Thule sets steep sustainability challenge against vision to double sales

The Thule Group, alongside reporting its Q1 results, has laid down a new set of sustainability targets that the business hopes to achieve, all while doubling sales by 2030.

A statement titled “new Long-term financial goals and sustainability ambitions” sets out a vision for the group’s next ten years, within which the target is to maintain a 7% or higher compound annual growth rate. This is a steeper trajectory than the prior 5% organic growth target put to investors.

Alongside this, the group targets a >75% ordinary dividend, in relation to net income, revised upwards from the prior >50% target.

Paradoxically, growth of sales will have to be measured against new targets on greenhouse gas emissions, both directly with the business, as well as up and downstream of its operations.

The new goals laid out are:

  • 46% reduction, in absolute numbers, of greenhouse gases from Thule’s production sites, compared with the base year 2019.
  • 100% renewable electricity at the group’s own manufacturing sites and offices.
  • An absolute reduction of greenhouse gases by 28% related to purchased materials and upstream and downstream logistics, compared with the base year 2019.
  • A set of long-term targets shooting for reduced water consumption, higher recycling rates and health and safety targets.

“Long-term sustainable and profitable organic growth remains our biggest focus,” says Thule Ceo Magnus Welander. “The results we have delivered since the IPO in 2014 are clear proof that our strategy and our operational work have been successful. We are convinced that the defined strategy is right for Thule Group also in the future. Expected positive development in the future in terms of both market trends and our own ability to gain market share, in both existing and new product categories, lie behind our decision to raise or long-term ambition level.

“Our sustainability efforts are part of our natural DNA and communicating clear long-term 2030 goals also in this area, in connection with the new financial goals, is therefore just as natural,” he adds.

Q1 Results

The Thule business has ridden a trend of “staycationing” across Europe, with Covid-19 tying people’s hands to domestic adventure. As a result the firm’s share price has rebounded many fold from its pandemic low (157.80) in March of 2020 to reach record highs recently (422.80).

  • Net sales for the quarter amounted to SEK 2,538m (1,744), corresponding to an increase of 45.5 percent. Adjusted for exchange rate fluctuations, sales increased 56.0 percent.
  • Operating income amounted to SEK 594m (325), corresponding to a margin of 23.4 percent (18.7). Adjusted for exchange rate fluctuations, the operating margin increased 4.2 percentage points.
  • Net income amounted to SEK 447m (241).
  • Cash flow from operating activities totaled SEK 72m (8).
  • Earnings per share before dilution amounted to SEK 4.28 (2.33).