Thule Group recovers lost ground in Q3

Thule Group has published its interim report for the third quarter of 2020, revealing that the company delivered currency-adjusted growth of 52 percent.

Additionally, driven by the strong sales growth, a favourable gross margin and an efficient organisation, Thule Group delivered an underlying EBIT margin of 24.5 percent (16.3) for the quarter. They also generated improved cash flow in comparison to the previous quarter of SEK 764 million.

Magnus Welander, CEO said: “As I communicated in connection with the second quarter report, we hoped to be able to recover the lost spring season during the summer, and to continue to ride the strong global bike trend that commenced during June. This was precisely what happened during the third quarter.”

The differences between countries and categories differed significantly as told by Magnus Welander. With regards to Europe and ROW, the quarter saw sales rise 59 percent after currency adjustment meaning that the group posted a growth of nine percent after nine months. Welander attributes this growth to the healthy demand for bicycle products due to the global bike boom.

“Our broad and market-leading portfolio of products in the bike category (bike racks, bike trailers and child bike seats), gained strong traction from a very positive bike trend. In addition, we also saw within our other products for car transport how the spring lockdown led to a pent-up demand for our products during the summer.”

“Accessories for RVs performed well, since many consumers chose this type of vacation with the possibility of living in their own, more private sphere. Stroller sales also grew during the quarter. The bag category, however, trended negatively due to reduced travel and also lower sales of Back to Campus bags as a result of school closures in markets in Europe and Asia”, he added.

In Region Americas, sales rose 36 percent in the quarter after currency adjustment and sales growth was 1 percent for the first nine months of the year.

“As in Europe, the growth was mainly driven by a very healthy level of demand for bicycle products. In addition, stroller sales were highly positive, as were sales of rooftop tents. Bag sales were also weaker than in the preceding year”, said Welander.

“Sales in Latin America were weak during the quarter due to the escalating pandemic situation in these markets and consequent caution among our distributors.”

From a short-term view, several challenges remain for the group, including uncertainty regarding the scope of new market lockdowns in a number of countries. Whilst the cycling trend is predicted to continue in these sectors, it is worth noting that the company will experience greater seasonal exposure to categories that have been negatively affected by the market realities during Covid-19.

However, Thule is looking to continue its long-term focus of offering good quality products and take advantage of the underlying market trends that benefit the cycling industry. The group plan to continue with its ambitious plans with major investments in product development and its production and distribution structure in the next year.

“I want to conclude by thanking all the colleagues at Thule Group, who have shown fantastic drive and enormous flexibility during a very challenging period,” Welander added.