Thule Group AB (publ)

Thank you very much and welcome everybody to this Q4 call. I am as always joined by our CFO, Toby Lawton, and we'll take turns going through a presentation and then open up for Q&A. So before we get into the quarter and the details, I'd like to just take a moment to step back and look at the full year 2025. It's of course been an intense year and not an easy market but in many ways it's been a good year for Thule and let's mention a couple of highlights. Thule has never been bigger. We have recorded the highest sales number we've ever done in 2025 and profit increases versus previous year despite of course a challenging market with cautious consumers, retailers, currency headwinds and tariffs, etc. We have done the biggest upgrade of our sporting cargo carriers product portfolio in the history of Thule. And that's important because sporting cargo carriers is just over 50% of our sales. And we know that new Thule products drive growth. We are seeing fast growth in our newest product categories, dog transportation, car seats, and phone mounts. And we have had a very good first year together with the QuadLock team. We've added two new markets to Tudor.com, taking our D2C footprint to 20 markets live now. And our digital channel is now a meaningful channel to launch new products and categories, which is clear to us. We continue to push cost improvements in supply chain and in other areas, but clearly visible in supply chain through the record gross margin we've seen in 2025. We are pleased and proud to see continued strong recognition for product design. Again, winning the ADAC test for on-car seats this year with our second product and a further 17 Red Dot and IF Design Awards. And we have recently clarified and set the direction very clear going forward that we're focusing on building what we call champion product categories and driving efficiency gains. So that was the stepping back for 2025. And let's now dig into some of the details for the quarter. On page three, I mean, you are probably well aware that the fourth quarter is our and therefore doesn't have a big impact on the full year financials. But nonetheless, it is a quarter that's in the right direction for us with increased sales and increased profitability. Sales amounted to just over 1.8 billion Swedish in reported currency, plus 20% versus previous year, excluding currency effects. We're still seeing cautious consumers and retailers in the marketplace. Organic growth was flat, 0%. Positive growth in Europe, small positive, and a negative in North America, although a bit less negative than previous quarters and particularly the start of the year. And we also saw that organic growth number was better at the end of the quarter than when we started the quarter. Reported sales is up 9%, and then, of course, there are big currency effects in the quarter, 10% impact on the top line. We continue as previous quarter to see that the growth we are seeing is driven by new TULA products and new categories, including the acquired QuadLock business. EBIT margin adjusted increased to 4.5%, which is a bit higher than last year. It actually in this small quarter is also impacted meaningfully by currency effects. And Toby will get back to that later in the presentation. EBIT up to 83 million versus 65 last year. So zooming out to the full year results, sales a bit over 10 billion Swedish, 10 and a half, plus 14% excluding currency effects and the small organic growth decline of 1%. Still big currency effects for the full year, although not as big as, of course, for the fourth quarter. EBIT margin is 16% for the year, one percentage point lower than last year. Of course, margin continues to be strong and all-time high. SG&A is coming down in H2 and excluding QuadLock. And correspondingly, the EBIT margin is increasing during the second half of the year versus previous year. Cash flow from operations continues to generate good cash flow at about 1.1 billion, which is lower than last year. And then, as we talked about before, the working capital patterns has now returned to sort of historical patterns, which was not fully the case last year. The board of directors is proposing an ordinary dividend of 8.3 sec per share, which is the same level as previous year. Zooming out on page four, 2025 is yet another year of increased sales and increased profit for Tule. This graph shows the trend since the IPO in 2014, and it's a nice continuous upward trend over time with some COVID bumps and declines, of course. Sales is also in reported sec despite the currency effect all-time high and EBIT increased versus previous year, taking sales to zero. 10.4 billion, and EBIT to 1.7 billion for the full year. So that's the top line financials. But we turn next into the category level. We are a product company after all. So I think this adds hopefully some color to how the business is performing at the moment. And overall, as I mentioned in the beginning, the growth we're seeing is coming from new products and new categories. But let's dig into the four product categories that we report. Sport and cargo carriers declined 4% in the quarter and 1% for the full year. We saw good growth from the bike carriers we launched during the spring in 2025. We see good momentum also in H2 of the new rear of cargo products that we have launched. For example, the Thule Arcus XL here in Q3. And we've seen a good start, although it's very recently launched, the pickup truck rack Thule Escape we launched in December in 2025. For the full year, we do see growth in Europe for sporting cargo carriers, but the decline is driven by a decline in North America. It is still a challenging market. We still see the best sales performance in our premium end, in the higher price points. And the retailers were, as we talked about in the Q3 call, really cautious on stocking inventory of spring-summer products as the summer product ended, which impacted, for example, bike carriers' inventory levels and our sales also in Q4. RV products is growing in a market that is improving. Net sales was up 10% in the fourth quarter organically and full year 4%. And for the first time in quite a few quarters now, two years almost, we see that sales increase also to the OE channel, i.e. directly to manufacturers. um whereas the aftermarket trend has been better for a few quarters and is growing also on a full year basis in 2025. we are really pleased to see also that quite a few of the we have delivered quite a few new products within rv product segment in the last 18 months and they continue to do well and actually drive all the net growth in terms of money for us so on top of an improving market we do see good performance from our new rv product just launched And market conditions are improving step by step. And as talked about previously, the consumer interest has remained quite high over the last two years. The aftermarket channel has done better and better. And now we see a return to growth for us also in the OE channel, which is, of course, positive. Turning to active with kids and dogs, net sales was up organically 6% in the quarter. down two for the full year. We continue to see very nice sales momentum in our new categories. Dog transportation continues to grow really well in 2025, building on a very strong start in 2024. And the child car seats also continues with a really nice sales momentum and is now the new record holder for the best category by first full year sales as we wrap up 2025. We also see continued momentum in all-terrain and running strollers, which is very positive. But similarly to what we talked about in Q3, we continue to see the cautious retailers, particularly on cautious with inventory buildup for strollers. Seasonal products impact sort of everything bike related, which impacts the category negatively, particularly at the start of the quarter. And just as in Q3, we see better consumer demand and wholesale demand and Tula.com continues to grow. Bags and mounts is a little tricky to get the numbers right here because we have the impact of the acquired quad lock business reported under bags and mounts. But the organic growth was 0% in the quarter for bags amounts. It was up over 100% in terms of total sales, excluding currency effects. And 0% is a clear improvement versus the full year trend, which was minus 10. This category now is to almost 70% made up by performance phone mounts. And the QuadLock had another improvement. really good quarter with organic growth over 15% in Q4 and about 15% for the full year as well. The bags business or bags and luggage business is doing a bit better. The Thule brand is back to modest organic growth in the second half of the year, also in Q4, whereas we just continue to see a decline in case logic and OE products in bags. So before I hand over to Toby to talk about the more financials, I thought we would return to talk, expand a bit on the highlights that I started out sharing. And in particular, some of the highlights that are important for 2026 and going forward. On page seven, let's start with the updated financial targets and our plan to reach them. And we shared this at our Capital Markets Day in November last year. But to recap, the financial targets that we have set are ambitious. We want to outperform the historic performance that Tula has delivered. We have a pre-pandemic and also until the full During the full period, we've been a listed company delivered organic sales of an average of 5%. And our new sales target is to deliver 7% annual organic sales growth. The other two targets are not changed. They are achieving an EBIT margin of 20% and the dividend payout ratio at or above 75% of net income. We have two main targets. priorities or themes to deliver on our ambitious targets. And the first one is to build bigger and more champions. Champion product categories to recap are the categories that are the core to our success and have accounted for 90% of historical sales and gross profit growth and value creation for Thule. And these are categories where we are a clear global number one with the distance to number two. Typically in a small market, or we call a pocket, a niche, Where Thule is not just the market leader by numbers, but we are the leader in terms of innovation and with the clear ability to out-innovate a competitor, that is innovate more and better than competition, to really get payoff on our strong product development. capabilities. And the first priority in our growth plan is to grow bigger champions that is grow the ones we have and also add more champions. And our ambition is to go from the current six to 10 by 2035. We are pleased to see that we already have three what we call champion candidates in our portfolio that are doing well that we can continue to develop. The second part of our plan to reach our financial targets is around efficiency and skill effects. And you may remember from the capital market state that our current EBIT margin is about one and a half percentage points below the historical average. But the EBITDA margin is 1.5 percentage points higher than the historical average. So we have during the COVID years invested quite a lot in building a bigger infrastructure, particularly manufacturing capacity. that we now have room to grow into. So we are doing two things to take us to the margin target. First of all, we are taking a lot of cost actions and the actions that we already have initiated will drive EBIT margin up 2.5 percentage points by 2028. And then secondly, we expect and have proven historically that when we get volume growth, we do get scale effects both on gross margin, for example, increased utilization of our manufacturing capacity, and on sales and admin costs. So on that note, and on the topic of champion product categories, it's very pleasing to just have done the biggest ever upgrade of our sport and cargo carriers product portfolio. As mentioned, this category is As we report, it accounts for just about 50% of our sales, and it includes three of our six champions, roof boxes, roof racks, and bike carriers. And we have done an upgrade in 2025, both of bestsellers that we have taken to the next level with a new generation of products. We have delivered several new innovations, for example, to Lesanto, which is a Corobox product, Combined with the bike carrier behind the car and two Larkos XL just recently launched, which is a cargo box behind the car that can have capacity for skis, which is doing really well. And we've also particularly focused on North America and delivered quite a few North American specific products that we see also really pay off. So all these actions have had clear positive sales impact in 2025 across the geographical regions. And we are now entering 2026 with an upgraded portfolio and more news on the way. On the topic of champion candidates, as an example, I'd like to point out the momentum that we have in dog transportation at the moment. And you may remember we entered this category in the beginning of beginning of 24. quickly became the best new category of first-year sales in the year of 2024, with the Thule Allax, the crash-tested dog crate driving the business, and then later followed up with the dog-specific bike trailer, Thule Bexi. And we've continued to see good performance in 2025, with more products added to the portfolio, increased distribution, and increased awareness. And this is a category which, We think it has a clear potential to be a future champion, what we call a champion candidate. This is a niche market or a clear pocket. There are no global players, no global brands in dog transportation. We know from our own research that many Thule consumers already own a dog, of which many own two. And the pet market is clearly growing and pet safety is clearly a growing trend within that. So we will continue to grow dog transportation in 2026, both through more products we will share in a minute, but also continue to extend the distribution. We're also supporting our champion categories and candidates with what we call better sales and marketing. We're reaching more consumers, but also presenting and selling more of what we have. And we are doing many activities to this end. But one example I'd just like to highlight, because it's very recent, is that we held a Thule Experience event in November in Malmö and in Hillerstorp in Sweden, where 50 of our global Thule brand ambassadors were showcasing our wide product portfolio and the launch is coming up in front of a 500... 500 people audience made up of big customers, important customers and global media. So we're starting to see the global PR effect very early right now with positive results, but we also perhaps at least as importantly have really good discussions right now with some of our biggest customers about expanding the range of Tudor products in those channels. And last but not least, on a more business-oriented update, I'd like to mention something on our sustainability of efforts that are paying off. It's a long-term work to meet long-term targets. And the key area for us where we're making progress is around the CO2 emissions. We continue to come down, and now CO2 emissions are down by almost 30% compared to the base year in 2019. That is in absolute numbers. And one of the key drivers for us to achieve this is the way we design our products, and what we call eco-design, where we are already at the product development stage, try to think through very carefully which materials we use, reducing, for example, aluminum and steel where we can, using recycled aluminum, and really designing for sustainability footprint. And one very recent example launched here just two months ago is the Two Lakescape bedrock system for pickup trucks, which It's replacing a quite a few years old product with 60% lower emissions footprint compared to the previous version. So we are making big efforts and it's paying off and leads us on the good path towards reaching our CO2 target. So with that bit more business oriented update, I'll turn over or hand over to Toby to take you through some of the more financial detail.

Thank you, Matthias, and good morning, everybody. I'll start off on a couple of minutes on the income statement. And firstly, looking at the Q4 numbers, the Q4 revenue, we were just over 1.8 billion sec in the quarter, which, again, it is our smallest quarter of the year seasonally. So we have to bear that in mind. That was 9% higher than the same quarter last year. So the reported sales growth was 9%. Organic growth was flat. The acquisition impact on Q4 was 20%. And FX was minus 10%. So we had a pretty big impact from FX in just in quarter four. So I'll come back to that. The gross margin in the quarter increased to 44.9% versus 41.6% last year. And that increase is mainly driven by the acquisition of Quadlock. And here, while the margin has increased versus last year and we have a good margin, it's a good gross profit margin, it's important to bear in mind that the actual amount of gross profit is also impacted by the FX impact on revenue. So the fact that we have a 10% negative impact from FX on revenue drops through to the absolute amount of gross profit. The adjusted EBIT in quarter four was 83 million versus 65 million in prior year. And here, there's two main effects. Firstly, the margin is up due to the QuadLock acquisition, which has also the impact on the gross profit, which I mentioned earlier. But it's also improved due to lower selling and administration expenses, excluding QuadLock, so lower cost excluding QuadLock. But it's negatively affected, however, from the FX impact, which I mentioned earlier, particularly on gross profit. And the FX impact in the quarter actually has an impact on EBIT margins of around 2% to 3%. So quite a big impact in the quarter. But again, it's our smallest quarter, so it shows up more in the small quarter. When it comes to the full year, we had net sales of 10.4 billion. This is versus 9.5 prior year, so reported growth of 9%. Organic growth was minus 1.3%. Acquisition impact plus 15%. And here the FX impact is minus 5%. So not as big as in Q4. Q4 was bigger, but still a negative FX impact on the full year as well. Gross margin increased for the full year to 46%. So record gross margin versus 42.7% last year, with the increase driven by the QuadLock acquisition again, but also by price mix effects and also efficiencies in our supply chain. Adjusted EBIT for the full year is 1671 million SEC. And this compares to 1622 million SEC prior year. So we ended the year with an adjusted EBIT margin of 16.0%. And here, just to mention the FX impact is smaller on the full year, but still has an impact of approximately 1% on a margin basis. All right, if I go to the next slide and here a few details on our investments in R&D or our development spend, which we've had in 2025. And you may remember this graph from our Capital Markets Day presentation as well in November. And here you can see firstly that the development or R&D spend ended on 7.3% of sales for the full year 2025. And that, again, is also impacted by the FX impact primarily on sales. And you could say without any FX impact, we would have basically been flat versus prior year in development spend at 7.0%. As you can see from the graph here, we also increased the share of our spend on our champion categories, which, as Matthias has talked about, those are the categories which generate 90% of the value creation or the profit growth in Tula. So it's important that we increase our spend on champion categories. And for 2026, we are going to continue that to increase our proportion of spend on champions. And we'll also spend less in total in 2026. And looking further forward, we talked about this also at the Capital Markets Day, but our medium term plan is to reduce development spend to 6% of revenue in the medium term and to spend at least 4% of revenue on the champion categories within that development spend. So continuing to focus our spend on the champion categories that deliver the profit growth. Okay, if I turn to the next page on cash flow, cash flow, for the full year, we generated a cash flow from operations of 1.1 billion, a bit more than 1.1 billion. So we have continued to have a good cash flow generation in Tula. As part of that, we reduced inventories by 157 million SEC, a good reduction in inventories, we did have a target that we talked about at the start of the year to reduce inventories by 200 million, but we forward integrated in Australia in quarter four, which did have an impact on inventories that we've put into the market in Australia as part of that forward integration. So that's had an impact in the quarter. But here it's also important to remember that over three years, we've delivered an inventory reduction of 1.6 billion. So a big inventory reduction over the last three years. Overall, working capital increased by 131 million SEK for the full year. And we're back, you could say, to our historical pattern when it comes to working capital. Finally, on the CapEx line, you can see we had a CapEx spend for the full year of 348 million SEK. and that's primarily relating to the automation and extension of our warehouse in Poland. And we did actually bring forward a bit of that investment into quarter four to get ahead of the winter weather and ahead of plan. So that's going well. The next slide, we show our leverage and here you can see our debt to net debt to EBITDA leverage. And leverage is important to us. And it's something we follow very closely. And we want to maintain a conservative leverage. And we do that with a leverage of 2.0 net debt to EBITDA. You can see historically, we've been at a level around 1.7 to 1.8. For a lot of Thule's history, we're close to that level. We're still comfortable with our leverage, but we expect to delever during 2026 and come towards that level. And just to reiterate what I said on the cash flow side, really, that our quarter four leverage was somewhat impacted by this inventory effect that we built some inventory in Australia as a part of the forward integration and also that we pulled forward some of the Huta investment, both of which, of course, are impacts that will help the cash flow in 2026. So we'll get that effect back in 2026. Four. And then to the next slide, just briefly on the dividend, the board has proposed a dividend of 8.3 sec per share. This is the same dividend level as we had in the last year, in the prior year, and is also in line with our financial target, which is to distribute at least 75% of net income as a dividend. Okay, and with that, I'll hand back to you, Matthias.

Thank you, Tobbe. And I'll close off the presentation part of this with some forward looking remarks. So on page 17, our focus forward is now quite clear. Now we're about building champion categories and driving efficiency gains. Starting off where we are, I mean, we are still operating in the market where both consumers and retailers are cautious. It's important to note, and particularly so in North America. However, there are some positive signs in the marketplace of improvements. And the clear example is within RV products where market conditions are moving in the right directions and improving. Thule is well positioned in general, almost independent of the market with our strong brand, global market leadership in our key categories and own manufacturing in both Europe and the US, for example. But now we're also quite excited to enter 2026 as we have an upgraded product portfolio, not the least in sport and cargo carriers. We have fast growth in our three newest product categories and lower cost levels. So we will continue to push the agenda at a high pace also in 2026. And to take you through some of the action points under building bigger and more champions, we are continuing to launch quite a few new products in 2026. It is a high pace. Do we continue? And we are focusing this on our champion categories. So more details to follow on the next page. We're also building and adding more champions by both growing the product portfolio in these champion candidates, but also growing the presence in terms of sales distribution and driving awareness. And that's across dog transportation, car seats, and our all-terrain and running strollers. We are, as we talked about at the Capital Markets Day, not pleased with the long-term performance around in bags. And we are turning that around by focusing on outdoor-related products and functional accessories. I'll show a few examples in a minute or mention a few examples. And lastly, we continue to support our champion categories by selling more of what we have, reaching a bigger consumer audience. For example, in addition to the tool experience event I mentioned, we are continuing to build out D2C also in 2026 with more markets for tool.com. And building up the presence in Australia that we just established to Toby's point earlier, we now have our own sales organization in place as of just a couple of months ago. We're continuing to push the efficiency and scale effect points as well in 2026. We are focusing our R&D spend and will bring the total R&D cost level of spend level down in 2026, while still spending more on our champion product categories. We're continuing to drive efficiency in our supply chain. For example, we will continue to insource selected components where it fits our capabilities to utilize our available capacity. And we will continue to build what we call product technology platforms. For example, harmonizing components and parts of products across our product portfolio. We have... come quite far within bike carriers, for example, where we have a quite wide portfolio, where we can see that we can use same components or similar components for many types of bike carriers, thereby driving synergies in purchasing, in manufacturing processes, sometimes even consolidate manufacturing lines. So that's an important work that is ongoing with much more to give and will support the gross margin going forward. And then lastly, we continue to take actions to reduce what we call the structural costs. So our setup, if you like. And we are, as you know, automating our DC in Poland for GoLive in 2027, which we expect to have a significant savings of, in this case, 100 million SEC with full effect 2028. So full speed ahead on both building bigger and more champions and driving efficiency gains. A couple of notes on the product launches coming in 2026. We have a busy launch calendar also in 2026, although not as intense as in 2025 or 2024. But more importantly, it's really now aligned and focused on building champions and the agenda that I just talked you through. So a couple of examples. Under the first umbrella, growing the existing champion categories, we're doing... We're addressing more use cases, we're addressing more price points, both lower and higher, and more North American products. Just to mention a few, Thule APOS Park Secure is taking our most premium bike carrier and adding parking sensors, which we think is a sought-after feature in the market, and of course pushes the price point up and really positions Thule with a unique premium plus offer, I would say. We have just launched Tule Vero, a new North American product for heavier bikes. And we are introducing Tule Velolite very soon, which is an entry-level price point bike carrier. So we're doing many things there. We continue to invest in our next generation champion categories. And to take just two examples, we are launching our first dog basket for the bike, making it easier to bring your at least smaller dogs when you are biking online. And we are, during spring, introducing a new and upgraded suite of car seats, of both infant and toddler seats that are connected, have sensor-based feedback that will help prevent misuse and help the parent to be more informed when the child is safely in place in the car seats. In all, continuing to push the child safety agenda as the Turle wants to do. And then lastly, we are launching several products to turn around the bags trend, focusing our bags assortment much more on outdoor-related products and functional accessories. And we have just recently shipped what is Tool Inlock to the market, which is an innovative new bike commute bag and rack solution. And more products are coming just this spring. We are a product company, and I think it's always nice to show a little bit of product before we wrap up. So bear with me. I'll go quick. But on page 19, Tulivero just hit the North American retailers about now. It carries... up to 80 pounds of weight so that is heavier bikes and e-bikes it has a tilt functionality and it has been very well received in early introductions and by the press so far I mentioned Thule Velolite, which is a great value bike carrier. It's our newest bike carrier that touches the entry-level price point if you're still looking for a safe, flat-form rear-car bike carrier and also comes in a fun bike version. We're really looking forward to that. We've done a big push on rooftop boxes recently. We introduced Thule Force in 2025, our best-selling mid-price box. We introduced a new generation Thule Motion, our best-selling premium box, a little bit before that in 24. And now in 26, we're refreshing our entry-level roof box called Thule Pulse with a new generation. We're looking forward to having a fully upgraded roof box assortment as we move into 2026. And I mentioned also quickly Thule Inlock, which we think is a really innovative bike commute bag solution, which if you're used to bike panniers, sort of shifts the system around to avoid any hardware on the bag and towards your back and puts that on the bike with a super easy slip on, slip off functionality. So we are quite excited about the new products coming out in 2026 and we are very pleased that we are focusing our product launches on the champions we have and the champions we are trying to build. So that summarizes the presentation part of this conference call. And we now ask the moderator to turn to Q&A.