While withholding the payment of dividends to save cash because of the Covid-19 epidemic, Thule Group’s annual meeting approved an incentive program for executives and key employees after the company reported a relatively small 7.5 percent decline in sales during the first quarter of 2020, with drops of 13 percent in the Americas and 5.7 percent in Europe and the rest of the world.
The incentive program will allow the participants to draw up to 2,090,000 warrants for new shares representing about 2.03 of the diluted equity. The shares will be issued by Thule at market value prior to the 2021 annual meeting. The subscription price will correspond to 118 percent of the volume-weighted mean value of the company’s shares on Nasdaq Stockholm between April 29 and May 13, 2020. Participants may receive an addition to their gross salary corresponding to their investment as a retention bonus.
In reported terms, Thule’s revenues fell by 4.9 percent in the first quarter to 1,744 million Swedish kronor (€162.9m-£177.0m). The operating profit dipped by 4.9 percent as well, but adjusted for currency fluctuations, the operating margin fell by 0.4 percentage points to a still honorable level of 18.7 percent. Net earnings declined marginally to SEK 241 million (€22.5m-£24.5m).
Sales and profits improved significantly at the start of the quarter, except for the effects of reduced travel in Asia, but they fell after the lockdowns ordered in Europe and parts of North America in March. In Europe, the biggest drops were felt in France, Italy, Spain and the U.K., where the most drastic measures were implemented. Only the Active with Kids grew in the quarter in Europe as well as in North America, thanks to the launch of a new stroller. The business developed well in Brazil but not in the rest of Latin America.
Temporary layoffs and remote working have been implemented throughout the organization. Magnus Welander, Thule’s chief executive, said he was optimistic about the longer term because of the company’s leading position in products for an active life close to home, with a clear exposure to “staycation” trends.
