Interim Condensed Consolidated Financial Statement Q3, 2025

Improving bottom line at last
The third quarter showed an improvement in sales and profitability to the same quarter last year, mostly through Devold. The retail market continued to be driven by price pressure and a warm start of the winter season, which meant a slower start of winter sales in September. Among the Brands there was a mixed picture.

Globetrotter, our German retailer, limited its use of discounts to drive digital sales which meant substantially lower digital sales, but it had almost no negative effect on brick-and-mortar sales. This lead to an improved gross profit to earlier quarter and a much better gross margin. We also are continuing to see improvement in our Nord American business where Canada continues to stand out in performance. The operating profit of the Group increased to 32,061 TEUR from 28,566 TEUR last year. Both the comparable business and Devold contributed to the increase.

The Net sales for the quarter ended at 206.4 MEUR vs 197.5 MEUR last year. The increase was driven by punctual delivery of preorders and Devold. In terms of the split between consumer sales between digital and brick and mortar shifted. The brick and mortar have outperformed digital in almost all markets and even more in the third quarter. The gross margin of the Group increased due to more direct to consumer sales and less discounting in the quarter as well as a higher gross margin in the Brands segment.

We had around 1.3 MEUR in one off costs from some minor restructuring. We also had higher than anticipated higher costs in the logistic operations, as we did not gain as much efficiency yet as anticipated.

Brands
The Brands segment, excluding the effect of the North American wholesales business, showed increased sales of 17.0 %. The increase was driven by Fjällräven deliveries from a higher preorder book as well as the addition from Devold. Hanwag delivered preemptively a part of their preorders already in Q2 to take height for startup problems during Q3 in their change of business system. Royal Robbins showed increased sales, but from smaller numbers. The North American retail operation continued their improvement. The gross margin recovered compared to earlier quarters, due to lower need to discount merchandise. The costs were kept under control and savings were taking effect.

Global Sales
Overall Global sales decreased in net sales to 34.0 MEUR vs 52.8 MEUR last year. Most of the decrease was due to the fact that the North American business now are accounted in Brands. On a like for like business the European distribution was down 1%, driven by Hanwag orders being delivered in Q2 and some IT related delivery problem at Hanwag. The Asia/Pacific markets continued to grow, making a rebound from earlier quarters. The non-consolidated Chines business continued to grow and is like to show record sales and result for the year in local currency.

Frilufts
Sales in the Frilufts operation showed a decrease of 3.1 %, from 97.4 MEUR to 94.4 MEUR. This was driven by a general decrease in digital sales decrease and the volatile warm situation in September. Despite that Globetrotter showed an improved result, due to less discounting, meaning a higher profitability for Frilufts in the quarter.

Retail channel development from a Group perspective
Our total brick-and-mortar sales was flat 86.5 MEUR vs 86.7 MEUR. Our digital sales decreased from 37.4 MEUR to 32.2 MEUR, -13.7 %.

Q4 sales
In terms of our expectation for Q4 it is depending on the weather. The colder the better. The actual fallout remains to be seen, but we expect Devold to contribute to the total sales and the bottom-line in Q4. However, due to the current situation in the market both politically and economically nobody knows.

Going forward
We still have challenges. The original core outdoor market is still not growing. There is a growth in extended outdoor like outdoor lifestyle, which is more volatile as it is more fashion and distributed through different sales channels. The general price pressure driven by the web retailers is a challenge. We are therefore implementing a new channel strategy, which will start being implemented next year. We are also entering a faze in our business system change. This will be important to our future success as we are changing a lot of our processes to both become more efficient as well as enabling us to lower risk and serve the market, both dealers and consumers, better. The insecurity in the market also means that we must carry larger risk as dealers are returning to a smaller proportion of preorders. Therefore we are working on creating a more flexibly supply chain to better serve the market at a lower risk. In terms of our logistic operation, we see operative cost savings of around 4 MEUR compared on an annual basis as we finish migrating the operation to Ludwigslust.

However, we see a reasonable preorder book for the spring compared to last year for Brands and Global sales. We believe will have a stronger contribution from Devold next year as the rollout in new markets through Fenix sales channels starts next Spring. In terms of investment, we will next year focus on increasing our market presence e.g. marketing spending.

All the best
Martin Nordin
Chairman of the Board