Earnings call transcript: Thule Group’s Q2 2025 performance sees growth

Thule Group reported a strong second quarter of 2025, with total sales reaching SEK 3.4 billion, marking a 16% year-over-year increase. The company achieved a gross margin of 46.3%, up by 2 percentage points from the previous year. Despite the positive sales growth, the adjusted EBIT margin declined to 21.6% from 23.6% in the prior year. Thule’s stock saw a slight decline of 1.2% after the earnings announcement, closing at SEK 232.4. According to InvestingPro data, the stock is currently trading near its 52-week low, with a beta of 1.11 indicating moderate market sensitivity.

Key Takeaways

• Thule’s Q2 sales rose by 16% year-over-year, with a gross margin improvement.
• Organic growth was modest at 1.5%, indicating underlying market challenges.
• The adjusted EBIT margin decreased, reflecting increased operational costs.
• The stock price decreased by 1.2% following the earnings release.
• Thule is focusing on product innovation and inventory optimization.

Company Performance

Thule Group demonstrated robust sales growth in the second quarter of 2025, driven by new product launches and strong performance in direct-to-consumer channels. The company’s trailing twelve-month revenue growth stands at 7.35%, as reported by InvestingPro. While the company faced challenges in maintaining its EBIT margin due to restructuring costs and market pressures, particularly in North America, it maintains a healthy current ratio of 1.69, indicating strong short-term financial stability. Despite these challenges, Thule remains a leader in its core product categories, such as bike carriers, and continues to expand into new areas like dog transportation products.

Financial Highlights

• Revenue: SEK 3.4 billion (+16% YoY)
• Gross margin: 46.3% (+2 percentage points YoY)
• Adjusted EBIT: SEK 734 million
• Adjusted EBIT margin: 21.6% (down from 23.6% last year)
• Net profit: SEK 512 million

Outlook & Guidance

Thule is optimistic about its future prospects, with plans to continue focusing on product development and expanding its product categories. The company aims to improve its performance throughout the year, despite market uncertainties. Thule is also working on optimizing its inventory and has set a target to reduce it by SEK 200 million. With a P/E ratio of 23.64 and an attractive dividend yield of 3.57%, the company maintains a balanced approach to shareholder returns while investing in growth. InvestingPro analysis reveals several more key metrics and insights available to subscribers, including detailed Fair Value calculations and comprehensive financial health scores.

Executive Commentary

CEO Mattias Ankarberg emphasized Thule’s market leadership and innovation capabilities, stating, "We are global market leaders in the most important product categories." He also acknowledged the tough market conditions, particularly in high tariff-exposed categories, but expressed confidence in the company’s investment strategy: "We remain focused on investing to grow and hope that that pays off."

Risks and Challenges

• Weak market conditions in North America and cautious consumer behavior.
• Ongoing production challenges in the RV market.
• Potential impact of restructuring costs on future profitability.
• Market uncertainty and high tariff exposure affecting certain product categories.

Thule Group’s Q2 2025 earnings reflect both opportunities and challenges, with strong sales growth but pressure on margins. The company’s focus on innovation and strategic investments positions it well for future growth, albeit with cautious optimism given the current market environment.

Full transcript - Thule Group AB (THULE) Q2 2025:

Carly, Call Coordinator, Thule Group: Good morning all, and thank you for joining us for the Thule Group Interim Report Q2. My name is Carly and I’ll be the coordinator for today’s call. If you’d like to register a question during the call, you can do so by pressing star followed by one on your telephone keypad. To remove yourself, a line of questioning will be star followed by two. I now turn over to the President and CEO, Mattias Ankarberg. The floor is yours.

Mattias Ankarberg, President and CEO, Thule Group: Thank you very much. Welcome everybody to today’s call. I’m also, as usual, joined by Toby Lawton, our CFO. We will talk to the presentation and it is later on available on our IR website, as always. Starting off with the summary on page two, this quarter is a quarter where we’re growing, even though the market is still tough, growing a bit more than in Q1, and total sales in reported currency amounted to SEK 3.4 billion. That’s 16% more than last year. Excluding the currency effects, we continue to see a weak market, both on the retailer and the consumer side, and particularly so in North America. On a positive note, it’s not getting worse, but it is still tough. We’ll get back to that. Organic growth was a small plus 1.5% the quarter.

Europe is up 4% and North America is down 3%, which we are of course not happy about, but it’s a big improvement versus the development in the first quarter, which we’ll speak more about later. Quite significant currency effect in the quarter of almost 6% negative takes reported growth in Swedish kroner to 10%. It’s very clear in the quarter and also in the previous quarter that the growth is coming from new products and new product categories, including the acquired Quad Lock performance phone mounts business, which continues to do well. It is, I guess, fun fact, but it is the biggest quarter in terms of sales in Thule history and about SEK 100 million bigger, I think, than the peak quarter during the pandemic.

Gross margin increased close to 2 percentage points, driven by Quad Lock, which has a financial profile with a higher gross margin and higher share of SG&A. EBIT or adjusted EBIT margin was down 2 percentage points. It costs a bit more to drive growth in a tough market. As we have said going into the year and also in Q1, we have more product launches ahead of this high season that is in H1 this year compared to last year, so the product development costs are higher in the first half year compared to last year. The operating profit or adjusted EBIT is in line with last year, excluding the restructuring costs for the actions we are taking in North America, the actions we announced the last quarter. Cash flow for operations was very good at almost SEK 800 million.

Just as a reminder, the working capital pattern that has been a bit different the last few years is now in line with historical seasonal pattern, and we have an inventory reduction target of continuing to reduce inventory on the back of the $1.2 billion we’ve done last two years with another $200 million this year, which is on track. A couple of highlights: we are very happy to have received further strong recognition for good product design. In March, we received seven IF Design Awards, and now in this quarter, we have received 10 new Red Dot Awards, which is, of course, a lot of big credits to our team. We’ve also won the ADAC car seat test, Europe’s most important consumer test for car seats. We won that during the autumn with our first product, and we won it again now during spring with our second product.

Lastly, the changes we have made in North America are starting to pay off, which we will get back to in a little bit. Turning the page and zooming out, we see that the profitable growth trend is continuing. Thule has been a public company since 2014, and we have a good solid development of profitable growth throughout many years, and continues also this year. We can also note that on a rolling 12 basis, net sales is now above $10 billion, and again EBIT is a bit weighed by product development costs earlier in the year. This year still the total amount is about last year. We’re a product company, and we report four product categories, and as usual, let’s go through them all to give you some flavor of what’s going on in the business.

The headline across all is that the new Thule products and categories are the factors driving the growth. Also in this quarter, starting with Sport & Cargo Carriers, which is our biggest product category for sure, we’ve had a better Q2 than a Q1 with the net sales, which, and when I say net sales here, we refer to organic growth of 3% in the quarter. Takes the year-to-date number to plus plus one. Several good launches are really adding growth. We’ve updated our best-selling bike carrier Thule EasyFold 3 in Q1. That’s clear support for the growth. We’ve launched a few North America specific bike carriers, which are really doing well.

We’ve had a June launch of our new lightweight, more mid-priced compact bike carrier, Thule Outpace, which has started really well, and in general, we have several rear-of-car cargo products that are also adding really, really nice growth, so several successful launches. Having said that, it is a tough market, particularly so in North America, which continues to be weak as we exited Q1 and Q2 continues. Consumers are cautious, but also on top of that, retailers are cautious to build inventory. Growth in total continues in Sport & Cargo Carriers in Europe, almost there in North America in the quarter, and a big improvement versus last quarter’s trend. Second category, RV Products. We have the second quarter in a row now with growth despite the weak market, had 4% organic growth in the quarter, takes the year to date at 3%.

The industry is going through a weaker period, and we have our sales pattern reflect that. We continue to decline in sales to the OE channel or the RV manufacturers, but that’s offset by good growth in the aftermarket channel, that is to dealers. We should also point out that also in the RV business, we have invested in new products, and it is very clear that the new products, which also received some nice design awards, are adding to the growth number in the quarter. Now that the season is here, on page five we’ll cover the remaining two product categories. Active with Kids & Dogs is a mixed picture. In total, the category grew by 1%, which is a bit better than Q1, taking the year to date to minus 2%.

We have two new product categories in this area, and they are both adding to growth for sure. The first is dog transportation, which was launched early last year. A really nice start last year, actually the best start of any new product category. Continues very strong also this year with the premium dog crate Thule Allax and the dog trailer Thule Bexi. We just launched the product that you see on the picture to the right, Thule Capi, which is a crash tested dog harness for dogs, now in June, which also had a very early, of course, but a good start. Very pleased with the development in dog transportation products, and also car seats, child car seats for sure add value, of course boosted a bit by the ADAC test, which we’re pleased about. Another new product coming also here in the second half of the year.

Two good growth drivers there. However, offsetting that is a decline in bike related products in this Active with Kids & Dogs area. Very cautious retailers to take on inventory and some of them also struggle financially, and we see that pattern from Q1 continues now in Q2. Highlight in this product family is that we continue to see very nice, good sales momentum on Thule.com, but on the retailer side it is more challenging. A total of those two different sort of aspects added that to plus 1%. Bags & Mounts is also a mixed picture where in total the category grows a lot, but that’s because we include the acquired Quad Lock business. Organic net sales, which is the bags business, declined by 21%. Quad Lock, if we start there, is two thirds of this product category.

Bags & Mounts now continues to do really well, increased sales by more than 15% organically, continue to be fueled by good products and good market expansion, and we’re very happy to see that the business continues to do really well. The backside is the opposite side of a big decline and a couple of clear reasons for why. First of all, we should just remind everybody that we have had a declining part of this category for a long time, which we refer to as legacy products that are being phased out over time. Secondly, an important factor here is that North America represents a very large share of this category. It’s for many purposes mainly North American business where the market has been very weak, and a lot of this is sourced from Asia and Southeast Asia in our case.

Retailers have, particularly related to the tariffs, also been very cautious to take on inventory in this category. Same positive note as with Active with Kids & Dogs that we do continue to see good growth of bags and luggage Thule branded products. On Thule.com, we reach our own consumers and they are happy to receive our products, and we see sales growth there, but a very challenging retail environment in bags. On the note of North America, on page six, we have for sure been impacted by the weak North American market in Q1, particularly following the tariff announcements made. We had a -13% organic sales development in Q1. As you may remember if you follow us, we talked a quarter ago that we made significant changes to North America.

We have a new dedicated North American sales organization in place that is now based in our regional head office in Connecticut, co-located with one of the two factories that we have in the U.S., and we have closed a satellite office that came with an acquisition many years ago. That decision has now been accelerated and Toby will cover that later. It relates to the one-off costs. That new organization dedicated to North America on the sales and marketing side, we’ve also focused our growth investments on what we think are the most attractive pockets we have. We are the market leader in bike carriers, but we have lots more to do there. We have a new focus on pickup trucks, or a renewed focus on pickup trucks. Thirdly, we have done price increases as of June 1 to offset the impact of the tariffs.

It is nice to see that as we wrap up Q2, the changes are paying off. It is still a weak market, although not getting worse. We have clear improvement in the sales trend with -13% in Q1 now being -3%. Of course, we’re not happy until it’s a plus, but it’s good to see that things are moving in the right direction. It is even better to note that the difference is really driven by the new strong performing North American bike carriers, which actually have been in very high demand, even if the market is tough. We’ve been selling more than we can produce, which is a nice problem to have in this situation.

We continue, of course, with this work and the bike carrier work, but also the new truck bed rack Thule Escape, which we believe is a really strong product, very robust and easy and quick to both install and adjust. We launch here towards the winter at the end of Q4. Also note that both these products are also produced in the U.S. This could be noteworthy given the tariff discussions we have. We’re really proud of the team and of the whole Thule organization that we have also been winning further recognition for our product development and design. On page seven, just outlining, we won the ADAC, Europe’s most recognized car seat contour test again, and it’s a product called Thule Elm Rearward Facing for small children between 6 months and 4 years old that won the test now in May.

Digging into the details in the test results, I would say we’re particularly happy to see that we are recognized as the number one brand to eliminate misuse, which was a key part of our car seat launch. A lot of car seats are safe, but of course we could take it to the Thule level in terms of both safety and convenience. We also know that a lot of car seats are not installed correctly, and we wanted to deliver a product where it’s easy to do a good installation that is safe, and we get good results from that design. That’s really nice to see, winning with the first product. With the second product, we’ve also been awarded more design awards.

We had seven IF Design Awards received in March this year, and now we have received 10 design awards from Red Dot, which is the second of the two big international design award organizations. Very pleased to see that we can call out that we have, or note that we this year have been receiving awards also for North American specific bike carriers, but also for, in this list, two RV Products: the Velo Swing and the Velo Track, that also help our performance within the RV business. Of course, turning to page nine, we are focused on growth for the short and the long term. Another one of our key priorities is to drive further efficiency within our supply chain. You may remember we have been very focused on inventory levels and taking SEK 1.2 billion out the last two years.

We are now taking the next step to extend and automate our warehouse facility in Poland, in Huta, Poland. It is fully automated, or it will be a fully automated warehouse with triple the pallet capacity of today. That means we can eliminate costs for two external warehouses and actually also reduce inventory levels, reduce double handling, optimize logistics better, and of course also lower personnel costs. We expect this project for this new warehouse to be up and running by 2027. I will leave the word to Toby to go through some of the more investment details of the project.

Toby Lawton, CFO, Thule Group: Thank you, Mattias. And good morning, everybody. Just to give a few of the financials on the Huta project, we expect a CapEx of approximately SEK 450 million, and that will be phased over the next three years as you see below: 30% in 2025, 60% in 2026, and 10% in 2027. The cash savings from the project are approximately SEK 100 million per year, which we expect to have full effect first from 2028. There will also be a one-time positive effect on inventory of approximately SEK 80 million, and that will come successively during the first year of operation of the new facility. We expect some depreciation, of course, annual depreciation of approximately SEK 25 million, which then results in an EBIT impact of SEK 75 million per year, again with full effect first from 2028.

This is an important project for us, but it’s part of the Thule investment program that we have going on, the normal investment program, and we expect that to remain at approximately 2.5% to 3% of revenue over time. We expect to remain at that level excluding leasing CapEx. All right, and with that, I can flick on to the next slide, slide 10, and there’s a lot of numbers here, but if I just to orientate, the left-hand side here you see is a recap of 2024. In the middle, you see 2025 by quarter. On the right-hand side, you see a year-to-date comparison of the figures for 2025 and 2024. If I start with the revenue growth, we, as Mattias has mentioned, we do have revenue growth obviously this quarter in a challenging market.

Revenue growth in total is 10%, from SEK 3.1 billion last year to SEK 3.4 billion this year. That’s a 10% reported revenue growth. We have organic growth of 1.5%. Then Quad Lock contributes with over 14%. We have a negative impact this quarter from FX, which Mattias has mentioned, which is obviously due to the stronger Swedish crown which we see this quarter. The growth is driven by new products and categories, as Mattias has mentioned. Also to mention here again that the last 12-month revenue has increased and is now SEK 10.1 billion when you take the last four quarters together. When it comes to the gross margin, we had a Q2 gross margin of 46.3%. This is approximately 2 percentage points up versus last year, which was 44.4%. So 2 percentage points up approximately, or 1.9 percentage points up versus last year.

It’s also 1.5% better than the first quarter gross margin. Just to mention here that the biggest factor versus last year is Quad Lock. Versus the first quarter, we are returning to the normal pattern where we still have the highest gross margin in our biggest quarter, which is the second quarter. We expect to see a more even gross margin across the year, across the four quarters. If I come down to the cost side, selling expenses have been impacted mainly by the acquisition of Quad Lock. Here it’s important to remember that while Quad Lock has a positive impact on gross margin because it has a higher gross margin, it also has a higher level of selling expenses. It does impact the selling expenses. The other factor in selling expenses is the earlier phasing of the product launches this year ahead of the high season.

We also have administration expenses where we also have some impact from the acquisition of Quad Lock.

Mattias Ankarberg, President and CEO, Thule Group: Of course.

Toby Lawton, CFO, Thule Group: Coming down to the adjusted EBIT number, we had an adjusted EBIT of SEK 734 million this quarter and that is adjusted to remove the impact from the one-off impact from restructuring costs in North America which were SEK 31 million taken this quarter and they relate to the closure of our site in Longmont, Colorado. If you look at the adjusted EBIT margin, then the adjusted EBIT margin is 21.6% in quarter two. We had 23.6% in quarter two last year. This is lower than the adjusted EBIT margin last year. The main impact here is from the development cost and related to the phasing of product launches which we mentioned earlier. That’s the main impact on the EBIT margin. It’s important to remember it’s the same new products which we’re launching which are also driving the top line growth. They come hand in hand.

Further down the P&L, we have an interest expense in quarter two of SEK 39 million. We have a tax charge of just over SEK 150 million which is an effective tax rate of 23%. Net profit in the quarter is SEK 512 million. If I move to the next slide, slide 11, here we have the cash flow in the same format, so I won’t repeat that. You can see cash flow from operations in the second quarter was SEK 744 million. Working capital contributed here with SEK 156 million which is part of our seasonal pattern which Mattias mentioned earlier, that we build up working capital some quarters and we release some quarters and we release some working capital in quarter two. It’s a swing between different lines within working capital.

This quarter we had a good reduction in inventories of SEK 303 million which is normal for us due to the seasonality because this is the high sales quarter. We sell down inventory and we’re still very much on track towards our annual target for the full year to reduce inventory by SEK 200 million. Receivables goes the other way, however, we increase receivables because of the high sales quarter. Again, it’s the same effect and we increased receivables by SEK 282 million in the quarter but overall working capital reduced by SEK 156 million. We had a CapEx in the quarter of SEK 58 million. Year to date we are on SEK 98 million for the first half year.

That level is expected to be a bit higher in the second year as we start to have some of the Huta CapEx in H2 but still within our expected investment program. We had a dividend payment also in the quarter of SEK 448 million. All in all, that means we had a—if I move to the next slide, slide 12—we’re very focused on our cash flow, we’re very focused on managing our leverage, and the net debt came down slightly. Net debt and leverage are basically on a similar level as they were in Q1.

Going forward, I think it’s important to be aware we do expect this to come down in Q3, both net debt and leverage ratio, net debt to EBITDA, and that’s due to the fact that, also due to the seasonal patterns, we have a strong cash flow in quarter three and we also have no dividend payment in quarter three. That means that we expect to reduce our net debt and our leverage in quarter three. With that, I hand back to Mattias.

Mattias Ankarberg, President and CEO, Thule Group: Thank you, Toby. Turning to a few forward-looking comments to wrap up the presentation part and on page 13, as far as focus, we continue to drive the long-term growth strategy we have in place and we’re doing that in a tough market. Having said that, we are, we think, quite well positioned in a tough market. Yes, North America is tough. Yes, consumers and retailers are cautious across the world and we do expect that to continue for the coming period. We are global market leaders in the most important product categories. We sell premium products to consumers that are enthusiasts and have the ability to pay for news and innovations. I think we have proven over time again and again that we are world leading when it comes to developing new products and have innovation capabilities.

We have a manufacturing footprint both in Europe and the USA and we are financially strong so that we can do long-term investments. We are also well positioned in the aspect that we can impact quite a lot of our own destiny. We know that investments in product innovation pay off both in the short and long term. Q2 is a very good example of that. We also have opportunities to increase our efficiency and take out costs, and the extension and automation of the warehouse in Poland is a very good example of that. These are things we can do within our own control. The four priorities that we continue to drive are product development, where we have a really high pace this year, more front-loaded compared to next year, and increased focus on the attractive pockets we have identified in North America that’s making a difference.

We are scaling up new product categories, both the ones we’ve launched organically, dog transportation and child car seats, and the acquired performance phone mounts business. We are working on being more visible to the consumer and we can see how the D2C channel continues to outperform all other channels in the quarter again. On the theme of supply chain efficiency, we are working on continuing to lower inventory level to free up cash and also, as mentioned earlier, now an automation project of the Polish warehouse. There are clear priorities with a few new action points, but the four main priorities continue. We are in the middle of the high season. It is a very big product launch year compared to last year. We are more front-loaded and the high launch pace continues. Now in 2025, we have three themes.

This year we are upgrading several of our best sellers. We are innovating or launching innovations in our core Sport & Cargo Carriers category. A few launched and a few to come, and we’re also scaling up our newest product categories. Let me just wrap up by showing you a few examples of what’s coming very soon on page 15. Sorry. We have a short view of Thule Pon, which is the newest addition coming in a couple of months and adding to the car seat category. It’s a high back booster seat for the bigger children, which of course is safe and well designed and has received positive reception so far from the retailer environment. Really looking forward to see that come into consumers’ hands.

We are soon, in this quarter in Q3, building out our leading duffel bag collection Thule Crossover with more types of products and new colors and also more accessories. That’s been a growth driver for us and look forward to see more of that. With a change of mood from summer to winter, hope everybody gets a good summer vacation first. When it comes to booking that ski vacation, keep Thule Arcos XL in mind with a good cargo solution behind the car, which is now wider and extended and would enable most people to transport their skis also behind the car for easier access and more convenience. Just examples of a few products that are to come during the second half year of 2025. That concludes the presentation part. We’ll get back to summer mode and we’ll get back to the operator to manage questions.

Carly, Call Coordinator, Thule Group: Thank you very much. We would now like to open the lines for Q and A. If you’d like to ask a question, please press star followed by one on your telephone keypad now. If you’d like to remove a certain line of questioning, please press star followed by two. As a reminder, to raise a question, press star followed by one. Our first question comes from Daniel Schmidt of Danske Bank. Daniel, your line is now open.

Daniel Schmidt, Analyst, Danske Bank: Yes, good morning Mattias and Toby. I hope you can hear me. Just a couple of questions, maybe starting with the U.S., which of course has been in focus for a number of reasons. Could you say anything starting with the reception of the price increases that you conducted by the 1st of June? I know it’s quite difficult to really figure out what was pre-buy effects and so on in May, maybe, and what’s going to happen in what happened in June. What do you see now six weeks after the price increases, and maybe tie that together with your belief of the underlying demand pattern in the U.S. that you experienced so far in the past couple of months.

Mattias Ankarberg, President and CEO, Thule Group: Hi Daniel, hear you loud and clear. Mattias here, I can start. Yes, we, and just a reminder for everybody, we increased prices in North America with about 10% as of June 1 to offset the impacts from tariffs and secondary effects, I would say, of a lot of other things. Nemes, you’re right in the sort of in the directions you call out, Daniel. There was a bit of pre, we announced this quite well ahead of time to our retail partners, so there was a bit of pre-buy in May to get the lower prices obviously, and then a little bit soft in June, but not too dramatic, I would say, in either direction.

I personally believe that a lot of retailers are focused on inventory levels right now, and it’s not really worth it, sort of worth the risk for many to take in a lot of inventory ahead of time. We operate, as you know, a very retail-like supply chain model, so we can also deliver at very short notice in June. There was a bit of pre-buy that helped May and sort of hurt June, and I guess it’s a little early to see where that will happen in July, but no drama, I would say.

The other point I think that’s worth calling out related to this topic is that we’ve seen pretty much, I would say, every single player we keep an eye on also increase prices around this timing, some a bit earlier than us, some in June, some mid-June, and some now with the sort of follow-up price increases also in July. I think the entire market is moving up in price in most of the categories that we are in. Volumes hurt, of course, when the prices go up quite a bit, but the sales price helps. Just pure mathematics. I think the underlying demand is tough and weak.

I mean, there was a bit of a sort of full stop experience there among the tariffs during Q1, and then you sort of left Q1 with a lower market but stable, and that sort of continued, I’d say, look throughout the second quarter, and that continues in Q3 as well. News is really what’s working. I guess that’s a couple of observations around your question, Daniel, and feel free to add follow-up questions if there’s something to drill more into.

Daniel Schmidt, Analyst, Danske Bank: Yeah, there’s a lot of moving parts, of course. Would you say that the exit rate is better than the entry rate in the U.S. for your sake in the quarter?

Mattias Ankarberg, President and CEO, Thule Group: I’d say it’s about the same. I mean, the thing that really moved the needle for us in Q2, I mean, we had a -13% organic in North America in Q1 and -3% in Q2. The thing that’s moved the needle for us is the new product and the new North American bike carriers specifically, and where we have really good reception. It’s more tied to our performance, is more tied to the launches of that and, you know, the big retailers getting the bigger orders out to all the stores, etc. of that. I don’t think actually I could call out the biggest difference in underlying trends throughout the quarter, except our own actions, which are the most significant parts.

Mads Liss, Analyst, Kepler Cheuvreux: Okay.

Daniel Schmidt, Analyst, Danske Bank: You actually also speaking about growth, you actually managed to grow RV again as you did in Q1, even more so in Q2 despite the OE market being down quite a lot still in Q2. At the same time, it was really in Q3 last year you started to see the big drop in OE and you also have one of the biggest players being out a couple of weeks ago saying that they will increase production because they think dealer inventories are now in balance. Should we start to see the OE side of RV performing better for you guys now as we get into Q3 with easier comps and these comments in mind?

Toby Lawton, CFO, Thule Group: Hi Daniel. Good morning. Toby here. I can comment on that one. We have seen in Q1 and Q2 the OE market is down a lot and we’ve been down a lot in that sector as well. We’ve just been compensated by a really good performance in the aftermarket. We do see generally when it comes to the consumer side that the sales are decent. You know, it’s pretty stable versus prior year. Consumers are still interested in buying RVs from the dealers and inventory is coming down as you say. It seems to be a very mixed picture across different manufacturers. I would say in general we’ve seen, I think the trend is in Q3, which is also the kind of where they take vacation stops, there’s going to be more reductions in production capacity than expected in Q3.

We expect Q3 to be impacted more than we had previously expected. It’s gone on a bit longer, this effect, and it remains to be seen if anything carries, how much it carries on after Q3. I think it’s getting better for some manufacturers, but it’s not getting better for others. It’s still going to be tough for another quarter at least.

Daniel Schmidt, Analyst, Danske Bank: I guess the sort of the German factors are going to be more impacted than you maybe earlier expected then.

Carly, Call Coordinator, Thule Group: If.

Daniel Schmidt, Analyst, Danske Bank: I read between the lines. You do have a lower base to compare with on the OE side at least.

Toby Lawton, CFO, Thule Group: Yeah, I mean it did start during Q3 last year, so that’s as it is.

Daniel Schmidt, Analyst, Danske Bank: Dropped quite a lot in Q3.

Toby Lawton, CFO, Thule Group: Yeah, exactly.

Daniel Schmidt, Analyst, Danske Bank: Maybe then moving on to cost and margins before I leave the store. You did of course reiterate you were quite front loaded on PD spending. You did provide some information in Q1 saying that that was the difference versus the margin last year. Is that true for Q2 as well? You stick to your guidance that you will and should be around 7% of sales for the full year.

Toby Lawton, CFO, Thule Group: Yeah, I mean, I think you answered the question yourself more or less, Daniel. Yes, the biggest factor in the margin dropped versus prior year, and if you take adjusted EBIT margin, we are 21.6% this year. We were 23.6% last year. The margin is lower this quarter versus last year, and the biggest factor there is the phasing of development spend towards the first half year. We do expect development expense for the full year to be approximately 7%.

Fredrik Ivarsson, Analyst, ABG Sundal Collier: All right, good.

Daniel Schmidt, Analyst, Danske Bank: Finally, on the gross margin, which did pick up quite a bit, and you’re right, that’s basically due to Quad Lock down. Is there anything else there that you want to mention that had an impact? We did talk about freight cost and raw materials in the previous quarters. Are they now basically unchanged on a year-over-year basis, or what’s your view?

Toby Lawton, CFO, Thule Group: Yeah, I mean you’re correct. The biggest impact that increased the gross margin versus prior year is the Quad Lock impact. That’s true. I think I’ve talked a bit about the pattern of gross margin through the year where we expect it to be a bit more steady throughout the year. Basically, we had an uplift in Q1 this year versus last year due to the factors you mentioned, due to product mix and price. Here in Q2 it’s more level. We have a 1.5% increase between Q1 and Q2, which is more in line with the normal pattern of gross margin. Year to date we do have a small improvement, but basically underlying gross margins are kind of pretty much flat with last year.

Fredrik Ivarsson, Analyst, ABG Sundal Collier: Yeah. Okay.

Daniel Schmidt, Analyst, Danske Bank: Finally, maybe on those investments made in Poland with $75 million in savings on EBIT will affect 2028. Is that going to be back end loaded, or is there any impact on 2026 and 2027 in terms of savings?

Toby Lawton, CFO, Thule Group: Yeah, there will be. We expect it to start up in 2027. We expect some effect in 2027, but the first full year effect will be 2028.

Mattias Ankarberg, President and CEO, Thule Group: Okay, thank you.

Daniel Schmidt, Analyst, Danske Bank: Thank you so much.

Carly, Call Coordinator, Thule Group: Thank you very much. Our next question comes from Fredrik Ivarsson of ABG Sundal Collier. Fredrik, the line is now open.

Fredrik Ivarsson, Analyst, ABG Sundal Collier: Thank you. Good morning team. Can I come back to Daniel’s question on the EBIT margin? I guess down a couple of percentage points versus last year in the first half of the year if we exclude Quad Lock. I guess the key driver obviously is the product development costs. If you were to call out any other drivers of the somewhat lower margin, which ones would that be please?

Toby Lawton, CFO, Thule Group: The main driver is the product development cost, Fredrik. That’s the main driver of that EBIT margin impact.

Mattias Ankarberg, President and CEO, Thule Group: I think, Fred, to add to it, last in Q1 we said the full gap was explained by product development phasing and now it’s the majority again in Q2. If we do exclude the Quad Lock impacts you talked about, the clear big reason is the product development cost, full in Q1 and most in Q2 as well.

Fredrik Ivarsson, Analyst, ABG Sundal Collier: With the majority being more than 2/3, or how should we read that stake, around there?

Mattias Ankarberg, President and CEO, Thule Group: I think.

Fredrik Ivarsson, Analyst, ABG Sundal Collier: Okay, good, thanks. You might have already answered this question, but the underlying gross margin sounds flat this year on year. Can you just confirm that again? Sorry, I sort of missed the answer on that question before.

Toby Lawton, CFO, Thule Group: Yeah, no, so in Q2 the underlying gross margin is flat. The impact is from the Quad Lock acquisition in Q2.

Fredrik Ivarsson, Analyst, ABG Sundal Collier: Okay, good. That was actually all my questions, so thank you and enjoy the summary.

Toby Lawton, CFO, Thule Group: Thanks, Rudy.

Carly, Call Coordinator, Thule Group: Thank you very much. As a reminder, to raise a question, please press star one. Our next question comes from Gustav Hagéus from SEB Group. Gustav, your line is now open.

Gustav Hagéus, Analyst, SEB Group: Thank you. Good morning, guys. Thanks for taking my question. I have a question on OpEx, the OpEx build in the quarter. I appreciate your comments on R&D and phasing, but looking at OpEx, it.

Mattias Ankarberg, President and CEO, Thule Group: Builds a bit Quad Lock.

Gustav Hagéus, Analyst, SEB Group: I assume Quad Lock has, say, 110 FTEs, but please correct me if that’s not an accurate number. Assuming that 110 FTEs to Quad Lock, then the underlying FTE base is up, say, 10% year over year. Inventory was down in the quarter, 1.5% organic growth. I assume no volume growth.

Mattias Ankarberg, President and CEO, Thule Group: Really.

Gustav Hagéus, Analyst, SEB Group: understand the breakup here between Sweden and other geographies in terms of FT build. If you could elaborate a bit on the breakup between Sweden and other geographies in terms of FT build, that would help, thanks.

Toby Lawton, CFO, Thule Group: You’re right. Quad Lock is approximately 110. Gustav, I would say the remaining part is really seasonal workers in factories. It’s not Sweden. We don’t have much seasonal work in Sweden. It’s largely in Poland and U.S. where we have seasonal work, and we have, you know, being strong in bike carriers with products we obviously produce ourselves and which are quite intensive on seasonal work. We have seen we have a higher level of activity in our factories basically in Q2 than we had Q2 last year.

Gustav Hagéus, Analyst, SEB Group: Okay, would you mind sharing the number of seasonal workers who used to do that? I think you discontinued that in Q3 last year.

Toby Lawton, CFO, Thule Group: I think we don’t separate out employees by different categories, Gustav. The increase is driven by both Quad Lock and seasonal workers.

Carly, Call Coordinator, Thule Group: Okay.

Gustav Hagéus, Analyst, SEB Group: Is the number of FTs in Sweden now versus a year ago up or down?

Toby Lawton, CFO, Thule Group: I don’t have the figure to give you, Gustav, but it’s stable. I think it’s no big change.

Carly, Call Coordinator, Thule Group: Okay.

Gustav Hagéus, Analyst, SEB Group: Yeah, those are all my questions. Thanks.

Toby Lawton, CFO, Thule Group: Yeah, thanks.

Carly, Call Coordinator, Thule Group: Thank you very much. Our next question comes from Adela Dashian from Jefferies. Adela, your line is now open.

Adela Dashian, Analyst, Jefferies: Thank you and good morning gentlemen. Just a few from me. Firstly, on this year’s heavy product launch year, I guess how should we view this going forward? Has 2025 and I guess also 2024 been more of like a pull forward of some product launches and should we expect next year to be a bit more moderated or do you see opportunities to continue to scale the new categories in ways where growth could continue to be supported by the new product launches next year?

Mattias Ankarberg, President and CEO, Thule Group: Yes, happy to answer that question. We work with long-term product portfolio plans for all our categories, sort of three to five year outlooks. It’s been really intense in the launch calendar both in 2024 and 2025, last year mainly because we added two new product categories and this year because we’re doing more in our sort of core categories if you like. We make decisions after summertime, early autumn about what to launch for next year, and again we have long-term plans. We do have some flexibility to pull some things forward or shift some things out depending on what we find is attractive or not. That’s a fun and important exercise to be done during the third quarter.

I think the thing I want to make sure I mention is that we have purposely and actively ran a pretty heavy product launch calendar this year because we see that’s what’s resonating with the market and that’s what’s driving growth. Yes, it costs a bit more, particularly because we take a lot of our product launch development expenses as SG&A, including tooling costs and things like that. It adds sales gross margin and it adds, of course, positive contribution, although maybe not in % in the same quarter. It over time makes us a stronger player with the partners and gives us a bigger footprint when the market returns. We’ll make those decisions for next year during Q3 and we will update you before the year is over on our launch plans for next year. It’s active decisions that we are making.

Adela Dashian, Analyst, Jefferies: If that’s the case, I guess, would it be fair to say that last year around this time you actively decided to push ahead with more product launches than you would have in 2025 in order to combat the weaker market environment?

Mattias Ankarberg, President and CEO, Thule Group: Yes, during Q3 last year we had those conversations in our organization, and that’s when we made exactly those decisions. Correct.

Adela Dashian, Analyst, Jefferies: Okay, got it. All right, if we stick to North America, is there any way for you to be a bit more precise on the growth number here? The negative organic growth, like how much did these new product launches support? What was driven by the directors and change platform? Any type of, you know, I understand you can’t be overly specific. Any type of commentary here would be super helpful.

Toby Lawton, CFO, Thule Group: Yeah, sure.

Mattias Ankarberg, President and CEO, Thule Group: No, we’ll add what we can. No problem. I think, you know, overall again, sounded like a parrot. A tough market, clearly visible in some of the high tariff exposed categories like Bags & Mounts, for example, where retailers are super cautious. Right. That’s another color there, I think. Two other comments. Maybe we see that the consumers are, yes, cautious, but retailers are also very cautious on inventory build, and we continue to see our D2C channel business in the U.S. or Thule.com growing and clearly outperforming the total. I think that’s a sign that it’s not just consumers, it’s also a bit of retail behavior, and I guess a bit of credit to our D2C team as well.

I think a second color, which may be a more important one I can throw in, is pretty much the full difference between doing a -13% in Q1 organic sales in North America and a -3% in Q2 is related to new products and particularly new bike carriers for North America. You never really know before you launch, do you believe you have some really strong products coming. A couple of them have actually been selling more than we can produce and have to add shifts and add production capacity. The new products are really sort of what’s helping the trend improve quarter on quarter and of course also helping the total.

Adela Dashian, Analyst, Jefferies: Okay, that’s actually good color. Thank you for that. Lastly, on the inventory targets or the inventory reduction target that you’ve had for this year, are you still progressing as planned on that? No changes?

Mattias Ankarberg, President and CEO, Thule Group: Yeah.

Toby Lawton, CFO, Thule Group: Hi Adela, Toby here. Yeah, absolutely. We have the target of $200 million that’s on top of $1.2 billion that we released over the last two years as well. We expect another $200 million inventory reduction this year and we’re working hard towards that and it’s, we’re on track.

Adela Dashian, Analyst, Jefferies: Great. That’s all for me.

Mattias Ankarberg, President and CEO, Thule Group: Thank you.

Carly, Call Coordinator, Thule Group: Thank you very much. Our next question comes from Carl Deijenberg of Carnegie Investment Bank AB. Carl, your line is now open. Carl, can we just ask, the check online isn’t locally muted.

Carl Deijenberg, Analyst, Carnegie Investment Bank: Thank you. Maybe you can hear me better now.

Toby Lawton, CFO, Thule Group: Morning guys.

Carl Deijenberg, Analyst, Carnegie Investment Bank: Yeah, I just wanted to follow up again on Quad Lock and maybe specifically on the U.S., which is obviously quite an important market for that entity as well. If you could remind us a little bit on the pricing dynamics and so forth and maybe, you know, if you could share a little bit the development during the quarter as well. I know you haven’t been as pronounced on the pricing adjustments relative, let’s say, old Thule, but anything that has changed there in recent weeks on the back of the tariffs and so forth, given the D2C model and sourcing and so forth, or has the quarter been fairly undramatic when we look at the, let’s say, growth that you report here in Q2 for Quad Lock specifically in the U.S.?

Mattias Ankarberg, President and CEO, Thule Group: Hi Carl, I think you’re breaking up a little bit at the end. I think I got your question, so I’ll answer and then just follow up if there’s anything else. On Quad Lock, of course Quad Lock is exposed to many of the same kind of macro factors that I guess not just Thule but many companies are. It’s a little bit of a headwind in the U.S., still delivering good growth. Price increases have been made also in the Quad Lock business. It is a little bit of a different business model, as you know, because it’s sort of lower ticket items and it’s very heavy on D2C, 75%, and can make much more frequent changes. It’s not as sort of in there as you called old Thule business. It was sort of more general price list as of June 1.

Whereas in Quad Lock, we make more continuous changes. It’s also maybe worth to call out that gross margin is clearly higher in the Quad Lock business, as you know. You can be more nuanced and optimizing pricing over time to carve it out. It doesn’t really impact immediately the gross margin to the same extent. To summarize, yes, same market forces and yes, price increases in Quad Lock executed in Q2 as well.

Carl Deijenberg, Analyst, Carnegie Investment Bank: Yeah, fair enough. Coming back to the gross margin again, and apologies if this question was already asked, has there been any headwinds in the gross margin here in Q2 or the year to date development on the back of the under utilization? I guess you’re having a little bit lower temps workers now as you are still reducing inventories, or is that effect now fairly marginal as the big chunk was taken last year? Is the effect very limited now?

Toby Lawton, CFO, Thule Group: I can try to answer this. I think there are definitely headwinds, there’s cost inflation when it comes to material cost and of course there’s some salary increases which we’re offsetting and we’re driving efficiency gains to offset as much of that as possible. We’re not offsetting it completely on the cost side. We do have to offset some through price increases which we’ve done as well. It’s definitely, there definitely are cost headwinds. I would throw into that you mentioned a bit the kind of seasonality. We are producing a lot of the bike carriers ourselves and in the U.S. in particular, we’ve been running out of capacity. We’ve been trying to increase capacity a lot and we’ve put a lot more focus and more people into the factory to try and drive up the production levels and increase capacity quickly to meet the demand.

There’s a kind of combination of many effects but underlying, it’s flat versus last year.

Carl Deijenberg, Analyst, Carnegie Investment Bank: Yeah, just finally, a little bit more of a technical question, but just on the adjustment that you’re taking here in Q2 of roughly SEK 30 million, is that, you know, on the Longmont facility, is that the total that is planned to be taken, or is there any further one-offs here to be expected in Q3, Q4?

Toby Lawton, CFO, Thule Group: No, that’s the total. It’s expected to cost $31 million.

Mattias Ankarberg, President and CEO, Thule Group: Okay, thank you very much.

Toby Lawton, CFO, Thule Group: Thanks Carl.

Carly, Call Coordinator, Thule Group: Thank you very much. Our next question, Agnieszka Vilela from Nordea, your line is now open.

Agnieszka Vilela, Analyst, Nordea: Thank you. I have three questions. Maybe coming back to the U.S. and your comment that you’ve seen quite good demand for your bike products and that you were running production somewhat low, lower than the underlying demand. Can you tell us if you now have ramped up accordingly? I mean, is your production now running and meeting your demand expectations in the U.S.?

Mattias Ankarberg, President and CEO, Thule Group: Hi, Mattias here. Yes, by and large we have, and it’s a positive problem to have in this market when you have more demand than supply. There is one product where we still would like to do a little bit faster production pace. By and large we are now meeting the demand as we are in mid July here.

Agnieszka Vilela, Analyst, Nordea: Perfect, thanks. Thank you. Maybe follow up on that. Do you feel that you lost any sales in Q2 specifically because of that issue?

Mattias Ankarberg, President and CEO, Thule Group: I think there’s two ways to answer that question. First of all, could we have sold more in Q2 if we had more practical capacity? Yes, that is true. From that perspective, yes, we did lose sales, but I think from a sort of total to the group perspective, the answer is no, because these were new products and we’ve been a lot focused on bringing in innovative products to enter new niches and new adjacent segments in North America. This is what we’ve been successful with. It’s not lost versus last year, but it’s a somewhat lost opportunity.

Agnieszka Vilela, Analyst, Nordea: Understood, thank you. Just looking in your organic growth profile, you returned to growth in Q2 again now. If we assume that we don’t see much deterioration in the underlying markets, what are your expectations for your growth in the coming quarters? Just looking at your product launches, price increases, and the trends that you see during the selling season right now.

Mattias Ankarberg, President and CEO, Thule Group: As you know, we don’t give sort of guidance or sort of clear forecast like that. I think it’s of course positive that what we see that we do, our own actions, is giving good results. We have been more front loaded on launches this year. We hope that they will carry also during the rest of the high season and into the autumn. We have a couple of more things coming. We are very confident that Thule will be better and better as the year progresses. That’s of course a long term thinking. We have more things that will be more positive for growth. It is an uncertain market out there and new tariff, announcements slash potential announcements I guess happening on a daily basis almost, which impacts purchase decisions from some customers and also some supply chain elements sometimes.

We are very of course humble about things but very confident that we’ll get better and we have more good products coming. If the market is exactly the same or not, then we will see. We remain focused on investing to grow and hope that that pays off and the market is at least not getting worse.

Agnieszka Vilela, Analyst, Nordea: Thank you. My last question is on the Bags & Mounts business. Quite heavy decline in the quarter, more than 20% organically. Can you just remind us about the size of the legacy business right now for you and how fast you expect that business to be phased out and also what kind of impact on profitability there could be if that business disappears?

Mattias Ankarberg, President and CEO, Thule Group: Yeah, I think you’re very right on the dynamics. Let’s make sure everybody on the call gets this. I think what’s now called Bags & Mounts, first of all, mounts or Quad Lock is 2/3 of that. That’s 1/3 of the previously packs, bags and luggage business. Out of that, around 25-30% or so is legacy business. The margin profile of that business is actually quite good. It’s in line with the bags category in general. Otherwise, it would of course have been an easy decision to just delete it. It is in product categories which are just facing macro headwinds generally or really tough marketplaces. We’re not discontinuing because they sell and we make money on them. There is a small niche even for CD wallets these days, believe it or not, and the camera bags and other things, but we’re not investing in building it out.

It will eventually come to a decision, of course, when it’s time to stop it. We are not there this year and probably not next year either.

Agnieszka Vilela, Analyst, Nordea: Thank you.

Carly, Call Coordinator, Thule Group: Thank you very much. Our next question comes from Mads Liss of Kepler Cheuvreux. Mads, your line is now open.

Mads Liss, Analyst, Kepler Cheuvreux: Yeah, hi, thank you. A couple of questions. Europe there, could you give some sort of flavor regarding different geographical areas, countries in Europe, how you propose the development?

Gustav Hagéus, Analyst, SEB Group: Let me double check.

Toby Lawton, CFO, Thule Group: Yeah, I can take that, but I think we give a bit of color in our report also when we talk about the regional mix. Hang on, I’m just finding the page.

Mads Liss, Analyst, Kepler Cheuvreux: Yeah.

Toby Lawton, CFO, Thule Group: I mean generally across Europe we see it’s pretty even. I would say generally pretty even growth across most markets in Europe, and we have our kind of strongholds in Nordic and DAC areas. I would say we’re stronger when it comes to some of the juvenile products in some markets like Benelux and Nordics, where we’re getting traction quicker in those areas as well, which are going well. Generally, pretty even performance.

Mattias Ankarberg, President and CEO, Thule Group: I would add to that. I agree fully with Toby’s comments. Pretty even. I think the difference we see between the countries are of course there, but for us it’s more around product mix where we are stronger and weaker. For example, in different parts of Europe, for example, where RV industry is pretty more dominant, of course we had a pretty good quarter versus the market in RV. That helps. Pretty big picture, pretty even across Europe.

Mads Liss, Analyst, Kepler Cheuvreux: Thanks. Very good. Coming back to Quad Lock, I guess there you, if I remember right, you have sort of indicated that the growth had been sort of 20% plus quarter over quarter for Quad Lock. Have you, have that trend continued in the second quarter?

Mattias Ankarberg, President and CEO, Thule Group: Yes, I think when we did the acquisition we shared some more information and also some commentary available on our website if you like. The category for the performance phone mounts has been growing around 10% to 12% historically and we believe it should continue to grow around 10% going forward. Quad Lock has been beating that sort of as the market leader, a lot of it thanks to product innovation and expansion of the product portfolio. In Q1 the growth was over 20% for Quad Lock organic and now in Q2 the growth was a bit more than 15%. Beating the market in you were.

Mads Liss, Analyst, Kepler Cheuvreux: Running within 21 you had 14. Good, sounds great. You mentioned the new car seat there for older children. How much does that add to the total market opportunity for car seats?

Mattias Ankarberg, President and CEO, Thule Group: It’s a significant piece, but it’s not as big as the segments already out. This is the smaller one, which is one part why it comes a bit later. It’s a good one still, and it’s also good from a product offering kind of perspective because kids grow, right? We start with launching products for the infants and then the toddlers. Now, with a little bit bigger products, you can grow with the Thule car seat family, but it’s the smaller one of the three.

Mads Liss, Analyst, Kepler Cheuvreux: Are you fully loaded there now or should there be more to be in the Schindler’s area?

Carly, Call Coordinator, Thule Group: I mean.

Mattias Ankarberg, President and CEO, Thule Group: Yeah, now we have an offer when this product is out, which is not yet, but it will be during the month. We will have the full offer between infant, toddler, and young children, so that feels really great. Of course, over time we are focused on innovation and always pushing the boundaries. You will see new car seat products coming from Thule.

Mads Liss, Analyst, Kepler Cheuvreux: Sure, I expect that. I guess I had a question. You have this investment program in new warehouse in Poland. What will happen with the capacity there? Is it sort of increasing, or is it more that you reduce the lead time to customers and so on? Maybe if you could touch upon how it affects your ability to address the D2C segment. I can take that.

Toby Lawton, CFO, Thule Group: Hi Matt. Yeah, I think, I mean what we’re doing generally is we are taking over warehousing that today is covered by outsourced 3PL, logistics provider. We’re taking over warehousing and bringing it in house. With that, we’re reducing double handling where we then ship it to a warehouse which then ships it onto end customers. We are definitely increasing capacity. We’re tripling the capacity of pallets in the warehouse in Poland, but we are reducing one step in the materials handling and it enables us also to kind of grow our logistics service to include both and regular customers across Europe in a good way with good delivery times.

Mattias Ankarberg, President and CEO, Thule Group: The cash regeneration is there, definitely.

Mads Liss, Analyst, Kepler Cheuvreux: It does not sort of affect your D2C opportunity.

Toby Lawton, CFO, Thule Group: No, I mean we still supply D2C today and we’ll do it from this warehouse in the future, so yeah.

Mattias Ankarberg, President and CEO, Thule Group: Yeah, exactly.

Mads Liss, Analyst, Kepler Cheuvreux: Okay, great. Thanks. That’s all for me.

Carly, Call Coordinator, Thule Group: Thank you very much. We currently have no further questions, so I’d like to hand back to the management team for any further remarks.

Mattias Ankarberg, President and CEO, Thule Group: Thank you very much everybody for joining this call. We wish you a good day and hopefully a good summer and look forward to speaking to you again at the Q3 report, if not before. Thank you very much.

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