AI assistant
Thule Group — Interim / Quarterly Report 2020
Feb 10, 2021
2983_10-k_2021-02-10_60fcace2-fe24-415c-b879-ba750333e81c.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
Year-end report, fourth quarter, October–December 2020
Fourth Quarter
- Net sales for the quarter amounted to SEK 1,605m (1,211), corresponding to an increase of 32.6 percent. Adjusted for exchange rate fluctuations, sales increased 44.6 percent.
- Operating income totaled SEK 241m (47). Underlying EBIT amounted to SEK 241m (71), corresponding to a margin of 15.0 percent (5.9). Adjusted for exchange rate fluctuations, the operating margin increased 9.8 percentage points.
- Net income amounted to SEK 164m (30).
- Cash flow from operating activities totaled SEK 319m (174).
- Earnings per share before dilution amounted to SEK 1.57 (0.29).
Full year
- Net sales for the full year amounted to SEK 7,828m (7,038), corresponding to an increase of 11.2 percent. Adjusted for exchange rate fluctuations, sales increased 13.1 percent.
- Operating income totaled SEK 1,591 (1,195). Underlying EBIT amounted to SEK 1,593m (1,245), corresponding to a margin of 20.3 percent (17.7). Adjusted for exchange rate fluctuations, the operating margin increased 2.2 percentage points.
- Net income amounted to SEK 1,166m (883).
- Cash flow from operating activities totaled SEK 1,614m (1,030).
- The global pandemic impacted sales negatively in the spring, which is normally the company's peak season. A delayed season together with increased demand resulted in a substantial recovery in the second half of the year.
- The Board of Directors proposes a dividend of SEK 15.50 per share, corresponding to SEK 1,621m based on the number of shares outstanding at February 10, 2021.
| Oct - Dec Oct - Dec | Jan - Dec Jan - Dec | |||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | % | 2020 | 2019 | % | |
| Net sales, SEKm | 1 605 | 1 211 | +32.6 | 7 828 | 7 038 | +11.2 |
| Underlying EBIT, SEKm | 241 | 71 | +240.3 | 1 593 | 1 245 | +27.9 |
| Operating income (EBIT), SEKm | 241 | 47 | +415.4 | 1 591 | 1 195 | +33.2 |
| Net income, SEKm | 164 | 30 | +449.5 | 1 166 | 883 | +32.0 |
| Earnings per share, SEK | 1.57 | 0.29 | +442.3 | 11.23 | 8.56 | +31.2 |
| Cash flow from operating activities, SEKm | 319 | 174 | +83.4 | 1 614 | 1 030 | +56.7 |
CEO's statement
The strong finish to 2020 enabled us to reach our profitability margin target of 20 percent
We ended a turbulent 2020 with an extremely strong fourth quarter with a growth of 45 percent after currency adjustment. The exceptionally strong second half of the year enabled us to deliver currency-adjusted growth of 13 percent for the full year. A development that was difficult to imagine in the middle of April, when society was shutting down around the world to limit the pandemic's spread, which contributed to the temporary halving of sales.
Driven by healthy sales growth, continued high gross margins, and a scalable and efficient operations, we delivered an EBIT margin of 15.0 percent (5.9) for the quarter. The strong profitability during the quarter also enabled us to deliver an EBIT margin of 20.3 percent for the year. Thereby meeting our goal of an EBIT-margin exceeding 20 percent earlier than anticipated.
The sustainability goals for 2020, which were set in 2014, have largely been met. Therefore, new longterm sustainability goals were set in December, within the framework of the Science Based Targets initiative, in line with the goal of the Paris Agreement and the UN's 2030 Agenda for Sustainable Development to limit the increase in the planet's average temperature to 1.5°C.
Region Europe & ROW – biking-related categories continue to grow
During the quarter, sales in the region rose 43 percent after currency adjustment, which meant that we posted currency-adjusted growth of 14 percent for the full year. As with the third quarter, the trend was positive in essentially all markets.
The Sport&Cargo Carriers category benefited in the quarter from a continued positive bike market, which gained a further boost from a mild autumn and winter. Sales of roof racks and rooftop tents were also healthy. However, the closure of winter sports venues in the Alps depressed sales of roof boxes and ski-racks slightly. For the full year, growth in the category was 18 percent after currency adjustment, with a clear impact from an increase in taking holidays locally.
After currency adjustment the Active with Kids category grew 33 percent in the year and the fourth quarter also performed extremely strongly in the three sub-categories: strollers, bike trailers and child bike seats.
Accessories for RVs also performed well in the fourth quarter, as many RV manufacturers ramped up production following significant challenges earlier in the year. For the full year, this category increased 7 percent after currency adjustment for the region.
However, the bag category continued to be negatively affected due to reduced international travel. For the full-year 2020, net sales declined 23 percent after currency adjustment.
Region Americas – bike products, rooftop tents and strollers the winners
In Region Americas, sales rose 48 percent in the quarter after currency adjustment and sales growth for the full year was 10 percent.
In Sport&Cargo Carriers growth was mainly driven by a high demand for bike racks, but other product categories also performed well. For the full year, we posted currency-adjusted growth of 13 percent.
The year ended very strong in the Active with Kids category and full-year sales rose 57 percent after currency adjustment.
Bag sales in this region were also weaker than prior year due to the pandemic and we ended the year with sales down 19 percent after currency adjustment.
The limited and niche targeted sales of accessories for RVs in this region grew quickly and now accounts for 3 percent of the region's sales.
Short-term uncertainty remains, but the long-term trends are positive
From a short-term view, considerable uncertainty remains regarding the scope of any pandemicrelated lockdowns in a number of countries.
However, we remain convinced that the robust trend for outdoor and vacation activities closer to home will remain positive for our product categories. Our design-winning products in combination with very flexible production in and near our main markets will remain a competitive advantage.
I want to conclude by thanking all colleagues of Thule Group, who have shown fantastic drive and enormous flexibility during a very challenging year, which ended up being very successful.
Magnus Welander CEO and President
Financial overview
Trend for the fourth quarter
Net sales
In the fourth quarter of 2020, net sales amounted to SEK 1,605m (1,211), representing an increase of 32.6 percent. Adjusted for exchange rate fluctuations, net sales for the Group rose 44.6 percent.
In Region Europe & ROW, net sales totaled SEK 1,074m (797), up 34.9 percent, and 42.9 percent after currency adjustments. Net sales in Region Americas amounted to SEK 531m (414), up 28.2 percent and 48.0 percent after currency adjustment versus fourth quarter 2019.
| Oct-Dec | Jan-Dec | |
|---|---|---|
| Change in net sales | 2020 | 2020 |
| Changes in exchange rates | -12.0% | -1.8% |
| Structural changes | 0.0% | 0.0% |
| Organic growth | 44.6% | 13.1% |
| Total | 32.6% | 11.2% |
Gross income
Gross income for the quarter totaled SEK 643m (463), corresponding to a gross margin of 40.0 percent (38.2). After currency adjustment, the margin improved 1.5 percentage points driven by increased production volumes and an advantageous product mix.
Operating income
Operating income totaled SEK 241m (47). Underlying EBIT amounted to SEK 241m (71), corresponding to an operating margin of 15.0 percent (5.9). Operating income was positively impacted by higher sales as well as by lower overheads compared with the same period last year. Last year, operating income was impacted by restructuring costs of SEK 24m. Changes in exchange rates had a negative impact of SEK 13m.
| Oct-Dec | Jan-Dec | |
|---|---|---|
| Change in underlying EBIT margin | ||
| Underlying EBIT 2020 | 241 | 1 593 |
| Underlying EBIT margin 2020 | 15.0% | 20.3% |
| Underlying EBIT 2019 | 71 | 1 245 |
| Underlying EBIT margin 2019 | 5.9% | 17.7% |
| Underlying EBIT 2019, currency adjusted | 58 | 1 254 |
| Underlying EBIT margin 2019, currency adjusted | 5.2% | 18.1% |
| Change in underlying EBIT margin, currency adjusted | 9.8% | 2.2% |
Net financial items
Net financial items for the quarter amounted to an expense of SEK 18m (expense: 14). Exchange rate differences on loans and cash and cash equivalents were an expense of SEK 10m (expense: 2). The interest expense for borrowings was SEK 8m (expense: 12).
Net income for the period
In the fourth quarter, net income was SEK 164m, corresponding to earnings per share of SEK 1.57 before and SEK 1.56 after dilution. For the year-earlier period, net income totaled SEK 30m, corresponding to earnings per share of SEK 0.29 before and after dilution.
Trend for the full year
Net sales
For the full-year 2020, net sales amounted to SEK 7,828m (7,038), representing an increase of 11.2 percent. Adjusted for exchange rate fluctuations, net sales for the Group rose 13.1 percent. Until mid-March, sales grew compared with the previous year. The outbreak of coronavirus (COVID-19) and the far-reaching quarantine measures introduced in most countries had a strongly negative impact on sales during the second half of March and the months of April and May. The latter half of the second quarter and the second half of the year posted strong growth year-on-year. A large share of the sales lost during the spring season were delayed and extended the season.
In Region Europe & ROW, net sales totaled SEK 5,721m (5,057), up 13.1 percent. After currency adjustment, net sales rose 14.2 percent. Net sales in Region Americas amounted to SEK 2,107m (1,980), an increase of 6.4 percent and 10.1 percent after currency adjustment compared with the full-year 2019.
Gross income
Gross income amounted to SEK 3,230m (2,829) corresponding to a gross margin of 41.3 percent (40.2). After currency adjustment, the margin improved 0.7 percentage points. An advantageous product mix, over absorption, lower material costs and efficiency improvements in the assembly plants made positive contributions.
Operating income
Underlying EBIT amounted to SEK 1,593m (1,245), corresponding to an operating margin of 20.3 percent (17.7). Changes in exchange rates had a positive impact of SEK 9m. The strong sales growth that occurred during the second half of the year more than compensated the weak period at the end of the first quarter and beginning of the second quarter. Operating income totaled SEK 1,591m (1,195).
Net financial items
Net financial items for the full year amounted to an expense of SEK 64m (expense: 49). Exchange rate differences on loans and cash and cash equivalents amounted to an expense of SEK 15m (0). The interest expense for borrowings was SEK 49m (expense: 49).
Net income for the year
Net income for the year was SEK 1,166m, corresponding to earnings per share of SEK 11.23 before dilution and SEK 11.21 per share after dilution. For the full-year 2019, net income was SEK 883m, corresponding to earnings per share of SEK 8.56 before dilution and SEK 8.55 after dilution.
Cash flow
Cash flow from operating activities for the quarter was SEK 319m (174). The sales increase in the quarter impacted in form of higher profits and stable working capital with lower accounts receivable as well as a somewhat higher inventory driven by the build-up of inventory in the last quarter of the year. Cash flow from operating activities was SEK 1,614m (1,030) for the full year. Investments in tangible and intangible assets amounted to SEK 170m (161). During the quarter, net debt was reduced and the utilization of the credit facility declined SEK 505m. A total of SEK 262m was issued in conjunction with the 2017/20 incentive program that concluded in July.
Financial position
At December 31, 2020, the Group's equity amounted to SEK 5,253m (4,330). The equity ratio amounted to 62.2 percent (52.3).
Net debt amounted to SEK 384m (2,119) at December 31, 2020. Total long-term borrowing amounted to SEK 1,060m (2,348), and comprised loans from credit institutions of SEK 902m (2,178) gross, long-term finance lease liabilities of SEK 149m (164), capitalized financing costs of SEK 7m (10) and the long-term portion of financial derivatives of SEK 16m (15). Total current financial liabilities amounted to SEK 87m (65) and comprised the short-term portion of financial derivatives and finance lease liabilities.
| SEKm | Dec 31 2020 | Dec 31 2019 |
|---|---|---|
| Long-term loans, gross | 1 051 | 2 342 |
| Financial derivative liability, long-term | 16 | 15 |
| Short-term loans, gross | 53 | 53 |
| Financial derivative liability, short-term | 35 | 12 |
| Overdraft facilities | 0 | 0 |
| Capitalized financing costs | -7 | -10 |
| Accrued interest | 0 | 0 |
| Gross debt | 1 147 | 2 413 |
| Financial derivative asset | -57 | -26 |
| Cash and cash equivalents | -706 | -268 |
| Net debt | 384 | 2 119 |
Goodwill at December 31, 2020, amounted to SEK 4,256m (4,620). The decrease was attributable entirely to currency effects.
At December 31, 2020, inventories amounted to SEK 1,068m (1,092). Compared with last year, inventory was negatively impacted by currency effects amounting to SEK 85m.
Other information
Coronavirus pandemic
In connection with the rapid global development of the coronavirus situation, Thule Group implemented vigorous measures to reduce the risks pertaining to results and cash flow. In addition to the short-term furlough of employees, these measures also comprised substantial reductions in variable expenses and some minor reprioritized investments. As demand for the Group's products rose, the short-term furlough measures ended. In total, Thule Group has received SEK 16m in government grants, of which SEK 8m in Sweden. The company intend to repay the support received from the Swedish Agency for Economic and Regional Growth (Sw.Tillväxtverket).
On March 22, 2020 the Board of Directors made the decision to withdraw its proposal announced previously for a dividend amounting to approximately SEK 774m and this was adopted by the Annual General Meeting on April 28, 2020.
Seasonal variations
Thule Group's sales and operating income are during a normal year partially affected by seasonal variations. During the first quarter, sales in the Sport&Cargo Carriers category (roof boxes, ski-racks, etc.) are affected by winter conditions. The second and third quarters are primarily impacted by how early the spring and summer arrive. In the fourth quarter, seasonal variations are primarily attributable to sales of winter-related products (roof boxes, ski-racks, snow sport backpacks, etc.) and sales of products in the bag category prior to major holidays.
Employees
The average number of employees was 2,669 (2,422).
Thule Group's share
The shares of Thule Group AB are listed on the Nasdaq Stockholm Large Cap list. At December 31, 2020, the total number of shares in issue was 104,562,436.
Proposed dividend
The Board of Directors proposes a dividend of SEK 15.50 per share, corresponding to SEK 1,621m based on the number of shares outstanding at February 10, 2021. SEK 8.00 per share comprises the ordinary dividend for 2020 and SEK 7.50 per share an extraordinary dividend based on the withdrawal of the proposed ordinary dividend for 2019. The proposed dividend amounts to 71 percent of 2020 earnings per share and 88 percent of 2019 earnings per share, corresponding to 138 percent of 2020 earnings per share. It is also proposed that dividends be paid in two installments for a better adaptation to the Group's cash flow profile. The first installment will comprise the extraordinary dividend and half of the ordinary dividend. The proposed record date for distribution of the first installment of SEK 11.50 per share is April 26, 2021 and the proposed record date for the second installment of SEK 4.00 per share is October 4, 2021.
Annual General Meeting
The Annual General Meeting for Thule Group will be held on April 22, 2021, in Malmö, Sweden.
Share-based incentive program 2020/2023
The warrants program resolved on by the Annual General Meeting (AGM) for executive management and key employees of Thule Group was implemented in the second quarter of 2020. The program comprises 2,090,000 warrants issued to Thule AB for onward transfer to participants. The participants acquired the warrants at the fair market value and the program currently includes 31 participants. The subscription price is SEK 216.60, which corresponds to 118 percent of the volume-weighted average price according to Nasdaq Stockholm's official price list for shares in the company during the period April 29, 2020 through May 13, 2020. If on subscribing for the share, the latest price paid for the company's share when the stock exchange closes on the last trading day preceding the subscription date exceeds 162.3 percent of the average share price based upon which the subscription price has been determined, the subscription price shall be increased correspondingly. The warrants may be exercised during the period June 15–December 15, 2023. In total, SEK 24m has been raised in equity through premiums for exercised warrants.
Regarding the earlier incentive program, the 2017/2020 warrants program ended on July 29, 2020 and this meant that the number of shares in the company increased by 1,353,830 and an issue of SEK 262m.
Shareholders
At December 31, 2020, Thule Group AB had 16,384 shareholders. At this date, the largest shareholders were AMF Försäkringar & Fonder (8.1 percent of the votes), Nordea Fonder (4.3 percent of the votes), SEB Fonder (4.3 percent of the votes) and Didner & Gerge Fonder (3.9 percent of the votes).
See www.thulegroup.com for further information on Thule Group's shareholders.
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–December 31, 2020. The Parent Company invoices its costs to Group companies. The Parent Company reported net income of SEK 713m (814). Cash and cash equivalents and current investments amounted to SEK 0m (0). Long-term liabilities to credit institutions totaled SEK 894m (2,168).
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 5, Risks and uncertainties.
Sales trend by region
| Oct-Dec | Change | Jan-Dec | Change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| SEKm | 2020 | 2019 | Rep. | Adj.1 | 2020 | 2019 | Rep. | Adj.1 | |
| Net sales | 1 605 | 1 211 | 32.6% | 44.6% | 7 828 | 7 038 | 11.2% | 13.1% | |
| - Region Europe & ROW | 1 074 | 797 | 34.9% | 42.9% | 5 721 | 5 057 | 13.1% | 14.2% | |
| - Region Americas | 531 | 414 | 28.2% | 48.0% | 2 107 | 1 980 | 6.4% | 10.1% | |
| 1 Adjusted for changes in exchange rates |
Region Europe & ROW
During the fourth quarter, sales in the region rose 43 percent after currency adjustment, which meant that we posted currency-adjusted growth of 14 percent for the full year. As with the third quarter, the trend was highly positive in essentially all markets.
The Sport&Cargo Carriers category benefited in the quarter from a continued buoyant bicycle market, which gained a further boost from a mild winter. Sales of roof racks and rooftop tents were also healthy. However, the stringent restrictions at winter sports venues in the Alps depressed sales of roof boxes and ski-racks slightly. For the full year, growth in the category was 18 percent after currency adjustment, with a clear impact from an increase in taking holidays locally.
After currency adjustment the Active with Kids category grew 33 percent in the year and the fourth quarter also performed extremely strongly in all the three sub-categories: strollers, bike trailers and child bike seats.
Accessories for RVs also performed well in the fourth quarter, since many RV manufacturers restarted their production following substantial challenges earlier in the year. For the full year, this category increased 7 percent after currency adjustment for the region.
However, the bag category continued to be negatively affected due to reduced international travel. For the full year, net sales declined 23 percent after currency adjustment.
Region Americas
In Region Americas, sales rose 48 percent in the quarter after currency adjustment and, accordingly, currency adjusted sales growth for the full-year 2020 was 10 percent.
In Sport&Cargo Carriers growth was mainly driven by a very healthy level of demand for bicycle products, but other categories also performed well. For the full year, we posted currency-adjusted growth of 13 percent.
The year ended extremely strongly in the Active with Kids category and full-year sales rose 57 percent after currency adjustment.
Bag sales in this region were also weaker than in the preceding year due to the pandemic. For the full-year 2020, sales declined 19 percent after currency adjustment.
The limited and clearly niched sales of accessories for RVs in the region grew quickly and now accounts for 3 percent of the region's sales.
| Sport&Cargo Carriers | RV Products | Active with Kids | Packs, Bags & Luggage | |||||
|---|---|---|---|---|---|---|---|---|
| Share of Thule Group Sales 2020 (2019) |
64% (63%) |
15% (15%) |
13% $(10\%)$ |
8% (12%) |
||||
| Share of | Eur&ROW | Americas | Eur&ROW | Americas | Eur&ROW | Americas | Eur&ROW | Americas |
| Regional Sales 2020 |
61% | 73% | 20% | 3% | 14% | 9% | 5% | 15% |
| (2019) | (59%) | (71%) | (21%) | (1%) | (12%) | (7%) | (8%) | (21%) |
| Sales Growth | $+17%$ | $+9%$ | $+37%$ | $-21%$ | ||||
| 2020 vs 2019 (Constant Currency) |
$+18%$ | $+13%$ | $+7%$ | $+73%$ | $+33%$ | $+57%$ | $-23%$ | $-19%$ |
Sales trend per product category for the full year
Sport&Cargo Carriers
The product category posted year-on-year growth of 17 percent after currency adjustment in 2020. The extremely positive trend for the sub-category bike racks dominated the category during the year. This was in turn driven by increased cycling in conjunction with the pandemic, the last few years' clear sales growth trend for electric bicycles and a mild autumn and winter that prolonged the cycling season in the fourth quarter. The greater weight and higher price of electric bicycles makes Thule's technologically more attractive solutions, which retail at higher levels than the competition's, able to capture market shares in the product category.
Sales of roof racks performed well and posted growth in a year with dramatically reduced sales of new cars. This, once again, confirms our earlier experience that sales in the category are primarily linked to consumer behaviour and activity and not to the number of cars sold in the market.
In the third of the larger sub-categories, roof boxes, the picture was more mixed. Sales in North America were favorable, while restrictions and lockdowns of ski resorts in the Alps at the end of the spring season and during the current winter season, resulted in lower sales in Europe.
RV Products
This category has a strong focus in Region Europe & ROW, which accounts for 96% of the Group's sales in the category. The sector had a challenging spring and summer in the European market, where RV manufacturers had difficulty restarting their complex production chains following pandemic-related closures. At the same time however, sales increased of older vehicles (some of which had already been fitted with our products) that were already at retailers and when new production accelerated in the autumn, the trend was very positive. For the full year, sales for the region increased 7 percent after currency adjustment.
Sales in North America also developed positively in the niche products sold in the region.
Active with Kids
Once again this year, Active with Kids was the most rapidly expanding product category with growth of 37 percent after currency adjustment. Growth was achieved in all sub-categories and bike trailers and child bike seats were positively affected by increased cycling. Strollers also continued to grow rapidly with positive trends for all three models. The very positive trend for North America is worth mentioning, with recaptured market shares with the Thule Urban Glide 2 jogging stroller as a result of its main competitor returning to earlier price points after having been aggressively discounted throughout 2019.
Packs, Bags & Luggage
The pandemic had a very negative impact on the bag category in 2020 and sales declined across the category by 21 percent after currency adjustment. The largest sub-category, smaller backpacks, laptop cases and laptop sleeves for everyday use was negatively affected by reduced sales compared with last year during the back to campus season, when students normally return to university and high schools with a new bag for the season. An even more negative development hurt sales of cabin bags and suitcases as a consequence of air travel decreasing by about two thirds around the world.
The market for legacy categories (mainly camera bags and tablet cases), which has been declining for several years, resulted in these categories accounting for 28 percent (29) of the category.
Assurance
The Board of Directors and the President provide their assurance that this year-end 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.
February 10, 2021
Board of Directors
Review report
This report has not been reviewed by the company's auditor.
Selected key events
The new rooftop tent Thule Tepui Foothill takes Gold at the ISPO Award 2021 – Outdoor enthusiasts who appreciate the freedom offered by a rooftop tent also love to bring different sporting equipment with them on their adventures. The new Thule Teupi Foothill rooftop tent makes it possible to bring kayaks, bikes and other equipment in a small roof box on the car roof – and still have space for a collapsible tent that comfortably sleeps two adults. Thule Tepui Foothill is being launched in stores in spring 2021.
New product development center opened in Hillerstorp in January 2021 – The new development center encompasses 5,000 square meters with areas dedicated to design, concept, prototypes and construction. The SEK 100m investment will enable continued successful product development and is directly adjacent to the Thule Test Center. The global test center will be expanded further in 2021 to allow the inclusion of new types of test processes. The investment is estimated at SEK 80m and will be completed by spring 2022.
Financial statements
(Unless otherwise stated, all amounts are in SEK m)
Consolidated Income Statement
| Oct - Dec | Jan - Dec | |||||
|---|---|---|---|---|---|---|
| Note | 2020 | 2019 | 2020 | 2019 | ||
| Net sales | 2 | 1 605 | 1 211 | 7 828 | 7 038 | |
| Cost of goods sold | -962 | -748 | -4 599 | -4 209 | ||
| Gross income | 643 | 463 | 3 230 | 2 829 | ||
| Selling expenses | -322 | -330 | -1 300 | -1 315 | ||
| Administrative expenses | -80 | -86 | -338 | -319 | ||
| Other operating expenses | 0 | 0 | 0 | 0 | ||
| Operating income | 2 | 241 | 47 | 1 591 | 1 195 | |
| Net interest expense/income | -18 | -14 | -64 | -49 | ||
| Income before taxes | 223 | 33 | 1 527 | 1 146 | ||
| Taxes | 4 | -59 | -3 | -361 | -263 | |
| Net income | 164 | 30 | 1 166 | 883 | ||
| Net income pertaining to: | ||||||
| Shareholders of Parent Company | 164 | 30 | 1 166 | 883 | ||
| Net income | 164 | 30 | 1 166 | 883 | ||
| Earnings per share, SEK before dilution | 1.57 | 0.29 | 11.23 | 8.56 | ||
| Earnings per share, SEK after dilution | 1.56 | 0.29 | 11.21 | 8.55 | ||
| Average number of shares (millions) | 104.6 | 103.2 | 103.8 | 103.2 |
Consolidated Statement of Comprehensive Income
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Net income | 164 | 30 | 1 166 | 883 |
| Items that have been carried over or can be carried over to net income | ||||
| Foreign currency translation | -427 | -187 | -585 | 249 |
| Cash flow hedges | 22 | 15 | 13 | 6 |
| Net investment hedge | 72 | 44 | 57 | -34 |
| Tax on components in other comprehensive income | -15 | -10 | -6 | -13 |
| Items that cannot be carried over to net income | ||||
| Revaluation of defined-benefit pension plans | 9 | 14 | -9 | -28 |
| Tax pertaining to items that cannot be carried over to net income | -2 | -3 | 2 | 6 |
| Other comprehensive income | -341 | -127 | -527 | 185 |
| Total comprehensive income | -177 | -98 | 639 | 1 069 |
| Total comprehensive income pertaining to: | ||||
| Shareholders of Parent Company | -177 | -98 | 639 | 1 069 |
| Total comprehensive income | -177 | -98 | 639 | 1 069 |
Consolidated Balance Sheet
| Dec 31 | 'Dec 31 | |
|---|---|---|
| 2020 | 2019 | |
| Assets | ||
| Intangible assets | 4 296 | 4 664 |
| Tangible assets | 1 033 | 1 023 |
| Long-term receivables | 6 | 5 |
| Deferred tax receivables | 342 | 376 |
| Total fixed assets | 5 678 | 6 067 |
| Inventories | 1 068 | 1 092 |
| Tax receivables | 0 | 1 |
| Accounts receivable | 762 | 704 |
| Prepaid expenses and accrued income | 55 | 62 |
| Other receivables | 179 | 91 |
| Cash and cash equivalents | 706 | 268 |
| Total current assets | 2 770 | 2 218 |
| Total assets | 8 448 | 8 285 |
| Equity and liabilities | ||
| Equity | 5 253 | 4 330 |
| Long-term interest-bearing liabilities | 1 060 | 2 348 |
| Provision for pensions | 224 | 205 |
| Deferred income tax liabilities | 309 | 259 |
| Total long-term liabilities | 1 592 | 2 812 |
| Short-term interest-bearing liabilities | 87 | 65 |
| Accounts payable | 660 | 529 |
| Tax liabilities | 145 | 14 |
| Other liabilities | 80 | 52 |
| Accrued expenses and deferred income | 564 | 430 |
| Provisions | 66 | 54 |
| Total short-term liabilities | 1 603 | 1 143 |
| Total liabilities | 3 195 | 3 955 |
| Total equity and liabilities | 8 448 | 8 285 |
Consolidated Statement of Changes in Equity
| Dec 31 | 'Dec 31 | |
|---|---|---|
| 2020 | 2019 | |
| Opening balance, January 1 | 4 330 | 4 012 |
| Adjustment to Equity, January 1 | - | -26 |
| Net income | 1 166 | 883 |
| Other comprehensive income | -527 | 185 |
| Total comprehensive income | 639 | 1 069 |
| Transactions with the Group's owners: | ||
| New issue of shares | 262 | - |
| Dividend | - | -722 |
| Warrants | 22 | -3 |
| Closing balance | 5 253 | 4 330 |
Consolidated Statement of Cash Flow
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Income before taxes | 223 | 33 | 1 527 | 1 146 |
| Adjustments for items not included in cash flow | 35 | 1 | 229 | 160 |
| Paid income taxes | -75 | -52 | -183 | -298 |
| Cash flow from operating activities prior to changes in working capital | 182 | -18 | 1 573 | 1 008 |
| Cash flow from changes in working capital | ||||
| Increase(-)/Decrease (+) in inventories | -301 | -138 | -90 | 19 |
| Increase(-)/Decrease (+) in receivables | 396 | 186 | -241 | -31 |
| Increase(+)/Decrease (-) in liabilities | 42 | 145 | 372 | 34 |
| Cash flow from operating activities | 319 | 174 | 1 614 | 1 030 |
| Investing activities | ||||
| Acquisition of subsidiaries | - | -10 | - | -10 |
| Acquisition/divestment of tangible/intangible assets | -54 | -58 | -170 | -161 |
| Cash flow from investing activities | -54 | -67 | -170 | -171 |
| Financing activities | ||||
| New issue of shares | - | - | 262 | - |
| Warrants | - | -2 | 22 | -3 |
| Dividend | - | -361 | - | -722 |
| Debt repaid/new loans | -524 | -14 | -1 285 | -53 |
| Cash flow from financing activities | -524 | -378 | -1 001 | -779 |
| Net cash flow | -258 | -271 | 443 | 81 |
| Cash and cash equivalents at beginning of period | 967 | 540 | 268 | 186 |
| Effect of exchange rates on cash and cash equivalents | -2 | -1 | -5 | 1 |
| Cash and cash equivalents at end of period | 706 | 268 | 706 | 268 |
Condensed Parent Company Income Statement
| Oct - Dec | Jan - Dec | ||||
|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | ||
| Other operating revenue | 5 | 5 | 22 | 19 | |
| Administrative expenses | -30 | -9 | -59 | -34 | |
| Operating income | -25 | -4 | -37 | -15 | |
| Result from Shares in Subsidiaries | 700 | 800 | 700 | 800 | |
| Interest income- and expense | -0 | -3 | -9 | -12 | |
| Income after financial items | 675 | 793 | 653 | 773 | |
| Appropriations | 63 | 45 | 63 | 45 | |
| Net income before taxes | 738 | 838 | 717 | 818 | |
| Taxes | -8 | -8 | -4 | -4 | |
| Net income | 730 | 830 | 713 | 814 |
Condensed Parent Company Balance Sheet
| Dec 31 | Dec 31 | |
|---|---|---|
| 2020 | 2019 | |
| Assets | ||
| Financial fixed assets | 4 214 | 5 586 |
| Total fixed assets | 4 214 | 5 586 |
| Other current receivables | 300 | 47 |
| Cash and cash equivalents | 0 | 0 |
| Total current assets | 300 | 47 |
| Total assets | 4 514 | 5 633 |
| Equity and liabilities | ||
| Equity | 3 192 | 2 195 |
| Other provisions | 18 | 14 |
| Liabilities to credit institutions | 894 | 2 168 |
| Liabilities to Group companies | 368 | 368 |
| Total long-term liabilities | 1 281 | 2 551 |
| Liabilities to credit institutions | 0 | 0 |
| Liabilities to Group companies | 0 | 871 |
| Other current liabilities | 40 | 16 |
| Total short-term liabilities | 40 | 887 |
| Total equity and liabilities | 4 514 | 5 633 |
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 year-end report.
Note 1 Accounting policies
This condensed consolidated year-end report has been prepared in accordance with IAS 34, Interim Financial Reporting, and the applicable provisions of the Swedish Annual Accounts Act. The year-end 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, except that pertaining to IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. Due to the COVID-19 situation, the company has received a total of SEK 16m in government assistance, of which SEK 8m in Sweden. This is recognized as a cost reduction of the items to which the assistance pertains and is only recognized when it is reasonably certain that the assistance will be received and any conditions for the assistance have been met. Revised standards that became effective in 2020 have had no material impact on the Group's earnings and financial position.
Note 2 Operating segments and allocation of revenue
Thule Group comprises one segment. Though the Group has shared global processes for product development, purchasing, manufacture, logistics and marketing, its sales are managed in two regions, Region Europe & ROW and Region Americas. Internal monthly follow-up focuses on the Group as a whole, in addition to the geographic sales data, which is presented at other levels than Group level.
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Sales to customers | 1 605 | 1 211 | 7 828 | 7 038 |
| - Region Europe & ROW | 1 074 | 797 | 5 721 | 5 057 |
| - Region Americas | 531 | 414 | 2 107 | 1 980 |
| Underlying EBITDA | 278 | 113 | 1 737 | 1 383 |
| Operating depreciation/amortization | -37 | -42 | -144 | -138 |
| Underlying EBIT | 241 | 71 | 1 593 | 1 245 |
| Other depreciation/amortization | 0 | 0 | -1 | -1 |
| Items affecting comparability | - | -24 | - | -49 |
| Operating income | 241 | 47 | 1 591 | 1 195 |
| Net interest expense/income | -18 | -14 | -64 | -49 |
| Taxes | -59 | -3 | -361 | -263 |
| Net income | 164 | 30 | 1 166 | 883 |
All revenue is recognized at one point in time.
Note 3 Fair value of financial instruments
| Fair Value | ||
|---|---|---|
| Dec 31 | Dec 31 | |
| 2020 | 2019 | |
| Assets - Financial derivatives | ||
| Currency forward contracts | ||
| Currency swaps | 36 | 13 |
| Currency options | 9 | 3 |
| Interest rate swaps | 12 | 9 |
| Total derivative assets | 57 | 26 |
| Liabilities - Financial derivatives | ||
| Currency forward contracts | -13 | -5 |
| Currency swaps | -19 | -7 |
| Interest rate swaps | -18 | -15 |
| Total derivative liabilities | -51 | -27 |
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 4 Taxes
The effective tax rate for January–December 2020 amounted to 23.7 percent. The effective tax rate for the corresponding period in 2019 amounted to 22.9 percent. No significant events occurred during the year that could affect the Group's effective tax rate.
Note 5 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 racks 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.
Specifically in relation to the corona pandemic, there are risk factors associated with the decisions made by various countries and states to close down the market from a production or a sales perspective. Despite Thule Group's flexible production chain and sales in 140 different countries, with no individual dominating suppliers or customers, it is difficult to assess this risk factor.
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
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |
| Net sales, SEKm | 1 605 | 1 211 | 7 828 | 7 038 |
| Net sales growth, % | 32.6% | 4.7% | 11.2% | 8.5% |
| Net sales growth, adjusted %1 | 44.6% | 0.6% | 13.1% | 3.9% |
| Gross margin, % | 40.0% | 38.2% | 41.3% | 40.2% |
| Underlying EBIT, SEKm | 241 | 71 | 1 593 | 1 245 |
| Underlying EBIT margin, % | 15.0% | 5.9% | 20.3% | 17.7% |
| Operating income (EBIT), SEKm | 241 | 47 | 1 591 | 1 195 |
| Operating margin, % | 15.0% | 3.9% | 20.3% | 17.0% |
| Earnings per share, SEK | 1.57 | 0.29 | 11.23 | 8.56 |
| Equity ratio, % | 62.2% | 52.3% | 62.2% | 52.3% |
| Working capital, SEKm | 1 255 | 1 140 | 1 255 | 1 140 |
| Leverage ratio | 0.2 | 1.5 | 0.2 | 1.5 |
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 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
Gross margin Gross income as a percentage of net sales.
Gross income Net sales less cost of goods sold.
Gross debt Total long and short-term borrowing including overdraft facilities, financial derivatives, capitalized transaction costs and accrued interest.
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.
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.
Net investments Investments in tangible and intangible assets adjusted for disposals.
Net debt Gross debt less cash and cash equivalents.
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.
LTM Rolling 12-month.
Earnings per share Net income for the period divided by the average number of shares during the period.
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.
Leverage ratio Net debt divided by the underlying LTM EBITDA.
Equity ratio Equity as a percentage of total assets.
Underlying EBITDA EBITDA excluding items affecting comparability.
Underlying EBIT EBIT excluding items affecting comparability and depreciation/amortization of consolidated excess values.
Financial calendar
Interim report January–March 2021 April 22, 2021 Thule Group AGM (Malmö) April 22, 2021 Interim report April–June 2021 July 21, 2021 Interim report July–September 2021 October 22, 2021 Thule Group's Annual Report will be available at www.thulegroup.com from the week commencing March 29, 2021.
Contacts
Fredrik Erlandsson, Senior Vice President Communications and IR Tel: +46 (0)70-309 00 21, e-mail: [email protected] Jonas Lindqvist, CFO Tel: +46 (0)736-65 45 75, e-mail: [email protected]
About Thule Group
Thule Group is a global sports and outdoor company. We offer high-quality products with smart features and a sustainable design that make it easy for people across the globe to live an active life. Under the motto Active Life, Simplified — and with a focus on consumer-driven innovation and long-term sustainability — we develop, manufacture and market products within the product categories Sport&Cargo Carriers (roof racks, roof boxes and carriers for transporting cycling, water and winter sports equipment, and rooftop tents mounted on a car), Active with Kids (strollers, bicycle trailers and child bike seats), RV Products (awnings, bike racks and tents for RVs and caravans) and Packs, Bags & Luggage (hiking backpacks, luggage and camera bags).
Thule Group has about 2,600 employees at 9 production facilities and 35 sales offices worldwide. The Group's products are sold in 140 markets and in 2020, sales amounted to SEK 7.8 billion. www.thulegroup.com
Thule Group AB (publ) Fosievägen 13 SE-214 31 Malmö, Sweden Corp. Reg. No: 556770-6311 www.thulegroup.com