Thule Group Aktie

Welcome to the Thule pre-quarter 2 update. [Operator Instructions]. Now I will hand the conference over to the CEO and President, Mattias Ankarberg, and CFO, Toby Lawton. Please go ahead.

Thank you, operator, and welcome, everybody, to this quarter update. We will speak to the presentation available. And as usual, we'll start with a short recap of the previous quarter. We'll talk about the current market situation and Thule priorities and then to sum up before Q&A.

Toby will cover some of the financial aspects for us to keep in mind right now. So -- and then, of course, we'll have a good time for a Q&A session at the end. So I'll kick it off, and we can turn to the next page, just to remind everybody where we left off after the Q1 call. First quarter of this year was a good start to the year for us. We did show organic growth in a market that is still challenging. And on top of that, we also improved profitability. It's nice to see that the growth we're delivering is coming from our focus on building what we now call champion product categories, both growing the existing champions, where we have continued to launch new products and drive sales and also fast growth in our 3 so-called champion candidate categories, categories that have the characteristics of a champion, but are not yet big enough to be in the champion category.

And the fastest growth we saw was from the product area active with kids and dogs, which is the area where we report our 3 champion candidates. Lastly, North America continued to move in the right direction, still the toughest market, but step-by-step for several quarters now, we are seeing improvements. And then we also, again, were recognized for our product design through several new product awards in -- already in 2026 first quarter, which we're really proud about. So it was a good start to the year. And then if we flip the page, we can see that, that was a continuation of a long-term trend. And most of you have seen this graph several times, but this is the representation of the sales and EBIT development since the IPO in 2014, and Thule has a track record of profitable growth over a long time, and it was nice to see that the first quarter of 2026 was a continuation of that trend. Now if we turn to the next page, I'd also like to highlight something that was announced after the Q1 call.

In early May, I believe it was in May 6, we announced the acquisition of a small company in the dog transportation space, a company called Curli, which is the leader -- a leader in premium dog harnesses and particularly the leader in harnesses of a certain model, so-called vest harnesses for smaller dogs, founded by 2 very passionate Swiss mountaineers, climbers that have taken their knowledge about harnesses from the climbing environment into the dog environment and develop some of the really nice products that we are now happy to welcome into the Thule family, very much complements the core Thule product range, which is around car and bike-related safety-related products with a nice addition of these dog best harnesses and will also complement some organically developed products that will be launched -- harness products that will be launched already in the fall of 2026.

So we are happy to see further expansion in the dog transportation category through new products, but also then to the acquisition of this small Swiss company. If we turn to an update of sort of the market situation on our priorities on this page. We -- this is the -- this is the commentary that we had at the end of Q1, and I'd like to just remind everybody what we said and then also give a bit of a fresh update to where things stand at the moment. Starting with the market side. We said at the end of -- we said at the time of the Q1 report, sorry, that the market is still tough. We still see cautious consumers and retailers out there, particularly so in North America.

Having said that, there were some positive signs in the marketplace of improving market conditions, but the only segment where we really had seen that materialize and had turned for the better was within RV products, where some of the growth that we saw in Q1 came from market bouncing back and some of the growth from the new products we have launched over the last few years. We also commented at the time that we had not seen any immediate negative effect of the crisis in the Middle East.

And however, that if that would continue, we would expect it to, of course, impact macroeconomic conditions and consumer spend. And there were also speculations of a more positive scenario and positive in the sense that positive for the industry that the development in the Middle East and some other things could lead to more of a staycation effect in terms of traveling and vacationing for the summer of 2026.

So now we're in June and a few things have happened, of course. And what we see, though, overall is the picture is largely the same. We still see an overall tough market and still see North America as the toughest spot. If we look at public information like consumer confidence numbers, we can see that the sentiment has dropped or continue to drop, drop further in the U.S., both in April and in May and also in the EU that the levels are lower so far in Q2 than they were in Q1. And I think the staycation trend is -- there are still some indications and some discussions that, that may come into place during the summer, but it's still nothing that is visible in the marketplace already.

And also to say, I don't think it would have been -- it would be really visible during summer if that would materialize. So overall, still a market situation which is similar as in the first quarter. Now having said that, of course, despite the tough market continuing in Q1, we were really happy to see organic growth from the Thule side in the first quarter. And we saw -- as I commented in the beginning, we were happy that, that came from our focus on building existing champions and building up new ones. And we are continuing to execute our agenda for 2026 very much in line with the direction we have set out. So we continue to execute the focus on building bigger and more champions and driving efficiency gains, and we expect to see organic growth also in the second quarter.

And there are several points to the agenda, which we have covered in detail before, and I thought not to go through them in detail now. They are very consistent with the messages we have delivered before. But we are, of course, happy to take questions at the end of this call if you would have questions around these strategic priorities. On the next page, though, I'd just like to highlight some of the launches that we are doing to support our focus on building champions. And as a reminder, we are focusing more of our R&D spend and increasing our spend on building champions, our existing champions.

But we are focusing -- sorry, but we are, in total, bringing our R&D spend down to drive cost efficiency. So the launch calendar there, reflecting that set of priorities means that we are launching more products in the Champion categories, but less products than the last 2 years overall. But so far, we have been very active and launched several new products for all of our champion categories more or less. And since we are in spring, it's been a heavy focus on bike-related products. And if you click on the next page, I can just comment quickly on a few of the highlights so far. We have introduced recently a North American specific product called Thule Vero, which is really a premium product for hitch bike carriers or North American car fleet built for carrying heavier bikes or e-bikes that has been really well received. I'm really pleased about that.

And we've also continued to push the use cases and to play in more price points, both lower and in higher price points. And on the next page, you can see the picture of our now most premium bike carrier, which is called Thule Epos ParkSecure, which is a bike carrier, which is basically an upgraded version of the previous most premium bike carrier. Thule Epos now has parking sensors to protect your car, your bike and of course, your bike carrier while putting the car in reverse. And this launched early April and has had been very well received by both the press and key opinion leaders and also in terms of volumes.

And then we have launched several other products related to bike, but we have not only launched bike-related products. And again, on the notion of playing in more -- even more higher price points like the Thule Epos ParkSecure you see on this page, -- we've also done products for lower price points or maybe mid-price price points from a market perspective, but low from a Thule perspective. So on the next page, you can see a picture of our entry-level roof box that has been upgraded Thule Pulse 2, which has also been launched this spring to strengthen our offer within rooftop boxes and again, playing in more price points and more use cases. And then lastly, to just also comment on some products bringing innovation to the marketplace.

On the next page, we're continuing to build also several other product categories selectively, a launch we just did in April of a product called Thule Widesky, which is a bit of an innovative product in rooftop tents, which is hard gel tent, sorry, which is very easy to open and close. but also converts the temp into basically a couch or a sofa, enabling the temp to act as the bedroom, if you like, but also as a living room, so to speak. And it's also very well received by the marketplace. So in all, we're continuing to execute our agenda for growth and for efficiency. And we expect to see continued financial performance improving as a result of the actions we are taking.

And with that, I'll hand over to Toby, who will use the next page as a backdrop to give you some updates on financial aspects to consider as we talk about the second quarter.

Thank you, Mattias. Good afternoon, everybody. And maybe firstly, just a quick comment on this page. And you can see the seasonality of our business here. And basically, if you look at the history, you can see that Q2 has been the biggest quarter for us. So seasonally, this is a big quarter. There's still a couple of weeks left and a couple of weeks left in high season. So we're not yet at the end of the quarter. But what -- as Mattias says, what we see is we are in a tough market, but we do expect organic growth in a tough market. It's good to remember at the same time that Q2 in 2025.

So last year was the strongest organic growth we had in 2025. So it is a tougher bar to reach organic growth this quarter, but we do expect that. But remember, there are still a couple of weeks to go. I think also worth remembering on the net sales side here is that we've had quite some FX headwinds in recent quarters. And in Q1, for example, the negative impact of FX on sales was minus 7%. In Q2, the exchange rates have moved a little bit in our favor, you could say. So the FX headwind is still there, but it's less than it has been in recent quarters, but we expect it to be around 2% negative or actually slightly above 2% negative. So yes, that basically means that the reported growth will be lower than the organic growth. Then we have gross margin.

And as we -- as you know, we had a good gross margin development and an increased gross margin development during last year and during the last 24 months basically. And part of that was obviously the effect from the acquisition of Quad Lock, but there was also a significant step-up underlying in gross margin over recent quarters. And as we previously said, the main focus this year is on maintaining that good level of gross margin, which would be a good performance. When it comes to below gross margin to the SG&A, we have been pushing hard, as you know, on cost efficiencies and on reducing costs. In SEK, our SG&A was down significantly versus last year in Q1. So it was down by about SEK 60 million in Q1.

And the main impact, as you know, and we talked about in the Q1 report was lower development spend, which was also phased -- a phasing impact, which led to a bigger increase in Q1 -- a bigger -- sorry, decrease in Q1. We also expect SG&A to be down versus prior year for the first half, but the vast majority of that will be from Q1, where we had this big reduction of SEK 60 million. And note here that I'm comparing also to the number for prior year, which excluded the one-off cost for the restructuring in Longmont, which we had the SEK 31 million which was reported in Q2 last year, and we showed the EBIT, both including and excluding that impact. So note that I'm talking excluding that impact.

We also have had some FX impact on EBIT. It's always hard to predict FX impacts. But in Q1, we had a negative impact of approximately SEK 30 million. In Q2, we expect it to be a bit less, but still a negative impact from FX on EBIT. All right. If I just move on then to say a few words about the Middle East and the impact of the crisis, which Mattias touched on earlier as well. Just by reminder, we don't have any operations and any significant presence in, you could say, the Middle East or Gulf region. But we do expect some impact on cost for materials and freight due to primarily the increased oil and energy prices. However, so far, and we mean here Q1 and we expect Q2 to have relatively little impact.

Material costs have largely been hedged in Q1 and Q2. There is some small impact on freight costs, which has gone up due to higher energy prices, but small. But that's the impact we expect -- the small impact we expect in Q2 would be a small impact from freight. We do expect more of an impact in the second half where the hedging that we did on the material costs in Q1 and Q2 has now come to an end, and we've entered new contracts for buying materials. And particularly here, I'm talking about aluminum and plastics, but also obviously, we'll have the impact of freight costs in the second half year.

Overall, we've worked hard to mitigate the impact of these costs, and we also decided to offset some remaining impact by some price increases. Most of these will be implemented during Q3, and they're being finalized, and we'll further update in the Q2 call, which we have when we announced the Q2 result in July. And of course, the eventual impact of these energy-driven cost impacts will depend on how the development of the cost goes from here and whether they ease or not and how quickly they would ease as well. So okay, that's what I had to say on Middle East and price increases.

And finally, just to mention, we -- you might have seen that we issued a bond at the beginning of May. So we issued our first bond of SEK 1 billion under the MTN program. And that has a 3-year maturity, and we had a very good level of interest. It's diversified our funding, and we were oversubscribed 2.6x on the bond. So really good to see that even bond investors have -- yes, have a strong interest in investing in Thule and a good view of Thule credit as well. So it's good to see. So with that, yes, I think I'll finish there. And yes, I hand back to you, Mattias.

Thank you very much, Toby. And I think we'll then can -- yes, we can move to the next page, but it's time to open up for questions. So I turn to moderator to manage the Q&A session.

[Operator Instructions]

The next question comes from Daniel Schmidt from Danske Bank.

A couple of questions from me. I hope you can hear me. And maybe starting at the wrong end then, but starting with what you finished off in talking about the raw material. And clearly, raw materials spiked in March and they stayed elevated in April. But then since then, it has started to come down and basically, oil price and plastic-related prices are almost where we were at the end of February. Aluminum has come down quite a bit, and it's not that far off and then steel prices remain quite high. Are you sort of lifting prices during Q3 related to the average raw material cost that you had in Q2? Or how does that sort of correspond to the latest price development? And could it be a situation where you raised prices more than you needed basically?

Maybe I can just go first on -- I mean, on the cost side, Daniel. But we saw -- yes, costs did go up in kind of March time, in particular, when the crisis obviously started. They've been fairly stable on a higher level. And to remind, we buy some quite specialist sort of grades of aluminum and plastics. So it's not commodity pricing that you always see that translates into the prices we pay. They tend to be a bit more slow moving, you could say. But they follow the same trend basically. But we -- yes, we haven't seen -- I think we haven't seen it getting worse since the beginning of the crisis. It sort of went up and stayed there, but it won't be straight back to the levels before the crisis. I think that's clear.

And then maybe to answer your last part of your question there, Daniel, I think it's right. It's been volatile, up and then maybe down a bit. And I guess who knows the development of the next couple of weeks. But that's also part of the reason why we're still finalizing the price increases as we speak. The other reason is to make sure we're in high season, and we want to keep our teams and our customers focused on executing the plans we have and all the activations that are in. So we'll land this over the next couple of weeks and then execute it during Q3, and we can give you an update on the amounts and the path to execution when we have the call about the Q2 report.

Yes. But if I understand you correctly, given the history that you had, your aim is to sort of do a lot internally in order to mitigate and then the rest is going to be through price hikes and sort of with the end game being that you will hopefully defend the gross margin simply.

Exactly. And as I think we commented -- that's spot on. And then I think as we commented on the Q1 report, I mean, we, at the time, I think, said that we didn't expect this to be an impact on Thule as, for example, the magnitude of the tariffs last year when we had to take some pretty significant price increases then specifically to North America because although we did quite a few things to offset internally, that was too much to bear for us on the alone. So -- we are doing things now exactly to what you said, Daniel, and shifting around what we can and working with suppliers. And the rest, we will use price increases to basically keep gross margin neutral that we can.

Yes. Okay. And then my second question relates, of course, more to [ top line ]. And you mentioned in connection with the Q1 report that Q2 had started in a similar fashion as you finished Q1, alluding to maybe a slight acceleration. I'm talking fairly small numbers here, I think, versus what the average rate that you had in Q1. Now it sounds more like you're maybe holding the same pace as you did in Q1. Is that a fair statement and sort of give shed any light on what's been happening during May and June so far?

I think if we -- that's a good question, of course, and you're sort of really into the nuances here. I think if we step back, it's -- from where we sit as sort of a management team, it's not a lot of difference in the underlying trend. The sales mix is a little different in Q2 than in Q1. And we should remember that the way our business works is that we are really in high season right now. And the last 2 weeks of June, if a couple of big customers are pushing hard in the end of June or if it's rather July, that could also impact numbers a little bit on the margin.

So I think we're not seeing a big difference improvement or deterioration in market conditions, and we're seeing good results from our own actions and new product programs just as we did in Q1 -- and then I think that's sort of the level we're commenting on here. And then if that plays out exactly to a little bit higher or lower versus whatever momentum end of Q1 or Q1 in average, we'll have to wait and see until we've summarized the quarter basically.

Yes. Okay. I get you. And then just a final question on FX. And clearly, it will have a less impact on you in this quarter versus the previous quarter. Could you just remind us what the impact from FX was on EBIT level in Q1?

Yes, I can. So it was approximately SEK 30 million on EBIT level in Q1. And we expect it to be less than that in Q2. It's hard to predict FX and the quarter is not finished, but where we're sitting now, that's what we expect.

The next question comes from Adela Dashian from Jefferies.

You spoke a bit here about the regional variances in North America versus Europe and so on. But can we talk about the category mix and maybe also if you continue to see sustained recovery in the RV segment as the year progressed?

Sure. So again, Q2 is a really big quarter for us, the biggest one. And part of why that is or the big reason for why that is, is because it's bike season. So high season is bike season for [ Thule ], which means we're selling a lot of bike carriers and a lot of multisport and bike trailers and other associated bike products, child bike seats, et cetera. So that mix is a bit different than, for example, Q1 that still covers, of course, a lot of the winter season, which is more related to ski. So that's a bit different. And we, as maybe a side comment, try to also, as of last year, tailor our launches accordingly. So we have launched quite a few things around bike now in Q2. So that, I guess, is the overall comment on the sales mix for the quarter.

On the RV side, yes, we are continuing to see that the RV industry is recovering. It is a smaller share of sales in Q2 because of the reason I mentioned before, bike is bigger. And then there are some signs in the RV industry recently that is posing, I guess, a little bit of question marks for the industry with the registrations maybe not as strong as hoped in Central Europe for the last 2 months, et cetera, that we are, of course, also monitoring carefully and having a lot of close discussions with customers and others in the industry, but to plan the future ahead, and we can comment more on that when we talk in July.

But so far, we see that the industry is continuing to recover. And then maybe as a last comment to your question around RV, I'd also like to remind everybody that the growth we've been seeing in RV products, for example, in the last quarter comes also to a significant extent from new products that we have launched ourselves. So our performance is, for sure, based on market improving, but also our own actions.

Okay. I see. And then can I also ask on -- it's been a rather wet start to the summer, spring season in Europe. Has that impacted you at all? Or does it because of timing, not really since, I guess, the replenishment orders are coming in the kind of the peak summer months rather than in the early spring?

Yes. I would say that in general, I mean, weather, of course, always plays a role, but it plays a rather small role for Thule. And to your point, we work with a multitude of go-to-market models and some customers are taking things in early, some are waiting a bit. Some have larger orders intake in the beginning and others are now working more with replenishment orders. So overall, it's a little shift between sort of weeks and months. But as the quarter goes, I don't think it will have -- I don't think we will sum up Q2 and see that has a significant weather effect. So I think it can actually be ignored.

Great. Maybe lastly, Mattias, is D2C growth still outpacing wholesale or retail? And do you have any like specific numbers that we can make use of there?

Yes, we are seeing good growth in D2C, and it's really encouraging from 2 points, both that, of course, the growth is coming and it's nice for the business and for the margin profile, although maybe it's sort of a marginal mix positive effect. But the other one is we clearly see that D2C is now becoming a real muscle for us in the sense that it's an important channel to launch new products where we have D2C open in a lot more countries than we had just 2, 3 years ago, and we have a bigger consumer database that interact with us on a quite regular basis and are curious about the assortment and some of the services we provide. So it's becoming more of a strength for us. And of course, we do have some numbers, but I hope it's okay for you. We always try to comment on specific numbers when we do have the quarterly report, so we can share the exact details at that point.

The next question comes from Mats Liss from Kepler Cheuvreux.

A couple of questions. First, regarding -- I mean, you mentioned the organic growth there in Q2 and continues, I mean, and that bike season for you. And well, the question is really, is it a more sort of upgraded premium product that are getting attention? Or is it the more mature, maybe not so pricey product that you are sort of get a feel for if consumers try to trade down or if they stick to the premium products you offer?

Yes, I can start. No, I think in general, we continue to see that new products and upgraded products really do drive growth. So that -- and this year in, for example, bike as we're in Q2, we are launching products with both higher price points and more advanced features, if you like, but also lower price points for us than we've done in many years. And both are working well. Both our views and both are spec differently and both are meeting apparently a consumer need in the marketplace.

Then having said that, what I think we've tried to call out the last couple of quarters is we do continue to see the best performance in the higher price points. And I think it's probably a sign of the times that in maybe a bit tougher times, the people that do have both the wallet and sort of the passion or the interest are the ones that are continuing to spend probably to a higher extent and that we see across virtually all of our product categories that most premium end is performing the best.

Okay. Great. And then just if you could remind me about -- I mean, you implemented some efficiency cost savings measures, I think, especially in the North American market. And we have seen the impact so far, but the year-over-year impact in the second half, could you just remind me of that?

Yes. I think -- I mean, in summary, we're working hard on cost. We do expect to have some improvement in reduction in costs during the full year. We saw that in Q1. But as I mentioned, the Q1 was also -- was about SEK 60 million down in cost, and that was a big impact, which was also partly due to the phasing in development costs, which also particularly helped Q1.

Maybe I was a bit too late with North America. I mean those measures were implemented a year.

Okay. I specifically in North America, we did some measures, the closure of Longmont is not that big. So that's number one, but that was done last year in Q2.

The next question comes from Hai Huynh from UBS.

I just have one. So I believe you guided for leverage of 1.7, 1.8x. Q1 rose to north of 2x on seasonality. With the Q2, Q3, do you expect to still have 1.7, 1.8x as the year-end ambition, especially once Q2 rolls off and you have to start with a higher raw materials base. Does that change your working capital outlook and leverage outlook?

Yes, I can take that. But I mean, firstly, we haven't guided on any leverage sort of specific number. But what we have said is that we do expect to see leverage come down. And obviously, with our seasonality, Q2 is a big quarter revenue-wise. And then cash flow-wise, we have -- it's important to remember that we also pay a dividend in Q2. So actually the best cash flow quarter is actually Q3 for us. But we do expect to see over quarter 2 and mainly quarter 3 to see leverage come down.

The next question comes from Johan Eliason from SB1 Markets.

Just a follow-up. I mean, you mentioned that you expect also positive organic growth in Q2 here. How is it with Quad Lock? Are those sort of still trending around the double-digit level? Or how is that development?

Yes. Johan, I think I'll answer accordingly. I think Quad block has had a pretty consistent about 10% or for several quarters last year, north of that up to 15% growth, and it is a growing category and a growing business. And it, of course, can go a little up and down between the quarters, but we continue to see good opportunities and good growth for the Quad Lock business. And then again, we won't get into specific numbers here before the quarter has closed, and we'll do those at the Q2 call. But a long path of continued growth opportunities ahead of us and continued execution in line with our plans.

Good. And just remind me, is there any particular seasonality with Quad Lock considering its origin for Q2?

Yes. No, not so much. I'll start and then Toby, you can maybe add if you like. But I mean, from a geographical point of view, also Quad Lock sells in over 100 countries and North America and Europe is the biggest footprint. So it's impacted by the Northern Hemisphere summer, if you like. Q1 is the smallest quarter, and the others are fairly similar in terms of revenue, in terms of size. And then Toby, feel free if there's some additional color you'd like to provide.

Yes. No, I think that covers it, Mattias.

Yes. Good. And then just finally on this bond, I mean, does that imply anything on financial net in the quarter? Sometimes people pay off some early debt, et cetera, that causes a spike around events like this. Would that be the case for you also?

No, that's not the case here. And this is not that we're trying to increase our level of debt either. It's maybe worth mentioning as well. It's purely a diversification of our funding base. So we think it's good to optimize our funding base for -- to get diversification and also the lowest cost. one.

And there's no temporary sort of in Q2.

No, there's no -- I mean, we expect the financial net to be to be steady. No big difference from previous quarters.

The next question comes from Carl Deijenberg from DNB Carnegie.

So could I first ask if you could give any quantification on the magnitude of the raw material exposure that you mentioned, the plastic and aluminum. I believe you've quantified that in all the annual reports, I think roughly 15%, respectively, of the cost of goods sold. And I just wanted to understand, is that ballpark a similar exposure you're having today as well? Or has that changed over time?

I can cover that. That is the -- our exposure to aluminum as a material, yes, Carl. That's not changed.

Okay. Great. And then just also the comments you made on the anticipated price adjustments. I was just curious, have you started to see any other peers or brands starting to do hikes already on the back of this? Or is it still a little bit too early?

Small, I would say, hikes here and there, but nothing too much. I think if I would venture to guess that a lot of people are thinking similar to us right now. Let's wait a little bit and see how this plays out. Plus we're right in the middle of high season for a lot of our categories. So let's give the customers and the consumers the chance to buy things at a sort of a steady situation before we mix things up too much. So I would say overall, not a lot actually, quite little. .

Okay. And just finally, also, I wanted to ask what the latest is on tariffs. I mean that's obviously been quite dynamic with regards to news flow and Section 232, and you made quite big price adjustments last year in the U.S. on the back of this. So what is the latest there for you? Has that changed anything in the last couple of months? Or is it, let's say, steady state from a cost angle?

Yes. So I would say from -- if you look at the tariff impact we have now versus what we had, say, this time last year, it's basically at the same level, a very similar level. It's different tariffs or it's charged in different ways than it was this time last year. But the overall impact is about the same.

[Operator Instructions]

The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

Two questions from my side. First, on the U.S., in particular, you've been talking about the Xscape launch for some time. And I'm curious to hear whether you've seen any impact from that category or from the product range in Q2? Or is it too small?

Yes. Well, both actually, I would say. It's been launched at the very end of last year. And as of course -- well, not, of course, we've been really pleasing to see that it's had a good impact, really is changing things around in that little category. Having said that, of course, it is not on its own, a force of big enough to change the whole North American situation and therefore, of course, a small impact to the group. But it is a good contribution, and it is a good stepping stone for us to really change things around in the truck category where we have been not very active at all for many years. .

Okay. Good. And second one, on the gross margin. It sounds like you're sort of aiming for a stable one in 2026. But shouldn't we expect a positive mix effect if Quad Lock becomes a larger share of the group, which it sounds like it's heading towards that sort of way given that it has a completely different gross margin profile, of course.

I mean just a comment from me, there's obviously a lot of things which impact. One is product mix where there's some positives like you mentioned and some -- if RV has been growing faster than the average, which probably is on the other side. Then, of course, this material cost plays into that somewhat, Fredrik, and how we mitigate that material cost plays into that. FX plays a little bit into that as well, which has been negative recently that we've been having to take.

So yes, overall, it's a combination of all those effects, but we're we made some good progress in gross margin, I think, over more than a year now over probably 6 or 7 quarters. And I think we feel good about the level of gross margin we've achieved, and it's important that we hold on to that and holding on to that will be a good performance in this environment.

The next question comes from Mats Liss from Kepler Cheuvreux.

Just coming back to the Champion creation you're in the process of. I just wondered, I mean, is it -- I mean, it's basically organic growth to Champions? Or are these acquisitions that you potentially have to do like in the old terms of stations, something that would like to speed up the creation, I mean?

No, it's a good question. I think if we're then stepping back and I guess to your point, Mats, quite a bit away from the sort of Q2 discussion, we can see that over time, the growth and the profit that -- at has delivered over many years has come through these categories that have the same characteristics that we now call Champions and the 2 characteristics we're clear market leader, #1 in a pretty small market where we can innovate more and better than competition. That's -- and then that's really the champion characteristic. And then we draw a line at SEK 0.5 billion and say, if you're above that, you're all a champion. So we have 6 of those today, champion categories.

Our ambition is to go to 10 by 2035. And we have 3 internal sort of candidates at the moment that fit the champion criteria, but are still smaller than the SEK 0.5 billion mark. The all-terrain and running Strollers is one. The dog transportation is one and then the car seats in Europe is the third one. So we have a few. Having said that, then we have, of course, a few more things in the making to be launched over the coming few years that has the potential. And then also, we are, I would say, proactive in terms of M&A. I mean we have about 25 companies that we speak to on a regular basis, and some of those could add to a business that we have and therefore, boost the path towards a champion. Hopefully, Curli boosts the dog transportation area towards being a champion.

And some companies are big enough that -- and has the fit good enough fit that they could be stand-alone sort of acquisitions that could form a new champion like what could do in performance phone now. So -- but we did change -- having said all that, M&A then, of course, plays a role, but we did change the financial targets in November last year to specifically be around organic growth rate because we just want to emphasize and underline that the main priority for us is to drive organic growth through building out the existing champions and building up new ones. So it plays a role, but the main focus is organic.

The next question comes from Daniel Schmidt from Danske Bank.

Yes. Sorry, just a short follow-up on what you just talked about. This acquisition, although it's quite small, would that entail any sort of additional costs that you will book in Q2 related to due diligence or anything sort of anything meaningful that adds to the cost, please?

So it will add some cost in Q2, but it will be small as it's a small acquisition. But of course, there will be -- there is some costs associated. And I think good point, Daniel, we can explain that impact in the Q2 information. But it's small, but yes.

Yes. So you will probably write it out or speak about it at least in connection with the call.

Yes, yes.

The next question comes from Adela Dashian from Jefferies.

Maybe while we're on the topic of champion categories, I guess once a product or category reaches this champion status, is growth from there on going to be more price weighted? Or do you see opportunities to continue to take, I guess, market share and see continuous volume progress beyond the point of becoming a champion category?

Thanks. It's a good question. And I think the -- of course, all categories have their own little characteristics. But I think the more general point is actually that we can continue to innovate and find new use cases to build the market or drive the market, if you like. for example, we were market leader in rooftop boxes, and we could develop rear of car boxes or we were market leaders in top of the car bike carrier transportation, and we could invent rear of car bike carrier transportation and open up new segments, if you like, within the champion.

And I think that's sort of probably one of the most important points about the sort of champion status is that when we have scale enough knowledge enough capabilities in terms of development and distribution and ambassador activation and consumer awareness, et cetera, enough. Our innovation in these categories really pays off because we get a lot of return on that leverage. So innovation driven is probably the best phrase to use when it comes to how do you grow a champion. And then that could come through volume or more premium products, therefore, higher average price, if you like.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you, everybody, for joining the call and for answering -- sort of asking questions to make this interactive. Always good. I hope you have a good mid-summer for those of you in Sweden, a good weekend for the rest of you when you get there and see you at the Q2 call. Thank you.

Hello, and welcome to the Thule Interim Report Q1. My name is Ken, and I will be your moderator today.

[Operator Instructions]

I would now like to pass the conference over to Mattias Ankarberg to begin. Please go ahead.

Thank you, and welcome, everybody, to this call. I am, as usual, joined here by our CFO, Toby Lawton, and we will also, as usual, speak to a presentation that will later be available on our IR website. And following that presentation, we'll open up for questions.

So starting off with the highlights for the quarter. It's a good start to the year. For sure, it's still a challenging market in many ways, but we delivered organic growth of 4% and an improved profitability. It's nice to see that the growth is driven by our focus on building what we call the champion categories, and we see the fastest growth in the quarter in the product area Active with Kids & Dogs, where we have invested a lot during recent years and continue to fuel the growth with new products.

While the absolute number still can be improved, North America is continuing in the right direction despite the market being the most challenging in the space that we operate in. So it's nice to see a good continued trend in the right direction. And it's also nice to see that we again are recognized for outstanding product design with many new design awards in Q1 2026.

Turning to the financial overview on Page 3. We, as mentioned, have organic growth and higher profitability in the quarter. Sales amounted to just short of SEK 2.6 billion with the organic growth being up 4%, 5% in Europe, which is pretty good. And North America is flat compared to last year, which, again, is not a number to be satisfied with but it is continuing step-by-step, quarter-by-quarter to move in the right direction, which we're pleased about. Rest of the World increased organic growth 2%.

There is some quite significant currency effect in the quarter, 7 percentage point impact, which take the reported sales in SEK to minus 3% versus previous year. We had a really nice high gross margin in the first quarter last year, and we maintained that high level, which we are pleased with. And the EBIT margin is up almost 1.5 percentage points to 16.5%, driven by some organic growth, of course, but also cost efficiency. Reduced sales and admin costs in the quarter, particularly lower product development spend but also some lower admin costs. And cash flow from operations was positive in the quarter, SEK 25 million, which is an improvement versus the historical trend. And Toby will get back to some further details on all these financial metrics in a little while here further on in the presentation.

And before we get into the details, let's take just a step back and remind ourselves about the long-term trend. Thule has been a listed company for over 10 years, and we have a long track record of profitable growth. And just to set the numbers straight, we now, of course, continue that trend in Q1. And on the last 12-month basis, we have net sales of SEK 10.3 billion and an EBIT margin of 16.4%.

If we move into the performance by product area, we'll talk you through all the 4 product areas one by one. And I'd like to just quickly mention that as of this report, we now refer to these 4 as product areas and product categories is a more specific term. So -- for example, the product area, Sport & Cargo Carriers, is a collection of product categories like roof racks, cargo boxes and bike carriers, just to clarify the terminology a bit more.

And we can start with the biggest product area, Sport & Cargo Carriers, which is almost half the sales in the first quarter. Here is also a product area we have 3 so-called champion product categories, roof racks, cargo boxes and bike carriers. And as a quick reminder from the CMD in November, champion categories are categories that Thule is a clear global #1, and we have the capabilities to do what we call out-innovate competition, innovate more and better than competition and drive our own growth but they're also sizable enough to matter for the entire company. So -- but SEK 500 million or bigger. We have 6 champion categories today, a few champion candidates, and that's the #1 growth priority to grow these.

So Sport & Cargo Carriers in Q1 was flat versus last year in organic sales terms. We did see, as we always do, nice growth from -- contribution from new Thule products. And here recently, we have launched some new products in the quarter, which are at the entry price level. I mean Thule is obviously sales tilted towards the premium end but it's nice to be able to offer more consumers the option to buy into Thule. And we had a good start, both for the rooftop box Thule Pulse and the entry price bike carrier Thule VeloLite. We continue to see really nice momentum in what we call rear cargo -- rear car -- excuse me, cargo products, which we've strengthened the offer quite a bit last year. And we, just before the new year in December last year, launched the first product for many years in the pickup truck space in North America, the truck bed rack Thule Xscape and which is also off to a nice start now in the Q1 2026.

So good to see that these products are continuing to add growth to the company. We did see growth in total for the Sport & Cargo Carrier product area in Europe, but a decline in North America. That's why it's flat in total. It is still cautious retailers and consumers, but it's nice to see that we do grow in the premium end, both in Europe and in North America. What's holding the growth back in total is the mid- and lower-priced items in North America where the market is still the most challenging.

Moving on to the second product area, RV products, accounted for just over 20% of the sales in the quarter. Here's a product area where we saw some good growth in the quarter, up 8% organic, and it's now the second quarter in a row where we see growth in both the aftermarket, which we've done for quite some time but also in the OE channel. The market is recovering or improving, and we see that the OE customers or manufacturers are taking less and less production stops, which, of course, helps the growth to be balanced across both those channels. We should also say that the growth is, for sure, not just driven by a recovering market. We have continued to invest in product development also during a tougher time for RV products and also have some award-winning products, and we can see that these products contribute really well to the growth that we're seeing now in the quarter. We see a start of the year, good consumer interest still in RV camping with good attendance to consumer fairs and general high interest, and we expect the market to be gradually improving also going forward.

The third product area is our fastest-growing product area in the quarter, is Active with Kids & Dogs, which is a product area where we have also invested a lot in recent years, and it's a product area where we have what we call 3 product -- sorry, 3 champion candidates, product categories that we believe a lot in that fit the characteristics of a champion category, but are not yet big enough to classify as a champion. And we see really fast growth in all these 3 champion candidates.

In all-terrain and running strollers continues really strong, driven by our Thule Urban Glide product and some news around that product that really helps. We see continued strong trend in dog transportation, including our recently launched dog crate Thule Allax double, so the ability to safely transport 2 dogs at the same time, launched just a few months ago. And we also continue to see very good momentum in child car seats, and we see strength from our most recent launch of the high-back booster seat, Thule Palm, which came during the autumn last year. So very nice growth in all 3 champion candidates.

The soft spot in the category is multisport and bike in the product area, excuse me, is the category multisport and bike trailers, where there's still a lot of product in the market and quite a discount-driven segment. We do see nice growth in the premium end but tougher on the mid-price and the lower-price segment, just like in Sport & Cargo Carriers. So, in all, it's nice to see that these 3 champion candidates are now growing fast but also meaningful enough in size that it takes the whole Active with Kids & Dogs product area to plus 11%, and therefore, making a significant contribution to the total growth for the company in the quarter.

Lastly, the product area, Bags & Mounts grew by 6% organic in the quarter. We do see continued growth momentum in performance phone mount that came with the acquisition of Quad Lock, which continues to grow well and represents now about 2/3 of the Bags & Mounts product area. On the bag side, we are undergoing some changes. As you may remember, it's nice to see some growth in the Thule branded bags in the quarter with well-received new products. Thule Chasm gear haulers has launched and got a good reception. And the new bags and rack system for bike commuting, what we call the Thule InLock system has also had a good start. And as planned and earlier communicated, we see continued decline in the Case Logic and the OE bags, which, of course, has a drag on the overall growth for the bags business and also for the full Bags & Mounts category.

And lastly, before I hand over to Toby, we are very pleased and proud to again be recognized for our product design, having received in this quarter, 14 new product awards from Red Dot and 8 from iF Design, these 2 being the 2 main award institutes, design institutes handing out awards. I believe it's a great testament to our design team but also more generally, our brand and our full R&D team, and it's a real team effort to bring these to the market. It's also nice to see that we do get product awards and are recognized across both our existing champion categories, some of the champion candidates and also some other gems in the portfolio. So very proud and pleased that the team continue to deliver really good product and that it resonates with both consumers and also the awards.

And with that, I'll hand over to Toby to take us through some more financial details.

Thank you, Mattias. Thank you. And yes, good morning, everyone. And I'll take a bit closer look at the financials and starting with the slide financial summary. And if I start here at the top with the sales line, you can see a sales growth organically of 3.9%. Good to see us back to a good organic growth. But we also have a currency impact, of course, which is negative, which is driven by the SEK being stronger than the dollar and the euro in the prior year, and that impact is around 7% negative. So overall, sales was minus 3% when you take those 2 effects together. Gross margin is basically flat at the same level as last year, 44.8%, which is a historically high level. And this was positively impacted by price and mix and by efficiency gains but that was offset by increased material costs and tariffs, which, of course, is versus Q1 last year. Tariffs are higher as well in Q1 this year.

Then we have a good positive impact from selling and administration expenses, which are SEK 60 million lower than Q1 last year. The biggest effect here is reduced development cost but we also see a lower administration cost in quarter 1 this year than we had in quarter 1 last year. And just one thing to note here is it's a good reduction from development cost. We have said that for the whole of 2026, the full year, we expect development costs to be lower than 2025. But I would say we have a little bit extra in Q1 because of the -- basically the timing or the phasing where we've taken -- last year, we took quite a larger share of development cost in Q1. And this year, we have a little bit smaller share of the full year development cost in Q1. So that's a part of it, but it's also underlying a good reduction in development cost and administration cost.

And finally, EBIT or operating profit, we have SEK 424 million in the quarter versus SEK 401 million in the first quarter last year. This has been impacted negatively by currency as well, so approximately SEK 30 million impact of currency, which is negative. But the margin is obviously higher by 1.4 percentage points, which is good to see and is due to the selling and administration expenses, which I talked about earlier. And with that also the last 12 months, the LTM margin has also increased from -- we had 16% for the full year 2025. And now if you take the last 12 months at the end of quarter 1, we're at 16.4%.

If I go on to the next slide and just taking a step back to look at the relative shares of sales of different parts of the business and starting with the geographic regions on the left side. And here, these are the share of sales of the last 12 months compared to the full year 2025. And you can see the biggest part of the pie, the dark blue is Region Europe, which had 5% growth in the quarter and is now a slightly bigger share than of the LTM at 68%. Then we have North America, which was flat and rest of the world, which had a 2% growth and is 9% of the group's revenue.

Moving to the right-hand side where you see the product areas. Firstly, starting on the left with Active with Kids & Dogs, which Mattias talked about here, it's 11% of the revenue of the company on an LTM basis, and we had good growth here. We grew by 11% in the quarter. Then bottom left, you see RV products, where we had 8% growth, a good performance. Bags & Mounts top left, we had 6% growth, and that's 21% of the company. And then the largest share with Sport & Cargo Carriers had flat growth. And here, as Mattias presented as well, we have -- it's the new products that are driving the growth here, and it's also an area where we see growth in Europe but decline in North America.

And then on to the next slide and just showing a bit longer perspective of our EBIT and EBITDA development and in particular, comparing to the levels that we had pre-pandemic, and this is something we talked about a bit more at our CMD, which was held in November, so you can find more information there. But firstly, you can see that the EBIT margin on a -- also on an LTM basis has increased from 16% to 16.4%. So a good step in the right direction. And then above that, you see the EBITDA margin here, which when you look at the level now, we have LTM, we have 19.9%, '25, we had 19.5%. And both of those are above the level we had pre-pandemic at 19.0%.

So if you look -- I mean, if you look on this level at EBITDA level of profitability, we're actually higher than we were pre-pandemic, which is, I think, important to note. And it's basically, EBITDA, of course, takes out the effect of depreciation, which is a noncash effect, but it is particularly the depreciation, which has increased compared to the period pre-pandemic in our P&L. And this was due mainly to the significant investments that took place, particularly during the pandemic to increase manufacturing capacity in '21 and '22. So that's what's also behind the free capacity and the significant free capacity we have that we talk about sometimes as well.

And then finally, just to round off the EBIT margin financial target, of course, is 20%. We are very focused on the financial target of 20% and meeting that in the medium term. And it's good to see that we've taken a step in the right direction in the LTM as well with increasing our margin from 16% to 16.4%.

Just then to go on to the cash flow. And here, you see in the table to the left that our cash flow from operations was positive at SEK 25 million for quarter 1. And just to mention that cash flow is normally quite small or even negative in quarter 1 because of seasonality, so bear that in mind. But if you look at the graph on the bottom left, actually, it's -- you can see if you actually go back 2 years to 2024, we're actually back to a similar level than we were in 2024 Q1 when we actually also had a big help from inventory reduction at that time. So it's good to see we're back to that level, and we're still managing working capital very tightly to deliver the best cash flow we can.

Within that cash flow, we had a working capital increase of SEK 365 million, and that's mainly due to the increase in receivables, which is a seasonal effect. But of course, even with that increase in working capital, we had a positive cash flow from operations. Then we also had a CapEx in the quarter of SEK 99 million, which is mainly related to the investment in our warehouse in Poland, where we're building an automated and extended warehouse next to our main manufacturing site in Poland.

And altogether, those impacts increased our net debt by SEK 133 million, so a small increase in net debt and net debt-to-EBITDA ratio is slightly up versus the end of quarter 4 but 2.1x EBITDA, and this is something we're very focused on. It's a similar level that we've had during history but we're very focused on bringing it down. And you can see particularly from the graph that you see on the bottom left as well that we have Q2 and Q3 ahead of us, which are the strong cash flow quarters and which should really help us bring the leverage down a bit in the coming quarters.

So with that, I will hand back to Mattias.

Thank you, Toby. Just a couple of forward-looking comments from us, both regarding the market and also our own priorities. Starting on the market side, I mean, we stay at the sort of same message that we are well positioned in what continues to be still a challenging market, particularly in North America. We do have some highlights or some more positive pockets in the market and particularly just as called out in the last quarter, market conditions are improving within RV Products, which is nice to see. We have not seen any negative impact in the short term on demand from the conflict in the Middle East, which is positive. And we feel that we are well positioned moving into high season now in Q2 with an upgraded product portfolio. We have fast growth in our newest categories and Active with Kids & Dogs is summarizing that and lower cost levels. So we continue to execute that and feel good about the high season that we're now moving into.

Looking at the year and our priorities, they have not changed. These are executing the strategy that we have and the initiatives that we laid out in the Capital Markets Day in November. And remember, there are 2 main themes here. The priority #1 is around growth and it's growth through building champion product categories. It is to launch new and upgraded products to grow the existing champion categories that we have, which we know is working, new Thule products drive growth also in a tough market. And then secondly, it is to add more champions, grow the champion candidates by growing the product portfolio and also sales and marketing activities to increase distribution and awareness about these products.

We are having a turn in the bags category. We are changing the bags category, which we also spoke to at some length at the Capital Markets Day to be more focused on outdoor products and functional accessories, which we are seeing good receipt from but it is a bit of a journey. It's going to take about 2 years to get where we want to be. And then we are also, of course, supporting our nice products and product categories with a stronger sales and marketing effort, building what we call a bigger consumer audience and continuing to expand our D2C presence and scaling up the new setup and our own presence in Australia as 2 examples of that.

So priority #1, build bigger and more champion product categories. Priority # 2 is to drive what we call efficiency gains and scale effects. And there are several things that go into this, again, as outlined at the CMD in more detail. But just to highlight a few, we are with this strategy, focusing R&D spend more on the champions. We will spend more R&D and resources on the champion categories but lower in total. And we can see that, that effect is coming through now already in the first quarter of this year, supporting the EBIT margin development.

We're also taking several actions and initiatives in our supply chain, driving additional in-sourcing, continuing to build out what we call technology platforms to harmonize assortment and components in our assortment in our product categories. And not the least, continuing to implement our new warehouse in Poland that's going to go live next year and we'll have a big savings effect, cash savings of SEK 100 million with the full effect when it's fully up and running in 2028.

So that's the agenda. No change, continue to execute. And just to turn to some of the more product-oriented comments that support this growth agenda, we do have many product launches also 2026, not as many as we did in the last year or 2. But I think the bigger change is that we are now really supporting our champions with these product launches. So we continue to launch several products within all our champion categories and building out the next-generation champion categories. And just to take a couple of examples, as it's always fun to talk product and particularly Thule product. And we thought we'd bring up a few bike-related topics as we're now moving into high season, which is bike season.

So on Page 16, we have just launched in the first quarter, Thule Vero, which is a North American specific product, a premium product, a bike carrier built for transporting heavier bikes, which also comes with a tilt function and can take many types of heavy bikes. And we are continuing to find new price points and new use cases in this champion category. And in this quarter, we have launched both a lower-priced product and a higher-priced product. So starting on the entry price side, we have launched Thule VeloLite, which is the new entry-level bike carrier, very good quality, Thule quality product platform bike carrier behind the car, which is our first one bike version platform carrier, which comes at a low price point of EUR 399, at least for Thule standards.

And in the opposite side of the price range, we have upgraded our most premium bike carrier product, Thule Epos that now comes with parking sensors. So it's launched here in early April, Thule Epos ParkSecure, which comes at a premium price of EUR 1,699 for the consumer who really wants the best and are really focused on protecting their bike and transporting the bike in the safest possible way. So several launches around bike carriers.

We have continued to push also other product categories. I mentioned quickly, we have launched Thule Pulse. It's a new upgraded version of our entry-level rooftop box, which is off to a nice start. We have some other categories that are also getting a little bit of love, and we have launched a new rooftop tent called Thule Widesky just recently, which we think is a really nice innovative product in this little niche. It's a hard case hard shell rooftop tent, which comes with the Thule quality and the functionality, easy to set up, easy to close but also has a really nice bed that can double as a couch or a sofa, which is a feature really appreciated by the consumers who have bought it so far.

Lastly, we are investing in our so-called champion product categories in all -- sorry, in the Champion candidate product categories in all of all-terrains strollers, dog transportation and car seats. And now in the second quarter, we will start the rollout of the upgraded version of our car seats, which are connected, including sensors that can give the parent feedback to prevent misuse around how the child is installed in the car seats and how the car seat is managed. So we look forward to the start of that here in just a few weeks' time. So I think that gives a little bit of a flavor of the product launches that we are seeing right now in Q1 and Q2.

And with that, we will conclude the presentation part of this call and turn to operator to manage questions.

[Operator Instructions] We have our first question from Adela Dashian from Jefferies.

A couple from me. Firstly, on North America, flat development in Q1. Is there anything you can say on trading as you entered into the second quarter of the year? And also in terms of, I guess, inventory levels at this stage of the year versus last year?

Adela, so in general, Q2 for us, start of Q2 is sort of a continuation of Q1. So we see the same trends roughly. On North America specifically, we have seen an improved trend quarter-on-quarter, not that we're happy with the level of flat, of course but it is going in the right direction. And we hope that, that will be the development also for Q2.

Inventory levels, excuse me, what was the second part of your question? I mean it's -- in general, inventory levels are okay. There are some brighter spots and some darker spots, if you like. But in -- across, I would say, premium end, higher price points, there is not an inventory issue in any of our categories really. The darker tougher spots are where we play in some of the medium and lower-end price points in sport and cargo in both North America and in Europe actually and bike trailers. But on the positive side, I think the most challenging space was RV for a while, where inventory levels at dealers are gradually improving, and we see that what used to be production stops on the OE side to manage these inventory levels is now -- there are still some production stops but less and less, which is on the positive side. So the premium is okay and a few tougher spots in the lower price points and RV is the improving trend.

Okay. And then on the gross margin development, could you explain the drivers behind it being flat year-over-year?

Yes, I can [ handle that. ] So as I said, price/mix is positive. And obviously, versus Q1 last year, we are comparing to before we did the tariff-related price increase in North America. So that's one impact but also mix is positive there overall as well versus Q1 last year. So those 2 are positive. And on top of that, we do have some efficiency gains. We've been working hard to drive efficiencies as we've talked about in our factories. So that's contributing positively. But on the other side, we do have material cost is higher than it was a year ago. And part of that is we have a -- when it comes to a margin percentage and FX impact as well, which is really we see in material costs but it's negative on gross margin. And the tariffs, of course, have also come in since Q1 last year. So those 2 -- those effects, the positive and the negative, basically cancel each other out.

Okay. And then as we -- you mentioned tariffs here, there was a change to Section 232 in April. Does this have any impact on your effective tariff rates? Are you able to shed some light on what your blended rate was prior to the change?

I mean I won't go to a specific rate but I would say the changes that came in impacted particularly aluminum and steel, which we do have in our products. So basically, as of today, we don't see a big impact. It's -- obviously, it's a moving target a little bit with the tariffs. But you can say the tariff situation we have now is basically the same as we saw in the middle of last year, even though some of the numbers to different countries have been applied in different ways but the impact is similar. It's not lower.

We have our next question coming from Fredrik Ivarsson from ABG.

I hope you can hear me. First, Toby, you mentioned capacity utilization. At what level are you operating at the moment in terms of utilization maybe versus where you sort of believe that you want to be or what's an optimal level?

Yes, I can take that straight away. I mean we it's -- to quote one figure is a bit oversimplified but we basically say that we are at about 70% capacity utilization if you take kind of average across factories and product areas. So -- and we did -- I mean, the reason for that is we invested a lot of money during, like I said, '21 and '22, we increased capacity, particularly in our biggest factories in Poland. And yes, we have considerable free capacity still.

That's clear. Second question, just a clarification on what you said regarding consumer behavior. I think you said, Mattias, that you haven't really had an impact during the last couple of months on the back of the increased geopolitical turmoil. Was that correct? Did I read that statement correctly?

Yes, absolutely correct, Fredrik. We have not seen any negative impact of the Iran conflict on consumer demand. Obviously, if this continues, it will have sort of economic consequences and who knows what the follow-up will be. But so far, no negative demand impact from our end.

Okay. Good. And then if we could continue with the margin bridge discussion a little bit further down to the EBIT margin. How much of the 1.4 percentage point expansion was due to lower product development? And maybe also what kind of impact you saw from FX because that's been a headwind, I suppose?

Yes. Well, I would say we -- I mean, when you look at our SG&A, we are down SEK 60 million in Q1. And you can see how much of that comes from, yes, selling cost and how much comes from administration costs. So the biggest part comes from the selling cost and development is part of that reduction in selling cost. So -- and then we manage our costs and we have costs in different countries. We have a significant part of our SG&A in Sweden. So that means we don't get a kind of bigger positive impact from FX as we -- as you might -- as we have a kind of negative impact on sales. So it's -- there is some FX impact but it's mainly real reduction in SG&A cost.

Okay. Good. And last question before I jump into the queue. Forward-looking external headwinds from tariffs and raw material inflation when we look into the rest of the year, what should we consider here? And also if you could say anything on what you're planning in terms of potential price increases midyear like we've seen in recent time on the back of, I suppose, higher raw material prices?

So I'll take the first part, Fredrik. So I can say, I mean, I think everyone has seen, obviously, with the crisis in the Middle East that it's impacting, energy costs is impacting some material costs and for us, particularly aluminum and steel prices we see going up and energy cost impact on freight as well because it impacts the cost of freight. So we -- what I would say is we don't -- we haven't seen any impacts on that cost side in Q1 because the costs are basically locked in. We expect little impact in Q2 because we're -- yes, we're largely fixed and hedged for Q2 for those as well.

But we're monitoring. We're working hard to try and counter those effects. But obviously, depending how long this goes on for and what the impact is, it will impact -- have a bigger impact in Q3 and Q4, which is something we'll have to manage.

Yes. And to your second question about the possible or potential price increases, Fredrik, as Toby said, we are looking to counter these COGS increases that we expect in other ways as best we can. We do have 9 factories in the world. We can shift a few things around and there's some initiatives we can take. So -- but having said that, I mean, we are also committed to, if need be, protecting our margins through price increases. We are investing a lot in growth, and we want to have a healthy gross margins. We can continue to invest in product development and growth in our particular champion categories. But no decisions made on any price increases yet. And it is -- how to say this, at least from a regional perspective, not at all as dramatic effect as, for example, the tariff price increases last year. This is not at the same magnitude at the current raw material level.

So as of right now, to summarize, no price increases decided or announced, but monitoring carefully. And I think we have established that we have the pricing power if we decide to act in midyear.

We have our next question coming from Daniel Schmidt from Danske Bank.

Mattias and Toby, a couple of questions. Starting out maybe with the Champion candidates. Would you say when you look at Active with Kids that you mentioned those 3, of course, or all those 3, and they are growing rapidly, they are basically making up the entire growth, I assume because bike trailers were down.

Correct.

Yes. And you have talked about the size of the running strollers but we haven't really talked about what size sort of dog crates and car seats have reached in terms of sales. We're in year 3 now, I think, in terms of launch as we enter '26. Would you shed some light on that?

Yes, that's true. And we're trying to keep a few things, of course, from competition as well. But it is all these -- so I'll share what we can share but it's very true that all 3 of these Champion candidates are growing very nicely, high-digit, double-digit, and it doesn't start with one. So it's really nice in all of them. It took us -- I think we talked about the Capital Markets Day using the all-terrain and running strollers as a good example. And it took us sort of 10 years to come to a SEK 300 million level. And that path is also in numbers in the graph in the presentation.

But we also talked about that, firstly, dog transportation that was launched 2 years ago and then also car seats, I guess, 18 to 24 months ago, they are both developing faster versus that trend. So we are beating that development by quite a bit. So I think to summarize, you could say that taking all these 3 together, they are growing fast. They are, for sure, driving all and more of the growth in the Active with Kids & Dogs category, and that is meaningful. That's plus a percentage point to the organic growth for the company in the quarter. And it's nice to see that the combination of the growth and meaningful size now starts to matter.

Yes. That's good. And when we look at Bags & Mounts, which grew by 6% and 2/3 are made up by Quad Lock. Is it fair to assume that they stood for the growth in the quarter and the rest of the bags business was flat with the OE business and Case Logic being down and the rest being up a bit. Did they sort of cancel each other out, if you follow my drift.

Yes, that's about right. Quad Lock continues to grow nicely. And Thule bags Thule branded bags is actually up. But to your point, OE and Case Logic is down. So there's, I believe, a small positive if you look at the total bags, but it's 3 very different components, continued good trend for Quad Lock, or performance phone mounts, some growth in the Thule branded bags but still undergoing change and then a decline in the other bags. So -- you are very correct.

Okay. It's still sort of early days, of course, when it comes to this conflict in the Middle East. But clearly, sort of the world has become more uncertain. Do you see any indications of sort of a comeback to staycation, not in the magnitude that we saw 4 years ago or 5 years ago, but do you see any sort of indication from consumers or retailers talking about that?

Yes. It's a very interesting point and something that we're monitoring very carefully. There is, I would say, in summary, and then I can expand. But in summary, there's quite a bit of talk about it but no real material sort of data to support it yet. I mean the industry is talking about Lufthansa is canceling 20,000 flights and gas prices are up and what will people do? Will probably -- is there a scenario where people do a little bit more staycation or shorter trips, weekend trips, which would benefit, I think, the outdoor industry in general and probably Thule too.

So there is a bit of talk around that. I think it's not yet visible in sort of bookings or search trends to any major extent. But I also think to be -- my personal opinion, it's a little bit too early to see those trends that would be more visible when you come to close to the vacation period or summer vacations in the Northern Hemisphere. So a lot of talk but no real data to support it yet.

Okay. Good. And then maybe just a last question on SG&A in the quarter, and it was down, as you say, SEK 60 million, which is 8%. And I guess part of that is FX, of course but I also heard Toby say that most of it is sort of a real shift. Then you did mention lower admin costs. Are they -- what does that relate to? And is that temporary? Or is that a structural change to admin cost?

We're focused on, I mean, efficiency improvements, and we've implemented some steps. We talked a bit last year about the office we closed in Colorado in North America as well and some steps we've taken in North America, which contribute. So it's -- yes, it's -- yes, it's real efficiency initiatives that are driving the change in admin cost.

But it's predominantly the U.S. office closure? Or are there any other tangible things that you want to mention?

We're doing -- I would say, we're doing things across the board but I was just to cite a few of the probably the bigger ones but it's things across the board, I would say.

We have our next question coming from [ Agnieszka Vilela.]

I have one left. It looks like you are trying to enter the kind of entry-level segment more and more. Could you comment on the reception of those products? Also, what kind of growth do you expect they will contribute with and whether they will be margin neutral for you? And also, is it kind of a way to fill up the empty capacity that you have right now?

Yes. No, that's a good question. Happy to answer. So I think if you look back a couple of years, Thule has been always playing strongest in premium, mid-price and then selectively in the sort of what we call entry level, maybe it's more of a mid-price from a sort of total market point of view. And I think during R&D programs are sort of multiyear programs. And during COVID, when everything was flying, we were invested a lot in sort of premium. And we have, during the last 2 years, tried to balance the portfolio to be able to tap into to more consumer segments.

Last year, we launched some good products in mid-price, both in the rooftop boxes and in bike carriers. And this year, we are complementing that with some entry-price products we just talked to. So it's had good reception, good value for money. I would say about the same margin, no tangible -- no measurable -- no real significant difference in terms of gross margin. Of course, the product is specced lower than the higher-end product. And we are expecting some growth. It's not sort of the core Thule territory, which is still the premium end but it's a nice addition to the growth to be able to offer that consumer that may not maybe have yet the wallet to buy the premium to still tap into Thule to add some nice volume for the factories.

And also, to be frank, a little bit of a competitive moat as well because it protects our market position, if you like. We like to protect our market share and make sure we have a big moat around our champions and having a wider price range also means it's tougher for competition to try to act.

We have our next question coming from Carl Deijenberg from DNB.

So I also just had one follow-up question here, and that is just a, yes, general reflection or observation. I mean, I guess we've seen a couple of other companies in the discretionary sector talking a little bit about potential prebuys here towards the end of Q1 and going into Q2. And I heard your comments with regards that you haven't planned any price adjustment upwards but I guess it's fair to assume that at least the industry prices are on the way up. So have you seen any such behavior in -- towards the end of Q1 or entering Q2 that, that could be positively impacting the organic growth for you?

Yes. So if I understood your question right, Carl, you're wondering about price trends in the industry and if we're seeing shift up and the prebuys, yes. Exactly. So I think in terms of pricing, if we start there, we haven't really seen -- there's talks but there's no real announced increased prices, at least in our categories. On the prebuys, we haven't really seen any of that effect. Quite the opposite. I think retailers have been quite cautious to take in inventory before the high season and the sellout is moving. So not a dramatic effect and if anything, more cautious.

Our next question comes from Hai Huynh from UBS.

This is Hai here from UBS. On leverage, please, because I believe at the Q4 call, you said that you expect delevering to 1.7, 1.8x for this year. Q1 picked up to 2.1x. And I realize, yes, there's some seasonality in there but that does look a little bit high to be able to achieve that range from year-end. Do you still expect to delever this year? Or has anything changed in your assumptions given the [indiscernible] working capital dynamic?

Yes, no, I can say -- so yes, we have a leverage of 2.1, as you say, slightly below 2.1 but 2.1. You could say a lot of Thule's history, we've been between 1.5 and 2. So it's not -- I would say it's kind of level we've managed for some time. But we are focused on reducing leverage and optimizing cash flow to reduce leverage. And it's important to -- when you look at our cash flow profile, the bulk of the cash flow comes in, in Q2 and Q3. So we do expect that number to come down with that effect from Q2 and Q3.

Our next question comes from Andreas Lundberg from SEB.

Just one on the Sport & Cargo Carrier business being flat, I guess the other segments are benefiting from launches and so forth and recovery in RV and implications why this segment is lagging, so to say? And how do you view that here into the peak season?

Thanks, Andreas. No, it's a good question. I think it's for sure the biggest part. The product area accounts for almost half the sales, and we're playing in a lot more price range than maybe in some of the newer categories where we haven't built that presence yet. And the Sport & Cargo Carriers are growing in Europe but it's North America that we see the decline. And within North America, we actually see growth in the sort of premium price point in Sport & Cargo Carriers in the quarter, which is very nice to see, which is also where we have been launched North America-specific products. But on the mid and the sort of the lower-end product or price points in North America, it's a really tough market with a lot of discounting and promotions.

And here, we are not seeing the growth. So that's the negative drag that we see in Sport & Cargo Carriers here in Q1. And then, I mean, the second part of your question, what does that mean going forward? I think that comes back to the North America topic. I mean we have seen good development in -- or good growth in Europe for quite a few quarters and this quarter as well, also in Sport & Cargo and North America is step-by-step moving in the right direction.

And that will, given the size of the Sport & Cargo Carrier product area, play into the same trend. So that's the explanation for the Q1 development, and that's also the comment on the forward-looking.

On a follow-up there, you say weaker in mid-price/entry in North America. How much is that of the total category or total segment?

Yes. So it's a sizable part within Sport & Cargo Carriers, if you look at that specifically. I mean premium is still the biggest part. This is where we play the most but it is a significant part of the Sport & Cargo product area.

Our last question comes from Mats Liss from Kepler Cheuvreux.

Well, coming back to the gross margin there, just a follow-up there. I mean you see the bike-related accessories are moving along well but also the RV segment, could you say something about how those trends affect the gross margin development?

Yes, I can -- maybe I can start there. But I mean, RV, you could say -- I mean, we've had good growth in RV. So that within the whole means that the gross margin of RV is a bigger share of the total. And that's actually a bit lower gross margin than the rest of the group. So that effect on its own is actually pulls the gross margin down a bit just because RV operates at basically a bit lower gross margin, but a bit less SG&A as well. So it's kind of a bit of a different P&L profile. Yes.

To Toby's point earlier, I mean, there are also other -- and to your point, I think, with the comment around the bike growth and moving into high season, we see growth in other areas. And I think it's good to keep in mind that there's not an enormous discrepancy between gross margins across our product categories. But it's nice to see that in total, the price/mix effect is positive and efficiencies are positive, which manage or sort of support the development and offsets some of this negative impact we're seeing from materials and currency.

Okay. Great. And then a question about tariffs there. I mean, the details are moving but the 232 there in the tariffs, previously, it was sort of more related to the metal and component content, and now it's more full value products to be sort of tariff exposed. Do you have sort of any indication how that will affect you...

Yes, I tried to say -- I think -- so the change to the 232 tariffs for -- which particularly pulls out aluminum and steel from the other tariffs from the previous setup. But it's not a big change. I would say it's actually that part is not a positive change either but it's not a big change. So it's a small negative impact overall with those tariffs as they are today. And then, of course, this is a moving picture.

Thank you. I can confirm that there's no further questions.

Thank you, everybody, for joining the call. I wish you a very good day and look forward to speaking to you at the Q2 call, if not before. Thank you.

Welcome to the Thule Q1 Pre-quarter Update. [Operator Instructions]

Now I will hand the conference over to the CEO and President, Mattias Ankarberg; and CFO, Toby Lawton. Please go ahead.

Thank you very much, and welcome, everybody, to this pre-quarter call. I'm Mattias, and I'm here also with our CFO, Toby Lawton, as announced. We'll do a short presentation followed by Q&A. And in the presentation, we'll cover just where we left off in Q4. We'll give you an update of the current market situation, remind you of the priorities that we have at Thule for this year, and then I'll hand over to Toby for some color on Q1 specifics.

So starting off maybe on Page 2, just to recap where we left off in Q4. We had a quarter which was in the right direction at the end of the year. It's a challenging market for sure. But overall, a lot of things got better and better. If we're looking at Q4 specifically, we grew, well, 20% in total, excluding currency effect. But a lot of that was, of course, due to the acquisition we did just over a year ago.

Organic growth was flat, which, of course, we're happy with, but it was a clear improvement versus Q3, small growth in Europe at the organic level and still decline in North America, but also in North America, a sort of sequential improvement over the year and not the least because we've done a lot of actions in North America during 2025.

EBIT margin was up a bit in Q4. It was all of H2 despite some currency effects that were actually quite significant just for Q4 as it is a small quarter. So in the right direction for the last quarter of the year last year.

And if we step back to Page 3, the long-term trend, we could see that in total, 2025 was a year that was continued in the right direction for Thule, with profitable growth continuing yet another year. Of course, a lot impacted by -- from the acquisition of Quad Lock, but the blue bars show the sales development, a boost during COVID, but except that a pretty straight line to the Northeast and the green line is the EBIT, which has also increased versus last year and the year before. So long term, moving towards a bigger and more profitable Thule.

So maybe on the next page, going -- moving into some more current situation, we could start maybe with the market update. And by and large, it's very similar to what we talked about in Q4. Market situation hasn't changed much and the trends don't typically change that quickly for us. It is, in general, still a cautious market out there with cautious consumers and retailers, particularly so in North America.

There are clear signs during the second half of last year that the market would improve in a positive outlook. But as we talked about in Q4, the only market segment where we see that, that has already materialized to a more positive trend is within the RV market in Europe, where the market continues to recover and where we also, for the first time in 2 years, saw growth in both the aftermarket and the OE channels.

On the situation in the Middle East, we have not seen any significant short-term impact, any negative impact on consumer demand or retail behavior. Having said that, I mean, consumer sentiment research shows that consumers are concerned about not the least cost of living. And of course, if this situation would be prolonged, it could have an impact on inflation, interest levels in the general economy, which could have consequences. But so far, we have not seen any significant negative impact from the situation.

We also believe that we are entering 2026 with an upgraded version of Thule, if you like. We did a lot of things in 2025 that we feel are putting us in a better position as we go into 2026. For example, we have done the biggest upgrade of, what we call, Sport&Cargo Carriers, a product group that represents for a bit more than half of the company's total sales. And we've upgraded that more than we've ever done before in 2025 with the upgrades to both mid-price and premium products across several of those subcategories.

We're also entering 2026 with 3 quite new and fast-growing categories with Quad Lock being the largest, the acquired category, which grew 15% last year, and we believe has a lot of good runway for growth still in a category that's growing 10% a year. We are also growing quickly within both car seats and strollers, the actual kids assortments and also within dog products. Car seats and dog products are fairly new to us. We launched organically during 2024, so still small. But given the fast growth, starting to become meaningful in terms of making contribution to the total. So that's also nice as we go into 2026.

We have a bigger digital presence as we built out Thule.com, which is now a significant channel for us in terms of launching new products. And not the least, we also are lowering cost levels, working on our efficiency ahead of 2026. And we saw that cost levels in the sort of organic business through the acquisition came down already during the second half of 2025, and the plan is for that to continue, of course, in 2026. So we cannot control the market, but we are entering the 2026 with several things that we feel are working for us.

And we are focused very much on 2 big themes this year. If you followed us at the Capital Markets Day, you will remember that there are 2 main themes that are sort of the foundation of our strategy going forward. The number one, we call build bigger and more champions, which is the biggest growth priority for us. A couple of categories have contributed with 90% of the value creation historically for Thule, and we want to do more in these categories and similar categories. So we have a big launch calendar already this year, a bit less than last 2 years, but still a lot of new products coming to the market, very much focused on the existing champion categories and what we call the champion candidates. And then we are supporting that with sales and marketing efforts in both the digital channel and through other ways as well.

And the second big theme in our strategy is to drive what we call efficiency gains and scale effects, where we have a lot of initiatives underway already. And you may remember that we have initiatives already launched that will drive 2.5 percentage point increase in EBIT margin over the next 3 years. And of course, some of those kick in already in 2026 and some others will come later down the road.

So that's where we are, and that's how we're coming into the year. And then to give a little bit of a Thule flavor to this, more -- in a more practical and therefore, product way before handing over to Toby, have a quick launch at the -- look, sorry, at the launch calendar. And these are some of the products we're launching this year. And it is quite a big list of launches this year as well, although not as heavy as the last 2 years, clearly above history before that. And similarly to last year, we are trying to catch the spring and summer season this year. So a lot of these products are coming now in Q1 or in Q2.

And as you can see, there are 3 headlines here. We are building out our champions, our global #1 market positions with both bike carriers that are now on the premium plus aspect. We are coming with Thule Epos ParkSecure parking sensors for our most premium bike carrier as well as, for example, Thule VeloLite, which is the new entry level -- entry price level bike carrier for us, it's one-bike version and several other things also in the core existing champions.

We're building out the next-generation champion categories in both car seats and dog products and some more exciting things. And then we are reworking our bags category to focus more on the outdoor segment and using bags as accessories to some of our other existing products, which we also have a big belief in and which also start already in Q1.

So maybe just to quickly highlight a few before I turn to Toby. We are now in Q1 launching Thule Vero, which is a North American specific products for heavier bikes, particularly e-bike that has just kicked off, and we're excited about. We are, as mentioned, launching our first ever one-bike tilt-up platform bike carrier, which is a first price or entry-level price bike carrier, at least by our standard entry level, which means we are touching a bit lower price points than we have in a while, which is complementing a lot of the premium things we have and are doing.

We're also launching a new version of our entry-level roof box, again, allowing us to play in more price points in our core categories. And we are reworking bags. And I think a great example of this is what we're doing within bike computing, a trend that we believe a lot in and where we have a lot credibility as a brand coming with a very innovative system for bike commute bags called the Thule InLock system, which has already launched and had a really nice reception with retail so far here as spring is kicking in.

So that's where we left off in Q4. That's the market update, and that's the priority for Thule as we move into 2026 high season about now.

And before we open up for questions, I hand over to Toby for some financial color on the quarter specifically.

Thanks, Mattias. Good afternoon, everybody. And firstly, just -- I mean, just one slide to just remind everybody of the seasonality we have in Thule. So you can see here, this is the kind of the last 2 years by quarter. And you can see Q4 is the dark bar here, but you can roll forward a quarter, you can see that Q1 is a bigger quarter, but it's Q2 that is our biggest quarter. So just to put it in context.

And then, yes, I think we can move on to a few things to bear in mind, just in particular, when you're looking at the first quarter. Firstly, Mattias has already talked about the market situation and organic growth. And if you're assuming something on organic growth, bear in mind that there are also the FX situation, which is going to be a headwind as well in quarter 1. And we expect the negative effect from FX headwinds on revenue to be around 7% to 8% in quarter 1. So that's still the fact that the Swedish krona is stronger versus quarter 1 last year, to keep that in mind.

When it comes to gross margin, you'll remember we made some big step-up in gross margin last year. A big chunk of that was due to the acquisition of Quad Lock, which was in from the beginning of last year, but was a part of the step-up we made last year. And we also made some underlying improvements in gross margin last year as well. So we had a good step-up in gross margin last year.

This year, we're trying to hold gross margin and hold those gains we made last year. There are some headwinds in terms of particularly FX impacts gross margin a bit negatively and some material cost increases, but we're trying to offset those as much as possible. But just to bear in mind that it's going to be hard to completely hold gross margin, but it won't be far away. But we -- yes, we don't expect increases in gross margin. It's more the objective to hold on as much as possible.

When it comes to SG&A, we do expect SG&A, and I'm talking here in money, in SEK million. We do expect SG&A to go down versus last year. We're reducing cost versus Q1 last year. The biggest part of this is development cost, where we've also talked about, it's nothing new, but we talked about that we're reducing overall development cost in 2026 versus 2025. And we also had an early phasing of development costs last year. This year, it's still fairly early, but not as much as last year. So we will have a lower level of development cost in overall SG&A.

We have some savings also in other areas, but development cost is the larger one. So a bit lower level on SG&A in quarter 1. So put that all together with gross margin holding or close to holding on and reduced SG&A, we expect to see an improvement in EBIT margin versus Q1 last year. Nothing new, like I say, these are things we talked about before, but that's what to expect.

When we come lastly to cash flow, nothing strange either in cash flow, no one-off items. But just to remember that Q1 seasonally is where we increase working capital because it's ahead of the season and we're increasing inventory and customer receivables because we're supplying ahead of the season to our customers. So bear that in mind as well.

So I think that's all for me, and I'll hand back to Mattias.

Thank you, Toby. And I think I'll pass it on and hand to operator to manage questions, please.

[Operator Instructions] The next question comes from Hai Huynh from UBS.

It's Hai from UBS. My first one is around the Q1 current trading so far. How would you describe demand through the first quarter given that you saw an improving exit rate towards the end of Q4?

And my second question is on the -- more of the cost side for the recent disruption in oil price increase. Could you give us an idea of your exposure in terms of plastics, which is oil derivatives, for example. How are you protected in terms of contracts and hedging? And where do you see the impact coming through in Q1?

Yes, absolutely. I'll start with the demand question and then pass over to Toby to the cost update. Yes, you're right, we did see an improvement in Q4 versus earlier quarter and to your point, also better towards the end of the quarter. And we are here to grow, and we want to get to the target of 7% in midterm, as we've said, and we think it's going to be a gradual improvement to get there. I think the market is, as we talked about, starting with that side, better within RV in Europe. But besides that, it is still cautious and out there.

But I think some of the things that we have done are gradually also helping the development. For example, I mean we talked about that North America has been really the weaker geography for us in '25, and we have now started to address that in spring last year with, for example, North American bike carriers, and we came with a pickup truck product here just in December '25, which now we have for the first quarter ever. So we did see a gradual improvement during the quarter, and we want to continue to see a gradual improvement towards our target going forward and see growth.

Thanks, Mattias. And I can come back, on the cost side, basically, I can say -- so for Q1, we see limited effect -- limited impact from, if you like, the current situation with the oil price and the Middle East and so on. We are -- we've secured volumes and hedged prices for our main raw materials in -- basically in Q1 and Q2 and a bit of Q3. So we -- through the kind of busy part of the season, we are relatively low level of impact. But of course, going forward, we'll have to decide how we go forward depending on how things play out from here. But you can say in -- certainly in Q1, very, very little impact.

The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

Can we turn to Quad Lock for a second. I appreciate that it's been part of the group for more than a year, and you might not share all the details you did last year. But at least for me, the margin in Q4 was surprisingly strong. And I wonder if you could help us to think about the phasing of the margin into Q1. And what sort of drivers to bear in mind?

Yes. No, I mean, Quad Lock had a good margin in Q4. And Quad Lock had a good sales performance with Black Week in Q4, which also drove revenue and drove a good margin performance. Then it's important to remember, Q1 for Quad Lock is the smallest quarter. So that was the same last year as well, so that impacts profitability. But given the Quad Lock has now been in the group for more than a year, it's just like any other part of the group, we won't report Quad Lock performance separately going forward, but Quad Lock continues to grow and perform.

Okay. Fair enough. And then maybe turning to RV. You mentioned the RV market, Mattias, you grew both channels in Q4. And we hear some cautiously optimistic wordings from the manufacturers in Europe as of now. So how do we think about the channels in Q1, please?

Yes. No, I can add a little bit of color there, I think, Toby, feel free to add as well. But I think exactly to your point, Fredrik, maybe just to set the theme for everybody, RV is about 15% of Thule sales, and it's almost entirely European business for us, which I think is a good reminder for everybody. I think the market segments could be a bit different across geographies within the RV world as we speak. But for us, it's in Europe. We sell about 50% of our sales to OEs, to vehicle manufacturers and about 50% to dealers or aftermarket.

And if we look back at the last couple of years, 2 years or so, it's actually been pretty good interest on the consumer side with vehicle registrations, fair visits and aftermarket sales has not been too bad, quite discount driven, but there's been a lot of vehicles post-COVID and maybe even some false starts in terms of when people thought that demand would pick up. So there's been too much volume on the parking lots to say the least, which has led OEs to take production downtime for, well, what is it, at least 4 quarters, maybe more last year.

And I think Q4 was the first quarter in 2 years where we saw an increase in both the aftermarket channel and in the OE channel. And the OE growth was due to the fact that there are fewer production stops now. So there is still not all the OEs are running at sort of typical or high capacity in our view, but better. And we expect that to continue also in 2026. So there should be better OE volumes coming out of the market, which means better Thule sales to OE within RV in Europe in Q1 and hopefully going forward also as well and continued growth in the aftermarket channel as well.

Great. And last one from my side. You mentioned of the racks for the pickup trucks in the U.S. Is that going to add sort of meaningful incremental growth? Or is it too small as of now?

So I guess I should qualify that for the U.S. is about 20% of the total Thule sales. And of course, today, I mean, racks is a small part of that. But it's an area where we haven't launched any new products for 10 years, I believe, maybe even a little longer. So it's -- and we know that about 25% of all Thule North American consumers drive pickup trucks. So it's a sizable opportunity for us.

It hopefully moves the needle a bit for the U.S. numbers, but since the U.S. is only 1/5 of the total Thule, it won't have sort of a significant impact for the total in the first quarter. But we believe that with this strategy of not just having global product portfolio, but also regional and in this case, North American specific, where there are significant pockets to go after like North American pickup trucks, we can, over time, build up a significant sales. And it's nice to see that it's starting to move the right direction immediately after we launch the product.

The next question comes from Agnieszka Vilela from Nordea.

I have a couple of questions. Maybe starting with pricing. Can you quantify the price increases that you implemented in 2026? Also, do you plan to raise the prices further to compensate for the raw material impact? And maybe if you have seen any reaction from the customers so far on your price increases?

Yes, I think. So we have increased prices the way Thule typically does. As of Jan 1, low single digit between 1% and 2%, depending a little bit of market and product, of course, and variances, but not a lot. On top of that, we have new products, of course, that some of which some have higher price points like the bike barrier with parking sensors or some actually lower price points, which we threw into the mix now. But on the sort of comparable products, it's 1% to 2% price increase for 2026. And that has been the Thule history largely of having low single-digit price increases. There are 2 major exceptions over the last decade, I would say. One was during COVID and the other one was in North America, specifically in last year in June to compensate for the tariffs that we could not compensate in other ways.

So I think we have not as of yet planned to do any new price increases to compensate for anything related to oil prices or anything similar. So having said that, I think it's clear that with this strategy of having a product categories where we are clear global #1 and own manufacturing, we do have pricing power. And we do know that even if we raise prices, we still sell really well in premium, but we would prefer to play with more price points now and to, of course, go after volume if we can. So modest price increases coming into the year, nothing else planned, but we still have the option to act differently if we would come to that situation.

Understood. And then is it fair to assume that you should return to organic growth already in Q1 with having this kind of price increases now with you and talking about the new product launches probably supporting volumes, what do you think?

I'm not sure I heard exactly, but I think it was on the -- the question was around organic growth in Q1, I think of course...

Yes.

Yes, we never really give any guidance in that sense. But I think our commentary has been that we did see quarter-on-quarter improvement last year and also ending the quarter better than we started. And we have been, I think, clear that we think we can get to 7% organic growth in the midterm, which is 2 to 4 years, and we should see a gradual improvement towards that. So yes, we expect from 2026 that this will be organic growth and EBIT margin improvement. And then, of course, we never know what's going to happen in the market, wars happen on short notice and other shocks that happen. But right now, we don't see any other direction than what we have communicated earlier.

Great. Great. And then last question really for me on the entry-level products. Can you tell us like how you think about profitability level for those products? And also if you see any risk of cannibalizing your own premium products?

Yes, absolutely. Good questions, both. So let's see, first one was around profitability. Profitability is largely similar across the different product segments. We might make a little bit more on the very premium things, but it's not a very big difference, actually small because the products are also spec differently, and we become increasingly good in these, by our standards, big categories to use the same components and same manufacturing lines, et cetera, so we can get scale effects from just adding more products. So profitability is similar across the portfolio.

There is, for sure, a little bit of risk of cannibalization and pricing is an art and the science, and it's important that we develop products with different specifications that we can clearly argue versus the consumer that there are different use cases and you should be able to pay a premium if you go from sort of entry to mid or from mid to premium. But I think another way to look at it is in the premium segments, Thule typically has very little competition. We are fortunate to be making some of the best products that sets us apart. But on these lower price points, there is competition. So if we are not potentially cannibalizing ourselves, someone else might do it. So it's -- these lower price points are both playing a bit of offense to get some volume, but also playing a bit of defense to make sure that we sort of plug some holes in the market for us. It has also the nice benefit of -- in terms of pricing that we have more products to play with when it comes to price positions if we need to take actions on pricing going forward.

The next question comes from Adela Dashian from Jefferies.

I just had a quick question regarding if you could shed some light on what the normalized contribution of RVs are if you exclude the weakness and the pandemic buildup of bike in Q1?

You were breaking up a bit. Could you repeat the question, please?

Just what the normalized contribution of the RV segment should be in the quarter, if you exclude all the weakness and also the pandemic type of bike products?

Right. I think RV has been -- how to put a normalized, this is a long time ago. But Toby, maybe you want to...

I would say -- I mean, in share of revenue of the group, I don't have Q1 last year in front of me, Adela. But I mean, that it's -- you could say RV share of sales for the group should be similar to what it was in the first quarter last year. No big change.

Okay. Okay. And then maybe secondly, on just, I guess, I understand, obviously, that you don't have a direct impact to what's happening in the Middle East. But at the same time, have you started to see maybe in the more recent weeks and now I'm pointing more towards Q2 that your customers are starting to behave differently? Or is there truly stable demand patterns?

Well, I guess, the facts so far show that there is no weakness in demand from either the direct channels that we have to consumers or the customers that we are talking to. But -- so that's sort of where we are in terms of just hard facts. I mean having said that, of course, everybody that we're talking to that are important retailers and wholesale partners out there is monitoring the situation carefully. I mean, if this would continue, of course, there could be disruptions to supply chains. There could be cost increases and there could be, which I think is probably the bigger point for us in that case, impact on the consumer demand because of economic reasons. So, so far, no. But of course, we have a lot of respect for the consequence that it could have and so does our partners.

The next question comes from Mats Liss from Kepler Cheuvreux.

Just a follow-up there. I guess, it's -- I mean, things have happened quite quickly here in the Middle East. And I mean, the lead times are maybe a bit short for you. But do you see a risk there that retailers and so on have built inventories now? And well, there is a risk that they won't be able to get demand they like from consumers? Or is there another thing that could maybe help demand that customers -- well, consumers prefer domestic holidays and more like during the pandemic maybe. I mean there are a lot of question marks there. But could you say something about that?

Yes, absolutely. We'll try to comment on all of those points. And then please remind me if forget something. But I think, first of all, in terms of retailer sort of inventory levels, we haven't seen much change. I mean the general direction for the last more than a year, maybe 2 is that retailers hold less inventory, more cautious on inventory, working capital costs money. And we continue to deliver smaller quantities, more frequent deliveries, but that's not new. That's been going on for, well, I'd say, almost 2 years now, maybe more actually. So that continues.

I think in terms of deliveries, we, Thule, does not ship things so much through the impacted areas. We produce most of what we sell in our own factories close to our customers. Of course, we source components and some products from Asia, but that's typically around sort of the Cape more than through the geographies impacted by the war. So that's also okay for now.

There is, to your last point, a little bit of speculation in the outdoor industry and the likes that could this be a situation where people maybe do less long-distance travel, it's expensive. We've seen some flight tickets go up, some flight operators canceling a lot of destinations and routes where people spend more time close to their homes and in their home countries, which would be potentially good for companies like Thule in that case. So that's -- there is some speculations around that. But I guess, for us, it's way too early to tell. High season kicks in about now. So -- and I guess the war, of course, we will all follow and see the consequences of. But I guess that's just one of those things that we will have to monitor quickly and see how things develop.

Great. Yes. And just -- I mean, you have this upgraded offering and a lot of new products upgraded. And I mean, could you -- well, do you expect some sort of replacement demand also? I mean you had the peak sales there 4 years ago. And now you mentioned that in bike carriers, you have this new more of quality or able to carry more weight. How do you see that? Or do you need to find new customers in those segments?

A bit of both. I think on the one hand, we always see when we have great new products, particularly on the premium end that we do see those customers who always want the best. And there is usually a pretty good marketplace for used to the products that can be passed on or sold or given to somebody else in your family, maybe or a friend. So there's always that drive. And then I mean, some of what we're launching also this year is partly addressing new price points, which should be a little bit of a net add for us. So that's, I think, also good.

And then, I mean, lastly, for sure, there was a lot of product in the market after COVID and super hard to keep track on the exact volumes in the secondhand markets, but we can do it a little bit through some people we are talking to and some partners, but also to monitor, for example, things like spare parts in our own sales and have a look at that. And I think there are some pockets or some areas where there's maybe a bit too much demand still. But by and large, we should be through that situation now.

So for sort of practical purposes or sort of big picture, the consumer demand should set the scene for what is possible to sell. And we think we are coming with lots of great products that are upgrades, lots of great products that address new price points. And then let's not forget, we have new categories that we are expanding and bringing to the market, which is also net growth for us. So we feel we have quite a few things that is working and set up well for 2026 for us.

The next question comes from Daniel Schmidt from Danske Bank.

Yes. I think most of the stuff that I wanted to ask has been asked. But on -- maybe on Quad Lock, and I do appreciate and realize that that's part of now the sort of structural reporting that you have between the categories and this is Bags & Mounts. But you were playing down quite a lot any potential distribution synergies or product synergies between Quad Lock and Thule when you bought it, you haven't talked so much about it in 2025. You have now owned it for 15 months. And is there anything that you could say about that going into '26 now that you've had it in your portfolio for more than a year. And I seen that you have come with one product at least that has been a collaboration between you and the legacy business. Is there more to come there? Or what's your stance on that?

Yes. Daniel, yes, no. But I think, first of all, I think we should say that Quad Lock is a business we're really pleased with and a category that is sort of growing at 10% a year historically and which we expect to do so for quite some time. And remember, this category was pretty much invented by 2 gentlemen that founded Quad Lock 15 years ago. So quite some runway compared to some other categories that's been within the Thule business. So there's lots of growth opportunity to go after with new products and increased market penetration sort of for Quad Lock stand-alone.

Having said that, of course, we're happy to be boosting it a bit, if we can. And you're right, we haven't really -- that hasn't been the first priority in the first year. There's been lots of other integration activities that's gone well. We have started to develop some co-branded products, testing out the waters a bit with bags in Quad Lock with Thule branded, which we just launched one product here in -- I believe it was early March, maybe it was even February. So that's a good start, and you will, for sure, see more of that.

And I think then the other big opportunity to boost the Quad Lock business is -- I mean Quad Lock comes from a D2C situation. But of course, there are retailers, bricks-and-mortar retailers that some that are sell a product, but more that could sell a product around the world. And here, Thule has some really strong partnerships over many years. And we have, for sure, been working on that in 2025 to open some doors and have some good discussions with what we believe are some of the best retail partners, both in Europe and North America to bring Quad Lock product into the physical brick-and-mortar stores. So you will see some of that in '26. I will not reveal the names as these are sort of final stages now ahead of high season, but that is something that also will support the top line for the mounts part of Thule or the Quad Lock business.

Yes. Okay. That's interesting. And there was basically nothing of that in '25 or very little. It was more sort of an integration year, and now you can look forward a bit and you will see some of those discussions being realized in sort of listings on offline retailers simply.

That's correct.

Okay. Cool. Actually, just for reference, I think you said in the Q4 reporting that RV is maybe 20% of sales normally in Q1, at least that's my recollection.

Yes. No, I think that's right, about 50% for the full year, it's around there.

[Operator Instructions] The next question comes from Johan Eliason from SB1 Markets.

Mattias and Toby, just a minor follow-up here. I believe your Polish CapEx will sort of peak in 2026. How will that pan out over the quarters in general?

Yes, Johan, yes, so our Polish CapEx, which is the CapEx in the new automated distribution center next to our biggest factory in Poland. And '26 is the biggest year, around 55% of the total CapEx -- the total CapEx is SEK 450 million, about 55% of that will come in '26. And we actually expect it to be pretty evenly spread, Johan, between the quarters. So you can -- yes, you can assume it's evenly spread.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much, everybody, for joining, and look forward to speaking to you again at the Q1 conference call, if not before. Enjoy the rest of our day.

Hello, everyone, and thank you for joining us today for Thule Group Q4 and Year-end Report 2025. My name is Sammy, and I'll be coordinating your call today. [Operator Instructions]

I'll now hand over to your host, Mattias Ankarberg, CEO and President, to begin. Please go ahead, Mattias.

Thank you very much, and welcome, everybody, to this Q4 call. I am, as always, joined by our CFO, Toby Lawton, and we'll take turns going through the presentation and then open up for Q&A. So before we get into the quarter and the details, I'd like to just take a moment to step back and look at the full year 2025. It's, of course, been an intense year and not an easy market. But in many ways, it's been a good year for Thule. And let's mention a couple of highlights.

Thule has never been bigger. We have recorded the highest sales number we've ever done in 2025 and profit increases versus previous year despite, of course, a challenging market with cautious consumers, retailers, currency headwinds and tariffs, et cetera. We have done the biggest upgrade of our Sport & Cargo Carriers product portfolio in the history of Thule. And that's important because Sport & Cargo Carriers is just over 50% of our sales, and we know that new Thule products drive growth.

We are seeing fast growth in our newest product categories, dog transportation, car seats and phone mounts, and we have had a very good first year together with the Quad Lock team.

We've added 2 new markets to thule.com, taking our D2C footprint to 20 markets live now. And our digital channel is now a meaningful channel to launch new products and categories, which is clear to us. We continue to push cost improvements in supply chain and in other areas, but clearly visible in supply chain through the record gross margin we've seen in 2025. We are pleased and proud to see continued strong recognition for product design, again, winning the ADAC test on car seats this year with our second product and a further 17 Red Dot and iF Design Awards. And we have recently clarified and set the direction very clear going forward that we are focusing on building what we call champion product categories and driving efficiency gains.

So that was the stepping back for 2025. And let's now dig into some of the details for the quarter. On Page 3, I mean, you are probably well aware that the fourth quarter is our smallest and therefore, doesn't have a big impact on the full year financials. But nonetheless, it is a quarter that's in the right direction for us with increased sales and increased profitability. Sales amounted to just over SEK 1.8 billion in reported currency, plus 20% versus previous year, excluding currency effects. We're still seeing cautious consumers and retailers in the marketplace. Organic growth was flat, 0%. Positive growth in Europe, a small positive. And negative in North America, although a bit less negative than previous quarters and particularly at the start of the year. And we also saw that organic growth number was better at the end of the quarter than when we started the quarter.

Reported sales is up 9%. And then, of course, there are big currency effects in the quarter, 10% impact on the top line. We continue, as previous quarter, to see that the growth we are seeing is driven by new Thule products and new categories, including the acquired Quad Lock business.

EBIT margin adjusted increased to 4.5%, which is a bit higher than last year. It actually in this small quarter is also impacted meaningfully by currency effects, and Toby will get back to that later in the presentation. EBIT up to SEK 83 million versus SEK 65 million last year.

So zooming out to the full year results, sales a bit over SEK 10 billion, SEK 10.5 billion, plus 14%, excluding currency effects and a small organic growth decline of 1%. Still big currency effects for the full year, although not as big as, of course, for the fourth quarter. EBIT margin is 16% for the year, 1 percentage point lower than last year. Gross margin continues to be strong, an all-time high. SG&A is coming down in H2 excluding Quad Lock. And correspondingly, the EBIT margin is increasing during the second half of the year versus previous year. Cash flow from operations continues to -- Thule continues to generate good cash flow at about SEK 1.1 billion, which is lower than last year. And then as we talked about before, the working capital pattern has now returned to sort of historical patterns, which was not fully the case last year. The Board of Directors is proposing an ordinary dividend of SEK 8.3 per share, which is the same level as previous year.

Zooming out on Page 4, 2025 is yet another year of increased sales and increased profit for Thule. This graph shows the trend since the IPO in 2014, and it's a nice continuous upward trend over time with some COVID bumps and declines, of course. Sales is also in reported SEK despite the currency effect all-time high, and EBIT increased versus previous year, taking sales to SEK 10.4 billion and EBIT to SEK 1.7 billion for the full year.

So that's the top line financials. And thought we'd turn next into the category level. We are a product company after all. So I think this adds hopefully some color to how the business is performing at the moment. And overall, as I mentioned in the beginning, the growth we're seeing is coming from new products and new categories. But let's dig into the 4 product categories that we report.

Sport & Cargo Carriers declined 4% in the quarter and 1% for the full year. We saw good growth from the bike carriers we launched during the spring in 2025. We see good momentum also in H2 of the new rear of cargo products that we have launched, for example, the Thule Arcos XL here in Q3. And we've seen a good start, although it's very recently launched, the pickup truck rack, Thule Xscape we launched in December in 2025.

For the full year, we do see growth in Europe for Sport & Cargo Carriers, but the decline is driven by a decline in North America. It is still a challenging market. We still see the best sales performance in our premium end in the higher price points. And the retailers were, as we talked about in the Q3 call, really cautious on stocking inventory of spring/summer products as the summer product ended, which impacted, for example, bike carriers inventory levels and our sales also in Q4. RV products is growing in a market that is improving. Net sales was up 10% in the fourth quarter organically and full year 4%. And for the first time in quite a few quarters now, 2 years almost, we see that sales increase also to the OE channel, i.e., directly to manufacturers, whereas the aftermarket trend has been better for a few quarters and is growing also on a full year basis in 2025. We are really pleased to see also that quite a few of the -- we have delivered quite a few new products within RV Products segment in the last 18 months, and they continue to do well and actually drive all the net growth in terms of money for us. So on top of an improving market, we do see good performance from our new RV product just launched.

And market conditions are improving step by step. And as talked about previously, the consumer interest has remained quite high over the last 2 years. The aftermarket channel has done better and better. And now we see a return to growth for us also in the OE channel, which is, of course, positive.

Turning to Active with Kids & Dogs. Net sales was up organically 6% in the quarter, down 2% for the full year. We continue to see a very nice sales momentum in our new categories. Dog transportation continues to grow really well in 2025, building on a very strong start in 2024. And the child car seats also continues with a really nice sales momentum and is now the new record holder for the best category by first full year sales as we wrap up 2025.

We also see continued momentum in all-terrain and running strollers, which is very positive. But similarly to what we talked about in Q3, we continue to see the cautious retailers, particularly cautious with inventory buildup for seasonal products impact -- sort of everything bike related, which impacts the category negatively, particularly at the start of the quarter. And just as in Q3, we see better consumer demand and wholesale demand and Thule.com continues to grow.

Bags & Mounts is a little tricky to get the numbers right here because we have the impact of the acquired Quad Lock business reported under Bags & Mounts. But the organic growth was 0% in the quarter for Bags & Mounts, was up over 100% in terms of total sales, excluding currency effects. And 0% is a clear improvement versus the full year trend, which was minus 10%. This category now is to almost 70% made up by performance phone mounts. And the Quad Lock had another really good quarter with organic growth over 15% in Q4 and about 15% for the full year as well.

The bags business or Bags & Luggage business is doing a bit better. The Thule brand is back to modest organic growth in the second half of the year, also in Q4, whereas we continue to see a decline in Case Logic and OE products in bags.

So before I hand over to Toby to talk about some more financials, I thought we would return to expand a bit on the highlights that I started out sharing and in particular, some of the highlights that are important for 2026 and going forward.

So on Page 7, let's start with the updated financial targets and our plan to reach them. And we shared this at our Capital Markets Day in November last year. But to recap, the financial targets that we have set are ambitious. We want to outperform the historic performance that Thule has delivered. We have pre-pandemic and also until the full -- during the full period, we've been a listed company, delivered organic sales of an average of 5% and our new sales target is to deliver 7% annual organic sales growth.

The other 2 targets are not changed. They are achieving an EBIT margin of 20% and the dividend payout ratio at or above 75% of net income.

We have 2 main priorities or themes to deliver on our ambitious targets. And the first one is to build bigger and more Champions and champion product categories to recap or the categories that are the core to our success and have accounted for 90% of historical sales and gross profit growth and value creation for Thule. And these are categories where we are a clear global #1 with the distance to #2 in typically in a small market or we call a pocket, a niche, where Thule is not just the market leader by numbers, but we are the leader in terms of innovation and with a clear ability to out-innovate a competitor that is innovate more and better than competition to really get payoff on our strong product development capabilities.

And the first priority in our growth plan is to grow bigger Champions, that is grow the ones we have and also add more Champions. And our ambition is to go from the current 6 to 10 by 2035. We are pleased to see that we already have 3, what we call Champion candidates in our portfolio that are doing well that we can continue to develop.

The second part of our plan to reach our financial targets is around efficiency and scale effects. And you may remember from the Capital Markets Day that our current EBIT margin is about 1.5 percentage points below the historical average, but the EBITDA margin is 1.5 percentage points higher than the historical average. So we have, during the COVID years, invested quite a lot in building a bigger infrastructure, particularly in manufacturing capacity that we now have room to grow into. So we are doing 2 things to take us to the margin target. First of all, we are taking a lot of cost actions and the actions that we already have initiated will drive EBIT margin up 2.5 percentage points by 2028.

And then secondly, we expect and have proven historically that when we get volume growth, we do get scale effects, both on gross margin, for example, increased utilization of our manufacturing capacity and on sales and admin costs.

So on that note, and on the topic of Champion product categories, it's very pleasing to just have done the biggest ever upgrade of our Sport & Cargo Carriers product portfolio. As mentioned, this category as we reported, account for just about 50% of our sales, and it includes 3 of our 6 Champions, roof boxes, roof racks and bike carriers. And we have done an upgrade in 2025, both of best sellers that we have taken to the next level with a new generation of products. We have delivered several new innovations, for example, Thule Santu, which is a cargo box combined with a bike carrier behind the car, and Thule Arcos XL just recently launched, which is a cargo box behind the car that can have capacity for skis, which is doing really well. And we've also particularly focused on North America and delivered quite a few North American-specific products that we see also really pay off. So all these actions have had a clear positive sales impact in 2025 across the geographical regions, and we are now entering 2026 with an upgraded portfolio and more news on the way.

On the topic of Champion candidates, as an example, I'd like to point out the momentum that we have in dog transportation at the moment. And you may remember, we entered this category in the beginning of '24, quickly became the best new category of first year sales in the year of 2024 with the Thule Allax, the crash-tested dog crate, driving the business and then later followed up with a dog-specific bike trailer, Thule Bexey. And we've continued to see good performance in 2025 with more products added to the portfolio, increased distribution and increased awareness. And this is a category which we think has a clear potential to be a future Champion, what we call a Champion candidate. This is a niche market or a clear pocket. There are no global players, no global brands in dog transportation. We know from our own research that many Thule consumers already own a dog, of which many own 2. And the pet market is clearly growing and pet safety is clearly a growing trend within that. So we will continue to grow dog transportation in 2026, both through more products, we will share in a minute, but also continue to extend the distribution.

We're also supporting our Champion categories and candidates with what we call better sales and marketing. We're reaching more consumers, but also presenting and selling more of what we have. And we are doing many activities to this end. But one example I'd just like to highlight because it's very recent, is that we held a Thule experience event in November in Malmo and in Hillerstorp in Sweden, where 50 of our global Thule brand ambassadors were showcasing our wider product portfolio and the launches coming up in front of a 500 people audience made up of big customers, important customers and global media.

So we're starting to see the global PR effect very early right now with positive results, but we also perhaps, at least as importantly, have really good discussions right now with some of our biggest customers about expanding the range of Thule products in those channels.

And last but not least, on a more business-oriented update, I'd like to mention something on our sustainability efforts that are paying off. It's a long-term work to meet long-term targets. And the key area for us where we're making progress is around CO2 emissions. CO2 emissions are down by almost 30% compared to the base year in 2019. That is in absolute numbers. And one of the key drivers for us to achieve this is the way we design our products and what we call eco design, where we already at the product development stage, try to think through very carefully which materials we use, reducing, for example, aluminum and steel where we can, using recycled aluminum and really designing for sustainability footprint. And one very recent example launched here just 2 months ago is the Thule Xscape bed rack system for pickup trucks, which is replacing a quite a few years old product with 60% lower emissions footprint compared to the previous version. So we are making big efforts and it's paying off and leads us on the good path towards reaching our CO2 target.

So with that a bit more business-oriented update, I'll turn over or hand over to Toby to take you through some of the more financial detail.

Thank you, Mattias, and good morning, everybody. I'll start off on a couple of minutes on the income statement. And firstly, looking at the Q4 numbers, the Q4 revenue, we were just over SEK 1.8 billion in the quarter, which, again, it is our smallest quarter of the year seasonally. So you have to bear that in mind. That was 9% higher than the same quarter last year. So the reported sales growth was 9%. Organic growth was flat. The acquisition impact on Q4 was 20% and FX was minus 10%. So we had a pretty big impact from FX just in quarter 4. So I'll come back to that.

The gross margin in the quarter increased to 44.9% versus 41.6% last year, and that increase is mainly driven by the acquisition of Quad Lock. And here, while the margin has increased versus last year and we have a good gross profit margin, it's important to bear in mind that the actual amount of gross profit is also impacted by the FX impact on revenue. So the fact that we have a 10% negative impact from FX on revenue drops through to the absolute amount of gross profit.

The adjusted EBIT in quarter 4 was SEK 83 million versus SEK 65 million in prior year. And here, there's 2 main effects. Firstly, the margin is up due to the Quad Lock acquisition, which has also the impact on the gross profit, which I mentioned earlier, but it has also improved due to lower selling and administration expenses, excluding Quad Lock, so lower cost, excluding Quad Lock. But it's negatively affected, however, from the FX impact, which I mentioned earlier, particularly on gross profit. And the FX impact in the quarter actually has an impact on EBIT margins of around 2% to 3%. So quite a big impact in the quarter. But again, it's our smallest quarter, so it shows up more in the small quarter.

When it comes to the full year, we had net sales of SEK 10.4 billion. This is versus SEK 9.5 billion prior year. So reported growth of 9%. Organic growth was minus 1.3%. Acquisition impact plus 15%. And here, the FX impact is minus 5%. So not as big as in Q4. Q4 was bigger, but still a negative FX impact on the full year as well.

Gross margin increased for the full year to 46%, so a record gross margin versus 42.7% last year, with the increase driven by the Quad Lock acquisition again, but also by price mix effects and also efficiencies in our supply chain. Adjusted EBIT for the full year is SEK 1,671 million, and this compares to SEK 1,622 million prior year. So we ended the year with an adjusted EBIT margin of 16.0%. And here, just to mention, the FX impact is smaller on the full year, but still has an impact of approximately 1% on a margin basis.

All right. If I go to the next slide and here, a few details on our investments in R&D or our development spend, which we've had in 2025. And you may remember this graph from our Capital Markets Day presentation as well in November. And here, you can see, firstly, that the development or R&D spend ended on 7.3% of sales for the full year 2025. And that, again, is also impacted by FX, the FX impact primarily on sales. And you could say without any FX impact, we would have basically been flat versus prior year in development spend at 7.0%.

As you can see from the graph here, we also increased the share of our spend on our Champion categories, which, as Mattias has talked about, those are the categories which generate 90% of the value creation or the profit growth in Thule. So it's important that we increase our spend on Champion categories. And for 2026, we are going to continue that to increase our proportion of spend on Champions, and we'll also spend less in total in 2026. And looking further forward, just we talked about this also at the Capital Markets Day, but our medium-term plan is to reduce development spend to 6% of revenue in the medium term and to spend at least 4% of revenue on the Champion categories within that development spend. So continuing to focus our spend on the Champion categories that deliver the profit growth.

Okay. If I turn to the next page on cash flow. Cash flow for the full year, we generated a cash flow from operations of SEK 1.1 billion, a bit more than SEK 1.1 billion. So we continue to have a good cash flow generation in Thule. As part of that, we reduced inventories by SEK 157 million, a good reduction in inventories. We did have a target that we talked about at the start of the year to reduce inventories by SEK 200 million, but we forward integrated in Australia in quarter 4, which did have an impact on inventories that we've put into the market in Australia as part of that forward integration. So that's had an impact in the quarter. But here, it's also important to remember that over 3 years, we've delivered an inventory reduction of SEK 1.6 billion. So a big inventory reduction over the last 3 years. Overall, working capital increased by SEK 131 million for the full year, and we're back, you could say, to our historical pattern when it comes to working capital.

Finally, on the CapEx line, you can see we had a CapEx spend for the full year of SEK 348 million, and that's primarily relating to the automation and extension of our warehouse in Poland. And we did actually bring forward a bit of that investment into quarter 4 to get ahead of the winter weather and ahead of plan. So that's going well.

The next slide, we show our leverage. And here, you can see our net-debt-to-EBITDA leverage. And leverage is important to us, and it's something we follow very closely. And we want to maintain a conservative leverage, and we do that with a leverage of 2.0 net debt to EBITDA. You can see -- historically, we've been at a level around 1.7 to 1.8 for a lot of Thule's history. We're close to that level. We're still comfortable with our leverage, but we expect to delever during 2026 and come towards that level. And just to reiterate what I said on the cash flow slide really that our quarter 4 leverage was somewhat impacted by this inventory effect that we built some inventory in Australia as a part of the forward integration and also that we pulled forward some of the Huta investment, both of which, of course, are impacts that will help the cash flow in 2026. So we'll get that effect back in 2026.

And then to the next slide, just briefly on the dividend. The Board has proposed a dividend of SEK 8.3 per share. This is the same dividend level as we had in last year, in the prior year and is also in line with our financial target, which is to distribute at least 75% of net income as a dividend.

Okay. And with that, I'll hand back to you, Mattias.

Thank you, Toby. And I'll close off the presentation part of this with some forward-looking remarks. So on Page 17, our focus forward is now quite clear. Now we're about building Champion categories and driving efficiency gains. Starting off where we are, I mean, we are still operating in a market where both consumers and retailers are cautious. It's important to note and particularly so in North America. However, there are some positive signs in the marketplace of improvements. And the clear example is within RV products where market conditions are moving in the right directions and improving.

Thule is well positioned in general, almost independent of the market with our strong brand, global market leadership in our key categories and own manufacturing in both Europe and the U.S., for example. But now we're also quite excited to enter 2026 as we have an upgraded product portfolio, not the least in Sport & Cargo Carriers. We have fast growth in our 3 newest product categories and lower cost levels. So we will continue to push the agenda at a high pace also in 2026. And to take you through some of the action points under building bigger and more Champions, we are continuing to launch quite a few new products in 2026. It is a high pace that we continue and we are focusing this on our Champion categories. So more details to follow on the next page.

We're also building and adding more Champions by both growing the product portfolio in these Champion candidates, but also growing the presence in terms of sales distribution and driving awareness. And that's across dog transportation, car seats and our all-terrain and running strollers.

We are, as we talked about at the Capital Markets Day, not pleased with the long-term performance around in bags, and we are turning that around by focusing on outdoor-related products and functional accessories. I'll show a few examples in a minute or mention a few examples. And lastly, we continue to support our Champion categories by selling more of what we have, reaching a bigger consumer audience. And for example, in addition to the Thule Experience event I mentioned, we are continuing to build out D2C also in 2026 with more markets for thule.com and building up the presence in Australia that we just established. To Toby's point earlier, we now have our own sales organization in place as of just a couple of months ago.

We're continuing to push the efficiency and scale effect points as well in 2026. We are focusing our R&D spend and will bring the total R&D cost level or spend level down in 2026, while still spending more on our Champion product categories. We're continuing to drive efficiency in our supply chain. For example, we will continue to in-source selected components where it fits our capabilities to utilize our available capacity. And we will continue to build what we call product technology platforms. For example, harmonizing components and parts of products across our product portfolio. We have come quite far within bike carriers, for example, where we have a quite wide portfolio where we can see that we can use same components or similar components for many types of bike carriers, thereby driving synergies in purchasing, in manufacturing processes, sometimes even consolidate manufacturing lines. So that's an important work that is ongoing with much more to give and will support the gross margin going forward.

And then lastly, we continue to take actions to reduce what we call the structural costs, so our setup, if you like. And we are, as you know, automating our DC in Poland for go-live in 2027, which we expect to have a significant savings of, in this case, SEK 100 million with full effect 2028. So full speed ahead on both building bigger and more Champions and driving efficiency gains.

A couple of notes on the product launches coming in 2026. We have a busy launch calendar also in 2026, although not as intense as in 2025 or 2024. But more importantly, it's really now aligned and focused on building Champions and the agenda that I just talked you through. So a couple of examples. Under the first umbrella, growing the existing Champion categories. We're addressing more use cases. We're addressing more price points, both lower and higher and more North American products. Just to mention a few, Thule Epos park secure is taking our most premium bike carrier and adding parking sensors, which we think is a sought-after feature in the market and, of course, pushes the price point up and really positions Thule with a unique premium plus offer, I would say.

We have just launched Thule Vero, new North American product for heavier bikes, and we are introducing Thule VeloLite very soon, which is an entry-level price point bike carrier. So we're doing many things there.

We continue to invest in our next-generation Champion categories. And to take just 2 examples, we are launching our first dog basket for the bike, making it easier to bring your at least smaller dogs when you are biking. And we are, during spring, introducing a new and upgraded suite of car seats of both infant and toddler seats that are connected, have sensor-based feedback that will help prevent misuse and help the parent to be more informed when the child is safely in place in the car seats, in all, continuing to push the child safety agenda as the Thule wants to do.

And then lastly, we are launching several products to turn around the bags trend, focusing our bags assortment much more on outdoor-related products and functional accessories. And we have just recently shipped what is Thule InLock to the market, which is an innovative new bike commute bag and rack solution and more products are coming just this spring.

So we are a product company, and I think it's always nice to show a little bit of product before we wrap up. So bear with me, I'll go quick. But on Page 19, Thule Vero just hit the North American retailers about now. It carries up to 80 pounds of weight. So that is heavier bikes and e-bikes. It has a tilt functionality, and it has been very well received in early introductions and by the press so far.

I mentioned Thule VeloLite, which is a great value bike carrier. It's our newest bike carrier that touches the entry-level price point if you're still looking for a safe platform rear car bike carrier and also comes in a one bike version. We're really looking forward to that.

We've done a big push on rooftop boxes recently. We introduced Thule Force in 2025, our best-selling mid-price box. We introduced a new generation Thule Motion, our best-selling premium box a little bit before that in '24. And now in '26, we are refreshing our entry-level roof box called Thule Pulse with a new generation. We're looking forward to having a fully upgraded roof box assortment as we move into 2026.

And I mentioned also quickly, Thule InLock, which we think is a really innovative bike commute bag solution, which if you are used to bike pannier, sorry, sort of shifts the system around to avoid any hardware on the bag and towards your back and puts that on the bike with a super easy slip on, slip off functionality.

So we are quite excited about the new products coming out in 2026, and we are very pleased that we are focusing our product launches on the Champions we have and the Champions we are trying to build.

So that summarizes the presentation part of this conference call, and we now ask the moderator to turn to Q&A.

[Operator Instructions] Our first question comes from Fredrik Ivarsson from ABG.

First, I'd like to drill into the margin of Quad Lock a little bit. It seems like it was very strong in Q4, if I'm not completely mistaken. And it seems like the margin here was almost as high as in Q2. And I mean, Q4 is obviously a high campaign quarter, et cetera, et cetera. So what drove the strong margin in Quad Lock? Was it gross margin? Or did you reduce costs here underlying? And then how should we think about start of Q1 and maybe for the full year, what you expect in terms of growth and then margins, I guess, et cetera, et cetera?

I think -- yes, you're right, Quad Lock had a -- we had a good quarter in Quad Lock in mobile phone mounts. And I mean, it's really driven by a strong performance during the Black Week, in particular, in November when we did very well in driving revenue. And really, when we get good growth, that drops through to good margin as well for Quad Lock. So that's what's impacted margin in the quarter. And I would say going forward, as we said from the beginning, Quad Lock is slightly accretive to Thule's overall EBIT margin, and we expect the same going forward as we've seen this year.

Okay. So OpEx was roughly flat Q-on-Q or in line with previous quarters?

You're talking Quad Lock or?

Yes, yes, yes.

No. So OpEx is impacted by sales as well. So there is -- because it's a lot of D2C business, there's quite a lot of marketing spend, which is driven also from the top line. So OpEx is not flat.

It's not flat, but of course, we get some leverage from strong sales growth.

Yes. You still get leverage, but it's not flat.

Sure. Okay. And second one on the new categories, dog transportation and child car seats, which we spoke about quite a bit in the presentation. Would you be open to share some ballpark figures on the incremental sales stemming from these 2 on an annual basis?

Fredrik, Mattias here. It's a good question. I think 2 comments. First of all, I think you can maybe get an indication as you look at our reported categories, the Active with Kids & Dogs categories where we've been quite clear that these are the categories driving the growth for us this year, while it's been more challenging in other areas.

And then secondly, we'll bring that question with us as we think about reporting going forward. It would be wrong to just sort of start throwing out numbers right now, but we'll take that into consideration for 2026.

Okay. And then on product development costs, which you also spoke about, obviously, you spent around SEK 760 million in '25, and you plan to spend a bit less in '26. So what's a good number for us to have in mind when thinking about this for the current year, please?

I think we're quite clear, Fredrik, we expect product development spend to go down in money, in absolute numbers, and that's the guidance we gave, yes. We're not going to have a specific...

Yes. That's fair. And last one before I jump into the queue. How should we think about the FX headwind on the margin as we look into the coming quarters, Q1, Q2?

Yes, I think -- obviously, it depends on what happens in FX going forward. So that's one part of it. But I think it's also worth bearing in mind that the FX movements kind of in '25, there were some quite big movements at the end of Q1 and the beginning of Q2, if I remember right. So Q1 will -- yes, if FX rates stay as they are today, Q1 will face some headwinds as well.

Right. But maybe not as strong as in Q4 given the size of the quarter?

I mean, yes, obviously, we're only 1 month into the quarter. But yes, FX have maybe eased a little bit in January, but we'll see where they go February, March. But yes, I think the other piece of it is that basically, it's probably bigger impact for Q1 than Q2, Q3 and Q4 if FX rates stay as they are today.

It's a detail, Fredrik. But for us, Q1 is also -- I mean, March is the bigger month in the quarter. And obviously, not much has changed in January versus how we ended the year in terms of impact, but we'll see as the quarter progresses.

Our next question comes from Daniel Schmidt from Danske Bank.

A couple of questions from me. And starting with -- Mattias, you mentioned in your opening remarks that organic growth numbers were better at the end of the quarter versus the first part of the quarter. And I think that also probably comes back to your comment about low restocking at the sort of previous high season, which impacted your sales at the end of Q3 into Q4 on the bike side, if I remember correctly. But when you say that, do you also mean organic growth for the legacy business because Quad Lock, of course, becomes part of the organic growth from 1st of December in your numbers?

Daniel, yes, you are right on all points. It is true what we said about the destocking effects. I mean, we had a pretty good -- we had organic growth in Q2 and the start of the summer. We really saw the D2C business continuing at the fall, but really cautious retailers. And I guess that cutoff between Q3 and Q4, we saw most of that in Q3, but a bit of that in the beginning of Q4. And when that was largely gone or we sort of passed that calendar dates where that's not meaningful anymore, we saw organic growth, both driven by Quad Lock, but also in the sort of previous or as you call it, legacy Thule business towards the end of the quarter, yes.

Good. And with that in mind, and you also, of course, mentioned that U.S. or North America has been weak, but you've seen this gradual improvement also maybe in that market, although it's probably still negative in maybe all the months of Q4. Maybe I'm wrong, but that's sort of how I'll read you. But given that trend that you sort of referred to and what you say in general when it comes to the legacy business for Q4 and the fact that, I would say probably, if I remember your wording last year that you started to see retailers in North America or in the U.S. pulling the brakes quite hard by beginning of March last year. Sort of that scenario, wouldn't it be sort of quite reasonable to expect the U.S. market to be back to growth as we enter the second half of Q1?

Yes, we would hope so. I think overall, I think it's nice to see that things are moving in the right direction if we start with the total picture first. And on the U.S. specifically, then I think there are 2 things I always try to keep separate. One is the marketplace and one is what we're doing. And I think in terms of the market, there was clearly a big halt there in beginning of March last year after the tariff announcements. To your point, that's very true.

I think on the other hand, you have seen a continued sort of decline in consumer sentiment in the U.S. throughout 2025. So if you do sort of year-on-year comparison, the underlying consumer sentiment is worse than it was a year ago, I doubt. There are signs that could pick up. And I was in the U.S. 2 weeks ago and talked to our team, of course, but also quite some customers. And I think there is now a bit of a mixed picture in terms of some being quite optimistic and others still quite cautious.

So I think in the marketplace, to summarize, I'm not sure it's going to be a plus or a minus, but more importantly, I think, is some things that we have done. And I think we have seen really nice impact of the quite a few North American specific product we have delivered in the last sort of 12, 18 months. Bike carriers in the spring. And now we've just launched Thule Xscape, which is a pickup bed rack, which we haven't done a new product for pickup trucks in many years, that's out in December. So we are having better and better traction, I think. So it's hard to tell the net effect on those 2, particularly when we're talking about a quarter or even half a quarter, but I am optimistic that we will change or turn the trend around in North America in the coming quarters.

Okay. Good. Cool. And you also talk a lot about dog crates and car seats. And I hear you when it comes to maybe breaking those numbers out as we go along into '26. But you also mentioned continued extension of distribution of dog crates in '26. Is that meaningful or sort of -- is there a lot of retailers that haven't been able to reach yet in the U.S. or maybe more importantly, in the European market?

Yes. I think with all our dog products, we are still both adding product portfolio, but also expanding distribution. Where we quickly got traction is in markets which had, I think, more of an acceptance or a consumer used to this product, the Nordics, DACH regions, where dog safety and dog in car is quite an established kind of product to use. But we have seen really good growth in the U.S., for example, in dog products in 2025. And to be really transparent, pretty much with just some online listings in thule.com because it's not really a product that we're used to buy at the retail stores. But now with that first success case in hand, we have some interesting conversations with pet retailers and some of the outdoor retailers in the U.S. So for sure, there's more to do in Southern Europe, in North America and in general.

Okay. And just maybe a dumb question, but mark -- sort of weather conditions, we don't talk a lot about that, but especially, we talk about it maybe when the season is shifting. If it's sort of a late spring or early spring and so on. But it has been very snowy, I think, especially in Europe this year. Is that having any impact on your assortment?

Yes. Well, probably we don't focus on it too much, to be honest. We try not to spend too much on sort of these short-term effects. But in general, good snow conditions means more skiing and earlier skiing and helps boxes, for example, and ski transportation. But of course, the bike season ends a bit earlier in Southern Europe, for example. So that maybe knocks a little bit of that.

But I'd probably -- and then in the U.S., where -- let's see now, we had good snow on the East Coast, but really poor snow conditions in Central and the West Coast for until, what, about maybe January or even New Year's maybe. So probably a little bit, but to be honest, I have not done the exercise to pin down if it's net positive or net negative. But if it would have been a meaningful point, we would have brought it up, of course.

Yes. And then maybe another sort of overall question. Others are talking a little bit about sort of consumers refraining from buying U.S. brands, maybe especially in Canada. I don't know how prevalent that trend is in Europe. Are you seeing any of that?

No, not really. I think we -- Thule is clearly positioned as a Swedish brand. It even says Sweden on our logo. And I think in the U.S., we are -- among the sort of Thule fans, if you like, that know us really well. There is some general awareness we are produced in the U.S.

I mean from a sort of a Yakima and all these guys, are they losing out more? And is it a competitive advantage for you in sort of Canada and parts of Europe?

Right. Thanks, Daniel. Now we do see competitors, I would say, having challenges, probably more driven by supply chain issues and not having manufacturing capacity in the U.S. with price hikes and sometimes, yes, other types of more qualitative discussions with the customers. But nothing I have picked up specifically on the branding to be honest with you.

You can say we have a good position in Canada, but it's not the biggest market. So it's -- yes, but we already have a good position and a good market share in Canada.

Our next question comes from Carl Deijenberg from DNB Carnegie.

Could I start on the organic growth development in RV products here in Q4? Obviously, a step-up relative to what you've seen in the earlier part of the year. And maybe first, if you could share a little bit the growth split what you report or what we talk about the OE side relative, let's say, the aftermarket on the growth development in Q4 would be interesting to hear about.

Yes. Carl, it's Mattias here. I can start and Toby can add. But if we step back just for clarity, I mean, the RV industry has had a challenging period. And we have -- during the last year or almost 2 years now actually, still seeing pretty good consumer demand and the aftermarket has done quite well for us, while OE has declined, particularly now in the recent quarters as OEs have taken manufacturing stops, not to push more inventory into the value chain. So we're now seeing that picture turn around a bit with continued modest growth for the full year, continuously for the aftermarket channel.

But Q4 is the quarter where OE is back to growth for the first time in almost 2 years. So the split is around 50-50 for us between OE and aftermarket, but it's a bit more OE in the low season Q4 because obviously, not a lot of consumers buy their new motor home in November, December, but the OE that are producing are producing ahead of next year's deliveries. So it's a bit higher. So in this quarter, specifically, the growth is driven by the pickup in deliveries to the OE channel.

Right. Interesting. Could I then also ask a little bit on the pricing situation in the U.S. I mean you made fairly pronounced hikes in the middle of '25. And I believe you also did some, let's say, the normal adjustments here in the beginning of this year. And I just wanted to ask a little bit now when we had a couple of months with tariffs and, let's say, maybe a new cost picture for you guys and so forth, just your view on the balance you're entering '26 with also if you consider recent raw material movements and so forth. Do you feel that we are now on a sufficient level in terms of the pricing?

Carl. Yes, we -- I mean, we did a price increase 1st of June last year, which offset basically pretty much all of the tariff impact at that time. Then there were some adjustments during the summer, and we actually have had the normal price increase from 1st of January this year, which you could say across the board is normally around 1.5%. It's slightly higher in North America because we're compensating for the final pieces of the tariffs that came through during the summer last year. But now we feel we're in -- yes, we're in a good position given where the tariff situation is today. That's all we can say, I think. And we've offset the impact, yes.

Yes, yes. And maybe on the topic as well, I mean, obviously, some raw material movements have been quite extreme here in the latter parts of Q4, I guess, maybe less so on aluminum. But yes, do you expect any sort of indirect impact from what we're seeing on other raw materials billing in or anything? I guess you don't use any copper and so forth in your production, but yes, anything from that? Or do you see that you're on.

No, we see -- for our raw materials, we use the main raw materials. We don't see any dramatic price movements basically. Like you said, we're not using copper. We're -- the main raw materials we use are basically aluminum, steel and some types of plastics, so. And it's a bit more stable on those.

Our next question comes from Agnieszka Vilela from Nordea.

I have three questions, I think. Starting with Quad Lock, obviously, strong performance in 2025, plus 15% organic growth. Can you tell us what were the main growth drivers for Quad Lock last year in terms of products and geographies? And also, what are your expectations for the growth for '26?

Mattias here. I'll start. Quad Lock had a good year, and it's had many good years. The trend has continued with us as the owner and partner. And it's really 2 sort of growth drivers that are in combination driving the total performance. One is product development, continue to launch more products, more types of mounts to fit more types of bikes, use cases, vehicles, which expands the category. And the other one is driving consumer awareness, if you like. It's still a category that Quad Lock pretty much invented and is bringing out to the world, to consumers and reaching more consumers with the D2C direct model and also getting listings with some new retailers has been an important driver of the growth.

Quad Lock has seen good growth in all geographies, but North America has been a tougher marketplace also for Quad Lock just as for the total Thule business. I think we've said a few times that we have seen historical market growth in performance phone mounts, best we can analyze an estimate of around 10%, maybe slightly above for a few years, 10% to 12%. And that's where we expect around 10% of the market will continue to develop. Of course, Quad Lock is the clear global #1. It's a Champion, and it's hard to beat the market over time and time again, but we do see Quad Lock participating both in building up that market and that 10% and in good years also have the potential to overperform.

Perfect. Well understood. Then maybe on the growth expectations for '26, Mattias, can you tell us like if you look at the new product categories and new products as well, how much can those add incrementally to your growth in '26? Is it like a number like 3% or 5%? How should we think about the contribution to sales coming from new products really?

It's, of course, I understand you asked the question, and it's a fairly relevant question. And we have a target to get to 7% organic growth. Would love to get there as soon as we can, as we talked about at the CMD in November. We've done 5% historically in a GDP market of maybe 2% to 3% growth, and we want to take that to 7%. And part of why we think we can beat historical performance is the new categories that can help us. And you may remember that we talked at Capital Markets Day that we -- to get to the 7%, we expect the same historical 5% in our sort of traditional Thule categories of Sport & Cargo and RV products, whereas the Active with Kids & Dogs and the Bags & Mounts is going to grow faster, we expect 10% to 15% that will take us to the total of 7%.

So that's the contribution we are expecting, and that's the contribution we are building for. Now -- and I know you're, of course, curious about 2026 specifically. But as we've talked about many times, we are building this long term. We see that the growth is coming, but there are some market trends that are looking more promising, but still overall cautious consumers and retailers. So when those 2 curves start pulling in the same direction, we will be at our 7%. And when exactly that timing is, I think your guess is as good as ours, but we will get there.

Understood. And then the last question for me, probably to Toby. I mean, a lot of uncertainty in the market still. And as you also talked about the growth even. But what will be the most important drivers for your profitability development in 2026? Are there any tailwinds and headwinds that you can help us to list out?

Agnieszka, I mean, I think with Thule continuing to drive growth, profitable growth has been the lever of Thule's value creation for a number of years and will continue to be for '26 as well. So that's what we're focused on investing in and delivering. Does that answer your question, Agnieszka?

If you can -- no, not really, sorry. But yes, maybe a comment. We can imagine FX still negative and raw materials you commented on. But then if the growth comes, maybe not 7%, but some growth maybe that you expect and you mentioned also price increases. So any -- and lower R&D. So if you could help us like to structure the significance of those factors maybe.

Okay. And I mean, we work to continue to drive growth. So that's number one. But we do expect to focus R&D expenses, as we said, and we've come down in absolute terms when it comes to R&D expenses. And then we're working in the medium term as well on our efficiency improvements, which we're going to deliver 2.5% impact on EBIT margin over the medium term. So that's not all going to come in '26, but we expect to track on the way to that during 2026. And then, yes, on top of that, the scale benefits that Thule can generate from growth are substantial as well. So I think if you kind of think about those things in the way you model, then, yes, you should be on the right track.

Yes. On the negative side, mainly FX then or...

Yes. I mean FX, -- I would firstly, make sure you understand also that our exposure on FX is mainly to the euro/SEK. So we're not that exposed to euro/dollar when it comes to profitability. It does impact the top line, but profitability is not affected much by the dollar. It's really the euro/SEK, which has obviously moved less than the dollar. And yes, we have seen some FX headwinds in quarter 4. And like I mentioned before, if it stays at the same level as quarter 1, we'll have some FX headwinds as well. But I'd say overall, I wouldn't -- yes, like I said before, you could say an impact for the full year '25 was around 1% EBIT margin from FX in '25, where we had some pretty big movements. So it's substantial, but it's not the biggest item when it comes to Thule's exposure and profitability, but it is a factor, absolutely.

Our next question comes from Mats Liss from Kepler Cheuvreux.

Well, just coming back to R&D spending there, you mentioned some extra electronics or whatever sensors that you have on the car seats and also on some of the other products you have. Is this an important part of the R&D spend you have currently? Or is it sort of a marginal importance? Could you say something there? And maybe also if these electronic devices could be sort of an important part in growing the Champions going forward?

Thank you for your question. It's a very nice feature that we are, I think, very early to market with, but it's not a meaningful impact on our spend. We are developing this together with partners that have really strong knowledge in this area, and now we're applying it to the Thule product.

So for the car seat example, just to give you maybe a bit more clarity, as a parent, you will be able to be informed if the car seat is installed correctly, if the buckle is tightened correctly and things like that. And you can get that information either through sound and light or in your app, Thule App. So there are some nice features that we are bringing to the market that are so far very well received by these premium retailers and some opinion leaders to push the safety agenda, but it's a very limited impact on our total R&D spend.

It is very interesting, to your point, more broadly and conceptually to start thinking about the next level of safety for products. And of course, electronics and digitization is an exciting area that we are exploring in more Champions, but nothing that is imminent or will significantly impact either top or bottom line in 2026.

Okay. Great. And then coming back to the -- you mentioned that you will -- 4% spend on the Champions. And is those 4% sort of spent on the existing Champions? Or is it sort of developing the new ones? It's a mix, I guess, but could you say something about that?

Thank you for allowing us to clarify that. The 4% we are talking about for Champions is the existing 6 champions that we have. So part of that other area is to invest in the Champion candidates that we have they want to build up. And then, of course, everything else in our product portfolio that we still want to maintain.

And you also mentioned, well, your partners there, I just heard that anyway. The Champions, could they sort of be developed in cooperation with partners also? Or is it more sort of the Thule existing organic growth structure that developed those?

Our Champions are really managed by our in-house product development team. We have almost 300 product development engineers in Hillerstorp in Sweden and satellites in several countries around the world, and we do product development in-house, which we're really proud of. And maybe I wasn't super clear when I talked about the electronic component of our future connected car seats that the electronic component, the electronics that go into that product is developed by a either a supplier or a partner.

Great. And finally, I mean, you have all these new products there. And then again, you also mentioned the cautious consumer. But do you sort of try to, well, build an inventory now in the first quarter to maybe get ahead of the demand and push forward some interest among retailers? Or is the lead times enough so you don't need to build any inventory. Could you say something there?

It's Toby here. But we -- I could say we -- I mean, we have a seasonal pattern to our inventory, number one. So we do normally build inventory ahead of the season and then reduce inventory, yes, during the season and the summer. So it's quite normal to build a bit of inventory during quarter 1. But that's just driven by the seasonality of the market really. And I don't think there are any other effects you should be looking for or thinking about.

We will be ready when the demand comes. I think we are planning accordingly. But to Toby's point, this will be in line with historical working capital movements.

Our next question comes from Johan Eliason from SB1 Markets.

Just very brief follow-ups here at the end. You talked about price hikes for '26, typically 1.5%. It was obviously more in '25, but can you gauge it a little bit? Was it 2%, 3% or what -- are we talking about as realized prices in 2025?

And then just a detail, I noticed your CapEx levels for the investments in Poland went up in the second half. How will this pan out in '26 by quarter or on a total CapEx level?

Firstly, on the price increases, Johan, we had the normal around 1.5% at the beginning of '25, but then we did have a special price increase in relation to tariffs in North America from 1st of June, and that was approximately 10%. It wasn't the same on every single product, but approximately 10% on average from 1st of June in North America. So that's the first question.

And the second question on -- we do actually give some details in the report on the expected phasing of the CapEx in Poland. So I'm just turning to the page. But if you look in the report, I think we see -- just here, we say we expect -- I mean, the total CapEx is SEK 450 million. Of that, 33% has been taken in '25. We expect most of the rest, so a big piece of the rest to come in '26, which is 56%, and then there'll be the remainder in '27, so the trail in '27. So that's the phasing expected.

And there's nothing else to focus on in the CapEx otherwise?

No, it will mainly be the Huta project in '26. Yes, that will be by far the biggest impact in '26, yes.

We currently have no further questions. I'd like to hand back to Mattias for some closing remarks.

Thank you, everybody, for joining the Q4 and full year call. Wish you a great day and look forward to talking to you again at the Q1 report. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.

Welcome to the Thule pre-quarter 4 update. [Operator Instructions] Now I will hand the conference over to the speakers, CEO and President, Mattias Ankarberg; and CFO, Toby Lawton. Please go ahead.

Thank you very much. Welcome, everybody, to this pre-quarter call. Myself and Toby will have a short presentation, and then we'll move into Q&A. As you're probably aware, the fourth quarter is clearly our smallest quarter and maybe less exciting from a financial point of view. But nevertheless, we have been busy, and we'll talk you through a bit on what's happened with our priorities, the market situation and then some quick highlights from our recent Capital Markets Day. But starting out on Page 2, just recapping where we are so far in the year.

Our most recent quarter, the third quarter, the heading was good profitability in a continued tough market. I think it captures the quarter well from a financial point of view. Sales was SEK 2.5 billion, which was up 13% in total, excluding currency effects. Organic growth was negative and reported growth was still held back quite a bit by some significant currency effects of about 5%. We do see -- continue to see cautious consumers and retailers in the third quarter which we have done all year.

Following a spring and the summer with positive organic growth, which was also visible from our Q2 results, we could also clearly see an effect at the end of the third quarter with particularly retailers being very cautious to carry inventory of seasonal products or summer products. It is after all quite some time until the chance to sell them again in spring, and that really impacted sales at the end of the third quarter quite a bit, the seasonal products. But despite the negative organic growth number, the EBIT margin increased slightly, supported by a continued increase in our gross margin, but also a decrease in SG&A, excluding the acquired Quad Lock business compared to the previous year, and that was as planned, which I'll come back to later.

Zooming out a little bit and looking at the year-to-date, we have the same growth number, excluding currency effect of 13%. Organic growth was in place, as I said, during spring and summer. So total for the year is negative 1.5% as reported growth is just over 9% and still some significant currency effects also on a full year basis. There's some clear differences between the geographical regions, which reflect also market conditions quite well, where we year-to-date Q3 is flat organic growth in Europe. North America is minus 7% and Rest of World is small for us, less than 10% and minus 2% and actually back to good growth in Q3, but a bit weaker in the first half.

And I think the comment that's worth to make is maybe on North America, where we've seen the toughest market situation, the toughest sales trend for us as well, clearly so in Q1 and then better in Q2 and Q3. And we've made quite some changes to North America, both on growth and efficiency, and we continue to see that they pay off for us. So still not where we want to be, but steps in the right direction. Overall, it's been a soft market, but the growth we have seen within the business is clearly driven by the new Thule products, which very much add to growth for the year and in new product categories, both the recently launched organic categories, dog transportation and car seats and also the acquired Quad Lock business, of course.

On a year-to-date basis, EBIT margin is 18.5%, which is down from 19.8% in the corresponding period last year. Again, a continued growth in -- or increase in gross margin, but higher costs during the first half of the year, also excluding Quad Lock as we had faced product launches more heavily towards the first half of the year. R&D costs are higher in the first half, but came down in Q3 and will come down for the second half year, which impacts the cost levels as we have communicated already ahead of the previous year.

So that's where we are from a financial point of view. If we -- before we dig into some more here and now, just step -- take a further step back on the next page. Thule has been on a journey to deliver profitable growth for many years, and this chart shows the performance since the IPO in 2014. And while it is a challenging year from many aspects, we're continuing on a last 12-month basis to build a bigger Thule with more sales and -- higher sales and a higher profit number. Trend continues.

As a quick reminder on the next page, the seasonal variations are quite significant, and quarter 4 is clearly our smallest quarter as a company. These graphs show the distribution between quarters for both sales and operating income. The graphs are from the quarterly reports. And I guess the small Q4 numbers means that sales is for sure lower, but operating income is maybe not close to 0, but very small compared to the other quarters. And that means that even small deviations, of course, can make an impact on percentage deviation in Q4, but does not at all move the needle for the full year, as just a reminder. And I guess the other reminder or -- which is also not dramatic is regarding market situation in Q4.

Some of you probably listened to us at the Capital Markets Day quite recently, where we also commented that the market situation we see in Q4 is very much in line with what we saw in Q3, so no major changes, still a challenging market, still a more challenging consumer situation in the U.S. than in Europe. We are still seeing good growth from new pool of products and new product categories, and we are in the metrics that we have still performing better than our competitors, also partly supported by having our own manufacturing footprint, both in Europe and in the U.S. So that's the update on for the financials and just in terms of market situation in Q4. I thought I'd mention just a few headlines from the recent Capital Markets Day as it is quite fresh. We had a CMD on November 20.

And the main takeaway and the main message is that we will deliver long-term value creation by focusing on organic growth through what we call the champion product categories. And if you missed that, I'll get back to that shortly and continued efficiency gains. And if you would like to dig into the CMD, there is, of course, lots of materials on our investor website available via this link. We did launch on the next page, new financial targets or set new financial targets just ahead of the CMD. And we have 3 metrics as our financial targets. One was changed, two were not. The one that was changed was the growth target, where we have now set the target for ourselves to deliver annual organic growth at or above 7%.

The EBIT margin target is unchanged and the dividend payout ratio is unchanged. And maybe just a little bit of color on the growth target. I mean, historically, we have delivered 5% on average organic growth. So the new target is slightly more ambitious or it is more ambitious than historical performance. It is also intentionally defined as organic growth to clarify that, that is our primary focus. And we have also commented that these targets are to be achieved in the midterm, which is 2 to 4 years. And happy to comment more or discuss this more on this call later, if you like. Last point I'd like to make on this page is that we also have quite some ambitious sustainability targets as a company, which are not listed here, but the sustainability targets remain, they are not changed.

So the sort of summary on the financial -- on the CMD, sorry, combining the financial targets and the content of the day is that we feel strongly we have a clear path to reach our financial targets. There is the #1 priority in our growth plan is to do what we call build bigger and more champions. And champion categories are categories where Thule is clear global #1 in an attractive, what we call pocket, a small market or a niche where -- and more importantly, where we have the ability with our strong R&D team and capabilities to out-innovate competition, driving value through product development and innovation. And having done a deep dive of historical performance, Champion product categories have accounted for 90% of both the sales and the profit growth of the company since the IPO. So clearly, these are the categories that drive the value for us. And our ambition is to go from the current 6 champion categories to 10 by 2035. So that's the first priority of our growth plan and the main theme on the growth side.

In addition to that, we will actively drive efficiency gains and benefit from scale effects. We've already initiated quite a lot of cost actions during the last two years. Top line headings being we're reducing structural costs in several ways. We will focus our development more going forward, the spend more, sorry, actually increasing spend and attention to champions and champion candidates, but reducing elsewhere and continue to drive an increased supply chain efficiency. And we also know from history and from operational performance that when Thule gets good volume growth and sales growth, we do get sales scale effects on both gross margin and on SG&A.

So the priorities for 2026 at a very high level is, of course, to continue to execute our agenda on these two themes. And maybe on the next page, an important part of that is to align our product launch calendar around these -- around the strategic priority of building champion categories and next-generation champions. So not to exhaust the full list, but we have 3 types, 3 headings for our launch calendar for '26 that I think captures the agenda well.

We will, for sure, launch several products that aim to grow our existing #1 positions or our current champion categories in several of them. I will show 1 or 2 examples in a minute. We do have 3 champion candidates that we call them already and product categories, which we believe have the characteristics and the momentum that they could become champions, and we will continue to launch product against those. And then lastly, which was also covered at CMD, we are not pleased with the total performance within our bags categories. So we are focusing that in a bit different way and changing that, and we are launching new products to support that development as well. So our product launch calendar very much aligned to -- in line with the focus on building bigger and more champion product categories. And this wouldn't be a Thule presentation unless we give you a little bit of a taste of new products.

So just 3 examples that align also well with the strategy. Actually, the first one here, Thule Xscape is a product just launched in mid-December. It is the first product in several years for pickup trucks. It's a North American product, which is called a truck bed rack, sort of the equivalent of a roof rack from a European point of view maybe, which we believe is the best product in the market for several reasons. It's easiest to install. It's fastest to install, it's easiest to adjust. And of course, it has that Thule quality, durability and functionality for the end consumer. So very nice reception so far. Early days, of course, but very, very happy to see this product off to a good start here as it's just launched a few weeks ago. The second example, which is a champion candidate then, which is in dog transportation, also just recently launched in selected markets, which is the dog crate Thule Allax that we've had good success with, now launching in a double door version.

So the dog crate that is, again, we believe, the best dog crate in the market designed to protect both dogs and people is now available in a version that can hold more dogs with a double door functionality. And then last but not least, we believe we have opportunities to expand some of our existing strongholds, #1 positions more also in price points, both up and down. We will, for example, this spring, launch an upgraded version or even higher functionality in our best bike carrier Thule Epos. This will be called Thule Epos [ Park Secure, ] which is to be noted that the product comes with parking sensors. So no more risk of putting your car in reverse and damaging your car or your garage or [indiscernible] with your fantastic bike carrier. So stay tuned.

And before we head to Q&A, I'd hand over to Toby for just some additional comments.

Thanks, Mattias. And yes, good afternoon, everybody. I'll just give a few things to bear in mind really when it comes to the Q4 result and probably those people who are modeling the numbers, just to help in that respect. Firstly, yes, a reminder that Q4 is a small quarter. So it is our smallest quarter. It's not -- the profit is small in Q4. So it's not going to move the needle or change the annual figure materially. So yes, basically, the LTM figure that we had at the end of Q3 is not going to change materially when it comes to the full year figure because it's such a small quarter. So that's just an obvious fact. But then when looking at the numbers, the top line, just to bear in mind when it comes to the top line, it's obviously impacted, firstly, by the organic growth number, whatever that is.

Secondly, it's impacted by the Quad Lock acquisition, of course. And keep in mind here that last year, we had one month of the Quad Lock acquisition in quarter 4, and that added sales of around SEK 100 million in quarter 4 last year. So this year, we'll have 3 months of Quad Lock. So yes, obviously, that needs to be scaled up from that SEK 100 million for one month last year. Thirdly, we've had FX headwinds all year, which impact top line in particular. In Q3, we had a negative 5% from FX movements on the top line. In Q4, we expect actually even a little bit more than that because the SEK has strengthened a bit versus even more during the quarter. So there will be, again, the negative impact from FX headwinds in terms of revenue in Q4.

When it comes to the gross margin, we do expect to maintain the gains to gross margins that we've made during the last particularly 5 quarters; however, don't expect the same year-on-year increase that we had in Q3. And there's a couple of reasons for that. Firstly, we already had one month of Quad Lock in Q4 last year and Quad Lock has a higher gross margin, so impacts our gross margin positively, but we already had one month of that effect in last year. And secondly, the positive impact from Quad Lock is not as big in Q4 as it is in other quarters because Quad Lock sales are -- a lot of them are made during the Black Week sales week with the discounting as well. So that impacts the Q4 Quad Lock impact. Then when it comes to fixed costs or OpEx, yes, do make sure to include the impact of Quad Lock now being in for three months rather than one month, which they were in, in 2024. And in 2024, Quad Lock had an SG&A of a fixed cost of around SEK 50 million for one month.

So obviously, expect it to be with some growth, at least 3x that or a little bit more than 3x that in 2025. So an additional amount of, yes, more than SEK 100 million in terms of OpEx. And another way to guide on fixed costs or OpEx is, I think you can also look at history. And when you look at Thule's history, the Q4 fixed costs or SG&A has historically been quite similar to the level we had in Q1. This year, we do expect the Q4 SG&A or OpEx to be slightly lower than Q1 because of the phasing of development costs and cost reduction that we also saw in Q3. So it will be a similar effect to Q3. But -- so we do expect it to be a bit less than Q1 this year, but you can still use that as a guide to the kind of level we expect in terms of OpEx in Q4.

And finally, on cash flow, as we said all year, we are targeting an inventory reduction this year of approximately SEK 200 million, which we expect to see. So that should be an effect we see in the cash flow for the full year here as well. All right. I hope that's helpful. But with that, I will hand over to Q&A.

[Operator Instructions] The next question comes from Daniel Schmidt from Danske Bank.

I hope you can hear me. Just maybe a forward-looking question a bit more. You were quite cautious, Mattias, when it came to demand in connection with the CMD and I think you repeated that today. But one thing you did say was that you saw a better market when it comes to European RV production and the biggest RV manufacturer was out a couple of days ago confirming that basically that they're actually ramping up production and expected to do so also in the coming two quarters. How is the split when it comes to your RV sales? It's 17% on a full year basis of the total group sales, but how does that divide in Q4 and Q1 as a percentage of sales for the group normally?

Yes. Maybe I can start high level and then Toby, you could add maybe some specificity to that. But yes, you're right about sort of recapping the statements, Daniel, of course. I mean we do believe -- I think there are some signs that particularly European market could be improving more in general, but it's too early to say that's happened yet. I think North America is still in a tougher spot also from a sort of outlook point of view. And I also think it's important to -- again, as we talked about, Q4 is kind of really small for us. So not maybe a great read sort of internally either.

Having said that, to your RV topic, yes, there are some positive signs. It's been a lot of inventory in the value chain at dealers and OEs have taken production stops to compensate for that. They still are, but a bit less in Q4 is our view. And we also note in our dialogues with the big players that to varying degrees, but more optimism on the outlook on the RV side. So we agree with all those statements, Daniel. And then maybe, Toby, if there is some commentary you'd like to add and maybe also some specificity to Daniel's question around the shares.

Yes, absolutely. Yes. So from a full year perspective, we have 50% of our RV business is sold through the aftermarket and 50% is sold to the manufacturers or the OEs. However, I think as you alluded to, Daniel, in the fourth quarter, the aftermarket is much smaller, yes, because it's obviously not the season. So the aftermarket is probably less -- is 1/4 or less of the total revenue in quarter 4. And I would just add to that then this year, the OE side or the manufacturer side has been very weak, while we've been helped by a good performance in the aftermarket.

So obviously, with the aftermarket being a smaller piece in Q4 is obviously yes, that's not helping. But on the other hand, the OE side has been better this Q4 than it was -- has been earlier in the year because the manufacturing stops are still there, but they're not as big as they were in Q4 last year. But we expect -- but there's still significant production stops, I think it's important to bear in mind. And going forward, yes, there is a bit -- some optimism from some of the manufacturers. I'd say the biggest one is probably the most optimistic, which you mentioned, Trigano from what we read. But that percentage then that is aftermarket versus OE does -- in Q1, it's a bit more coming from the aftermarket as they begin to sort of stock up ahead of the season...

I think I was also maybe referring to the entire exposure versus the rest of the group sales, so to speak. It's 17% on a full year basis. But is that 15% or 10% in Q1 and then 20% in Q2? Or how is that sort of divided?

Well, if you look -- I mean, just...

Normally.

Yes, I could say if you look in -- I'm just looking at Q4 last year, RV was 17% of sales. And for the full year last year, RV was 18% of sales. So it's not a big variation.

And in Q1, it maybe doesn't differ that much by quarter either, sort of maybe the same percentage?

In Q1...

We don't need to get stuck on that.

Q1 is...

Maybe it doesn't -- so at least that is something that might be moving in the right direction. You also mentioned that you will be conducting price increases by January. Have you done so?

Yes, we have done so. We have done very much in line -- in general, very much in line with sort of our historical rhythm. Full year price increases of around 1%, 1.5%, more like 1.5% this year in total, I think 1% to 2% historically to be fair, a little bit more in North America to compensate for some of the sort of additional effects or follow-on effects from the tariffs, but nothing that materially changes that, but around 1.5%.

Okay. And then just maybe a last question on costs. We -- I think you were quite clear in terms of sort of Q4 being a small month and all that. But you did have and you did make the comparison to Q1. But in that comparison, you also have a situation where the Swedish krona has strengthened quite a lot and you do have a lot of costs in Sweden, but you still have people in other currencies, so to speak. And on top of that, you were quite adamant saying that you had quite elevated PD spending in H1, especially Q1, I think. Has that been less of a difference in H2 versus H1 compared to what you thought a couple of quarters ago?

I think it's in line with what we expect, Daniel. So we do expect Q4 OpEx or SG&A to be a bit lower than Q1, which is the impact of the phasing of development spend and the impact of cost reductions, some of which is FX related and some of which is structural. But we saw that effect as well partly in Q3. So that's what I mentioned. I say historically, we've been in line with Q1. We do expect to be better this year.

Yes. But what's been added, I guess, is the shutdown of the Colorado office, which you didn't see in Q3, which you will see in Q4, right, in terms of lower cost?

That's right. But it's not -- that's not a big effect.

The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

Just one question from my side. If we could get somewhat of a proxy for Quad Lock's gross margin in Q4, I guess it's a bit lower than Q3 given Black Week and all that.

Yes. We don't really break down the actual gross margin. We give the overall operating profit impact of Quad Lock per quarter, Fredrik. But the gross margin from Quad Lock is -- I mean, as we said, it's significantly higher than the average, but it is lower in Q4 than it is in other quarters because of this significant amount of sales coming through Black Week in Q4. So it's not having the same impact as in other quarters.

Is a couple of percentage points lower than Q3, a decent guess?

I'd say a bit more than that.

Okay. And then if I could tag along to the demand discussion. Obviously, you reiterate your cautious comments, but have you seen any big swings during the quarter, especially in the U.S. given all that's happening on the geopolitical side?

No, not really, Fredrik. We see -- I mean, it's a different season as we move sort of from summer into winter. But from a market -- overall market dynamic side, we don't see a big difference. External indicators like consumer sentiment, et cetera, are a little up and down, I guess, overall, slightly down in the U.S., maybe slightly positive in Europe, but we haven't really seen any material changes overall to the market situation. There are some specific things in some geographies and categories. We spoke about RV in Europe, which is a bit more optimistic. But no sort of overall changes worth mentioning.

The next question comes from Mats Liss from Kepler.

Yes. One question here as well. Just while you mentioned the slowdown due to cautious retailers when you ended the third quarter there and trying to get rid of the seasonal product. Just to get a feel for that, did that sort of even out during the quarter? So things sort of -- yes, it was something that affected the start of the fourth quarter and later on, the seasonal products were out and you didn't sort of yes, you saw stable but in line with previous quarters organically...

I can start and then Toby add to it. But yes, it's -- the shift is really, as I think you put it, the seasonal products, which is sort of spring and summer related going out of sort of consumer demand, then retailers have a really low appetite in general to hold that stock until maybe spring comes back again. So it's not -- it's less about, of course, the quarterly cutoff point.

So that continued a little bit into October depending on where you are in the world. Autumn comes at different times in the Nordics and in Southern Europe, for example. But as we move into winter season, which for us is, of course, then more around, for example, skiing season and other activities, then the seasonal effect of these categories are -- is less. But in the beginning of the fourth quarter, we saw the same trends as we saw at the end of the third quarter from the seasonality category point of view.

Okay. Great. Yes. And maybe some small one on the Champions there. I mean you have -- you showed the different product categories. And when -- I mean, it's a long-term target that you will grow this from 6 to 10. But when do you expect to see the -- well, 7 -- appear? Is it in 2 years? Or is it more...

Yes, that's a good question, Mats. And I think we've said that to be a champion, it should be clear #1 in the product category, and it should be sort of a small and clearly defined sort of niche or market, but at least also SEK 0.5 billion in sales. And of the organic one, we have 3 that we think are good candidates internally already. One we've had for 10 years, and that's close to SEK 300 million already. So that's well on its way. And of course, from a sort of just size perspective, clearly, the one that is closest to be the next champion.

And then we have 2 smaller ones launched just, well, 1.5 years ago or so, but growing really fast. On top of that, we've also said that we also have M&A as a potential lever to add 2 champions or add champions. So that could, of course, happen sooner or later. But we -- that's kind of the state of them at the moment. And we keep working on all angles and focusing on both growing the ones we have and adding more.

The next question comes from Johan Eliason from SB1 Markets.

Can you hear me now?

Yes.

Excellent. I just had a question regarding -- you talked about the ambitions to reduce the inventory levels by some SEK 200 million. Do you have any similar sort of action programs to be working on the payables as well?

We -- I mean, the short answer is no. I mean, we work -- yes, to make sure we have a good relationship with our suppliers. And work on payables as well. But they -- you can say that the inventory was a special case where we increased inventory, particularly during the pandemic, and we've been working hard to bring that down and also changing our supply chain model to hold less inventory and to turn inventory quicker. We don't have those effects to the same extent in payables.

Okay. Because if I look at the numbers, it does look like your payables levels have changed quite significantly since from the pre-pandemic level. But is that just because of the business mix changes? Or how should I understand that?

Yes, there's nothing else driving that. So I mean, maybe we can sort of look into that offline to see exactly what you're referring to, which comparison. But yes, there's no change to the way we manage payables.

The next question comes from Agnieszka Vilela from Nordea.

I have 2 questions. Starting with Quad Lock. Looking at Q3, it delivered about mid-single-digit organic growth, but you also said that the growth was affected by comparables with a new retail customer in Q3 2024. So my question really is that comparison also affecting Q4? Or should we expect that the growth is returning to double digits? And maybe if you can also comment on the kind of black week development by Quad Lock.

Yes. Maybe I take this first. But basically, that was an effect. You're absolutely right, Agnieszka. That was an effect that impacted Q3, but it doesn't impact Q4. So we do expect Quad Lock to come back to more the year-to-date growth level in Q4. So yes, back to double digit. Then the second part of your question was on the impact of Black Week...

Black Week sales.

Yes. I think it's fair to say that Black Week sales has been -- since Quad Lock is predominantly an e-commerce player or DTC player, of course, Black Week has a larger role. And it's fair to say that, that has been in line with historical patterns as well. There's a little bit of changes to how this is managed, but very much similar to history.

Okay. Okay. Perfect. And then last question for me. You commented that the demand in Q4 is basically developing in line with what you see -- what you saw in Q3. Should we interpret it that the organic growth should be about at the same level, say, minus 4% in Q4 as well?

I think we're not kind of guiding on a specific figure, Agnieszka, but I think, yes, if you read the signals we give, the market situation is similar to Q3.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you, everybody, for joining. Wish you a great weekend, I guess, when you get there, hopefully, not too distant future soon, and then see you at the Q4 call. Take care.

So welcome to Thule's Capital Markets Day 2025. My name is Catharina Paulcen, and I'll be your moderator for today. So we are broadcasting live from Thule's head office in Malma, where the audience is a mix of participants on-site and online. So we had an exciting morning, not only because of the product demonstrations, but also because it's snowing quite heavily in Sweden at the moment. So you could say that the winter season really kicked off in Sweden today.

And now it's time to kick off this capital markets event by introducing our first speaker, President and CEO, Mattias Ankarberg.

So again, welcome to our Capital Markets Day. I have really been looking forward to today to present our new financial targets and the path to achieving them. And I know that a lot of you have followed us for a long time, but we are excited to today share the results of a deep dive we have done, analyzing how we have made money in the past and how we'll make more money in the future.

I want you to leave today with a number of things, but 3 things in particular: Firstly, Thule has a proven ability to grow profitably, and it is our conviction we will continue to do so at an even higher pace. Secondly, you will be introduced to what we have coined the Thule Champions. These are the core of our future growth plans. And then thirdly, efficiency gains. We are fortunate to be in an industry with supportive trends. But right now, the market is tough. There's no doubt about that.

I wish I could change that, but of course, I can't. But what we can do is control our costs and drive efficiency gains. We've already initiated several things, and the Thule Champions will guide us to where more efficiency gains can be made. So we will cover this and more during this day, and we will structure the day in 4 chapters. We'll start off talking about who we are. After that, we'll cover what we do better than anybody, how we create value.

Following Chapter 2, we will have a short Q&A session and a break. Chapter 3 will be around our ambition. What is it that we want to do? And following that presentation, there will be another Q&A session and break. And then lastly, we'll talk numbers. We're going to go through the path to reach our financial targets and a bit of a longer Q&A session following that.

Now in the interest of time, there are many other important topics that we will only cover at a high level today. So we will only, to some extent, go into things like sustainability or AI or D2C. But you are more than welcome to ask questions on any topic during any of the Q&A sessions. So let's get into it.

Chapter 1, This is Thule. Thule is a product company and an outdoor company. And more specifically, we make what we think are some of the world's best products for people who want to live active lives outdoors. And we've been around for quite some time and done this for quite a long time. Thule was founded in 1942 in the south of Sweden, in Småland, more particularly Hillerstorp, and we have ever since been on a journey to develop new products and enter new product categories.

And last year, in 2024, to the very top right of this chart, you can see we were more busy than usual. We entered not just 1 or 2, but 3 new product categories at the same time. We organically stepped into both dog transportation, which we call Active with Dogs, car seats and then through an acquisition of Quad Lock, entered performance phone mounts. And today, Thule looks a little bit something like this.

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Today, Thule is a global company, and we like to do a lot of things in-house or have in-house capabilities as we call it. We have a sales footprint of 138 markets, and we have many product categories. We report 4 major product categories. The main -- the biggest one, which represents a bit more than half of the sales of the company, it's called Sport & Cargo Carriers. Here, you find roof racks, rooftop boxes, bike carriers and more. second category is for RV Products. RV stands for recreational vehicles, motor homes and caravans. We do awnings, we do bike carriers for RVs and more things. Active with Kids & Dogs is where you find the multisport and bike trailers, strollers, child bike seats and the newest categories, dog transportation and car seats. And the fourth category, Bags & Mounts is luggage, various types of bags and the Performance Phone Mount business that we acquired a year ago.

Now I mentioned that we have in-house capabilities, and we particularly have strong in-house capabilities in R&D and supply chain, I'd like to point out today. We have a global R&D and test center in Hillerstorp in Småland where Thule once was founded, where we have several hundred development engineers working to develop the best Thule products we can possibly do. Having said that, we also have satellite offices to cater to some specific market and category needs across the world, in Australia, in Belgium, in China and in the U.S.

We also produce a lot of what we sell in our own factories. We have manufacturing sites, 9 sites, 9 factories across 7 countries, which has been good for us for many reasons, financially, yes, but also from quality control and being close to development, et cetera. And particularly in these times with regionalization of supply chains, it's, of course, good for us that we can make a rooftop box in a factory in Germany, in the U.K., in the U.S. and in Brazil.

So I mentioned that we are a product company and an outdoor company. We're also a growth company. And again, founded in '42, but we've been a public company since 2014, which is the year that this graph starts. The blue bars is the sales per year and the green line is the EBIT over time. And as you can see, it's developed with a boost of COVID and then a slowdown after, but except that, in an almost straight line. If we exclude some of the currency effects that generally have been positive, the sales development has been 5% on average per year. So a net sales CAGR of 5%, excluding currency effects.

And we've had good profitability with an EBIT margin of just below 18%, 17.8% on average. One of the reasons why Thule has experienced this good growth is that we are positively positioned versus some good trends. And I'd like to point out 4 major trends today that we benefit from and that we innovate against. So number one, increased outdoor participation. So more and more people want to live active lives outdoors. Some of the best statistics we can find in this area comes from the U.S. There is something called the Outdoor Industry Association that publishes numbers yearly and sometimes more frequently.

And if you look at those numbers, you'll find that 10 years ago, just over 50% of all Americans said that they engage in outdoor activities, and that's broken down in many ways. A boom during COVID, but actually continued to grow also after COVID. And last year, the number was almost 60%, 58.6% to be very specific. And what I think is interesting with statistics too is that the increase in outdoor participation is driven by some new consumer groups, more young people, more women and more ethnic groups.

And if you look at the core users, the people that are most often engaging in outdoor activities, the most frequently engaged, just that core group increased by 5 million Americans just last year. So clearly, there is an interest in the outdoors that continues to grow, good for Thule. A second important trend is what we call bike is the new car. And e-bikes has really changed the game, how we move around and around mobility in many ways. Today, about 50% of all the bikes sold in Germany are e-bikes. And of course, that enables easier bike commuting, longer distance commuting, new ways to move around. Very good for Thule.

In addition, there were big infrastructure projects to build more bike lanes. EU alone has a project -- a multiyear project to build thousands of kilometers of new bike lanes and has allocated EUR 7 billion to that project, which a report last month said, was on track.

The third trend I'd like to point out is what we call near home vacationing. So people, of course, like to go on vacations, but there's a clear trend towards less international and long-distance travel and more travel closer to your home. And when you ask consumers why, there are actually several different answers to why. Some say it's hassle-free. You don't like the hassle of the airports and the travel. Some focus on the flexibility. I can decide last minute, I can decide to change my mind if I want to. Some connected to opportunities around remote work, combining work and vacations. Others talk about sustainability as a big driver. But in any case, it's, of course, good for Thule that people travel closer to their homes because they will travel with their car or potentially their bike or their RV and they need to bring things, and we offer products for that.

Last trend I'd like to point out, which is important for us is around safety, particularly around both child safety and pet safety. And here, the trend is driven both by increased regulatory demands, which at both the country and other levels are rising, but also general consumer awareness for more safe solutions to transport kids and pets. Again, another trend, of course, good for Thule and something that we can innovate against.

Now if we zoom in on the near term, though, it is clear and you are aware, we are in a tough market. And I think we all could mention some negative macro statistics and consumer stats that describe the year. But I think one chart that illustrates a lot of the market dynamics we are experiencing this year is on the right-hand side here. This is from The Economist and what they report as the World Uncertainty Index. It's a measure of how much uncertainty is mentioned in economic reports, et cetera. And it clearly rose up very quickly at the beginning of this year. And that impacts everybody, also us at Thule, of course.

And if we look at our sales development this year for the first 3 quarters of 2025 that we have reported year-to-date, we are, of course, very happy to have a total sales growth of 13%, excluding currency effect. But more than all of that comes from acquisitions, of course. The Thule organic sales is negative 1.5%. Now it's -- many of you would know this. It's hard to find a perfect peer group for Thule. But if you look at a selection or the set of, I would say, publicly listed hard goods outdoor companies, they are experiencing even tougher times than we are.

Let me add a little bit of nuance and color to this organic 1.5 minus number because I think it's worth to spend the time on that. I think a year ago, we were feeling quite optimistic. We had a 3.5% organic growth last year, which was in the right direction. Consumer sentiment was getting for sure in the right direction in Europe, and you started to see the signs also in the U.S. And we had a very good start to 2025. It was just early, but it looked very promising in January. And then the whole situation changed with the introduction of tariffs that led to a lot of other things and, I think, reflected partly in this World Uncertainty Index chart. And what we've seen really is 2 effects this year. Firstly, for sure, a weaker consumer in general. Now the U.S. consumer confidence numbers are almost at a 50-year low or thereabouts, worse than most crisis. Europe is better, but still far below historical levels.

And if you ask consumers their intent to buy sport and outdoor products, most studies would say that's about 20% below the year before, a little bit even lower in the U.S. and a bit better in Europe. But the other factor we're seeing is also retailers being really cautious, being focused on profitability, cash, liquidity more than growth or expansion. And probably for many of them for good reasons. There's for sure been store closures, restructurings and even a few bankruptcies in our space on the retail side in the last 12 months.

So what that means, of course, is they're very cautious to take in products to expand and to particularly hold inventory over low seasons, et cetera. So that also impacts the landscape we're in right now. What we see in our own sales is clearly that our own channels that are impacted by the consumer sentiment, but not by the retail dynamic are doing much better, clear growth. We are performing the best in the premium end, the higher price points where we have that enthusiastic consumer who is willing to spend the money for products doing what they love.

We are doing better in Europe and in North America, as many of you are aware. And of course, new products and categories really help. So there are some bright spots for when the market will turn, and we will get back to a bit of that later today. But -- and it, of course, will turn. It's further ahead in some markets and categories. But still, so far, it is a tough market here and now.

But independent of the near-term market situation, and I believe much more importantly, we are on a journey to create a bigger and more profitable Thule. And a lot of things have happened just in the last 2 years that will give good impact in the coming few years. So I'd like to walk you through a few of those things. I mentioned we have entered 2 new categories successfully last year. Both the dog transportation and the car seat entries have in their respective first years, set new records for best first year sales of any category at Thule. So well received, which is really good for us.

We entered a third new category with the acquisition of Quad Lock, the global market leader in what's called performance phone mounts, a good category with double-digit growth and performing plus 15% growth so far this year, also positive for us for the future. We have upgraded significant parts of our sport & cargo product portfolio in just the last 2 years. And you may remember, I said in the beginning that sport & cargo is a bit more than half of the sales of the company.

We have developed stronger products in both premium and mid-price in rooftop boxes, in bike carriers and more, and we see good impact on sales, but also on margin, and we have a really strong gross margin 2 years in a row. And of course, upgrading half of the footprint helps. We have also been focusing on some efficiency gains. And some of you know that we have taken down inventories a lot. It was high, but the work still needed to be done to bring it down, and it's more difficult in a tough market. But we have reduced inventory by SEK 1.5 billion over the last period, which, of course, helps finance a lot of the growth initiatives that we are driving.

We have also changed our focus in North America, both on the cost side and the growth side. So we have done a few things. We have put in place a dedicated North America sales and marketing team focused only on North America, which is a new structure compared to what we had before and a more flat structure. And that is looking very promising. We're very happy with the work that the team has started to do.

We're focusing our growth efforts on fewer categories where we really believe we have the strong opportunity to win. So we did a big job of upgrading our North American bike carrier portfolio that really paid off for us in Q2, which drove much better numbers in Q2 than in Q1. And the second opportunity we're going after is pickup trucks, where we have an opportunity. We know many of our consumers already have pickup trucks, but we haven't brought any products to market in many years. So in just 3 weeks, there will be new products out to address also that market segment.

And then lastly, again, on efficiency gains, we've had a mentality and a good practice of always working with continuous efficiency gains and continuous improvements at Thule, but we have this year taken a few more actions to move the needle a bit faster. We discontinued the North American car seat development program in Q1, partly to focus the North American team, partly to focus the R&D team and other resources and partly because of market reasons that we can get into, if you like. We are changing or have changed the organization structure to what I said, a more flat, more lean structure, also closing a satellite office in North America, consolidating to fewer places that saves us costs.

And we are -- not the least, we have launched a big initiative to extend and automate our biggest warehouse in Poland, which will save us SEK 100 million on a cash basis on an annual basis when fully operational and will go live in 2027.

So a lot of things have been set in motion in summary that will give effect over the coming few years. You have probably all seen that we have updated our long-term financial targets, and they are updated to be more ambitious than the historical performance. So let me walk you through one by one, how we are thinking about our financial targets.

So firstly, the growth target, we have changed to be clearly focused on organic growth and to be focused on a percentage number, so a continuous growth per year. And we think those 2 changes better reflect the way we think about growth and think about growth over time. Comparing the number to the previous target, which was SEK 20 billion in 2030, I think that target, it's important to mention, was set in May 2022 at the tail end of COVID, which was a different time. And we think the more relevant comparison for the new target is the historical performance, which was 5% over time, as you've seen.

So it's more ambitious, and we believe we have the plan to deliver on that. And we hope that you will have the same feeling when you leave today. We'll cover a lot more around that during the day. The EBIT margin target is 20%. It's not changed. It was 20% before as well compared to historical performance of 17.8%. And the dividend payout target or ratio is 75%, not changed and very much in line with historical performance. And I'd like to take the opportunity to also mention when we talk about financial targets that Thule also has clear and quite ambitious sustainability targets, and those are not changed. Those remain.

Now I'm guessing that some of you are sitting out there thinking, okay, that's probably good targets, but when are you going to reach them? And the short answer is we have the ambition to reach them in the midterm, which for us is about 2 to 4 years. And we will go through a lot more detail today. But to give a little bit more nuance upfront, you saw before that Thule has grown 5% per year over time. That's done in a market which saw a GDP growth of about 2% to 3%. So 2% to 3% outdoor overperformance, if you like. Now we believe that we have the ability and the plans in place to increase that overperformance. But of course, to get to 7%, we need some market growth. Do I believe we will have good market growth already next year? Probably not. Do I believe it's there in 2 years? Yes, for sure, it could be. Could it be that it takes 3 or even 4 years? Yes, it could.

But independent of exact timing, the more important point is that we are convinced that we have a plan in place that can deliver higher growth and higher profitability compared to the historical levels.

Let's get into Chapter 2. What is our competitive advantage? How does Thule create value or in maybe simpler terms, what has worked for us and what has not worked as well for us. So we've talked about products several times today already. And for those of you here live in the audience, you had the opportunity to see and interact with some in the morning. And we really have a wide portfolio of great products. We have the benefit of being recognized for having great products by, of course, consumers and ambassadors, but also through design awards.

And we have, I believe, no less than 38 design awards in the last 2 years alone from the 2 most prestigious awards, the iF Design and the Red Dot Design Awards. And we have a wide portfolio. We're in many different areas. We're in bags and luggage. We are in tents. We are in backpacks. We are in bike trailers. We're in dog products. We do surf transportation. So we do quite a lot of things, a wide portfolio. And I think it's very interesting that just a few of those product categories have driven the value creation of the company.

Actually, when you look back, just a handful of product categories represent 90% of the sales growth and the profit growth of the company. And if you look at those product categories, 73% of our total sales was made up of those categories in 2014 at the IPO. 79% was the number in 2019, and it's continued to increase since. And to me, this is a little bit unusual. Most companies that I've worked with or seen, you have a good core business that, of course, you nurture and want to develop, but then you have some growth initiatives that you think should move the needle and be the future.

But at Thule, the things we've had for a longer time has actually delivered more growth than the newer things, which is a bit unusual, I find. And I think it's really interesting. And I'd like to share a few things around these Champions, as we call them, the champion product categories because it's important for us. So firstly, these Champions are categories where we are the global #1, and they are in small markets or pockets as we call them. And we have 6 today. This is who they are.

And I use the word categories separately from the reported categories, which is a more broad definition of product categories. So it could be good to be aware. The first 3 we've had for a long time. We started out with roof rack in the '60s, roof boxes or the first one was the ski box in the '70s and bike carriers a decade later. All of those 3 are reported within what we call the Sport & Cargo Carriers reported product category structure.

We have 3 more. We have awnings within the RV product category. We have multisport and bike trailers as part of Active with Kids & Dogs. And then lastly, we have performance phone mounts, which came with the acquisition of Quad Lock reported under bags and mounts. And in all these 6 categories, we are, again, the clear global #1. And we're not just global #1 by a little bit. We're like #1 by a bit. There's a distance to #2 here, a bit of a moat, if you like.

And secondly, these are all small markets, niches or as I call them, pockets, typically SEK 2 billion to SEK 5 billion global market sizes and typically with a sale of around SEK 1 billion for Thule, a little bit up and down, but thereabouts. And they also share some common characteristics, mentioned a few. First of all, they all fit our brand really well. They're products that help enable this active life outdoors, and there are products where consumers that are enthusiasts really appreciate these products. So it's a good fit with the brand that we have as outdoor and quality, et cetera.

Secondly, they all have good market tailwind. There is category growth for sure, some on volume, but there's also -- because of this enthusiast consumer, people are willing to spend for the best product in these categories. This is what people are passionate about and people are willing to pay money for that product, which helps the category growth.

And then thirdly, it's not easy for anybody to do. There are some barriers here or a bit of a moat, if you like. And that could be for a number of reasons. So some are driven by regulatory reasons for around safety regulations. For example, things you put on a car and drive on the roads, there are clear regulations around that. Some is around intellectual property, where there are some clear strengths for Thule and some barriers. Some because they are actually quite tricky to manufacture and you need a lot of capabilities to do that, and we have in-house manufacturing. Some is more because of the complexity.

Think of a roof rack. You could say how hard could it be. It's just a steel bar on top of a car. Well, all these kits, as we call them, fit kits that goes with all the cars, there are thousands of vehicles, and that needs to be updated constantly and tested, et cetera, et cetera. So as we like to say, the more difficult it is, the better it is for Thule. And then what all that means is that we have this fantastic innovation capability. We can develop these award-winning products. But in these categories, we get leverage from that. We have innovation capabilities that deliver new products, and then we drive premium in the category. We drive growth. We are positioned to do so, and we also get scale effects because we manufacture them ourselves. So it's great to have them. But even more important is that we are good at developing them.

You've seen that they've driven the growth, right? And I think we have many things that make us suited to do that better than anybody else. But instead of taking my word for it, let's hear what some of the industry insiders have to say. Now if you're a mountain biker, you may have seen this clip before, but here is how an outsider describes Thule's product development process and the work in some of these categories.

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So that's a description of how we work with developing products and developing these Champions, particularly where we have our strongholds. And at a very high level, Champions are really important to us because as the global market leader and as the player with the best innovation capabilities, which sort of allows us to control our own destiny or at least shape our own future. But it also comes with some responsibility, I would say. So let me take you through this. It's, of course, fantastic to be able to out-innovate competition. If you are working with premium products for passionate consumers, innovation plays a role. And with more know-how and as the global #1, we are bigger and have more resources than others, we can out-innovate other players in the field.

And that means, to some extent, that we can kind of grow our own market because when we develop new products that enthusiasts are willing to pay for, that raises the price point, the premiumization, but also find new use cases, new pockets and develop the categories through our own efforts. It also means we sort of expand the moat or the barriers for others. We have the strong Thule brand, but also as we get bigger and bigger in small markets, it limits the opportunity and the ease of entry from other players. And I've been in consumer goods for over 20 years. And a lot of the people in the industry that I talk to these days are talking a lot about new competition, particularly Chinese competition. And of course, it's a force in the marketplace that everybody has to address somehow or relate to.

But the beauty of being really big and global #1 in small pockets is that we are more shielded than others because we have the size and the limited market potential and the strongest capabilities and resources. Also, and importantly, from a financial point of view, since we also do a lot of things in-house, we get scale effects. We get economies of scale from driving organic growth in these Champion categories.

Now I mentioned that the Champions come with some responsibilities, I called it or some howevers. I think there are 2 things I'd like to point out. Firstly, to be #1 is not static. You need to continuously innovate and drive the market. So it's important to have a long-term mindset and continue to innovate and bring new products and new features and upgrades to the market to remain #1. Second point I'd like to make is developing new Champions take a lot of time and resources. It took decades to be global #1 in rooftop boxes.

And again, a long-term mindset is really needed to win over time. So the last point I'd like to make around these Champions is that some of them have come through acquisitions. So I mentioned in the beginning, there were 6 Champions in our portfolio today. The 3 that are within Sport & Cargo Carriers, have been around for many years. But the 3 at the bottom have come through acquisitions, now not that frequent, but still 20 years ago Thule acquired a company called Omnistor, which was the leading player in Europe for doing awnings and bike carriers for RVs, and that's developed into the RV business that we have today.

We acquired a company called Chariot in 2011, an Iron Man athlete in Canada had developed a product, so he could bring his kids while exercising, and that's become the multisport and bike trailer category that we see today. And last year, we acquired Quad Lock, which is the global market leader in performance phone mounts. And I think the acquisition of Quad Lock is a good example of how we think about potentially bringing new Champions into Thule through M&A.

So I'd like to invite Toby up on stage to have a bit of a chat around that.

So Toby, you've been involved in quite many acquisitions over the years. So how do you think this acquisition compared to other deals you've been doing?

Well, yes, firstly, yes, good afternoon, everybody, maybe first of all. But I would say one of the main things was we went into a lot of depth around the Quad Lock acquisition. The project actually started well over a year before we made the acquisition, and we used that time to go into a lot of depth on the project. For those who don't know me, my background, I was 7 years Head of M&A for a large Swedish corporate. I've also been CFO for a consumer company in Asia Pacific, and Asia Pacific includes Australia. So I think I could contribute quite a lot with my background.

And then in making the acquisition, firstly, we did a very thorough due diligence, as you always should do in major acquisitions. We got really under the skin of the Quad Lock business. We really saw what an attractive acquisition target Quad Lock was, a really strong management team, really strong financials. So that was #1. But I think probably what was maybe different was in parallel to the acquisition, we also did a lot of homework on what really makes sense strategically for Thule. We worked a lot on what fits Thule, and we didn't call it Champions at the time, but it was the -- what you're seeing today and being presented today around the Champions and really the strategic fit with Quad Lock was a really great fit with Thule and adding another clear champion position to the Thule portfolio.

Sounds good. So Mattias, what do you think were the greatest challenges with this acquisition?

Yes. I think to Toby's point, we went through a lot of things, but I think 2 things come to mind. Firstly, to get really comfortable that this was a champion as we call it now, a global market leader that had the ability to out-innovate their competitors and not their phone case company. But we spent a lot of time on that and got convinced. And then I think the second point that came up is fit with the Thule culture. Of course, cultural fit is always a theme.

But I think partly because of what Toby mentioned, we took our time. We had a lot of meetings digitally, of course, but physically in Australia, in Sweden. We involved quite a few people from both management teams to really get a good feel. And we had a lot of discussions around the brands and the overlap we see in the brands and the ambition for the brands and the consumer base that connects with the brands. And I think that made us a lot more comfortable that this is a good fit with the Thule culture as well.

So we have seen some nice growth numbers from Quad Lock in the recent year. But Toby, how is it really going?

No. It is good growth numbers. Quad Lock is growing 15% organic growth this year. So good growth. It's growing -- I mean, Quad Lock is a global business, as you know. So it's growing globally, a bit better in Europe than North America, just like the rest of Thule, but good growth overall, good margin development. So financially, absolutely good development. And I could mention also when it comes to integration, we had an intensive period in the beginning kind of plugging in Quad Lock to the Thule company, financial reporting and other areas like that, we plugged in quickly, of course.

And now we're working step-by-step through further integration in the areas that we think it makes sense and really adds value. So to give a couple of examples, we've created one sourcing office in Shenzhen in Southern China to drive sourcing there. You can say on IP management, we now have one organization and Thule is taking the lead in running IP matters. And you can say on the other hand, Quad Lock is really supporting the Thule side in building a business in Australia and building a better platform in Australia, which is something we're focusing on.

And then you could finally on kind of sharing learnings in sales channels as well, where Quad Lock clearly has been a strong leader in D2C side, and we've shared learnings that way and the other way also on the wholesale channel. So yes, a lot of intense activity and a lot of shared learnings and a good financial development. So yes, we're happy.

So Quad Lock -- so final question. Quad Lock has been part of Thule for about a year now. So what is the greatest learning you think, Mattias?

Well, I think actually some -- 2 things that actually connect back a bit to the process we had before the acquisition. I think we -- it was good that we had some of the more, let's call it, sensitive discussions upfront. There were, for sure, some -- there were 2 founders that were still part of the management team, really proud of what they built, as they should be. But we were really clear that we have a monobrand strategy. It will be integrated under the Thule brand umbrella, and we had that discussion upfront, which I think really has helped.

And then we spent a lot of time before signing the transaction, how will we work together on what I call the operating model. And I think that has enabled us to do what you just described, Toby, to quickly do the sort of plugging in and then quickly get to the sort of more value-creating activities and the synergies. So spend the time upfront, I guess, is the learning.

Good leaning. Okay. Thank you for a nice chat. Toby and I will now leave you to continue your presentation.

Thank you. All right. So now we have talked about the Thule Champions and the value that they bring. What has worked less well for us. And I have to say it's kind of hard to actually find something that's been really disastrous or bad. You've seen the financial numbers. We've moved in the right direction on growth and at good profitability for many years. But of course, there are some things that haven't developed as we had hoped, and we can learn from that, and we should learn from that. And I would like to point out a few.

So in 2017, we are here. We had been a few years on the stock exchange and really focused on becoming a consumer goods company. And we launched some ambitions to become what we call the contenders or challengers in 2 new markets, in bags or in certain areas of bags and luggage and within strollers. And now that we look back, we can see that, yes, that has delivered some growth for us, but it has not created the new legs or the new pillars of the company that we had hoped when we launched this ambition. And I think it's interesting to spend a bit of time on why.

You may remember that some of the products I showed early on that I said were great award-winning products are also in these categories. So we have clearly done some great categories -- sorry, some great Thule products. But the point is that these are not, to the full extent, great Thule markets. So for one, these are big markets with a lot of competition. Take the bags market we were going after or at least the segments, they were SEK 80 billion at the time and much bigger today, of course.

The #1 player in luggage and bags is Samsonite Group. They have 8 brands. It's kind of hard to beat on a number of factors, talent, distribution, et cetera. And the same thing with strollers. It's very competitive. It's very fragmented. It's a lot of, lot of players. Also, the markets are having these categories some growth, but I would say modest, low single-digit growth numbers. And I would say also a mixed brand fit. For sure, there are some things that connect really well to the Thule brand, but we have learned that the core consumer that is, of course, easiest to introduce new products still to is the outdoor passionate person, the person who want to live that active lifestyle outdoors.

So great Thule products, but not fully great Thule markets, means we don't get the leverage from the innovation capabilities that we have at Thule. But what I think is also really interesting is there are some real gems within these businesses. So if you look within these darker blue sales numbers, we have, for example, had really strong traction in what we call all-terrain and running strollers. We launched that in 2014 with a lot of good learnings from the multisport and bike trailers that we had, and it's been on a really great growth journey ever since.

It's also a really great Thule product, but it's also a great market, a clear niche. This is a product you use as a second stroller because you want to be out and active with your kids. It's about a SEK 1 billion size market. It's a strong brand fit. I almost said obviously because we just talked about being outdoors and being active. And there is good growth from the markets from young parents wanting to stay active and stay sporty also when they've had their children. So great Thule products and a great Thule market, and we are the global #1 with a lot more to go.

So lastly, if we compare these growth efforts then to how we have been investing for growth, what can we learn from that? And at Thule, we invest -- our growth investments are mainly investments in product development, which we take as an expense on the P&L line. And this is how the R&D spend has developed over time. And for those of you who follow us, you would recognize this yearly number, which is the R&D spend as share of sales that we typically -- or not typically, always publish at the end of every year. And this is the split of the R&D investments over time.

And I think there are a couple of interesting and positive things to take away from this. Firstly, I think we have been fairly good at maintaining R&D spend in our Champion categories that we have seen drive the value of the company. It was a bit of a dip, but we're bringing it back towards the end of the chart on the right-hand side.

And secondly, I think it's been good that we sort of put money behind our ambitions or when we were going after an ambition, we've also really invested to try to make that happen, which I think is what an ambitious innovation-driven company should do. And then I think there are 2 interesting learnings to take away from all this. As we know that the Champions have created the value, make sure to spend enough to have a strong continuous product pipeline to drive that value going forward.

And secondly, when we go after new categories, which we have and which we will continue to do, go for pockets, go for small niches where we have the strong credibility to play and build it step by step.

So to summarize Chapter 2, we create value through champion product categories. We are most successful when we are the global #1 in pockets where we can out-innovate our competitors. Building challenger or contender positions in big markets has not paid off. And these champion categories have the beauty and the benefit to allow us to, to a large extent, control our own destiny.

So that concludes the presentation part of this chapter. And now I'd like to invite Toby back up for a Q&A session.

So you talked about what's been creating value, and you also touched a bit upon competition, especially we're curious to learn more about the competition from low-cost countries. Is there a risk that we have new competitors, especially from China, entering our space and outcompeting us?

Well, it's, of course, a very important question and something we've been discussing a lot, and we see happening a lot in different industries and different companies. But I think for us, it really goes back to this concept of Champions. When we are clearly #1, it's more difficult to attack us, call it, the market size isn't that big. It's also not as attractive for others to attack us.

And then on top of that, we typically have these barriers of entry of some sort what we talked about before. So I honestly fundamentally convinced that, for sure, we should never underestimate competition and new players, but we are much better positioned than a lot of other companies out there.

One question we see here from an online audience is if you could elaborate a bit about the development in North America.

Yes, absolutely. So it's -- for sure, North America has been the most challenging marketplace for us this year, really came to, I would say, a stop, but there was a really sort of a pause in the mentality and in the ordering in Q1, and it was really, really weak. And we have seen consumer numbers go a little bit up and down, unfortunately, now down again just the last couple of weeks. So it continues to be a tough space.

But I think the more important point for us is we really took some actions early in the year. We have set a new sales and marketing organization in place. We're focusing on 2 big growth priorities where we really think we can win. And both of those things are going really well. So for us, it's about executing our plan and delivering on that.

See if we have any questions from -- yes, we're running with the microphone here.

A couple of questions. Agnieszka Vilela from Nordea. So maybe starting with your growth ambitions of 7% organic growth per year. Can you give us a flavor on what's behind that assumption and acceleration in the growth rates? And I think you mentioned that you want to see improving markets as well to reach that?

Yes, I can give you more than a flavor. I can give you a plan, and you will have it in the next 2 chapters. So we'll come back to it a lot. But you are right, Agnieszka. For sure, we think we can do better than we've done historically sort of with our own performance and with the resources that we have available. But of course, we are not naive. We need a bit of market growth to help us. But we will go through the details of that later on today.

Okay. And then maybe a follow-up also on your strategy for the products outside of your kind of champion space. What do you want to do with that products where you don't see -- you have that position today. And will you continue to spend as much as you did on R&D in that categories?

Well, have you read the chapters? No, we will get back to some of that as well. But I'd say -- maybe it's actually easier to address later. It's kind of hard to answer now. But it is, for sure, clear that we will focus more on the things that have created value, but we'll also focus more on future things where we have the insights that we have a higher chance of succeeding, if you like. And there are other things that we will do less of, and we will come back to that later today.

Carl Deijenberg with DNB Carnegie. So I had a question on -- you had the slide on the Champion categories, and you also had the slide on the nonchampions. You were talking about the ambitions back in 2017, you were contenders in packs and bags and so forth. And I guess now also with the new categories, child car seats and dog crates, you are sort of contenders there as well. Big markets, quite strong competition. So what's going to be the difference this time? And how do you make sure that the development in those will not look the same or those becoming Champions instead?

Great question. And I think -- we'll touch a bit on that later also, but it's important. So let's talk a bit about it. If you take these 2 categories that we've just entered -- or 3 with Quad Lock, they're actually quite different and much more like the -- what we think the champion categories. So take dog transportation as one example, and I'll leave the other maybe for later. Dog transportation is a fairly small market. It's about a SEK 2 billion size market globally.

There are no global brands. There is good market growth in general from pet, but also from pet safety. And the technical capabilities to do a dog create when it comes to aluminum, plastic testing, we saw in the video, crash testing because it's a car-related product, we think we have a strong position to be better than anybody, and we have a really good traction. So we actually think that -- and you will hear later the future Champions, if you like. We have some really good and interesting things going on already today inside the company that we can scale up.

Daniel Schmidt from Danske. I think back then, when you talked about bags and strollers and sort of your efforts in those categories, you also mentioned between the lines, I think, that these are global products. You've otherwise been a very sort of Western-oriented company because that's where your core consumer is, and this is a way to grow in Asia basically, which has maybe not worked out in the way that you expected 8, 9 years ago. Do you see pockets where you can be big, that is relevant in Asia that you're not in today?

Well caught. Yes, we do. And it is also, at the same time, true that we are, for sure, strongest in the Western markets, Europe in particular, but also North America. And we are -- I guess it's important to say to, we are a product company. So sort of the first lens, if you like, that we use is to say, can we do the best product? And then if we can sell that in 4 countries in Europe or in 180 countries in the world, that's question #2. But having said that, for sure, there are some opportunities also in the Asian market where we can find some nice pockets for us going forward.

Maybe you'll come back to that, I don't know. But it's been sort of very obvious that China is quite small for you, and it's been small for a very long time. And then maybe you talked about sort of your performance versus the outdoor market and there were some listed names in there. If you compare it to the ones that are not public, which is, I guess, harder to do, could you give us any numbers on your performance versus your sort of closest competitors in your sort of core legacy businesses in the U.S. or in Europe as of late?

No, it is a good question. And I think one of the almost automatic drawbacks of being sort of clear #1 is that there's not much other market statistics to be really goes. But there are some numbers. And I think -- see how we put this best, and you can help me out here, Toby. But I think, for example, in the U.S., where we have the toughest markets, we have strong channel partners, strong retailers who we work really closely with and they share their inventory level and sales out of Thule products, but also the sale out of the entire product category.

And there are some statistics, private statistics though that maybe you get your hands on. But -- so in the U.S., in traditional Sport & Cargo Carrier, it's down about double digit this year, which is slightly more than us. We have taken market share, particularly in bike carriers, where we have also had a big push. In Europe, I think actually, that could be a good example, we have an RV products category, and there are several listed RV players. So I guess you can compare our performance to that from an industry perspective. And I don't think we put the weighted average together, but it's clear that we are doing better than the listed ones.

Yes. Yes. So I think you can see the kind of limited market share data we can see, you could say, which is not public, but maybe through some of our retail partners, we are gaining share and we're holding share. So yes, there's not a significant change in the landscape, you could say.

Okay. Good. And just finally, also sort of you talked about seeing a better market, of course, and who knows if that's going to be true in 2026 or not. And we'll see -- but I guess there's also been a fairly sort of significant destocking going on. Do you have any view on where sort of your counterparts or your distributors, retailers are really in that journey? Is there any sort of indications that, that is easening in any way?

Yes, there are some indications, and it's part of that market picture that we talked about, and I'll come back a little bit, but let's talk about it now. So I think it varies quite a bit by category. And without going into too much detail, the RV industry is coming through sort of a weaker period and now entering a more positive situation. We can see from, again, internal metrics and things we do with the European RV associations that stock levels are coming down at the dealer level.

The RV industry is typically split in 2 parts, right, the OE part and the aftermarket part. And the aftermarket sales has actually been good this year and good. It's been growing, and it's been back to fairly good levels, and we continue to see that now. So their inventory is coming down and aftermarket is growing, and now it's just -- but the OEs to work through their production inventory levels of components, et cetera, they're taking some production stops, so we accept more positive there.

It's a bit more difficult in some of the juvenile and bike-related sort of retail spaces where it's much more fragmented. And it's tricky, too, because it's a sort of total picture. Maybe this is too long of an answer. But to give you an example, I was visiting a good customer that have one of our products, important products, and they also had a competitor products and the competitor products was at half price of their best seller than it used to be. And I was asking why? You can barely make money. They said, "Well, we have so much of this product left in stock." You don't have a lot of Thule products, but I have a lot of the other products. So I need to clean that out before I can buy more. So they're in a more fragmented space, I think there are more -- less visibility and probably more things to work through.

So let's take a final question from the online audience. If you could please clarify the growth target. Is it an average target over the -- you talked about the midterm. Is it an average growth target over the midterm? Or is it 7% growth in a single year?

It's an annual target. So our ambition is to grow with 7% per year.

Good. So now we will leave you off the hook and go into a coffee break, and it's going to be a 10-minute break. So see you back soon again.

[Break]

So welcome back, everybody. We'll now continue with the third chapter, which is focused on what it is we actually want to do going forward. Here, we will cover our strategy our ambition and the most important priority is to deliver on that strategy and ambition. And I'll start out with the strategy. So based on the learnings we have, we have phrased our strategy like this. We want to be big in pockets, united under the Thule brand. We will be in several product categories, but there is an identity that is the Thule brand that it all fits into a monobrand strategy. And let me add a little bit more nuance to this. When we say big, we mean number one, ideally, right, by a distance. There is some moat, some that separate us from competition.

We would love to be big in many pockets and many attractive pockets with good growth and good connection with our enthusiast consumers. And when we say pockets, I mean niches or specific market segments. They should all fit our identity, which is the Thule brand. So that's how we formulate and phrase our strategy. And one might think that downside of this strategy to be big in pockets is that it's kind of limiting for growth. Pockets are inherently quite small. But we don't think so.

We see a lot of opportunities actually. And to tell you a bit more about the opportunities that we see, I'd like to invite Aden Johnson up on stage, our Vice President of Category Management. Welcome, Aden.

Thank you, Mattias. I'm Aden Johnson, Vice President of Category Management here at Thule. I know a lot of you are already very familiar with Mattias and Toby. But for a lot of us, this is our first time being introduced to one another. So I want to take just a moment to let you know a little bit about who I am and my background.

I've been with Thule now for just over 4 years. I spent the first 2 years of my time here at the North American headquarters in Seymour, Connecticut, and then relocated last spring with my family here to Sweden to take on this role that I'm in now and join the group management team. And over my career, I spent about 20 years in the consumer goods space. primarily with global lifestyle brands that are really well known for well-designed, innovative and high-quality premium products.

I started my career in New York with Ralph Lauren Corporation and worked there for about 8 years. And then after that, moved into another soft good lifestyle brand called Vineyard Vines that brought me out to Connecticut. And then from there, pivoted into more of a hard goods role. So joined the Swiss company, Victorinox. Many of you know them. They make the Swiss Army knife and I was Vice President of Merchandising and Sales Planning for Victorinox.

And then that brought me to Thule just about 4 years ago and here today with you all. So just a little bit of my background so you know who you're talking to here. And I think what I'm going to talk to you now about are consumer insights. Mattias just told you about our philosophy around big in pockets and how that's a bit of a criteria in terms of us deciding which new products and new segments to get into. He talked a bit about market trends and how we use that in our decision-making process. But a third angle to this is talking to our consumer understanding who they are and how those market trends apply to them specifically.

So we'll go through that. And before I get into it, and just so you know where the data that I'm going to share today comes from. We ran a survey about a year ago with existing Thule consumers who have bought a product from the brand within the last 24 months, from our largest markets. There's about 1,000 respondents to this survey just so you know where these numbers come from. But these are existing Thule consumers that we've spoken to. So let's get into it.

If we look at the consumer at a high level, there's 3 things that I want you to remember about them. And the first is that they are affluent. 70% of them when we surveyed make more than the national median income in their home countries. And so what that means is they've got disposable income that they use to fuel, right, their outdoor passions and invest in premium products from brands like Thule to help them do that. So the first thing to remember is that our customer is affluent.

The second is that they are active. 2/3 of them tell us that they exercise at least 3 to 4 times per week, and that overindexes the general population in a lot of our largest markets. In a few minutes, I'm going to get into a little bit more depth there on what we mean when we say that they're active. But that's the second thing to remember. So they're affluent, they're active.

And the third thing, they are family-oriented. They have kids and they have dogs. If we delve into the kids' numbers for a second. If you look at our largest markets in the general population, it's about 25% to 30% of households that have children in the household. If you look at the Thule households in those markets, it's 2/3, nearly 2/3 have children in the household. So clearly, that's more than twice the general population that have kids.

And then if we look at dogs, I'll give you an example from our 2 biggest markets. In the U.S., 75% of Thule households have a dog in the household. It's about 50% in the general population in the U.S. If we look at Germany, it's 35% of Thule households have a dog in the household compared to about 20% in the general population in Germany. And if you ask these people have dogs in their household, actually 1/4 of them have 2 or more dogs in the household.

So when we look at the investments that we've made in kids products and dog products and continue to make and you see why that is because we already have a very engaged consumer that fits this profile that we can tap into and build more lifetime value with. So the 3 things to remember here about our consumer. They're affluent, they are active and they are family-oriented. They have kids and they have dogs.

And I promised that I would take you through what we mean specifically by active and I'll do that now. When we ask what activities that they participate in? Probably not a shocker for a lot of you in the audience, but a lot of them bike. That's the most popular activity for our consumer. It's 60% to tell us that they regularly bike. But what that is, is a good vote of confidence in the continued investments in our champion categories that Mattias talked about earlier in bike carriers, but also an indication of the opportunity that we have to build more on the bike and around the bike, that we'll talk about a little bit later. But bike is the most popular activity for our consumer.

If we move on to the next most popular, hiking. This, again, not a big surprise. This is probably the lowest barrier to entry of any outdoor activity. But it is a good, again, indicator for us and reason why we are still offering technical backpacks and hydration packs to support what we know our consumer is doing in the outdoors. And where it gets really interesting, there's a tie for the third most popular activity, and it's between running, and camping and RV. Around 40% participation in these areas. And when you think back to the last slide, right, we talked about 2/3 of Thule households have children in the household. And then you see that 40% of our consumers say that they like to run on an active basis. Then that starts to explain what Mattias was showing about why we've been successful in particular, in all-terrain and jogging strollers because when our customers have kids, they want to continue to run.

And it's Thule, being with the best product in the market when it comes to all-terrain and jogging strollers that enables them to do that. And so these stats are really a confirmation of why we've been successful in those types of strollers. And then camping and RV. 40%, that's high. If you look at our general population, again, in our largest markets, it's around 20% of people that would tell you that they actively camp or RV. So we're double that. And the reason for that, again, I think if you go back to the family dynamics we talked about in the first slide, when you have kids, when you have dogs, it becomes a lot more cumbersome to bring all that with you on the airplane or to deal with lodging and hotels rather than to just pick up, do some near home vacationing as Mattias mentioned earlier and have room for the kids, the dogs to spread out and run around, right?

So when we see these types of family dynamics, we tend to over-index in camping and RV. And that's why we've been so successful, again, in developing a champion in RV awnings and why we continue to invest in some of the tents that a lot of you here in Malmà saw downstairs this morning and all things around the campsite and RV.

So those are the 4 most popular activities for the Thule consumer. And then if we look more regional nuances where there's access to winter sports, we do see a high rate of participation as well in ski and snowboard and we just launched actually in October, our latest solution for this, Thule Arcos XL. So it's actually a carrier on the rear of the vehicle that accommodates skis up to 180 centimeters. And that has been very much exceeding our expectations so far.

So ski and snowboard again, really strong participation there. And then if we look at North America specifically, we see a hyperactivity for participation in golfing and hunting. We see about 30% there. And that doesn't mean that today, I'm going to tell you we're launching golf bags. But what it does mean is that when we understand this about our consumer, we can tailor our messaging and develop more use cases and develop a wider audience for products in the portfolio. And so the image that you see on the screen here is our Thule Onto rear of car carrier, but now it's shot in a golf context with golf bags and solving a pain point for somebody and showing them how this solution can do so many different things for them.

And then as well in North America, with all the shoreline, we see a lot of participation in fishing and water sports as well. And that's why we've invested in the last 12 to 18 months in a completely new fishing rod carrier portfolio to support that market and running some pilots even globally to grow that segment for us as well. So if we say the Thule consumer is active, specifically, this is what we mean, and that's how we use some of this data to inform our decision-making and also our marketing our content.

The other thing that we like to look at when we talk to our consumers is what's in their garage, what do they own? How can we own more of that garage? So if you look into the Thule consumer garage, here's what you'll see. If you look at the bikes in that garage, about 1/3 of them own a mountain or a gravel bike. But I think what's really interesting here is what you see in e-bikes. Mattias talked a little bit about this earlier, this trend that bike is the new car. We see it in the data. In Germany, our largest market, half of our consumers already own an e-bike. That's not just a nice-to-know stat. That means a lot for Thule. Because when you have an e-bike, you can carry more. You can go further with less effort. So that is a tailwind for us.

We should be able to sell more bike trailers, more child bike seats more bike panniers because it's easier for people to carry that. I can attest to that personally. I have a 4-year-old and a 2-year old. They go to school every day, including the snow day we have here in Malmà today. In the Chariot trailer, uphill, long distance, we would not be able to bring them to go on a bike trailer without an e-bike. It is a game changer for a lot of people. And so that, for us, gives us confidence to continue to develop all these solutions around the bike because of what we see here with our consumer.

If you look at motorcycles and scooters, we talked about Quad Lock in the acquisition there and building expertise in this moto space. We have about 1 in 5, 20% of our consumers that own or have access to a motorcycle or scooter. So we feel like with that expertise now having the Quad Lock family as a part of Thule, we're going to be able to hopefully tap into opportunities there in the future.

If you look at North America, we talked about participation in fishing and water sports. And so I think, naturally, we do see a higher rate of boat ownership in North America, which is also around 20% of the Thule consumer. And then if we look at the vehicles in their garages. You see a high rate of SUV ownership. That's been stable for some time in North America. But I think in other markets around the world, we've seen SUVs become a larger mix of automotive sales. And again, that's not just a nice-to-know stat. How we apply that to our business is to say, as SUVs get taller, it becomes a little more challenging for some people to get things on and off the vehicle. We've seen a big trend in the last few years from bike carriers, for example, where people are now preferring to take them on the back of the vehicle because it's more convenient and more accessible. And so we see the same sort of thing in cargo carriers.

And that's why as a brand we've invested in a lot of these rear-car solutions in the back of the vehicle for accessibility, for convenience and also if you have an electric vehicle, for aerodynamics. So that's how we're really applying these stats and adjusting our portfolios to get ahead of the market. And if you look at truck here in North America, this is a really interesting nuance. We have 1/4 of the Thule consumers in North America that own a pickup truck. And we feel like this is a huge, huge opportunity for us to take a lot of market share, and frankly, to be #1 in recreational truck racks.

We will come out with our first new truck bed rack solution in over a decade in about 2 weeks. It will be the fastest install and the easiest height adjustment of any truck bed rack for recreation purposes on the market. And we fully expect in North America that we'll be able to be #1. So when we talk about big in pockets, we talk about being #1, this is an example of where we feel like we can play.

And lastly, as a validation of what we talked about on the last slide in RV and camping, we do see ownership or access to RV and camper van, it's about 15%. So that's what's in their garage and how we measure that and how we like to look, how can we own more of that garage and tap into these consumer insights. And so to pull this all together, right, we talked about big in pockets. That's 1 of these 3 areas that you see on this diagram that feeds into our decision-making process and our criteria for these new segments and new products that we want to get into.

Do these things align with the Thule brand? Do they align with our core competencies? Can we be #1? We talked also about market trends. You just saw the consumer insights. That also feeds into this decision making. But we can have the potential to be big in pockets. We can have market tailwinds. We can have good consumer insights. We don't have innovative products that can disrupt and differentiate. We still won't be successful. So that's the third arm or leg, whatever you'd like to say on this diagram that's really important.

And when we feel like we can tick the box on all 3 of these things, that's when it comes together in terms of new products and new segments that we're looking to pursue for the future or scale in the current portfolio. And I'll come back in a few minutes to give you a specific example of that. But for now, I'm going to hand it back over to Mattias. Thank you.

Thank you very much, Aden. So now we have covered the strategy. We have covered opportunities. What is it that we want to do? Well, our ambition is to scale up profitable organic growth. We've talked before today that the focus is on organic growth, and we have an ambition to do that faster than we've done historically.

Now there's a number of things that need to come true for us to achieve this, of course, but there are 3 things that are particularly important that I'd like to cover today. So the first one is our focus on the champion categories. So building bigger and more champion categories. Continuing to innovate or out-innovate in the existing categories that we have to make them even bigger. To add new champions, and the good news is that there are already interesting and promising opportunities within the company today. And then lastly, we will think a bit differently about the bags category and use bags to support the champions that we have in the company.

So I'll go into each one of these 3 bullets now because it's important. It is our #1 priority. So starting with building bigger champions. Three areas to remember around our work to build bigger champions. The first one is we need to make sure we continuously innovate and have a portfolio of upgrade new products coming. So we will increase the R&D spend we have for champion categories and spend about 4% of our total sales on champions.

Secondly, we will continuously then feed these categories with product news and upgrades, both to drive trade-ups, premiumization, but also news and new niches and use cases that Aden talked about before. And on that note, we believe, and we have proven before, that we can thereby expand the categories. We can address more use cases within each category. We have proven that this year very well with bike carriers and proven it again and again in the champion categories that we have in the company.

We also can address more price points. We have, in the recent years, spent quite a lot of our efforts on the premium end, which is, for sure, the most important priority, and that's what we should own. We've done a bit more in mid-segment just this year. And we actually believe we can stretch these price points even more, developing products that are what I call premium plus, but also sort of mid, low, if you like, probably in our terminology entry level, but from a market perspective, more of a mid-price level.

We can add more accessories, and we can also address some regional or market-specific opportunities. For example, the North American-specific bike carriers we have developed, that's been successful this spring. So this is how we're thinking about building bigger champions, continuing to out-innovate and grow our existing #1 positions.

Now the other part of the focus on champions is to add more champions. And again, the good news is that there are really promising champion candidates, I'll call them, in the company today that we can scale up. And I'd like to cover 3, and I'll spend a little bit of time on this. So there was a question related to this also previously in the last Q&A. But going back to all-terrain and running strollers, a clear niche where we have done really well, have a really strong growth momentum. We are the global #1. There is market growth from sporty parents wanting to continue to run and be active even when they become a parent. We also see really good reception in terms of innovation here. When we bring something new up -- new out, sorry, upgraded, innovative, we see clearly the consumer responding. And we have a really good growth momentum. We will continue to put fuel to this fire and grow this part of our business.

The 2 other candidates I'd like to mention are the organic entries we did in 2024, so last year. And in the beginning of last year, in the first quarter, we entered the dog transportation space with the dog crate Thule Allax. Again, it's a clear pocket, no global players. Aden just explained some statistics around how many Thule consumers today own dogs. So for sure, there is a connection with us as a brand already. Pet market is growing. Pet safety is growing even more. And this was last year, the best new category measured by first-year sales in Thule's history. Award winning products from several institutes, including the 2 most prestigious ones. So off to a good start and something we also will focus on scaling up with more products launched this year, more to come and widening the distribution.

And the third candidate is car seats, which also launched last year. First products came to market in 3 countries, end of May and then the gradual rollout during the second half of 2024. This is a bit different. This is actually a competitive and quite big market. But there are few players that really focus on the premium end and the child safety focus end, which we are really doing. And we are convinced we can build a strong market position within the European premium car seat segment, and we have had a very good start to that work. You may remember that we not only won design awards. We won the most important consumer test, the ADAC test with our first product last year, and again with our second product this year. So clearly proving we are here to be able to make successful products and to win in the marketplace.

Also here, there are promising trends or good trends, I would say, with the focus on child safety, both from a regulatory perspective and from a parent and consumer awareness perspective. Not the least, the real world facing in car travel with infants. Looking at the first full year sales for car seat, this is now the new best category measured by first-year sales. So another promising start also commercially and another candidate that we will continue to scale up. Some of you have seen the most recent product downstairs today that will be launched next year. So in addition to these 3 existing candidates, we, of course, have a few more things in the works. We have plans to develop more categories organically. There is work going on.

You will not see a new product category in 2026. You may see the new category in 2027. And if not, you'll likely see it in 2028. As with innovation work, it's ready when we're fully satisfied, but there are some things going on. And in addition to that, we support this work of adding and building more champions with add-on M&A. There is about 25 companies today in the world that we talk actively to on a regular basis that could either add to an existing champion or potentially become a new one. But -- and if the time and conditions and several other things are right, we would, of course, be interested in using that route as well to continue to add more champions. So the first priority is building bigger and more champions. And from a strategic point of view, our ambition is to grow the number of champions from the currently 6 that we have today to 10 by 2035.

I mentioned before as a third bullet point that we also are thinking differently about bags going forward. So let me say something around that. Bags is a category where we have historically not been growing in total. It's been flat across the last decade. For sure, there are some things within the bags category done well, Thule-branded products that have developed well and some other things we've actively stopped investing in and, therefore, phased out. But even so, we think there is an opportunity to do much more and actually to stop doing some things within bags. So going forward, we will focus particularly on 3 things within the bags category.

We will continue to put focus on Thule outdoor lifestyle luggage and backpacks that we call it, core Thule collections that really do well and connect with our consumer. And we have some examples here. I think this is a good one. With the Thule Chasm duffel bag that has performed really well for us and continue to grow for us in -- also this year.

The second part is also within bags, there are interesting, attractive pockets or niches. We already today have a really strong offer and are #1 in, for example, bags for transporting your skis or your ski boots or surf bags or your bike when you take it on the plane or on a train. And to Aden's point previously, we see a lot of opportunities around bike commuting. So in a few seconds, Aden will be back and show you an example of an interesting pocket that we're resting now in 2026 through -- within the bags category.

And the last point around bags is we will also use bags to be accessories to support other champions. If you have a rooftop box, you might want to pack that in an efficient way. Or if you have a stroller, you probably have a few things you want to bring with you as you are taking your stroller out. And we are developing more accessories like packing cubes that has done really well for us. And also launching next year is what we call the Thule gear haulers that can be used to bring your things in an RV or in the back of a car or in a rooftop box or on a boat, et cetera. So bags will have a role also as functional accessories to support other Thule champions.

Now there are also a few things that we will do less of. We will reduce our focus on things that haven't done so well. We will stop doing developments for consumer electronics. So laptop backpacks, sleeves, cameras, things even. Business travel will not be a segment where we focus more on and the secondary brand, Case Logic and OE product will, for all practical purposes, be out of the portfolio within 2 years.

So having said that, I'd like to welcome Aden back to give an example of an interesting niche within the bags category that we would like to focus on going forward.

Great. Thank you, Mattias. So if we look, this diagram looks familiar, right? We looked at this a few minutes ago, really our guiding principles on how we look at new opportunities. And so I'm going to take you through one of those now in the bike commuting space. This is a new product called Thule InLock. Some of you may have seen it downstairs earlier. But I'm going to take you through the logic as to why we've decided to do this and why we see it as a really high potential product for us.

If we look at big in pockets, what we're talking about here right now are bike panniers. We're not talking about a broad bag segment. We're not talking about bike bags. We are talking about a niche with a limited number of competitors out there, Thule already being, I would say, top 3 in this space on on-bike pannier bags. And some of you may not know what a non-bike pannier bag is. So I have one here just to show you briefly what that means, right?

So this is a typical on-bike pannier bag. These bags have hardware mounted on to the rear of the bag, and this allows you to securely mount these bags to your bicycle for when you go to bike either commuting or recreationally. So that's what a typical bike pannier bag would look like today.

Now I talked about this being a candidate for big in pockets. It's also very much brand aligned. You saw the consumer insights earlier. You saw the market trends. And so we know that we have a consumer that bikes and we know we have a consumer that owns bikes. So very much brand aligned and also very aligned with our core competencies at Thule in R&D and supply chain and sales channels and marketing channels that we're already in. So on this one, when we talk about the big in pockets philosophy and can we be #1 here in bike panniers? Absolutely, we think we can.

If we look then at the second leg here, the trends in consumer insights. If you look at the market trends around bike commuting, you'll find, number one, government investment in bike infrastructure to encourage commuting is skyrocketing. In Europe, they're expected to spend 30% more in the next 5 years on bike commuting infrastructure than has been spent in the previous 5. If you also look at government incentives, trying to encourage people to bike commute, you'll find a lot of new programs.

In the U.K., for example, you can now pay pretax out of your paycheck in a lot of places for bicycles. In the Netherlands, your employer can provide it as a benefit in kind. So between government infrastructure investments and government tax incentives, there's a lot of tailwinds behind getting people on bikes and commuting on bikes. And then we talked about the general trend in e-bikes. So in Germany last year, 2 million e-bikes were sold, 1.8 million conventional bikes were sold. And so I talked earlier about e-bikes and being that game changer to enable people to commute an easier way.

So clear market trends in favor of bike commuting to support this. And we talked a bit about the consumer insights earlier and the fact that we know in Germany, our biggest market and in others, there's a high rate of ownership already with our Thule consumer base. But we also asked them in our largest market, Germany, how do you commute to work in school? 40% of them use a bike either as their primary or secondary method for those commutes. So we know from our consumer insights that people are already doing this, and we feel like we can tap into it in a bigger way.

So we've got supportive market trends. We've got supportive consumer insights. We've got something that we can be big in pockets. But again, as I said earlier, without innovation, we still won't win. So can we disrupt? Can we differentiate? Can we command a premium position in this bike pannier space? Absolutely. Yes, we can. It's an innovation-based culture. Mattias said it. It's our superpower. And so I'm going to take you through how we're going to do that and what this product does.

When we talk to consumers, when we do our market research, we look at what are those pain points, what is the biggest pain point with that pannier that I just showed you. What consumers tell us is it's off bike portability and comfort and ease or difficulty of mounting and dismounting the bags on the bike. And so you see why that is, right? There's all of this cumbersome heavy hardware on the back of the bag. And when you try and take it off the bike and take it with you, it's very uncomfortable, digs into your shoulders. It's a real pain point.

Sometimes, the most beautiful solutions are in their simplicity. And so that's what we've developed with this Thule InLock system. And to make it easy to understand, we took the hardware off the panniers. I'll show you what that looks like here. This is our Thule InLock pannier. There's just a side panel now that you can see in the photo here that mounts onto the bike and bag comes off and on that side panel. So for those of you here today that traveled with your carry-on and you had a backpack or a laptop sleeve, and you put that over the handle on your carry-on bag. That's exactly how this functions. Super simple, game changer, in my opinion.

We've solved the biggest customer pain point. It's differentiating. It's disrupting and we've got patents pending to protect it.

So right, big in pockets, yes. Market trends, positive. Consumer insights, positive. Innovation, absolutely. And so all those things come together, and that is what really directed our decision to make a big deal out of this product. We feel like this can be a game changer in the market and that we can be #1 in bike panniers with this solution.

Before I hand it back to Mattias, we're going to show you just a brief video of what this looks like in action. Thank you.

[Presentation]

So we talked about the first priority, building bigger and more champion categories. The second priority to scale up profitable organic growth is to do what I call reach a bigger audience or, in other words, sell more of what we have. We are fortunate to work with a fantastic brand. Thule is really well known for quality, connection to the outdoors, safety, reliability, durability, ease of use, design. There's a lot of good things. And it's also a brand that has high brand awareness.

But it's interesting that very few of our own consumers are aware of large parts of our offer today. In our biggest market in Germany, 2/3 of our own consumers don't know that we sell bags. So there is, for sure, an opportunity to introduce consumers to more of the Thule offer, in other words, reach a bigger audience and sell more. So we are working on that through many different activities, and I'd like to just show you a little bit of what we do.

Two things that we have done more of lately is events. If it is bike events in California, arranging a stroller-running event before one of the European -- Europe's biggest running events, the Adidas 10-K, high-end surfing events in Portugal with Big Wave Surfers or dog walks in Stockholm around the Thule store. Getting out there, showing the product in real life and engaging with consumers has been a good lever for us to pull.

And secondly, another and cost-efficient way for us has been to step up our work in PR, where we work with some of the best media in the world and increasingly telling the story about all of Thule or more of Thule rather than just one single product. Now there are also more concrete things we can do on specific geographies and channels. And I mentioned before that, for example, we have a new setup for sales and marketing in North America this year.

We've actually just recently changed our setup in Australia. As of 1st of November, we now have our own team in Australia, not an enormous market, but a very good outdoor market where we clearly can grow. And then there is a lot of things that we are doing around D2C and thule.com on the digital side, just opening thule.com for consumers in more markets and they're now starting to engage more digitally, and we could have probably an own Capital Markets Day just during that topic.

Lastly, for sure, there are some specific things we're also doing to address consumer segments and channels to make sure we build up our newest product categories. But these have been good for us. And we actually just last week, had the biggest customer and media event we've ever had at Thule. And instead of traveling to trade shows and meeting customers out there, it's more cost efficient, if we can, to be -- to bring people to us. So we were here in Malmà talking to a lot of good people around Thule, our new products, of course, but again, introducing more of our full offer to these partners. And it looked a little something like this.

[Presentation]

The third priority for us is more around how I can obviously not do this alone, and neither can Aden and Toby and Catharina and I together. We need a strong team. And I have spent 2 years building what I think is a super team, a top team of what we call accountable leaders that will drive these results. So let me spend a few moments and describe that. And what we really try to do is to build a team and an organization that can scale in a simple structure and an efficient structure.

So we are decentralizing what we think can be decentralized, sales responsibilities to regions and channels, category responsibilities to category specialty teams, but actually centralizing even further things where we can get scale on global investments like R&D and supply chain. And we have been working quite a lot also on how to empower those teams, clarifying responsibilities and accountabilities and making sure that the organization structure works in total.

Now that's all good, nice structure, but you need strong people, and we've spent a lot of time on actively talent managing and built what I call an A team of high performers. And if you look at the top 75 people we have in the company today, which is a wider definition of the leadership structure in the company, starting with the group management team, you can see in the bubbles to the right-hand side, we have over 80 years of experience on the group management team.

Looking at the top 75, sorry, 18% of those are internal promotions that got promoted within the last 2 years. And a similar number, 22% are external recruitments that we brought into the company in the last 2 years. So I feel really good that we have put both a structure in place that can scale and really great people involved that can drive this business.

And then lastly and very importantly, we're also working very actively with our fantastic Thule culture or what we call sometimes in Swedish, GnosjÃandan and we do have an amazing culture here at Thule. I really believe we have this entrepreneurial spirit. They can do attitude. We're always looking to improve things, and we play to win, and we want to win as a team. And that's something we have done quite a lot of work with to make sure we stay current and that's an important part of our recruitment and promoting, et cetera, of people.

So now I've talked about the 3 main priorities for achieving the ambition of scaling up. But I'd like to mention something else as well on top of this, something which is always important to us at Thule, and I've expressed it before us strengthening the foundation. But there are 3 things we just believe in that I want you to remember also. First of all, we believe in Swedish engineering. We believe we have strong engineering capabilities not just in the country, but within Thule and that we can actually bring a lot of great people to Hillerstorp and to build a strong base for product development going forward here locally.

We are continuing to extend the facilities in Hillerstorp. It will be ready in 2026, and we have long-term plans in place. We have today about 270 engineers in the global test and R&D center. And it's interesting and encouraging to see we attract people from all over the world. Between Hillerstorp and this site here in MalmÃ, we have employees representing 24 different nationalities. So that's something we believe in.

Secondly, we always work on cost efficiency. I think it goes back to the Smsåland's cassinette, the mindset or the culture that we have at Thule. Yes, I'm biased. I am from Småland, but still, this year, we've also done a few things to push the efforts a bit further. We will come back more to this in the next chapter, but we are investing in automating our DC in Poland, to optimize manufacturing capacity and to continue to drive continuous improvement efforts.

And lastly, what we also believe in is around sustainability and integrating sustainability into what we do, and that could also be an own session at some point. But the one thing that I'd like to mention, which I think separates us from some others is that we integrate sustainability in the way we design and develop products. So for example, our newest bike carriers that came out have a higher content of recycled aluminum, green aluminum produced with greener energy sources and, in total, have a CO2 footprint, which is 50% lower than the previous generation. Again much more to say on this, but I want to make sure that we address these points around a strong continuous foundation as well before we move forward.

So in all, scaling up profitably and growth is our ambition. Building bigger and more champion categories, reaching a bigger audience and having a top team of accountable leaders will be the 3 keys to get there. And I mentioned before that our strategic growth ambition is to go from 6 product categories that are champions today to 10 by 2035, and that ties in really nicely to the organic growth target of growing 7% per year.

And that concludes the presentation part of this third chapter. And with that, I'd like to invite my colleagues up again on stage for a Q&A session.

So you talked about keeping on innovating in the current champions, but I mean how many rooftop boxes and bike carriers can you really launch? Is there much more to do?

Absolutely, there's much more to do. And I think for those of you here in Malmà office today, you saw some of that down in the lobby. I think it's a great question. We've been making bike carriers for decades. What you saw downstairs that's going to launch this year is, again, solving a customer pain point the Thule Epos ParkSecure, where we've introduced parking sensors. That's the hardest part when you've got 3 bikes behind your vehicle to understand if you're going to hit something behind you and damage your bikes. And so again, we're continuing to innovate there.

And the other thing I would say, talking bike carriers that you see in the same carrier is the new bike arm that we've developed. We've seen a very much evolving market in terms of bike geometries and the diversity and bike geometries out there that we've had to address with new technology and new patents, and we've done that. So yes, things like bike carriers or roof boxes can seem a bit static, but there's always evolution in the market, and there's always opportunity to innovate. And same goes for sustainability to your point earlier, Mattias.

Should we continue with questions from the audience.

My name is Johan Eliason at SEB 1. I was just curious about your comment about the OE brands and Case Logic. How big percentage of your sales today is the Thule brand and if you adjust for Quad Lock, I guess, right now, but...

Well, in total, the Thule brand accounts for the vast majority of our sales. It's published in our quarterly and annual reports, but I don't have the number now off the top of my head. But within the bags category, you have seen a clear shift over time where we once several years ago used to be -- have a higher share of the Case Logic brand and some OE product, and that's declined quite rapidly, whereas the Thule brand has grown to a split, which is now Toby, do you remember?

It's more than -- significantly more than 50%.

More than 50% Thule branded within bags.

And then this potential headwind, you talked about closing them down over 2 years and still targeting 7% growth per annum. Are we talking about 1 percentage point or what?

Yes. So I'll actually come back in the next chapter on how that mathematical equation works. But for sure, within bags, we will and we have for years, declined the Case Logic business and the OE business. And we believe we can grow the Thule brand business faster with the new focus on some interesting bags opportunities that we went through earlier.

Carl here again with DNB Carnegie. So 2 questions from my side. First, on the R&D spend in the champions. You talked about going up to 4%. And I believe you had that pretty short, I believe you were around 2.5% now. That seems to have been fairly consistent over time. So is that going to be on expense of the, let's say, nonchampion categories? Or is it going to be an incremental 1.5 percentage point step up.

Yes. So we've been at, if I remember the chart right, around 3%, 3.5% or so, we can all look at it together later historically, to your point, Carl. And we will make sure that's around 4% to capture the opportunities we see. We will spend less on other things. So we will spend more of the R&D -- higher share of the R&D spend on the champions and on what we call the next champion candidate or the next-generation champions. And we will reduce in other areas. And in the next chapter, when we talk specifically about the path to financial targets, we will also talk more about the R&D spend and how that will evolve in total.

And that takes to my next question because you talked about going from 6 to 10 champions. And I believe also from the previous chart, you were going from, let's say, 4 to 6 in the last 10 years. And you said now until 2035 and champion qualifications seem to be quite high standard. You're talking clear #1 high market share go forth. So maybe a little bit on the phasing of the 2035 is going to be pushing it hard now initially to reaching the scale, or how many can you add per, let's say, over 5 years? Is that going to be achieved by 2030 and then you're going more to profitability mode? Or -- yes.

Yes. No, good question. So we've had 5 champions since the IPO, and we've added a sixth one now with Quad Lock. To your point, it is a fairly high bar to get there, a clear -- small pocket, clear #1, high market share. We talk internally about sort of SEK 500 million turnover for us as being a bar to meet. I think the good news -- the good starting point is there are 3 things we've already launched that we can scale up. And then we again have some more things in the works and potentially in other M&A if the right opportunity comes could be helpful.

But we are not thinking about the future in terms of sort of an investment phase and the profitability phase. We're thinking about a balanced approach to this, where we continue -- or sort of in parallel will drive continuous product development and continuous growth efforts, but focused on champions and the next-generation champions and efficiency gains to improve both the sales trend and the profitability trend at the same time.

I'll do online question in between. So we got a question about the common strollers are not classified as champions in this presentation. But car seats quite often connect to the strollers. So how do you see that? Could that actually help our position in the common stroller area as well?

I'll take that one?

Sure.

Yes, absolutely, again. I think that was part of the initial philosophy around why we decided to get into car seats here because a lot of first-time parents, they're buying a full travel system. And so they want to see if they're buying a stroller, they're going to use every day that they've got a car seat and a bassinet that really cleanly integrates into that whole system.

So the philosophy and the thinking from our end is that by extending the kids portfolio by offering these premium car seats really focused on safety, is that by extension, we'll get more customers spending more on all the products around that with the strollers, bassinets and accessories. So absolutely. Yes.

Yes. It's Agnieszka at Nordea again. So you mentioned that apart from the kind of organic development, you will also look for champions through acquisitions. Should we read it that all the M&As that you will make will be really to fill up the gaps in terms of product and technology rather than expanding geographically or buying some kind of distribution power. And also when it comes to the '25 targets that you mentioned, could you give us some flavor about the size of the targets or geographies? .

No, a good question. And to the first part of your question, if I recall correctly, the answer is yes. We are a product company, and we are investing according to sort of the product access primarily. And that goes that the work -- the M&A work going on is also mainly focused on adding either product for specific subcategories that fit our existing champions or potentially could become new ones. So it's a product lens first and foremost, to your point. Sorry, Agnieszka, what was the second part of your question?

Size of the targets or geographies.

Right. So we -- obviously, for some of the potential acquisitions that are add-ons to existing champions, they are fairly small. Some of the larger ones that could potentially be new champions or a bit larger. I mean Quad Lock was unusually large for us. There is no secret about that. But Toby will also come back later when we talk about financial targets about how we prioritize our capital, how we think about capital allocation. I think you maybe add some more insights to this. And we are clear also in our communication of targets that organic growth is the primary focus for the company.

So how should we think about growth coming from acquisitions?

Well, I think on the note of the last answer, we are primarily focusing on organic growth. But we have seen throughout history, how we can benefit from quickly getting into champion positions through an acquisition. So we're not excluding that. But again, I think after some further presentations around capital allocations, you will have a better understanding for how we prioritize, but the main focus is organic growth.

Any more questions from the audience? Yes, we have Daniel here.

Again Daniel Schmidt from Danske. Yes, maybe one more. And I think you told us a bit about the total addressable market on car seats and dog crates before. It's changed maybe a little bit on car seats, given that the U.S. is delayed and so on. And then we have maybe 2 unknown. And maybe you know, of course, where you want to be, but how does those sort of potential champions stack up in terms of addressable market versus the ones that you feel that you're already champions in.

So most of the markets we're champions in have a market size of SEK 2 billion to SEK 5 billion globally. There are some exceptions, but most of them, at least in the premium end where we play. And if you look at the candidates that we have, I mean, all-terrain and running stroller is about a SEK 1 billion market today, growing also, fueled by products like ours. Dog transportation is about a SEK 2 billion market. To your point, car seats is a bigger market, but that premium end in Europe is not enormous.

It's probably around SEK 8 billion or SEK 10 billion or so. So it's back to the original point actually that these are fairly -- these are pockets that are not enormous, but where we can win and be #1 and continue to grow them ourselves through product innovation and developing. That's where we perform the best.

I'm just thinking that maybe 2 of them are a bit smaller. And do you think that's compensated by being a much, much more fragmented market than roof boxes or bike carriers, i.e., is it a bigger opportunity that gain more market share than what you have in your bigger champion markets?

Let me just make sure I understand the question. Is it more opportunities in the existing categories you're saying?

No, rather than new ones, 2 of them are quite small. And in order to compensate for the size, are they more -- even more fragmented, i.e., competitionless than what you see in your legacy champion markets?

Good question. I have to run all the categories in my head. But if we look at the new ones, look, in dog transportation, there is no global player. There's few strong players. There is a lot of not very advanced solution out there, so very fragmented, right, and really clear opportunity for us. Same goes for the active strollers, if you call them that. But also part of the story and part of the fact we've been showing is when we have the ability to grow these segments through product development and product innovation, and I think it ties in really well with the focus on organic growth. If we continue to invest in growing these categories and then have some that we grow faster in and penetrate more and build up new champions in that will enable us to get to the at least 7% organic growth.

Adela Dashian from Jefferies. This might be a confusing question. But when you think of acquisitions and how you approach them, do you start off by looking at product categories to go after? Or is it the brand that matters the most?

For sure, the first. So we take a product lens as #1. What's an attractive category? Is there a tailwind? Can we innovate in this space better than everybody else? Or do we believe this target can and that would fit sort of with us? And then we actually want to run, as you may know, a mono brand strategy. So everything we do should be eventually fit with the Thule brand. Historically, what we've done this via co-branded or as we call it. So the original Chariot product, for example, is called Thule Chariot today. So for sure, product lens first.

And maybe also on your direct-to-consumer strategy, is it possible to expand a bit about what the ambitions are there? .

Yes, for sure. So a couple of things. Sort of strategically, we think it's great for many reasons. We want to grow all our channels, of course, so we don't grow at the expense of our partners. But having a direct connection with the consumers allows us to introduce more products to them, to learn more about what they want and to have a deeper relationship as a brand. Before the Quad Lock acquisition, to keep the numbers easy, we were about 7% of our sales as DTC, and we think we can double that within a couple of years. So the first step in that journey has been just simply to enable DTC shopping in more countries. I think we had 8 or 9 countries open for shopping at thule.com 2 years ago and now we have 17 or 18 or so. Australia will open in Q1 next year. So step by step, we are building a bigger digital footprint, getting more engaged consumers and yes, seeing the value out of that.

And you still think you have the right infrastructure in place to pursue this? Or will there be additional costs associated with this?

No, it's a good point that we've discussed sometimes before. And that's a fortunate situation with Thule. I mean, I've done a lot of e-commerce models over the years, but the heavy investments are in IT and in supply chain structures. On the IT side, we have, of course, you always upgrade, et cetera. But the supply chain setup at Thule is what I would call retail-like. So we typically supply our customers frequently. You can -- if you're a bike shop in Germany, you could probably order a product on the Monday and get it on the Tuesday or latest, the Wednesday.

So we're used to sending small orders in high frequencies across the world, and that's a very good fit with the DTC business. So it's actually not been very costly at all to add these kind of services to the supply chain structure that we have.

So a final question before the break. We are selling car seats in Europe, but the dog transportation we are selling all over the world. So how does this dog transportation marketing and selling, how is that different between, for example, Europe or North America or other regions?

Sure. Happy to take that one. It's very different, actually. If you look to the European market, a lot of the purchasing and the motivation for dog safety solutions is built around regulations. In Italy, in Spain, in Germany, in the U.K., all of these countries have laws and regulations that say the dog needs to be restrained when you're driving with it in the vehicle. And so that's a motivator for people to comply with those regulations, avoid fines and it's also the right thing to do. But that's the motivator in the European market. And that's why we piloted the dog products here first because we felt like there was that strong motivation to purchase locally.

But we knew we had a winner quickly after we started piloting it here and rolled it out later in the year in the North America market. And it's a very different motivation there because you don't have those laws and regulations that are mandating dogs to be restrained in the vehicle. And so we need to build that market. We need to build that awareness and tailor the marketing and the messaging approach locally there, which we've done. And if you think about it, right, a personal experience as a kid, 30, 40 years ago, I used to ride in the front seat between my parents and my grandparents. No booster seat, nothing.

And look how the child safety market has evolved over the last couple of decades. And so that's what we see here that we would anticipate it's going to happen with dog safety because there's a whole trend around pet humanization. People are spending a lot on their pets. They're a part of the family and they want to protect those pets and invest in that. So we see the same evolution coming in the next couple of decades here under dog safety. And so we want to be at the forefront of that and really lead it and be the ones building the market.

And I think we've been pleasantly surprised in North America actually with the results that we've had. They've exceeded expectations, and there's a consumer there that has the appetite for this. And last thing really to add is we've positioned it, not just around dog safety but actually safety for the passengers in the vehicle. So it's all about protecting passengers and dogs because in an accident, the dog can become a flying projectile, and that's harmful for all the passengers around the dog. So that's the message we're trying to deliver. Different ways in different markets depending on the consumer motivations, but great question.

Thank you, Aden and Mattias. It's time to refresh and refuel. And this time, we'll have a 15-minute break. So see you back soon.

[Break]

Okay. Welcome back, everybody. Now we're going to start the fourth and final section, and we're going to talk a little bit about the path to reaching our financial targets. And in case anyone has missed it, we have new financial targets today. And here are the financial targets.

Firstly, we have 7% organic growth, 20% EBIT margin and 75% dividend payout ratio. And we believe we have a clear path to reach these financial targets, and that's not just because we've set new financial targets for the company and for management, it's because we've worked through a through plan on how we think we can take ourselves and take Thule through these targets. So we have a clear plan behind this, and we're going to take you through that.

In order to do that, we're going to take you through 4 areas and drill down on these 4 areas. So firstly, we're going to take you through our consistent sales growth and the sales target, going to take you through our strong and stable EBIT margin and the EBIT margin target. We're going to touch on conservative leverage and, finally, the high dividend payout ratio. So we're going to drill down on each of these areas. And for the first one, when it comes to sales growth, I'm actually going to hand back to Mattias to take you through some of the background to sales growth. So...

Thank you, Toby. I'll cover the growth part, and then Toby will be back to cover the remaining three areas. So just a quick reminder. This is the same graph that we've showed at the beginning of this presentation. We've had a pretty consistent sales growth pattern, excluding the COVID effects for 10 years, 5% annual growth on average and actually 5% also over the last 5 years. So it's a good benchmark.

But as you've heard right now, our target is to increase that to 7%. It's just not 7% across the board, though. There are a lot of differences in terms of categories, market situations, and also initiatives from our side. So I will take you through that to some detail actually. But before I go in too much detail, I'd like to give you an overview. I mentioned before, and some many of you know, that we report four product categories at the highest level. The two on the left-hand side here, Sport and Cargo Carriers and RV products, together account for 70% of our sales.

And we have four of the six champion categories that we have are within these two, three in Sport & Cargo Carriers and one in RV Products. Ands here, our ambition is to perform in line with history. We have grown these categories for many, many years, and we have an ambition to continue to do so also going forward.

Now on the right-hand side of the graph, the other two product categories at the highest level, Active with Kids & Dogs and Bags & Mounts, represent 30% of our sales. We don't have as many champions today, but we made a lot of investments into these categories over recent years. And here, we expect faster growth. Here we expect to scale up and build the next generation of champions.

I'll now take you through the situation and the plans and actually the market dynamics for each one of these four main product categories.

Starting with Sport & Cargo Carriers, our ambition is to extend the global #1 positions that we have. We have champions and global market leaderships in roof racks, cargo boxes, and in bike carriers. And there are several good trends here that will support us that gives us tailwind. Now we have an increased adoption of electric vehicles. That changes how you transport things on and around your car.

Fewer people want to have things on top of the car because it reduces range. And therefore, things move to the back of the car, a growth opportunity for Thule, which we are investing against. We talked about e-bikes today a few times, also opportunities for Thule to innovate, heavier bikes, proliferation of bikes, more opportunities to create bike carriers for more types of bikes, including e-bikes.

And we have covered the trends around near-home vacationing, and there is actually underlying very positive trends or solid trends, I should probably rather say, within both winter sports and water sports. So good tailwind trends to support us.

There are also some specific subcategories or niches that we can build a new presence in within this space. So we have already a strong portfolio, of course, for bike carriers behind the car, several years ago, used to be on top of the car. And as Aden mentioned as an example before, we are investing to build similar products for the equivalent of rooftop boxes behind the car, introducing some things, two new products in the last two years.

It is growing really well for us, and one of them is represented on this photo here. And the other really interesting area we're investing in right now is around pickup trucks, where we have the next-generation product coming out in just a couple of weeks. This is also, as it represents our biggest footprint, over half of the sales, for sure, a category that will be supported from having what we call a bigger consumer audience.

Focused sales and marketing team in North America. We've just forward integrated or stepped in ourselves in Australia, and this will help us give scale and, of course, drive growth in this product category.

Now looking at the market trends here, and we've had some questions and discussions around that already today. This has been a solid market development over time, around the sort of GDP plus market growth of 2% to 4%, depending a little bit on the niche and the geography you're looking at. This year, the picture is different. Europe, to the best of our estimates, is more stable, probably around stable, maybe somewhat negative.

We'll see where the year ends up. But in Europe, to the question -- sorry, in the North American market, in the U.S. to the question we had earlier, we've seen a really shrinking market, and our channel partner tell us it's probably at least a double-digit decline. So clearly challenging. But given the consumer sentiment will turn and the positive tailwind trends that we see from the long-term favorable factors, we -- there is no reason to believe that we will not get back to the same 2% to 4% market growth in the midterm, which will be supporting us with our ambition of growing this at 5% or more over time.

The second product category is RV products. And we have, for many years, grown the Thule RV product business faster than the RV market, RV registrations, or other metrics for how to measure the size of the RV market. And that is our goal also going forward, to continue to outpace the European RV market. We have a really strong position in earnings. European market leader, clearly, and in bike carriers for RV products, for RVs, for motor homes, and for caravans. That is our main focus also going forward.

Here, there are positive market dynamics, which connect to the near-home vacationing, the camping trends that are still around, the consumers' appetite for having flexible and more sort of freedom in their travel. And we Additionally, in Thule have some additional support from the trend that motor home vehicles are getting smaller. So If you're looking at the growth in the RV market, most of the growth is coming from what's today called urban vans or sports vans, which means that, that's really good, but you need to have other solutions over time to bring more of your gear, and we can see innovation opportunities in this space and develop even more products.

On top of the European market, that is our main focus, we will address certain premium niches in both North America and the Asia Pacific region, and there are more opportunities there. We will also expand the product portfolio a bit. There are what we call around-the-van solutions. And one good example of that, that we've been successful with recently, is what we call panels. On the picture, you see that there are some 10 panels connected to the owning, a great additional product that helps you protect you from the weather conditions, whether it's sunshine or rain.

So there are more opportunities to connect to this portfolio that we already have. Here, there's a bit of a different market dynamic. Historically, this has grown a bit faster, not much, but somewhat faster than the Sport & Cargo Carrier market, but 3% to 5% and this year, yes, we are seeing a decline in the market, just like we did last year with an RV. But here, there is a light in the tunnel. A lot of the challenges this year is to stock levels and stock level effects.

So the RV market is typically best described in two channels, the OE or the manufacturers and the aftermarket, the dealers. And this year, we have seen that the aftermarket has returned to growth in terms of market vehicles sold registered, but also for us at Thule. However, there's been too much stock in the supply chain. So the OE side has taken production stops and really lowered volumes in order for the stock situation to normalize before ramping up production levels again. And that, of course, impacts us as well. So here, we see a positive sign of the market returning to growth. And step-by-step, fewer and fewer OE production stops helping the overall growth in the market.

So also here, particularly given the positive trends, there is no reason to believe that we will not have a good midterm market growth again that will support our ambition to grow at 5% or more in the RV product space.

The third product category is one of the categories where we have higher ambitions. And here, a lot of things have happened over the last just two years. Today, we have a one strong champion here. We have the multisport and bike trailers. That actually taps in very well to the bike commuting trend we talked about before, and that can be combined with several other products we have here like child seats -- child bike seats to tap into that trend even more. And this will continue to grow.

We are convinced that the bike is the new car as we talked about several times today, and the continued shift to e-bikes and investments in bike infrastructure will support that. Now that's one side, but there's also a lot of new things that have happened here. And here is where we see opportunities in the near term to scale up some of these up-and-coming champion candidates that we have. We've talked about dog transportation being one, where we will continue to invest in both new products to widen the portfolio, but also in presence, reaching more market and building consumer awareness over time.

We have talked about the all-terrain and running strollers, where we have a really strong growth trend, and we will continue to invest more in that space, both in terms of product and distribution to grow that even more going forward. And we've also talked about our ambition to be European #1 in premium car seats. Again, these latter categories that we recently have entered are supported for -- from positive trends towards safety, both for kids and for pets.

So a bit more arrows here to explain the market dynamics. But also here historically, for our footprint, which has been mainly then of the champions, good market growth, challenging this year, not the least because of the retail environment in these categories around juvenile and bike retailers. But we expect the market, of course, to return to growth, actually probably a bit less on kids in the next couple of years as birth rates have declined and that impacts the number a bit. But through to the other favorable trends, we do expect the market to come back to a good growth.

But more importantly, maybe or at least additionally, we do expect the good market trend in dogs. Dog accessories, in general, have grown about 5% per year globally in the last few years, and the safety-related products a bit more. So here, we have positioned Thule towards an attractive tailwind, hopefully, going forward. And here, we expect fast growth. Our growth ambition here is to grow by 15%. That is, of course, quite ambitious.

And just as a positive signal here, we see that despite the challenges in the consumer market this year and particularly also in these categories on the retail landscape, looking just at our own channels are thule.com and our own stores, we are growing well into double digits, actually 20% plus this year already. So we hope and expect that as the market normalizes, we can get that effect in a wider footprint and continue to invest, of course, and grow this by 15% per year.

And the last main product category that we have is Bags & Mounts. This is a story with two different sides or two stories under one product category rather. We have strong momentum in performance phone mounts, and we are reworking the bags category, as we talked about before. So we will continue to invest in the global performance phone mounts for sure, on product development.

This is Thule, that's what we do, but also building market awareness for this product. There is still a lot of untapped potential to bring this out to many consumers around the world. There is good tailwinds here just from generally people being more active and being, of course, more participating in more types of outdoor activities, but people are also using their phone or their smartphone for more things.

And the number of apps being developed for running, biking, and all kinds of different activities is one example of how phones get integrated into outdoor lives. So good trends also supporting the category.

We've talked particularly around bags before, so I'll go quick here. But just to recap, we will focus the bags category on attractive outdoor niches and bags and accessories and the Thule collections around the Thule outdoor lifestyle luggage and backpacks as we call it.

We will, at the same time, reduce the bags footprints in consumer electronics and particularly the secondary brand, Case Logic and OE. So here, we have historically had in the bags business, a low single-digit growth. I think a good example here, if there is a public -- public listed company called Samsonite Group, which is the market leader. You can follow their sales numbers, of course, and they typically also report market statistics.

If you look at the Samsonite Group's development this year, they're minus 4% for the first 3 quarters of the year, which also is in line with our view about similarly how the market is down this year. Phone mounts, on the other hand, market has historically grown around 10% per year, so very strong, and we see a similar trend this year. We expect, like others in the industry, the bags to come back to historical levels of around 1% to 3%, but we expect also mounts to continue to grow fast as a category for the coming years at around the double-digit market growth. Again, a beneficial trend supporting our future growth ambitions.

So the organic ambition here is actually also high. But given that we are reworking bags, that has a negative effect in the shorter term. So the midterm growth ambition here in all is 10% per year. And we're not waiting around. We're already acting to start working in this direction. A lot of things are already ongoing, as you've heard.

And we are launching products also next year, and we have made sure that we address the strategic priorities with our product pipeline in 2026. So I will not go through all these new products that are about to come. You have seen some of them today, but I can mention this. We are focusing on growing our #1 positions, our champion product categories. We are investing in building out the next-generation champions, and we are reworking bags to focus on outdoor and functional accessories.

Now it wouldn't be a Thule presentation unless I showed at least a little bit about some examples of coming products. So I can't help myself, so you have to hang on. But we have mentioned Thule Xscape today, which is coming in just two or three weeks, first week of December in North America, which we believe a lot in. It's called the bed rack, a truck rack, which has the easiest and the fastest install in the market and easiest to adjust that we believe a lot in.

We are building on the success in dog transport and the dog crate Thule Allax, launching the Thule Allax double door also in December, so coming very soon. We are introducing, as you have seen downstairs for those of you here physically, an upgraded version of our most premium bike carrier Thule Epos with the parking sensors. So no more damaged bikes or cars or also importantly, of course, bike carriers behind your cars, because now you will have parking sensors telling you to avoid obstacles.

And lastly, we are still innovating in smaller categories that could potentially one day become champion candidates or even champions. And we are looking into, in this case, the car tents category, where we're bringing out Thule WideSky, which is a hard shell rooftop tent with a low profile, so helps the range for the electric vehicles, particularly, but also in general for fuel economy, very fast setup, and it actually has a bed that converts into a sofa. So the bedroom can become a living room, if you like. So that is the priorities in terms of growth for each respective product category, and that's how that builds up to our growth ambition. An with that, I leave it back to Toby to cover the rest of the financial targets.

Thank you, Mattias. All right. Now I'm going to go into our EBIT margin, first of all. And you can see on the top right, our EBIT margin. I'm going to drill down into that. And before I go into the future plan, I'm going to talk a little bit about the history and where our EBIT margin is today.

I'm going to compare our margin to history. And basically, here, you can see I'm going to compare it to the pre-pandemic period. And why the pre-pandemic period? Well, during the pandemic when the volume swings and the sales swings up and down, the margin changed a lot and was very variable. The last time we had a stable margin profile was pre-pandemic, and I think it's relevant to compare our margin now with pre-pandemic.

So here, you can see on the EBIT margin, we had an EBIT margin of 17.5% in the pre-pandemic period, which was between 2016 and 2019. And today, if we take the last 12 months up until the end of September, we have an EBIT margin of 16.1%. So this is a gap versus the pre-pandemic average of 1.4%. Now I'm going to break that down and show you where that difference comes from.

Firstly, gross profit, and we've been working very actively in the last two or three years to drive increases in gross profit and drive increases in our quality of earnings with a better gross profit. And here, you can see the upward trend in the last couple of years, and we're up by 4.9% versus the pre-pandemic average. So we were 40.5% pre-pandemic, and now we're 45.4%.

And I show you a bit of the components of that. We work actively with our price and product mix to increase gross margin. So that's 2 percentage points of the increase. We work all the time with optimizing our supply chain. So that's 0.5% of the increase. Although when you dig underneath that, we actually have 1.5% of, if you like, cash benefits in terms of supply chain efficiencies, but we're also carrying the extra depreciation because we have invested behind automation and efficiency in the factories, which carries the depreciation. So we have an increase in depreciation within that of 1%. So net, those two is 0.5%. Finally, Quad Lock has a different margin profile. It has a big share of DTC. So It has a higher gross profit and a higher SG&A, but the gross profit impact, in particular, is, of course, positive, and that's 2.4 percentage points.

So all of those together make up the 4.9 percentage points of increased gross margin. And I mentioned we work to increase our gross margin to improve our quality of earnings. And what do I mean by that is basically that with a higher gross profit margin, we get much more leverage when we do manage to grow the top line, we can see much more effect on the bottom line from growth.

And you can see, as an example of that effect, when you look in the pandemic period actually in particularly 2021 when the sales were at the highest in the pandemic, we did get considerable leverage and Thule has an ability to really leverage margins with growth. The other side of that, however, is, of course, the cost side and the selling and administration expenses.

And here, selling and administration expenses have gone up 6.3%. The first impact I mentioned here, Quad Lock acquisition. As I said, this is positive on gross profit, but it's negative on Selling and Administration expenses. So here, it's an increase of 1.9% in Selling and Administration expenses. Overall, you can, of course, see that the impact is positive from Quad Lock, but again, positive on gross margin but negative on cost.

Then we have the development and selling expenses. And these have increased by 3.5%. The biggest component here is the R&D expenses, which have gone up by 2.4%. And Mattias showed this graph earlier. You saw the graph where the R&D expenses as a proportion of sales. And that's really driven by the investment that's been made in the new categories, as you saw from that graph presented earlier.

So that's the 2.4 percentage points in R&D. We've also had an increase of 1.1% on selling expenses. This is also partly driven by the investment behind the new categories and bringing the new categories to market. It's also a component in there is that as we increase, for example, our share of D2C sales, we have a higher level of cost and selling expenses to support D2C sales. So It helps our gross margin, but also increases cost.

But there is also an impact in there from the weak organic growth that we don't get the scale to offset the inflation in selling expenses as well. That's also been a factor in the selling expenses, particularly in the last 12 to 24 months. Administration cost over this period is flat. And the last impact is the warehouse and distribution expenses. Where we invested in warehouse and distribution or we increased our warehouse and distribution during the pandemic, and we've been working, and we are working to bring that down, but it is an increase versus the pre-pandemic period of 0.8%.

That just gives you a background of where we are today, and then I'll take you through where we are going to meet the financial target and how we're going to meet the financial target. And I'm going to take you to the steps we're going to take to get to the 20% financial target in two stages. And firstly, I'm going to focus on the left-hand side here.

And firstly, you can see I start with the LTM margin, which is the one I just presented, the 16.1% EBIT margin. And I'm going to talk through some initiated cost actions we have ongoing, which are already initiated and are going to take us to 18.5% EBIT margin. And I've got three categories of cost actions that we are undertaking.

The first one here, structural cost reductions. And this is a few things. Firstly, it's an investment in Poland, which Mattias has mentioned earlier, but it's an investment in automating our warehousing in Poland and our distribution, which will deliver cash benefits of SEK 100 million before depreciation. So that's one big impact.

We're also consolidating our third-party warehousing and reducing third-party warehousing at the same time. We have structurally changed our cost base in North America, which Mattias also touched on earlier. We both changed the management structure in North America, but we've also closed an office in Colorado, which reduces our cost base in North America.

And finally, we are investing in automation and digital solutions in administration and sales & marketing to drive cost reductions there as well. Altogether, those structural cost benefits will add approximately 1% of margin to the EBIT margin with full effect from 2028. And that full effect is because of the timing of the investment in Poland, which is contributing as well and will be fully implemented in 2028.

The second area is development expenses. And here, as we've talked about, we will have a more focused investment in R&D going forward. We will focus more of our R&D on the champions, the 4% that Mattias mentioned earlier, and we'll have less as a share of revenue of our R&D in other areas. Altogether, we expect R&D to start to come down in absolute terms already next year. And by 2028, we expect to have a 1% reduction in R&D expenses as a percentage of sales.

So that will drive 1% impact on the EBIT margin or improvement in the EBIT margin.

And the third area here is on the initiated cost actions is the supply chain where we have improvement projects ongoing and in particular, in two areas, which are driving cost reductions and efficiency in the supply chain. One area we're working on is on in-sourcing component manufacturing, which increases the volume we produce in our factories and improves the efficiency we have in our own supply chain. That drives lower cost in our cost of goods sold, in our gross profit. And secondly, we are focusing on technology platforms and producing our key products across technology platforms, which allows us to combine production volumes across different products within the same categories. So for example, how we produce components and parts for bike carriers, which are common with each other to drive more efficiency in manufacturing.

So altogether, those effects in supply chain, we expect to contribute 0.5% to the EBIT margin. So altogether, those initiated cost actions, which are already decided in ongoing and on track, will deliver 18.5% with full effect 2028.

Then on top of the initiated cost actions, we have scale-driven effects. And here are three effects that I want to talk about. The first one impacts -- effects the impact gross profit. And here, we have capacity utilization is a significant one that we have significant free capacity in our factories. We did -- we invested quite a bit in the pandemic and increased capacity, and we still have a lot of free capacity in our factory footprint.

And as we leverage that with growth, we get significant benefits in capacity utilization. On top of that, as we grow, we have more opportunities to drive efficiency with higher volumes and higher volumes through our manufacturing lines, both of which improve gross profit. We work actively all the time with our price and mix, not just to offset inflation in our material cost, but to actually drive improvements in our price and mix.

And finally, just a comment here, but it's important to understand that as we grow the Quad Lock business, if the Quad Lock business grows faster than the average, just mathematically, it has a negative impact on gross profit. But of course, it has a positive impact on the other side on the cost base. So just something to remember that a faster growth in Quad Lock means a negative impact on -- sorry, a positive impact on gross profit and a negative impact on fixed cost. Yes. So those are the scale-driven effects in gross profit in Number 4 there.

Number 5, you see the impact from leverage on the selling and administration expenses, which quite simply are yes, leverage on the fixed cost base, which are improved with the higher gross profit we have now. And here, again, I mentioned the Quad Lock. And then finally, the third one, we expect to drive growth even in a neutral market. But if the market is with us and the market is positive, then we expect additional market growth will contribute even more to the leverage we can get from scale-driven growth. And so all of those effects together, we expect to take us to 20% EBIT margin. And we talk again about the midterm. So 2 to 4 years is the time scale we think we can achieve that.

Just one -- then I'll just mention one final topic just to mention on EBITDA. We focus and we have our target on EBIT. EBIT is the right focus we have to drive performance in Thule. But EBITDA, I'm sure as many of you know is the measure of the operating cash performance. So it's -- yes, EBITDA, it's before depreciation. But here, the level that we have in the last 12 months is actually 19.4%, which is above what we had in pre-pandemic.

So cash-wise, we are performing better than the pre-pandemic EBITDA margin. And we expect also to improve EBITDA in line with the improvement in EBIT. We expect that to step up in the same way as we expect the EBIT margin to step up to reach 23.5% in the midterm.

All right. That was EBIT margin. Now I'm going to drill down briefly into the leverage. And the leverage is not a financial target for us, but it is something that is important for us and that we pay close attention to. And just to show you the development of our leverage, this takes you back almost 10 years in the development of our leverage. And you can see, if you look at the bars, our net debt has increased in the last four quarters, obviously, because of the Quad Lock acquisition.

But we are working our leverage down again. And you see the line is the leverage ratio, so the net debt to EBITDA. And we've worked that down, and we're now at 1.81 in terms of net debt to EBITDA, which is a conservative leverage, and we're in line with where Thule has been for a significant part of the history of that 10 years. So we maintain a conservative leverage, and that's important to us.

And how do we do that? Well, the way we can manage to maintain a conservative leverage and continue to invest in growth is that we have a very good cash flow generation in Thule. And the cash flow conversion, in particular, is very strong. And here, you can see the bars on this chart measure the cash flow conversion. And the top one is, if you like, operational cash flow conversion. And the second bar underneath is the free cash flow conversion after all interest costs, all tax, so the free cash flow to equity. And whether you measure over the last 3 years, the last 5 years, the last 10 years, it's a strong cash flow generation that Thule has consistently delivered.

And I think if you compare this to almost any peer, you will see that Thule is above the peers when it comes to cash flow generation, because we take so much of our investment through the P&L and that we drive our growth through investment through the P&L, we have a very strong cash flow generation.

Ans what does this mean? It means we can manage that leverage I talked about, but also that we can both fund the good growth and invest in the good growth at Thule delivers and also pay a good dividend. And I'll come on to that final point now, the high dividend payout ratio. I click on. And here, you see the same time period for the last 3 years, the last 5 years, the last 10 years, Thule has consistently delivered a good dividend.

The payout ratio is above 75% for the history. And that's a good dividend payout ratio of above 75%. We intend to continue that. So that's our -- also our financial target to continue to deliver a dividend with a payout ratio of 75% or above.

And one important aspect of this high dividend payout ratio for us is that it really forces us to be disciplined within Thule, and it's an important part of driving a strict capital discipline in the company that we -- effectively, we put ourselves between a rock and a hard place that we both have to deliver a good dividend every year, and we have to ensure that we invest very wisely in the future growth to make sure we get the maximum return from that future growth.

So it's really important that we invest every kroner of our investment very wisely. Yes, I would like to spend a few minutes just saying how we think about that when we do invest in future growth in Thule.

Here, if you take the left-hand side of this chart, we make investments in growth in many ways in Thule. Firstly, we have a significant investment in R&D. So when you look historically, you've all seen the figures today, we invest between 5% and 7% of sales in R&D historically. If you look at CapEx, we've invested historically around 3% of sales. Both of those drive organic growth, R&D through, obviously, development. CapEx through improving and growing our supply chain, and we really focus those investments on really delivering organic growth.

And on the bottom left, we -- after -- with the good cash flow generation after we funded the dividend, there is cash flow left over to drive growth as well, and we can use our debt financing capacity as well. And both of those are available to support growth investments as well. On top of that, for example, yes, add-on selective M&A.

And when we make these investments, I think -- I want to talk a little bit about how we think. Can you see on the right-hand side here, you can see the chart that Aden brought up earlier. We have the diagram of how we think when we look for new opportunities with big in pockets and making sure it matches our innovation with market tailwinds. So that's very important to identify new opportunities. But then we make very disciplined strict business plans and have strict return on capital criteria when we evaluate and decide on these investments. That's a very important part of our process. We have clear risk-based return criteria that we apply to our investments. We make those assessments in planning. We have a very strict project process within Thule.

And you may be heard in the -- there was a video earlier on where they talked about the project planning process where we have different toll-gates all the time. And every time we come to a toll-gate, we reassess, we maybe adjust, we accelerate, we decelerate or we stop a project, depending on whether we think that return is still good enough. That's -- yes, a very important part of the process. And finally, that we do a post-investment review after all investment projects in Thule to make sure we share the learnings and make sure we take forward the learnings to future projects as well.

All right. Then a final point, I think, is also very important here is that the management incentives in Thule are also fully aligned with TSR. So the management team has incentives aligned to total shareholder return, and we're in the same boat as the shareholders of Thule. So driving return is also very important to drive return in the investments and drive return in the share. Both Mattias and I have invested more than 3/4 of our net salary we've had from Thule since we started in warrants and shares in Thule. So we're very committed to -- yes, to Thule and driving shareholder return in Thule, and the whole management team is.

All right. On top of that, we have a few words on our capital allocation priorities. We have three priorities here. The first priority that we have when we allocate our capital is fueling profitable organic growth. That's number one. And here, we invest in our product innovation and focus there on building bigger and more champions is what we will do.

We focus on our supply chain and efficiency and capacity in our supply chain. We have significant benefits to improve capacity utilization, but we can drive more and more efficiency also through automation. And finally, it's very important to us to meet our sustainability goals as well. So we -- that's a part of investing in our organic growth as well. So that's number 1.

Number 2 is maintaining the attractive dividend, maintaining 75% of net income as a dividend. And at the same time, keeping a strong balance sheet. And again, this is important to us to make sure we have strict discipline in our capital allocation that we -- yes, we have to prioritize our allocation and our capital very carefully.

And finally, the third priority is that we use our funds to invest in selective and clearly value creating add-on M&A. And here, we want our M&A to support developing our existing champions or building new champions. And as I say, we will be very rigorous we making sure that any M&A is clearly value creating, is clearly accretive to Thule, but that is -- that is our third capital allocation priority.

So in summary, we have a clear path to reaching our financial targets. We think we can build the current and new champions to drive 7% annual organic sales growth. We have initiated cost actions that are in place and on track together with scale effects, which can take the EBITA -- EBIT margin and will take the EBIT margin to 20%. And then our strong cash conversion within Thule enables us also at the same time as investing in that growth to be able to distribute 75% of net income as a dividend. With that, I will hand over to Mattias for a summary.

Thank you, Toby. I started this day saying that I'd like you to remember three things in particular. Firstly, Thule has a proven ability to grow profitably, and it is our conviction that we will continue to do so at an even higher pace, driven by the Thule champions and efficiency gains. And now that we have spent this afternoon together going through the details, we can nuance the message a bit and summarize it according to this.

So as Toby said, we have a really clear plan to reach our financial targets. Our conviction is underpinned by the fact that we create our value through champion product categories, and that our ambition is to focus on what's worked, focus on exactly that and move from 6 product categories as champions now to 10 champions by 2035, helping scale up profitable organic growth. So that wraps the whole presentation of Chapter 4 and therefore, the presentation today. And now we move into the final Q&A sessions.

Okay. So final Q&A session, right? So let's start with an online question, and this one is pretty straightforward. Have you increased prices too much?

Shall I start...

We can start.

No I think -- I mean it's a valid question. I think when you look at Thule, we have products in different segments. So we launched products in the premium segment, in the mid-price segment, and in the low-price segment. So I think one point to raise I think we don't -- we don't raise prices just for the sake of raising prices, but we maybe launch more products sometimes in the premium segment than the mid-price segment. And you can say, I think in recent years, we have invested more in the premium price segment probably 3, 4 years ago, which has driven probably more of the new products we've launched have been in the premium price segment over the last couple of years. And now we're bringing more in the mid-price segment as well. So that's Number 1.

Yes, Number 2 I think, I would just -- I think one question I know this is kind of question out there, have we raised prices too much. So it's a general question. But to me if we have raised prices too much you would -- you would have seen someone else take more of the pie from Thule. And I can't see someone else who's taking more of the pie from Thule. That's how I would kind of throw the question back, if you like if -- yes, if we had lost due to price, someone else would have gained.

And I can't -- no one can tell us who that would be in simple terms. But it is a very important question to us. We work very hard to make sure we understand are we positioned right and are we pricing right, and, yes, are we maximizing the growth at the same time.

I think it's a good comment and just adding a little bit more to that. For sure, we have increased prices when there's been dramatic raw material and other factors in place, so has everybody, us not more than others, to your point. Probably today, we are favored, particularly in North America by having local productions. We see others raising prices more than we have done.

But I'd say that to your point, too, Toby, pricing is not about the average, it's about creating the value in the right price segment. There, we have opportunities as we think we've shown today, actually to go both premium plus with, for example, the Thule Epos parking sensors of ParkSecure, but also in the lower prices. Today, we actually see the best performance in the premium band where we have the higher price point. So it is -- pricing is both an art and a science. As long as it comes with good new products, independent of the price point, we can grow.

I think we have a lot of questions from the audience. Let's start with...

Yes, I have two questions. So starting with Kids & Dogs, you obviously expect very good growth in the future. I think that previously, you said that you target SEK 1 billion in revenue by 2030. Is that target still achievable? And also, if you could give us some milestones towards that target. For example, what revenues do you expect to reach in that category in child seats in 2025?

Yes. So thank you. So I think if I remember correctly, the ambition of SEK 1 billion sales in that product category was launched in conjunction with a SEK 20 billion sales target for 2030. As I commented on when we talked about financial targets, I think that was set during sort of a different time with a different market situation.

And we have actually changed the mindset more to think more about growth in terms of percentage growth over a year, as you have seen. So no, there is no specific milestone or target that SEK 1 billion by 2030 is more important than anything else. It's about expanding this product portfolio. We could do faster, of course, but then it will cost more money. This is a more balanced approach. But we do see the opportunities to build sort of champions, which we internally say is sort of SEK 500 million sort of cutoff point in both car seats and dog transportation. So we are continuing to invest, and those are two of the candidates that we have the highest hopes for at the moment.

All right. Then, Toby, a question to you actually. I think on the chart showing the EBIT bridge, you had some dotted lines there in the part showing the benefits from the scale. What did you want to say with that? Is there an upside to 20% EBIT margin if the market returns? Or what kind of volumes would you need to see to reach that?

There is upside. I mean the scale-driven effects improve with more scale. That means the more growth and the more positive market environment means we can drive those effects even more. So there is upside, absolutely.

And I think to add to that, I think a sort of dramatic version of that we have in the history, right? During the COVID period, we saw what happened and the scale effects at Thule were really positive. EBIT margin really went up very well. So I think would we see a positive market quicker than we expect and or at a higher sort of level than we expect, then of course, that would also impact our margin profile.

Daniel?

Maybe just coming back to the cost side and some of it is related to execution in Poland, of course, and that will take some time. As I understood that, that's going to be sort of ramping up through '27 and fully effect in '28. But other things are rolling more quickly. And one is, of course, with the changes you made in the U.S. You also talked about sort of extra warehousing maybe not being needed and all that. And on top of that, you also mentioned today that the R&D spending will be less in absolute terms next year than in this year. If you put those three together, how much does that move the needle in terms of the cost base in '26 versus '25?

Yes. I think -- I mean we will be on our way towards that target already in '26. So, yes, some effects will take time, and we do expect full effect '28, but we expect that to come successively through '26 and '27 and '28. But, yes, we don't have an exact number for '26, '27, and '28.

But some of it will already come through in Q4 now, right, when it comes to the U.S.

That will start to come through in Q4, yes.

Yes. And then gradually build through '26 into '27. Okay. And then you didn't talk about and that's difficult, I assume. I can understand that. You didn't really talk about mix changes. And of course, it depends on where the demand sort of ends up. But you do have your growth ambitions per business area. And at the same time, you also want to phase out Case Logic and some other parts, which I assume could be low margin. And If you put that into the equation, does that alter the numbers a bit? Or could you give any sort of shed some light on that?

Yes. Basically, there are some variances across -- between different categories in the margins. Sometimes it's a different profile. So let's take RV, for example, it's a lower gross margin, but it's a lower cost to serve the market. So the EBIT margin is in line with the others, but the profile is a bit different. But overall there are -- we don't expect the different growth rates from, for example, Active with Kids. Mounts & Bags versus Sports & Cargo Carriers and RV to change the margin profile. It's pretty neutral. And we don't have -- in summary, we -- of course, we have variations, but there's not big variations between categories. All categories have, yes, have positive and healthy margins. So there's not a significant mix change.

Then maybe the third piece of the puzzle is your own sort of production level. You've actually stated, I think, that you've increased production, although the inventory has been coming down. And I guess that's a mix effect as well between sort of third party and your own production and what's selling and what's not selling.

But you have realized quite a lot -- it looks like a lot more than you promised in terms of inventories coming down and there might be seasonal effects and so on that might be bouncing up in Q4. But if you look at that variable, is there more to gain sort of already next year in a slightly growing market from you having taken down inventories quite a lot in the past two years and you might need to maybe ramp up a little bit more sort of a hard question, but any sort of some light on that?

I would say in a growing market -- growth next year, we mean growth in capacity utilization, which means we will be producing more, and we will -- that will help us drive better efficiencies in our supply chain as well.

But do you think you're too low now? Because I think you're back to the levels where you were pre-pandemic and your assortment is much wider.

Yes, we're back to -- so we expect to deliver SEK 200 million of inventory reduction this year at the end of the year. So we're on track for that. But then we think we're down at a level ahead of sustainable level. Yes, we're ahead of that. There is some seasonality through the year. So I think wait till the end of the year.

But we should be ahead of that, I think. But we with then what we believe is a level of inventory that we can keep in relation to sales as we go forward. So as we grow, yes, we will need to hold more inventory, but we don't need to bounce back to a higher level at the same sales level.

Let's take an online question in between. So could you split up the 7% growth target into price, mix, and volume?

Can I start? Yes.

I think in general, Thule has had a price increases if we exclude the sort of dramatic years of COVID and specific things around tariffs in the U.S. of around 1%, 1.5% per year for the existing products we have in the market. And that's how we think about the assumption going forward as well.

Now the increased effect we have on our average net selling price is coming from new products, particularly when we replace an old generation product with an upgraded version of the same, if you like. We typically are able to add good features and better design, and we carry a bit of a higher price point. So we don't expect to drive the formula, if you like, in any other way than we've seen in the past unless there are new shocks to the system, if you call it that. So low single-digit ongoing price increases and then driving [A&SP] through news and the rest should be volume.

The next question.

I'm going to build on the earlier question about upside to the 20% target. I noticed in the chart showing your expected ambition to get to 2028 and 18.5% didn't include market growth. So should the assumption here be that there is more upside to 2028 then? And also, one more question about the margin. Previously, I believe your target was to be above 20%. So I guess, yes, how do you think about that?

Yes, I can start. We have initiated cost actions, which we expect to take us to 18.5% without market growth. But with growth and scale-driven effects, that's what takes us to 20%.

We're happy for that to happen already tomorrow or latest next year. But of course, we expect the market to get better, right, before 2028. And of course We hope to get some scale effects before that. I think the part of the chart was more to show the types of effect rather than the timing.

Yes. Exactly.

And I think regarding the financial target, I think we have actually rephrased it a bit. It was -- maybe Catharina has the exact definition, but equal or greater to.

No it was maintained 20% underlying EBIT margin.

Right. Also set, I think, at a time where we were at the peak of COVID. So I think we have just simplified it and said the growth is -- target is to get to 20%, but...

It was actually maintained more than 20% EBIT margin. Yes, that's the correct word. Yes.

Change of wording.

First one, I assume to Toby, back to the EBIT bridge. You said R&D down absolute terms next year. But then to get to the 1 percentage point, what have you actually assumed in terms of growth in 2027 then, I guess?

So we are saying we expect to get full effect down 1% from 2028, so the first year. We will have to adjust a bit as we go. So we're not committing to -- we will see how growth develops over that time, but we fully expect to get down 1% by 2028.

Regardless of top line.

But I think we have also to the point, it's important to remember that we look at R&D as an expense line in our P&L, but it really is a portfolio of investments, and we can choose which products to start, to keep or to stop. And I think with the focus that we have now established on sort of the existing champions and building new ones, those will steer how we invest. And that's why we are convinced that we will get the R&D spend down in total, but still focus on what has proven to create the most value in history.

Okay. Good. And then I believe you said earlier that Quad Lock has seen a positive margin development. So just to clarify, Quad Lock has a stronger EBIT margin today than when you acquired it.

Not sure that's what you meant to say.

No, it's positive. So it contributes positively to Thule's margin. I showed you the gross profit and the cost side. It's positive to Thule's margin, but its profitability is also developing well. But...

Yes. That's what I picked up on. No mind. Maybe last one on M&A. I guess you mentioned it a few times during the presentations. But at the same time, leverage is sort of stretched, I guess, at 1.8x. So where do you feel comfortable striking new deals at this point?

Yes. I would say -- I mean, I think we are comfortable at 1.8. We want to continue to work and we have good cash flow, which helps us bring it down. But we don't want to commit to a certain figure that that's kind of what we define as a conservative leverage. But it's important to us to maintain a good credit quality and a good conservative balance sheet. That's an important part of Thule's growth story as well. Yes, I think -- I would say we use history as a guide. We're back to a same similar level we've been through history, and we want to keep that.

Yes. I have a question on your capital discipline. I just wonder why don't you have an official return on capital employed, for example, target? And also, if you have any internal targets with that regards?

Yes, I can take. I mean the simple answer is the biggest part of our investment is development cost, which never ends up on our balance sheet. So if -- you can calculate return on capital from our balance sheet, but it doesn't tell even half the story because the biggest part of our activity to drive growth and invest in growth is we take through development and R&D.

Having said that, when we do projects, we absolutely -- we have a business plan and we make sure we get the return from that business plan that we want to get. And we measure return on -- we measure ROIC, return on invested capital in our business plan. And then I mean second part of your question, we have numbers internally. We want to see. We don't have one number that every project has to be at 15%.

If we have maybe a very secure project that's almost guaranteed to deliver a return maybe in a secure supply chain area or something, then maybe 12% is good enough. But if there's something with a higher risk, maybe we need 20%, 25%. So we do that's what I mean by saying risk-based. So we do risk assessments and -- but it's rigorous return on capital assessments are used to decide if we should do a project or not.

Maybe just -- I think you've gotten this question before, but I think you expanded on it a bit more today. You've been in the sort of better and best category. Now you talk a little bit more about good. And do you still feel that investing in good will give you the profitability that is sort of on par or higher than where you are as a group where you target these sort of good investments, so to speak?

Yes, I can start. I think you make -- it's correct. We are investing more in mid-price this year. And next year, we will actually do a bit of both. We have the parking sensor, more premium we ever done in bike carriers, but we are on that list of products that went through very quickly, introducing a new version of a good level rooftop box called Thule Pulse coming in Q1 and actually and as we measure it, entry-level bike carrier called Thule VeloLite, which is coming in at -- we think, an attractive price point.

But. Yes, in these categories, which are also champions, I mean we have a strong manufacturing footprint, a lot of technical know-how, and we, of course, design these products according to specifications that also allow us to have a good margin. So I would say about average margin that we have today, they're not accretive, but we do it because, a, we think we can drive revenue and volume; and b, it's also good from a competitive point of view that we make sure to protect that side of the market and don't let new entrants come sniffing from the low entry points and then develop capabilities to go further.

Okay. Then maybe just secondly, on the tariffs, we haven't talked about that much today, but it's been a topic of course, through the year. With the price increases that you did make, and I think you've talked about maybe additional compensating prices by the 1st of January, I might be wrong, but that was my interpretation. Where are you in terms of cost coverage, so to speak, now? And where do you think you will be by 1st of January?

Yes. I mean we increased prices in 1st of June this year in North America by 9% on average, which offset the tariff impact that we saw at that point. There have been some changes since then, particularly steel and aluminum tariffs have changed. It's not at the same scale, but they have gone up in terms of steel and aluminum, and we will compensate a bit more in the price increase from 1st of January in North America, and then we expect to be fully covered.

And then maybe coming back to the question that we talked about a couple of months ago, is that also covering -- is that on a one-to-one basis? Or is it covering for the margin as well?

So it's covering -- we want to be margin neutral basically, on a margin basis.

And just to add to that, the way we're trying to think about is, of course, we look at the direct mathematical impact of the tariffs, but there are several moving parts here. We, of course, try to look at other sources, if we can, sourcing components from other areas if needed, but it impacts freight costs, raw material prices and a lot of things.

But our goal is to be margin neutral. There is a little bit of timing to this, as Toby just mentioned and that you are well aware of. But coming out of the other side in January, we think we will be margin neutral.

As time goes on, there's more we can work with to offset this impact as well. We're offsetting through sourcing. And we can resource more locally in North America. Also looking at our manufacturing footprint, can we manufacture more parts in North America to avoid some tariffs as well. So we expect to offset some of the impact, but some of that takes more time.

I think we might have a final question from the online audience. About the champions, are these to be expected in Europe and the U.S.? Or could it potentially present an entry into markets where you're likely less exposed like China?

Yes. The champions can be, let's call it, geographically agnostic. They could be a global champion or it could be like we have today in our RV business that's almost entirely an European business. As I said, we have a few things in the works. Some of them are regional. We are, of course, looking into Asia and also now in some strong outdoor markets like Australia, we're stepping in, but could also be global. So the most important thing is that it's a product category where we are the clear global #1.

Any last question from the audience here in the room? No. Then we have reached the finish line. Thank you for bringing your best questions and keeping up the energy levels. I'll hand over to Mattias for some closing remarks.

Thank you very much. I'll move over here, so everybody can see. Thank you very much, everybody, for joining, whether it was digitally or physically here in Malmo. This concludes the session today. For those of you who are here, there are still some great Thule products downstairs to take a look at or play with. And some of the management team are hanging around. So feel free to stay around, if you like. But if not, look forward to seeing you at the next event. Thank you very much.

Good morning. Thank you for attending today's Thule Quarter 3 Interim Report. My name is Sarah, and I'll be your moderator today. [Operator Instructions] I would like to pass the conference over to our host, Mattias Ankarberg, CEO. Please go ahead.

Thank you very much. Welcome, everybody, to this call. I am, as usual, also joined here by Toby Lawton, our CFO, who will be speaking to the presentation, and the presentation will be available at our IR website following this call. So starting from the top, it's a quarter which in many ways are in line with the year that we've seen before with the exception that profitability is improving in a better way. So good profitability in a continued tough market. Sales was up in total, 13% versus last year, excluding currency effect, which is the same trend we've seen for the year so far. We do continue to see a weak market with cautious consumers and retailers. We will speak more about that. Organic growth is down 4% in the quarter, which we, of course, are not pleased about and currency effects continue to be significant, minus 5% in the quarter.

We are actually pleased about the performance of our new product categories and our new products, which add sales in the quarter as well as the acquired Quad Lock business, which continues to add sales and growth. EBIT margin was 17.9% in the quarter, which is higher than last year and also higher than the historical averages for the quarter. We had a strong gross margin up to 47.5%. SG&A, excluding the acquired Quad Lock business decreased versus last year. We have mentioned before that we would face R&D costs and launches differently this year, which helps this quarter and other SG&A costs are also actually a bit lower.

And the margin increase versus last year is driven by the Thule business, excluding the acquired Quad Lock business. In all, EBIT increased to SEK 453 million, up from SEK 413 million last year. We continue to generate good cash flow from operations, SEK 668 million, and the working capital patterns are -- have been now returning to what we've seen historically. Toby we will get back to that later. And we continue to reduce inventory. We have a target of reducing a further SEK 200 million this year, which will be then the third year in a row we take inventory down, and that is on track.

On the highlight side, we do continue to see good development of our newest product categories, and we've launched a few new products. We'll come back to the details, but both dog products is performing really nice, including Thule Cappy, which was just launched at the end -- very, very end of Q2. And during Q3, we have launched a high-back booster seat, child car seats for a bit older children called Thule Palm to -- now have a complete premium car seat portfolio for kids of all ages. And we have continued to work hard on the changes in North America that continue to give results.

Moving to Page 3 and stepping back before we come into details. With this quarter now in the books, it adds to the long-term trend we've seen over a decade or so of profitable growth for Thule. In the last 12 months, we have a net sales of just over SEK 10 billion, SEK 10.3 billion and an EBIT of SEK 1.7 billion and an EBIT margin of 16.1%. So having zoomed out, let's zoom back on Page 4, starting with the regional perspective. As mentioned in the intro, it is still a challenging market across basically all regions. In region Europe, which is by far the biggest region for us with 70% of the sales, we are now year-to-date flat on organic sales.

All these numbers refer to organic sales after a weak end to the spring/summer season. So let me give you some more color on that. We continue to see a quite promotional market with cautious consumers and retailers. We've actually had pretty good growth, organic growth in Europe during the high season. That was plus 4% during Q2, and it was continued to be a good start to the summer season at the start of Q3. But we clearly see an end-of-season effect where retailers are very cautious at the end of Q3 to replenish spring/summer products and mindful of inventory levels, which clearly impacted the sales for the full quarter negatively. And what's positive to see though is beyond that, that the newest categories, which have had a good start in Europe, car seats is a European effort for us and continue to grow really well as well as do the dog products.

In North America, we continue to see that region as the toughest region for us, the toughest part of the footprint that we operate in. Organic sales was 5% down in the quarter, which is slightly better than the year-to-date number of 7%. We did have a very weak start to the quarter following the announcement of the tariffs, and we communicated quite a lot of actions that we made during the first part of the year that we continue to see give positive effects. So there are some actions related to cost, but regarding the organic sales, we have changed the growth priorities. We have launched quite a lot of new North American specific products this year.

And the big difference in the performance in Q2 and Q3 versus earlier in the year is bike carriers for the North American market that continue to do really well and adds good sales for us. So overall, it's in the right direction compared to the start of the year, but still and not where, of course, we want it to be.

Region Rest of the World, clearly our smallest region with 6% of the share, improved in the quarter, organic sales of plus 11%. It's a small region, and we typically see some quarter-to-quarter movements. So probably not read too much into that number, but it is nice to see that as the spring season starts in the Southern Hemisphere, we see also good growth in some of those markets. And the trend improved in both the Asian market and in Latin America for us.

Switching to the category perspective on Page 5. The picture is similar in many ways, but we're starting with sport and cargo carriers, which is our biggest product category. We have a year-to-date minus 1% organic net sales and a bigger negative in Q3 following a better Q2. And again, we do see actually underlying this good growth from our new Thule products this year.

And again, we do see actually underlying this good growth from our new Thule products this year. We have upgraded our best-selling bike carrier called Thule Easyfold to generation 3. That does really well in the market. We have introduced a mid-price bike carrier called Thule Outpace, that's very nice growth for us, both in Europe and in North America. We have, as mentioned before, launched North American-specific bike carriers, for example, Thule ReVert, the hanging bike carrier is doing really well.

And also on the cargo side, cargo box side, the rear of cargo products, the towbar-mounted products also continue to see very nice growth. But again, it is still a challenging market. We do see -- continue to see the best performance in the premium and the toughest space to be North America. And I think I've already talked to the replenishment effect of the spring and summer product in this category. RV products continue to grow despite a weak market, and it's very much the same trends as we've seen in the last quarter. Industry is going through a challenging period.

And we do see -- continue to see a decline in sales to the OE channel and good growth in the aftermarket channel. And it's also, I think, pleasing for us internally to see that the new products we've launched in the 12, 18 months -- in the last 12, 18 months really make up for all the growth that we see in the RV business, both in the quarter and this year, which is a good sign that the new Thule products are delivering value.

Moving to the next page, the last 2 product categories. Active with Kids and Dogs is a similar picture as previous quarter. Net sales down 7% organically in the quarter, 3% for the year-to-date. Dog transportation continued to do well.

The premium dog create Thule Allax that we launched now 18 months ago, continued to grow very nicely. And the recently launched crash-tested dog harness Thule Cappy has done really well right out of the gate. And as mentioned earlier, we do see continued good growth in child car seats and additionally so by introducing the high-back booster seat Thule Palm in the quarter. Our strollers, all-terrain and running strollers continue to do well. That active consumer is still there and wants to spend money on great product. But we do see a decline, which unfortunately outweighs these growth areas for us.

And the decline is related to bike-related products in general for children, where retailers are cautious on inventory. We do continue to see growth on D2C, thule.com, which is a sign at least that consumers are interested, but the retail inventory situation is taking the whole category into a negative spot. Bags and mounts, we continue to see good growth from performance phone mounts, the acquired Quad Lock business. So organically, that is excluding Quad Lock, net sales is down 5% in the quarter, which is an improvement from the trend earlier in the year.

And including Quad Lock, of course, the number is a very big plus. The Quad Lock now accounts for 2/3 of this category. Quad Lock continued to grow nicely, 5% organically about in this quarter, which is a bit lower than the trend before, and that's -- the only reason is that there is -- was a major new retail customer introduced in the third quarter last year, which takes the percentage down, but the growth trend continues really nice and it's now at a 15% year-to-date growth development.

And the bags and luggage business, the other part of the bags and mounts category is improving, although still not at a plus. It's nice to see that the Thule brand is actually back to organic growth in Q3. We have launched a few new products, including a new collection of our best-selling duffel bags, Thule Chasm, which was well received and clearly helps. But we do see a continued decline in the sort of legacy business in the Case Logic brand and the OE products that continue.

Turning to Page 7. As mentioned in the introduction, in the quarter, the margin was helped by efficiency improvements and cost control. So I wanted to share a few words on that. Firstly, there is, of course, a benefit for the quarter of lower R&D costs in the quarter, which is due to phasing. As shared and communicated previously, this is an intense product launch year for us also in '25, and we have decided ahead of the year to take a more front-loaded launch calendar to capture more of the high season, and that meant higher R&D costs for the first half of the year, but also then consequently lower for the second half, and that's what we see now coming through in Q3 just as planned.

So that helps the margin for the quarter specifically. Additionally, though, we do see some efficiency gains that clearly support the margin, both on the gross margin side and on the SG&A side. So -- and I think just to give you a few examples, we have quite -- we have quite some unutilized manufacturing capacity, and we have increased in-sourcing to take better use of that. That helps the gross margin. we have actively consolidated third-party warehousing services that helps the SG&A. And we have continued to trim processes and cost efficiency around admin, sales and marketing with help of automation and digitalization, which is also helping the SG&A to improve.

So we have a bit of a small a culture here in this company, of course, and it's nice to see that the continuous efficiency gains also are visible in the results. And then in addition to continuous improvements, we are driving a few structural cost initiatives that are not giving so much effect yet, but will, and they are on track. So firstly, we have changed the cost in North America as we -- with the new organization and closure of a satellite office that we shared in Q1. We shared in Q2 that we are automating and extending a warehouse in Poland, which is expected to give annual cash savings of about SEK 100 million full effect 2028, and that's on track.

And thirdly, we've also spent a good effort this year on developing what we call technology platforms. So using common components across different products and product families to, of course, create a more efficient manufacturing setup and combining that with more in-house component manufacturing. And that's a work that we've been driving this year quite hard and is now ready to be in place to support profitability for next year.

So with those comments on the short and long-term cost control and efficiency, I will turn to Toby to go through some of the more financial statement.

Great. Thank you, Mattias, and good morning, everybody. If we turn to Slide 8, and I'll start off looking at the quarter 3 number, and we had revenue, you can see in quarter 3 here of just over SEK 2.5 billion in quarter 3. That's 8% higher than quarter 3 last year. So the reported sales growth was 8%. And -- the biggest factor there is the acquisition of Quad Lock, of course, which is adding 17% on revenue, but we have a significant negative from FX, which is important to remember now.

So that impacts net sales negatively by 5% this year because of the -- primarily the strong SEK. And organic growth, as Mattias mentioned, in the quarter was minus 4%. Gross margin has increased to 47.5% in the quarter from 42.9% last year. The biggest factor behind the increase in the gross margin is the acquisition of Quad Lock. So that's a bit more than half, but we have price/mix and supply chain efficiencies, which are also giving a good contribution as well. So bringing the gross margin up to 47.5%. So a good development. When it comes to EBIT, we reported an EBIT in the quarter of SEK 453 million. We had SEK 413 million in the same quarter last year. And that means the EBIT margin as well is 17.9% this year versus 17.6% last year.

And this is a few factors impacting the EBIT margin, obviously, the gross profit, the phasing of the selling expenses driven by the product launches more towards the first half, which Mattias mentioned is obviously a factor. And then further cost efficiencies in SG&A, which also are contributing to the improvement in margin together with Quad Lock. And I think when you take these effects, it's a good performance to see the increase in profit. And if you exclude the acquisition of Quad Lock, the SG&A costs have actually come down in the Thule business, excluding Quad Lock as well this quarter.

And also worth mentioning, when you look at the EBIT margin, Quad Lock is accretive to the Thule EBIT margin, but the biggest factor behind the EBIT margin increase versus Q3 last year is also, again, the Thule business, excluding Quad Lock. So a good performance. And obviously, in a quarter where organic sales growth is negative, it's even tougher to hit the EBIT margins and EBIT targets. So a good performance on the cost side. Net interest expense in the quarter was SEK 37 million and effective tax rate in the quarter, 24%.

Just turning then to the year-to-date numbers, which you see on the far right-hand side. Here, we have reported sales growth of 9%. We're now 3/4 of the way through the year and organic growth for the 3 quarters is minus 1.5%. And here, it's flat in Europe, our biggest market and negative 6.7% in North America. And here again, the Quad Lock acquisition is adding 15% and FX has been negative all year, so it's minus 4% also on the year-to-date. The gross margin improvement we've seen throughout the year. Again, Quad Lock is a major factor, but also price mix and supply chain efficiencies. So we have a gross margin year-to-date for the first 3 quarters of 46.2% versus 42.9% last year.

And adjusted EBIT is also SEK 1,588 million versus SEK 1,557 million prior year. So that altogether means then when you take the year-to-date numbers, our EBIT margin is 18.5% versus 19.8% last year. If I just turn to the next slide on the cash flow, and this was a good quarter for cash flow. We had cash flow from operations in the quarter of SEK 668 million. which is obviously a good cash flow and a big contribution from a seasonal decrease in working capital. Q3 is usually a good quarter for cash flow, and it's been again a good quarter for cash flow this year, so driven by that working capital decrease.

When you also take into account the CapEx in the quarter, we had SEK 140 million of CapEx in the quarter, primarily relating to the automation and extension of our warehouse in Poland. And when you take that off, we basically have a net or free cash flow of around SEK 500 million. And that's meant that we were able to amortize our net debt also by SEK 500 million.

And finally, to mention that we are reducing inventory further this year and our inventory target that we have had all year of reducing inventory by a further SEK 200 million on top of the big reductions last year and the year before is on track. And finally, the next slide, Slide 10, the net debt to EBITDA, where we have a high focus. And as I mentioned, net debt has been reduced by SEK 500 million in the quarter, which drives the ongoing deleveraging that we're seeing here. And you can see the net debt-to-EBITDA ratio is now down to 1.81.

So with that, I'll hand back to Mattias.

Thank you, Toby. A few forward-looking comments before we turn to Q&A. So Page 11, our priorities continue to be to drive our long-term strategy for profitable growth. For sure, it is a tough market, and we expect that it will continue, particularly so in North America for a bit longer. We are well positioned as we are global market leaders with premium products. We do deliver new product innovations that we see make a difference in the marketplace. And we have a strong global brand and with own manufacturing both in Europe and the U.S., which are nice assets to have at this time. And importantly, we also have opportunities to drive growth through our own actions. We do invest in product development when we see that those results are adding growth also when the market is tough.

And we do have opportunities to drive efficiency. We do, of course, continuous efficiency improvement as part of our day-to-day work, but also have now structural efficiency initiatives in place that will support the margin development over time. We'll continue to push the 4 clear priorities we have set out for the year, product development being top of the list. The season was front-loaded to capture more of the high season. So there is less now for the last quarter. I'll come back to that in a minute. But particularly in North America, we have increased our focus to focus more on pockets where we think are attractive. We will continue to scale up our newest categories, dog transportation, child car seats in Europe and the performance phone mounts business that we have acquired.

We are continuing to show more to sell more as we call it, to be more visible for consumers to sell more of what we have. And then as Toby rounded off on the last page, continue to focus on supply chain efficiency, both on reducing inventory levels and cost levels. So on the launch calendar for Page 12, this was a season -- or sorry, a year where we continue to keep a high pace. And we have launched most of what you see on this list already. There are 3 examples that I will call out very soon that we will now launch in Q4. This is also the time where we summarize our plans for next year.

We will, of course, continue to launch great products also in 2026. And the pace of that and the launch calendar and what that means for R&D costs, we will come back to -- at the Capital Markets Day we will hold in November in a few weeks. Turning the page, the products or notable products that are due to launch here in Q4. I'd like to start to describe Thule Xscape. We talked about that a bit, but it's part of our North American growth push. This is a pickup truck rack, a bed rack as it's called, which we believe will be the best on the market. It's the easiest to install. It's easiest to adjust and has strong performance in all quality dimensions that we launch now at the end of the quarter during December.

We're building on the good growth trend in dog transportation and introducing the Thule Allax dog crate in double door version or for 2 dogs. And we've seen really nice reception with the -- for the product and the category as a whole and the whole positioning of designing a product to protect both dogs and people seems to resonate with this premium consumer. So look forward to that launch. That's also towards the end of the fourth quarter. And then last example is Thule Arcos XL version, which is a rear of car cargo box that is of larger size, it's wider. So it now fits up to 180 centimeter, for example, skis behind your car. And this product has already been introduced to the market just last week in October.

To present the news last year and also to make sure we tell the story about all the news we've been delivering in the last period to the market, we are holding a global customer and media event in Q4 to present our launch calendar, again, our product, but also our brand. This is a concept that we introduced 2 years ago that was very successful, and we got a lot of attention.

So we look forward to hosting global outdoor retailers and top media partners in Sweden in Hillerstorp in Malmö in a couple of weeks. And to round off, speaking of meeting people in Sweden, we are shortly after our customer event holding a Capital Markets Day on November 20. We will cover our strategy, our priorities and the path to financial targets. It's possible to participate either online or on site in Malmö, Sweden. You are, of course, all very welcome to join.

If you have the opportunity to join in Malmo, there will be opportunity to see some product demos and have lunch, of course, and meet the representatives from the wider Thule team. And then the presentations and Q&A session start at 1:00 Central European Time, both then again, on Malmö or online. So register to join, and we look forward to seeing you then.

And with that, I open up for -- turn to operator to manage questions.

[Operator Instructions] The first question comes from Fredrik Ivarsson with ABG.

Thank you gentlemen. Three questions. First one on the gross margin. It seems like the legacy gross margin, i.e., excluding Quad Lock was up by, I guess, more than 2 percentage points at least. And I recall it was flat in Q2. Can you explain what the biggest differences between Q3 and -- Q2 and Q3 were then in terms of the gross margin?

Yes. Fredrik, I can take that one. So yes, the gross margin is up. Quad Lock is still the biggest factor in the gross margin increase. But you're right, there's a significant factor from the legacy business. And this is a few factors here, but it's price -- product mix is the main impact together with efficiencies in the factories, and it's in supply chain as well. And it's worth remembering as well that we are producing at a higher rate this year as well. So we have more efficiencies in utilizing our factories a bit more than we did last year, where we were still selling down from inventory to some extent as well. So we have a good trend on gross profit from that impact, which is also driving supply chain efficiencies.

Okay. And this you didn't have to the same extent, obviously, in Q2, I guess.

Not to the same extent in Q2, no.

Second one on Quad Lock. EBIT SEK 70 million versus SEK 100 million in Q2. And I recall you said Q3 was by far the strongest quarter in terms of earnings for Quad Lock, so it seems like the seasonality has changed a little bit. Can you give some color to this development and maybe also what we should expect as we look into Q4 with the Black Week and everything else.

Yes, I can just say, you're right, last year, Q3 was the strongest quarter. I think we talked a bit before about there was an impact last year that we saw from introducing some new customers in Q3, which led to an increased sort of bump in the Q3 volumes, which we didn't expect to see this year. But we -- yes, the seasonality has been different this year. You're absolutely right. So it's not been a strong top line from Quad Lock in Q3 this year. And it's -- I think that -- yes, 15% growth year-to-date, had a strong second quarter. So -- and quarter 3, yes, been a bit softer than the second quarter in terms of organic growth, but still a good -- I mean, a good approximately 15% organic growth year-to-date in Quad Lock.

Yes. And then do you expect more of a level development heading into Q4 than versus last year's big drop from Q3 to Q4?

Yes. I don't think I want to comment on Q4 expectations. But we see -- I mean, we don't see any significant changes in Quad Lock showing good growth, and it's a good business, and it's, yes, 15% growth year-to-date this year. And yes, Q4 is still to come.

That's fair. But you didn't have the same kind of one-off impacts in Q4 as you did in Q3.

No, this customer introduction that we had last year was in Q3. It wasn't -- we didn't have the same impact in Q4 last year. Yes. That's correct.

Perfect. And last one, I guess, given the most recent developments in terms of tariffs and other external factors, how should we think about pricing as we look into next year?

Mattias here. Yes. So just to recap, historically, we've been on sort of an annual price increases as of Jan 1. Then we've had lots of effects during pandemic, but then also related to tariffs, which means we've made some in-season or sort of in-year price adjustments, as you are very aware, in North America as of June 1. We are -- I guess, 2 principles to put things in perspective. We are doing annual price increases as of Jan 1, '26 again, also as we always do, we usually do.

And regarding the tariff situation, we're monitoring that very carefully. And we have been very open that, of course, we will try to offset any tariffs with efficiency improvements to the best of our ability and change our supply chain, but we will also pass on increased prices to the consumer to protect our margins if needed. So as of right now, we are monitoring the tariff situation and do not feel the need to make another price adjustment before the end of this year. But of course, that could change on short notice. But for now, then to summarize, we will see a typical price list increase as of Jan 1, 2026.

Our next question is from Daniel Schmidt with Danske Bank.

A couple of questions from me then. And maybe starting with the performance in the U.S. market and especially given that you did raise prices quite a bit from the 1st of June, I'm sort of a little bit surprised that you still see a 5% organic decline in the U.S. Are you able to sort of share your performance versus the market over the summer or the start of this year. Could you give any sort of indication of how you're performing versus the market?

Daniel, Mattias here. Yes. So a couple of comments. And of course, it's a tough space and -- and we -- it's good that things are better than the start of the year, but clearly not where we need to be with a minus 5% in the quarter for sure. I think a few points, the prices are in effect, so the volume is lower. I think it's interesting to observe that where we still do very good and the best is at the sort of premium end of the top of the range and particularly when it comes to news, but also in general in our portfolio.

So that sort of real enthusiast or premium consumer that has the money and is willing to spend the money on their passion, I think, is still what's driving the business for us. But it's, of course, much tougher in sort of the mid and the lower ranges in general, and so it is for us. So market statistics are, as you probably are aware, not easy to get a hold of. We do work closely with some of the biggest retailers in the U.S. where we see our own sales performance and we see the category sales performance, and there are some statistics, but they are only released on an annual basis.

But our view is that we continue to take market share, particularly in the biggest category bike carriers, and that's really been driven by the new products that we have launched and that the overall market is -- in volumes is clearly down. I mean we have raised prices, but so has everybody. So it's a volume loss for everybody and for the American consumer in the market at the moment.

Yes. So it's not really your sense that the price increases that you had to conduct in June has sort of made -- has worsened your position in the market on the categories where you can make the comparison.

No, quite the opposite actually. And let us see if we can, at some point, in a separate conversation, dig up some more information and show you. But we have, to remember, we do have manufacturing capacity in the U.S. and half of the products that we sell in North America are made in the U.S., and that puts us in a better position than most. So we have seen competitors raising prices by 20%, 25%, some even 35% to offset some of the tariffs that we have seen. It varies a lot by category and competitor, of course.

But in general, we are favored with our manufacturing footprint versus virtually everybody that we compete with. So no, we have seen big price increases across the categories, across the board, slightly varying timings and some in more steps. But when we have seen good market share growth in the biggest categories that we follow more closely with the big retail partners that we have. But it's a tough market situation overall and the volumes are down. If you look at some things like you probably follow consumer sentiment numbers, they're very near all-time low or 60-year low, right? So it's a tough spot for many American consumers at the moment.

Good. And then maybe turning focus to the European market and one of the few areas where there's good data or reasonable data at least on the retail side is the RV business. And we've been through now, I think it's 4.5 quarters of quite 5 quarters, quite significant underproduction. And it doesn't sound like there was any change in Q3 because retail sales has been developing quite okay. Do you see any change to that sort of low production level of RVs on the OEM side in Europe in Q4?

Yes, I can take this. Daniel, I mean, you're right, it's been weak on the OEM side for -- basically for some time now for 4 or 5 quarters even. And it's been kind of reduced manufacturing volumes from the OEMs, which is what drives the weakness in our volumes sold to OEMs as well. I think it's obviously now comparing against weak periods last year because we were already in where OEMs were taking significant downtime in -- yes, we started in Q3 last year, but also Q4 and carried on from there.

And as you say, the kind of -- the buyout statistics to consumers have been relatively stable, yes, have been okay this year. So I think most OEMs are starting to work on taking orders for next year and to look towards the next year season. And they do expect it to end sometime during the winter.

It's not -- yes, I think it's not going to be a quick pickup, but whether it's Q4 or Q1, we don't really know. But it's -- yes, we don't expect it to continue weakening versus weak comps basically.

So to summarize then, I think it's not maybe -- it's not back to full-blown growth patterns of anybody yet, but we do expect that this drag coming from OEM will stop as a comparison versus last year in -- during the winter, if it's Q4 or it goes into Q1, but that we do expect to no longer be a drag for the RV development.

Yes. Well, it sounds reasonable because it was quite extensive shutdowns in Q4 last year running into Q1. Good. And then on the cost side -- and you are quite adamant saying that you're down on the legacy business on SG&A, not only due to product development spending, but also the rest of SG&A. And I think you actually mentioned in connection with the Q2 report that you would be back or maybe it was actually with your September call with more thinkings, more thoughts around product development spending and SG&A into Q4 and 2026, maybe more specifically. Is that something you want to share now?

Yes. Well, I think we can -- part of that will be covered in the Capital Markets Day, so we should save some of that conversation. But of course, we high level, you could say we will continue to invest in our product categories for sure and drive growth through that. I mean we have been through a big push on new categories, and we have been through a big push now on some of the core legacy categories at a higher pace than usual for '24 and '25. So there is more nuanced picture to put in place for '26 and at the same time, addressing some pockets or niches that we think there are still opportunities on.

So we are wrapping that up or we have wrapped that up, sorry, and we have the plan in front of us. But let's save the discussion on the launch calendar and the implications for costs to the Capital Markets Day.

Okay. Having said that, do you want to sort of just looking at -- because I think you've said for this year, at least that H2 will be less heavy and you saw that in Q3, and there's no reason not to see that in Q4. Is that correct?

Yes. Yes, that's correct. I mean, as we said, the development has been faced with the first half.

And on that, is it also from October 1 that you will see some savings coming through from the shutdown of the Colorado office already in Q3?

No. That's from -- the office is finally closed at the end of October, yes. So you're right, there will be savings of that starting -- they'll be pretty small in Q4, but starting from now, basically.

Yes. And lastly, on Quad Lock's profitability, I appreciate that there was difficult comps on top line, but you still grew organically and the profitability is quite much lower. Is that also relating to the specific startup of a customer that you didn't have before? Or is that more relating to U.S. tariffs?

No, it's the former. So it's not -- it's relating to the -- I mean, the higher volume and higher sales they had last year due to this customer effect, which we mentioned. So the gross profit is the same. And as with the business model, if the sales are a bit lower, the margin is a bit lower, but there's still -- it's still a good margin and still accretive to Thule's margin.

Our next question comes from the line of Gustav Hageus with SEB.

Clearly, a step forward on the OpEx sequentially, as mentioned and as guided for. So congratulations on that to you and the team. I'm looking at the FTE build in the quarter, which does not align with the OpEx development. So it's up about 10%, excluding Quad Lock, I reckon. How much is -- because the volume is clearly down, but then I guess the speed of inventory reduction is lower in the quarter compared to last year. So I assume that is a delta. But could you sort of dissect what those 10% FTEs, how much goes into manufacturing on the inventory reduction specifically and what relates to other areas?

Yes. Just high level, Gustav, we -- it's true that, of course, organic sales is down. It's true that inventory is coming down, but production volumes are actually up. And therefore, production staff is up. I mean you've seen some weaker performance in some of the sourced products, for example, [ DACs ] over the year, but where we've seen strength in other products, if you look at the full year in, for example, things that we produce ourselves, for example, bike carriers. So production hours are up and then staff is up.

Okay. And looking at how you allocate OpEx between Quad Lock and Thule, is there any vintage Thule? Is there any costs that have been allocated to Quad Lock that was previously within the Thule organization a year ago.

I think it's a very simple answer. No. We don't allocate costs around -- Quad Lock's costs is Quad Lock's costs and the rest is Thule's costs. So no -- there's nothing being allocated.

And then back to the U.S. development. Is it fair to assume that given that you're pushing a bit for new products for -- in the U.S. market this year that you had a positive mix contribution to top line in North America in Q3, not price, but mix from new products. Is that a fair assumption?

Yes. You mean mix effect in terms of -- on the sales line or on the gross margin?

New products carry higher price than previous products so that you...

Yes. Overall, yes. I mean in the North America, for sure, I'd step back and say, overall, we have seen good development of the new products, even though the market has been tough, we've been talking about a lot, and that helps us both from a top line perspective and for sure, from a gross margin perspective. And in the U.S., that's been true also. And to your point, Gustav, we have been launching quite a lot of new North American specific products to North American markets, which has helped price points and sales.

And then on top of that, I mean, there is, for sure, an effect of the price increases we have done on June 1, which is also helping the top line in terms of sales. And then again, volumes, on the other hand, have been clearly lower.

Yes. And finally on that, I recognize your comments that you might have raised prices in the U.S. maybe perhaps even to a lower level than some peers. But there is seemingly quite a stark relationship between the all-time higher gross margin and the say, 15% organic volume decline in the state. Do you consider -- have you considered perhaps not bringing -- passing forward those costs and instead trying to go for some volume recovery or market share gains in the state?

And how do you -- how do you balance those 2 between the gross margin and the volume in this environment?

Yes. I think it's a good question, Gustav. And I think the way to answer that question is to look at the different parts of the market. So I'll try to see if I make myself clear. And if not, please do ask a follow-up question. So I think where we're seeing strength is in the premium end of the market, the best bikers, the best rooftop boxes, the best, et cetera. And there, Thule is really strong. We have a very, very high market share. We can do our best innovations. We can drive price points, and we see that the consumer is there and is willing to pay and that resonates.

So there's -- that's really strong for us. And there's -- continue to invest and continue to drive innovation and over time, higher price point is the strategy forward. Having said that, there are other parts of the market in the mid-price market and in the low end of the market and where Thule is not as strong. And you may remember, coming into this year that we said, look, we think there's an opportunity in mid-price where we can play, where -- so this year, we are launching a new mid-priced rooftop box, and we're launching a new mid-price bike carrier, Thule Outpace. And that has done well for us, really well actually. Thule Outpace has done really well, both in Europe and in North America.

And then the low end and the sort of value end Thule is not playing, of course. So I think to answer your question in maybe a more summarized way, the way forward is not to take price cuts on our top products, but the way forward is to build a wider portfolio that addresses more needs in the market, including some mid-price and some other opportunities where we still have market share opportunity. Does that make sense?

Sure. And then if I can sneak one last in. We're all asking sort of the same topics here. But on Quad Lock, the sequential deceleration of growth that you point to, let's call it, a onetime order in last year's comparable. If you sort of take that out of the comp from last year, is there still a deceleration in growth in Quad Lock? And is there a price component that was not there in Q3, similar to the U.S. general market that is boosting organic growth for Quad Lock in Q3? Those are my 2 questions on Quad Lock.

Gustav, that's an elegant way to answer the question. And yes, if you would take that sort of introduction of the new big customer out of that month in Q3, you'd see about the same growth trend over the year so far and the average is around 15%. And let's seem, your question -- question was around price. Yes, there is some price increases in Quad Lock as well. It's not -- it's a DTC heavy business and price increases can be made more gradually. So it's not a big step-up in Q3, and it's not actually a major effect overall, but it's not something that affects Q3 versus the other quarters in any material way.

Next question is from Agnieszka Vilela with Nordea.

I have a few questions. Maybe starting with your organic sales development. It was down by 4% in the quarter, and you also talked about the hesitancy both from consumers and retailers. Can you -- especially in the late part of the quarter, can you give us any flavor about the development in October? And also, what is your assessment right now of the retail inventories in the channels?

Mattias here. I can start. I think -- well, it's not -- how do I answer this best. It's been -- I think the Q3 was really colored in organic sales number by the end of the quarter, to your point, and there's a clear sort of end of season or not restocking spring and summer products that happened. And it's now in -- as you asked about October, we are moving into winter season and the market is still what it is, but it's nice to see that these kind of end of season effects is not happening in Q4. That was more end of Q3 season. So I think Q4 is more in line with the or sort of -- or sorry, October is more in line with the full year rather than represent anything else.

It's not represented -- it's not a representative metric to look at the end of the Q3 number. So I guess, confirming that this end-of-season effect really was there. And your second question, could you please repeat?

Yes. What are the inventories right now at retailers from what you can see?

Right. Sorry. So yes, overall, I think retailers have been trying to keep inventories at an efficient and low level best they can for the year to focus on cash and profitability. So we don't see big retail inventories in any part of the chain, which is sort of dramatic. Having said that, we also think that retailers continue to be very careful on inventories. And in general -- I mean, there are some exceptions to this, of course. But in general, I think the behavior we saw at the end of the summer season is much more much more connected to the fact that some of these products, if you take them in end of September, you won't probably not sell them until -- or much of them until March or April.

So why carry that inventory when you know that, for example, Thule can deliver in 1 or 2 days. So I think we don't see a really big stock effect piled up. I mean there are exceptions in bike retail in some parts of the North America, for example. But in general, that's not what we're seeing.

And then maybe a question to Toby. On the legacy gross margin, you mentioned that the improvement was driven by product mix and efficiency in factories and supply chain. Do you expect that factors to continue in the coming quarters?

Basically, we expect to hold a good gross margin. But obviously, we do also see seasonal effects in our gross margin. So that's important to remember that Q4 gross margin is impacted by the seasonality being a smaller sales quarter. But we absolutely work to maintain the gross margin trend that we've seen over the last quarters, over the last, yes, 4 or 5 quarters.

Perfect. And then the last question may be coming back to Quad Lock. With the Q3 margin development and margins now lagging last year, especially in the quarter quite significantly. Do you still expect about a 20% underlying EBIT margin for the business? Or what are your expectations right now for the future?

Yes. Look -- you're talking about Quad Lock EBIT margins, basically?

Yes.

And we do -- I mean, I think what I would say is, I think what we've said always before as well is that Quad Lock is accretive to this EBIT margin, and we expect that also for the full year. So yes, that's I think -- that's what we can say.

Our next question is from Mats Liss with Kepler Cheuvreux.

A couple of questions from me as well. First, I mean, you mentioned these efficiency measures and also some cost initiatives. Have they been fully implemented during the quarter? Or have you seen the full impact? I mean, the increased in-sourcing there you mentioned and the consolidation of third-party warehousing, for instance. And maybe also if you have adapted to the current market situation fully with the cost initiatives, so we shouldn't sort of expect more of this going forward?

Mattias here, I can start at least. And so I think it's a good question. I think we try to think about the cost initiatives in sort of 2 separate themes or 2 parts. One is sort of continuous efficiency trimming or gains, if you like, which is, we think, is part of what we do. And to your point, yes, the things you have mentioned are examples of things that have been done during this year and in this quarter, for example, consolidating third-party warehousing and increasing some in-sourcing. And then we, of course, adapt the variable costs to the very best in the sales trend as well.

But we -- maybe more importantly on this, we try to always look for efficiencies and see how we can improve no matter of the market situation. And that's nice to see that's been sort of coming through in the results and is now visible in the quarter. And then that's continuous efficiency, continuous improvement maybe. And then the second part is sort of structural cost initiatives where we make changes structurally. And those we have been driving, but they have not yet kicked into the P&L. I mean there will be some costs to North America that will start to generate savings soon.

And then we have a big project for the Poland warehouse, which will kick in fully in '28. And then we have some more things on technology platforms that will kick in for '26 on the gross margin. So it's a mix of things that are already in there with the continuous improvement points and then structural initiatives will come later.

Sounds great. And then you mentioned the product launches here in the fourth quarter. I just wanted to sort of ask about the year-over-year comparison there. I mean you mentioned that -- and well, the different -- is it sort of on a lower level year-over-year? So we shouldn't sort of expect launching costs to be at the same level as last year?

That is true. It is a lower level of launches and a lower level of R&D costs expected also for the fourth quarter compared to last year.

And also about North America there in U.S., you have this new product. Do you have -- well, sufficient or do -- do you see more sort of retailer segment to penetrate or are you sort of fully equipped there, so you don't need to address new customers?

I mean we have a lot -- in the existing categories we've been for a very long time, we are a very good distribution and very present. But we have new categories where we are still, for sure, building presence still, and that's expanding. And then on top of that, we have some markets and channels where we think we can do better. So for sure, we are also expanding that a bit. But from a big picture perspective, the existing product categories, we have a strong distribution in all the important markets.

Great. And finally, just, I mean, looking forward to the Capital Markets Day there. And I was just wondering, I mean it's, early days yet, but I mean you have the financial targets and so on. Should we expect you -- and things maybe have changed since they were launched, but should we expect some rebalancing of those? Or is it too early yet? I mean there are several years before you are expected to reach them?

No, it's a good question. I think we will talk about our path to drive profitability -- sorry, growth of profitability and also the path to financial targets at the Capital Markets Day. And financial targets are such that they are what they are until anybody at some point decides to change them. So for now, we have not changed them, and then we will come back to, of course, the topic when we meet on November 20.

We have a follow-up question from Daniel Schmidt with Danske Bank.

Yes. Mattias, you mentioned that you have been developing a tech platform with common components. And I don't know how big this is, but this is the first time I've heard it at least. Is that supposed to generate any sort of savings in terms of more efficient work processing. And maybe sort of if you tie in the AI component as well, which you have been using a bit more when it comes to translation and image processing and so on. Is there more to come from that in the coming quarters? Or did we already see much of that in Q3?

Thank you, Daniel. Good topics. I think 2 separate points. I'll add. I think on the sort of AI and digitalization, we mentioned that as examples of how we continue to drive efficiency in our processes in admin and in there's a lot of -- we do a lot of product development. There's a lot of imagery and a lot of drawings and a lot of technical documentation. And here, clearly, some of these new tools can help us to be faster and use less expensive consultants and whatnot.

So that's more of sort of a continuous efficiency part, which, well, with the new tools and technology, we will continue to drive. But I think the maybe bigger point is the first part of your question regarding what we call technology platforms. And it's something we worked on for, yes, this year and actually starting a bit earlier than that last year as well. So to try to set this into perspective, we have, for example, now a wide portfolio of bike carriers. If we take that as an example, where there are several different components that we use, everything from fixtures to straps to bike arms to fixation points to lots of different things.

And if we can harmonize some of those components across the product portfolio, then, of course, we have production efficiencies, more volume on fewer components. And coupled to that, we can do more of those in-house, so we can be efficient and use our manufacturing capacity that we have quite a bit unutilized today. So that gives us some scale. And then very nicely, it also gives us at least the opportunity to shorten product development lead times. So if you have a, let's call it, a library of components that we know work with a certain set of conditions and product niches, then it gives the development team lots of good options to at least use these components if they prefer to instead of developing new ones. So there's, for sure, cost and time efficiencies to be had here by thinking more platform thinking as we call it internally.

Yes. And is it correct to assume that, that entire sort of project is more sort of going live as we speak? Or is that sort of in a gradual process through the year?

No. We've introduced a few things during the year for sure. But I think next year is the year where we will start to see production lines being in place to do this at a bigger scale. So it is more ahead of us than it is in the current P&L, if that's to put it very bluntly. So it's a nice structural initiative. But it's a bit more engineering driven than sort of any sort of specific cost initiative, but will, for sure, support the gross margin development going forward.

Yes. And then maybe just a follow-up. I don't know if you said it or not coming back to the U.S., but just for clarification, your direct-to-consumer channel in the U.S., was is that growing in Q3?

Overall, I mean, DTC has been challenged as other markets. I actually don't have the number in front of me, but I do believe it was also stressed. But it is -- let's put it like this, Daniel, it's better than the retail channel across every single market that we operate in. So the sort of end consumer is still cautious, but there is, for sure, this retail inventory effect in any market that we look at. And then we can get back to you with specific numbers if we have them. But that's the trend.

Our next question is from Gustav Hagéus to with SEB.

A quick one. Given the current development and the recent development in the organic volume, I'm just curious to hear about you're currently investing in the Polish manufacturing plant with automation as one of the key investments. I would assume that automation brings higher margins as volume grows. In a scenario, I'm not saying this will be the case, but in a scenario where you don't grow the volume from here as you launch the new warehouse, is it still an acceptable return on those investments?

Yes, I can say the base calculation is without volume increase. So the savings that we talk about are basically without volume increase. And then if there is volume increase, the return gets better. So yes, we think it's good returns without volume increase.

And maybe just to add to it, Gustav, what's happening is, of course, we create an automated warehouse, but it's also a bigger warehouse so we can close other warehouses. So in total, it makes for a more efficient setup, close third-party warehouses, I should say.

There are no further questions at this time. I'll pass the conference back to Mattias Ankarberg for any further remarks.

Thank you very much all for joining. Look forward to talk to you again at the Q4 report. But hopefully, before that, see you at the Capital Markets Day on November 20. Thank you very much.

That concludes Thule's quarter 3 interim report. Thank you for your participation. You may now disconnect your lines.

Hello, everyone, and thank you for joining the Thule Group Investor Meeting. My name is Gaby, and I will be coordinating your call today. [Operator Instructions] I will now hand over to your host, Mattias Ankarberg, CEO and President of Thule Group. Please go ahead.

Thank you very much, and welcome, everybody, to this call. I'm joined today with -- by Catharina Paulcén, our Head of Corporate Communications and Investor Relations; and our CFO, Toby Lawton, was also supposed to join the call. He is on a flight that is very delayed and he might be able to join for the Q&A session later on. We will speak to the brief presentation, and we will today cover what's going on at Thule during the summer and the last period. We'll talk about the current market situation, and we'll talk about our priorities going forward. And of course, we will follow that with a Q&A session as well.

Very briefly on Page 2, this shows the long-term financial development. And as a reminder, the last quarter, second quarter of 2025, we had the headline that Thule was growing in a tough market. It was a tough consumer market in many aspects, particularly in North America. Still, we delivered a modest organic growth of 1.5% in Q2 and reported total growth of 10% in the second quarter with a quite substantial negative currency effect of minus 6% in that quarter.

But leaving the historical financials and moving to the next page, it's clearly been an intense first half year in 2025 with lots of things happening at Thule and lots of things happening in the world around us, of course. And during these 6 months, we have kept one foot on the gas and one on the brake, if you like, in driving lots of activities for both growth and efficiency. So I thought that we move to the second half of the year, now it would be worth just to recap what's going on in Thule at the moment. So first of all, we've continued to keep a high pace of product launches during the year. We've upgraded several versions of our best-selling products. For example, the new rooftop box Thule Force, a new generation of our best-selling bike carrier Thule Easyfold and our award-winning running stroller Thule Glide.

We've focused this year more on delivering innovations in our sport & cargo carrier category, which is the largest one. For example, we introduced Thule Santu, a rear of car cargo box that goes on a bike carrier and Thule Outpace, which is an innovative foldable bike carrier. And in general, we've also focused more on the mid-price segment this year following a big push on the premium segment in 2024. And what has been positive for us for quite some time now is that we see that new Thule products do drive growth even in a tough market. That's been beneficial for us. We've also had a big focus on building up our 2 newest product categories. In 2024, we launched both dog transportation with the first product, Thule Allax and the second product in this year, in June, we introduced Thule Cappy, the third product, which is a crash tested dog harness that saw the market here just this summer.

And we've also been building up car seats, where we, for the second time in a row, won the ADAC safety test, the German consumer test with our Thule ELM rearward-facing car seat. Then we are keeping building up our car seat portfolio also going forward. I will get back to that in a minute. We have been working really closely with the Quad Lock team to onboard and integrate the Quad Lock business into the Thule Group. Quad Lock has continued to perform well with good growth and high profitability during the last few quarters, and we have several integration projects that are running according to plan. You may also remember, if you follow us that we have shifted our focus in North America, which we announced in -- at the time of the Q1 report, both to drive more growth initiatives, but also to take quite some cost actions.

We have put in place a dedicated North American sales and marketing organization in the beginning of the year. We stopped the development project for North American car seats. We closed a satellite office in Colorado, and we have turned our attention to growing in what we think are attractive pockets where we have a strong right to win with lots of new North American bike carrier products, several launched this year, which made a big difference to the Q2 development versus the Q1 development. And also coming at the end of this year is a launch of a truck bed rack, or, I should say, Thule Escape, which is coming in Q4. Two attractive categories where we think we have much more to gain. And then, of course, we've been managing the tariff situation actively throughout all this year, and we do have a manufacturing footprint in the U.S., which helps us. But overall, we have, of course, also taken commercial actions, and we introduced price increases as of June 1 to compensate for tariffs.

Last but not least, we keep pushing supply chain efficiency. We've been focused on reducing inventory for just over 2 years now and come down quite a lot. This year, we have a target to reduce a further SEK 200 million, and that's according to plan. And then we also presented at the time of the Q2 report that we are automating and extending our warehouse in Poland, which is expected to generate annual cash savings of SEK 100 million with full effect in 2028, and that's done as part of our existing CapEx program for the company. So quite a busy first 2 quarters for Thule. And of course, we keep ourselves busy for the second half as well.

Turning the page and stepping back a bit to our future priorities then and starting with our position in the current market, it is clear that we are still in a tough market. I think we all would have liked to say by now that the market is picking up and -- but it's not happening yet. We saw that Q3 in terms of market and sales trends started about as Q2 ended, and that seems to be the underlying trend for the moment with one, I think, exception, which is that retailers are -- continue to be very cautious, and that impacts replenishment orders, particularly for retailers that are big on seasonal products and mainly for us, that's bike-related retail, of course, where retailers are just as in Q1, but for other reasons, careful to carry inventory for coming periods when sales is expected to be slow, focusing on cash reasons.

Similar to what we've seen before in Q1, where we also saw that in that kind of environment, D2C was performing better where consumers have access to product, and we see similar patterns now. So that's the situation in the market. And in this market, we are fortunate to be well positioned. We are global market leaders in our most important categories. We do sell premium products, which is -- and we can seem to see that the premium products end is doing better than the market in general. We have strong capabilities and innovation, own manufacturing in both Europe and the U.S., and we have, of course, a financial position that enable us to take a long-term perspective. And just as mentioned with some examples on the previous page, we also see that new Thule products continue to pay off in terms of growth, both in the short and the long term. We have some -- in this market, we have set ourselves a few priorities.

That's been the same for all of 2025, and they will continue to be the same for the second half of the year as well. Four points. First of all, we are a product company, we're a product development company. We keep the high pace in 2025. What's important to mention here is that we consciously decided to have a front-loaded launch season to capture more of the high season. And now we're turning into H2, which is a bit lighter. But we have increased focus on the pockets we think are most attractive and also particularly in North America. We are scaling up our newest product categories, dog transportation, car seats and the acquired performance phone mount business with Quad Lock. We keep pushing consumer visibility, as we call it, introduce more Thule products to existing consumers to show more and sell more. And we are keeping big attention to supply chain efficiency in terms of both reducing inventory and also taking cost actions I just mentioned.

So with that, before I move into some examples of what you can expect from us here during the autumn, I'll let Catharina complement this picture with a few more points.

Okay. So taking on the role of Toby, there are a few financial aspects to be aware of for Q3. The first one is currency. In 2025, the performance of the Swedish krona has been strong. For Thule, that has a greater negative impact on the revenue than on the cost due to the fact that we have a higher share of our cost in Sweden than we have share of revenue. For gross margin, Thule has improved the gross margin throughout the year, and we expect continued high gross margins also going forward, driven by new product launches and increased efficiency. On the cost side, we've been talking about the phasing of the R&D cost, where a higher share of the R&D cost is phased earlier in this year due to more product launches in Q1 and Q2.

So the R&D cost and the sales and marketing cost will decline in Q3 compared to Q2, while the Quad Lock SG&A cost will increase as an effect of higher sales for Quad Lock in Q3. And Q4 will have a lower R&D cost as a percentage of sales compared to Q4 previous year. And as a reminder, Quad Lock's Q2, Q3 and Q4 are fairly equal in size. Q3 is slightly larger and also has the largest EBIT of the quarters. And you can find the historical split for Quad Lock between the quarters in our Q4 and full year interim report. Quad Lock has a higher gross margin, but also higher SG&A cost compared to the average for Thule. So if Quad Lock performs better, it also adds to the cost. So that was all of the financial comments.

Thank you, Catharina. A few closing points from me. I think we just want to make sure we give you a little glimpse of the products that are coming for the autumn as we think we have some exciting things to share. And we -- on the next page, you can see we are continuing to build out the car seat portfolio. We have products in the market for toddler and infants. And with Thule Palm, we now introduce what's called a high-back booster seat for the somewhat bigger children, a product that Thule style has been designed for safety and comfort and has had a very good reception with the trade retailers so far and with media, and we're very excited to see that in the markets -- in the first markets here as of August and then being rolled out here across Europe during the second half of the year.

We're continuing to build out our duffel bag collection, Thule Chasm with more products, more materials, new colors and bringing freshness to this category, which has been popular with many consumers across several different activities. And then during the autumn, we also are introducing another product in our sport & cargo category, Thule Arcos XL, which is a transport solution to transport cargo and also skis behind your car. The XL, of course, denotes that this is a larger box, which fits most skis and snowboards, sorry, ready for the 2025 ski season coming up ahead.

Lastly, I'd just like to remind you or let you know if you missed it, that we are holding a Capital Markets Day on November 20 here in Malmö at the Thule head office. You are welcome to join, and you can follow the registration at the link, which is provided [indiscernible] website and also on our website, of course.

Thank you very much. And with that, this concludes the presentation part of this call. And now we'll turn to operator to manage Q&A.

[Operator Instructions] We have a question from Carl Deijenberg from DNB Carnegie.

So first question on -- I wanted to follow up a little bit on the development in the U.S. And if you could talk a little bit about the development you've seen since you implemented the price adjustments just prior to closing Q2. I recall that you were talking a little bit about that you had maybe seen some pre-buys in Q2. And I was just curious how the -- yes, how has that been received here throughout Q3 as well?

Carl, yes, happy to provide some color on that. I mean the general market situation in the U.S. is still tough, as you've probably seen from lots of other companies and also some external macro data. I think you're very right, the price increases were valid as of June 1, and we did see a bit of prebuy ahead of that and then a bit softer in June, but not dramatic, I would say. I think what we hear from retailers is that they are also focused on making sure they conserve cash and not build inventory. So that's probably a reason why we didn't see too much of a prebuy. And as expected, there hasn't been a dramatic sort of backlash or negative effect in Q3 either, slightly maybe on the softer side, but it's nothing that is dramatic. The overall market impact and sort of end-of-season behavior and inventory builds are probably larger topics for retailers. So not a dramatic effect to summarize.

Okay. Very well. And then following up on that as well. I mean I wanted to ask on this Section 232 that we hear more about now on tariffs in the U.S. on the steel and aluminum side, which I guess is a little bit of new information here throughout Q3. And maybe if you could talk a little bit how you are being affected by that? And do you see any further reasons to do any further price adjustments based on that, let's say, information?

I think we have Toby on the line. And while you're preparing, Toby, I'll just start off by saying that in general, our take has been to, of course, try to compensate as much as we can with not taking price increases if we don't have to. We do have 2 factories and local and regional sourcing in the U.S., but we will also pass on additional costs as the general industry has done across all our categories, I say, to the consumer if needed. So with that, maybe a little overview and intro, Toby, are you in a spot where you could elaborate a bit on this topic?

Yes, I am. And -- okay so the aluminum tariff is the one that has the biggest impact on us because it's the material we're using quite a lot of particularly flight carriers and roof racks. And that's -- the tariff was factored in initially in the price increase we did 1st of June, but the tariff level has changed since we planned the first price increase. So it has gone up a bit since then. And we are looking at, yes, further price increases to offset that, but it's a smaller impact than the impact we had that we took away in the 1st of June price increase, but it has gone up somewhat since we did that increase.

So we're going to look particularly in the price increase from 1st of January next year to offset that effect. So it's not the only one. There's also [indiscernible], obviously, in tariffs from Asia and the EU since the spring as well. But a smaller size than the -- we had the 9% increase from 1st of June, which offset most of it. But yes, there has been a bit more since then. So it's not the same scale, but it's still more than what we are absorbing and we expect to offset.

Yes. Understood. Then finally, also, I just wanted to ask also on the view on the launch pipeline entering 2026. I mean '24 and '25 has obviously been quite intensive, both on, let's say, iterations and new products. And yes, could you talk a little bit how you're reasoning about next year? And will that be equally intensive? Or do you prioritize now to come down a bit on R&D to sales? Or yes, could you share anything on that?

Yes, we can be very transparent where we are in that process. I mean, obviously, we are stepping back a product company, a product development company. So for sure, we'll continue to launch product. But you are very right, Carl, it has been 2 really intense years with last year also covering 2 new -- or introducing 2 new categories and then this year, keeping our high pace to drive sales. And we are -- we work with long-term portfolio plans across all our product categories, 3 to 5 years out. But as we have been, I think, talking about before, I think also in this forum or similar forums, we do have a process where we, this time of year, during the autumn, do a little bit of push and pull and see what goes into 2026, what goes for spring, what goes for autumn and what will go for later years.

So we're right in the middle of that right now. I think we're not expecting to go full stop. We're not expecting to go faster, but we -- and we are expecting to bring news across all our product categories. And we may -- we're trying also, of course, always to be a little better and do things in a bit smarter way to get more impact and lower costs. But we don't have the full picture yet, and we will share it when we have it. Typically, we've done it in conjunction with the Q4 report. But -- Q3 report, sorry. And we will get back to you at the time of the Q3 report as well.

We have a question from Agnieszka Vilela from Nordea.

I have 2. Maybe starting with Quad Lock. When I look at your numbers that you disclosed for 2024, it looks like Q3 is quite strong for them or was at least in the past year. So can you just tell us about the profitability profile for Quad Lock? Should we still expect 30-plus percent EBITDA margin for them in Q3?

Toby still...

Yes, I can jump in there. Yes. So Q3 is Quad Lock's strongest quarter when it comes to profitability. And basically, Q2, Q3 and Q4 are fairly equal when it comes to sales. So that was the case last year. It will be the case this year. We expect it to be the case this year. It's probably going to be a little bit less dramatic or less than it was last year. Q3 was the strongest quarter last year by quite some way. That was partly due to some phasing of also some B2B customers that ramped in Q3 last year. This year, it will be -- it's a little bit smoother between quarters 2, 3 and 4 basically. But still the strongest quarter, yes.

Okay. And then my last question is on the -- your profitability profile. And obviously, we understand that the markets are quite challenging right now and that you see headwinds from FX, tariffs and so forth. But do you consider any cost adjustment actions apart from what you're doing in the U.S. in order to protect profitability?

Yes. So I can comment to that. So I think we're taking an approach, which you've probably seen us do this first half of the year where we keep investing for growth in product development and also in sales and marketing to support the new categories that we have. And I think to connect back to what Carl asked the question later, that's sort of almost discrete or conscious decision that we're making for every season, how much to invest for growth and how much to hold back for efficiency savings or profitability. And then on the other hand, we've also been focusing quite hard on improving the efficiency of the business. And I think if you look back, I guess, 2 years, we were really focused on, first of all, bringing inventory down. We took that down by over SEK 1 billion in 2 years.

And then now we have launched a couple of cost actions related to North America and also quite a substantial cost saving coming from supply chain and warehousing with the new automated and extended warehouse in Poland. So we are from small land, as we say, with our culture, and we will keep looking for cost efficiency, of course. So we will continue to both invest for growth, invest for long term and invest for new product development and new categories, but also look for opportunities to create a more efficient business and increase profitability. We can, of course, not comment on any specific new initiatives right now, but that's the sort of approach we are taking.

We have a question from Adela Dashian from Jefferies.

Just 2 questions from me. The first one, I just want to confirm, did you say that you haven't launched any new products during the third quarter?

No, sorry, we are launching more products during the first half year, fewer during the second half year, but we have launched some products during the third quarter. For example, on the first picture, Thule Palm, the high-back booster seat just launched now in August.

Okay. So you launched less products in Q3 compared to Q1?

Yes, we're launching fewer products in Q3 and Q4 this year compared to both Q1 and Q2 this year, correct.

Okay. Perfect. And then just secondly, on -- I mean, we've spoken about the North American market and the weakness going on there. But could you speak on the developments in Europe? Are you also seeing the same type of trend that distributors are being a bit wary of sitting with inventory going into the low season?

Yes, we are seeing the same pattern in Europe, more sort of seasonally related to your point. Europe has been, and I believe still is more stable than North America and the European consumer, although maybe not in a fantastic position, less dramatically sort of negatively impacted by some of the things that are going on around in the world. And then there are some specific related topics, we have a fairly significant RV business, for example, which is pretty much European only, where we see that the aftermarket, the consumer-facing side of things is coming back step by step, which clearly signs of an improved consumer environment, although it's taking a bit of time, but there is still lots of stock, which creates reduced production on the OE or the manufacturer side holding back to our development. So maybe it's a long answer to your question, but we see the same kind of seasonal hesitation or seasonal replenishment hesitation in Europe. But overall, throughout the year, we've seen a more stable and solid Europe than North America.

We have a question from Mats Liss from Kepler Cheuvreux.

A couple of questions from me as well. First, you mentioned that you are sort of launching products in the mid-price segment. And I was just wondering how far have you come there? And what impact do you see on top line opportunities, I mean, to grow your sales going forward? And also maybe if you can touch upon -- well, how you are able to keep consumers from sort of trading down or cannibalize on your premium products in the mid-price?

Yes. No, thank you. No, it's true. We've done more in mid-price this year. And I think 2 good examples are upgrading the previous generation mid-price rooftop box Thule Force and also -- which is more of an upgrade of an existing good selling midsized product, but also maybe it's an even better example that Thule Outpace, which is a new bike carrier foldable at, we think, a good price point for the both European and North American market coming into the market. And if we step back a bit, I mean, we have launched a lot of products in the sort of premium end of things for several years, particularly during -- going back all the way now, it seems like a long time ago, but since the COVID years when everything was on fire, it made total sense to focus more, of course, on premium. And we've continued to have a premium heavy portfolio plan for several years.

And this year, we've seen good reception of the mid-priced products. Particularly in bike carriers it has been good for us all season. Thule Outpace has done really well, both in U.S. and in North America. So I think it's a really good example of how we have the right product at the right price point, we can drive demand with that consumer as well. And I believe going forward, we do have more opportunities to play in more price points. Thule is not, of course, an entry price or low-price player and will never be, but we can play in a wider range of price points in our core categories going forward. So you will see more of that from us coming.

And then to the second part of your question, it is -- that's part of the art of doing product and launching products, and it's never super easy. But of course, it's important and to find that right product spec and the right product design at the right price point for the product categories where we are really strong and global market leaders. I mean we -- I'm really proud of the team. We have really good insights, and we have really good partners with retailers and ambassadors and others that help us to navigate this, and we can do consumer tests and, of course, continuous refining. But it is a portfolio build, and we continue to build the portfolio and tweak it if we need be in terms of price points. So that's part of doing business in these categories.

Okay. So it's more of the same. I mean you start at the top with the premium and then you move down a bit to extra.

Exactly, and the premium point products, of course, have better features, more accessories and a lot of things that hopefully justify that extra price point for the consumer that is interested in the very best.

Yes. And just coming back to Quad Lock there, I mean, you mentioned that it's pretty even sales-wise during the year. So that's good, I guess. And secondly, just about the currency impact there, if it's any different compared to the -- well, core Thule, if you just could share a couple of words on that currency exposure on Quad Lock.

Maybe I can jump in there, Matt. I mean, Quad Lock, I mean, while it's an Australian company, you have to remember it's selling globally. So it sells a big chunk in North America, a big chunk in Europe and a bit in Australasia as well, but the majority in Europe and North America. So we get the same impact on currency there that it impacts us negatively the growth figures and the revenue when it comes to sales in North America and Europe in just the same way as it does the Thule business.

And production-wise, they are sort of in more favorable currencies at the moment.

That's right. Yes, the -- if you like, they have an impact on revenue, which is negative, but they don't have a negative impact on margin to the same extent because their cost base is largely Australian dollars, which has been weak this year and also U.S. dollars, which is also weak this year. So they don't have the same impact that Thule does where the rest of the Thule business, we have a significant cost base in Swedish crown, where we don't get the benefit of the weaker currencies versus the Swedish crown, of course.

We have a question from Fredrik Ivarsson from ABG.

I've got 2 potentially pointed to Toby, but we'll see. First one, Toby, if you could just run us through the key drivers of the legacy gross margin, i.e., excluding Quad Lock for the quarter.

If you take -- I mean, gross margin versus prior year, Fredrik, which -- yes, switching what you referred to then, it's the same drivers that we've had basically in previous quarters that we see the impact of, number one, price increases coming through. We also get the impact from the fact that we have higher production volumes because remember last year, we were selling a lot for inventory, which was coming down. So production volumes were lower. So we get some efficiencies through that effect. We do -- currency, while it's negative to us overall and it's negative to SG&A, it's actually a little bit positive when it comes to gross margin. So that's one effect. And then there's also -- the tariffs are a negative impact on gross margin. So overall, yes, all those effects combined give us basically the step-up we have on gross margin versus last year, which has been consistent in quarter. We saw that in quarter 2 and quarter 1, and we do expect the same in quarter 3.

Okay. That's great. And then on the product development costs, you've been guiding towards, I guess, 7% of sales and with that being sort of front-end loaded, how should we view the phasing in H2? Is Q3 going to be larger than Q4 in terms of those costs or the other way around?

Yes, I can -- I mean, Mattias referred to this a bit earlier on. But basically, we had a big chunk of development costs last year in Q4, which is something to remember, we launched child car seats. So that had an impact in Q4, which is where we see the biggest difference. But overall, it's absolutely the case that our development cost is -- was more weighted to the first half year this year and less in the second half year. But as I say, the biggest difference in Q4 largely because we had a big impact last year. Does that make sense?

Yes, that makes sense on the difference, but I was more alluding to the sort of phasing this year rather than the difference versus last year. But it sounds like Q3 and Q4 might not be that different in 2025.

I mean I'm not sure -- yes, I can't give any more color than I have, Fredrik. But yes, if you think compared to last year, which is the way I think most people are looking at it, we do have the weighting more in the first half year.

We currently have no further questions. So I will hand back to Mattias Ankarberg for closing remarks.

Thank you, operator. Thank you, everybody, for joining the call. A quick reminder again to don't miss the Thule Capital Markets Day, November 20. And before that, we hope to speak to you all at the time of the Q3 report. Thank you.

This concludes today's Thule Group Investor Meeting. Thank you for joining. You may now disconnect your lines.