Thule posts encouraging growth for first six months of 2016

Having acquired GMG B.V. earlier this month, Thule has now posted encouraging financials for the first six months of 2016.

European growth in the Sport and Cargo Carrier, as well as Outdoor and Bags segment predominantly drove growth, while product launches further bolstered prospects going forwards.

On integration of Yepp produced GMG B.V. , Thule said that it expected the transition to be swift and smooth. GMG operated a lean business, with six employees. The acquisition will allow the business to build upon its child seat category, tying in with a strategy to drive the Active with Kids category. 

Magnus Weylander, Thule’s CEO commented on the results: “Positive volume growth and product mix also enabled us to continue to increase profitability, despite a slightly weaker trend in the US, where the market was characterized by a certain degree of concern in the wake of the bankruptcy of two sporting goods chains. Underlying EBIT increased 9.9 percent during the quarter after currency adjustment. On a rolling annual basis, the margin thus now amounts to 16.8 percent (16.0 percent for the full-year 2015).

“We are very pleased about how well our various growth initiatives in Region Europe & ROW delivered during the quarter, with sales growth of 12.8 percent after currency adjustments.

“We continued to drive market growth and capture market share in our largest category, Sport&Cargo Carriers, due to highly appreciated product launches and continued close cooperation at the retailer level. Furthermore, we continued to grow rapidly in Other Outdoor&Bags, driven by a steady rise in awareness of our test-winning products in Active with Kids, as well as the expanded range of backpacks in Sport&Travel Bags. In RV Products, we continued the positive trend seen in the first quarter, capturing market shares in a category that also displayed robust market growth.”

In the second quarter of 2016, net sales in Outdoor&Bags rose to SEK 1,682m (1,574), an increase of 6.8 percent. Adjusted for exchange rate fluctuations, net sales here rose 8.7 percent.

Overall Net sales for Q2 totaled SEK 1,795m, corresponding to an increase of 6.3 percent. Adjusted for exchange rate fluctuations, sales rose 8.2 percent. Net income was SEK 308m.

One downside of otherwise rosy financials is a tax dispute in the German market regarding audits from 2005 to 2008. The German tax agency has issued a judgement which is expected to cost €17.6m in taxes and interest. Thule has appealed the decision, while setting aside SEK 46m.

Thule now employs 2,301 globally, a figure that has increased with early staffing for the season at its Polish and Swedish plants to manage increased sales volumes.

The full Thule statement can be read here.