Thule Group (THULE) investor relations material

Updated financial targets and growth strategy

• New financial targets set: 7% or higher organic growth per year, 20% EBIT margin, and at least 75% dividend payout ratio, aiming to reach these in 2–4 years, compared to historical 5% growth and 17.8% EBIT margin.

• Strategic focus is on organic growth, efficiency initiatives, and leveraging new product categories, with a shift from a SEK 20 billion revenue goal by 2030.

• Growth strategy centers on champion product categories, expanding from 6 to 10 by 2035, with increased R&D spend to 4% of sales for these categories and reduced investment in non-core areas.

• Bags category will be repositioned toward outdoor and accessory niches, phasing out non-core brands and business travel products.

• Efficiency initiatives include inventory reduction, automation in Poland, and organizational streamlining, with full cost benefits expected by 2028.

Market trends, product innovation, and category expansion

• Benefiting from trends like increased outdoor participation, e-bike adoption, near-home vacationing, and rising safety awareness for children and pets.

• Champion categories are small, niche markets where the company is global number one, leveraging innovation, regulatory barriers, and in-house manufacturing.

• Recent successful entries into dog transportation, car seats, and performance phone mounts, with new products in these areas achieving record first-year sales.

• New product launches include innovative solutions for bike carriers, dog crates, truck racks, rooftop tents, and bags, targeting both premium and mid-price segments.

• M&A will target product and technology gaps to add or strengthen champion categories, with organic growth as the primary focus.

Financial performance, capital allocation, and operational discipline

• EBIT margin improvement plan includes structural cost reductions, focused R&D, and supply chain efficiencies, targeting 18.5% by 2028 before scale effects, with scale-driven effects expected to drive margin to 20% as market recovers.

• Strong cash flow and conservative leverage (net debt/EBITDA below 2x) support both growth investments and a 75%+ dividend payout.

• Capital allocation priorities: 1) organic growth and innovation, 2) maintaining attractive dividend and strong balance sheet, 3) selective value-creating M&A.

• Management incentives aligned with total shareholder return, with strict risk-based return criteria for investments.

• Sustainability targets are unchanged, reflecting ongoing commitment.