Thule Group — Interim / Quarterly Report 2016

Oct 28, 2016

Interim report for the third quarter, July-September 2016¹

• Net sales for the quarter amounted to SEK 1,366m (1,343), corresponding to an increase of 1.7 percent. Adjusted for exchange rate fluctuations, sales rose 1.7 percent.
• Operating income amounted to SEK 243m (208), corresponding to an increase of 17.1 percent and a margin of 17.8 percent (15.5). Underlying EBIT was SEK 246m (223) and adjusted for exchange rate fluctuations, underlying EBIT rose 6.9 percent and the margin improved 0.9 percentage points.

• Net income was SEK 162m (148).

• Cash flow from operating activities² totaled SEK 436m (412).

• Earnings per share before dilution amounted to SEK 1.60 (1.48).
• On July 4, GMG B.V. the leading manufacturer of child bike seats in the Benelux region was acquired for EUR 10.0m on a debt-free basis. GMG B.V. had sales of EUR 6.1m in 2015.

	Jul - Sep 2016	Jul - Sep 2015	%	Jan - Sep Jan - Sep 2016	2015	%	Full-year 2015
Net sales, SEKm	1 366	1 343	+1.7	4 541	4 341	+4.6	5 320
Underlying EBIT, SEKm	246	223	+10.7	901	802	+12.3	850
Operating income (EBIT), SEKm	243	208	+17.1	892	780	+14.3	825
Net income from continued operations, SEKm	162	148	+9.4	639	565	+13.1	587
Earnings per share, SEK	1.60	1.48	+8.2	6.33	5.65	+12.0	5.87
Cash flow from operating activities, SEKm2	436	412	+5.9	787	509	+54.6	662

¹ Unless otherwise stated, the comparative figures in the overview pertain to continuing operations, excluding the Snow Chain Division, which was divested in 2015. In addition to financial definitions under IFRS, alternative performance measures are used to describe the underlying development in operations and to enhance comparability between periods.

² The comparative figures are based on the total operations, meaning both continuing operations and operations that were discontinued in 2015.

CEO's comments

Strong profitability growth in the quarter

During the third quarter, our stable trend of improved profitability continued with an underlying EBIT growth of 6.9 percent after currency adjustment. For the first nine months of the year, the underlying EBIT was SEK 901m, an increase of 10.3 percent after currency adjustment, meaning that on a rolling 12 month basis we achieved an underlying EBIT margin of 17.2 percent (16.0 percent for the full-year 2015).

Sales increased to SEK 1,366m during the third quarter (growth of 1.7 percent after currency adjustment and excluding the acquisition of GMG). Organic sales growth for the first three quarters was 5.2 percent (after currency adjustment), which is above our annual financial target of 5.0 percent. Operating cash flow also remains very strong.

Fast growth in Region Europe&ROW

We are very pleased with how well our initiatives in Region Europe & ROW drove growth during the quarter. With a sales growth of 9.0 percent in the quarter, we achieved an increase of 11.1 percent after currency adjustment for the nine-month period.

We continued to capture market shares in Sport&Cargo Carriers through successful product launches. Furthermore, we continued to grow rapidly in Other Outdoor&Bags, driven in particular by strong sales in Active with Kids. Our sport strollers, multifunctional bike trailers and child bike seats continue to capture market shares in this, for us, newer category. The positive trend in RV Products also continued and we are capturing market shares in a category that is also displaying strong market growth.

Weak market in Region Americas

Sales in Region Americas were weaker than expected during the quarter, with a decline in sales of 8.8 percent after currency adjustment. Despite a decline in sales of 4.0 percent through September, we retain our market shares, but the market as a whole has not recovered in the way we expected during the third quarter.

Primarily three factors had a negative impact on sales: a weak Outdoor segment following the bankruptcy of two major store chains in the spring, cautiousness in the cycling retail segment with large ingoing bicycle inventories ahead of the 2016 season, and a decline in sales of Bags for Electronic Devices. These are factors that we believe will also impact the fourth quarter.

Margin improvements in Work Gear

After a very strong start to the year, we experienced a somewhat weaker market in the US during the third quarter and sales declined SEK 7m and profitability

SEK 1m (after currency adjustment) compared to previous year. For the first three quarters, sales were in line with the preceding year, while underlying EBIT during the same period grew SEK 15m (38.2 percent after currency adjustment). Our improved production efficiency and focus on a more profitable product mix mean that the margin for the year is at 16.9 percent (12.3 percent for the same period in 2015).

Rapid integration of acquired GMG

In early July, we acquired GMG B.V., the leading manufacturer of child bike seats in the Benelux region. The products (sold under the Yepp brand) are an excellent complement to our existing range. At the trade fairs in September, we launched a new generation of child bike seats under the Thule Yepp brand, and the GMG entity is already a fully integrated part of Thule Group.

Supply Chain initiatives

We are currently conducting a number of major projects to ensure that we can achieve our growth targets. In conjunction with the acquisition of GMG, we decided to transfer the assembly of the new child bike seats in-house. Since wealso see generally strong growth in the new categories, we have decided to bring forward the opening of a further assembly plant in Poland. The new plant will be operational already during the first quarter of 2018.

In the Americas region, we have commenced the second stage of our major distribution project as a result of the relocation to our new distribution center for the eastern US, which has just begun. The center will be fully operational at the end of the first quarter of 2017. This new, larger and more efficient warehouse, and the structural improvements we have made at our distribution centers throughout the world, will be key contributing factors to continued efficiency enhancement in 2017.

Strong interest in our new products

We are entering the winter season, but in the third quarter we have also participated in a number of global trade fairs and demonstrated a range of new products set for store launch in the spring season. Generally, the reception has been very positive, with particularly strong interest in our new Thule Chariot multi-functional bike trailers and the new Thule Motion XT roof box. The product launches and our operational projects are key reasons why I am looking forward to an exciting period.

Magnus Welander CEO and President

Financial overview³

Trend for the third quarter

Net sales

In the third quarter of 2016, net sales amounted to SEK 1,366m (1,343), representing an increase of 1.7 percent.

In the Outdoor&Bags segment, net sales totaled SEK 1,253m (1,224), corresponding to an increase of 2.4 percent after currency adjustments. In the Europe & ROW region, sales increased 9.0 percent after currency adjustment, with strong growth in the Sports&Cargo Carriers and Other Outdoor&Bags product categories. However, in the Americas Region, sales declined 8.8 percent after currency adjustment, in the face of a challenging market and continued decline for the Bags for Electronic Devices product category.

In the Specialty segment, net sales totaled SEK 112m (119), down 5.9 percent after currency adjustments.

	Jul-Sep	Jan-Sep
Change in net sales	2016	2016
Changes in exchange rates	-0.0%	-0.9%
Structural changes	0.9%	0.3%
Organic growth	0.8%	5.2%
Total	1.7%	4.6%

Gross income

Gross income for the quarter totaled SEK 558m (508), corresponding to a gross margin of 40.8 percent (37.8). Gross income was positively impacted by currency effects (0.6 percentage points). Most of the remaining improvement derived from an advantageous product- and market mix.

Operating income

Operating income totaled SEK 243m (208). The increase during the quarter compared with the year-earlier is partly attributable to operating income in the preceding year being charged with items affecting comparability amounting to SEK 12m for a reorganization of the Outdoor&Bags segment. Underlying EBIT was SEK 246m (223), corresponding to an underlying EBIT margin of 18.0 percent (16.6). Changes in exchange rates had an overall positive impact of SEK 8m on underlying EBIT, compared with the third quarter of 2015. After currency adjustment, we achieved a year-on-year margin improvement of 0.9 percentage points in the quarter. The improvement was the result of sales growth, a positive product mix and an efficient cost structure.

	Jul-Sep	Jan-Sep
Change in underlying EBIT-margin
Underlying EBIT 2016	246	901
Underlying EBIT-margin 2016	18.0%	19.8%
Underlying EBIT 2015	223	802
Underlying EBIT-margin 2015	16.6%	18.5%
Underlying EBIT 2015, currency adjusted	231	817
Underlying EBIT-margin 2015, currency adjusted	17.2%	19.0%
Change in underlying EBIT-margin, currency adjusted	0.9%	0.9%

³ Unless otherwise stated, the comparative figures in the overview pertain to continuing operations, excluding the Snow Chain division, which was divested in 2015.

Net financial items

In the third quarter, net financial items amounted to an expense of SEK 10m (expense: 14). Exchange rate differences on loans and cash and cash equivalents were SEK 0m (0). The interest expense for borrowings was SEK 8m (expense: 14).

Net income for the period

In the third quarter, net income was SEK 162m, corresponding to earnings per share of SEK 1.60 before dilution (SEK 1.59 after dilution). For the corresponding year-earlier period, net income from continuing operations totaled SEK 148m, corresponding to earnings per share of SEK 1.48 before dilution (SEK 1.47 after dilution). Net income for the period was also charged with provisions of SEK 20m for the German tax audit for the years 2009-2012, see Note 5 Taxes for further information.

Trend for the first three quarters

Net sales

Net sales for the first three quarters of 2016 amounted to SEK 4,541m (4,341), corresponding to an increase of 4.6 percent. Adjusted for exchange rate fluctuations, net sales for the Group rose 5.5 percent, of which organic growth was 5.2 percent.

Sales for the Outdoor&Bags segment rose 11.1 percent in the Europe & ROW region after currency adjustment, while the sales in the Americas region – primarily the US – were negatively impacted by the sales trend mainly in the Bags for Electronic Devices product category. Net sales in the Specialty segment declined 0.4 percent after currency adjustment.

Gross income

Gross income amounted to SEK 1,866m (1,710) corresponding to a gross margin of 41.1 percent (39.4). Gross income was positively impacted by currency effects (0.5 percentage points). The improvement in gross margin was brought about by a favorable change in the product mix of the major product categories, with a smaller share of sales in the product category with the lowest average gross margins, namely, Bags for Electronic Devices, and by a positive price trend.

Operating income

Operating income totaled SEK 892m (780). The increase during the period compared with the year-earlier is partly attributable to operating income in the preceding year being charged with items affecting comparability amounting to SEK 12m for a reorganization of the Outdoor&Bags segment. Underlying EBIT was SEK 901m (802), corresponding to a margin of 19.8 percent (18.5). The improvement was achieved due to a positive product mix and initiatives to enhance sourcing and logistics efficiency.

Changes in exchange rates had an overall positive impact of about SEK 14m on underlying EBIT, compared with the first three quarters of 2015. After currency adjustment, the Group achieved a year-on-year margin improvement of 0.9 percentage points.

Net financial items

In the first three quarters of 2016, net financial items amounted to an expense of SEK 27m (expense: 49), and were negatively impacted by exchange rate differences of SEK 5m (neg: 8) on loans and cash and cash equivalents. The interest expense for borrowings for the first three quarters of 2016 was SEK 30m (expense: 41).

Net income for the period

In the first three quarters of 2016, net income was SEK 639m, corresponding to earnings per share of SEK 6.33 before dilution (SEK 6.28 after dilution). For the corresponding year-earlier period, net income from continuing operations totaled SEK 565m, corresponding to earnings per share of SEK 5.65 before dilution (SEK 5.62 after dilution). Net income for the period was also charged with provisions of SEK 20m for the German tax audit for the years 2009-2012, see Note 5 Taxes for further information.

Cash flow⁴

Net cash flow for the period

Cash flow from operating activities for the first three quarters was SEK 787m (509). The sharp improvement in cash flow on the year-earlier period was the result of improvements in operating income and working capital. Cash flow for the quarter was negatively impacted by a tax payment of SEK 55m (31) pertaining to a partial payment of the German tax agency claim on Thule Deuthschland Holding GmbH; see further Note 5 Taxes. Cash flow from investing activities was negatively impacted by SEK 92m related to the acquisition of GMG B.V. made in July. Investments in tangible assets amounted to an expense of SEK 68m (expense: 74). During the period, an issue valued at SEK 88m was carried out as a result of the exercise of warrants.

Financial position

At September 30, 2016, the Group's equity amounted to SEK 3,717m (3,263). The equity ratio amounted to 47.7 percent (46.3).

At September 30, 2016, the Group's net debt amounted to SEK 1,598m (2,158). Total long-term borrowing amounted to SEK 2,447m (2,412), and comprised loans from credit institutions of SEK 2,439m (2,418), gross, capitalized financing costs of SEK 9m (12) and the long-term portion of financial derivatives of SEK 17m (7). Total current financial liabilities amounted to SEK 32m (12) and comprised the short-term portion of financial derivatives and finance lease liabilities.

SEKm	Sep 30 2016	Sep 30 2015	Dec 31 2015
Long-term loans, gross	2 439	2 418	2 361
Financial derivative liability, long-term	17	7	13
Short-term loans, gross	4	4	5
Financial derivative liability, short-term	27	7	13
Overdraft facilities	0	0	0
Capitalized financing costs	-9	-12	-11
Accrued interest	0	0	0
Gross debt	2 479	2 425	2 381
Finanial derivative asset	-20	-8	-28
Cash and cash equivalents	-861	-259	-274
Net debt	1 598	2 158	2 079

Pledged assets for Thule Group amounted to SEK 22m (28).

At September 30, 2016, goodwill was SEK 4,180m. Goodwill pertaining to continuing operations totaled SEK 4,122m at September 30, 2015. Of the increase, SEK 68m pertained to the acquisition of GMG B.V.

At September 30, 2016, inventories amounted to SEK 678m (694).

Other information

Acquisition of GMG B.V.

On July 4, Thule Group acquired the Dutch company GMG B.V., the leading manufacturer of child bike seats in the Benelux markets. In 2015, GMG B.V. reported sales of EUR 6.1m, specializing in child bike seats under the Yepp brand. GMG B.V. has operated with a lean, product-focused sales- and marketing organization with six employees and an office in Zwanenburg in the Netherlands. The total purchase consideration was EUR 10.0m on a debt-free basis. Of the purchase consideration, EUR 7m has been provisionally attributed to goodwill and EUR 2m to the brand. The products will be sold under the Thule Yepp brand. The company is consolidated in the Group as of July. The acquisition has contributed sales amounting to SEK 12m and operating income of SEK 0m. Had the acquisition occurred on January 1, it is estimated

⁴The comparative period is based on total operations, meaning both continuing and discontinued operations.

that sales would have increased SEK 33m and operating income approximately SEK 5m. The acquisition is included in the Outdoor&Bags segment.

Seasonal variations

Thule Group's sales and operating income are partially affected by seasonal variations. During the first quarter, sales are affected in the Outdoor&Bags segment (roof boxes, ski-racks, snowsport backpacks, etc.) by winter conditions. In the second and third quarters, primarily Outdoor&Bags is impacted by how early the spring or summer arrives, while sales in individual quarters may be impacted by the quarter in which spring or summer occurs. In the fourth quarter, seasonal variations are primarily attributable to sales of winter-related products (roof boxes, ski-racks, snowsport backpacks, etc.) and sales of products in the Outdoor&Bags segment's bag category prior to major holidays.

Employees

The average number of employees was 2,284 (2,146). The increase was primarily attributable to increased sales in the product categories in which the Group has its own production, but also to a limited extent to scheduled pre-season inventory build-up to enable a more efficient production ramp-up of the production volumes for some of the Group's highvolume products ahead of the 2017 season.

Thule Group's share

The shares of Thule Group AB are listed on the Nasdaq Stockholm Mid Cap list. At September 30, 2016, the total number of shares in issue was 101,036,455.

Thule Group's 2014/2016 warrants program ended on January 12, 2016 and this meant that the number of shares in the company increased by 1,036,455.

Dividends

The Annual General Meeting on April 26 approved a dividend of SEK 253m, corresponding to SEK 2.50 per share based on the number of shares outstanding at September 30, 2016. Similar to the preceding year, dividends will be paid in two installments for a better adaptation to the Group's cash flow profile.

The record date for the first dividend payment of SEK 1.25 per share was April 28, 2016 and the record date for the second payment of SEK 1.25 per share was October 7, 2016.

Shareholders

At September 30, 2016, Thule Group AB had 3,643 shareholders. At this date, the largest shareholders (reported as each owner flags its holdings) were AMF – Försäkring och Fonder (10.2 percent of the votes), Lannebo Fonder (7.0 percent of the votes) and Swedbank Robur Fonder (5.7 percent of the votes).

Parent Company

Thule Group AB's principal activity pertains to head office functions such as Group-wide management and administration. The comments below refer to the period January 1-September 30, 2016. The Parent Company invoices its costs to Group companies. The Parent Company reported a negative net income of SEK 7m (neg: 2).

Cash and cash equivalents and current investments amounted to SEK 0m (0). Long-term liabilities to credit institutions totaled SEK 2,417m (2,394).

The Parent Company's financial position is dependent on the financial position and development of its subsidiaries. The Parent Company is therefore indirectly impacted by the risks described in Note 6 Risks and uncertainties.

Performance by business segment

Outdoor&Bags

	Jul - Sep Change		Jan - Sep		Change
SEKm	2016	2015	Rep.	Adjust.1	2016	2015	Rep.	Adjust.1
Net sales	1 253	1 224	2.4%	2.4%	4 201	3 998	5.1%	6.0%
- Region Europe & ROW	842	776	8.4%	9.0%	2 911	2 643	10.1%	11.1%
- Region Americas	412	448	-8.1%	-8.8%	1 289	1 355	-4.8%	-4.0%
Operating income	249	218	14.3%		916	820	11.6%
Underlying EBIT	252	232	8.4%	4.7%	924	841	9.9%	7.9%
Operating margin, %	19.9%	17.8%			21.8%	20.5%
Underlying EBIT margin, %	20.1%	19.0%			22.0%	21.0%

¹Adjustment for changes in exchange rates

In the third quarter of 2016, net sales in Outdoor&Bags rose to SEK 1,253m (1,224), an increase of 2.4 percent. Adjusted for exchange rate fluctuations and the acquisition of GMG B.V., net sales rose 1.4 percent organically.

Sales in this business segment rose mainly due to a continued strong trend in Region Europe & ROW, for which, excluding the acquisition of GMG B.V., net sales grew by 7.4 percent organically after currency adjustment. Both our largest product category Sport&Cargo Carriers and the Other Outdoor&Bags product category had a continued very strong performance during the quarter. In Sport&Cargo Carriers, growth was highest in the product categories that have the most even sales among the quarters, roof racks and roof boxes, but also remained positive in the bike rack category (which has its best sales months during the spring and early summer).

The strong sales growth in Other Outdoor&Bags was driven in particular by the very positive development in Active with Kids, with rapid growth in multi-functional bike trailers, sport strollers and child bike seats. The market for Recreational Vehicles (RVs) remained strong during the third quarter and in combination with our successful efforts to capture market shares in the category, this means that the RV Products category performed very well. The trend also remained strong in the smaller sub-category of Sport&Travel Bags. Sales declined somewhat for Bags for Electronic Devices during the quarter, despite successful launches in backpacks. The negative trend for camera bags continued and this previously dominant category now represents less than 20 percent of Bags for Electronic Devices in the region.

We are generally not satisfied with the Region Americas' sales trend during the quarter, but we have been able to maintain our market shares in a weak market. As commented earlier in the year, the entire Outdoor industry has had a very challenging year, following the bankruptcies of two major general sports store chains in the spring. The general concern these bankruptcies have caused in the industry have led to other retail chains taking a more cautious view of the market. The bike industry in the US has also had a relatively weak year after a number of major new players pushed up the inventory of bikes to very high levels ahead of the 2016 season. The situation with large inventories has impacted the earnings of smaller bike distributors and also generated concern in that category.

In Region Americas, which has a larger share of its sales in the Bags for Electronic Devices category, sales of camera bags also continued to decline rapidly and now corresponds to less than 10 percent of Bags for Electronic Devices. In this region, we did not succeed as well with the Back to Campus campaign efforts of backapcks and thus sales were weaker than expected in the category.

Operating income in the third quarter of 2016 amounted to SEK 249m (218) and underlying EBIT to SEK 252m (232), corresponding to a margin of 20.1 percent (19.0). After currency adjustment, this represents a year-on-year improvement of 0.4 percentage points.

Specialty

	Jul - Sep Change			Jan - Sep		Change
SEKm	2016	2015	Rep.	Adjust.1	2016	2015	Rep.	Adjust.1
Net sales	112	119	-5.6%	-5.9%	340	342	-0.7%	-0.4%
- Work Gear	112	119	-5.6%	-5.9%	340	342	-0.7%	-0.4%
Operating income	17	18	-5.4%		57	42	36.2%
Underlying EBIT	17	18	-5.4%	-5.4%	57	42	36.2%	38.2%
Operating margin, %	15.3%	15.3%			16.9%	12.3%
Underlying EBIT margin, %	15.3%	15.3%			16.9%	12.3%

¹Adjustment for changes in exchange rates

Net sales for the third quarter amounted to SEK 112m (119), corresponding to a decrease of 5.6 percent. Adjusted for exchange rate fluctuations, net sales declined 5.9 percent. The lower sales were primarily driven by pick-up truck tool boxes in the southern US, where the somewhat weaker oil industry had a negative impact on the sale of new pick-up trucks. The oil industry is generally a major influencing factor on the development of construction and installation projects in the southern US, a region where we have a large proportion of sales and a high market share.

Underlying EBIT for the third quarter totaled SEK 17m (18) and the margin was 15.3 percent (15.3). For the first three quarters, this means that we had an underlying EBIT margin of 16.9 percent, compared with 12.3 percent in the same period previous period.

Our strategic review of the US Work Gear operation is ongoing.

The Board of Directors and the President provide their assurance that this interim report provides a fair and accurate view of the Group's and the Parent Company's operations, financial position and earnings, and describes the material risks and uncertainties faced by the Parent Company and other companies in the Group.

October 28, 2016

Board of Directors

Review report

To the Board of Directors of Thule Group AB (publ) Corp. id. 556770-6311

Introduction

We have reviewed the summary interim financial information (interim report) of Thule Group AB (publ) as of September 30, 2016 and the nine-month period then ended. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, October 28, 2016

KPMG AB

Helene Willberg Authorized Public Accountant

Key events during the period

At the world's largest fair for car accessories (Automechanika in Frankfurt, Germany), a large number of new products were shown to distributors and store managers in this category. The new Thule Motion XT roof box received a particularly large amount of attention.

Thule Van Concept — a family of products for the modern motorhome user who wants to move quickly and efficiently between different places and take along many sports products and other practical items, had its world premier at the world's largest RV fair (Caravan Salon in Düsseldorf, Germany) in September. The new concept attracted considerable interest among the fair's 200,000 industry- and private visitors.

Financial statements

(Unless otherwise stated, all amounts are in SEKm)

Consolidated Income Statement

			Jul - Sep		Jan - Sep		Full-year
	Note	2016	2015	2016	2015	LTM	2015
Continuing operations
Net sales	2	1 366	1 343	4 541	4 341	5 521	5 320
Cost of goods sold		-808	-835	-2 675	-2 631	-3 313	-3 269
Gross income		558	508	1 866	1 710	2 207	2 051
Other operating revenue		0	-2	0	2	-0	1
Selling expenses		-240	-232	-744	-709	-962	-927
Administrative expenses		-75	-72	-223	-222	-299	-299
Other operating expenses		0	4	-7	0	-9	-2
Operating income	2	243	208	892	780	936	825
Net interest expense/income		-10	-14	-27	-49	-37	-60
Income before taxes		233	194	865	732	899	765
Taxes	5	-71	-46	-226	-167	-237	-178
Net income from continued operations		162	148	639	565	661	587
Discontinued operations
Net income from discontinued operations	3	-	-125	-	-146	3	-143
Net income		162	23	639	419	664	444
Consolidated net income pertaining to:
Shareholders of Parent Company		162	23	639	419	664	444
of which, pertaining to continuing operations		162	148	639	565	661	587
of which, pertaining to discontinued operations		-	-125	-	-146	3	-143
Net income		162	23	639	419	664	444
Earnings per share continuing operations, SEK before dilution		1.60	1.48	6.33	5.65		5.87
Earnings per share continuing operations, SEK after dilution		1.59	1.47	6.28	5.62		5.84
Earnings per share, SEK before dilution		1.60	0.23	6.33	4.19		4.44
Earnings per share, SEK after dilution		1.59	0.23	6.28	4.17		4.42
Average number of shares (millions)		101.0	100.0	101.0	100.0		100.0

Consolidated Statement of Comprehensive Income

		Jul - Sep		Jan - Sep	Full-year
	2016	2015	2016	2015	LTM	2015
Net income	162	23	639	419	664	444
Items that have been carried over or can be carried over to net income
Foreign currency translation	100	54	158	128	39	9
Cash flow hedges	-10	-9	-36	20	-22	34
Net investment hedge	-37	-41	-76	-29	-25	21
Translation differences from foreign currency translation and net investments recognized in net income	-	-26	0	-26	0	-26
Period change in fair value of available for sale financial assets	-0	0	-24	0	-24	0
Tax on components in other comprehensive income	-4	6	10	-14	3	-20
Tax on components in other comprehensive income recognized in net income	-	-6	-	-6	0	-6
Items that cannot be carried over to net income
Revaluation of defined-benefit pension plans	-3	7	-17	7	-20	4
Tax pertaining to items that cannot be carried over to net income	1	-2	4	-2	5	-1
Other comprehensive income	48	-17	19	78	-43	17
Total comprehensive income	210	7	658	498	621	461
Total comprehensive income pertaining to:
Shareholders of Parent Company	210	7	658	498	621	461
Total comprehensive income	210	7	658	498	621	461

Consolidated Balance Sheet

	Sep 30	Sep 30	Dec 31
	2016	2015	2015
Assets
Intangible assets	4 217	4 152	4 061
Tangible assets	538	485	485
Long-term receivables	32	44	51
Deferred tax receivables	531	523	508
Total fixed assets	5 319	5 205	5 106
Inventories	678	694	722
Tax receivables	15	3	12
Accounts receivable	728	745	610
Prepaid expenses and accrued income	62	55	54
Other receivables	135	94	121
Cash and cash equivalents	861	259	274
Total current assets	2 479	1 851	1 794
Total assets	7 798	7 056	6 899
Equity and liabilities
Equity	3 717	3 263	3 228
Long-term interest-bearing liabilities	2 447	2 412	2 363
Provision for pensions	140	122	120
Deferred income tax liabilities	183	142	184
Total long-term liabilities	2 770	2 677	2 666
Short-term interest-bearing liabilities	32	12	18
Accounts payable	406	366	449
Taxes	276	184	129
Other liabilities	150	119	28
Accrued expenses and deferred income	418	379	341
Provisions	29	55	40
Total short-term liabilities	1 311	1 116	1 005
Total liabilities	4 082	3 792	3 671
Total equity and liabilities	7 798	7 056	6 899

Consolidated Statement of Changes in Equity

	Jan - Sep	Full-Year
	2016	2015	2015
Opening balance, January 1	3 228	2 966	2 966
Net income	639	419	444
Total other comprehensive income	19	78	17
Total comprehensive income	658	498	461
Transactions with the Group's owners:
New share issue	88	0	0
Dividend	-253	-200	-200
Other	-4	0	0
Closing balance	3 717	3 263	3 228

Consolidated Statement of Cash Flow⁵

	Jul - Sep		Jan - Sep
	2016	2015	2016	2015
Income before taxes	233	194	865	732
Income from discontinued operations before taxes	0	-128	0	-149
Adjustments for items not included in cash flow	30	149	73	199
Paid income taxes	-75	-44	-127	-101
Cash flow from operating activities prior to changes in working capital	189	171	811	680
Cash flow from changes in working capital
Increase(-)/Decrease (+) in inventories	97	79	80	-40
Increase(-)/Decrease (+) in receivables	316	349	-149	-36
Increase(+)/Decrease (-) in liabilities	-165	-186	45	-94
Cash flow from operating activities	436	412	787	509
Investing activities
Acquisition of subsidiaries	-92	0	-92	0
Sale of subsidiaries	0	67	0	67
Acquisition/divestment of tangible assets	-19	-39	-68	-74
Cash flow from investing activities	-110	28	-160	-7
Financing activities
New issue of shares	0	0	88	0
Other	0	0	-4	0
Dividend	0	0	-126	-100
Debt repaid/new loans	0	-306	0	-256
Cash flow from financing activities	0	-306	-42	-356
Net cash flow	326	134	584	146
Cash and cash equivalents at beginning of period	532	126	274	114
Effect of exchange rates on cash and cash equivalents	3	-1	2	-0
Cash and cash equivalents at end of period	861	259	861	259

⁵Comparative figures are based on total operations, meaning both continuing and discontinued operations.

Parent Company Income Statement

		Jul - Sep		Jan - Sep
	2016	2015	2016	2015	2015
Other operating revenue	5	6	14	18	24
Administrative expenses	-9	-8	-26	-23	-32
Operating income	-4	-2	-12	-5	-9
Net interest expense/income	1	1	3	3	4
Income after financial items	-3	-1	-9	-2	-4
Appropriations	0	0	0	0	2
Net income before taxes	-3	-1	-9	-2	-3
Taxes	2	0	2	0	1
Net income	-2	-1	-7	-2	-2

Parent Company Balance Sheet

	Sep 30	Sep 30	Dec 31
	2016	2015	2015
Assets
Financial fixed assets	5 026	5 002	4 946
Total fixed assets	5 026	5 002	4 946
Other current receivables	2	2	4
Cash and cash equivalents	0	0	0
Total current assets	2	2	4
Total assets	5 028	5 004	4 950
Equity and liabilities
Equity	1 293	1 469	1 469
Other provisions	4	2	2
Liabilities to credit institutions	2 417	2 394	2 338
Liabilities to Group companies	368	368	368
Total long-term liabilities	2 789	2 764	2 708
Liabilities to credit institutions	0	300	0
Liabilities to Group companies	805	360	757
Other current liabilities	140	111	15
Total short-term liabilities	945	771	773
Total equity and liabilities	5 028	5 004	4 950

Disclosures, accounting policies and risk factors

Disclosures in accordance with Paragraph 16A of IAS 34 Interim Financial Reporting can be found in the financial statements and the associated notes as well as in other sections of the interim report.

Note 1 Accounting policies

This condensed consolidated interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, and the applicable provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with Chapter 9 of the Swedish Annual Accounts Act on interim financial reporting. The same accounting policies and calculation methods have been applied for the Group and Parent Company as in the most recent Annual Report. New and revised IFRSs that became effective in 2016 have had no material impact on the Group's earnings and financial position. As of July 3, 2016, the European Securities and Markets Authority's (ESMA) Guidelines on Alternative Performance Measures have been applied. In accordance with these guidelines, disclosures have been expanded to include financial performance indicators not defined under IFRS. The alternative performance measures published in this report should not be regarded as a substitute for financial performance indicators defined in accordance with IFRS but rather as a complement and these do not need to be comparable with similarly entitled performance measures presented by other companies.

Note 2 Operating segments

The Snow Chain division that was previously included in the Specialty operating segment was divested in 2015 and is reported as a discontinued operation. Refer to Note 3 Discontinued operations. Comparative figures for the Snow Chain division have been excluded retroactively.

		Outdoor&Bags		Specialty	Group common		Eliminations		Group
	Jul - Sep			Jul - Sep		Jul - Sep	Jul - Sep		Jul - Sep
	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015
Sales to customers	1 253	1 224	112	119	1	0			1 366	1 343
Intercompany sales	1	2	0	0	0	0	-1	-2	0	0
Underlying EBITDA	267	246	18	19	-22	-27			264	238
Operating depreciation/amortization	-15	-13	-1	-1	-1	-1			-17	-15
Underlying EBIT	252	232	17	18	-23	-28			246	223
Other depreciation/amortization	-3	-3	0	0	0	-1			-3	-3
Items affecting comparability	0	-12	0	0	0	0			0	-12
Operating income	249	218	17	18	-23	-28			243	208
Net interest expense/income									-10	-14
Taxes									-71	-46
Net income from discontinued operations									-	-125
Consolidated net income									162	23

		Outdoor&Bags		Specialty	Group common		Eliminations		Group
	Jan - Sep			Jan - Sep		Jan - Sep		Jan - Sep		Jan - Sep
	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015
Sales to customers	4 201	3 998	340	342	1	1			4 541	4 341
Intercompany sales	2	6	0	0	0	0	-2	-6	0	0
Underlying EBITDA	969	880	61	46	-78	-78			951	848
Operating depreciation/amortization	-44	-39	-3	-4	-2	-2			-50	-46
Underlying EBIT	924	841	57	42	-80	-80			901	802
Other depreciation/amortization	-9	-9	0	0	-1	-2			-10	-11
Items affecting comparability	0	-12	0	0	0	0			0	-12
Operating income	916	820	57	42	-81	-82			892	780
Net interest expense/income									-27	-49
Taxes									-226	-167
Net income from discontinued operations									-	-146
Consolidated net income									639	419

Note 3 Discontinued operations

	Jan - Sep
	2015
Revenue	84
Expenses	-103
Income before taxes	-19
Taxes	3
Realization gain/loss from divestment of discontinued operation	-130
Net income from discontinued operations	-146
Earnings per share, discontinued operations, SEK	-1.46

	Jan - Sep
	2015
Cash flow from discontinued operations
Operating cash flow before investments	69
Operating cash flow after investments	67

Note 4 Fair value of financial instruments

	Fair value
	Sep 30	Sep 30
	2016	2015
Assets - Financial derivatives
Long-term financial receivables	24	47
Currency forward contracts	8	3
Currency swaps	3	3
Currency options	9	2
Interest rate swaps	0	0
Total derivative assets	44	55
Liabilities - Financial derivatives
Currency forward contracts	-16	-4
Currency swaps	-1	-1
Currency options	-10	-2
Interest rate swaps	-17	-7
Total derivative liabilities	-44	-14

The carrying amount is an approximation of the fair value for all financial assets and liabilities. The Group's long-term liabilities are subject to variable interest rates, which means that changes in the basic interest rate will not have a significant impact on the fair value of the liabilities. According to the company's assessment, neither have there been any changes in the credit margins that would significantly impact the fair value of the liabilities. The financial instruments measured at fair value in the balance sheet consist of derivatives held to hedge the Group's exposure to interest rates, currency rates and raw material prices. All derivatives belong to Level 2. The Group's financial asset pertaining to the additional purchase consideration that has arisen in conjunction with the divestment of the Snow Chain division belongs to Level 3 of the hierarchy for measuring fair value as described in IFRS 13.

Note 5 Taxes

The company is involved in an ongoing tax dispute in Germany. As the company announced earlier, the German tax agency has issued a judgment on an increase in the tax base for the years 2005-2008, which would add another approximately EUR 17.6m in further taxes and accrued interest for the company. The company has appealed the decision. Regarding the tax audit in Germany for the years 2009-2012, the German tax agency made a decision during the quarter. The tax agency's decision comprises an increase in the tax base that would bring a further approximately EUR 10m in taxes and accrued interest. The company had already made a provision of SEK 46m for taxes/interest for the tax audits for 2005-2008. As a result of the German tax agency's decision for the years 2009-2012, the Group made a further provision of SEK 20m during the quarter. The provisions are based, for example, on an assumption that the company may not win an appeal and would thus be compelled to pay tax for income in Germany instead of Sweden. A tax payment of SEK 55m was paid during the quarter and SEK 42m was paid in 2015 for a share of the demands that the German tax agency claims to have. These payments do not constitute an admission in any way, but have only been made to prevent any interest increases.

The effective tax rate for the January-September 2016 period was 26.2 percent compared with 22.8 percent for the yearearlier period (adjusted for the provision regarding the tax audit in Germany, the effective tax rate for January-September 2016 was 23.8 percent). No other significant events affecting the Group's effective tax rate occurred during the period.

Note 6 Risks and uncertainties

Thule Group is an international company and its operations may be affected by a number of risk factors in the form of operational and financial risks. The operational risks are managed by the operational units and the financial risks by the central finance department. The operational risks comprise the overall economic trend, as well as consumption by both consumers and professional users, primarily in North America and Europe, where most of the Group's sales are conducted. An economic downturn in these markets could have a negative impact on the Group's sales and earnings. Changes in product technology and sales channel shifts could also affect the Group's sales and earnings negatively.

Thule Group's operations are also exposed to seasonal variations. Demand for consumer products for an active outdoor lifestyle (such as bike carriers or water sport-related products) is greatest during the warmer months of the year, while demand for cases for electronic products is greatest when schools start, at the end of the year and when new electronic products are launched. Thule Group has adapted its production processes and supply chain in response to these variations.

Other relevant risk factors are described in Thule Group's Annual Report and pertain to industry- and market-related risks, operating risks and financial risks. For tax-related risks, see also Note 5 Taxes above.

Key figures

	Jul - Sep		Jan - Sep	Full-year
	2016	2015	2016	2015	2015
Net sales, SEKm	1 366	1 343	4 541	4 341	5 320
Net sales growth, %	1.7%	13.6%	4.6%	18.7%	16.8%
Net sales growth, adjusted %1	1.7%	3.0%	5.5%	5.6%	5.1%
Gross margin, %	40.8%	37.8%	41.1%	39.4%	38.6%
Underlying EBIT, SEKm	246	223	901	802	850
Underlying EBIT margin, %	18.0%	16.6%	19.8%	18.5%	16.0%
Operating income (EBIT), SEKm	243	208	892	780	825
Operating margin, %	17.8%	15.5%	19.6%	18.0%	15.5%
Earnings per share, SEK	1.60	1.48	6.33	5.65	5.87
Earnings per share, SEK (total operations)	1.60	0.23	6.33	4.19	4.44
Equity ratio, %	47.7%	46.3%	47.7%	46.3%	46.8%
Working capital, SEKm	1 200	747	1 200	747	807
Leverage ratio	1.6	2.4	1.6	2.4	2.3

¹Adjustment for changes in exchange rates

Alternative performance measures

Alternative performance measures are used to describe the underlying development of operations and to enhance comparability between periods. These are not defined under IFRS but correspond to the methods applied by Group management and Board of directors to measure the company's financial performance. The alternative performance measures used are net debt (see table on page 5), underlying EBIT and underlying EBITDA. Underlying denotes that we have made adjustments for specific items, see Note 2 Operating segments. For further information, please refer to the Definitions section. These performance measures should not be viewed as a substitute for financial information presented in accordance with IFRS but rather as a complement.

Definitions

Debt/equity ratio Net debt divided by the underlying rolling 12-month EBITDA.

Discontinued operations Comprises the Snow Chain division.

Earnings per share Net income for the period divided by the average number of shares during the period.

EBITDA (Earnings before interest, taxes, depreciation and amortization) Income before net financial items, taxes and depreciation/amortization and impairment of tangible and intangible assets.

EBITDA margin EBITDA as a percentage of net sales.

EBIT (Earnings Before Interest and Taxes) Income before net financial items and taxes.

EBIT margin EBIT as a percentage of net sales.

Equity per share Equity divided by the number of shares at the end of the period.

Equity ratio Equity as a percentage of total assets.

Gross debt Total long and short-term borrowing including overdraft facilities, financial derivatives, capitalized financing costs and accrued interest.

Gross income Net sales less cost of goods sold.

Gross margin Gross income as a percentage of net sales.

Items affecting comparability Profit/loss items that are by their very nature unusual and significantly impact profit or loss. These play an important part in understanding the underlying business performance.

Leverage ratio Net debt divided by the underlying rolling 12-month EBITDA.

LTM Rolling12-month.

Net debt Gross debt less cash and cash equivalents.

Net investments Investments in tangible and intangible assets adjusted for disposals.

Operational depreciation/amortization The Group's total depreciation/amortization excluding depreciation/amortization of consolidated excess values. Other depreciation/amortization comprises depreciation/amortization of consolidated excess values.

Underlying EBITDA EBITDA excluding items affecting comparability.

Underlying EBIT EBIT excluding items affecting comparability and depreciation/amortization of consolidated excess values.

Working capital Comprises inventories, tax receivables, accounts receivable, prepaid expenses and accrued income, other receivables, cash and cash equivalents less accounts payable, income tax liabilities, other liabilities, accrued expenses and deferred income and provisions.

Financial calendar

Year-end report February 10, 2017 Interim report, January-March 2017 April 26, 2017 Thule Group AGM (Malmö) April 26, 2017

Contacts

Fredrik Erlandsson, Senior Vice President Communications and IR Tel: +46 (0)70-309 00 21, e-mail: fredrik.erlandsson@thule.com Lennart Mauritzson, CFO Tel: +46 (0)70-309 05 57, e-mail: lennart.mauritzson@thule.com

About Thule Group

Thule Group is a world leader in products that make it easy to bring the things you care for – easily, securely and in style – when living an active life. Under the motto Active Life, Simplified – we offer products within two segments: Outdoor&Bags (e.g. equipment for cycling-, water- and winter sports, roof boxes, bike trailers, sport strollers, child bike seats, laptop- and camera bags, backpacks and cases for mobile handheld devices) and Specialty (pick-up truck tool boxes). Thule Group has about 2,000 employees at nine production facilities and 35 sales offices worldwide. The Group's products are sold in 140 markets and in 2015, sales amounted to SEK 5.3 billion. www.thulegroup.com

Thule Group AB (publ) Fosievägen 13 SE-214 31 Malmö, Sweden Corp. Reg. No: 556770-6311 www.thulegroup.com