Thule has three strategic financial objectives over a business cycle:

• Growth of around 10 per cent annually
• An operational cash flow on a par with EBITA
• Operating profit (EBITA) of 12%

These goals were presented back in 2003 and have since formed the guiding principle for the Group’s operation. The growth objective has been exceeded annually since 2003 through a combination of organic and acquired growth.

Profitability

Thule’s financial objective is to achieve operational profitability (EBITA) equivalent to 12 percent. The 2005 operating result before goodwill depreciation and one-off items exceeded this target and arrived with a margin of 12.4% at 391 MSEK, 38 MSEK or 11% higher than previous year. Despite the slow start to the year, all divisions managed basically to offset increasing raw material prices through commitment to the Group wide lean manufacturing program, sales price increases and efficiency gains throughout the entire supply chain.

Cash-flow

Thule’s financial situation after the buy-out late 2004 through Candover encourages the company to focus on operating cash-flow. The annual cash-flow target is to be in line with the EBITA result in order to be able to serve the leveraged balance sheet. The outcome for 2005 was 429 MSEK (250 MSEK) and adjusted for divestments, 10% above the target. Contributively to this development was the fact that investments returned to a normal level after larger expansion investments in mainly Poland and the USA during 2004.

In addition to the above mentioned figure the operating cash-flow was further strengthened through the sales leaseback of the UK site in Rotherham as well as the handing over of customer contracts of the Danish Thule Rental fleet to a leasing partner.

Growth strategy

Thule has grown successfully since the beginning, but particularly during the past decade. The company’s strong position in Car Accessories makes it difficult to continue at the same pace exclusively through organic growth. In order to grow 10 per cent annually while maintaining profitability, the Group requires additional acquisitions in related product segments. One example of this approach is the acquisition of Belgium’s Omnistor Accessories NV during the year. The company is a leading European supplier of accessories for Recreational Vehicles (RVs) such as motorhomes and caravans. The target group is the same as for other Thule products, namely active familes.

Thule employs a structured acquisition process where a large number of suitable acquisition candidates are identified. All companies fulfil the scope of the Thule vision and complement the Group’s core business. Two companies were acquired in 2005: Swedish horse trailer manufacturer Star Industrier and, as mentioned above, Belgian Omnistor Accessories NV. Star Industrier will strengthen Thule’s position on the Swedish market for horse trailers, while Omnistor brings the Group a new product range which has been incorporated as a business unit within Division Europe/Asia.

Thule intends to maintain its growth rate, i.e. to endeavour to add two to four companies with combined sales of approximately one billion kronor over the next 12 to 18 months. The Group’s objective is to double its sales from today’s 3 billion to 6 billion SEK by 2007.