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Interim Report Q1, 2024

Tuesday, 7th May 2024

Thule Q1 Global Call

Wednesday, 8th May 2024

Introduction

Daniel Schmidt

Senior Analyst, Danske Bank

Daniel Schmidt: No worries at all. I think the time is - the clock is three o'clock and I think we are basically ready to start. So hello everyone, and welcome to this Q1 follow-up with CEO Mattias Ankarberg, CFO Toby Lawton, and IRO Fredrik Erlandsson. And I think we will actually start with a shorter resume or summary from Mattias and then followed by a Q&A that I will moderate. So please, Mattias, the floor is yours.

CEO's Speech

Mattias Ankarberg

CEO, Thule Group

Good Start to the year

Thank you so much, Daniel, and hi everybody. Welcome to the call. I'll do a quick intro and then look forward to a good discussion between all of us. But three points from me, the quarter, a bit of a market situation and outlook, and then our future priorities from here. So on the quarter, Q1 is a good first quarter for us; it's a good start to the year. Good growth, good profitability, it is still a tough market but very nice to see that our new products perform well even in a tough market. So that's the headline on the quarter.

Positive sales trends

If we dig into it a little bit more, we can - obviously you've probably seen that sales were up 8% in constant currency and there are really beyond the sort of general market climate, which we can come back to. There are three factors that are impacting that sales trend, particularly two positively and one negatively. The first positive one I would recommend on quickly is new to the products that we clearly see contribute to the sales growth also in this quarter. This is the biggest launch year ever for us in 2024. And we have started with quite a few launches in Q1 and we have good reception from, for example, our best-selling luggage collection to the Subterra. We have very good reception from our updated generation bestselling stroller, Thule Glide. And we've also had a good reception of our first new product in the new product category, dog transportation, the dog crate, Thule Allax. So some examples of news that are contributing to growth. That's number one.

Number two, positive factors, we see clearly good growth within bike-related products. Bike has been a theme for many quarters. It was challenging for quite a while, particularly because of inventory situation, but it's been back to growth since Q3 and we see that that growth has picked up a bit more in Q1 here. So still not a great market in general for bike, but on the premium side it's better and for us it's growing very well in Q1.

Negative RV sales trend

The negative point, number three for us on the sales development, is RV. And also to that point, similarly to the last two quarters, we see a decline in the RV product category. RV industry is going through a tougher period, we are aware of that. What is nice to see is that the decline is less now than the last couple of quarters. We lost 5% versus previous year in sales in RV. But we do think that market is going to be challenging for the coming period as well, and we can get back more into that detail. So those are the main three points that impact the sales trend.

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And more quickly on the other items, I mean, gross margin is strong, fairly close to all-time high for a first quarter. SG&A is a bit elevated compared to historical patterns. Connected to the fact that we're launching more products than ever this year and it will be higher SG&A costs during the first half of 2024, as we've commented on before. But even so, EBIT margin is in line with last year, 17% versus 17.2%. Cashflow is good, and then the inventory reduction target that we've set this is on track to be achieved. So financially a good start.

Future market outlook

And talking about then a bit more future looking on both the market and our priorities. On the market side, we - maybe not exciting message but we expect to see the same trends to continue largely for the next period as we've done before. Again, we continue to see a fairly challenging market overall for the consumer and also for retailers with inventory levels are still largely elevated. Their place orders later - closer towards the start of the season in smaller quantities, which is a clear pattern that we see continuing into Q2. We believe that the bike will continue to pick up and RV will continue to be challenging for the next quarter as well.

Our priorities are also the same as they've been for a while. We continue to drive a sort of long-termforward-leaning growth agenda driven by product development, new product categories, and being more visible for the consumer. And then as a fourth point, we also continue to work on efficiencies in our supply chain, so that's not changed. The only thing that has changed on our priorities is that now in Q2 we are in high season, so this is traditionally the highest quarter in terms of sales, in terms of production, and for this year also launches. We have a lot of product launches coming in Q2 that we would of course love to talk about a lot, which we always think is fun.

New products received well in the market

But importantly also we are now - as we will close Q2, we have then entered two new product categories. We've already started in dog transportation with the first product, second one coming here very soon in Q2. And also before the end of Q2 we will have entered car seats in the European market, which is a long- awaited initiative that is now coming to market. So that's the good start of the year, busy times, high end year in the organisation in the still fairly challenging market. That's the summary. And then, Daniel, I'll turn to you to manage Q&A.

Q&A

Daniel Schmidt (Danske Bank): Absolutely. Thank you so much, Mattias. So now it's simply Q&A and just raise your team's hand and I will call you out one by one if you want to ask a question. And if there's no one asking, I will of course start. But I just want to start the call with, is there anyone out there that wants to start the Q&A? Okay, I can start and just jump in whenever you feel like it. And clearly as you say, it's still a very quite tough market, but you happen to grow quite well. Of course it's also related to a fairly tough Q1 last year, but clearly sort of bike seems to be bouncing back up again. But could you say anything a little bit more about the trend in general? Because it's been a very sort of strange period now the past four years with the pandemic and the post pandemic reaction and the supply chain and all that and entering sort of recessionary times almost, or at least in some parts of the world where spending goes down. What is your opinion on where we are in terms of the outdoor/biking trend, are we above 2019 levels or below? How is it developing?

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Mattias Ankarberg: Yeah, that's an interesting question to discuss for a while. I think we ask ourselves that a lot and discuss that with a number of people. And I think the couple of different views to look at it,. Firstly, if we talk from just the consumer interest, we think generally there is still a trend towards people wanting to be more active towards biking but also towards other activities. We see consumer affairs and different kinds of events where even in the RV industry, which is going through a more challenging period, that attendance to these bigger events and fair is where it used to be pre-pandemic. And the lots of people in the industry are sort of positive to the general consumer interest, so that's nice. Camping is all-time high in both North America and Asia. So there's a number of things that are, in terms of activities, going well.

Secondly, there is still inventory issues in some significant parts of the supply chain, in retail particularly. Less so in the premium end of things and in bike, definitely more on other parts of the market than the premium end of things. But of course that holds back volume a little bit and also creates more promotional activity with some retailers.

And then we should also remember, and this one is harder to quantify, that a lot of consumers bought a lot of product for outdoor activities during the pandemic, and then when will that pick up, when the renewal? Our view is - and what we see clearly is two things to that aspect. One is that the premium consumer seems to be doing better, we do better in premium. And secondly that newness, new product still drives sales and growth, which is a nice benefit to us of course since we're focusing so much on product development.

But all in all, what does that mean? Well, long-term positive trends, more and more people want to live active lives but still a bit challenged volumes compared to where we were pre-pandemic. So our view is that several other product categories, even though we're coming back in growth, we are in, volume wise, lower when we should be in, I don't want to use the word normal here, but maybe pre-pandemic volumes, so to speak.

Daniel Schmidt: But it's clear, I think you guys have stuck out a bit, at least at the start of this year, growing and many other consumer-related companies are still in decline. And of course everyone is hoping that the second half of this year is going to look better and hopefully it will. But I guess that also is telling about sort of the fact that the market is still quite tough. You do have a lot of Nunes[?] still to come. You did have quite a few product launches in 2023, even more so maybe at the start of this year, but more - even more will come and hopefully that will carry you through this slightly more difficult period, is sort of my understanding. Is that how you view it as well?

Mattias Ankarberg: Yes, of course, that helps us clearly, to your point, and that is a nice benefit of being a long-term and very sort of product development oriented company that we have a newness and can drive some growth with that premium consumer even in a tougher time. So I fully agree there, Daniel. Then we should remember that some of the growth, some of the newness, mainly when you build up new presence and new categories, for example, takes time to build up.

I mean, if we launch a new generation of the world's most-sold rooftop box which was launched here just on the border of Q1 and Q2, first day of April, of course we have strong global market share, all the distribution, great brand awareness. Whereas we enter car seats and we are an entrant, there are great players out there, and that growth will come over time more than it will be in categories we're already established.

But that was just an additional comment to give some more colour. But all in all, yes, newness helps us to drive growth also in this tougher period.

Daniel Schmidt: And speaking of that, of course it comes with a cost as well. And you've been on fairly elevated product development spending budgets now for maybe a bit more than two years. And of course you've mentioned that this year, and I think you've reiterated that in connection to Q1, will be an elevated year, but it's not going to be costing you guys even more in 2024 than it did in 2023. It's sort of, I think

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you've said flattish, but it's front-end loaded in terms of the timing. And can you be sure of that - because many times when companies enter sort of a phase of high or growing budgets when it comes to product development, or R&D, they tend to stick at that level. What makes you sure that you'll be coming back down again in terms of absolute numbers and at least in terms of potential sales as well?

Mattias Ankarberg: The beautiful thing, for us at least, and Toby you can weigh in on this also afterwards, is that we run pretty discreet projects in a project portfolio, so we can make active decisions about what level we want to invest in. And then I think personally, another beautiful aspect of Thule is that we are long- term and we can decide to invest even if the market is tougher for a bit of time. But we should remember we also, as Thule, take a lot of project-related costs as cost as SG&A. And that is part of the reason why this is so front-loaded. We have nine factories, we produce 80% of what we sell, and we also produce even our own tools that go into the manufacturing equipment. And those tools are produced at the end of the product development project and we take them as SG&A straight down the P&L.

So that is of course a significant number, particularly when we talk about tools for a car seat production, which is a fairly complex product. So if Toby and I or the company management team decides that we will be less ambitious on the product development side, we run fewer project or simpler projects and less tooling, and of course the cost would come down. I don't know if you can add, Toby, some language to that?

Toby Lawton: I mean, just to add, like you said, particularly when it comes to development costs, we have good visibility obviously on what we've spent money on. And we can see very clearly the kind of discreet projects and parts that we've invested in, particularly the new products coming online here. Which we can see rebalancing over time going forward back to a more normal level. So we have visibility on seeing that come through basically. And the other point is really in relation to the kind of SG&A part, the marketing part where we don't do heavy promotional work, generally we market our products but we're not discounting or doing those kind of activities to drive sales. That's not really part of our business model. So I think we have pretty good visibility.

Daniel Schmidt: And maybe too detailed question, but is it fair to say that the product development budget, is that 65%, 75% - 65%, 70% tilted towards H1, is that a fair number? And sort of 30%, 35% in the second half, or where are we? How much tilted towards the first half is it?

Toby Lawton: Yeah -

Mattias Ankarberg: Go ahead, Toby.

Toby Lawton: No, but I would say as a percentage of sales, we also have a significant chunk of our sales in the first half, but it'll be a higher percentage of sales in the first half than the second half as well because of this.

Mattias Ankarberg: Let us be clear also and repeat what we have said in other communications, just so we are in line, it will be heavier to the first half of the year and particularly in Q2 and not the least because of the car seats launched, to your point. And then we haven't given specific numbers more than that, but that is the message.

Daniel Schmidt: How about - it's good, and you're happy with reiterating that it's not going to be above last year's absolute number?

Mattias Ankarberg: Yes.

Daniel Schmidt: Yes. All right, good, good. And then just coming back to newness[?], because that's such a big part of your focus and story and success as of late, I think at least, and you do mention bestsellers maybe being of course the most relevant in driving sales here. And now just by definition, that you already have everything built out and you're known and that's your sort of claim to fame, simply those products.

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But you also, as you write in the report, and I think we've touched upon it before, received a lot of acknowledgements and a lot of awards this year. You've received awards before and you've been quite good at it, but this year is extraordinary. You had the Red Dot award, you have the IF Design awards, which are two prominent awards that are handed out every year and you've received by far the most awards ever. Is that, sorry, is that how we should read it as simply a reflection of the fact that you've made all these investments and the outcome has been very strong products, or is it the fact that you've a lot more products to these competitions, or where's the truth?

Mattias Ankarberg: I think the first - there are really two factors driving this. First of all, we are at a higher investment in terms of product development and we're launching more new products than ever. So the sheer number, of course, increases also many more awards. But secondly, I think hats off to our design team and our entire R&D team who is just getting better and better and I think also finding a more consistent Thule design language that seems to resonate well, obviously at least with jurors of these award- giving institutions. So I think it's both quantity and quality of the product development that is been going on the Thule force for several years and that really impressed me with what they're bringing to market.

Daniel Schmidt: And hopefully, if these sort of experts deem these products as outstanding, hopefully consumers will as well.

Mattias Ankarberg: Yes, and we've seen, in all transparency, when we talk about - because we received awards, to your point Daniel, very nicely, 29 history before this year and 23 more during this year. So it's fantastic. And when we see awards for, again, bestselling products or established categories, then typically that gives also a sign that it's a product that's going to be well received by the consumer as well. When we receive award for something which is maybe completely new or more of an innovation, it's harder to say if that's guaranteeing a commercial success because it's more down to taste than all of that. But in any, of course, way you look at this, we are very proud on behalf of the team and Thule for the awards by themselves. But also it's a positive for us commercially for sure. It's a sign of nice reception and it's also great for marketing, if nothing else.

Daniel Schmidt: And I also did the comparison with your closest competitors in some of your main categories and they are far off. So it has to be some sort of truth to the fact that maybe you've sort of widened the distance through this quite excessive product development spending that you've gone through.

Mattias Ankarberg: Yes, and I think, again, I think it's a testament to sort of the Thule model of, it sounds maybe cliché, but being long term for real and spending, keeping the people expand, investing in the Hillerstorp Global RD facility, thinking long term in terms of product portfolio, improving consistency in design, and all of those things. During ups of the market and downs of the market, but keeping that eye on the long term, I think is a fantastic effort and really pays off.

Daniel Schmidt: Yeah, yeah. Good. We actually have a couple of questions. So we'll start with Alan Connery, please go ahead.

Alan Connery (North Rock): All right, thanks for taking my question. So I was hoping you might elaborate a bit on the car seat strategy and I guess some of the questions I'd love to have addressed is how many models you hope to have in the market initially, what sort of the country rollout look like? What you expect to - how you expect to position it in terms of pricing? Whether you feel you're bringing anything new or any particular innovation that you can share with us? And then more generally whether it represents a different level of risk for the organisation than in the past. Because to my mind, car seats is a sort of category where I've often thought it would be a natural place for Thule to go and yet the company's chosen obviously quite deliberately not to go there until now, and I feel there must be good reasons why it hasn't done this move earlier. So I'd love to sort of explore that. Thank you.

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Mattias Ankarberg: Yeah, happy to. I'll start and then, Fredrik and Toby, you can add. But first of all, it's an interesting and attractive segment for us. It's about a SEK 15, one, five, billion segment in the premium end globally. Majority of that is in Europe but a sizeable chunk of it in North America as well. We are launching in Europe, there are different regulatory frameworks in the world, but particularly for US, and that brings along the North America and Europe. So we are launching with three products, and during this quarter in Europe there's a base, there's an infancy, and there's a toddler seat. We are well underway, we'll launch in a couple of weeks' time.

We will do four, I would say, simplified, practical purposes, production, logistics, and others - a gradual rollout country by country during a few months starting soon. And then into autumn, we will start in the biggest market in Europe, which is Germany. And we will do that also part not just because it's the biggest, but also it is a country where there is good premium retail distribution. We want to enter this market or this segment on the premium end, clearly. And we want to make sure that we already, from the start, have a presence in the right premium distribution channels.

In Germany there are at least two retail chains that have both slogans, something to the lines of we don't sell car seats, we sell child safety. Where you come in as a pregnant woman and man hopefully, along as well, and you do go through selections before your child is born and you come back and you get help with installing the products and a bunch of service elements. So we are there and that's a great start for us.

We have a lot of respect for this category and we also respect that there are good players in the category, good competition. So we need to bring something strong and unique in terms of product to the market, and we are. And we have - of course bringing, we talked about the words, that Thule design and the ease of use, but we're also really doubling down on safety aspects with our car seats. So we focus on two aspects of child safety with our child car seats. The first one is impact protection, where we have a Thule impact protection system that we believe is best in class when it comes to, would there ever be an unfortunate incident or accident or a crash impact protection from front side and rear basically? And as a side note, of course it's been really helpful to have our own crash test facilities in Hillerstorp when we're developing this and I been able to test it over 500 times.

Secondly and importantly, we know that unfortunately, a lot of car seats today are not installed correctly in the cars. The typical example is that one of the two ISOfix arms is in place, but the other one has not locked in place. So we have developed a product that guides or informs the consumer if the product is installed correctly through light and sound, basically. So we say safety starts at installation and it should be easy to install correctly. And this has gotten a lot of attention and positive remarks from retail and press and the likes so far in the industry.

So pricing wise, we are coming in also, again, premium product, premium price, so we are on par with the premium players in the market. Not above, not below, but on par. And I believe I covered most questions, but again, starting in Germany in a couple of weeks' time and then rolling out from there.

Daniel Schmidt: Yeah, any follow up, Alan?

Alan Connery: I mean, maybe just that final question on whether it does represent a different type of risk and whether that's commercial or manufacturing reputation or anything else.

Mattias Ankarberg: Yeah, absolutely. It's a different type of risk, and I think, in some ways, it's a higher risk, in others it's a lower. I mean, from a brand perspective and from a manufacturing capability perspective, product perspective, we are - I completely agree with you, Alan, this is right on Thule. We feel this is our territory. We also have reasonably established juvenile distribution, so there's a lot of things that are to the plus - on the plus here. It is a higher risk in the sense that, at least by our standards, this is a more regulated market than we are used to. We're not in Pharma compared to other industries like that maybe. But compared to other products, there is regulatory parameters involved. And of course with the

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regulatory also comes reputational risks. So we have of course done our homework and a lot of internal focus and external resources to work through this in the best way possible, but it is a different risk profile with both lower and higher risk elements than some of the other categories.

Alan Connery: Perfect, thank you.

Daniel Schmidt: Okay, thank you, Alan. We'll go on to the next one, Hugo Torrel[?]. Please go ahead.

Hugo Thorel (Moneta AM): Yep. Hello, everyone. I wonder if you could maybe give us some indication about how big are the new generation of products in the Q1 in the mix? And by new generation, I mean the products that replace all legacy projects, as for the rooftop - roof box and the bike racks. So yeah, if we can get just an indication on that, it'll be a full[?]

Mattias Ankarberg: Yeah. So thanks, Hugo. We haven't quantified down to specific products. What we have said is that there's specifically two positives and one negative aspect driving the plus 18 the quarter. And then in general for us over time, about half of our sales has - comes from products that are three years or younger. So that's another benchmark for you to maybe consider when you think about the freshness of our portfolio.

Hugo Thorel: Thank you. And maybe just in the same kind of - maybe on longer period, but what would be the typical price increase you would do in the new generation you put in the market for that project portfolio that already exists?

Mattias Ankarberg: Yeah, obviously varies quite a lot. But between 5%, 7% or so is a typical upgrade in terms of price points and features, I would say, for a new generation of our bestselling products.

Hugo: Thank you very much.

Daniel Schmidt: Okay, thank you Hugo. Raif please go ahead.

Raif Abillama (Renhet Associates): Hi, thank you. Two questions please. First one on the car seat launch, are you planning to have it tested by independent test providers? When do you expect those results to be out? I noticed there were no reviews basically on those car seats, is that part of your strategy, you want those reviews to be available after the product becomes available? And the second question was on the gross margin, obviously you have a lot of new products that are being launched, so that should help your mix. You were very clear about the fact that you're sending out of inventory, so that is not helping your cost absorption. But as you are getting to the end of this initiative, you should start to see some benefits on the gross margin. Will we see it this year or next year?

Mattias Ankarberg: I'll answer the first question, Rafe[?], thank you. And then, Toby, you can take the gross margin one. Yeah, you're completely right, Rafe[?], car seats is a typically heavily consumer tested category with different kinds of organisations and these days also websites and newspapers, et cetera. It's important to note, there's also a, for the European launch, there is a - to sell a car seat, you need a certificate and to get the certificate you need to pass a regulatory test, put it like that. And that we have passed, so that the certificate is granted to us. And then in terms of the consumer test, what typically happens is that everybody puts a product in the market and then a mystery shopper comes and picks it up off the shelf somewhere and do a test and then you read about it in the newspaper, so in publications. So that is what we expect to happen with our car seats as well. Obviously, we have done a bit of homework, but this is the way the industry works. And maybe, Toby, you would like to comment on the gross margin topic?

Toby Lawton: Sure, sure. Thanks. Yeah, no, I think you're correct Rafe[?], that basically we have an effect that we are selling down inventory, which means that what we're selling in Q1 and largely in Q2, was produced in the backend of 2023 when we had pretty low production levels. So we have then a pretty weak overhead absorption in those costs, which kind of drags the gross margin. Going forward we have - as

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gross margin has come down and we have better production levels, sorry, as inventory has come down and we have better production levels, we will see better levels of overhead absorption in our product costs going forward, which should improve gross margin.

And then the other part, just to mention, you mentioned the new products which are coming, but I would say with the new products in the beginning they're more of a - it's not a positive on product cost or gross margin because we've got low volumes in the beginning. So we have the opposite effect there that we we're taking the overhead on a smaller volume in the beginning before the growth comes through. So you could say a little bit of a drag offsetting the other effect. But we should see the effect of the inventories coming down should mean improvement towards the back end of the year. Yes.

Raif Abillama: Okay, thank you. And maybe as a follow on, when do you expect the full benefit of your investments in your production new automation initiative that you put through in the last two years? Will we see it this year?

Mattias Ankarberg: I can start and, Toby, you can follow up. But I think we do see it underlying, sequentially kicking in and already - but we can see it. But as Toby said, since we're selling down inventory that was produced earlier period, that of course in the report gross margin maybe clouds some of those underlying effects. We do have a target of - we reduced inventory by SEK 800 million last year. We do target reducing another SEK 200 million this year. So it's a smaller reduction but it still is a reduction in inventory still, which means factories are not running at full utilisation of course, and we don't see that back pricing. But hopefully we will see about the market but at least we are confident with our inventory target and then we should have better factory utilisation and be able to have better follow on of the gross margins effect in 2025. Toby, you can add to it if you want to.

Toby Lawton: Yeah, no, I could just add that I think Thule has invested in automation over a longer period of time and continues to invest in automation. It's a kind of longer journey, if you like, and it's both cost reasons, it also improves quality, and a third aspect is it makes - you have more leverage on production as well that we can increase production levels more easily to meet demand. So it's contributing in all those different ways.

Raif Abillama: Okay, thank you.

Daniel Schmidt: All right, I think we have a follow-up question from Alan Connery. Please go ahead.

Alan Connery (North Rock): Yes, a short-term question, I guess, but it's on Red Sea dynamics and whether people who source their product from Asia perhaps are having sort of positive indirect effects on your business.

Mattias Ankarberg: I missed part of the question. Sorry, could you repeat, Alan?

Alan Connery: Well, I mean, obviously you have a sort of nearshoring production and not everyone does and so is there a chance that the Red Sea dynamics means that actually you stand to benefit in the marketplace? Toby, do you want to go?

Toby Lawton: Yeah, no, I could add. We do see some inbound logistics from Asia, the costs of that have gone up. It's nothing like where it was in the pandemic, so it's not as extreme as logistics costs were then. But absolutely they've gone up and they're taking more time and we are marginally impacted. But whether others are more impacted or not, I would say it's hard to see that effect really where we sit now,

Mattias Ankarberg: I think from a delivery performance point of view, our perception has been that, yes, it's taking longer time, it's a bit more costly but still product is coming through with a bit of a delay. So it's not comparable to where we were during the COVID or just post-COVID where there were weeks or months of issues of delays, where we really could benefit from having product and others couldn't. At least that's not what we're hearing from our customers.

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Daniel Schmidt: Hey Alan, any follow up, or happy, maybe?

Alan Connery: That's great.

Daniel Schmidt: Okay, thanks. I could follow up maybe on the gross margin question, we talked a lot about under absorption and there's still some to go in terms of taking the inventory down. And I do think you did maybe a SEK 100 million in Q1, if you read the numbers at least, so maybe it's just another SEK 100 to go. But you also have - talking about the Red Sea, but just coming back a little bit, you do have, I assume, freight costs in the inventory gradually coming through positively as well as raw materials, is that correct Toby?

Toby Lawton: I would say the freight cost had come down already for the better part in last year, so there's not much more to come there. I would say the biggest effect is the production levels and production overhead that we were talking about earlier.

Daniel Schmidt: And raw material is not meaningful -

Toby Lawton: That as well had come down largely by sort of middle back end of next year, it was already

• it is been stable since then. I would say it's not come down further this year really.

Daniel Schmidt: Okay. Okay good. I will continue then and anyone that wants to ask a question, just raise your team's hand. I think just coming back to the product launch and just maybe a small question on the dog crates, which is a new category, and I completely understand that it's probably not that impressive sales numbers yet, but can you say anything about the launch rollout? Is it a number of countries that you started with in Europe, US, when is that coming or is that already there or where are we?

Mattias Ankarberg: Yep, starting in Europe, US second part of the year. And extra focus on the, let's call it the markets where dog safety is higher on the agenda, so Nordics, Germany, Austria, Switzerland mainly, but some of the markets done well as well. And to your point, Daniel, no, I mean it doesn't tilt the entire P&L for the quarter but it's a nice start. And won some - won awards of design, won is first consumer review, good placement with good retailers. One example, the biggest pet retailer in Germany took it into about 20% of their stores and after two months, they said we'll want to have this in all our stores and we're taking some competition product out. So some good qualitative early wins I guess, and a good sales start. So we're happy. I'm pleased with the start.

Daniel Schmidt: It sounds like or it looks sort of a category where there's a lot of fairly unknown brands or maybe you need to be sort of a dog owner for a long time to recognise some of them. But it does look like Thule is coming into category with a much, much more sort of stronger brand, much higher brand awareness among consumers overall. Is that your opinion as well?

Mattias Ankarberg: Yes, absolutely, and it is a good observation on your part. And I think it's quite interesting from just a sort of business perspective with these two new product categories this year, that they have such different dynamics with car seats being a much bigger category but with clearly established good premium competition. Whereas dog transportation is a much smaller category, but to your point, local at best, some regional players. Not really established strong players in the premium end. And clearly an opportunity for us to come in with the best product in what we think will be a growing segment. Look at how child safety has developed over the last decade or two and how people treat their dogs these days and the trends we start to see around dog safety. So now it's an opportunity for us to have one of those really high market shares down the line, which we are very happy to have in some of the other key product categories.

Daniel Schmidt: Yeah, absolutely. All right, a couple of questions from listeners or the audience. Please go ahead, William, from Allianz.

William Herpichboehm (Allianz Global Investors): Thank you. Nice to meet you. More broadly speaking, beyond the next few quarters and the focus on new products, can we expect any larger strategic

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