Thule Group reported revenues jumped 56.0 percent in the first quarter. Sales in the Americas region rose 83 percent on a currency-neutral basis.
Highlights of the quarter include:
- Net sales for the quarter amounted to SEK 2,538m (1,744), corresponding to an increase of 45.5 percent. Adjusted for exchange rate fluctuations, sales increased 56.0 percent;
- Operating income amounted to SEK 594m (325), corresponding to a margin of 23.4 percent (18.7). Adjusted for exchange rate fluctuations, the operating margin increased 4.2 percentage points;
- Net income amounted to SEK 447m (241);
- Cash flow from operating activities totaled SEK 72m (8);
- Earnings per share before dilution amounted to SEK 4.28 (2.33);
- New long-term targets have been established by its Board of Directors with doubled sales by 2030, a maintained EBIT margin of >20 percent, a raised dividend level to >75 percent of net profit and achieving ambitious science-based targets initiative goals for greenhouse gas emissions by 2030.
Thule’s statement from Magnus Welander, CEO and president, follows:
Very Strong Start To The Season and New Long-Term Targets
The very positive market trend that we saw in the second half of 2020 continued during the first quarter of 2021. We posted growth of a full 56 percent for the quarter after currency adjustment.
The positive macro trend of the past few years, with increasing numbers of consumers seeking an active life, also has meant a healthy market growth for Thule’s products. This long-term trend has been reinforced by the restrictions on international travel due to the pandemic, with more people opting for “staycations” or simply enjoying a short day trip with activities in their local area.
Driven by the very strong sales growth, continued high gross margins, and a scalable and flexible supply chain, we delivered an EBIT margin for the quarter of 23.4 percent (18.7). In the preceding year, the first quarter was negatively affected during the second half of March. The main reason for this was the restrictions on outdoor activities imposed in many countries to limit the spread of the pandemic.
The long-term targets presented at our capital markets day in 2017 were achieved already in 2020.
We have therefore defined four new long-term targets to be achieved by 2030:
- Sales: Sales to be doubled by 2030
- Profitability: Maintain EBIT margin of >20 percent
- Dividends: >75 percent of net profit
- Sustainability: Achieve the Science Based Targets initiative goals
The long-term targets are presented in more detail in a separate presentation that is available on the company’s website.
Region Europe & RoW—Strong Start To The Spring Season
During the quarter, sales increased in the region 49 percent after currency adjustment and the trend was very positive in essentially all markets.
The Sport & Cargo Carriers category benefited in the quarter from a continued buoyant bike market. Sales of roof racks and rooftop tents were also healthy. Sales of roof boxes increased during the quarter, despite closed winter sports venues in the Alps, which meant that sales of roof boxes and ski-racks decreased specifically in those markets.
The development in the Active with Kids category remained very positive in all three sub-categories: strollers, bike trailers and child bike seats. Accessories for RVs performed very well during the quarter since RV manufacturers succeeded in increasing their production in their effort to meet the large demand that began to accumulate already in 2020. This demand also remains very strong.
The Packs, Bags & Luggage category displayed a mixed picture. Luggage continued to be negatively impacted due to reduced international travel, while sales of sports bags developed well.
Region Americas—Strong Growth
In Region Americas, sales rose a full 83 percent in the quarter after currency adjustment. In Sport&Cargo Carriers, the growth was mainly driven by strong demand for bike products. But other sub-categories also performed well, as North American consumers chose the car as their mode of transport for vacations.
The strong trend in the Active with Kids category also continued, with healthy growth in all sub-categories. Bag sales were also somewhat weaker in this region due to reduced air travel and the fact that more people were studying or working from home. However, as in Europe, sales of sports bags increased.
The US and Canada posted excellent growth and Latin America also grew significantly in the quarter.
Trends Still Positive Ahead Of Peak Season
From a short-term view, considerable uncertainty remains regarding the scope of any pandemic-related lockdowns in a number of countries. In addition to this, in line with most manufacturing companies with rapid growth in these times, we see certain challenges in relation to supplier capacity and global logistics.
However, we remain convinced that the positive trend for leisure and vacation activities closer to home will remain strong for our product categories. With our sought-after products and very flexible production in and around our main markets, we expect a continued very favorable trend during the year.
Photo courtesy Thule