4.7
7. Performance

7.1 Operating segments

Accell Group identified the following three operating segments: Bikes, Parts and Corporate/Eliminations.
The table below provides information on these reportable segments:

2021 Bikes Parts Corporate/ Eliminations Consolidated
  € x 1,000 € x 1,000 € x 1,000 € x 1,000
External net turnover 983,098 393,284 730 1,377,112
Inter-segment net turnover 5,790 7,197 -12,987 -
Segment net turnover 988,888 400,481 -12,257 1,377,112
Other income 1,088 - - 1,088
         
Contribution profit 119,577 40,834 23  
Allocated cost central functions -48,339 -5,353 3,314  
Segment profit (loss) before interest and tax 71,238 35,481 3,337 110,056
Net finance cost       -23,690
Share of profit (loss) of equity-accounted investees       2,747
Result on the sale of subsidiaries, non-consoldidated companies and other investments       2,355
Consolidated profit (loss) before tax 71,238 35,481 3,337 91,467
         
Segment assets 1,172,760 198,586 -311,683 1,059,662
Segment liabilities 627,020 149,844 -173,350 603,513
Depreciation and amortization 12,813 5,473 2,671 20,957
Capital expenditure 9,825 1,643 1,000 12,467

2020        
  € x 1,000 € x 1,000 € x 1,000 € x 1,000
External net turnover 951,695 344,414 344 1,296,453
Inter-segment net turnover 5,462 6,671 -12,133 -
Segment net turnover 957,157 351,084 -11,789 1,296,453
Other income 111 - 16 127
         
Contribution profit 93,131 26,051 -5,227  
Allocated cost Corporate -46,250 -5,059 12,086  
Segment profit (loss) before interest and tax 46,881 20,992 6,859 74,732
Net finance cost       -12,825
Share of profit (loss) of equity-accounted investees       1,008
Result on the sale of subsidiaries, non-consoldidated companies and other investments       -
Consolidated profit (loss) before tax 46,881 20,992 6,859 62,915
         
Segment assets 882,050 141,257 -143,732 879,575
Segment liabilities 399,019 107,301 -2,699 503,622
Depreciation and amortization 14,056 5,409 5,463 24,928
Capital expenditure 9,755 1,210 672 11,637

 

Geographical information


The sales to external customers reported in the geographical segments are based on the geographical location of the company and on the location of the customer. 

  Net turnover based on company location Net turnover based on customer location
  2021 2020 2021 2020
  € x 1,000 € x 1,000 € x 1,000 € x 1,000
The Netherlands 361,622 314,934 303,577 264,078
Germany 557,350 535,009 429,754 424,076
Other Europe 438,628 427,185 623,712 591,887
Other World 19,511 19,325 20,068 16,411
Total 1,377,112 1,296,453 1,377,112 1,296,453


Geographical asset information is based on the physical location of the assets at 31 December:

  2021 2020
  € x 1,000 € x 1,000
Non-current assets 1)    
The Netherlands 84,857 86,584
Germany 57,910 53,692
Other Europe 81,696 79,953
Other World 8,465 9,373
Total 232,928 229,602

1) The deferred tax assets and the net defined benefit asset are, in accordance with IFRS 8.33b, excluded from non-current assets.

 

Accounting policies

Operating segments
Operating segments are reported in a manner consistent with the internal reporting to the Board of Management, which is considered to be Accell Group's chief operating decision-maker. The reportable segments Bikes and Parts are the main pillars of Accell Group and are supported by the central functions in the Corporate segment. Both the Bikes and Corporate segments report directly to the Board of Management, with dedicated regional Bikes directors. The Parts segment is managed by one dedicated director, who reports to the Board of Management, and is directly accountable for the functioning of the segment’s assets, liabilities and results. The Board of Management reviews the performance of the segments via monthly internal management reports. The performance of the regional Bikes directors and the Parts director is measured based on contribution profit, as included in the internal management reports. The central functions, which report directly to the Board of Management, include procurement, supply chain, innovation & technology (R&D), IT, e-commerce, HR and central G&A. The related costs are allocated to the reportable segments on a reasonable basis.

Unallocated result items comprise net finance expenses, share of profit (loss) of equity-accounted investees and results on the sale of subsidiaries.

Segment capital expenditure is the total cost incurred in the period under review to acquire property, plant and equipment and intangible assets other than goodwill for example development expenditure.

Revenue
The majority of Accell Group’s contracts are contracts with customers in which the sale of goods is generally expected to be the single performance obligation. The timing of the transfer of control varies depending on the individual terms of the sales agreement. For sales of bicycles, parts and accessories, transfer usually occurs when the product is delivered to the customer. However, for some international shipments the transfer occurs when the goods are loaded onto the relevant carrier at the port. Generally, the customer has no right of return for such products. Revenue is recognized at the point in time when control of the goods is transferred. 

Accell Group provides warranties for general repairs and does not provide extended warranties or maintenance services in its contracts with customers. The warranties serve to guarantee that the bicycle, part or accessory functions as intended and meets the agreed specifications. As such, these warranties are assurance-type warranties that are accounted for under Provisions.

Some contracts with customers include customer programmes and incentives, such as special pricing agreements, promotions, advertising allowances and other volume-based incentives. Accell Group recognizes revenue from the sale of bicycles, parts and accessories measured at the consideration received or receivable, net of accruals for customer incentives and returns (if the customer has a right of refund). If revenue cannot be reliably measured, Accell Group defers revenue recognition until the uncertainty is resolved.

Accounting estimates

Accell Group makes estimates in the measurement of discount accruals, included in trade receivables. When customers are given discounts, these reduce the transaction price and consequently the revenue. The conditional discounts in revenue are estimated based on accumulated experience supported by historical and current sales information. Expected sales volumes are determined taking into account (historical) sales patterns and other relevant information. A discount accrual is recognized for expected volume and year-end discounts payable to customers in relation to sales made until the end of the reporting period.

7.2 Other income

Other income amounted to € 1.1 million in 2021 and is mainly attributable to the settlement of a brand license (2020:
€ 0.1 million, mainly attributable to rental income).

Accounting policy

Other income is reported on an accrual accounting basis, meaning when the revenues are incurred not necessarily when they are received.

7.3 Cost of materials and consumables

  2021 2020
  € x 1,000 € x 1,000
Materials 899,178 906,690
Freight and inbound costs 44,626 15,213
Warranty provisioning 5,210 5,448
Obsolete raw materials and semi-finished goods 3,667 5,110
External assemblies 3,112 2,241
Cost of materials and consumables 955,794 934,703

 

Accounting policy

Cost of materials and consumables are recognized in the same period as the revenues to which they relate e.g. when Accell Group sells goods (bikes or bike parts and accessories) or performs services. Expenses are recognized on an accrual accounting basis, meaning when the expenses are incurred, not necessarily when they are paid.

7.4 Personnel costs

  Notes 2021 2020
    € x 1,000 € x 1,000
Wages and salaries   136,632 122,384
Social security charges   16,010 14,595
Pension contributions   8,390 7,422
Share-based payments 16.4 775 351
Other personnel costs   7,100 4,170
Personnel expenses   168,908 148,922

 

The average number of employees (FTEs) was 3,495 in 2021 (2020: 3,139).

Accounting policy

All expenses are reported on an accrual accounting basis, meaning when the expenses are incurred (services are received), not necessarily when they are paid. For more details on accounting policies regarding pension contributions and share-based payments see note 11.2 and note 16.4 respectively.

7.5 Depreciation, amortization and impairment losses

 

  Notes 2021 2020
    € x 1,000 € x 1,000
Amortisation of intangible assets 10.3 2,740 3,005
Impairment losses (reversals) on intangible assets 10.3 -300 3,936
Depreciation of property, plant and equipment 10.1 8,917 8,235
Depreciation of right-of-use assets 10.2 9,598 9,759
Gains & losses from lease modifications (remeasurement) 10.2/9.1.3 -5 -8
Capital loss on sale of property, plant and equipment 10.1 7 1
Capital loss on sale of intangible assets 10.3 - -
Depreciation, amortisation and impairment losses   20,957 24,928

 

Accounting policy

For the accounting policy on amortization, impairment and divestment losses on intangible assets, see note 10.3. For depreciation of property, plant and equipment, see note 10.1 and for depreciation of right-of-use assets see note 10.2.

7.6 Other operating expenses

  2021 2020
  € x 1,000 € x 1,000
Selling expenses 77,784 69,954
General and administrative expenses 6,855 7,278
Lease expenses 1,414 1,757
Research & development expenses 5,813 2,051
Maintenance and energy 5,495 4,635
Audit and consultancy costs 7,361 5,475
IT costs 8,900 7,974
Other 8,639 15,423
Other operating expenses 122,262 114,546

 

Selling expenses are primarily marketing costs, freight costs, other (outbound) logistics costs, del credere costs and platform fees. For more details on lease expenses, see note 9.1.3.

Other expenses are primarily costs related to provisioning, tools, car costs and facility costs. The decrease in the other expenses in 2021 compared to 2020 is mainly caused by less provisioning. 

Accounting policy

All expenses are reported on an accrual accounting basis, meaning when goods are received or services are provided, not necessarily when they are paid.

7.7 Result on the sale of subsidiaries, non-consolidated companies and other investments

The result on the sale of subsidiaries, non-consolidated companies and other investments consist mainly of the sale of the fitness and motorcycle parts business of Tunturi Sweden, the sale of the associate Urbanvision and the sale of a 10% investment in a company.

7.8 Earnings per share

The calculation of earnings per share and of diluted earnings per share is based on the following data:

  2021 2020
Net profit accruing to Accell Group N.V.'s shareholders (€ x 1,000) 69,974 64,829
     
Number of issued shares as per 31 December 26,836,619 26,805,031
     
Weighted average number of basic shares for the earnings per share 26,829,592 26,804,632
Potential impact of share options and conditional shares on the issuance of shares under the share-based payments programme 83,414 89,237
Weighted average number of issued shares (diluted) 26,913,006 26,893,869
     
Reported basic earnings per share (€ x 1) 2.61 2.42
Reported diluted earnings per share (€ x 1) 2.60 2.41
     
Adjustment factor according to IAS 33 1.000 1.000
     
Total earnings per share financial year (€ x 1) 2.61 2.42
Total earnings per share financial year (diluted) (€ x 1) 2.60 2.41