Third quarter
- Net sales for the quarter amounted to SEK 2,528m (2,344), corresponding to an increase of
7.9 percent, of which 17.0 percent from the acquisition of Quad Lock and a negative 5.1 percent from exchange rate fluctuations. Organically, sales declined 4.0 percent. - The gross margin for the quarter increased to 47.5 percent (42.9).
- Operating income for the quarter amounted to SEK 453m (413), corresponding to a margin of 17.9 percent (17.6).
- Net income for the quarter was SEK 314m (300).
- Earnings per share before dilution amounted to SEK 2.91 (2.84).
- Cash flow from operating activities totaled SEK 668m (955) for the quarter.
CEO’s STATEMENT
Good profitability in continued tough market
The market remained tough in the third quarter with a negative impact on sales. Despite this, operating income increased and the operating margin was higher than both last year and historical levels. Our newest product categories continued to perform well, and the work to build a larger, more profitable Thule continued at a high pace.
Third-quarter sales increased 13 percent, excluding currency effects, and organic sales declined 4 percent. The market has not yet shown signs of recovery, with consumers and retailers remaining cautious in both Europe and North America. Our decision to launch more new products early in the year has been successful and our organic sales increased during the peak season. However, retailers remain cautious and chose not to replenish at the end of the season, which had an impact on third-quarter sales. Our newest product categories, dog transportation and child car seats, continued to grow rapidly while at the same time the acquired Quad Lock added new sales.
The EBIT margin amounted to 17.9 percent (17.6). We are pleased that the margin has increased both compared to the previous year and the average historical level, despite the tough market situation. Continued improvements to the product mix and our supply chain efficiency contributed to record-high gross margins. As planned, our decision to launch more products in the first half of this year resulted in product development costs decreasing compared with last year. Excluding the acquired Quad Lock, other expenses also decreased year-on-year. Overall, EBIT increased to SEK 453m (413).
Our sustainability work continues at a steady pace. Creating more sustainable products represents is part of our product development work and Thule has been working with eco-design and life cycle assessments for more than a decade. Many of this year’s upgraded bike carriers have 50 percent lower greenhouse gas emissions than the previous version. These ongoing efforts are taking us step by step toward our climate goals.
Building new categories for the future
Following an intense first half of the year, we launched fewer products in the third quarter. New Thule products clearly drive growth, particularly in areas where we hold strong market positions. One example is RV Products, our category for recreational vehicles where while the market is still going through a tough period we have shown organic growth all year. All of this growth is attributable to new products launched in the last 18 months.
While there were fewer launches in total in the third quarter, efforts to build our newest product categories has continued at a high pace. Thule Cappy, a crash-tested dog car harness, launched in June was well received and the first shipment quickly sold out. In the third quarter, we also launched Thule Palm, a high back booster seat for older children. The launch of Thule Palm means we now have a premium range of car seats to fit all ages.
Toward the end of last year, we added another category through the acquisition of Quad Lock, the global market leader in performance phone mounts. The integration of Quad Lock, which will soon have been part of Thule for a full year, is proceeding as planned and Quad Lock has continued to perform well. Among other initiatives, we opened a new joint sourcing office in Shenzhen, China in the third quarter, where colleagues from both organizations can draw on each other’s expertise on the ground.
North America continues in the right direction
Earlier in the year, we implemented changes in North America to streamline the structure and focus growth initiatives. We have been active in addressing the impact of the increased tariffs and at the same time the North American region has been given more focus, in terms both of product development and of sales. Successful launches of bike carriers for the US market improved the sales trend for the second quarter and continued in the third quarter. The fourth quarter will see the launch of Thule Xscape, an easy to install premium product enabling the safe transportation of skis, surfboards, rooftop tents and other equipment on pick-up trucks. Challenges clearly remain with the North American market, but we are focusing on what we can influence and, each quarter, the development is going in the right direction.
Improved efficiency and cost control
Cost awareness is part of Thule culture and our Småland mindset. In the first six months, we decided to keep our foot on the gas with many successful product launches, even if they come with an increase in costs. A lower third-quarter launch pace means we are now realizing the effects of ongoing efficiency improvements, which contribute to increased gross margins and reduced costs.
This year, for example, we have increased the share of in-house manufactured components to more efficiently leverage available capacity in our own factories. In addition, we have also consolidated warehouses and closed smaller third-party warehouses to save costs and increase efficiency in the larger warehouse facilities. Within product development, sales, and marketing, we have introduced AI services for, which are used for example for translation and image processing, which saves time and are more cost-efficient. This demonstrates the Thule spirit in practice, and our continued efficiency focus allows us to actively choose where and how much to invest in growth.
During the year, we have also decided on a number of structural cost reductions. The organizational changes in North America have been implemented and our warehouse automation in Poland, with expected annual savings of SEK 100m from 2028, is on track.
Long-term investments continue
Thule is well positioned even in a tough market. We are global market leaders in our key product categories, and invest long-term in developing fantastic and sustainable products, a strong global brand and cost-efficient manufacturing and logistics.
We are now entering the fourth quarter, our smallest in terms of sales. However, it will be an eventful quarter, including a global customer event in Sweden. We have launched many new products over the past two years and look forward to cost-effectively showcasing our global R&D and test center in Hillerstorp and all our product categories and news in one single Thule experience.
We also look forward to telling you more about Thule and our prioritized long-term investments at our Capital Markets Day on November 20. All in all, we expect an intense end to the year.
Mattias Ankarberg
CEO and President