Thule Group CEO and President Magnus Welander comments on the third quarter 2016

Strong profitability growth in the quarter
During the third quarter, our stable trend of improved profitability continued
with an underlying EBIT growth of 6.9 percent after currency adjustment. For the
first nine months of the year, the underlying EBIT was SEK 901m, an increase of
10.3 percent after currency adjustment, meaning that on a rolling 12-month basis
we achieved an underlying EBIT margin of 17.2 percent (16.0 percent for the full
-year 2015).
Sales increased to SEK 1,366m during the third quarter (growth of 1.7 percent
after currency adjustment and excluding the acquisition of GMG). Organic sales
growth for the first three quarters was 5.2 percent (after currency adjustment),
which is above our annual financial target of 5.0 percent. Operating cash flow
also remains very strong.
Fast growth in Region Europe&ROW
We are very pleased with how well our initiatives in Region Europe & ROW drove
growth during the quarter. With a sales growth of 9.0 percent in the quarter, we
achieved an increase of 11.1 percent after currency adjustment for the nine
-month period.
We continued to capture market shares in Sport&Cargo Carriers through successful
product launches. Furthermore, we continued to grow rapidly in Other
Outdoor&Bags, driven in particular by strong sales in Active with Kids. Our
sport strollers, multi-functional bike trailers and child bike seats continue to
capture market shares in this, for us, newer category. The positive trend in RV
Products also continued and we are capturing market shares in a category that is
also displaying strong market growth.
Weak market in Region Americas
Sales in Region Americas were weaker than expected during the quarter, with a
decline in sales of 8.8 percent after currency adjustment. Despite a decline in
sales of 4.0 percent through September, we retain our market shares, but the
market as a whole has not recovered in the way we expected during the third
quarter.
Primarily three factors had a negative impact on sales: a weak Outdoor segment
following the bankruptcy of two major store chains in the spring, cautiousness
in the cycling retail segment with large ingoing bicycle inventories ahead of
the 2016 season, and a decline in sales of Bags for Electronic Devices. These
are factors that we believe will also impact the fourth quarter.
Margin improvements in Work Gear
After a very strong start to the year, we experienced a somewhat weaker market
in the US during the third quarter and sales declined SEK 7m and profitability
SEK 1m (after currency adjustment) compared to previous year. For the first
three quarters, sales were in line with the preceding year, while underlying
EBIT during the same period grew SEK 15m (38.2 percent after currency
adjustment). Our improved production efficiency and focus on a more profitable
product mix mean that the margin for the year is at 16.9 percent (12.3 percent
for the same period in 2015).
Rapid integration of acquired GMG
In early July, we acquired GMG B.V., the leading manufacturer of child bike
seats in the Benelux region. The products (sold under the Yepp brand) are an
excellent complement to our existing range. At the trade fairs in September, we
launched a new generation of child bike seats under the Thule Yepp brand, and
the GMG entity is already a fully integrated part of Thule Group.
Supply Chain initiatives
We are currently conducting a number of major projects to ensure that we can
achieve our growth targets. In conjunction with the acquisition of GMG, we
decided to transfer the assembly of the new child bike seats in-house. Since
wealso see generally strong growth in the new categories, we have decided to
bring forward the opening of a further assembly plant in Poland. The new plant
will be operational already during the first quarter of 2018.
In the Americas region, we have commenced the second stage of our major
distribution project as a result of the relocation to our new distribution
center for the eastern US, which has just begun. The center will be fully
operational at the end of the first quarter of 2017. This new, larger and more
efficient warehouse, and the structural improvements we have made at our
distribution centers throughout the world, will be key contributing factors to
continued efficiency enhancement in 2017.
Strong interest in our new products
We are entering the winter season, but in the third quarter we have also
participated in a number of global trade fairs and demonstrated a range of new
products set for store launch in the spring season. Generally, the reception has
been very positive, with particularly strong interest in our new Thule Chariot
multi-functional bike trailers and the new Thule Motion XT roof box. The product
launches and our operational projects are key reasons why I am looking forward
to an exciting period.
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Enquiries, please contact:
Fredrik Erlandsson
SVP Communications and Investor Relations
Tel: +46 70 309 00 21
E-mail: fredrik.erlandsson@thule.com
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About Thule Group
Thule Group is a world leader in products that make it easy to bring the things
you care for – easily, securely and in style – when living an active life.
Under the motto Active Life, Simplified. we offer products within two segments:
Outdoor&Bags (e.g. equipment for cycling-, water- and winter sports, roof boxes,
bike trailers, baby joggers, laptop and camera bags, backpacks and cases for
mobile handheld devices) and Specialty (pick-up truck tool boxes). Our products
are sold in 139 markets globally. There are more than 2,000 of us working for
Thule Group at nine production facilities and more than 35 sales locations all
over the world.
Net sales for 2015 amounted to 5.3 billion SEK.
Thule Group is a public company listed at Nasdaq Stockholm.
For more information, please visit www.thulegroup.com