Thule Group AB (publ)

Hello and welcome to the Sully Interim Report Q1. My name is Ken and I will be your moderator today. All nights will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your cell phone keypad. I would now like to pass the conference over to Mattia Ankerberg to begin. Please go ahead.

Thank you and welcome everybody to this call. I am, as usual, joined here by our CFO, Toby Lawson, and we will also, as usual, speak to a presentation that will later be available on our website. And following that presentation, we'll open up for questions. So starting off with the highlights for the quarter, it's a good start to the year. For sure, it's still a challenging market in many ways, but we deliver results. organic growth of 4% and an improved profitability. It's nice to see that the growth is driven by our focus on building what we call the champion categories, and we see the fastest growth in the quarter in the product area active with kids and dogs, where we have invested a lot during recent years and continue to fuel the growth with new products. While the absolute number still can be improved, North America is continuing in the right direction, despite the market being the most challenging in the space that we operate in. It's nice to see a good continued trend in the right direction. And it's also nice to see that we, again, are recognized for outstanding product design with many new design awards in Q1 2026. Turning to the financial overview. on page three. We, as mentioned, have organic growth and higher profitability in the quarter. Sales amounted to just short of 2.6 billion Swedish, with the organic growth being up 4%, 5% in Europe, which is pretty good. And North America is flat compared to last year, which again, It's not a number to be satisfied with, but it is continuing step by step, quarter by quarter, to move in the right direction, which we're pleased about. The rest of the world increased organic growth 2%. There's been quite significant currency effects in the quarter, 7% percentage point impact, which take the reported sales in SEC to minus 3% versus previous years. We had a really nice high gross margin in the first quarter last year, and we maintained that high level, which we are pleased with. And the EBIT margin is up almost 1.5 percentage points to 16.5%, driven by some organic growth, of course, but also cost efficiency. Reduced sales and admin costs in the quarter, particularly lower prior development spend, but also some lower admin costs. And cash flow from operations was positive in the quarter, 25 million, which is an improvement versus the historical trend. And Toby will get back to some further details on all these financial metrics in a little while here further on in the presentation. And before we get into the details, let's take just a step back and remind ourselves about the long-term trend. It truly has been a This is a company for over 10 years, and we have a long track record of profitable growth. And just to set the numbers straight, we now, of course, continue that trend in Q1. And on the last 12-month basis, we have net sales of 10.3 billion SEC and an EBIT margin of 16.4%. If we move into... The performance by product area will talk you through all the four product areas one by one. And I'd like to just quickly mention that as of this report, we now refer to these four as product areas. And product categories is a more specific term. So, for example, the product areas for cargo carriers is a collection of product categories like roof rocks, cargo boxes, and bike carriers, just to clarify the terminology a bit more. And we can start with the biggest product area, sport and cargo carriers, which is almost half the sales in the first quarter. Here is also a product area. We have three so-called champion product categories, roof racks, cargo boxes, and bike carriers. And as a quick reminder from the CMD, in November, champion categories are categories that are today the clear global number one. And we have the capabilities to... do what we call out-innovate competition, innovate more and better than competition and drive our own growth. But they're also sizable enough to matter for the entire company. So about 500 million SEC or bigger. We have six champion categories today, a few champion candidates, and that's the number one growth priority to grow these. So sport and cargo carriers in Q1 was slapped versus last year in organic sales terms. We did see, as we always do, nice growth from contribution from new Thule products. And here recently, we have launched some new products in the quarter, which are at the entry price level. Thule is obviously sales tilted towards the premium end, but it's nice to be able to offer more consumers the option to buy into Thule. And we had a good start, both for the rooftop box Thule Pulse and the entry-price bike carrier Thule VeloLite. We continue to see a really nice momentum in what we call rear of cargo, rear of car, excuse me, cargo products, which we've strengthened the offer quite a bit last year. And we just before the new year in December last year launched the first product for many years in the pickup truck space in North America, the truck bed rack Thule X-Skate. which has also off to a nice start now in the Q1 2026. So good to see that these products are continuing to add growth to the company. We did see growth in total for the sport and cargo carrier product area in Europe, but a decline in North America. That's why it's flat in total. It is still cautious retailers and consumers, but it's nice to see that we do grow in the premium end, both in Europe and in North America. what's holding the growth back in total is the mid and lower price items in North America where the market is still the most challenging. Moving on to the second product area, RV products. It's counted for just over 20% of the sales in the quarter. Here's a product area where we saw some good growth in the quarter, up 8% organic. And it's now the second quarter in a row where we see growth in both the aftermarket, which we've done for quite some time, but also in the OE channel. The market is recovering or improving, and we see that the OE customers or manufacturers are taking less and less production stops, which of course helps the growth to be balanced across both those channels. We should also say that the growth is for sure not just driven by a recovering market. We have continued to invest in product development also during a tougher time for RV products and also have some award-winning products. And we can see that these products contribute really well to the growth that we're seeing now in the quarter. We see the start of the year, good consumer interest still in RVing, camping. with good attendance to consumer affairs and general high interest. And we expect the market to be gradually improving also going forward. The third product area is our fastest growing product area in the quarter. It's active with kids and dogs, which is a product area where we have also invested a lot in recent years. And it's a product area where we have what we call three products, sorry, three champion candidates, product categories that we believe a lot in, that fit the characteristics of a champion category, but are not yet big enough to classify it as a champion. And we see really fast growth in all these three champion candidates. In all, terrain and running strollers continues really strong, driven by our two Lurvin Glide products and some news around that product that really helps. We see continued strong trend in dog transportation, including our recently launched dog crate, Tula Alex Double, so the ability to safely transport two dogs at the same time, launched just a few months ago. And we also continue to see very good momentum in child car seats, and we see strength from our most recent launch, the high-back booster seat, Tula Palm, which came during the autumn last year. So, Very nice growth in all three champion candidates. The soft spot in the category is multi-sport and bike trailers, where there's still a lot of product in the market in quite a discount-driven segment. We do see nice growth in the premium end, but tougher on the mid-price and the lower-price segment, just like in sport car carriers. In all, it's nice to see that these three Champion candidates are now growing fast, but also meaningful enough in size that it takes the whole Active with Kids and Dogs product area to plus 11, and therefore making a significant contribution to the total growth for the company in the quarter. Lastly, the product area bags and mounts grew by 6% organic in the quarter. We do see continued growth momentum in performance phone mounts that came with the acquisition of Podlock, which continues to grow well and represents now about two-thirds of the bags and mounts product area. On the bag side, we are undergoing some changes, as you may remember. It's nice to see some growth in the Thule-branded bags in the quarter with well-received new products. Thule Cat and Gear Haulers has launched and got a good reception. And the new bags and rack system for bike commuting, what we call the tool in-lock system, has also had a good start. And as planned and earlier communicated, we see continued decline in the case logic and the OE bags, which, of course, has a drag on the overall growth for the bags business and also for the full bags amount category. And lastly, before I hand over to Toby, we are very pleased and proud to again be recognized for our product design, having received in this quarter 14 new product awards from Red Dot and eight from IF Design, these two being the two main award institutes, design institutes, handing out awards. I believe it's a great testament to our design team, but also more generally our brand and our full R&D team. It's a real team effort to bring these to the market. It's also nice to see that we do get product awards and are recognized across both our existing champion categories, some of the champion candidates, and also some other gems in the portfolio. So very proud and pleased that the team continues to deliver really good product and that it resonates with both consumers and also the awards. And with that, I'll hand over to Toby to take us through some more financial details.

Thank you, Matthias. Thank you. Yeah, good morning, everyone. And I'll take a bit closer look at the financials and starting with the slide financial summaries. And if I start here at the top with the sales line, you can see a sales growth organically of 3.9%. Good to see us back to a good organic growth. But we also have a currency impact, of course, which is negative, which is driven by the SEC being stronger than the dollar and the euro in the prior year. And that impact is around 7% negative. So overall, sales was minus 3% when you take those two effects together. Gross margin is basically flat at the same level as last year, 44.8%, which is a historically high level. And this was positively impacted by price and mix and by efficiency gains. But that was offset by increased material costs and tariffs, which, of course, is versus Q1 last year. Tariffs are higher as well in Q1 this year. Then we have a good positive impact from selling and administration expenses, which are 60 million SEC lower than Q1 last year. The biggest effect here is reduced development costs. But we also see a lower administration cost in quarter one this year than we had in quarter one last year. And just one thing to note here is it's a good reduction from development costs. We have said that for the whole of 2026, the full year, we expect development costs to be lower than 2025. But also we have a little bit extra in Q1 because of basically the timing or the phasing where we've taken Last year we took quite a larger share of development cost in Q1, and this year we have a little bit smaller share of the full year development cost in Q1. So that's a part of it, but it's also underlying it with a good reduction in development cost and administration cost. And finally, EBIT or operating profit. We have $424 million in the quarter versus $401 million in the first quarter last year. This has been impacted negatively by currency as well. So approximately 30 million sec impact of currency, which is negative. But the margin is obviously higher by 1.4 percentage points, which is good to see and is due to the selling and administration expenses, which I talked about earlier. And with that also, the last 12 months, the LTM margin has also increased from, we had 16% for the full year 2025. And now if you take the last 12 months, At the end of quarter one, we're at 16.4%. If I go on to the next slide, and just taking a step back to look at the relative shares of sales of different parts of the business, and starting with the geographic regions on the left side. And here, these are the share of sales of the last 12 months compared to the full year 2025. And you can see the biggest part of the pie, the dark blue, is region Europe, which had 5% growth in the quarter and is now a slightly bigger share than of the LTM at 68%. Then we have North America, which was flat, and the rest of the world, which had a 2% growth and is, yeah, 9% of the group's revenue. Moving to the right-hand side where you see the product areas, Firstly, starting on the left, we're active with kids and adults, which Matthias talked about here. It's 11% of the revenue of the company on an LTM basis, and we had good growth here. We grew by 11% in the quarter. Then bottom left, you see all the products where we had 8% growth, a good performance. Bags and mounts top left, we had 6% growth, and that's 21% of the company. And then the largest share with sports and cargo carriers had flat growth. And here, as Matthias presented as well, we have the new products that are driving the growth here. And it's also an area where we see growth in Europe but decline in North America. And then on to the next slide, I'm just showing a bit longer perspective of our EBIT and EBITDA development. And in particular, comparing to the levels that we had pre-pandemic, and this is something we talked about a bit more at CMD, which was held in November, so you can find more information there. But firstly, you can see that the EBIT margin also on an LTM basis has increased from 16% to 16.4%, so a good step in the right direction. And then above that, you see the EBITDA margin here, which when you look at the level now, we have LTM, we have 19.9%, 25, we had 19.5%. And both of those are above the level we had pre-pandemic at 19.0%. So if you look, I mean, if you look on this level, that's EBITDA level of profitability, we're actually higher than we were pre-pandemic, which is, I think, important to note. And it's basically EVDA, of course, takes out the effect of depreciation, which is a non-cash effect, but it's particularly the depreciation which has increased compared to the period pre-pandemic in our P&Ls. And this was due mainly to the significant investments that took place, particularly during the pandemic, to increase manufacturing capacity in 21 and 22. So that's what's also behind the free capacity and the significant free capacity we have that we talk about sometimes as well. And then finally just to round off the EBIT margin financial target of course is 20%. We're very focused on the financial target of 20% and meeting that in the medium term and it's good to see that we've taken a step in the right direction in the NCM as well with increasing our margin from 16% to 16.4%. Just then to go on to the cash flow, and here you see in the table to the left that our cash flow from operations was positive at 25 million for quarter one. And just to mention that cash flow is normally quite small or even negative in quarter one because of seasonality, so bear that in mind. But if you look at the graph on the bottom left, actually it's You can see if you actually go back two years to 2024, we're actually back to a similar level than we were in 2024 Q1 when we actually also had a big help from inventory reduction at that time. So it's good to see we're back to that level and we're still managing working capital very tightly to deliver the best cash flow we can. Within that cash flow, we had a working capital increase of £365 million, and that's mainly due to the increase in receivables, which is a seasonal effect. But, of course, even with that increase in working capital, we had a positive cash flow from operations. Then we also had a capex in the quarter of £99 million, which is mainly related to the investment in our warehouse in Poland, where we're building an automated and extended warehouse next to our main manufacturing site in Poland. and altogether those impacts increased our net debt by 133 million, so a small increase in net debt, and net debt to EBITDA ratio is slightly up versus the end of Q4, but 2.1 times EBITDA, and this is something we're very focused on. It's a similar level to what we've had during history, but we're very focused on bringing it down, and you can see particularly from the graph that you see on the bottom left as well that We have Q2 and Q3 ahead of us, which are the strong cash flow quarters, and which should really help us bring the leverage down a bit in the coming quarters. So with that, I will hand back to Mattias.