The Thule Group has raised its financial forecast, setting a long-term goal to generate an underlying operating margin (Ebit) of about 20 percent of sales, up from a previous target of 17 percent. It is still projecting, as before, annual organic growth in sales of around 5 percent.
The reason for the management's optimism is that the Swedish company has been able to keep its annual currency-neutral sales growth at a rate of more than 5 percent in recent years and that it is currently delivering an underlying Ebit margin of 18 percent, after divesting less profitable businesses.
Thule wants to continue to focus on organic growth but remains open for possible strategic merger and acquisition opportunities. It plans to keep the leverage between net debt and Ebitda at a level of between 1.5 and 2.5 times, down from a previous target of 2.5 times.
Outlining its long-term ambitions in the various product categories in which it is involved, Thule says it wants to strengthen its number one position in Sport & Cargo Carriers, a segment that comprises roof racks, roof boxes, bike racks and other tools for the transportation of water and winter sports equipment by car. This segment represented 65 percent of its turnover in the first half of this year, posting a sales increase of 7 percent.
Thule also intends to be a serious contender in three other product categories: luggage, daypacks and strollers. Luggage and daypacks are part of Thule's Packs, Bags & Luggage division, whose sales declined by 4 percent in the first half, representing 15 percent of its turnover. The division includes computer and camera bags, which have not fared well in the U.S., and more recent and successful initiatives in the area of luggage and hiking backpacks.
Strollers belong to Thule's Active with Kids division, whose sales jumped by 48 percent in the first half, building up to 8 percent of revenues. Bicycle trailers and child bike seats are also covered by this fast-growing division. Another division of the group handles bike carriers, awnings and tents for motorhomes and caravans, which represents 12 percent of group sales and where Thule wants to grow faster than the market.