Thule Group Ab · OMXSTO:THULE
Thule Group Ab — Investor Day (September 2017)
78 slides from Thule Group Ab's investor day presentation, Sep 20, 2017
Slide 1: Thule Group Capital Markets Day 2017
Thule Group Capital Markets Day 2017 Thule Group Senior Management Stockholm, 2017-09-20
Slide 2: Agenda for the Capital Markets Day 2017
Agenda for the Capital Markets Day 2017 ▪ Our path forward and new financial targets ▪ The Thule brand ▪ Sustainability ▪ Product Category presentations ▪ Sport&Cargo Carriers ▪ Packs, Bags & Luggage ▪ Active with Kids ▪ RV Products ▪ Financials ▪ Q&A Slide 2 2017-09-20 Thule Group Capital Markets D
Slide 3: Our path forward
Our path forward Our path forward Slide 3 2017-09-20 Thule Group Capital Markets Day 2017
Slide 4: 75 years of product driven growth – And we are just getting started
75 years of product driven growth – And we are just getting started... ▪ 1942 Founded in Hillerstorp, Sweden ▪ 1960’s Enters Sport&Cargo Carriers category ▪ 1970’s European expansion ▪ 1980’s Global expansion with broader portfolio ▪ 1990’s Global leader in Sport&Cargo Carriers ▪ 2000’s Rapid expans
Slide 5: Our investment case remains strong
Our investment case remains strong Attractive Market Attractive Company ▪ Strong user-influenced Innovation and Product Development ▪ Differentiated Premium Brand ▪ Favorable mega-trends ▪ Global Route-to-Market Strategy and Implementation driving market growth ▪ Strong Position in the Value Chain ▪
Slide 6: A global lifestyle company within branded consumer goods for an active life
A global lifestyle company within branded consumer goods for an active life Slide 6 2017-09-20 Thule Group Capital Markets Day 2017
Slide 7: A global lifestyle company within branded consumer goods for an active life
A global lifestyle company within branded consumer goods for an active life Media talking about Thule products 2017 Examples Slide 7 2017-09-20 Thule Group Capital Markets Day 2017
Slide 8: A global lifestyle company within branded consumer goods for an active life
A global lifestyle company within branded consumer goods for an active life Slide 8 2017-09-20 Thule Group Capital Markets Day 2017
Slide 9: We have delivered on our promise to profitably grow a brand focused business
We have delivered on our promise to profitably grow a brand focused business Sales growth >5% (constant currency) EBIT-margin >17% (underlying) SEKm SEKm 6,3% 17,6% 18,1% 16,6% 5,3% 5,3% 5,3% 16,3% 5,2% >17% 14,4% 5759 >5% 5304 >15% 13,0% 1042 5018 935 835 4316 3786 3892 703 562 493 2012 2013 2014 2
Slide 10: Drive profitable organic growth
Our mid-term ambition level is to continue on our successful journey Drive profitable organic growth while continuing to: 1) build a platform for further long-term growth 2) generate significant cash and shareholder return 3) explore strategic M&A Slide 10 2017-09-20 Thule Group Capital Markets Day
Slide 11: Financial targets – We have decided to raise profitability target
Financial targets – We have decided to raise profitability target Current 2017 Jun New 2015 2016 Targets LTM Targets Organic Growth (Constant Currency) ≥ 5% 5.3% 5.0% 5.6% ≥ 5% Underlying EBIT Margin ≥ 17% 16.6% 17.6% 18.1% ≥ 20% Net Debt / EBITDA c. 2.5x 2.3x 1.6x 2.0x 1.5 - 2.5x Dividend Policy (O
Slide 12: We have laid a growth foundation by entering into new product categories
We have laid a growth foundation by entering into new product categories Slide 12 2017-09-20 Thule Group Capital Markets Day 2017
Slide 13: Time for a new Product Category structure as “Other” category has grown
Time for a new Product Category structure as “Other” category has grown Bags for El. Devices Other Outdoor&Bags Multisport trailers Awnings&Tents Child Bike Seats Bike Carriers Legacy and OEM Small everyday Sport Related Luggage Strollers Other RV Products Bags&Cases use bags Packs&Bags Packs, Bags
Slide 14: Regional differences in size of RV Products in Europe and “legacy” bags in US
Regional differences in size of RV Products in Europe and “legacy” bags in US Sport&Cargo Carriers Packs, Bags & Luggage Active with Kids RV Products BILD SHARE OF 65% 15% 8% 12% NET SALES EUR&ROW Americas EUR&ROW Americas EUR&ROW Americas EUR&ROW Americas 2017/Q2 LTM 62% 71% 10% 22% 10% 6% 18% 1% S
Slide 15: Long-term Product Portfolio ambition level
Long-term Product Portfolio ambition level Sport&Cargo Carriers Packs, Bags & Luggage Active with Kids RV Products BILD Stable growth driven by Stable growth with sub- Stable growth Cyclical with positive Thule Group category differences trend currently MARKET TREND ( ) ? Maintain and grow Fast grow
Slide 16: Building a global brand
Building a global brand
Slide 17: The Thule brand stands for more than 71% of sales
The Thule brand stands for more than 71% of sales 71% Share of sales 2016 Thule brand 86% Share of Sales 2016 Thule Group brands Slide 17 2017-09-20 Thule Group Capital Markets Day 2017
Slide 18: The virtuous circle we strive for in building the Thule brand
The virtuous circle we strive for in building the Thule brand Focus on Learn from your past Be yourself your strengths Guide and lead Result focus by example Consistent and Dare to play Visually engage protective the “long game” Slide 18 2017-09-20 Thule Group Capital Markets Day 2017
Slide 19: “Product is King” approach still at the core of what we do
“Product is King” approach still at the core of what we do Slide 19 2017-09-20 Thule Group Capital Markets Day 2017
Slide 20: Connecting to the emotional feel of the Thule brand across all channels
Connecting to the emotional feel of the Thule brand across all channels Slide 20 2017-09-20 Thule Group Capital Markets Day 2017
Slide 21: Sponsored Thule Crew members are more to us than “just good athletes”
Sponsored Thule Crew members are more to us than “just good athletes” Slide 21 2017-09-20 Thule Group Capital Markets Day 2017
Slide 22: Sustainability
Sustainability
Slide 23: Sustainability – Focus in all aspects of what we do
Sustainability – Focus in all aspects of what we do Sustainable and reliable manufacturing Responsible business practices Products that inspire a Climate smart logistics Genuine social engagement healthy and active lifestyle Slide 23 2017-09-20 Thule Group Capital Markets Day 2017
Slide 24: Sustainability – On track to meet ambitious 2020 Environmental Targets
Sustainability – On track to meet ambitious 2020 Environmental Targets 65% reduction in CO2 emissions 100% renewable electricity in own plants GWh Share 20 100% - 45% 15 75% 10 50% Reduction CO2 emissions 5 25% at Thule Group sites (as compared with Base Year 2014) 0 0% 2012 2013 2014 2015 2016 Shar
Slide 25: Sustainability – Staff and sponsored Thule Crew members key in CSR activities
Sustainability – Staff and sponsored Thule Crew members key in CSR activities Slide 25 2017-09-20 Thule Group Capital Markets Day 2017
Slide 26: Sustainability – Staff and sponsored Thule Crew members key in CSR activities
Sustainability – Staff and sponsored Thule Crew members key in CSR activities Slide 26 2017-09-20 Thule Group Capital Markets Day 2017
Slide 27: Thule Group – Active life, simplified
Thule Group») ACTIVE LIFE, SIMPLIFIED
Slide 28: Sport&Cargo Carriers
Sport&Cargo Carriers
Slide 29: Sport&Cargo Carriers: 65% of our sales with ambition to continue stable growth
Sport&Cargo Carriers: 65% of our sales with ambition to continue stable growth SALES GROWTH SHARE OF NET SALES 2017/Q2 LTM 65% 2017H1 vs. 2016H1 +7% (Constant Currency) Bike Racks Roof Racks Boxes&Baskets Water/Winter/Other Slide 29 2017-09-20 Thule Group Capital Markets Day 2017
Slide 30: Sport&Cargo Carriers: Continued push for category growth as market leader
Sport&Cargo Carriers: Continued push for category growth as market leader ▪ We will continue to drive the market growth ▪ Overall market with low single digit growth ▪ Regional differences in single years ▪ Bike racks has been main driver in recent years ▪ We are the market leader ▪ >50% global mark
Slide 31: Sport&Cargo Carriers: We have the best products in the market
Sport&Cargo Carriers: We have the best products in the market Slide 31 2017-09-20 Thule Group Capital Markets Day 2017
Slide 32: Sport&Cargo Carriers: Sales approach with Glocal strategy and mentality
Sport&Cargo Carriers: Sales approach with Glocal strategy and mentality ▪ Sales in 140 markets demands local insights ▪ Historical differences in terms of sales channel, but we are using insights from Regional strengths ▪ N. America – strong in Outdoor ▪ W. Europe – strong in Automotive ▪ Gaining tr
Slide 33: Sport&Cargo Carriers: Embracing the Omni-channel reality
Sport&Cargo Carriers: Embracing the Omni-channel reality thule.com Brick&Mortar ▪ 80 country versions Thule Retail Partners Key Accounts ▪ 24 languages ▪ 21 Mio visitors annually ▪ Buyer’s Guide and Dealer Locator On-line Omni-channel Specialists Slide 33 2017-09-20 Thule Group Capital Markets Day 2
Slide 34: Sport&Cargo Carriers: Continuous supply chain efficiency improvements
Sport&Cargo Carriers: Continuous supply chain efficiency improvements ▪ With customers expecting more and more from brands an efficient supply chain becomes competitive advantage ▪ Less and less inventory in retail ▪ Later cut-off times for orders ▪ Simplified ordering processes ▪ More flexible pick
Slide 35: Strengthen No.1 Global position
Sport&Cargo Carriers: Continue winning as the undisputed market leader Strengthen No.1 Global position while continuing to: 1) out-innovate competition 2) enhance our tools and support to retail 3) load the Thule brand with even more emotion 4) drive efficiency gains Slide 35 2017-09-20 Thule Group
Slide 36: Packs, Bags & Luggage
en Packs, Bags & Luggage
Slide 37: Packs, Bags & Luggage: A category with challenges, but also big potential
Packs, Bags & Luggage: A category with challenges, but also big potential SALES GROWTH SHARE OF NET SALES 2017/Q2 LTM 15% 2017H1 vs. 2016H1 - 4% (Constant Currency) Legacy/OE Bags&Cases Smaller everyday bags Luggage Sport&Outdoor Packs Slide 37 2017-09-20 Thule Group Capital Markets Day 2017
Slide 38: Bags: Traditional US focused Case Logic business declining
Bags: Traditional US focused Case Logic business declining ▪ A category made up of market challenged sub- categories and price sensitive OE customers – which will continue to decline ▪ Legacy categories with some differences, but with major challenge that they are dependent on a few large customers
Slide 39: Bags: Solid growth in everyday bags like smaller backpacks
Bags: Solid growth in everyday bags like smaller backpacks ▪ A highly competitive category, but if we get it right we will generate growth and better margins ▪ Seasonal buying patterns and fight for the “pegs” at large retail (especially in US) ▪ We will work with a dual brand approach ▪ Thule at hi
Slide 40: Packs: Solid growth in Sport&Outdoor oriented packs and bags
Packs: Solid growth in Sport&Outdoor oriented packs and bags ▪ Competitive category with slow churn ▪ Osprey clear global leader ▪ Many local heritage brands and general sporting good companies (in simpler and smaller bags) ▪ We have launched award winning products and are still expanding our covera
Slide 41: Luggage: Big growth ambitions in huge and growing category
Luggage: Big growth ambitions in huge and growing category Global Travel Bags & Luggage market ▪ Total market: 33 Bio USD (260 Bio SEK) Bio USD 45 ▪ Target market Thule: 10 Bio USD 40 (80 Bio SEK) 35 ▪ Business Bags & Premium Travel Bags 30 25 ▪ Geographically relatively evenly spread in Asia, Ameri
Slide 42: Luggage: A market with strong players, but still huge opportunity to play
Luggage: A market with strong players, but still huge opportunity to play ▪ We enter this category with a +5 year horizon to become a serious contender and will launch several collections to become a significant player ▪ Target market dominated by Samsonite Group ▪ 3 Bio USD ▪ Several of the biggest
Slide 43: Become a serious contender in Luggage and Daypacks
Packs, Bags & Luggage: Ambition to create another pillar for Thule Group Become a serious contender in Luggage and Daypacks while continuing to: 1) manage decline in legacy/OE products 2) grow with relevant Sport&Outdoor packs 3) ensure improved margin contribution Slide 43 2017-09-20 Thule Group Ca
Slide 44: Active with Kids
“ ; | — erage Active with Kids ' a
Slide 45: Active with Kids: We have grown to be a serious player in Juvenile products
Active with Kids: We have grown to be a serious player in Juvenile products SALES GROWTH SHARE OF NET SALES 2017/Q2 LTM 8% 2017H1 vs. 2016H1 +48% (Constant Currency) Strollers Multisport Trailers Child Bike Seats Slide 45 2017-09-20 Thule Group Capital Markets Day 2017
Slide 46: Active with Kids: We have proven that we can develop great products
Active with Kids: We have proven that we can develop great products Slide 46 2017-09-20 Thule Group Capital Markets Day 2017
Slide 47: Active with Kids: 2011 acquisition gave us products for super-sporty parents
Active with Kids: 2011 acquisition gave us products for super-sporty parents Slide 47 2017-09-20 Thule Group Capital Markets Day 2017
Slide 48: Active with Kids: Multisport trailer facelift 2017 opened up for more parents
Active with Kids: Multisport trailer facelift 2017 opened up for more parents Slide 48 2017-09-20 Thule Group Capital Markets Day 2017
Slide 49: Active with Kids: In-house developed Bike Child Seats hit the market in 2014
Active with Kids: In-house developed Bike Child Seats hit the market in 2014 Slide 49 2017-09-20 Thule Group Capital Markets Day 2017
Slide 50: Active with Kids: 2016 acquisition created leading portfolio in Child Bike Seats
Active with Kids: 2016 acquisition created leading portfolio in Child Bike Seats Thule Yepp Nexxt Thule Yepp Thule RideAlong Slide 50 2017-09-20 Thule Group Capital Markets Day 2017
Slide 51: Active with Kids: Thule Glide jogger entry in 2014 for traditional core user group
Active with Kids: Thule Glide jogger entry in 2014 for traditional core user group Slide 51 2017-09-20 Thule Group Capital Markets Day 2017
Slide 52: Active with Kids: 2014 - Thule Urban Glide jogger positioned as Sport Stroller
Active with Kids: 2014 - Thule Urban Glide jogger positioned as Sport Stroller Slide 52 2017-09-20 Thule Group Capital Markets Day 2017
Slide 53: Active with Kids: So far we have only targeted a small niche of stroller market
Active with Kids: So far we have only targeted a small niche of stroller market ▪ 25 Bio SEK total market Global baby stroller and pram market, 2014 - 2020FC ▪ > 5% CAGR expected ▪ 10 Bio SEK Target market Bio SEK ▪ Premium strollers growing faster 35 than total market ▪ We are currently only compet
Slide 54: Active with Kids: Thule Urban Glide – An All-Terrain Stroller for more parents
Active with Kids: Thule Urban Glide 2 – An All-Terrain Stroller for more parents Slide 54 2017-09-20 Thule Group Capital Markets Day 2017
Slide 55: Active with Kids: 2nd half 2018 we launch our first 4-wheel stroller
Active with Kids: 2nd half 2018 we launch our first 4-wheel stroller - Thule Sleek Slide 55 2017-09-20 Thule Group Capital Markets Day 2017
Slide 56: Active with Kids: Thule Sleek – A flexible, compact urban stroller with style
Active with Kids: Thule Sleek – A flexible, compact urban stroller with style Slide 56 2017-09-20 Thule Group Capital Markets Day 2017
Slide 57: Active with Kids: Thule Sleek – The first of several new city-style strollers
Active with Kids: Thule Sleek – The first of several new city-style strollers Slide 57 2017-09-20 Thule Group Capital Markets Day 2017
Slide 58: Become a serious contender in Strollers
Active with Kids: Ambition to become a new leg to stand on for the Thule Group Become a serious contender in Strollers while continuing to: 1) lead in Multisport Trailers and Bike Seats 2) establish ourselves in Juvenile channel 3) improve supply chain set-up for future Slide 58 2017-09-20 Thule Gro
Slide 59: RV Products
RV Products
Slide 60: RV Products: A cyclical business with positive trend in recent years
RV Products: A cyclical business with positive trend in recent years SALES GROWTH SHARE OF NET SALES 2017/Q2 LTM 12% 2017H1 vs. 2016H1 +31% (Constant Currency) Awnings&Tents Bike Racks Other RV Products Slide 60 2017-09-20 Thule Group Capital Markets Day 2017
Slide 61: RV Products: We focus on product niches in more premium European market
RV Products: We focus on product niches in more premium European market EUROPE N. AMERICA ▪ Consumers prepared to pay for quality, ease of ▪ Consumers have shown less interest in high use and integrated design quality, easy-to-use, design driven products ▪ We have led design driven innovation approa
Slide 62: RV Products: A cyclical market with long cycles and current positive trend
RV Products: A cyclical market with long cycles and current positive trend European RV Registrations 2005 - 2017 ▪ Market still recovering after significant downturn in 2008 Units 250 000 ▪ Caravan decline over 15 years seems to have bottomed out 200 000 ▪ Motorhomes the winner again the last 3 year
Slide 63: RV Products: We have extended our No. 1 position in our niches in Europe
RV Products: We have extended our No. 1 position in our niches in Europe ▪ Building on successful Product Upgrade Program ▪ 95% of the products renewed in the last 5 years. ▪ True innovation in all traditional sub-categories ▪ Focus on comfort and security is opening new markets ▪ Being on trend wit
Slide 64: RV Products: Sport&Cargo Carrier products overlap and brand strength helps
RV Products: Sport&Cargo Carrier products overlap and brand strength helps Slide 64 2017-09-20 Thule Group Capital Markets Day 2017
Slide 65: Outpace the RV market
RV Products: Ambition to continue to outpace the market Outpace the RV market while continuing to: 1) out-innovate competition 2) strengthen Key Account relationships 3) tactically widen geography and assortment 4) be flexible in managing possible cyclicality Slide 65 2017-09-20 Thule Group Capital
Slide 66: Financials
Financials
Slide 67: We have delivered on our promise to profitably grow a brand focused business
We have delivered on our promise to profitably grow a brand focused business Sales growth >5% (constant currency) EBIT-margin >17% (underlying) SEKm SEKm 6,3% 17,6% 18,1% 16,6% 5,3% 5,3% 5,3% 16,3% 5,2% >17% 14,4% 5759 >5% 5304 >15% 13,0% 1042 5018 935 835 4316 3786 3892 703 562 493 2012 2013 2014 2
Slide 68: Financials: Predictable seasonality of operational cash generation
Financials: Predictable seasonality of operational cash generation Operational Cash Flow (2014 - 2017YTD) ▪ Cash conversion (OCF/EBITDA) average of 86% recent years SEKm 600 ▪ CapEx stable at 2-3% per year in 484 relation to Net Sales 419 379 369 387 400 252 200 173 178 134 90 0 -25 -68 -90 -143 -20
Slide 69: Financials: Currency exposure remains similar to recent past
Financials: Currency exposure remains similar to recent past ▪ Net sales distribution by currency ▪ Gross EBIT flows by currency EUR 47% EUR 117% USD 33% SEK GBP 8% GBP 19% CAD CAD 4% PLN DKK NOK BRL 13% DKK NOK USD 3% CNY 8% 6% BRL 1% 1% 1% 1% 1% 4% 1% Other HKD -1% -3% PLN CNY -13% -15% SEK -36% S
Slide 70: Financials: Efficient OWC management, while improving business performance
Financials: Efficient OWC management, while improving business performance Operating Working Capital (2012-2016) ▪ Distribution set-up completely changed last 3 years, to cost efficiently handle: SEKm ▪ Next day deliveries in key markets ▪ Later cut-off times for deliveries 1500 20% ▪ Increased numb
Slide 71: Financials: Product Development spend to generate growth
Financials: Product Development spend to generate growth Product Development spend as share of Sales ▪ 2013-2017YTD: Push for mid- term growth and EBIT margin % improvement thanks to launching new products 7 ▪ 2017/Q3-2018: Entering our 6 most aggressive phase 5 ▪ Strong push into new categories (Lu
Slide 72: Financials: Strong cash generation enables organic growth, dividends and M&A
Financials: Strong cash generation enables organic growth, dividends and M&A ▪ Cash development Nov. 2014 to June 2017 ▪ Net debt / EBITDA: 3,41x 2,00x SEKm 208 186 200 144 253 1 930 939 -1 392 -455 -200 -127 232 -92 89 -60 Cash at IPO OCF - OCF - Share issue Divestments Dividends Tax Amortization F
Slide 73: M&A
M&A
Slide 74: Targeted and proven track record in M&A remains a part of our toolbox
Targeted and proven track record in M&A remains a part of our toolbox ▪ Organic growth remains our No.1 focus ▪ We have a limited, but successful M&A record in target category Active with Kids ▪ Chariot Carriers – Multisport Trailers ▪ GMG Yepp – Child Bike Seats ▪ We scan approx. 20 cases annually
Slide 75: Closing remarks
—— - Closing remarks peer |
Slide 76: A great company with proven track record, strong trends and ambitious targets
A great company with proven track record, strong trends and ambitious targets ▪ 75 years or product development driven growth ▪ Strong track record in last 5 years ▪ Sales CAGR >5% (in constant currency) ▪ EBIT CAGR >13% (in constant currency) ▪ EBIT-margin growth from 13% to 18% ▪ Market trends are
Slide 77: Q&A
Q&A
Slide 78: Thule Group – Active life, simplified
Thule Group») ACTIVE LIFE, SIMPLIFIED