Things are getting worse and worse for the number 1 bicycle manufacturer in Europe

Accell Group (Winora, Lapierre, Babboe, Batavus, Haibike), considered the number 1 in cycling in Europe, is clearly unable to get its head above water. Worse: the financial rating agency Fitch Ratings even lowered its rating, the fourth time in a year. A measure which greatly reflects the group’s current difficulties.

An employee of the Heerenveen bicycle factory // Source: Accell Group

Will Accell Group manage to stabilize and move forward? The one who is today considered the number 1 bicycle manufacturer in Europe is going through a difficult period. Owner of a multitude of brands including Winora, Lapierre, Batavus and Haibike, the Batavian firm saw its financial rating downgraded (from CCC to CCC-) by Fitch Ratings, we learn from Bike EU. This is the fourth time in a year that this American rating agency has singled out Accell.

The Fitch Ratings report is an opportunity to take a closer look at the company’s financial figures. We learn, for example, that Accell Group has simply spent all of its cash, estimated at 700 million euros. Since last year, its main shareholder KKR has financially supported the company, notably with a loan of 298 million euros.

A gigantic debt

For Fitch Ratings, Accell must achieve an EBITDA of at least 100 million restore a minimum liquidity margin“. As a reminder, EBITDA corresponds to earnings before interest, taxes, depreciation and amortization. Except that for the rating agency, the estimated forecasts do not speak in favor of Accell Group.

We expect EBITDA to remain low and barely above break-even as manufacturers, including the Accell Group, will be forced to continue their discount policies. Moderate market normalization is only expected from 2025”, it is written. Let us also remember that in March 2024, the Financieele Dagblad (FD) mentioned a gigantic debt of 1.2 billion euros.

Winora iRide Pure test before
Source: M. Lauraux for Frandroid

Fitch Ratings continues: “We see significant operational challenges as the company re-engineers its product portfolio and business processes across manufacturing, logistics and sourcing“. Here, the agency focuses on the relocation of Accell’s production to Hungary and Turkey, where labor is cheaper. In fact, between 100 and 150 jobs have been lost in the Netherlands.

These efforts are further exacerbated by sales challenges in addition to Babboe’s recall costs. Business seasonality and industry challenges mean the second and third quarters are critical for Accell Group’s recovery», Adds the American agency.

A broken trust

Indeed, the recall of Babboe cargo bikes more than likely cost the group millions of euros, which would have knowingly concealed the industrial deficiencies of its cycles from its customers. In addition to the money spent on this recall, consumer confidence has also been broken.

In short, Accell Group is strongly affected by the industry crisis that occurred in 2023, where inflation, falling demand, geopolitical uncertainties and overstocking have led to numerous bankruptcies and other legal receiverships.

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