The year 2018 was one of many changes. The arrival of the new CEO, Ton Anbeek, at the end of 2017 accelerated the transition process in 2018. Accell Group further refined its strategy under his leadership and revised the structure and management of the company with a strong focus on synergy, benefits of scale and cooperation. Accell group’s strategy, which is aimed at long-term value creation, and the related targets for the coming years have been recorded and communicated externally. As the Supervisory Board, we have been closely involved in the development and refinement of the strategy and we strictly monitor the implementation and execution of this strategy. In this context, we consult continuously with the Board of Directors regarding, among other things adjustments to and the speed of the implementation.
As part of the change process, the Supervisory Board decided to also strengthen and renew the Board of Directors. COO Jeroen Snijders Blok stepped down from his post and Hielke Sybesma resigned as CFO after the General Meeting of Shareholders of 25 April 2018. Erik van den Heuvel was appointed as interim CFO to bridge the period until the appointment of the new CFO. Finding the right successor to Mr Sybesma took up a considerable amount of the Supervisory Board’s time in 2018.
At the Extraordinary General Meeting of Shareholders in October 2018, Ruben Baldew was nominated as the new CFO. He subsequently took up the post as of 1 November 2018. Not only did this appointment complete an almost complete renewal of the Board of Directors; it also means that the board is now at full strength to implement the new, refined strategy.
We bid farewell to Jan van den Belt as a member of the Supervisory Board at the General Meeting of Shareholders of 25 April 2018, as he had completed his third term on the board. In addition to this, Ms. Jansen Heijtmajer and Mr. Van de Weerdhof were nominated as new members of the Supervisory Board. The General Meeting of Shareholders subsequently appointed both nominees as members of the Supervisory Board for a four-year term.
In 2018, the Supervisory Board supervised the management and general course of events at Accell Group. In the course of the year, we met 10 times (occasionally in the presence of the Board of Directors) to discuss the strategy, the changes to the strategy and the progress in the implementation. The refining of the strategy comes with many adjustments, including changes in the field of internal governance, numerous new processes, new competencies and a lot of new talent. More specifically, we devoted attention to the following aspects in 2018: IT systems and structure, the progress of the cost-saving process in the supply chain, the structure of the production network, the innovation process, the omnichannel distribution model and the progress in North America. In line with the refined strategy, we also discussed various potential acquisitions in the year under review. In 2018, this resulted in the acquisition of Beeline in North America and Velosophy in Europe.
In October 2018, the full Supervisory Board made a five-day visit to North America, during which we talked to people in our own organisation, market experts and customers. Ultimately, we took a critical look at these activities due to the persistently disappointing results, even after adjustments to the strategy, reorganisations and changes in the management. As a result, it was decided in December 2018 to designate the American activities as non-core. At the same time, Accell Group launched a process to assess all possible options for the North American business. Accell Group also once again confirmed it is fully behind the strategic plan for 2018-2022, with a clear focus on continued growth for the core activities in Europe and improvements in profitability.
During the Extraordinary General Meeting of Shareholders in October 2018, shareholders criticised the functioning of the Supervisory Board and more specifically its functioning in 2017/2018 at the time of the talks with Pon Holdings. Partly in response to the request of the shareholders, we decided to strengthen the Supervisory Board by appointing a new chairman who will closely follow the implementation of the strategy. The intention is for the General Meeting of Shareholders to appoint the proposed new chairman as a member of the Supervisory Board at the General Meeting of Shareholders of 24 April 2019. The Supervisory Board intends to then appoint the new member as its chairman once Mr. Pasman has stepped down as chairman.
The Supervisory Board acted in a plenary fashion at all times in the year under review. In other words, all the members board were present at all of the meetings of the Supervisory Board.
Recently, with the help of a professional third party, we assessed the functioning of the Supervisory Board as a whole, its separate committees and the individual members – both as a board and vis-a-vis the Board of Directors and individual Supervisory Board members. Based on individual interviews with all members of the Supervisory Board and the Board of Directors, the Supervisory Board members and the external consultant subsequently dedicated an open session to discussing the outcome of the interviews. In this session, we established a number of potential improvements and follow-up actions, some of which have already been partly addressed, and some of which will be addressed in a joint session of the Supervisory Board and the Board of Directors.
The past year can be seen as a transitional year for Accell Group. The bicycle and bicycle parts and accessories markets are changing rapidly, especially on the distribution front. The Netherlands is leading the way in that respect. Accell Group is in the midst of a transition aimed at enabling the company to realise its full potential on an international scale. With this in mind, in addition to the aforementioned appointment of a new chairman, the Supervisory Board has therefore decided to nominate Mr. Ernsting (with the enhanced right of recommendation of the Works Councils) for reappointment as a member of the Supervisory Board for a third two-year term. This safeguards the continuity needed after the many changes to the Supervisory Board and the experience and expertise required within the Supervisory Board.
The composition of the Supervisory Board thus ensures an effective coverage in terms of background, know-how and experience to support and follow Accell Group critically during the ongoing transition. This, combined with the fact that in our view all current members of the Supervisory Board can be considered independent as meant in best practice provisions 2.1.7 and 2.1.9 of the Dutch Corporate Governance Code, gives the members sufficient time and space to fulfil their responsibilities properly, both individually and as a team.
Accell Group currently does not currently comply with the standard for a balanced division of the seats on the Board of Directors and Supervisory Board, but the Supervisory Board aims to improve this in its search for new members, as well as the diversity in general.
The Supervisory Board has two committees: the audit committee and the selection and remuneration committee. These committees carry out their tasks on the basis of regulations adopted by the Supervisory Board. The committees maintain close contacts with the full Supervisory Board to discuss current subjects and reach decisions.
The Supervisory Board discussed the 2018 financial statements with the Board of Directors and the external auditor (KPMG Accountants N.V.) and approved same in its meeting of 11 March 2019. Based on this, all Supervisory Board members (and directors) signed the 2018 financial statements. KPMG has issued an unqualified audit report and will be represented at the General Meeting of Shareholders of 24 April 2019 to provide explanatory comments. The General Meeting of Shareholders will be asked to adopt the annual accounts for 2018 and approve the payment of a dividend for 2018 of € 0.50 per share.
The Supervisory Board attaches great importance to effective corporate governance, with the emphasis on independence, responsibility and transparency. We therefore closely follow key developments in the field of corporate governance.
We wish to express our appreciation to all stakeholders for their engagement with Accell Group. We greatly appreciate the staff members who work day in day out with a great level of feeling, commitment and enthusiasm to implement the various changes within the company as quickly as possible. Their efforts will ultimately be the key to the realisation of our group ambitions.