelux
rolled out in new regions over the Accell platform), EBIT margins are expected
to improve to 9% in FY22, slightly increasing to 9.3% in FY24.
P&A sales and EBIT margin
450 7%  P&A segment EBIT: The P&A segment has a high fixed-cost base (warehouses,
400
350
6% procurement staff) so operational leverage can be substantial if volume
300
5%
increases, as seen in 1H20 (EBIT margin of 4.5% vs. 2.9% a year earlier). As we
250 4%
200 3%
assume further volume growth as the installed base of bikes in Europe
150
100
2% expands, as well as usage increases and Accell maintaining or modestly
50 1%
increasing market share, we forecast an improvement in EBIT margin to 5.2%
0 0%
FY15a FY16a FY17a FY18a FY19a FY20e FY21e FY22e FY23e FY24e in FY22, progressively rising to 5.5% in FY24.
Sales (incl internal) EBIT margin (%)
Source: ABN AMRO estimates  Based on our divisional forecasts, we assume a material improvement in EBIT
margin for the company as a whole in FY21 (no disruption costs of EUR 14m),
with Accell achieving its FY22 target of at least 8%, assuming no additional
Covid-19 flare ups.
D&A  Capex will be lower than usual in FY20, but is expected to trend back to the
FY19 level in FY21. Although we expect a production-footprint adjustment
(closure of three small locations), which should result in lower capex and,
therefore, depreciation (management has indicated that it can boost volume
by at least 30% from its larger production base), for now we assume stable
depreciation and amortisation to FY23. In FY23/24, we expect an increase of
capex to EUR 20m on capacity expansion, leading to higher D&A charges after
FY24.
Financing costs  The use of the extended seasonal working capital RCF as well as the Go-C
facility (EUR 60m) and the negative interest on the company’s cash balances
are expected to result in higher interest expense and financing fees.
Taxes  Accell guides for an effective tax rate of 26% going forward, which is what
we have included in our model.

5.2. Balance sheet

Figure 43: Accell forecasted balance sheet
FY17a FY18a FY19a 1H20a 2H20e FY20e FY21e FY22e FY23e FY24e
Intangible fixed assets 41.8 56.4 49.8 46.6 46.7 46.7 46.6 46.6 46.7 46.8
Goodwill 57.1 82.3 82.8 82.8 82.8 82.8 82.8 82.8 82.8 82.8
Net tangible fixed assets 69.4 66.5 64.4 65.0 64.9 64.9 64.8 65.8 71.5 76.0
Right of use assets 0.0 0.0 29.8 30.2 30.2 30.2 30.2 30.2 30.2 32.8
Financial fixed assets 2.8 3.2 4.4 3.6 3.6 3.6 3.6 3.6 3.6 3.6
Deferred tax assets 3.4 2.7 25.8 24.8 24.8 24.8 24.8 24.8 24.8 24.8
Net defined benefit assets 15.0 19.6 22.4 23.2 23.2 23.2 23.2 23.2 23.2 23.2
Inventories 333.6 340.0 386.8 317.7 400.1 400.1 408.7 425.4 446.7 467.8
Trade debtors 127.1 128.3 140.7 197.1 138.3 138.3 150.9 162.2 171.4 182.0
Other debtors 22.7 30.7 35.2 25.4 25.4 25.4 25.4 25.4 25.4 25.4
Cash & securities 24.1 26.7 11.5 284.6 196.5 196.5 195.6 195.5 247.3 304.5
Other non-current assets 8.3 5.4 5.5 5.8 5.8 5.8 5.8 5.8 5.8 5.8
Assets held for sale 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Assets 705.3 761.9 859.2 1,106.6 1,042.1 1,042.1 1,062.3 1,091.3 1,179.2 1,275.4
Shareholder's equity 299.3 322.4 323.2 351.0 347.2 347.2 406.4 481.9 556.7 639.6
Provisions 8.6 10.7 11.0 12.9 11.0 11.0 11.0 11.0 11.0 11.0
Pension liabilities provisions 8.5 8.3 8.7 8.6 8.6 8.6 8.6 8.6 8.6 8.6
Deferred tax liability 11.8 18.9 16.8 16.2 16.2 16.2 16.2 16.2 16.2 16.2
Long-term interest bearing
100.5 100.2 97.3 206.7 206.7 206.7 156.7 156.7 156.7 156.7
debt
Short-term interest bearing
84.6 78.3 179.5 231.7 171.7 171.7 171.7 111.7 111.7 111.7
debt
Trade creditors 146.7 180.4 168.0 178.7 179.8 179.8 190.7 204.2 217.3 230.7
Other non-current liabilities 1.2 3.9 1.2 1.4 1.4 1.4 1.4 1.4 1.4 1.4
Other current liabilities 44.0 38.8 53.4 99.6 99.6 99.6 99.6 99.6 99.6 99.6
Total Liabilities & Capital 705.3 761.9 859.2 1,106.6 1,042.1 1,042.1 1,062.3 1,091.3 1,179.2 1,275.4
Goodwill  Given our forecast for Accell in terms of top-line growth and margin
expansion, and our assumption that the company will not opt for medium-
sized or large M&A, goodwill is assumed to be stable.
Working capital  Although all components of working capital are important, the largest for
Accell is inventory, which consists of finished bicycles and bike parts and
components to be produced. In the past, issues with sub-optimal planning, a
too-large model range and too many SKUs led to high inventory both during
the year and at year-end, which required not only financing but also discounts
to free up cash to finance working capital for the following season.
 Since FY15, Accell has had a Chief Supply Chain Officer focused on, among
other things, reducing inventory, although issues in FY19 (delayed delivery of
the newest Haibike models) and FY20 (Covid-19) have held back
improvements.
 We assume that standardisation (‘on track’ according to Accell), further
reductions in SKUs and increased use of frame groups will lead to
improvements in FY21 and beyond. But we also recognize that a broad
portfolio of products is key to maintaining solid relationships with customers,
dealers and buyers. We estimate that improvements will level off with
inventory days of 161, closer to the average of FY16-FY18, which is still a
major improvement vs. this year and last.
NWC as % sales  Accounts receivable: We assume that Accell’s bargaining power relative to
33%
32%
dealers and buying groups, as well as growth in P&A (which we assume has
31%
31%
much lower than average day sales outstanding) will result in a DSO decline.
29%
29%  Accounts payable: Accell’s performance fluctuates, with DPO varying from 70
27% 28%
27%
27% in FY17 to 86 in FY18. As we assume supplier rationalisation (a component of
25%
our forecast added-value improvement), it’s likely that remaining suppliers,
23%
who we assume to be relatively larger than the supplier group prior the
21%
FY 19a FY20e FY21e FY22e FY23e FY24e
rationalisation, will demand shorter payment terms. We therefore assume
Source: ABN AMRO Equity research that DPO will decline slightly to 79 going forward.
 We expect net working capital as a percentage of sales to improve from 33%
this year to 27% in FY23, which we see as solid improvement. However, this
is still short of the 25% targeted by the company.

Leverage and liquidity  As a precautionary measure, Accell has obtained a two-year loan facility of
EUR 115m which has been guaranteed by the Dutch government (under the
“GO-C” programme). The company has indicated that it will draw EUR 60m
on this facility in 2H, with the remainder as yet unallocated.
 The company has also drawn EUR 50m on its Term Loan Accordion facility
(total EUR 125m) and has extended B revolving facility B for seasonal working
capital from July to December 2020. As a result, gross cash balances
amounted to EUR 297m for 1H20, with the company keen to be prepared for
the possible effects of Covid-19 flare-ups.
 The company’s bank consortium has also agreed to amend its financial
covenants, giving Accell more flexibility on term-loan leverage (4.6x to 3Q21
and 3.1x at year-end FY21) as well as solvency (15% at 2Q20, increasing to
18.6% at year-end FY21). Based on our calculation, assuming no Covid-19
flare-ups and significant working capital outflows in 2H20, Accell will remain
well within its debt covenants for the remainder of FY20 as well as in FY21.
 For a detailed overview of our forecasts and how Accell stacks up vs. these
covenants, please see Appendix 1.

5.3. Cashflow
Figure 44: Accell forecasted cash-flow statement

FY17a FY18a FY19a 1H20a 2H20e FY20e FY21e FY22e FY23e FY24e
EBIT 38.0 33.0 60.0 45.1 0.7 46.6 90.6 111.0 121.0 131.6
D&A 11.1 12.3 26.2 13.1 12.3 25.5 23.7 23.8 24.0 26.7
Change in w/c -10.3 19.4 -70.5 66.9 -22.5 44.5 -10.3 -14.6 -17.3 -18.3
Change in provisions -0.9 2.8 -1.2 3.4 -1.8 1.5 0.0 0.0 0.0 0.0
Other cash flow -0.1 -0.6 0.0 0.5 0.0 0.5 0.0 0.0 0.0 0.0
Net investments -12.5 -9.2 -13.5 -5.7 -6.9 -12.6 -13.4 -14.5 -19.5 -20.8
Gross operating FCF 25.3 57.7 1.0 123.4 -18.2 105.2 90.7 105.7 108.1 119.2
Cash taxes -23.4 -16.3 -13.2 -2.8 1.4 -1.4 -21.7 -27.6 -30.5 -33.4
Net operating FCF 1.9 41.5 -12.2 120.6 -16.8 103.8 69.0 78.1 77.6 85.8
Net financials -6.8 -8.0 -7.5 -4.8 -5.9 -10.7 -9.7 -7.9 -7.2 -6.8
Lease repayments 0.0 0.0 -10.4 -5.3 -5.5 -10.7 -10.2 -10.2 -10.2 -13.2
Dividend -6.7 -7.4 -8.5 0.0 0.0 0.0 0.0 0.0 -8.5 -8.5
Servicing of finance -13.5 -15.3 -26.4 -10.0 -11.4 -21.4 -19.9 -18.1 -25.9 -28.6
Acquisitions/divestments 0.0 -17.6 -44.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Change in debts 30.6 7.7 53.7 186.7 -60.0 126.7 -50.0 -60.0 0.0 0.0
Change in equity 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Change in cash balance 18.9 16.2 -28.9 297.3 -88.2 209.2 -0.9 0.0 51.7 57.2
Capex  In the last five years, capex has represented between 0.7% and 1.1% of sales,
relating primarily to maintaining and upgrading the production footprint. We
assume Accell is cautious on the capex front in FY20 for obvious reasons, and
that it will revert to normal levels thereafter (essentially maintenance capex,
about 1% of sales). As stated earlier, a production-footprint reduction is
expected, which could result in lower capex requirements, at least in the
near term. In FY23, we assume the start of a production-capacity expansion
program (with a total investment EUR 10m), explaining the capex increase in
FY23 and FY24. This investment will enable Accell to continue to grow in mid-
single digits, a conservative level since bike assembly is not a capital-intensive
operation. In other words, FCF may turn out to be better than expected.
 Accell has invested substantially in a new ERP application (pilot in the
Netherlands in FY19) which will be followed by a roll-out to other geographies
in FY20-FY21. Its CRM capabilities will also manage customer demand,
required for a better design/planning and production process. This explains
the company’s relatively high overall capex in FY19-FY21. Additional
investments in software will follow due to the centralization of certain
functions.
Working capital  The unusual working capital and cash flow pattern in 1H20, with inventory
already lower than usual in 3Q, means there will very likely be a substantial
cash outflow – rather than an inflow – in 2H, However, for FY20 as a whole,
we still assume a net inflow. In the years thereafter, we revert to normal
seasonality and working-capital patterns with NWC as a percentage of sales
trending down, as explained in the Balance Sheet section.
FCF  Due to a robust EBIT performance, improvements in NWC and relatively stable
capex (up to FY23), FCF is set to be more than healthy. We forecast EUR 105m
in FY20 and very healthy level in FY21-FY24, though lower than in FY20 due
to increasing capex and negative working capital outflows occasioned by
strong top-line growth.
Change in debt  We assume that Accell will retain a relatively high level of liquidity as Covid-
19 flare ups are still a risk. This explains why we do not assume repayment of
the accordion component of the Term Loan (EUR 50m) or repayment of the
EUR 60m GO-C programme loan in FY20. We assume repayment of the
accordion in FY21 and repayment of the GO-C in June of FY22. This also means
no dividend can be paid by over FY21.

6. Valuation
6.1. DCF model shows upside
Figure 45:Discounted cash flow model
Sum PVs
2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E post
2029
Sales 1,170.8 1,277.3 1,382.0 1,470.6 1,561.2 1,657.2 1,746.0 1,835.9 1,930.3 2,017.7
Organic growth 5.4% 9.1% 8.2% 6.4% 6.2% 6.2% 5.4% 5.2% 5.1% 4.5%
EBIT 45.9 90.6 111.0 121.0 131.6 138.3 143.9 151.0 156.3 161.7
EBIT margin (%) 3.9% 7.1% 8.0% 8.2% 8.4% 8.3% 8.2% 8.2% 8.1% 8.0%
Tax on EBIT -11.5 -22.7 -27.7 -30.2 -32.9 -34.6 -36.0 -37.7 -39.1 -40.4
NOPLAT 34.4 68.0 83.2 90.7 98.7 103.7 107.9 113.2 117.2 121.3
D&A 25.5 23.7 23.8 24.0 26.7 27.8 28.3 29.0 29.9 30.8
Change working capital 44.5 -10.3 -14.6 -17.3 -18.3 -25.8 -24.0 -24.3 -25.4 -23.9
Change in provisions 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Capex -12.6 -13.4 -14.5 -19.5 -20.8 -15.8 -16.7 -17.5 -18.4 -19.3
Acquisitions/Divestments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Lease payments -10.7 -10.2 -10.2 -10.2 -13.2 -13.4 -13.9 -14.6 -15.3 -15.8
FCF 81.5 57.8 67.7 67.7 73.1 76.5 81.7 85.8 87.9 93.2
Present value of FCF 75.3 49.3 53.3 49.2 49.0 47.4 46.7 45.3 42.8 41.9 439.0
Enterprise value 939.2
-/- Net debt 235.1
-/- Minorities (MV) 0.0
-/- Provisions 0.0
- Pension deficit 6.4
+ Investments 5.5
Equity value 703.2
# of shares 26.7
FV per share (EUR) 26.3
Price target (12M) 28.5
To determine the fair value of Accell, we use a risk-free rate of 2% and a risk
premium of 6.5%, which with a beta of 1.5 and a tax rate of 27% results in a
WACC of 8.3%. We expect the EBIT margins of both the Bicycle and P&A segments
to remain the same after FY24, at around 8.4%, including the terminal-value EBIT
margin, as we think the company will be able to maintain its performance. It
could be argued that Accell could further improve its EBIT margin after FY24
from normal operating leverage. However, we have chosen to remain
conservative, and progressively lower EBIT to 8.0% to reflect the continuous
maturation of the industry. All this leads to an EV of EUR 950m, from which we
subtract net debt excluding lease liabilities (leases depreciation and lease
payments are already accounted for in FCF) and a pension deficit of EUR 6.4m
while adding the equity-accounted investees to the tune of EUR 5.5m. We arrive
at a fair value of EUR 28.5 per share, which represents a significant premium to
the current share price.

6.2. Relative valuation: Accell is clearly undervalued
Figure 46: Multiples-based relative valuation (EURm)

Relative valuation P/E EV/Sales EV/EBITDA
2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E

MERIDA INDUSTRY CO LTD 25,2 22,2 19,9 2,6 2,3 2,0 32,8 27,2 23,8
GIANT MANUFACTURING 26,6 24,8 22,5 1,7 1,6 1,5 16,1 15,0 13,6
SHIMANO INC 37,5 35,7 32,2 5,3 4,8 4,5 21,2 17,2 14,9
DOREL INDUSTRIES-CL B 9,2 10,6 7,8 0,3 0,3 0,3 4,0 4,7 4,4
MIPS AB 81,1 51,8 40,9 26,0 18,0 14,0 57,3 37,9 29,7
ANTA SPORTS LTD 37,0 25,3 20,1 5,4 4,2 3,5 21,3 15,3 12,3
KMC KUEI MENG INT. 21,0 17,6 17,6 4,7 4,1 4,0 15,8 14,5 11,8
TOPKEY CORP 19,8 15,4 NA 2,4 2,1 NA 10,0 7,8 NA
Average peer group (adj) 26,3 22,8 23,1 3,9 3,2 3,1 19,5 16,2 13,2
Relevant multiples (excl. Merida) 16,9 14,0 10,5
Median (unadjusted) 19,5 15,3 13,4
Enterprise value (EURm) 1.596,7

Net cash/(debt) -235,1
Pension surplus (deficit) -6,4
Participations 5,5
Equity value 1.360,6
# shares 26,7
Fair value per share 50,9
Price target 55,0
Normally, we would carry out a sum-of-the parts valuation for the bike and the
parts & accessories businesses. However, due to insufficient disclosure of
profitability per division by some peers, we have opted for a relative valuation
using both bike manufacturers, parts manufacturers and accessories
manufacturers.
However, exposure to the Chinese (and possibly other markets, including North
America) appears to skew the valuations of peers such as Merida (FY21 EV/EBITDA
of 27x) while Swedish company MIPS, a bike helmet manufacturer, is valued at
an FY21 EV/EBITDA of 38x. Excluding the highest value (MIPS) and the lowest
values (Dorel) and Merida (China exposure), we obtain an average FY21
EV/EBITDA of 14x. Applying this to Accell results in a fair value per share of EUR
51, or a price target of EUR 55. Although we are not arguing here that Accell
should be valued at this level, the calculations do show that it is currently
undervalued.

7. Company overview
With reported turnover of EUR 1.11bn and adjusted EBIT of EUR 38m in FY19,
Accell Group stands out as a leader in the production and sale of bicycles, bicycle
parts and accessories. Accell is the market leader in Europe, and No. 1 worldwide
in e-bikes. It operates across 18 countries, sourcing its revenue in more than 80
and employing 3,000 average FTEs. Germany and the Netherlands are markets of
particular interest, as, combined, they represent 75% of FY19 turnover. The
company is organized around two segments: Bicycles (76% of FY19 total revenue)
and Parts and Accessories (24%). Within the Bicycles segment Accell has a multi-
brand portfolio comprised of 10 bike brands in order to operate close to its core
markets and to respond to local consumers’ tastes and needs. The international
sport brands target high end niches where consumer preferences are universal.
Each bicycle brand comprises different products, targeting different needs and
consumer segments (Electric Bikes, City Bikes, Mountain Bikes, Children’s Bikes).
E-bikes are the rising star of bicycles portfolio, accounting for 75% of total
revenue.
Figure 47:Company targets and key shareholders

Company Portfolio
Company map
Description Brands Countries Volumes% 1 M argins
M anufacturing and Batavus, Sparta, Winora,

Bicycles selling regular, electric Lapierre, Koga, Carqon, 63 75% 6%
and cargo bkes Babboe, Haibike, Raleigh
Parts and M anufacturing and

XLC 52 25% 3%
accessories selling bike parts
Company’s target until FY22

 Between 1.4 to 1.5 EUR billion
 Added value/Net turnover of more than 31%
 ROCE larger than 15%
 Trade WC/ Net Turnover of less than 25%
 8% operating margin
Shareholders Accell
6% 3% Norges bank
Free float: 64%
Pon
7%
Teslin Participatiees
Listing venue: Amsterdam U.A.
20% B.V. Beleggingsfonds
Average daily 7% ASR Verzekeringen

traded volume 92.48k shares N.V.
2019:
Source: Accell Group, ABN AMRO Equity Research

7.1. A deep dive into Accell’s brands

As stated previously, Accell operates a multi-brand portfolio balanced between
national and international brands. We provide below a description of its most
significant brands, in our view. Note that this is not an exhaustive list.
Figure 48:Accell’s bicycle brands

Main Countries Description
City bike brands
Batavus is one of the well-known and reputable Dutch bike brands.

Netherlands, Batavus supplies both E-Bikes and classic bikes for a broad consumer-
Belgium, Germany base.
Pioneer in the Dutch electric bicycle market on the e-innovation front.

Netherlands, Sparta works continuously on technology-driven product development,
Belgium while simultaneously exploring new target groups and new market
segments for e-bikes.
Trustworthy German local brand that has been working for more than
Germany, Austria a century as a producer of bikes for a wide scope of utilization.
Winora supplies classic bicycles but also E-bikes.
Sport bike brands

One of Accell’s top international brands. Haibike has been developing
Germany, Austria, and designing innovative bikes in Germany since 1995. It is well-
Switzerland renowned for being the ideal partner for high quality sporty mountain
bikes, being the pioneer of the ePerformance bikes (E-M TB)
One of the strong Accell international brands. It stands out thanks to

Central Europe, its sophisticated models and dedication to details. Ghost supplies
Netherlands both sporty bikes and E-bikes in three main categories (Fully, Hardtail,
Lanes) with various models within each category.
Netherlands, Premium brand, internationally recognized for its continuous

Belgium, Central innovation and close ties with top athletes and teams in the
Europe competitive cycling sector.
Accell’s top cycling brand, known in France for its high quality and
France, Belgium, continuous effort to improve athletes’ performance. Sponsor of
Netherlands professional cycling team Groupama-FDJ.
Iconic brand in Great Britain and increasingly in North America. It

responds to the needs of a wide spectrum of consumers by supplying
UK, Netherlands various bike categories, ranging from children’s bikes to professional
racing bikes.
Cargo bike brands (Velosophy)
Dutch cargo bike brand that sells both non-electric and electric cargo
Netherlands, bikes with two or three wheels. The brand is sold not only to private
Belgium, Germany consumers but is increasingly being used by companies for cargo
transportation purposes.
Recent cargo bike brand know for its unique and innovative approach
Netherlands to model design and functionality. Acquired by Accell in 2018, it is
company’s brand built to compete with Pon’s Urban Arrow.

Figure 49:XLC product sample

XLC product range
7.2. Accell’s bike components suppliers
Figure 50:Bike components suppliers and locations

Saddle:
Selle Royal
Fabric
WTB
ISM
Frames: Produced
mainly in Taiwan
Wheels: Produced
by Accell
Brakes:
Shimano – Asia, Eastern Europe Gears:
Wheel hubs:
Hayes – North-America Shimano
Europe Chain:
Tektro Orviolo
KMC Pinion
Elvedes
Wipermann SRAM
Carbon Drive Kervelo
Campagnolo
E-bike battery: E-bike systems:
Samsung Bosch – Eastern Europe
LG Chem Yamaha – Eastern Europe, Asia
Optimum Nano Shimano – Asia, Eastern Europe

8. Key risks
Seasonality of business  Accell operates in a business that is highly seasonal. The bicycle market
is very sensitive to seasonal influences, as bikes are sold primarily in
the spring and summer, while the company starts to ramp up
production in the fall and winter. This structural seasonality usually
leads, if not properly managed and planned, to an excess stock at the
end of the year that would need to be sold at a discount, placing 
pressure on the company’s turnover and margins at the end of the year.
Although Accell has several programs in place to reduce this risk (roll-
out of ERP and CRM across the group, better analysis (website, SEO)
and constant dialogue with clients, this is a structural risk that cannot
be completely mitigated.
Supply-chain disruption  Accell sources a large number of components from various countries all 
over the world. This dependency on the supply of components creates
several risks to the company, mainly in the event of supply-chain issues
while demand is strong. As the Covid-19 pandemic demonstrated,
supply-chain disruption can have a very significant effect on both sales
and gross margins, and, therefore cash flow. Accell’s key sourced
components, such as frames and gear shifters, are brought in from Asia
via shipping, usually taking more than one month to arrive at the
company’s plants. During the Covid-19 pandemic, maritime trade from
Asia was stopped, forcing Accell to source its materials via air freight,
which is more expensive and carries fewer materials per trip, resulting
in an exceptional increase in costs. Accell’s production planning can
also contribute to this risk if consumer demand changes within the year
as it’s difficult to change supplied materials in a shorter time frame.
Accell is cushioning this risk by reducing production complexity and
centralizing planning processes.
EU anti-dumping policy changes  The EU extended in 2019 anti-dumping duties on imported Chinese 
bicycles of 48.5% until FY24, as Chinese manufacturers have continued
dumping and would flood the EU market with dumped bicycles if the
duties were discontinued, as happened with the US and Japan, where
most of the bicycles sold are Chinese. China's bicycle and e-bike
manufacturing market is almost five times larger than the total EU
market of approximately 22 million bicycles and e-bikes per year, and
would be even larger if no anti-dumping policies were in play. There is
no current indication as to whether the EU Commission will extend the
anti-dumping policies once more, though we see no reason why that
shouldn’t happen. If the policy is discontinued, we see a moderate risk
for Accell, as consumers would enjoy a large amount of cheaper bike
and e-bike options.

9. Corporate Governance and

Remuneration
Figure 48:Accell Management Team and Supervisory Board profile

Management team
Board of Management
 CEO since 2017
Ton Anbeek  Studied Business Administration at Erasmus University, worked at Unilever from
CEO
(1962) 1987 to 2006, most notably being the M anaging Director at Unilever M aghreb
 Former CEO of Beter Bed Holding N.V. from 2010 to October 2017
 Joined as CFO on the 1st of November of 2018
Ruben
Baldew  Became a qualified Chartered Controller at M aastricht University
CFO
(1977)  Held various finance positions at Unilever, such as Financial Director of Unilever
Benelux
 CSCO since 2015
Jeroen Both
CSCO  Held various positions in supply chain at British American Tobacco, with
(1964)
extensive international experience
Supervisory Board
 Chairman since April 2019

Rob Ter
Haar  Served as a member of the supervisory boards of companies including Friesland
Chairman
Campina and Univar.
(1950)
 Previously, he was CEO of Hagemeyer and De Boer Unigro.
 Appointed on the 25th of April of 2018
Gert Van de
Weerdhof Vice-  Since 2017, he has been a member and chairman of the supervisory board of
chairman Ctac N.V. and a member of the supervisory board of Sligro N.V.
(1966)
 Held various management positions at PepsiCo and Procter & Gamble Benelux
Peter Member of  Appointed on the 28th of April of 2011

Ernsting the
 Was Senior VP and member of the executive committee at Carlsberg
Supervisory
(1958)  Previously, held a number of management positions at Unilever
Board
Danielle Member of  Appointed on the 25th of April of 2018 and is in charge of the Audit Committee
Jansen the  Currently holds the position of global process director at Friesland Campina and
Heijtmajer Supervisory chairs the supervisory board of Aegon Nederland
(1960) Board  Spent 23 years in various finance positions at Shell
Remuneration
Variable salary is given based on the following measures
The company has a 80% financial performance criteria:
• M aximum of 40% for earnings per share growth in 2019, compared with the earnings per share growth in the two
preceding financial years;
• M aximum of 15% for reported EBITDA growth in 2019 compared to the budgeted EBITDA for said financial year;
• M aximum of 25% average working capital improvement as percentage of the turnover in 2019 compared to the lowest
percentage of the average working capital in the preceding two financial years.
Accell additionally has a 20% individual targets that differ depending on the role of the individual:
For the CEO and CFO:
• Sale of Accell Group’s business in North America; remuneration dependent of timing realization;
• Revenue growth 2019: remuneration dependent on achieving threshold, budget or performance over budget. Revenue
below threshold will not result in a short-term bonus.
For CSCO:
• Procurement savings: remuneration dependent of achieving threshold, budget or over budget.
• Revenue growth 2019: remuneration dependent on achieving threshold, budget or over budget. Revenue
threshold budget will not result in a short-term bonus.

Solid corporate governance, In terms of governance, Accell lacks diversity at both Board of Management and
however lacking diversity Supervisory Board level, deviating from the principles and best-practice
provisions of the Dutch Corporate Governance Code. The company responded by
launching a project to develop a group-wide diversity programme by mid-2020.
It currently has one woman on the Supervisory Board and none on the
Management Board. Additionally, both the Remuneration and Audit committees
respect the provisions of the Dutch Corporate Governance Code, with both Chairs
of being independent financial experts.
Standard anti-takeover measures in The company has put in place provisions to prevent the developments concerning
place third-party bidders that might affect the continuity or independence of Accell.
The company has the possibility of issuing cumulative preference shares B and
the Accell Group preference share trust has call options for the same shares,
with the ability to exercise said call options at any time.
Little skin in the game The members of Accell’s Board of Directors have a limited amount of share
options with a total for all three members of 13,300 share options’. Mr. Both is
highest holder of PSUs, as he is the one who has been in the company the longest,
with Mr. Anbeek (CEO) and Mr. Baldew (CFO) being at the company for less than
4 years. The PSUs awarded vest immediately with a lock-up period of 3 years,
which, in our view, aligns the Board of Directors’ interests with the shareholders.
Regular short and long term The Board of Directors short term incentive plan can be seen in the table above.
incentive plans The targets and the pay-out percentage are in line with peers in the AScX using
both quantitative and qualitative performance criteria. The short term variable
incentive payed-out to the Board of Management in FY19 was, on average, 40%
of the fixed remuneration, as some of the financial targets were not met. We
note that the ST bonus is tied with the performance of the year, further aligning
the management interests with shareholders. Moreover, only 1,650 share options
were distributed, to Mr. Baldew, as the target, that the ROIC has to be larger
than the WACC for the respective financial year, was not met.

10. ESG
Bicycle use significantly helps Accell sells and manufactures regular, electric and cargo bicycles, which are one
reduce transportation carbon of the most environmentally friendly means of transportation. As seen below,
footprint using the bicycle as an alternative to the car or public transport significantly
reduces CO2 emissions, as bicycles are still the lowest emitters of greenhouse
gasses per passenger-kilometer traveled. One key finding is that emissions from
cycling are over 10 times lower than those stemming from the passenger cars, as
a bike produces 21g of CO2 per passenger per km vs. 271 g on a similar trip for a
passenger car.
Cargo bikes a sustainable alternative Cargo bikes also contribute to fewer CO2 emissions and traffic in city centers.
to delivery vans According to the EU-funded Cyclelogistics project, 50% of motorized trips
transporting goods in European cities could be shifted to cargo or e-cargo bikes.
The 2014 study found that motorized delivery vehicles vastly underutilised their
storage capacity, and that bikes are also better equipped to tackle denser urban
road networks. In particular, the study found that e-cargo bikes are best for trips
of under 7km, with a focus on everyday food supplies and other household
essentials.
Figure 51:CO2 realeased by most popular comutting vehicles compared with bikes (CO2 in grams)
350
300
250
200
150
100
50
0
Car Public transport Bike
CO2 released during use CO2 used during production of vehicle
Accell emits less CO2 per euro than However, even though Accell’s products are ecologically friendly, it is still a
its peers in the AScX manufacturing company, so is still under pressure to reduce resource
consumption and implement sustainable practices, mostly on production and
materials used to produce its bicycles. We note the company’s progress in
improving CO2 emissions in their operations. As shown in the graph below, Accell
emits considerably less CO2 than comparable companies in the AScX index, when
adjusted for sales.

Figure 52:Scope 1 and 2 CO2 per sales ratio
40
35
30
25
20
15
10
0
2016 2017 2018 2019
Accell Acomo Kendrion Sligro
Company focused on reducing waste Moreover, the company has very specific targets to reduce waste and create less
and SU plastics pollution in its operations, planning to reduce energy consumption by 1.5% per
year, reduce single-use (SU) plastics in packaging by 2-4% per year and cut
transportation by 50%.
Both suppliers and components must As previously stated, the impact of materials used in production is also under
be sustainability friendly scrutiny by the public, as the company uses paint coatings that, if not of proper
quality, can be harmful to users and the environment. Accell has a laboratory
where it performs toxicology testing protocols according to specific international
chemical regulations. Additionally, the company is making an effort to ensure
that its suppliers are compliant with strict audit and environmental rules. This
involves them signing its Code of Conduct and aiming for the audit of 15 suppliers
a year by the Responsible Sports Initiative.
Worker satisfaction and training are Accell is particularly focused on retaining its employees and actively seeks their
increasingly important for Accell input on, among other things, how to improve conditions, reflected in its first
group-wide employee engagement survey, in which more than 72% of staff
participated. The company also invests in training its staff, and has pledged that
staff will receive, on average, 24 hours of training annually (vs. 14 hours at
present).

11. Appendices
11.1.Overview of Accell and financial covenants
In the following table, we show how Accell stacks up against its covenants, based
on our forecasts. The second table summarises the covenants, as amended in
early July. Based on our estimates, Accell will remain well within covenants as
amended June 12.
Figure 53:Accell Group debt covenants

FY FY FY FY FY
1H19a 2H19a FY 19a 1H20a 2H20e 1H21a 2H21e 1H22a 2H22e
20e 21e 22e 23e 24e
Net Assets 340.7 323.2 323.2 351.0 347.2 347.2 394.6 406.4 406.4 462.6 481.9 481.9 556.7 639.6
Balance sheet total 894.0 859.2 859.2 1,106.6 1,042.1 1,042.1 1,058.9 1,062.3 1,062.3 1,082.8 1,091.3 1,091.3 1,179.2 1,275.4
Solvency ratio (%) 38% 38% 38% 32% 33% 33% 37% 38% 38% 43% 44% 44% 47% 50%
Solvency Covenant 25% 25% 25% 15% 15% 25% 16% 19% 25% 25% 25% 25% 25% 25%
Term loan 75.0 202.0 202.0 185.0 184.7 184.7 134.7 134.7 134.7 134.7 134.7 134.7 134.7 134.7
Rolling Normalized
EBITDA 56.1 88.4 88.4 89.0 72.1 72.1 95.3 114.3 114.3 125.4 134.8 134.8 145.0 158.3
Term loan/Norm.
EBITDA 1.3 2.3 2.3 2.1 2.6 2.6 1.4 1.2 1.2 1.1 1.0 1.0 0.9 0.9
waived waived waived waived waived
Term loan covenant 2.5 2.5 2.5 3.1 2.5 2.5 2.5 2.5 2.5
Normalized EBITDA 58.4 30.0 88.4 59.0 13.1 72.1 82.3 32.1 114.3 93.3 41.4 134.8 145.0 158.3
Normalized EBITDA
covenant - - - (30.0) (70.6) (70.6) 5.6 - - - - - - -
Liquidity - - - 416.0 196.5 196.5 232.4 195.6 195.6 213.6 195.5 195.5 247.3 304.5
Liquidity covenant - - - 25.0 25.0 25.0 25.0 25.0 25.0 25.0 - - - -
Headroom 333.6 327.8 327.8 254.9 200.0 200.0 195.9 207.1 207.1 211.8 216.1 216.1 226.1 236.8
Covenant 224.3 265.3 265.3 196.2 181.9 181.9 96.0 132.8 132.8 54.8 72.8 72.8 33.0 33.0
Figure 54:
Overview of Accell covenants
Term loan leverage Relevant period Covenant
30-Sep-21 4.6:1
31-Dec-21 3.1:1
Solvency Relevant period Covenant
30-Jun-21 15,0%
31-Dec-21 15,0%
30-Jun-22 16.2%
31-Dec-22 18.6%
Thereafter 25,0%
LTM Normalized EBITDA Relevant period Covenant
30-Jun-20 -30,0
31 Sep 20 -58,9
31-Dec-20 -70,6
31-Mar-21 -51,4
31-Mar-21 5,6
Figure 55:Accell revenues and EBIT margins per segment

FY FY FY FY FY
1H19a 2H19a FY 19a 1H20a 2H20e 1H21a 2H21e 1H22a 2H22e
20e 21e 22e 23e 24e
Bicycles revenues 555.3 290.1 845.4 515.7 349.7 865.4 579.2 368.2 947.5 626.7 399.1 1,025.8 1,096.6 1,168.5
Bicycles EBIT 52.2 10.4 62.5 35.4 0.3 35.7 57.9 12.9 70.8 72.1 20.0 92.0 99.7 108.3
Bicycles EBIT
9.4% 3.6% 7.4% 6.9% 0.1% 4.1% 10.0% 3.5% 7.5% 11.5% 5.0% 9.0% 9.1% 9.3%
Margin
P&A revenues 134.5 131.1 265.5 161.2 144.2 305.4 174.1 155.7 329.8 188.0 168.1 356.2 374.0 392.7
P&A EBIT 3.8 4.5 8.3 7.4 2.2 9.5 9.1 8.1 17.1 9.8 8.7 18.5 20.2 21.6
P&A EBIT Margin 2.8% 3.4% 3.1% 4.6% 1.5% 3.1% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.4% 5.5%

Financial Statements
P&L Statement (EURm) YE in Dec 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Net Revenue 849 882 986 1,048 1,068 1,094 1,123 1,171 1,277 1,382
Cost of sales (589) (614) (673) (733) (766) (770) (769) (847) (874) (938)
Gross Profit 260 268 313 315 302 325 354 323 403 444
Operating costs (217) (216) (244) (244) (253) (279) (268) (251) (289) (309)
EBITDA 43 53 69 71 49 45 86 72 114 135
Depreciation (8) (8) (9) (9) (10) (11) (23) (25) (22) (22)
EBITA 35 45 60 62 39 35 63 47 92 112
Amortization (1) (1) (1) (1) (1) (2) (3) (1) (1) (1)
EBIT 34 44 59 61 38 33 60 47 91 111
Net Interest (12) (9) (9) (8) (8) (8) (9) (12) (10) (8)
Associates - - - - - - - - - -
Other pre-tax items 0 0 (1) 1 0 11 0 - - -
Pre-tax profit 23 35 49 53 30 36 51 34 81 103
Taxes (4) (9) (16) (20) (20) (16) 8 (9) (22) (28)
Minorities - - - - - - - - - -
Other post-tax items - - - - - - (56) - - -
Reported Net Profit 19 26 32 32 11 20 3 25 59 75
Normalised EBITDA 43 53 69 71 49 45 86 72 114 135
Normalised EBIT 34 44 59 60 38 34 55 48 92 112
Normalised Net Profit 19 26 32 32 11 20 59 25 59 75
Balance Sheet (EURm) YE in Dec 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Financial Assets - - - - - - - - - -
Goodwill 54 64 58 59 57 82 83 83 83 83
Other Intangible Assets 40 43 45 45 42 56 50 47 47 47
PP&E 65 68 70 72 69 67 64 65 65 66
Other Non-Current Assets 40 17 34 29 30 31 88 88 88 88
Fixed Assets 198 192 207 205 198 236 285 282 282 283
Inventories 238 244 339 322 334 340 387 400 409 425
Debtors 99 133 135 138 127 128 141 138 151 162
Cash and Marketable Securities (1) 16 14 172 49 24 27 11 196 196 196
Other Current Assets 27 40 37 28 23 31 35 25 25 25
Total Current Assets 381 431 683 537 507 526 574 760 781 809
Total Assets 580 623 890 742 705 762 859 1,042 1,062 1,091
Equity 240 276 306 319 299 322 323 347 406 482
Minority Interests - - - - - - - - - -
Total Shareholder Funds 240 276 306 319 299 322 323 347 406 482
Long-Term Debt (2) 103 71 59 47 101 100 97 207 157 157

Provisions 27 27 30 31 29 38 37 36 36 36
Other Long-Term Liabilities 2 3 2 1 1 4 1 1 1 1
Short Term Debt (3) 96 95 313 150 85 78 179 172 172 112
Accounts Payable 72 109 136 155 147 180 168 180 191 204
Other Current Liabilities 39 42 43 39 44 39 53 100 100 100
Total Liabilities 340 347 584 422 406 440 536 695 656 609
Total Liabilities and Shareholder Funds 580 623 890 742 705 762 859 1,042 1,062 1,091
Net Debt (2 + 3 - 1) 183 152 200 147 161 152 265 182 133 73
Cash Flow Statement (EURm) 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
EBITDA 43 53 69 71 49 45 86 72 114 135

Change in WC (52) 8 (67) 26 (10) 19 (71) 44 (10) (15)
Net Interest (paid) / received (10) (9) (10) (9) (7) (8) (7) (11) (10) (8)
Taxes (paid) / received (3) (9) (10) (19) (23) (16) (13) (1) (22) (28)
Other operating cash flow (2) (5) (1) 7 (1) 2 (1) 0 - -
CF from operations (23) 38 (19) 75 8 43 (6) 105 73 85
Maintenance Capex (6) (9) (10) (14) (12) (9) (14) (13) (13) (14)
Expansionary Capex - - - - - - - - - -
Disposals / (Acquisitions) (1) 9 (2) (1) - (18) (44) - - -
Other investing cash flow - - - - - - - - - -
CF from investing (8) 0 (12) (14) (12) (27) (58) (13) (13) (14)
Increase / (decrease) in Equity (0) (0) - - - - - - - -
Increase / (decrease) in Debt 52 (34) 36 (79) 31 8 54 127 (50) (60)
Dividends Paid (11) (7) (9) (9) (7) (7) (9) - - -
Other financing cash flow - - - - - - (10) (11) (10) (10)
CF from financing 41 (42) 27 (87) 24 0 35 116 (60) (70)
Other - - - - - - - - - -
Total change in cash 10 (3) (4) (26) 19 16 (29) 208 (1) (0)
Source:Accell Group, ABN AMRO Equity Research

Per Share Data (EUR) 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Avg. no. of shares (mln) 24.2 24.7 25.1 25.6 26.3 26.5 26.7 26.7 26.7 26.7
Eoy no. of shares (mln) 24.2 24.7 25.1 25.6 26.3 26.5 26.7 26.7 26.7 26.7
Avg. no. of shares FD (mln) 24.3 24.8 25.3 25.8 26.4 26.5 26.8 26.8 26.8 26.8
Dividend Per Share 0.45 0.29 0.34 0.34 0.28 0.28 0.32 - - -
EPS 0.79 1.06 1.29 1.26 0.40 0.77 0.10 0.93 2.22 2.82
Normalised EPS 0.79 1.06 1.29 1.26 0.40 0.77 2.22 0.93 2.22 2.82
Diluted EPS 0.78 1.05 1.28 1.25 0.40 0.76 0.10 0.93 2.21 2.82
Diluted Normalised EPS 0.78 1.05 1.28 1.25 0.40 0.76 2.21 0.93 2.21 2.82
Book Value per Share 9.92 11.18 12.18 12.46 11.36 12.18 12.09 12.99 15.21 18.03
Cash Earnings per Share 0.89 1.03 1.26 1.11 0.35 0.88 0.58 1.41 2.60 3.17
Equity Free Cash Flow per Share (1.22) 1.17 (1.17) 2.42 (0.19) 1.27 (0.74) 3.46 2.22 2.63
Gross Operating Cash Flow per Share (0.45) 2.27 0.03 4.06 1.43 2.53 0.54 4.38 3.89 4.50
Net Operating Cash Flow per Share (0.96) 1.55 (0.76) 2.94 0.29 1.61 (0.23) 3.93 2.72 3.17
EBITDA per Share 1.76 2.13 2.73 2.76 1.86 1.71 3.22 2.70 4.28 5.04

Valuation 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Share Price Average 14.0 13.7 17.7 20.3 25.9 18.8 22.6 23.6 23.6 23.6
Share Price YE (used for MC calculation) 13.4 13.6 21.1 21.9 23.4 18.8 25.8 23.6 23.6 23.6
Market Cap 326 338 532 565 620 500 691 632 632 632
Net debt 183 152 200 147 161 152 265 182 133 73
Other EV adjustments (5) 2 1 (1) (2) 1 1 1 1 1
Enterprise Value 505 492 733 712 778 653 957 815 766 706
EV / Normalised Sales 0.6 0.6 0.7 0.7 0.7 0.6 0.9 0.7 0.6 0.5
EV / Normalised EBITDA 11.8 9.4 10.7 10.1 15.9 14.4 11.1 11.3 6.7 5.2
EV / Normalised EBITA 14.5 10.9 12.2 11.5 19.9 18.9 15.2 17.2 8.3 6.3
EV / Normalised EBIT 14.9 11.3 12.5 11.8 20.5 19.2 17.4 17.0 8.3 6.3
P / E Normalised 17.0 12.9 16.4 17.4 58.8 24.6 11.6 25.4 10.6 8.4
P / E Normalised fully diluted 17.1 12.9 16.5 17.5 59.0 24.7 11.7 25.4 10.7 8.4
Equity FCF yield (9.1%) 8.5% (5.5%) 11.0% (0.8%) 6.7% (2.9%) 14.6% 9.4% 11.1%
Div yield 3.3% 2.2% 1.6% 1.6% 1.2% 1.5% 1.2% 0.0% 0.0% 0.0%
WACC 8.31% 8.31% 8.31% 8.31% 8.31% 8.31% 8.31% 8.31% 8.31% 8.31%
EV/IC 1.2 1.2 1.6 1.5 1.7 1.4 1.8 1.5 1.4 1.3
ROIC / WACC 0.8 0.9 1.1 1.1 0.7 0.7 0.9 0.8 1.5 1.8
P/B 1.4 1.2 1.7 1.8 2.1 1.6 2.1 1.8 1.6 1.3
ROE / COE 1.0 1.2 1.4 1.3 0.8 0.7 1.2 1.0 1.6 1.7
Analysis 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
NOPAT (EURm) 25 33 44 45 29 26 41 35 67 82
NOPAT Adjusted (EURm) 25 33 44 45 29 26 41 35 67 82
Return on Average Capital Employed 7.6% 8.7% 11.4% 11.4% 6.9% 5.7% 8.9% 5.8% 11.0% 12.7%
Return on Average Invested Capital 6.2% 7.7% 9.4% 9.3% 6.2% 5.5% 7.7% 6.3% 12.6% 15.0%
Return on Average Assets 4.3% 5.4% 5.8% 5.6% 3.9% 3.5% 5.1% 3.7% 6.4% 7.6%
Return on Average Equity 10.4% 12.7% 15.1% 14.5% 9.2% 8.2% 12.7% 10.4% 17.9% 18.5%
Gross Profit Margin 30.6% 30.4% 31.7% 30.0% 28.3% 29.7% 31.8% 27.6% 31.6% 32.1%
Normalised EBITDA Margin 5.0% 6.0% 7.0% 6.7% 4.6% 4.1% 7.8% 6.2% 8.9% 9.8%
Normalised EBITA Margin 4.1% 5.1% 6.1% 5.9% 3.7% 3.2% 5.7% 4.0% 7.2% 8.1%
Normalised EBIT Margin 4.0% 4.9% 5.9% 5.8% 3.6% 3.1% 4.9% 4.1% 7.2% 8.1%
Normalised Pretax Margin 2.7% 4.0% 4.9% 5.0% 2.8% 3.3% 4.6% 2.9% 6.3% 7.5%
Normalised Net Profit Margin 2.2% 3.0% 3.3% 3.1% 1.0% 1.9% 5.3% 2.1% 4.6% 5.5%
Net Debt / Normalised EBITDA 4.7 3.2 5.4 2.8 2.0 2.2 2.3 2.6 1.4 1.2
Net Debt / EBITDA covenant - - - - 2.5 2.5 2.5 - 3.1 2.5
Net Debt / Equity (Gearing) 76.5% 55.2% 65.4% 46.1% 53.8% 47.1% 82.1% 52.4% 32.7% 15.1%
Equity / Total Assets (Solvency) 41.4% 44.3% 34.4% 43.1% 42.4% 42.3% 37.6% 33.3% 38.3% 44.2%
Solvency covenant 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 15.0% 18.6% 25.0%
EBIT Interest Cover 2.9 5.0 6.5 7.3 4.6 4.5 5.9 4.0 9.5 14.3
Interest Cover Covenant - - - - - - - - - -
Company Key Performance Indicators 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
Net debt/Adj. EBITDA (x) 4.7 3.2 5.4 2.8 2.0 2.2 2.3 2.6 1.4 1.2
FCF (EURm) (29.5) 28.9 (29.3) 61.9 (4.9) 33.5 (19.7) 92.4 59.3 70.2
FCF conversion (%) (1.6) 1.1 (0.9) 1.9 (0.5) 1.7 (7.0) 3.7 1.0 0.9
DPS payout rate (%) 0 0 0 0 0 0 0 0 0 0
NWC as % of sales 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Source:Accell Group, ABN AMRO Equity Research

Important disclosures
Issuer Ticker Price EUR
Accell Group ACCG.AS 23.60
ABN AMRO Bank N.V. adopted a Research Policy for the purpose of ensuring that research produced by its analysts is impartial, independent, fair, clear
and not misleading. In particular the Policy identifies policies intended to promote the integrity of research including those designed to ensure the
identification and avoidance, management or disclosure of conflicts of interest in connection with the production of research, including information
barriers. The disclosures below include those required to be made by ABN AMRO Securities (USA) LLC by Finra rule 2241 and other applicable regulations.
Consequently ABN AMRO Bank N.V. discloses the following:

ABN AMRO Bank NV or its affiliates expects to receive or intends to seek compensation for investment banking services from the Company in the next 3
months.
ABN AMRO Securities (USA) LLC does not make a market in securities of the companies that are the subject of this report
ABN AMRO Bank NV or its affiliates is a market maker or liquidity provider in the financial instruments issued by the Company.
Analyst certification
The persons named as the authors of this research report certify that:
1. all of the views expressed in the research report accurately reflect the personal views of the authors about the subject financial instruments and
issuers; and
2. no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research
report.
Martijn den Drijver

Hugo Lisboa Lago
Analysts' compensation is determined based upon activities and services intended to benefit the clients of ABN AMRO Bank N.V. and its affiliates.
Like all ABN AMRO Bank N.V. and affiliate employees, analysts receive compensation that is impacted by overall ABN AMRO Bank N.V. profitability,
which includes revenues from other business units.
ABN AMRO Bank N.V. and affiliates equity research ratings distribution (primary covered stocks)
ABN AMRO Definition % companies % companies for which ABN

under coverage AMRO has provided
Rating
with this rating Investment Banking
services
BUY The stock belongs to the favourites of the local ABN AMRO Bank N.V. universe. 57% 56%
Expected total return (incl. dividends) for the coming 12 months: > +15%
HOLD The stock does not belong to the current favourites. The investment case is 34% 38%
not appealing for the time being. However, it's worth to keep the stock.
Expected total return (incl. dividends) for the coming 12 months: > 0%, < +15%
SELL The stock belongs to the less attractive ones within the ABN AMRO Bank N.V. local 10% 5%
universe. The outlook is uncertain.
Expected total return (incl. dividends) for the coming 12 months: < 0%
30 August 2020 ABN AMRO Bank N.V. Primary Equity Research Coverage: 119
Prior to 1-10-2014 ABN AMRO applied 4 ratings (Buy, Hold, Reduce, Sell)
Historical equity recommendations and target price for Accell Group (EUR)
30
28
26
24
22
20
18
16
14
12
10
Jul 17 Oct 17 Jan 18 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20
BUY HOLD SELL Accell Group Target Price

History of Target Prices History of Recommendation

Date Recommendation Target Price Date Recommendation Target Price
8/30/2020 BUY EUR 28.51 8/30/2020 BUY EUR 28.51
Source: ABN AMRO Equity Research, Factset

Equity Brokerage and Research - Contact List

Ferdinand Vaandrager +31 20 628 1688
Head of Global Markets Sales
Equity Sales Equity Research

Bram Fiselier (Head) +31 20 535 7264 Ron Heijdenrijk (Head) - Financials +31 20 343 7359
Eddy de Bruin +31 20 535 7052 Thijs Berkelder - Energy +31 20 383 1216
Marc DeNatris (US) +1 917 284 6725 Martijn den Drijver - Industrials +31 20 628 0042
Ronald Evers +31 20 383 6097 Wim Gille - Technology +31 20 628 2639
Philip Hardeveld - Financials & Real Estate +31 20 535 7364 Mutlu Gundogan - Chemical and Materials +31 20 628 1386
Juliet Jellema (US) +1 917 284 6742 Cor Kluis - Financials +31 20 383 7728
Jeroen Koopman +31 20 535 7285 Niko Levikari - Real Estate +31 20 628 9049
Anne van Lie Peters +31 20 535 7265 Veronique Meertens – Real Estate +31 20 628 1853
Jaap Linnebank +31 20 535 7359 Lotte Timmermans - Renewables +31 20 628 2066
Esther Silli (FR) +33 1 5621 8581 Robert Jan Vos - Consumer +31 20 343 7579
Johan van der Veen +31 20 535 7263 Eric Wilmer – Consumer +31 20 629 1459
Konrad Zomer - Business Services, Media & Telecom +31 20 383 1356
Sales Trading Corporate Access

Frank Bonsee +31 20 535 7082 Geertje Cornelissen +31 20 535 7284
Daam-Martijn van Holst +31 20 535 7139 Robin de Jonge +31 20 383 6879
Oskar van Enst +31 20 383 6122 Nancy Kool +31 20 535 7416

ABN AMRO BANK

Gustav Mahlerlaan 10 (visiting address)
P.O. Box 283
1000 EA Amsterdam
The Netherlands
Tel: +31 20 628 9393
Each research analyst primarily respo nsible fo r the co ntent o f this research repo rt certifies that with respect to each security o r Co mpany that the analyst co vered in
this repo rt: 1) all o f the expressed views accurately reflect his o r her perso nal views abo ut tho se securities o r Co mpanies, and 2) no part o f his o r her co mpensatio n
was, is, o r will be, directly o r indirectly, related to the specific reco mmendatio n o r views co ntained in this repo rt.
P ro duc t io n o f t he do c um ent
A B N A M RO B ank N.V., with registered o ffice at Gustav M ahlerlaan 10, 1082 P P A msterdam, Netherlands ("A B N A M R O "), is respo nsible fo r the pro ductio n and
the disseminatio n o f this do cument, which has been prepared by the individual(s) wo rking fo r A B N A M RO o r any o f its affiliates (except A B N A M RO Securities
(USA ) LLC) and who se respective identity is disclo sed in this do cument (the "p e r s o n s i n v o l v e d ") (to gether the "p r o d u c e r s o f t h e d o c u m e n t ").
Similarly, the A B N A M RO lo go used in this research repo rt refers to A B N A M RO and its affiliates o ther than A B N A M RO Securities (USA ) LLC.
This do cument can be distributed by an affiliate o f A B N A M RO that is no t registered as a U.S. bro ker-dealer to majo r U.S. institutio nal investo rs o nly.
D is t ribut io n int o J apan:
This research is no t fo r distributio n in o r transmissio n into Japan.
D i s t r i b u t i o n i n t o t h e UK :
This co mmunicatio n is o nly directed at perso ns who are investment pro fessio nals under A rticle 19 o f the Financial Services and M arkets A ct 2000 (Financial P ro mo tio ns)
Order 2005 and the investment o r investment activity to which this co mmunicatio n relates is o nly available to and will o nly be engaged in with such perso ns.
P erso ns who do no t have pro fessio nal experience in matters relating to investments sho uld no t rely upo n the co ntents o f this co mmunicatio n.
D i s t r i b u t i o n i n t o t h e US :
This material sho uld no t be distributed to any US perso ns by A B N A M RO o r any affiliate o ther than A B N A M RO Securities (USA ) LLC except
that A B N A M RO may directly distribute it so lely to perso ns who meet the definitio n o f M ajo r US Institutio nal Investo r under Rule 15a-6 o r perso ns listed under
Rule 15a-6 (a)(4). This material sho uld no t be co nstrued as a so licitatio n o r reco mmendatio n to use A B N A M RO to effect transactio ns in any security mentio ned herein.
In co nnectio n with distributio n o f this material in the United States by A B N A M RO Securities (USA ) LLC: A B N A M RO Securities (USA ) LLC, a US registered
bro ker-dealer, accepts respo nsibility fo r this Investment Research and its disseminatio n in the United States by A B N A M RO Securities (USA ) LLC.
This Investment Research is intended fo r distributio n in the United States o nly to certain US institutio nal investo rs.
US clients wishing to effect transactio ns in any investment discussed in this material sho uld do so thro ugh a qualified representative o f
A B N A M RO Securities (USA ) LLC; A B N A M RO Securities (USA ) LLC, is a bro ker-dealer registered with the SEC and is a FINRA member firm.
No thing herein excludes o r restricts any duty o r liability to a custo mer that A B N A M RO Securities (USA ) LLC has under any applicable law.
A nalyst(s) preparing this repo rt are resident o utside the United States and are no t asso ciated perso ns o r emplo yees o f any US regulated bro ker-dealer.
Therefo re the analyst(s) may no t be subject to Rule 2711restrictio ns o n co mmunicatio ns with a subject co mpany,
public appearances and trading securities held by a research analyst acco unt.
Fo r impo rtant disclo sures and equity rating histo ries regarding co mpanies that are the subject o f this repo rt, please co ntact yo ur sales o r research representative.
N o public o f f er o r f inanc ial pro m o t io n
This do cument do es no t co nstitute an o ffer o r so licitatio n fo r the sale, purchase o r subscriptio n o f any financial instrument in any jurisdictio n. It is no t directed to , o r
intended fo r distributio n to , any perso n o r entity who is a citizen o r resident o f o r inco rpo rated o r lo cated in any jurisdictio n where such distributio n wo uld be co ntrary
to lo cal law o r regulatio n and/o r where A B N A M RO wo uld infringe any registratio n o r licensing requirement within such jurisdictio n. This do cument has been pro vided
to yo u fo r yo ur perso nal use o nly and sho uld no t be co mmunicated to any o ther perso n witho ut the prio r written co nsent o f A B N A M RO. Sho uld yo u have received
this do cument by mistake, please delete o r destro y it, and no tify the sender immediately.
So urc es and dis c lo s ure
A B N A M RO believes that the info rmatio n and/o r the interpretatio ns, estimates and/o r o pinio ns regarding the financial instrument(s) and/o r Co mpany(ies) to which this
do cument relates (respectively, the "f i n a n c i a l i n s t r u m e n t ( s ) c o n c e r n e d " and/o r the "C o m p a n y( i e s ) c o n c e r n e d ") are based o n reliable so urces. A B N A M RO makes no
representatio ns as to the accuracy o r co mpleteness o f tho se so urces and, in any case, the recipients o f this do cument sho uld no t exclusively rely o n it befo re making
an investment decisio n. The interpretatio ns, estimates and/o r o pinio ns reflect the judgement o f A B N A M RO o n the date o f this do cument and are subject to changes
witho ut no tice.
N o inv es t m ent adv ic e
The info rmatio n co ntained herein do es no t co nstitute investment advice no r any o ther advice o f whatever nature (including advice o n the tax co nsequences that
might result fro m making any particular investment decisio n). Investments in the financial instrument(s) to which this do cument relates may invo lve significant risks,
are no t necessarily available in all jurisdictio ns, may be illiquid and may no t be suitable fo r all investo rs. The value o f, o r inco me fro m, any financial instrument(s)
co ncerned may fluctuate and/o r be affected by external facto rs such as exchange rates fluctuatio ns. P ast perfo rmance is no t indicative o f future results. This
do cument is intended fo r general circulatio n and do es no t take into acco unt the recipient's particular financial kno wledge and experience, investment o bjectives
and financial situatio n o r needs, and is no t intended as a perso nal reco mmendatio n to invest in the financial instrument(s) co ncerned. B efo re making an investment
decisio n o n the basis o f this do cument, an investo r sho uld co nsider whether such investment is suitable in light o f, amo ngst o thers, its particular financial kno wledge
and experience, investments o bjectives and financial situatio n and, if necessary, sho uld seek appro priate pro fessio nal advice. Neither A B N A M RO no r any o f its gro up
co mpanies (including any subsidiary, affiliate o r ho lding co mpany), directo rs, o fficers and emplo yees shall in any way be liable o r respo nsible (whether directly o r
indirectly) fo r any co sts, claims, damages, liabilities and o ther expenses, including any co nsequential lo ss, arising fro m any use o f this do cument, except in the
event o f wilful misco nduct o r gro ss negligence o n their part.
N o t ax adv ic e
A B N A M RO B ank do es no t pro vide any tax advice. A ny statement herein regarding any US federal tax is no t intended o r written to be used, and canno t be used,
by any taxpayer fo r the purpo ses o f avo iding any penalties.
Superv is io n
A B N A M RO has a full B anking License fro m the Dutch Central B ank (DNB ) and is supervised by the A utho rity Financial M arkets (A FM ), the DNB and the ECB
C o p yr i g h t
This do cument co ntains info rmatio n, text, images, lo go s, and/o r o ther material that is pro tected by co pyrights, database rights, trademarks, o r o ther pro prietary
rights. It may no t be repro duced, distributed, published o r used in any way by any perso n fo r any purpo se witho ut the prio r written co nsent o f A B N A M RO o r in the
case o f third party materials, the o wner o f that co ntent.

Accell Group: Time To Accelerate

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Accell Group: Time To Accelerate

Uploaded by

Copyright:

Available Formats

Investment research

Accell Group Global Markets

Leisure Products/The Netherlands

This document is classified as Confidential by ABN AMRO

This document is classified as Confidential by ABN AMRO

1. Investment case .............................................................4

2. Accell at a glance .........................................................13

3. Accell Bikes Division ......................................................15

4. Accell Parts & Accessories division .....................................25

5. Our forecasts ...............................................................29

7. Company overview ........................................................37

8. Key risks ....................................................................40

9. Corporate Governance and Remuneration.............................41

11. Appendices .................................................................45

Financial Statements ...........................................................46

This document is classified as Confidential by ABN AMRO

…also fuelled by Covid-19

…as well as government incentives

Figure 3:Bicycle stimuli by Accell’s principal European countries

Netherlands Germany France UK Italy Spain Belgium EU

Source: ABN AMRO Equity Research, Bloomberg

This document is classified as Confidential by ABN AMRO

Strong brands regionally, but also expanding at a European level

Figure 4:Accell’s bicycle brands

Source: ABN AMRO Equity Research, Accell Group

Source: Accell Group Source: Accell Group

This document is classified as Confidential by ABN AMRO

Close relationship with dealers/buying groups allows for…

…improved design, planning and production…

Figure 7: Overview of planned margin-enhancing measures

Measures being taken Description Level of completion Comments

 Improve forecasted production by

 Collect feedback only from largest

Use focused consumer  Improve forecasted production by

 Reduce production complexity to

 Create more consistency and

 Reduce production complexity to

Reduced number of  Increase purchasing power to

 Reduce margin dilution from  Improved gross margin, limited

Establish direct line to  Improve margins by reducing

Source: ABN AMRO Equity Research, Accell Group

…driving improvements in added value…

This document is classified as Confidential by ABN AMRO

A further element in the enhancement plan is the near-shoring of certain

Figure 8:Accell added-value bridge

Source: ABN AMRO Equity Research

…and working capital

The measures that Accell is taking and plans to implement (including

Online strategy taking shape (Click and Collect and Go Live)

This document is classified as Confidential by ABN AMRO

Solid top-line growth is forecast

E-bikes P&A Trad bikes Cargo Cargo Traditional bikes E-bikes

EBIT margin target to be achieved

Figure 13:Accell’s turnover and EBIT margin (LHS: EURm)

Sales EBIT margin

Source: Accell Group, ABN AMRO Equity Research

However, further improvement is possible

This document is classified as Confidential by ABN AMRO

But 2H20 will be hampered by supply chain issues and WC outflow

Figure 14: Normal 1Q-4Q FY18-19 vs actual 1Q20 and 2Q20

10,0% 19,6% 17,4% 18,6% 17,3%

Receivables Inventory Payables