The phasing-out of low-margin contracts with OEMs (Original Equipment Manufacturers) in the U.S. had a negative impact on Thule’s sales of SEK 11 million Swedish kronor (€1.0m-$1.1m) for the fourth quarter, and accounted for half of the negative trend in the region. The Swedish company is known for its roof racks, roof boxes and bike racks, as well as strollers, bags and sleeves of various kinds.
Net income dropped by 31.8 percent from the year-ago quarter to SEK 30 million (€3.1m-$3.2 m), while revenues went up by 4.7 percent in reported terms to SEK 1,211 million (€124.4-$128.1 m), or by 0.6 percent in constant currencies. The gross margin improved by 0.2 percentage points to 38.2 percent, while the underlying Ebit margin improved by 0.4 percentage points to 5.9 percent.
In Europe and the rest of the world, Thule saw stable growth. During the quarter, sales in the region rose by 4.2 percent in constant currencies. In terms of product categories, the company recorded strong sales of roof boxes driven by the new premium roof box, Thule Vector. The luggage category also grew strongly, led by the launch of the Thule Crossover 2 collection. RV Products continued to perform well thanks to positive market growth in the German market. Meanwhile, the U.K. also posted healthy growth, as well as Eastern Europe, with the exception of Russia. In South-East Asia, the company benefited from the successful launches of luggage and bags.
In the Americas, revenues declined by 5.7 percent in constant currencies, weighed down by the reduction in OEM contracts and lower sales of bags and cases. Canada delivered its best quarter of the year with strong growth in most categories, while sales in Latin America were in line with last year. The group has taken steps to reorganize the business in North America. As previously reported, it has acquired at the end of 2019 Denver Outfitters, an American producer of vehicle-mounted fishing-rod carriers, in a bid to expand its product range in camping and outdoor lifestyle.
For the full-year, sales rose by 8.5 percent to SEK 7,038 million (€667.0m-$722.8m), or by 3.9 percent in constant currencies. In Europe and the rest of the world, on a constant-currency basis, revenues jumped by 6.1 percent from the previous year, while in the Americas, they declined by 1.2 percent. The gross margin fell by 0.6 percentage points to 40.2 percent and the underlying Ebit margin was down by 0.3 percentage points to 17.7 percent. Net income climbed by 5.5 percent to SEK 883 million (€83.7m-$90.6m).
