Thule Group Q3 2025 slides: margin expansion offsets organic growth decline

Introduction & Market Context

Thule Group AB (STO:THULE) presented its third-quarter 2025 results on October 22, showing resilience amid challenging market conditions. The Swedish outdoor equipment manufacturer reported improved profitability despite organic growth headwinds, with the stock responding positively, rising 5.11% to SEK 247 following the announcement.

The company continues to navigate a difficult market environment characterized by cautious consumer spending and retailer behavior, particularly in North America. Despite these challenges, Thule’s strategic focus on new product categories and operational efficiency has helped maintain its financial performance.

Quarterly Performance Highlights

Thule reported Q3 2025 sales of SEK 2,528 million, up from SEK 2,344 million in the same period last year, representing a 7.9% reported growth. While organic growth declined by 4.0%, the acquisition of Quad Lock contributed significantly with a 17% positive impact, partially offset by a 5.1% negative currency effect.

The company’s profitability metrics showed improvement, with EBIT increasing to SEK 453 million from SEK 413 million in the prior year. The EBIT margin rose to 17.9% from 17.6%, while gross margin saw a substantial improvement to 47.5% from 42.9%.

As shown in the following chart tracking Thule’s long-term growth trajectory, the company has maintained consistent profitable growth over the years:

Regional performance varied considerably, with Europe and North America both experiencing 5% organic sales declines in Q3, while the Rest of World region showed strong 11% organic growth. Europe remains Thule’s largest market, accounting for 67% of sales, followed by North America at 24% and Rest of World at 9%.

The following regional breakdown illustrates these dynamics:

The detailed income statement reveals the company’s financial performance across key metrics:

Cash flow from operations reached SEK 668 million for the quarter, with working capital decreasing by SEK 292 million due to seasonality. The company continues to make progress on its inventory reduction target of SEK 200 million for 2025.

The comprehensive cash flow statement provides further details:

Thule’s financial leverage has improved slightly, with the Net Debt:EBITDA ratio decreasing to 1.81 in Q3 2025 from 2.00 in Q2 2025:

Strategic Initiatives

Thule’s strategy focuses on expanding into new product categories while maintaining leadership in its core segments. The company reported that new categories like dog products and child car seats are performing well, contributing to sales growth despite the challenging market environment.

The acquisition of Quad Lock continues to deliver strong results, with the Bags & Mounts category showing 189% growth including Quad Lock’s contribution. Organically, Quad Lock grew approximately 5% in the quarter and has expanded to represent 67% of the category year-to-date.

CEO Mattias Ankarberg emphasized the company’s strong market position, stating: "We are well positioned as we are global market leaders with premium products, leading innovation capabilities." This focus on premium positioning and innovation remains central to Thule’s strategy.

The company’s efficiency initiatives are supporting margin improvement through various measures including increased insourcing, consolidation of third-party warehousing, automation, and digitalization. Specific structural cost initiatives include:

• Restructuring of North American operations
• Automating and extending the warehouse in Poland (expected to generate annual cash savings of SEK 100 million with full effect in 2028)
• Increased focus on technology platforms and in-house component manufacturing to support profitability in 2026

The following slide outlines these efficiency gains and cost control measures:

Forward-Looking Statements

Looking ahead, Thule has outlined clear priorities for the remainder of 2025, focusing on:

1. Product development – maintaining a high pace of innovation, with launches front-loaded to capture more of the high season

2. Expanding new categories – continuing to scale up recently launched dog transportation products and child car seats

3. Consumer visibility – enhancing brand visibility and expanding direct-to-consumer channels

4. Supply chain efficiency – targeting an additional SEK 200 million inventory reduction in 2025

The company acknowledges ongoing market challenges, particularly the weak North American market and cautious consumer behavior globally. However, management remains confident in Thule’s positioning as a global market leader with premium products and leading innovation capabilities.

Thule will host its Capital Markets Day on November 20, 2025, where it will provide further details on its strategy, priorities, and path to financial targets. The event will be available both online and on-site in Malmö, Sweden.

As the company continues to navigate market headwinds, its focus on product innovation, category expansion, and operational efficiency appears to be resonating with investors, as evidenced by the positive stock price reaction following the Q3 results presentation.

Full presentation:

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