Roadshow Presentation. February 2015

Transcription

1 Roadshow Presentation February 2015

2 Today s Presenters Magnus Welander Chief Executive Officer Lennart Mauritzson Chief Financial Officer Joined Thule Group: 2006, CEO since 2010 Born: 1966 Previous Experience: Business Area President Thule Group CEO Envirotainer Group Various management positions at Tetra Pak Joined Thule Group: Rejoined 2011 Born: 1967 Previous Experience: CFO Beijer Electronics Vice President Finance Thule Group Vice President Finance in Cardo Slide 2

3 The Thule Group Vision Active Life, Simplified Slide 3

4 Thule is a Global Premium Branded Sports&Outdoor Company Outdoor&Bags Region Americas 34% Net Sales by Segment 2014 Sport&Cargo Carriers Bags for Electronic Devices Net Sales and Underlying EBIT Breakdown 2014 (SEKm) 10% 4,693 90% Underlying EBIT Margin: 14.6% (13.6% 2013) 686 1% Region Europe and ROW 66% Other Outdoor&Bags Outdoor&Bags 99% Specialty Specialty Global Reach Sales in 136 Countries Snow Work Gear Chains 72% 28% Work Gear Snow Chains Slide 4 Source: Company information

5 Transformation Since 2010 into a Brand-Centric Sports&Outdoor Company Point Business and Strategy Clearly Centered around Outdoor Core 1 Towing 20% Specialty 8% Trailer 14% Outdoor&Bags 58% Specialty 10% Outdoor&Bags 90% Consolidated Brand Platform around the Thule Lifestyle Local brand / category approach Cars and transport use >15 Brands Centralised brand management Focus on consumer / emotional connection Other Branded Consumer Driven Execution Focus on distributors and wholesalers Limited key account management Seven different Thule homepages No social media approach Retail and Distribution Forward integration in key markets Thule Retail Partner Program rolled out in >2,000 stores Increased control of PoS Communication Bring Your Life communication concept Truly global website New PR approach SG&A as % of Net Sales SG&A Focused on Driving the Business 16.1% 8.0% Prod. Dev. Sales&Mktg Admin +2.3pp 18.4% -1.8pp 6.2% Prod. Dev. Sales&Mktg Admin vs 2009 Source: Company information 1 Breakdown of net sales by segment. Slide 5

6 A Compelling Story in the Attractive Sports&Outdoor Market 3 We Play to Win! 2 We Are a Global Leader 1 We Operate in an Attractive Market Favorable Mega-Trends Driving Long-Term Market Growth Strong New Product Development Differentiated Premium Brand Global Route-to-Market Strategy and Implementation Strong Position in the Value Chain Management Team with Proven Track-Record Multiple Avenues for Growth Attractive Financial Performance Slide 6

7 2 Market Leading Product Development with Strong User Focused DNA Trade Endorsement >20 Design and Trade Awards ( ) Product Focus Across Organization Top Management focus area Passionate users within the company 135 FTEs dedicated to product design & development Media Endorsement >100 Test Wins across Categories ( ) Proven Development Processes Consumer Insights Design Language & Technical Concepts Detailed Design (DFM 1 and DFA 2 ) Testing Thule EasyFold out of Simply the best High Share of Sales From New Products % 46% Share of Net Sales generated from products launched in the last 3 years Consumer Endorsement Highly Rated in Open Consumer Reviews Product replacement cycles have been reduced by 1/3 in the last 5 years Source: Company information 1 Design for manufacturing. 2 Design for assembly. Slide 7

8 2 A Modern Approach to Consumer Communication Long-Term Brand Building Sponsoring Thule Crew Consumer Involvement Social Media and Uploading Earned Media PR focus on Relevant Channels Slide 8

9 2 A New Distribution Strategy Implemented from 2010 A Structured Go-To-Market Approach Creating a Global Thule Retail Presence Category Captaincy Approach with Key Retail Chains Thule Retail Partner Program for Smaller Stores Outdoor&Bags > 2,500 Key Account doors > 2,100 Thule Retail Partner doors Product Assortment Focus and Support for Look&Feel in Store Training of Store Staff Slide 9 Source: Company information

10 We Have a Strong Position in the Value Chain 2 Direct Material Spend by Supplier (2014) Top 10 Suppliers 29% 10 Thule Group Assembly Sites Chicago Seymour Perry Broad Supply Base Hillerstorp Huta Haverhill Menen Neumarkt Sao Paolo Molteno Sales by Customer (2014) Top 10 Customers 18% Broad Customer Base Source: Company information Slide 10 Sales in 136 Countries

11 3 Multiple Avenues for Growth and Margin Expansion Top Line Drivers Exploit Core Product Offering and NPD Capabilities Product and Category Expansion Continued Brand Enhancing Retail Expansion Drive Profitability Enhancements Market and market share growth via NPD in existing markets Establish leadership position early in new growth markets Strengthen position in recently entered categories: Sport&Travel Bags and Active with Kids Selectively explore new categories Category Captaincy approach with brand focus in all channels Strategically increase direct distribution vs. third party distribution Strengthen multi-channel capabilities Continued focus on costs Implementation of efficiency programs Room for margin expansion in selected categories Firmly Position Thule as a Leading Sports&Outdoor Brand Globally Continue to implement the Bring Your Life positioning strategy Further deepen the emotional connection with Thule (PR, events, PoS, social media) Source: Company information Slide 11

12 3 Future Top-line Growth Derived from Several Sources Within Outdoor&Bags Sport&Cargo Carriers Bags for Electronic Devices Other Outdoor&Bags A B C Share of Sales (Thule Group) 59% 17% 13% Market Characteristics SEK 5 Billion market 3-4% CAGR Thule only global brand Regional brands No. 2 High barrier to entry Very big total market (SEK 43 billion), but also very fragmented with large low-cost volume Growth within sub-categories vary greatly Low barrier to entry Total market of SEK 10 billion) made up of several distinct sub-markets 2-3% CAGR Barrier to entry vary by subsegment What We Target and How We Plan to Achieve It Continue market leading NPD, providing functional, safe, easyto-use products with contemporary design Continue apply Go-To Market Approach implemented last 4 years Reduced exposure to declining product families Increased efforts to drive growth in fast growing product families (e.g. Tablet, Phone and GoPro Cam cases) and more stable categories (e.g. daypacks) Several new product launches enabling us to grow our market share from low levels as new entrants Permission to Play from retailers received at recent trade events Increased focus on emerging markets Refresh of Case Logic brand Additional push with Thule brand Source: Arthur D. Little analysis and Management estimates Slide 12

13 A Sport&Cargo Carriers Leading Market Positions in All Regions North America 54% Overview of Global Market Shares for Sport&Cargo Carriers Global 49% Europe 52% 25% 4% 9% 5% 4% 9% 6% Thule Yakima Saris Thule YakimaMont Blanc Atera Thule Mont Blanc Atera #1 #1 #1 Latin America #1 RoW 28% 30% 27% 14% 18% 15% Thule EqMax LongLife Thule Inno Terzo Thule Group Distribution Source: 2013 Estimate, Arthur D. Little analysis Slide 13

14 A Sport&Cargo Carriers Utilizing Market Leading Position to Drive Growth Global position Reference Point in the Market Global Leading Brand High unaided brand awareness Premium price positioning Quality image Product Breadth, Development Competence and Development Spend Widest assortment in the market Strong proven Product Development track record Size provides advantage in terms of spend Rigorous testing standards Products that Generate Traction Trade, Media and Consumer Recognition Thule EasyFold out of Simply the best Structured Route-to-Market Approach Thule Partner Program rolled out to >2,000 retail stores Category Captaincy approach with major retail chains Structured steps in logical forward integration Strong Retail Presence Source: Company information Slide 14

15 B Bags for Electronic Devices Multiple Initiatives to Drive Growth Key Focus for Growth Focus on Growth Categories Brand refresh at 30-year anniversary Mid-price brand Broad assortment Broad distribution in CE channel Young, urban, fashion Used in category since 2012 Premium price brand Targeted assortment More targeted distribution Protective, outdoor/sport inspiration Dual Brand Approach Use Economies of Scale in Sourcing Slide 15

16 C Other Outdoor&Bags Broad New Product Expansions Source: Company information Slide 16

17 C Other Outdoor&Bags New Products Drive Growth The Base We Start From Key Focus for Growth RV Products Tents and Awning in Focus No. 1 position in the European market for Awnings and Bike Carriers Tent segment represents the growth opportunity with key launches in 2014 received well Focus on awnings and tents continues New target focus Van Campers Active with Kids Broadened Offer Provides Growth Premium position in multi-functional child carriers reaffirmed with Thule brand introduction in category Strong reception of new bike trailers and bike seats open up market for the future Addition of child carrier backpacks makes us broadest player in category Distribution growing across markets Continued growth in multifunctional child carriers Dedicated category sales specialists supporting our normal sales organization Continued push of the new products with sales organization experts and broadening of range More focus on opening juvenile channel Sport&Travel Bags Getting Traction in New Categories Permission to play received by retail during 2014 Focus is to continue to drive sales Dedicated category sales specialist supporting our normal sales organization Continued push of the new products with sales organization experts and broadening of range Source: Company information Slide 17

18 2014 Results

19 Q Highlights Mild and late winter hurts Snow Chain sales Net sales 1 of SEK 976m (924) Outdoor&Bags +11,4% (+1.9% excluding currency effects) Specialty -15,9% (-22.5% excluding currency effects), due to late winter affecting snow chain sales Underlying EBIT 1 of SEK 37m (45) Specialty Segment EBIT reduced by SEK 22m to SEK 12m (34) Higher SG&A expenses vs. PY in the period in Outdoor&Bags, related to product development and launch preparation cost for new products categories that will be available in retail in first half of 2015 Items affecting comparability of SEK -52m (-10) Net income 1 of SEK -100m (-52) Earnings per share 1 of SEK (-0.62) Cash flow from operating activities 2 was SEK -77m (106) Thule Group AB (publ) was stock-listed on Nasdaq Stockholm on November 26 New 5-year financing structure in place New Eastern European Distribution Centre finalized in the quarter Thule Group chosen as Vendor of the Year in Action Sports from World s largest Outdoor Retailer (REI) Thule chosen as Swedish Brand of the Year by Swedish Sport&Outdoor Retailer Association 1 Pertains to continuing operations, excluding operations discontinued during Correspondingly, the comparison periods have been divided into continuing and discontinued operations. 2 Pertains to total operations, meaning both continuing and discontinued operations. Slide 19 Feb 12, 2015 Thule Group Year-end Q Results Update

20 Q Net Sales and EBIT by Segment Outdoor&Bags Oct-Dec Change SEKm Rep. Adjust. 1 Net sales % 1.9% - Region Europe & ROW % 6.0% - Region Americas % -3.5% Operating income % Underlying EBIT % -5.2% Operating margin, % 3.1% 4.6% Underlying EBIT margin, % 5.8% 6.4% 1 Adjustment for changes in exchange rates Specialty Oct-Dec Change SEKm Rep. Adjust. 1 Net sales % -22.5% - Snow Chains % -36.3% - Work Gear % -5.2% Operating income % Underlying EBIT % -67.4% Operating margin, % 1.7% 17.4% Underlying EBIT margin, % 7.1% 17.4% 1 Adjustment for changes in exchange rates Slide 20 Feb 12, 2015 Thule Group Year-end Q Results Update

21 2014 Q4 Selection of Trade Introductions Case Logic Kontrast camera bag series Thule EnRoute daypack and Thule Vectros MacBook bumper Thule Urban Glide jogger (introduction to European trade) Thule Hullavator Pro Kayak Carrier with lift assist Slide 21 Feb 12, 2015 Thule Group Year-end Q Results Update

22 2014 Full Year Highlights Outdoor&Bags Segment drives profitable growth Net sales 1 of SEK 4,693m (4,331) Outdoor&Bags +10.0% (+5.1% excluding currency effects) Specialty -3,8% (-8.4% excluding currency effects) Underlying EBIT 1 of SEK 686m (588) Underlying EBIT-Margin 1 of 14.6 percent (13.6) Net Income 1 of SEK 199m (299) Earnings per share 1 of SEK 2.32 (3.54) Cash flow from operating activities 2 was SEK 355m (390) Operational cashflow 1 in 2014 SEK 637m Cash conversion 1 of LTM underlying EBITDA of 85% (80%) Net debt / Underlying EBITDA decreased to 3.4x (5.4x) Dividend of SEK 2.00 per share proposed by the Board 1 Pertains to continuing operations, excluding operations discontinued during Correspondingly, the comparison periods have been divided into continuing and discontinued operations. 2 Pertains to total operations, meaning both continuing and discontinued operations Slide 22 Feb 12, 2015 Thule Group Year-end Q Results Update

23 Financial Highlights Full Year 2014 Reported Net Sales Underlying EBIT and Margin SEKm SEKm 13.6% % 686 Thule Group FY 2013 Thule Group FY 2014 FY 2013 Thule Group FY 2014 Outdoor & Bags SEKm SEKm 17.4% % 774 FY 2013 Outdoor&Bags FY 2014 FY 2013 Outdoor&Bags FY 2014 SEKm SEKm Specialty 506 O&B Americas FY 2013 Specialty FY 2014 FY 2013 Specialty FY 2014 Note: EBIT adjusted for non-recurring items & depr/amort on excess values 1 Constant currency adjustment based on average FX rates 1 January-31 December Slide 23 Feb 12, 2015 Thule Group Year-end Q Results Update

24 Operating Working Capital and CapEx Operating Working Capital Comments SEKm ,8% 21,1% 21,4% 22,4% % 20% 10% Operating working capital as of 31 December 2014 was as follows: Inventory: SEK 795m Accounts receivables: SEK 754m Accounts payable: SEK 497m Other working capital as of December 31 was SEK -251m, corresponding to -5.3% of LTM 2014 net sales % OWC OWC % of Net Sales Capital Expenditure Comments SEKm ,7% 1,7% 1,5% 2,8% 130 4% 3% 2% The two biggest 2014 investments were expansion driven and pushed 2014 CapEx to higher than normal levels Eastern European Distribution Centre (in Huta, Poland) investment of SEK 65m. Approx. SEK 63m has been recorded during 2014 and SEK 2m was recorded during The Distribution Centre was operational as of Jan., % 0% Test Centre expansion investment (in Hillerstorp, Sweden) of SEK 21m,. Approx. SEK 10m was recorded during 2014 (2014 is the first year with cash outflow). The Test Centre expansion will be operational in Q3/2015. CapEx CapEx % of Net Sales Source: Company information Slide 24 Feb 12, 2015 Thule Group Year-end Q Results Update

25 Thule Group A strong cash generator in the 2 nd half of the year SEKm OB Q1 Q2 Q3 Q4-200 Source: Company information Slide 25 Feb 12, 2015 Thule Group Year-end Q Results Update

26 Reported Income Statements Thule Group Q4 Q4 Jan-Dec Jan-Dec SEKm Net sales ,331 4,693 Cost of goods sold ,715-2,861 Gross income ,832 Other operating revenue Selling expenses Administrative expenses Other operating expenses EBIT Net interest expense/income Income before taxes Taxes Net income from continued operations Net income from discontinued operations Net income Consolidated net income pertaining to: Shareholders of Parent Company Non-controlling interest Consolidated net income Source: Company information Slide 26 Feb 12, 2015 Thule Group Year-end Q Results Update

27 2014 in Summary Outdoor&Bags Segment drives profitable growth Sales Outdoor&Bags growth of +5.1% (excl. Fx) Specialty business challenged after 2nd weak winter Positive reception from trade to our 2015 introductions Continued Focus on Thule Retail Partner Program Operational E. European Distribution Centre operational Q1/2015 New ERP implemented in Bags for Electronic Devices New structure of Hong Kong sourcing team in place Financial Gross Margin increases 130 bp to 39.0 percent Underlying EBIT-Margin grows 100bp to 14.6 percent Cash flow from operating activities at SEK 355m Net debt / Underlying EBITDA decreased to 3.4x Board proposes SEK 2,00 dividend. Paid in two occasions, SEK 1.00 in May and SEK 1.00 in October Slide 27 Feb 12, 2015 Thule Group Year-end Q Results Update

28 Thule Group 2014 Performance vs. Financial Targets Organic Growth 5% 3.5% Thule Group Constant Currency Net Sales Growth 5.1% -8.4% Outdoor&Bags Specialty Underlying EBIT Margin 15% 14.6% Increase from 13.6% (2013) in line with plans to reach goal mid-term Net Debt / EBITDA c. 2.5x 3.4x Reduction from 5.4x (2013) in line with plans to reach goal mid-term Dividend Policy 50% 51% Dividend of SEK 2.00 per share proposed by the Board Source: Company information Slide 28 Feb 12, 2015 Thule Group Year-end Q Results Update

29 Focus 2015 is to Capture Profitable Growth with Investments made in Focus Continue to Drive Profitable Organic Growth in Outdoor&Bags Segment Continued strong performance in Sport&Cargo Roll-out of new Active with Kids products portfolio Roll-out of Technical Backpacks Get growth Bags for Electronic Devices Continue to manage Specialty cost efficiently Further steps in lean set-up in Snow Chians Production efficiencies in Work Gear Capture gains from Operational Efficiency Ramp-up of Eastern European distribution centre Closing of W. European bags distribution centre Capture gains from more efficient supply chain Slide 29 Feb 12, 2015 Thule Group Year-end Q Results Update

30 Q&A Slide 30

31 Disclaimer This presentation has been prepared by Thule Group AB (publ) (the Company ) solely for use at this presentation and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. Statements in this presentation, which are not historical facts, such as expectations, anticipations, beliefs and estimates, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of Such statements involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. This presentation may contain various forward-looking statements that reflect management s current views with respect to future events and financial and operational performance. The words believe, expect, anticipate, intend, may, plan, estimate, should, could, aim, target, might, or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Company s control and may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. These risks include but are not limited to the Company s ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brands in its portfolio, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.