Thule Group AB (publ)

Hello, everyone, and thank you for joining the Tula Group Interim Report Q4 and NDU Report 2024 call. My name is Marie, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I will now hand over to your host, Matthias Ankerberg, CEO and President, to begin. Please go ahead.

Thank you very much and welcome everybody to this Q4 call. I am also here joined by Toby Lawton, our CFO, and we will do this presentation together, followed by Q&A. And as usual, we will speak to a presentation that will be available on our investor relations website. So let's start off on page two. We've had a good year. It's been really busy, to say the least, but it's also paid off. This is a year where we are back to profitable growth, despite the market being still challenging. It's the biggest product launch year in Thule history. More new products than ever. We have also entered three new product categories. In the beginning of 24, we launched dog transportation with the first product, Thule Alex Dog Crate. During the year, we have launched child car seats in Europe. And during Q4, we acquired Quadlock, the global market leader in performance phone mounts. We were also busy getting even closer to the consumer and added, as one of those initiatives, five new D2C markets via Tulu.com. We are proud to be recognized for our product design. We have received more International Design Awards Red Dot NF Design this year than ever. And we, our team also won the Red Dot Design Team of the Year earlier in the year. And just recently, we were ranked highly in the Morningstar Sustainalytics sustainability rankings. In fact, Thule was ranked one of the top 50 companies in the world according to this assessment and number one in the world of all consumer durable companies. So a busy and good year for us. Turning to page three, looking more closely at the results and starting with the quarter. It is clear that the fourth quarter is our smallest quarter due to seasonality and doesn't impact the total financial results for the year so much. But still was a good quarter for us. Growth of 7% versus the year before. We continue to see a generally tough market, particularly in North America and in RV. We'll get back more to that later. The growth is really driven from the acquired QuadLock business and new Thule products. EBIT margin increased a bit, 0.4%, and EBIT was 65 million versus 53 last year. Zooming out to the full year, we had a growth of 5%. The market conditions I just mentioned are valid largely for the full year, too. And on the full year basis, it's really new Tula products and bike-related products that are the main growth driver of those 5%. We ended the year with an EBIT margin of 17%, which is half a unit better than last year. It's an all-time high gross margin of 42.7%. And part of that is offset by higher SG&A costs due to the many product launches we have done this year. Still ending up with an EBIT margin at half a unit above last year and an EBIT of 1.6 billion Swedish. Strong cash flow from operations. And we have beaten the target to reduce inventory by 200 million, which is, of course, contributing to that cash flow. The board is proposing a dividend of 8.30 seconds per share, which is in line with the financial target of distributing 75% of net income and continues to give us lots of firepower to continue investing in growth for the future. And we will get back more to that later on as well. Zooming out a bit on page four, Tool has been a growth company for many years. This chart shows the development since the IPO in 2014. And we had a peak or a boom during the COVID years and two decline years following that. So it's nice to see that we are now back to profitable growth. Sales for the full year is up 5% and EBIT 1.6 billion. And we do that despite investing more than ever in product development. In fact, we have invested more in money than ever before and about the same in percent of sales before. We ended up the year of spending 7% of our sales on product development. This has also, of course, given positive effects for the growth in 2024. This will also have positive effects for the growth in the coming years. And in fact, when we look at our product portfolio today, product development portfolio pipeline right now. We are right now running more new product development projects than we've done ever before. So with that said, I'd like to spend a bit more time on the specificities of the product categories. We are a product category, and let's have a look at the performance of the different product categories, both for the quarter and for the year, starting off on page six. So our biggest product category, sport and cargo carriers, is really driven by bike-related products for the quarter and for the full year. The category increased sales by 1% organic for the year and 5% for the full year. The bike market has developed positively, but clearly this is also an area where we see good growth from new Tuller products. So we had a strong start for this autumn's released new vertical hanging bike carrier to the revert, which is mainly addressing the North American market. We did a soft launch of our upgrade bestseller to the easy fold during the autumn, too, which also had a really nice start. We do continue to see more generally for this category, which also includes other major subcategories like roof racks and rooftop boxes, for example, a tough market of cautious consumers and retailers, particularly in North America. We do see that the bike market in Europe is back to healthy inventory levels. And the difference, main difference, why the quarter is showing a lower growth number than the full year is that the bike-related products account for a smaller share of the sales in the fourth quarter. Fourth quarter is a winter quarter and less people bike in the winter. But overall, a good 5% growth for the full year driven by bike-related and new bike products. Packs, bags and luggage is a story of... of two parts. Net sales decreased for 7% in the quarter and 2% for the full year. As we've done for several quarters, we continue to see growth in Tula branded products, and we continue to see that growth driven by new Tula products. So in the quarter, we see good growth in the newly launched luggage product, Tula Subterra, and the new updated duffel bags, Tula Chasm. We see good growth, continuously good growth in the quarter in bike bags and bike related bags. But as for the previous comment, bike is a smaller share of the fourth quarter. The decline is driven by legacy products as we continue to wind them down and exit legacy business. And net effect of that is minus for the quarter and for the full year. Our best performing product category in terms of growth, both for the Quarter and for the full year is juvenile and pet, where we have done a lot of new things. Growth is 14% for the quarter, organic, and 10% for the full year. We launched a new generation of our best, I would say, sorry, excuse me, of our strong all-terrain stroller to the Urban Glide 3 that was launched during the first quarter of the year. And we've seen good growth from that category forward. Since then, that continued also into the fourth quarter. And we have seen several other product upgrades also supporting growth. However, this is an area where we've also launched completely new product categories. So we launched the dog transportation in the beginning of the year with our dog crate Tula Alex as the first product. And we continue to add to dog transportation with the launch of the dog trailer, the bike trailer Tula Beksi in the autumn. And we've had a really good start for dog transportation products. In fact, it's the best first year sales of any new category introduction in the history of Thule. So it's clearly contributed to the growth in this area. We also launched car seats starting in May in the German speaking countries, Germany, Austria and Switzerland. Continued throughout the autumn and had a really intense fourth quarter with introducing Thule car seats in 20 European countries in the fourth quarter. Our fourth product category is RB Products, where we continue to see a challenging market. The industry is going through a tougher period. It is, as it was in the last quarter, a story also with two sides. On the positive note, it continues as of starting of Q3 to be growth in the aftermarket channel, that is the sales to the dealers that are closest to the consumers who are still keeping a high interest in the RV business and are now also buying products more than the year before. However, there is a lot of inventory in the market and the OE customers have reduced their production plans during both the third and now continued into the fourth quarter to manage inventory levels in the industry. Hence, weak sales to the RV OE channel and that decline is bigger than the growth in the aftermarket. Net sales comes out to be 7% negative for the quarter and 3% negative for the full year. I can also comment that RV products typically and particularly owe a high share of sales in the quarter or Tula. That was some detail on the product categories, both for the quarter and the full year. Let me also present a few of the highlights for the quarter. On page eight, as mentioned briefly before, we have continued to launch car seats throughout the year. And this was the most intensive quarter in terms of launch, where we introduced the products to over 20 European countries. We have had a sequential launch starting in May, followed by Benelux in September, and then now over 20 countries in Europe. We are really proud to be recognized for having the safest child car seats in the market. And we are really proud to be able to have that recognized by the most important consumer test in the market, the German Stiva or ADAC test. That was, of course, a very good milestone for us and also a good reason for us to really launch in a very intensive way in the fourth quarter. We were having events with all major retail partners. We had PR events in 10 cities and we had a good reception from both retailers, but consumers and also media, which we're really proud about. So more to come. Now we are launched in Europe. We continue to build the category going forward. And for 2025, we will continue Of course, address this more with sales and marketing efforts and continue to work with our partners to get the Thule products in front of the consumers, but also add new products. And there will be a high back booster seat, the product for the somewhat older children released during spring 2025. So that was an intense initiative for the company. And another important event was the acquisition of Quadlock, the global market leader in performance mounts. performance phone mounts, which we announced in November and completed in December. And QuadLock, just as a quick reminder, is the market leader in three specific segments in the market, performance phone markets, for bicycle, clear number one, for motorbike, clear number one, and for off-road drive. It's a company founded in 2013, so fairly young still, turning almost one and a half billion Swedish. 25% EBTA, sales in over 100 countries and fairly distributed footprint around the world and strong in D2C. So the Quadlock digital business accounts for about 75% of the total sales. And turn to the next page. The main reason we acquired Quadlock is that it's a really strong fit with Thule and the strategy that we are executing on going forward. And there is a lot more information on this in previous events. But just to summarize the three pillars that we really build on and that Quadlock meets is that we focus on market leadership and attractive categories. Quadlock is clearly the global market leader in performance for months, as also shown on the previous page. It is, in a way, the category-defining brand in the market, and it's the most recommended brand in the market by consumers and has the widest offer. It's also a category... which is attractive. There's about a 10% growth rate in the category, and consumers choose product based on robustness, quality, safety, and ease of use, all things that are close to our Thule territory. So it's a good fit, clear market leader in an attractive category. It's a company that is also building its future on product-driven growth, which is very similar to or exactly as the Thule philosophy is. Kodlok has a really strong track record of innovation, expanding the portfolio, starting a bicycle into off-road car, motorbike, marine and more areas. It is the clear market share winner in previous years and has a strong product development team in place with much more to come. It's also a very good fit with the Thule brand and the culture that we have. have very many similarities between the consumer base of Thule and Quadlock. Both target outdoor enthusiasts willing to pay premium for the best product. Both brands are in the eyes of the consumer associated with quality, safety, enabling an active life. And we also are happy that we have a very strong cultural fit between the two teams. So Quadlock is acquired during the fourth quarter, which is, of course, another important event for Q4. And then lastly, from me before I hand over to Toby to cover the financials, we are proud to be recognized for the long-term and ambitious sustainability work that we are doing on page 11. We have some pretty ambitious goals in place, including reducing our CO2 equivalent footprint according to the SBTI goals. We've seen a good development over several years, which we continue to work hard on and improving, not the least by new products which have a lower CO2 footprint. And it's also nice to be recognized for that work. And I think the team has done a lot of good things. And it's a good recognition to be among the top 50 out of the Sustainalytics ranking globally. So with that, I hand over to Toby to cover sustainability. some of the financial aspects.

Great. Thank you, Matthias. Good morning, everybody. I'll start with slide 12. And here you can see the sales by quarter over the last six years for Thule Group. And as you can see, firstly here, of course, the last quarter, as Matthias said, is the smallest quarter. This is the low season for Thule, so it's worth remembering that. The second point, I think we had 7% growth in quarter four. So good growth. And this, of course, has been helped by Quadlock, which has been consolidated since the acquisition was closed on the 4th of December. So we basically got one month impact from Quadlock in the Q4 results. And thirdly, then organic growth was flat or slightly down, as Matthias has said. It's basically the same trends as we've had before, but the business impact is a bit different. And the main effects there are coming from The bike season, that is a weak bike season in Q4. People don't ride their bikes as much in the winter. And the bike season or the bike business has been driving growth all year. And the second point is really that RV is normally a bigger share of sales in Q4 and RV is a weak point. And even within RV, we have two channels and the OE channel of RV is the weaker channel. And it's the OE channel, which is normally bigger in Q4 as well. So all that changes. All those mix effects contribute to the overall mix in the organic growth rates. Also worth noting in Q4, we have a weaker growth from Americas versus Europe. Europe is stronger in Q4 this year. If you look back a year, it was the other way around. So to some extent, that mix just in the fourth quarter is due to comparables. But obviously, for the full year, the story still stands that we're stronger in Europe and we're basically flat in America in terms of gross. If we come to slide 13, the income statement. And here, firstly, if I point to the right-hand side at the top, you can see the revenue. And we had 9.5%. billion sec of revenue in 2024. And this is 4.5% growth versus prior year. Yeah, the organic growth then is 3.5%. And then in Q4, we had 7% growth of which the organic growth was, as I said, flat or slightly down. If we just look a bit further down to the gross margin, here you can see we had a gross margin in the fourth quarter of 41.6%. And for the full year, we had 42.7%, so a good increase versus last year. And you can see in all quarters, we're up on last year. So that trend has been carrying on through the year and is impacted positively by our product mix, our increased volumes, and the increased volumes coming through the business and being manufactured by Thule are driving a steadily lower manufacturing cost. And also in quarter four, you could say the product mix is helped by the acquisition of Quadlock, which is positive on gross margin. If we move down to EBIT, you can see we now have a line called adjusted operating income. And here we are excluding the one-off transaction costs of 100 million SEC that we had for the Quadlock acquisition, which have been taken in Q4 24. When we look at the adjusted EBIT margin, you can see for the full year, we end up at 17.0%, which is half a percent up on the prior year. And this is really driven by the improving gross margin that we've been driving, somewhat offset then by the investments we've been making in basically in selling expenses, as you see here. And those investments are primarily in development, where as Matthias showed, we've invested in development, this year for future growth we've invested more than 650 million in development this year but also marketing supporting the new products and new launches finally the effective tax rate is 22.5 percent so same same as last year and the net income for the year is yeah 1.122 billion sec i just turn over then to the cash flow and a couple of Minutes on the cash flow. Firstly, the cash flow from operations has been at 2.3 billion SEC for the year. So another strong cash flow delivered this year. A good contribution from the underlying operating results, of course, but also another good contribution from reducing inventory further during 2024. And we had a reduction of nearly 500 million SEC versus 200 million SEC target that we set for ourselves. And I can also say here we are targeting a further 200 million on inventory reduction in 2025. And finally, then the last line or second last line you can see here is the capex. And we had capex of 263 million for the year. So stable, similar level to last year, slightly under 3% of revenue. And if we turn to the next slide, slide 15, and here you can see our net debt and also our leverage or net debt to EBITDA. And of course, having made the QuadLock acquisition in Q4 and funded that acquisition, the net debt has increased due to that in the fourth quarter. But with the good underlying cash flow of the business, I think we come out with a leverage at the end of the year of net debt to EBITDA of 1.83%. which is lower than we actually guided for at the time of the acquisition due to good cash flow in Q4. And it's also very much in line with historical levels of leverage. So a normal level in line with historical average. And I would say just to mention here that when we measure net debt to EBITDA, we've obviously got the full net debt included for the QuadLock acquisition. And we also include the 12 months of EBITDA on a performer basis for the acquisition, which is a normal way to measure your leverage following an acquisition. And if I just turn to the next page, page 16 here, just to show some history on dividend as well, and our proposal on dividend, which is 8.3 sec per share. This is 75% of our net income, which is in line with the financial target, which has been in place previously. basically for the last four or five years. You could see, it's worth noting that last year was a bit higher. The leverage last year was a bit lower than the historical average. So we decided then to have a slightly higher dividend level. But this year, you can say the leverage is in line with the historical average and we followed the financial policy as we've done most years. And I think more importantly, it's a good dividend with 75% of net profit, but we also continue to have a good balance sheet and the capability to continue investing in our future growth plans. So with that, I hand back to Mattias.

Thank you, Tobi. That concludes the 2024 part of this presentation. Let's spend a few minutes looking forward into 2025. And as we enter 2025, we have a long-term view on the business, as always at Sula, and we continue to drive our long-term growth strategy. We are well positioned in what remains still a challenging market. When we look at market conditions as we enter this year, we continue to see a challenging market in North America and for RVOE specifically. It is a better market in Europe in general, and it is a better market for premium bike-related products. And as we've said on scene all year, we are pleased to see that new Thule products drive growth also in a tougher market. On the note of tariffs and other uncertainties, it's also worth to mention that most of what Thule sells is produced in our own factories. We have factories both in Europe and two factories in the US, and we have Thule. production of our most important sales product sales-wise in the US or produced locally in the US. And we also have a wide portfolio of offers. So we have the opportunity to limit supply chain uncertainty, including tariffs, if that would arise. We have set for ourselves four clear priorities for 2025. Firstly, if there's one thing we learned from 2024, it's that new Thule products drive growth, even if the market is tough. And we see the results of that also on the bottom line. So we will continue to put our foot on the gas also for 2025. We will continue to invest in product development. We will keep the record launch pace that we've had in 2024 also for 2025. And we will have a more front-loaded launch plan. That means we will launch more products earlier in the year compared to 2024. And the reason is we want to capture more of the high season with our new products that are coming out in 2025. Secondly, we have an ambition to be successful in more categories at the same time. In 2025, we are focused on scaling up what we have launched and acquired in 2024. You will see new products in dog transportation coming in Q2. You will see a high back booster seat in car seats, in child car seats coming also during the year. And we will, in partnership with the Quadlock team, continue to invest and grow that performance phone mount business through new products as well. So many things to do to build a stronger market position in the areas we just have entered. Thirdly, we know we want to be closer to the consumer or more visible for the consumer. We know that we have many customers that really like Tula products, even our fans. But few are aware of the full offer that we have as a company. So we are focusing on showing more to sell more. We continue to focus on expanding our D2C presence. And you will also see some new marketing activities for us during 2025. Lastly, an important area is to continue to run efficiency throughout our supply chain. We have a strong in-house footprint, as we mentioned before, and we can clearly see that when we have improved efficiency over the last two years, we get funds to invest in growth. And as one clear target, we continue to aim to reduce the inventory levels also in 2025 on the back of 1.2 billion reduction during the last two years. So target is to reduce a further 200 million in 2025. And as this is the fourth quarter presentation, therefore a good look into next year, I thought I'd mention just a few more highlights of what is coming ahead here as we are soon looking into to high season. So on page 18, this is examples of products that we are launching in 2025. And the headline is very clear. The high launch pace continues. We will continue to focus on upgrading versions of our best selling products. That means many of our best products are getting upgraded. A lot of that will happen in our core categories, sport and cargo carriers, that is rooftop boxes, bike carriers, and other big products. But we'll do the same also in bags and actually in RV and in juvenile and pet as well. We wouldn't be too late if we wouldn't be aiming to launch some real innovations also. This year, we will see innovations more in our core sport and cargo carrier category, and I will get back to that in a minute. And as mentioned previously, we will also launch new products in our new product categories. You will see a crash-tested dog harness called Thule Cappy coming in Q2. A high-back booster seat, as mentioned, Thule Palm. And an extended version, a double-door version of Thule Alex, the dog crate, coming towards the end of 2025. As we are now already in Q1, and I'm sure many are eager to go out and shop some Thule products, I thought I'd give you a highlight of some things that are either probably in a store near you or very soon to be in a store near you. So Thule Force is our best-selling mid-price rooftop box. 2024, we upgraded Thule Motion, our best-selling premium rooftop box, and this year we are upgrading our mid-price rooftop box. It will get a new design, better aerodynamics, a new lock mechanism, and lots more accessories to be launched at the end of quarter one. Thule Glide is our award-winning running scroller, which we clearly think is the best one in the market. That will also get a new design, several improved features that help the child to be more comfortable, Actually, also the parent to be easier to keep the child safe and in place, but also for the child to get in and out of the stroller. And it will also be launched during the first quarter. And as an example of an innovation, we are launching also in the first quarter to Lesanto, which is an innovation in the area we call rear of car, which we believe a lot in for the future. Tule Santo is the product that allows you to transport both your bike and cargo at the same time behind the car. It's also constructed in a way that the box can be used with many, many of the bike carriers already in the market to the bike carriers that is. We really look forward to this launch and it is actually already arriving in the first stores as we speak. So in all, to sum up the forward-looking part, we are getting ready for high season. We will have more product launches in Q1 than we've ever had before. We will add new 2.com DTC countries, and you will see new marketing campaigns coming out in 2025. We're also just about to enter the peak production period for the company, and that means basically all areas of the companies are really busy, and we have lots of high energy throughout our organization and excited about what's to come in 2025. And with that, we turn to moderator to take questions.

To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure that your device is unmuted locally. We have a question from Frederick Iverson of ABG. Please go ahead.

Thank you. Good morning, team. Thanks for the presentation. I've got a few techie questions. I'll take them one by one. And now, I guess, a lot of moving parts with Quadlock. And you helped us with most of it, but it would be sort of helpful also to get some sense of the gross margin in Quadlock, both for the quarter and on a full year basis, just to get some sense.

I mean... Quadlock is clearly positive to the gross margin of Tula. We're not giving out a specific figure on the Quadlock, but it's part of the mix shift within our gross profit margin that's driving improvement in gross profit margin. But I would say it's not the biggest part of the improvement, but it's a part of that improvement. The biggest part is the underlying business where we're getting improved product mix and improved manufacturing cost and volumes driving improvement. transformation costs, but it has a positive impact. Absolutely.

Okay. Fair enough. And then as we look into 2025, how should we view the key drivers of the legacy to the gross margin the way you see it?

Well, I think we had an improving gross margin trend through 2024. And that's come through, you know, improving volumes, as we said, an improved product mix. We expect to, you know, to hold on to and continue that that journey. Basically, we have some price increases coming in in 2025. But we we don't know. You could say some of the some of the increase during 2024 has been kind of. catching up on the manufacturing cost after the pandemic, which is, which is, which is driven in improvement. So, so it's, it's, it's a kind of a big improvement in 2024. Um, but we're definitely investing to, you know, to drive, uh, maintain and drive our gross profit as well. Yep.

Good. Thanks, Toby. And then next question on bike-related sales. You mentioned that the recovery continued in Q4. Where are you now in terms of normalized levels? Are you still sort of on some kind of recovery mode, or do you feel that you're back on normalized levels now? Should we... Could we view next year as more of a normal year in terms of bike-related sales? Or, yeah, basically, where are you here?

Hi, Fredrik Mathias here. Europe is good. And in the premium end, we're talking about here where we play. It's actually been fairly good since, I would say, mid-23. And it's sort of gradually improved a bit from there. But that was sort of the... That high season was good for bike-related. Europe is in a good place. Premium bike is in a healthy inventory balance. North America is still a bit of a different story. I would say the big retailers have a good inventory position when it comes to premium bike-related products. The North American market also has a fairly large share of its distribution, which is what's called independent bike retailers, smaller enthusiast shops, mom and pop shops. And they still have lots of inventory. Some have inventory for years post this covid boom and low consumer demand for since then. But but Europe is in a good place and North America is getting there, but behind. Okay, so still some upside in North America.

That's good. And then last question from my side on the product development costs. You mentioned 650 million in 2024. Is that a good number to have in mind as we look into this year as well?

I could say it was more than 650 million. It's actually about 670 million in 2020. 2024, which is 7% of revenue. And, you know, as Mathias said, we plan to continue to invest to drive future growth. So, you know, at around the same proportion of revenue.

Okay, very clear. Thanks, Toby. That's all my questions.

We have a question from Gustav Hegers of SEB. Please go ahead.

Thank you. Good morning, guys. Thanks for taking my questions. If I might start with the the market in U.S. on sort of the bread and butter categories, roof racks, roof boxes. Is it your opinion that you've kept market shares flat or increased them or decreased them in 2024 in that specific vertical?

Yeah, hi Gustav, Mattias here. Yeah, for... For rooftop boxes, we maintain market share, basically. We have a very strong position in rooftop boxes in the US. There could be some fluctuations around that high number, but we maintain that. For bike carriers, we're also strong at number one, but there's more competitors and also more data available. We actually take market share in 2024 and quite substantially so, but still it's been a tough market for North America and bike, not the least.

And roof rack, is that not a major... I'm sorry.

Roof rack is in a similar territory as rooftop boxes where we also are a very strong presence and hold our market share.

Okay, thank you. And then you mentioned you're running more product projects currently than ever historically. And... Given that you now started sort of the pitot and the mid-price segment a little bit more with it to the outpace and so forth, could you give us a rough sense of the share of those products that you're currently running as a project that you aim to target the mid-price rather than the upper price level?

Yeah.

Sure, I'll do a brief overview at least. I would say that if we start with a little bit of a historical context, Tula has always played in sort of the mid-price or upper mid maybe and the premium end. During the pandemic, there was a lot more focus on premium. We could sell anything we produced basically and the premium got more attention. So now we are addressing some of the mid or upper mid segments that haven't been addressed for a little while, which are quite big volumes, actually, and an attractive opportunity to do some work on. Looking forward, the balance that we will have when we come out at 25 is pretty much what we look to have going forward as well. So it's so many categories and product levels, but we are more in premium than we are in mid. I guess it depends on how you put the numbers together, but probably 70-30 or something like that. And that's a good balance we feel going forward as well. We aim to make the best product in the world that is easiest done in the premium end of the market. But we also address the upper mid or the mid price segments when we see that there's a good business logic and good business volumes. That's the reasoning behind the activities we are driving right now.

And if the way you look at organic growth in 2025, does that assume positive mix?

Positive mix in what perspective you mean?

To organic growth, your organic growth assumptions that you have internally, I guess, are based on volume price mix assumptions. Do you assume that mix will be positive for Tula in 2025?

um yes it will be positive for 25 if you would look at volume and and average net selling price but you also have the way we look at it is simplified just like you described volume and selling price but it's also true that when we upgrade mid-price products we drive average net selling price let me give you an example the the most sold bike carrier we have is called to the easy fold and we um are now rolling out an upgraded version of Thule Easy Fold, Thule Easy Fold Generation 3, which we, by the way, highly recommend everybody to buy. And it's a better product. It has 50% less CO2 footprint and several other positive aspects, but its average net selling price is 100 euros higher than before, 949 versus 849 for a two bike. So that's a 12% price increase for a mid-price product. So we will drive... mix effects also within the mid-price segments, if that is clear, Gustav?

Yeah, that's clear. I was more thinking maybe consumers trading down to mid versus premium, but it doesn't sound like that is your thinking. And if I may take just two more. First, if you could give us an update on your view on the launch for the new categories in the States. If that has changed or you can update us on the rollout plan for car seats in particular to the state. And then if you're currently working on any additional categories that you will likely to give us some idea what the next steps will be for Tula maybe in 2026. That'd be interesting.

Sure. So we launched CarSeeds now in basically all of Europe. And it's a European product, as you know, Gustav, according to European regulatory standards. We have a North American product development initiative going on since a few years. There has been a new regulatory framework set and we are still developing. trying to see how the market reacts to that in terms of commercial offers. What we have said is that we will not launch in 2025. It will be later, and that message still holds. We have not set a new timeline, so we will not do it today either, unfortunately. And on your second question, yes, we are working on new product categories. That is some of the initiatives that we now currently have ongoing. We don't foresee to launch in the new product category 2025. And, of course, the boring answer is that we can, of course, not in this call release the new product category for 26, but the news will follow when the time is right.

Looking forward to that, then. Thank you for taking my question. Thank you.

We have a question from Carl Degenberg of Carnegie. Please go ahead.

Thank you very much. Good morning, guys. So I'll come back to, I wanted to ask on Quadnot again. I mean, I heard what you said on, and also the sourcing and production channel. I mean, we know the structure there, and it's a cool tool. I recall also Quadnot having quite a significant sourcing from China, if I am correct.

critical a little bit about that you know we've been here on the tariff side and you know u.s china and asian trade cards not having any impact on quadlock so forth yeah i can tell there's a little bit hard to uh hear you carl just i think i made out the question so so yeah we have um obviously the newly acquired quadlock business they source from china but not only from china so china and other uh manufacturing uh suppliers in in basically asia primarily um so so you know a tariff on china does have some impact what i would say is um you know they have strong gross margins and the product cost is is not a big part of the uh the cost uh in the pnl so so it's um It's a percentage on a small number. So it has some impact, but it's not a big impact. Okay.

Then I also wanted to ask, coming back a little bit to the comments you made on RV, and I appreciate the comments on the aftermarket business, but I wanted to hear a little bit on what you're seeing on the OE side right now. I mean, based on the discussions that you're having with

customers there do we appreciate that we are let's say close to the trough now in in europe or or um what are the tones in the industry going into 25. um matthias here um it's an interesting one um um and we should just remind everybody that our rb business is virtually european business so we we have knowledge of that market of course um yeah we see that basically the same trends that um were in place in Q4, continuing Q1. So our view is that we will continue to see growth in the aftermarket channel in Q1. Consumer interest is actually fairly high in RV and has been throughout 24. And there were some big fairs now in the beginning of the year, which have high attendance in line with previous years, but too much inventory in the market. And with the production, the reduced production that we've seen in the OECD, in Q4 will continue also in Q1. Everybody's hope in the industry, which we believe also is the most likely outcome, is that these production stops will lead to a more balanced inventory situation as the high season kicks in when spring comes. And hopefully, the industry is then in balance and can start looking at flat and therefore on growth as an industry.

Mm-hmm. Okay, very well. And then just finally, I wanted to ask a little bit on the CapEx development. I mean, as you pointed out there, I mean, they're quite unchanged year-on-year, 24 versus 23. I just wanted to hear a little bit your views going into 25. I mean, I guess CapEx needs in QuadLock is nowhere as significant as, let's say, the core business is, let's say, a similar number in terms of sales. Is that what we can also expect for this year or... Is there a reason to believe anything else?

Yeah, no, we don't have any formal guidance, Carl, but yeah, I think we invest, like I said, a bit less than 3% on revenue. We invest a lot in developing our factories and automation and other things to drive improvements in manufacturing costs and to grow volumes, but we don't expect a dramatic change, no.

Okay. Thank you very much.

We have a question from Daniel Schmidt of Danske Bank. Please go ahead.

Yes, good morning, Mattias and Toby. A couple of questions from me as well then. Just coming back to Quadlock a bit more. You've owned it now for two months. Could you first of all say anything about... The growth, or how did sort of December develop compared to December last year? What was sort of the exit growth rate for Quadlock heading into 2025?

Yeah, hi Daniel, Mattias here. No, I think Quadlock had a growth rate for most of which was around that category growth we've seen of 10%. I mean, Kodak has been a market share winner, so a little bit better. And that has continued basically throughout the year. And we continue to see that same trend also now that we wrapped up the year in December. So it's not an easy marketplace for any consumer company, but a good growth throughout the year that continued also in December.

So then double-digit growth also in December, is that what you said? Yes. And I recollect that December is a very small month. I think Toby said that it is the smallest month of the year normally for Quadlock. And if I got you right, you had it consolidated for 27 days. It did look like it was even... potentially more than 10% growth, but that is what you're basically saying, that there's sort of the run rate into 25. And given that you're also saying that Quadlock is very much a product-driven growth company like yourself, how do you view sort of... the pipeline, so to speak, when it comes to Quadlock product launches in 25 versus what they had in 24? What are you planning for?

Yeah, you're right, Dan, about everything you said. And yes, there is a very good, solid product development pipeline also for Quadlock for 2025. I get the years right. It's... a big team in place over 40 development engineers in in the quad lock team that is now also starting to collaborate with the Thule team of course to drive a lot of things and yeah there will be some quite exciting news actually already now in Q1 but we and some have been some have been launched if you're a hardcore mountain biker you may have seen some of the stem mounts or the anti- some of these things, but we were thinking Daniel in all transparency to as of Q1, when we have a first full quarter of, of Quadlock in our books to start to show you also some of the new products that have been released from the, from the Quadlock side. If you're curious, there is a Quadlock website where you can search for news or call us.

Yeah. Yeah. Okay. Okay. Good. Good. Just also coming back to the tariffs there a little bit. Um, you chatted, it will have a small impact, Toby, and that is, so far, I understand that fully, but are you also planning to pass on that effect to the end consumer?

No, I think, yeah, so far it's still unclear, I would say, number one, and we do manufacture in the US, so we have a better position than virtually every competitor with regard to our ability to manage this but yeah depending where it ends up but there is some impact and we do intend to mitigate that basically by yeah by price increases you know depending where it lands as well so to some extent we have to wait and see what's coming for China obviously but other countries are unclear yeah okay

It's a moving target, simply.

China's not a big part of the sourcing in North America, so China on its own is not a big impact. But if it's much wider than China, then it starts to be a bit bigger number, of course. But still, in the context of Tula Group, it's not a big part of our cost base or our profit that's impacted. Okay.

just moving on to another topic that we haven't discussed really today but it's been coming out sort of you are establishing more offline stores and you've stated that it will be more even more in 25 what is sort of your target there and could you set some more light on that yeah matthias here uh yeah we we have um uh not many stores in general to give everybody the context we have a

For you, not even a handful own operated, but we do have some partners who operate stores for us. And in total, if you look around the world, there are about 50 Thule branded stores. We think there is an opportunity to both improve the store format and present more of Thule in a more efficient way. And with that, also adding to the consumer experience in terms of support, service, repair, installation, etc., And we also see that in some of the cities we have great consumer interest and good brand building and good sales in some of these stores. So we are adding a few. But in all transparency, part of that is also trying out the new what we think is better store format. We opened one store in Munich during the autumn and we will open two more here in Q1 and two other European cities. And yeah, both to learn and to support our partners with an upgraded store format so they can make more money and we can make more money. And hopefully also see this as another growth opportunity to bring more of Thule closer to the consumer. But we shouldn't overestimate this initiative. We're not becoming a retailer or expanding a big own store network. It's to address these specific opportunities that we see. Yeah, just as mentioned.

Yeah, but the latest ones that you have opened, they are all the own Munich, Paris, Denver, Santiago, or part of those franchise.

Let's see now. Denver was a few years ago. Santiago is a partner. Munich was this autumn. That's clearly us. Paris was just this other day. That's us. So it's a mix. Okay.

Okay. And this is finally, you clearly are very happy with the launch of Dog Crates, and it's been annualized in terms of sales now, and it's the best launch ever from a new category. Do you think that that position is going to be overtaken by car seats when they annualize in May?

No. We hope that it will be overtaken soon. We have to remember when we were in May, we launched May 28 in three countries only. So I think it's a milestone, which we're very proud of, of course, to have launched car seats in Europe. But for all practical purposes, it's a few days and a few countries. But give it a little bit more time than May, and we hope that the answer is a very solid yes. Okay.

And just final one, maybe. Well, I am a little bit surprised that there's no change at all when it comes to the U.S. in terms of sentiment. Are you as well?

You mean from our numbers or the way we read the market?

Yeah, I think both maybe. There was a comp base in Q4, but you had sort of flat numbers for the full year. And sort of in terms of your wording, it hasn't really changed when you talk about the U.S. now compared to 12 months ago.

Right, I get you. No, I think, again, we can be open, you know, we... may have commented or may not, but I think we did feel internally during the autumn that there were some lights in the tunnel, so to speak. You could see that consumer sentiment was picking up a bit, and the discussions we had with our main retail partners, you know, the big outdoor guys, were, I think, starting to talk more about growth and growth opportunities than inventory levels and cost reduction. So we were seeing the conversation change a bit, And then, yeah, when we now have a new president in place, there is, let's call it, lots of uncertainty among our retail partners. You know, what about tariffs? What about cost? How will the consumer read these signals? Inflation has been high recently. on everybody's agenda i think in the us and if you read the statistics the perceived inflation effect is is holding the consumer purchase sentiment back quite a bit during 2024 so i think we were a bit more optimistic forward looking but then now we are saying it's a little bit harder to guess i think over the next one two three years for sure we'll see a better market but if that's gradual improvement quarter by quarter now or not is more difficult to see. So we just decided to keep it simple and maintain the same general commentary around the market situation.

Okay, thanks a lot, Matthias. That's all for me.

We have a question from Mats Liss from Geppler Chevro. Please go ahead.

Yeah, hi, thank you. Coming back to the organic growth, I mean, for the full year, you presented a 3.5% growth, and in the fourth quarter, it was close to zero. Could you give some indication there how much that slowdown related to RE products? I mean, other segments seem to maybe do a bit better, I guess.

Yes. I mean, that's the message we've been trying to give is the trends are the same in Q4. So it's not that the trends have changed, it's the mix that is impacting the overall growth rate primarily. So it's the fact that bike is weak, the fact that RV is a bigger share of sales in Q4, and RV is obviously... weakest point right now for us and even within RV also the mix that the channel that is normally bigger in Q4 is the channel that's most affected which is the OE or the manufacturers which are taking these production stops so I think that's the picture we don't see a kind of a big change in the trends in Q4 from previous quarters but it's the mix is different and then always I think important to point out that Q4 is our smallest quarter so It doesn't move the needle very much.

No, but I mean, your bikes are slow in the fourth quarter every year. So, I mean, and RV is down quite substantially, as it seems. So, I mean, would the trend have been 3.5% in the fourth quarter as well? Or is it just for RVs?

You would have seen a similar mix as in other quarters, Mats. You would have seen a similar total growth rate. That's correct.

Yeah, yeah, okay. Good. And then coming back to the new products a bit, I mean, in car seats you have, if there are any connections there between, well, parents choosing a stroller of yours and are there more sort of inclined to choose...

car seats from from usl or is there no connection there now there is some connection there and there is a trend in the marketplace that i think is coming mainly from from the us and uh has migrated into europe the last few years there's a people young young parents by or parents to be by bundles more so car seats combined with um with strollers. They are designed to work well together and have a lot of practical issues but also design issues or not issues, topics. So it's a trend that came from the US and picked up in, for example, the UK quite a lot in the consumer market a few years ago and they're now coming more across Europe as well. So clearly the combination of having both is beneficial for us. Now we can have our own product to go with the strollers that we have.

But your concept is sort of a flexible car seat that could be used with other stroller brands as well?

Yes, it can. And other car seats can be used without strollers as well. And there are several adapter and connector solutions in the market. And some also adhere to the same standards. But if you want the full bundle, it's now possible to get the full Thule bundle.

Okay, good. And about the pet transport products there, you seem to have a pretty good I think it's an interesting question actually and I think a little bit back to the strategy that we try to

or clarify. I think we shared that in some of the recent conversations after we acquired Quadlock. We try to be big in pockets, as we call it, but we try to be big in specific niches that suit us really well and that are attractive. And I do believe dog transportation is such a niche. I mean, it's clearly pet safety is a theme that is growing in society. People care about their pets almost as family members and want to keep them safe. The active and outdoor trend, a lot of people who like to be in the outdoors have dogs. People like to bring their dogs to things. And it's also a territory where we can, with our technological and innovation capabilities, bring the best possible product to the market. I mean, the dog crate we launched early last year, won the consumer tests basically right out of the gate. So I think it's a very good fit with the strategy. And we also had a great work by the product development team to bring out a really strong product and good work by the sales teams to quickly buy some distribution. And we know we have some wins where the previous market leading brands have been taken off some of the shelves and Tula product is now on the shelves. So it seems to be a good fit. And hopefully... The way we see it, the good growth category as well with positive trends around both pet and specifically pet safety.

Thank you. Great answer. Thanks.

Our last question is from Adela Deshan of Jefferies. Please go ahead.

Thank you. Just two quick ones from me. First on the strong growth in pet and juveniles. Was that entirely driven by the new product launches? And then if you could maybe provide us with an update on the RV market. Did you see an improvement towards the later months or weeks of the quarter? And how should we view it as we head into 2025? Is it going to be a continuation of the weakness in the first half and then an improvement in the second half or weakness throughout the full year? Thanks.

Hi, Mattias here. Let's see, the first one was around, yeah, Julian and Pet. Yes, it is driven, I would say, fully by our new products. I mean, there are three big drivers of that growth in the quarter. The two Lurban Glide 3 that was launched earlier in the year is our all-terrain stroller and our biggest stroller and has been giving really good growth. all year. Number two, dog transportation, as we just talked about, is a very good first-year For us, the best first year of any category, so it's clearly also supporting the growth. And then car seats, thirdly, which was rolled out in 20 more countries in Q4. So those are the actions that are driving this space. It's not an easy market in a lot of juvenile and juvenile retail right now, but we do a lot of things, and that's driving the pluses we see here. Secondly, on the RV market, trends are... I would say very similar across both Q3, Q4 and what we expect for Q1. So we do see the aftermarket or the dealer channel, the one that's closest to the consumer delivering growth quite nicely. So actually, but the OE channel, the manufacturing side is down quite a bit and more than the aftermarket is growing. And that's because these manufacturers are taking production stops or in other ways, reducing production output to manage all the inventory that is in the value chain that is RV. And we don't think that will change in Q1. We think that will continue for Q1 as well. And hopefully by the time high season kicks in in spring, then things should be in balance and we can be back to normal production levels and growth in the aftermarket channel.

That's super clear. And you're not seeing any at all changes to your market position or customers going with the lower priced items given the challenging environment. It's purely industry related, right?

Yes, for sure. And we are also in very specific segments within RV. So our two main product categories are awnings and bike carriers for RV where we are really, really strong and there's nothing of the other factors that you mentioned.

Great. Thank you so much.

We currently have no further questions, so I will hand back to Mathias for closing remarks.

Thank you, everybody, for joining this Q4 call. Wish you all a good weekend and look forward to talk to you again at the Q1 conference call.

This concludes today's call. Thank you for joining. You may now disconnect your lines.