Interim report for the first quarter, January–March 2018

Net sales¹ for the quarter amounted to SEK 1,611m (1,526), corresponding to an increase of 5.6 percent. Adjusted for exchange rate fluctuations, sales rose 5.5 percent.
Operating income¹ totaled SEK 309m (271), corresponding to an increase of 14.2 percent and a margin of 19.2 percent (17.7). After adjustment for exchange rate fluctuations, operating income rose 8.4 percent and the margin improved 0.5 percentage points.
Net income¹ was SEK 220m (197).
Cash flow from operating activities amounted to an outflow of SEK 214m (outflow: 172).
Earnings per share before dilution¹ amounted to SEK 2.15 (1.94).

	Jan - Mar Jan - Mar				Full-year
	2018	2017	%	LTM	2017	%
Net sales, SEKm	1 611	1 526	+5.6	5 957	5 872	+1.5
Underlying EBIT, SEKm	309	271	+14.2	1 107	1 069	+3.6
Operating income (EBIT), SEKm	309	271	+14.2	1 106	1 067	+3.6
Net income from continued operations, SEKm	220	197	+11.9	713	690	+3.4
Earnings per share, SEK	2.15	1.94	+10.8	-	6.77	-
Cash flow from operating activities, SEKm	-214	-172	-24.2	930	972	-4.3

¹ The figures pertain to continuing operations, excluding the Specialty segment, which was divested in June 2017 and constitutes discontinued operations.

CEO's comments

A good start to the year

In the first quarter of the year we grew with healthy profitability. Sales increased 5.5 percent after currency adjustment, driven by strong sales in Region Europe & ROW. In parallel, we continued to improve our EBIT margin, which on a rolling annual basis now amounts to 18.6 percent, driven by a favorable product and customer mix.

Region Europe & ROW remains strong

In Region Europe & ROW, sales increased 9 percent after currency adjustment in the first quarter.

The product categories largely followed the trend we saw in 2017, with Active with Kids as the fastest growing product category, percentage-wise. During the quarter, growth was given a particular boost by the successful launch of the updated Thule Urban Glide 2 stroller.

Record highs were set in the quarter for new registrations of RVs, but much of this increase was due to the time for registering new RVs with an older emission class ended in February. Even disregarding this partly administrative effect, which did not drive true consumer sales, we estimate the market grew with around 10 percent, and that we continued to outperform the market.

Moreover, Sport&Cargo Carriers and Packs, Bags & Luggage performed in line with 2017.

In terms of our geographic markets, we drove growth particularly in the Nordic region, France and Australia, due to new customers in a number of categories in these markets.

The US weighed down Region Americas

In Region Americas, sales declined by 4 percent in the quarter. The decline in sales was due to the ongoing phase-out in the US of a number of lowmargin OE contracts, which has been announced previously. These OE contracts relate to accessories for pick-up trucks sub-category in the Sport&Cargo Carriers category, and simpler bags and cases in the Packs, Bags & Luggage category.

In addition to the known sales decrease attributable to these OE contracts, the start of 2018 has also been relatively slow for retailers in the Sport&Outdoor channel. However, our assessment is that this is not indicative of consumers' interest in our products for the year as a whole, and is instead more due to caution among retailers ahead of the peak season in a continued turbulent US market.

The Active with Kids category grew very fast even in Region Americas, mainly due to strong sales of strollers and child bike seats.

Brazil and Canada were the strongest markets in the region.

Product mix drives improved margins

Reduced sales of OE products with lower margins in the US, combined with our continued growth in Active with Kids and more profitable bags resulted in improved profitability.

Raw material costs remained relativity high, but a positive product and customer mix together with the new 2018 prices for our customers resulted in the gross margin rising 0.3 percent after currency adjustment for the quarter.

Well prepared for the peak season

The personnel in all of the Group's assembly plants are working in line with plans to increase capacity ahead of the peak spring season. To ensure a steady and cost-efficient ramp-up ahead of the peak season, we took a conscious decision to increase the inventory of high-volume products. At the end of the quarter, the inventory totaled SEK 981m (SEK 902m for Q1, 2017) and comprised products we are sure will be sold during the peak season.

Many exciting new products

Our heavy investment in product development continues and in the spring and summer we are both launching a broad range of innovative products in retail and introducing new products to trade that will be launched to consumers in 2019. Together with our efficient production and distribution as well as our strong global brand, this means that I am optimistic about the year ahead.

Magnus Welander, CEO and President

Financial overview²

Trend for the first quarter

Net sales

In the first quarter of 2018, net sales amounted to SEK 1,611m (1,526), representing an increase of 5.6 percent. Adjusted for exchange rate fluctuations, net sales for the Group rose 5.5 percent.

In Region Europe & ROW, net sales totaled SEK 1,225m (1,083), up 13.1 percent, and 9.1 percent after currency adjustments. In Region Americas, after currency adjustment, sales declined 4.4 percent year-on-year, which was largely attributable to a planned phase-out of certain low-margin products.

	Jan - Mar
Change in net sales	2018
Changes in exchange rates	0.1%
Structural changes	0.0%
Organic growth	5.5%
Total	5.6%

Gross income

Gross income for the quarter totaled SEK 670m (624), corresponding to a gross margin of 41.6 percent (40.9). The increase was mainly due to currency, but also to a positive customer and product mix. After currency adjustment, the margin increase totaled 0.3 percentage points.

Operating income

Underlying EBIT amounted to SEK 309m (271), corresponding to an operating margin of 19.2 percent (17.8). Changes in exchange rates had an overall positive impact of SEK 14m on underlying EBIT, compared with the first quarter of 2017. After currency adjustment, we achieved a year-on-year margin improvement of 0.5 percentage points in the quarter.

	Jan - Mar
Change in underlying EBIT margin
Underlying EBIT 2018	309
Underlying EBIT margin 2018	19.2%
Underlying EBIT 2017	271
Underlying EBIT margin 2017	17.8%
Underlying EBIT 2017, currency adjusted	285
Underlying EBIT marginal 2017, currency adjusted	18.7%
Change in underlying EBIT margin, currency adjusted	0.5%

² Unless otherwise stated, the figures in the overview pertain to continuing operations, in other words excluding the operation divested in June 2017, which constitutes discontinued operations.

Net financial items

In the first quarter, net financial items amounted to an expense of SEK 16m (expense: 11). Exchange rate differences on loans and cash and cash equivalents were an expense of SEK 5m (income: 1). The interest expense for borrowings was SEK 10m (expense: 11).

Net income for the period

In the first quarter, net income was SEK 220m, corresponding to earnings per share of SEK 2.15 before and after dilution. For the corresponding year-earlier period, net income for continuing operations totaled SEK 197m, corresponding to earnings per share of SEK 1.94 before dilution and SEK 1.93 after dilution.

Cash flow

Net cash flow for the period

Cash flow from operating activities in the first quarter was a outflow SEK 214m (outflow: 172). The change compared with the year-earlier period was attributable to increased working capital and higher tax payments. Investments in tangible assets amounted to an expense of SEK 14m (expense: 13). During the period, a share issue valued at SEK 138m was carried out as a result of the exercise of warrants.

Financial position

At March 31, 2018, the Group's equity amounted to SEK 3,922m (4,125). The equity ratio amounted to 49.0 percent (50.6).

Net debt was SEK 1,926m (1,772) at March 31, 2018. Total long-term borrowing amounted to

SEK 2,373m (2,448), and comprised loans from credit institutions and the long-term portion of finance lease liabilities of SEK 2,366m (2,445), gross, as well as capitalized financing costs of SEK 5m (expense: 8) and the long-term portion of financial derivatives of SEK 12m (11). Total current financial liabilities amounted to SEK 62m (25) and comprised the short-term portion of financial derivatives and finance lease liabilities.

SEKm	Mar 31 2018	Mar 31 2017	Dec 31 2017
Long-term loans, gross	2 366	2 445	2 275
Financial derivative liability, long-term	12	11	13
Short-term loans, gross	6	5	7
Financial derivative liability, short-term	56	20	21
Overdraft facilities	0	0	0
Capitalized financing costs	-5	-8	-5
Accrued interest	0	0	0
Gross debt	2 436	2 473	2 312
Finanial derivative asset	-27	-22	-12
Cash and cash equivalents	-483	-679	-581
Net debt	1 926	1 772	1 719

Pledged assets for Thule Group amounted to SEK 0m (21).

At March 31, 2018, goodwill totaled SEK 4,306m (4,189). The increase was fully attributable to currency effects.

At March 31, 2018, inventories amounted to SEK 981m (902). The increase is mainly attributable to inventory accumulation ahead of the peak season.

Other information

Seasonal variations

Thule Group's sales and operating income are partially affected by seasonal variations. During the first quarter, sales are affected in the Sport&Cargo Carriers category (roof boxes, ski-racks, etc.) by winter conditions. The second and third quarters are impacted by how early the spring or summer arrives, while sales in individual quarters may be impacted by the quarter in which the 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 bag category prior to major holidays.

Employees

The average number of employees was 2,417 (2,249). The increase was mainly attributable to early staffing for the season at our Belgian, Polish and Swedish plants to manage increased sales volumes.

Thule Group's share

The shares of Thule Group AB are listed on the Nasdaq Stockholm Large Cap list. At March 31, 2018, the total number of shares in issue was 103,208,606.

Thule Group's 2014/2018 warrants program ended on March 5, 2018 and this meant that the number of shares in the company increased by 1,135,696 and an issue of SEK 138m.

Proposed dividend

The Board of Directors has proposed an ordinary dividend of SEK 6.00 per share which corresponds to SEK 619m based on the number of shares outstanding at March 31, 2018. The proposed dividend amounts to 87 percent of earnings per share. It is also proposed that dividends are to be paid in two installments for a better adaptation to the Group's cash flow profile.

The proposed record date for the first dividend payment of SEK 3.00 per share is April 27, 2018 and the proposed record date for the second payment of SEK 3.00 per share is October 5, 2018. If the Annual General Meeting resolves in accordance with the proposal, the first payment will be executed by Euroclear from May 3, 2018, and the second payment will be made from October 10, 2018.

Shareholders

At March 31, 2018, Thule Group AB had 12,577 shareholders. At this date, the largest shareholders were AMF Försäkringar & Fonder (13.3 percent of the votes), Lannebo Fonder (5.7 percent of the votes), Nordea Fonder (5.2 percent of the votes), Handelsbanken Fonder (4.4 percent of the votes) and Swedbank Robur Fonder (4.4 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–March 31, 2018. The Parent Company invoices its costs to Group companies. The Parent Company reported negative net income of SEK 4m (neg: 3).

Cash and cash equivalents and current investments amounted to SEK 0m (0). Long-term liabilities to credit institutions totaled SEK 2,351m (2,426).

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 7 Risks and uncertainties.

Sales trend by Region

	Jan - Mar		Change			Full-year
SEKm	2018	2017	Rep.	Adjust.1	LTM	2017
Net sales	1 611	1 526	5.6%	5.5%	5 957	5 872
- Region Europe & ROW	1 225	1 083	13.1%	9.1%	4 124	3 983
- Region Americas	386	443	-12.7%	-4.4%	1 833	1 889

1 Adjusted for changes in exchange rates

In the first quarter of 2018, net sales amounted to SEK 1,611m (1,526), an increase of 5.5 percent after currency adjustment. The continued strong performance of Region Europe & ROW was the driving factor behind increased sales.

Region Europe & ROW

In Region Europe & ROW, the very positive trend continued and we achieved growth of 9.1 percent (after currency adjustment) in the quarter as a result of healthy growth in the vast majority of our markets. Strong performance in the Nordic region, France and Australia made a strong contribution during the quarter. In Sport&Cargo Carriers, growth was particularly favorable in roof racks and roof boxes.

Record highs were set in the quarter for new registrations of RVs, but much of this increase was due to the extended time limit for registering new RVs with an emission class of 5b+, which ended in February. Many RV dealers therefore chose to register all of the remaining vehicles they had in stock with this emission class to, later in the spring, be able to either rent out or sell these as pre-registered secondhand vehicles. Even disregarding this effect, which did not drive true consumer sales, the market was healthy with growth of around 10 percent according to our assessment, and we continued our overall positive trend for RV Products.

The Active with Kids category continued to develop favorably during the quarter, mainly driven by the successful January launch of the upgraded Thule Urban Glide 2 stroller, which was well-received by the market.

The performance in Packs, Bags & Luggage was marginally impacted year over year by the major launch in the first quarter 2017 of the Thule Subterra luggage range with large volumes, which to some extent created a pipeline fill effect since we have not previously had this type of luggage. Stores posted favorable sales trends in the first quarter 2018 and we remain positive about the general performance of the luggage category over the full year.

Region Americas

After currency adjustment, sales in Region Americas declined 4.4 percent for the quarter negatively impacted by the trend in the US, while Brazil and Canada continued to trend positively.

As previously announced, in Sport&Cargo Carriers we were aware that the quarter would be negatively affected by the smaller sub-category of accessories for pick-up trucks. The reduction in sales of these low-margin products that we sell direct to car manufacturers will also impact sales negatively for the remainder of 2018 and the start of 2019. The Sport&Cargo Carriers category in the US was also held back by a degree of concern and caution at the retailer level ahead of a delayed spring season.

Sales of Packs, Bags & Luggage tracked in line with our expectations, held back by reduced sales of low-margin products such as simpler sleeves and cases for larger OE customers. Going forward, the categories we are focusing on are continuing to develop in the right direction, though we would prefer to see the trend accelerate.

The Active with Kids category continued to develop favorably during the quarter, driven by the successful launch of the Thule Urban Glide 2 stroller.

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.

April 25, 2018

Board of Directors

Review report

This report has not been reviewed by the company's auditor.

Selected key events during the period

New store in Stockholm, Sweden – during the quarter, a number of Thule stores were opened around the world by our partners, in line with the new retail concept presented in summer 2017. We also chose to open a second store under our own management in the Swedish market, with the opening of a store in central Stockholm in February.

Launch of Thule Urban Glide 2 – the upgraded version of the prize-winning Thule Urban Glide stroller was launched in January. With improved practical solutions for everyday use, we are convinced that this all-terrain stroller will attract an even larger following, outside of the most active parents, who wish to go jogging with their children.

Financial statements

(Unless otherwise stated, all amounts are in SEK m)

Consolidated Income Statement

		Jan - Mar			Full-year
	Note	2018	2017	LTM	2017
Continuing operations
Net sales	2	1 611	1 526	5 957	5 872
Cost of goods sold		-942	-902	-3 495	-3 455
Gross income		670	624	2 462	2 416
Other operating revenue		0	0	4	4
Selling expenses		-284	-279	-1 058	-1 053
Administrative expenses		-77	-75	-302	-300
Other operating expenses		0	0	0	0
Operating income	2	309	271	1 106	1 067
Net interest expense/income		-16	-11	-57	-52
Income before taxes		294	259	1 049	1 015
Taxes	6	-74	-63	-336	-325
Net income from continuing operations		220	197	713	690
Discontinued operations
Net income from discontinued operations	3	0	6	11	17
Net income		220	203	724	707
Consolidated net income pertaining to:
Shareholders of Parent Company		220	203	724	707
of which, pertaining to continuing operations		220	197	713	690
of which, pertaining to discontinued operations		0	6	11	17
Net income		220	203	724	707

Earnings per share continuing operations, SEK before dilution		2.15	1.94		6.77
Earnings per share continuing operations, SEK after dilution		2.15	1.93		6.72
Earnings per share, SEK before dilution		2.15	2.00		6.93
Earnings per share, SEK after dilution		2.15	1.99		6.89
Average number of shares (millions)		102.4	101.6		101.9

Consolidated Statement of Comprehensive Income

		Jan - Mar		Full-year
	2018	2017	LTM	2017
Net income	220	203	724	707
Items that have been carried over or can be carried over to net income
Foreign currency translation	217	-24	130	-111
Cash flow hedges	-36	5	-43	-1
Net investment hedge	-88	8	-96	-0
Period change in fair value of available for sale financial assets	0	0	24	24
Tax on components in other comprehensive income	22	1	47	26
Items that cannot be carried over to net income
Revaluation of defined-benefit pension plans	-4	5	-23	-14
Tax pertaining to items that cannot be carried over to net income	1	-1	6	4
Other comprehensive income	111	-5	44	-72
Total comprehensive income	331	198	768	634
Total comprehensive income pertaining to:
Shareholders of Parent Company	331	198	768	634
Total comprehensive income	331	198	768	634

Consolidated Balance Sheet

	Mar 31	Mar 31	Dec 31
Note	2018	2017	2017
Assets
Intangible assets	4 338	4 219	4 177
Tangible assets	659	581	645
Long-term receivables	12	10	9
Deferred tax receivables	350	503	324
Total fixed assets	5 358	5 314	5 155
Inventories	981	902	819
Tax receivables	53	0	26
Accounts receivable	944	907	580
Prepaid expenses and accrued income	72	56	49
Other receivables	109	201	76
Cash and cash equivalents	483	679	581
Assets held for sale	4 0	100	0
Total current assets	2 642	2 845	2 129
Total assets	8 001	8 159	7 285
Equity and liabilities
Equity	3 922	4 125	3 467
Long-term interest-bearing liabilities	2 373	2 448	2 283
Provision for pensions	156	129	148
Deferred income tax liabilities	184	161	185
Total long-term liabilities	2 713	2 738	2 617
Short-term interest-bearing liabilities	62	25	29
Accounts payable	649	552	519
Tax liabilities	169	211	217
Other liabilities	47	54	29
Accrued expenses and deferred income	414	385	382
Provisions	25	31	25
Liabilities attributable to assets held for sale	4 0	36	0
Total short-term liabilities	1 366	1 294	1 201
Total liabilities	4 079	4 033	3 817
Total equity and liabilities	8 001	8 159	7 285

Consolidated Statement of Changes in Equity

	Mar 31	Mar 31	Dec 31
	2018	2017	2017
Opening balance, January 1	3 467	3 826	3 826
Adjusted Equity as per 1 January	-2	-	-
Net income	220	203	707
Other comprehensive income	111	-5	-72
Total comprehensive income	331	198	634
Transactions with the Group's owners:
New share issue	138	110	110
Dividend	0	0	-1 113
Other	-12	-8	10
Closing balance	3 922	4 125	3 467

Consolidated Statement of Cash Flow

		Jan - Mar	Full-year
	2018	2017	2017
Income before taxes	294	259	1 015
Income from discontinued operations before taxes	0	9	38
Adjustments for items not included in cash flow	22	18	74
Paid income taxes	-155	-125	-138
Cash flow from operating activities prior to changes in working capital	161	162	990
Cash flow from changes in working capital
Increase(-)/Decrease (+) in inventories	-146	-75	-14
Increase(-)/Decrease (+) in receivables	-389	-318	-6
Increase(+)/Decrease (-) in liabilities	160	59	3
Cash flow from operating activities	-214	-172	972
Investing activities
Sale of subsidiaries	0	0	145
Acquisition/divestment of tangible/intangible assets	-14	-13	-128
Cash flow from investing activities	-14	-13	17
Financing activities
New issue of shares	138	110	110
Others	-8	-6	10
Dividend	0	0	-1 113
Debt repaid/new loans	0	1	-176
Cash flow from financing activities	129	104	-1 169
Net cash flow	-99	-81	-181
Cash and cash equivalents at beginning of period	581	763	763
Effect of exchange rates on cash and cash equivalents	1	-3	-2
Cash and cash equivalents at end of period	483	679	581

Condensed Parent Company Income Statement

	Jan - Mar		Full-year
	2018	2017	2017
Other operating revenue	5	5	18
Administrative expenses	-10	-9	-40
Operating income	-5	-4	-22
Result from Shares in Subsidiaries	0	0	600
Interest income- and expense	1	1	3
Income after financial items	-4	-3	581
Appropriations	0	0	15
Net income before taxes	-4	-3	596
Taxes	0	0	1
Net income	-4	-3	597

Condensed Parent Company Balance Sheet

	Mar 31	Mar 31
	2018	2017	2017
Assets
Financial fixed assets	5 550	6 034	5 468
Total fixed assets	5 550	6 034	5 468
Other current receivables	11	1	18
Cash and cash equivalents	0	0	0
Total current assets	11	1	18
Total assets	5 561	6 035	5 486
Equity and liabilities
Equity	2 024	2 397	1 903
Other provisions	8	5	7
Liabilities to credit institutions	2 351	2 426	2 261
Liabilities to Group companies	368	368	368
Total long-term liabilities	2 728	2 799	2 636
Liabilities to credit institutions	0	0	0
Liabilities to Group companies	786	820	927
Other current liabilities	24	19	20
Total short-term liabilities	810	839	947
Total equity and liabilities	5 561	6 035	5 486

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. With the following exceptions, the same accounting policies and calculation methods have been applied for the Group and Parent Company as in the most recent Annual Report. In 2018, the Group started to apply IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. The effects of these standards were described in the latest annual report.

Note 2 Operating segments and allocation of revenue

The two product groups (racks and other accessories for pick-up trucks) that were previously included in the Specialty operating segment are now recognized as part of continuing operations. Comparative figures have been recalculated retroactively. The remaining part of the Specialty operating segment, toolboxes for pick-up trucks, was divested in June 2017 and is reported as a discontinued operation. Refer to Note 3 Discontinued operations. As a result of the divestment of the Specialty operating segment, the Group now comprises one segment.

	Jan - Mar			Full-year
	2018	2017	LTM	2017
Sales to customers	1 611	1 526	5 957	5 872
- Region Europe & ROW	1 225	1 083	4 124	3 983
- Region Americas	386	443	1 833	1 889
Underlying EBITDA	327	288	1 175	1 136
Operational depreciation/amortization	-17	-17	-68	-67
Underlying EBIT	309	271	1 107	1 069
Other depreciation/amortization	0	0	-1	-1
Items affecting comparability	0	0	0	0
Operating income	309	271	1 106	1 067
Net interest expense/income	-16	-11	-57	-52
Taxes	-74	-63	-336	-325
Net income from discontinued operations	0	6	11	17
Net income	220	203	724	707

All revenue is recognized at a point in time.

Note 3 Discontinued operations

		Jan - Mar
	2018	2017
Revenue	-	74
Expenses	-	-64
Income before taxes	-	9
Taxes	-	-3
Net income from discontinued operations	-	6
Earnings per share, discontinued operations, SEK	-	0.06

	Jan - Mar
	2018	2017
Cash flow from discontinued operations
Operating cash flow before investments	-	34
Operating cash flow after investments	-	34

Note 4 Assets classified as held for sale

	Mar 31	Mar 31
	2018	2017
Assets classified as held for sale
Intangible assets	-	17
Tangible assets	-	22
Inventories	-	19
Accounts receivable and other receivables	-	42
	-	100
Liabilities classified as held for sale
Accounts payable and other liabilities	-	36
	-	36

Note 5 Fair value of financial instruments

	Fair value
	Mar 31	Mar 31
	2018	2017
Assets - Financial derivatives
Financial receivables	0	24
Currency forward contracts	7	10
Currency swaps	17	3
Currency options	1	9
Interest rate swaps	1	0
Total derivative assets	27	46

Liabilities - Financial derivatives
Currency forward contracts	-54	-11
Currency swaps	-4	-4
Currency options	-2	-4
Interest rate swaps	-8	-11
Total derivative liabilities	-68	-31

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.

Note 6 Taxes

The effective tax rate for the January–March 2018 period was 25.1 percent. The effective tax rate for continuing operations in the corresponding period of 2017 was 24.2 percent. No significant events affecting the Group's effective tax rate occurred during the period.

Note 7 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 smaller bags is greatest when schools start and at the end of the year. 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, legal and fiscal risks as well as financial risks.

Key figures

	Jan - Mar		Full-year
	2018	2017	LTM	2017
Net sales, SEKm	1 611	1 526	5 957	5 872
Net sales growth, %	5.6%	17.3%	-	10.7%
Net sales growth, adjusted %1	5.5%	13.9%	-	9.5%
Gross margin, %	41.6%	40.9%	41.3%	41.2%
Underlying EBIT, SEKm	309	271	1 107	1 069
Underlying EBIT-margin, %	19.2%	17.8%	18.6%	18.2%
Operating income (EBIT), SEKm	309	271	1 106	1 067
Operating margin, %	19.2%	17.7%	18.6%	18.2%
Earnings per share, SEK	2.15	1.94	-	6.77
Earnings per share (total operations), SEK	2.15	2.00	-	6.93
Equity ratio, %	49.0%	50.6%	49.0%	47.6%
Working capital, SEKm	1 338	1 512	1 338	957
Leverage ratio	1.6	1.6	1.6	1.5

¹Adjusted 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 to measure the company's financial performance. The alternative performance measures used are net debt (see table on page 4), underlying EBIT and underlying EBITDA. Underlying denotes that we have made adjustments for specific items, see Note 2 Operating segments and allocation of revenue. 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

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

EBIT (Earnings before interest and taxes) Income before net financial items and taxes.

EBIT margin EBIT as a percentage of net sales.

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.

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 transaction 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 LTM EBITDA.

LTM Rolling 12-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. Working capital in the cash flow excludes cash and cash equivalents.

Financial calendar

Thule Group AGM (Malmö) April 25, 2018 Interim report April–June 2018 July 19, 2018 Interim report, July–September 2018 October 26, 2018 Year-end report February 13, 2019

Contacts

Fredrik Erlandsson, Senior Vice President Communications and IR Tel: +46 (0)70-309 00 21, e-mail: [email protected] Lennart Mauritzson, CFO Tel: +46 (0)70-552 05 57, e-mail: [email protected]

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. — the company offers products within the product categories Sport&Cargo Carriers (e.g. roof racks, roof boxes, holders for bikes, water and winter sports equipment being transported by car), Active with Kids (e.g. bicycle trailers, strollers, child bike seats), RV Products (e.g. awnings, bike carriers and tents for motorhomes and caravans), Packs, Bags & Luggage (e.g. hiking backpacks, suitcases and camera bags).

Thule Group has about 2,200 employees at nine production facilities and 35 sales offices worldwide. The Group's products are sold in 140 markets and in 2017, sales amounted to SEK 5.9 billion. www.thulegroup.com

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