Thule Inc. reported sales rose 58.1 percent in the second quarter and grew 68.5 percent on a currency-neutral basis.
Net sales for the quarter amounted to SEK 3,229 million against SEK 2,043 million a year ago.
Operating income amounted to SEK 886 million, double year-ago profit of SEK 430 million. Operating margin improved to 27.4 percent from 21.0 percent. Adjusted for exchange rate fluctuations, the operating margin increased 5.2 percentage points.
Net income amounted to SEK 672 million against SEK 312 million.
Comments from Magnus Welander, CEO and president, in a press release are as follows:
The very strong trend continues
Sales growth for the second quarter was 58 percent (69 percent after currency adjustment) compared with the year-earlier period. This means that the strong growth trend continued for the fourth quarter in a row.
During the second quarter of 2020, most of our major markets were affected by significant lockdowns, primarily during April and May. This meant that this year we faced a relatively weaker comparative period. It is therefore particularly positive to be able to also report currency-adjusted growth of a full 39 percent compared with the second quarter of 2019.
Manufacturing costs increased during the quarter, driven by generally rising material prices and by the extreme freight prices in the global market. We also experienced challenges in accessing capacity at subsuppliers to be able to address our large volume increases, which resulted in additional costs.
To compensate the cost increases, we have introduced, and already partly implemented, price increases in two steps. The first increase was implemented on July 1 and the second will be implemented on January 1, 2022.
Driven by very strong sales growth, and our cost-effective and flexible organization, we delivered an EBIT margin for the quarter of 27.4 percent (21.0), despite external challenges.
Region Europe and RoW—very strong sales in all markets
During the quarter, sales in the region increased 74 percent after currency adjustment. The trend was very positive in all markets. For the first half of the year, growth of 62 percent was achieved after currency adjustment.
The Sport & Cargo Carriers category performed strongly in all product groups. Vacations using cars as the mode of transport and the strong bike trend benefitted us. Despite challenges in meeting significantly increased demand, we captured market shares with our strong product portfolio and our very good delivery capacity.
Development within the Active with Kids category remained very positive in bike trailers, child bike seats and strollers.
The RV Products category continued to perform very well in line with the first quarter as the rate of production among RV manufacturers remained high during the spring.
The bag category displayed healthy growth compared with the very weak comparative quarter. Especially sales of sport and leisure bags developed strongly during the quarter.
Region Americas—all categories performed very well
In Region Americas, sales increased 53 percent in the quarter after currency adjustment. For the first six months, this entailed a growth in the region of 65 percent after currency adjustment.
In Sport & Cargo Carriers, growth was very good for all product groups and in the Active with Kids category, we also continued to deliver growth in all sub-categories.
The bag category recorded growth after four consecutive quarters with reduced sales. With fewer restrictions and increased travel, both to work and on holiday and leisure, sales increased in our important collections.
High pressure and extended season
The strong trend for leisure and vacation activities nearer to home continues and we are well equipped to capitalize on the opportunities that this offers. Despite our highly flexible production, in and close to our main markets, we were unable to fully meet all demand during the second quarter. Accordingly, we anticipate a longer peak season that will continue into the third quarter since we strongly believe that consumers who have waited for vaccination and a larger degree of travel freedom, will continue to want to purchase our products.
In line with most manufacturing companies with rapid growth in these times, we meet challenges daily in relation to supplier capacity and global distribution. Considerable uncertainty also remains regarding the scope of pandemic-related lockdowns. However, we are convinced of our own ability to manage capacity increases and that the robust trend for leisure and vacation activities closer to home will continue.
All staff involved have already proven their flexibility and drive the last year, with huge engagement and exceptional efforts in a challenging market, which I want to thank them all for.
Photo courtesy Magnus Welander/Cycling Industry News
