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Hello, and welcome to today's Thule Group Year-End Report Fourth Quarter 2022. My name is Bailey, and I'll be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to Magnus Welander, CEO and President. Please go ahead when you're ready.
Thank you, [ Harry ]. Good morning, everybody. Time to wrap up a interesting 2022. So I ask [ Harry ] to go to Page 2, where we summarize a year that truly has had 2 very different phases. As you've been hearing from us throughout 2022, we had a phenomenal start to the year with a fantastic preseason for the bike market and in general very strong performance across Thule's categories. And then as we all remember, if we're listening into this call, we had to issue a profit warning in September as the bike retail sector clearly had a big handbrake pull when they saw they had too much inventories on hand.
So if you look at 2022 Q4, we have also, as always, remember that it's challenged by the fact that we have a clear strong comp period. And when you have a strong comp period over 1 year, it's easy when you're a public company that you have a very short memory, that it isn't as bad as it might look but versus 2021, Q4 was weak on sales.
We were 21% down currency adjusted. And the biggest downside was the U.S. and Canadian business or in Region Americas. And that is also once again related to the strong '21 Q4 that those markets had. As you remember, if you listened into our '21 Q4, we were still catching up with backlog deliveries of bike-related products well into the winter season in Region Americas while we had caught up earlier in Region Europe and Rest of World.
EBIT for the quarter, which is always our lowest EBIT quarter, was SEK 4 million. And that meant that we just barely became -- had a positive EBIT. We had a clearly stronger operational cash flow versus the same comparable period last year. But clearly, here, it was the fact that 2021 Q4, we were building up huge inventories for the season ahead, while now we did not need to do that having high inventory levels already in 2022.
So when we summarize the full year, it is the second-best year in the history of the Thule Group. Still doesn't mean we're happy with it because we had a 9.7% FX adjusted decline in our sales, and that's something you're never happy with. If you look at our performance by region, for the full year, they were quite similar. We were 9% down in Europe and Rest of World and 11.5% in Region Americas.
And if we look at our performance on an EBIT, we did SEK 1.7 billion in EBIT, which meant that our EBIT margin fell down to 16.8%. There was an operational cash flow of SEK 530 million, and Jonas will talk more about that later on. And the Board has also decided to propose an ordinary dividend of SEK 9.20 per share, which is in line with our then dividend policy of 75% of net income.
If we go to the next page, Page 3. We see what I mentioned first, the fact that we are looking at very different quarters, also very different quarters because of the previous periods' very different quarter. So when you look at numbers, you always need to look a little bit more back. And I can assure you, we're not doing this to try to, in any way, sugarcoat the fact that we declined 9.7%, but rather explain what the phasing periods are also now looking forward.
So if we look at quarter by quarter on Page 3, you can see that in Q1, we had a very strong start of the year in '22 both compared to 2021 and compared to the pre-pandemic 2019. And when you look at that, you can see that we had a 20% growth in reported currency but only 13% growth in currency adjusted versus '21, but we had a 64% growth in Q1 versus Q1 '19 currency adjusted. So a very strong start to the year. And as I mentioned many times already when we did the quarterly report and also later on in subsequent reports, we did see a clear bike category load in.
When we look at Q2, we then had a almost flat [indiscernible] currency adjusted versus a very strong Q2 in 2021, which was also a 43% growth when we look at versus 2019. Then came the handbrake pull in Q3. And when we saw that from the bike retailers, it clearly, versus a very strong ending of the season in bike in '21, meant that we saw a decline versus '21 Q3 of 29%. But to be remembered, it was still 23% more sales than we did in 2019 Q3. That was also the time we then issued a profit warning clearly telling the markets that we would see a weak Q4 and a weak Q1 in 2023 as well due to the fact that, that inventory rebalancing in the bike retail sector will only really start to happen as the normal bike season starts now in 2023.
And then finally, in Q4, we were 21% behind '21 in currency-adjusted and 28% better than '19. So overall, very difficult and different quarters to track and follow. By default, that also means that we now, when we will be looking at 2023, we have a very, very tough comp in our first quarter, which was extreme and more normal in the second quarter and then 2 easy comp periods in the third and fourth quarter. So I think that is a clear messaging also to all investors and analysts to not overinterpret anything in the quarters as they come.
If we then take the next slide, Slide 4. We will, as we have discussed a bit throughout the year about how much is the Thule Group exposed in a positive and negative sense to what goes on with bike. So if you look at this graph, it shows on a rolling 12-month basis how much of the sales were in the bike-related products, which we do, as you know, in all 4 of our product categories. We have products that are related to biking and using of a bike. So across those 4 product categories, if we take all the bike-related products and we compare that with all other products we have across the 4 product categories and look at a rolling 12-month, you can see quarter-by-quarter that we were steadily doing around 37% of our sales in pre-pandemic times were bike related.
Then came the pandemic. And we, at the same time, had some very successful new product launches. So we had just launched some very good new product, on top of that came the pandemic, which drove a general tendency for consumers to use more bikes than ever both in commuting as there weren't subways and buses or you might not have wanted to go on them, but also as a fun thing to do on the weekend, et cetera. When we look at that, we should remember that strong, long trend that had been there for years, that e-bikes are very positive for the total group. E-bikes are heavier, more expensive. So the likelihood of somebody buying a premium product to bring their e-bikes is much higher. That means we take a higher share of the market pie at the premium price points. And premium price points on accessories like a bike carrier is clearly bigger if you buy a very much more expensive bike, like an e-bike.
So we were seeing some trends that were positive. On top of that, we had a general biking trend. And then came the third positive for us during the pandemic, which we mentioned several times throughout '20 and '21, the fact that we have own operations close to the marketplace while our competitors made everything with sub-suppliers in China. That allowed us quicker, although we were struggling also to meet the demand boost that came throughout '20 second half and all of '21, we did a much better job than our competitors, thereby also grabbing some market share at price points where we normally might not have gained them. So we clearly had 3 factors helping bike to grow faster.
As a consequence, as you can see on the graph in how much bike related was a share of total sales, we saw a going up from the 37% almost on a rolling 12-month basis up to 50%, which meant in certain quarters, we even had up to 60% of sales from bike-related products. Now with the very aggressive handbrake pull, but even before then we were starting to see a normalization, performing very well in the rest of our categories. And so when we were performing well in the rest of our categories already throughout the second half of '21 and going in even through the very strong beginning of '22, you can see that the share of bike related were starting to drop. But then you see a very dramatic drop in the third and fourth quarter.
Now actually, when we summarize on a rolling 12-month basis then at the end of '22, we are actually back at 37% again. And as I've already indicated to you, we will now replace a strong bike quarter, extremely strong '22, with a weak one due to inventory reductions. So we will actually be below the pre-pandemic levels when we summarize on a rolling 12-month basis bike related after 2023 Q1 is closed. So what is happening is, as you can see in this graph, we are clearly performing very strongly in the non-bike related business. And we are also, as I've mentioned many times, very convinced of the strong bike trends that are underlying for the long run and about our fantastic product offer in also bike related. If we then go to our sustainability, I can already now having looked at the presentation just this morning, see that unfortunately there is an error in our sustainability graph. I think the team were a little bit busy last night with a lot of other things going on, as we'll come back to, and some of the graphs were wrong. So I will clarify that we will replace this graph. In reality, our numbers are significantly lower than this. And in fact, we are not at that 35 or 26 tons CO2 per SEK 1 million but 2.6 ton. So we will update the graphs and make that available and release a press release clarifying that. So we apologize for that mistake.
Because what did happen in 2022 was we took significant steps in our long journey, which is now committed not only to Science Based Targets, which we were already from several years ago, but also now to the business ambition of net zero 1.5 degrees by 2050. So that whole thing of being committed to Science Based Targets with an aggressive plan for 2030, we are also now net zero committed for 2050. When we then look at what did improve, although the graph is incorrect, the trend in the graph is correct. We clearly had a much better performance, both in total emissions but also most importantly, also in emissions per SEK 1 million of revenue.
What contributed to that was, of course, the ongoing and the hard work we have been doing for many years in our own plants. But as you are aware, if you have looked at our annual reports in the past and definitely will be aware when you look at our substantially expanded sustainability reporting in our upcoming annual report, the biggest part of us in the world of emissions is, of course, in Scope 3, in the materials we use for our products. So we have done a number of very key choices in making our products more sustainable by having higher degrees of recycled materials and also low energy produced aluminum and other products. So generally, a very aggressive path of ensuring that we produce and use the right materials, is a very big contributor.
Another big contributor is more efficient from a energy point of view and a mission point of view but also from a financial point of view, a significantly reduced airfreight and a better utilization of logistics in general. So all of that work is something I'm very proud of. So we'll make sure you get the right numbers. And then I urge you to look at our full reporting on our homepage.
I can also say I'm very proud of what the team has done. We have strengthened our team significantly within the sustainability area, and the team is truly living up to all aspects of this work, not just emissions. And I'm also happy to say that this is being recognized by outside entities. We are happy to announce that we are 1 of the top 50 companies out of the more than 15,000 companies that has Sustainalytics value from a supply sustainability point of view. So we are continuing that long-term ambition, and as I said, now also with a net zero commitment from the company.
If we go to the next slide, there is something aside from sustainability that, of course, Thule is very famous for and that I have talked to you about many times. This is a product is king company. And if you have a product is king company, does not mean you are not professional with what you do in your supply chain or how you market that or how you improve your homepage or what you do in social media or how you build your brand. It just means that all of that comes from the core center, that great products win over time. That approach is not free of charge. We have mentioned many times that we decided many years ago when I became a CEO, one of my key main directions was to spend the right amount of money to drive those innovations both in current product categories, but of course, as we are talking about the future, also entry into new product categories.
If you look at the graph of our spend as a percentage of sales, you can clearly see that both the actual numerical amount of how many millions we spend has been increasing significantly over the last few years. And in 2022, we actually hit 6% of sales. Smart people like you, analysts and investors, realize that we partly had indicated that we would be in the 5-plus % only. So what does this mean? It means that we, with the Board's approval, decided to push full speed ahead with all those large innovative product development efforts despite seeing a slowdown in the second half of the year. That is going to stand us incredibly well both in '23 with some launches coming, with a lot of launches coming in '24 but also in future years. Because in '23 and '24, we will not only enter new product categories, car seats and our dog-related products, but we're actually replacing all of our biggest sellers in all the other product categories. So it's a very, very big undertaking with lots of extremely cool products in the market coming. So we feel very good about that effort.
To give you an idea also, because I understand that although only a few million SEK of versus what analysts thought, one thing I think people underestimated, although us having told many times, we don't do phasings of our product development spend. We take them when they hit. We don't do things on the balance sheet. We take the effort as they go, which means that in Q4, we had up to 11% spend on product development. So a very significant push due to the fact of the small revenue season that, that quarter is.
If we then go to our income and cash situation. I leave it to Jonas to take the Slide 7.
Thank you, Magnus. I will, as usual, primarily concentrate on the quarter. Reported sales for Q4 2022 came in 11% lower than last year, and if we apply the current exchange rates to last year's Q4, we get 21% lower sales this year than last year for the quarter. And it is, like in the previous quarter 2022, the drop in bike-related products that is the reason. The gross margin is 31.5%, which is 2.2 percentage points lower than in Q4 2021. The big difference compared with the same quarter 2021 is, of course, that the volumes are lower, which has an impact on gross margin through lower absorption of fixed costs. Our variable production costs have gone down significantly and proportionally to the lower sales.
In addition to the lower volumes, we have also had a negative product mix shift when non-bike related products with generally lower margins, thereby automatically get a higher share of sales, as Magnus mentioned earlier. Overhead costs has increased from SEK 432 million to SEK 517 million or 8 percentage points seen in relation to sales. However, almost 40% of the increase in the cost, SEK 33 million, relates to unfavorable exchange rates, and the remaining increase relates mainly to R&D costs for the new product launches as well as to costs for handling the currently high inventory level.
The EBIT margin is 0.2% to be compared with 10.3% in Q4 2021. To put the margin in the quarter into a bit more of a perspective, the average margin in the fourth quarter for the years 2017 to 2019, that is before COVID, was 5.3%. The finance net in the quarter is lower than the same quarter last year because of higher utilization of bank facilities and higher interest rates. The tax for the full year of SEK 373 million corresponds to a tax rate of 22.6% to be compared with 22.3% in 2021.
And then we move to Slide #8. Operating working capital was SEK 3.277 billion at the end of Q4 '22 , which is considerably higher than at the same time in 2021 and relates to the increase in inventory of bike-related products. The stocking up occurred in the third and fourth quarter of 2021 and the first quarter of 2022. We did not expect to lower our inventory in Q4 2022 since the reduction of bike-related inventory does not start until the bike season starts.
The operational cash flow for the fourth quarter 2022 was SEK 91 million, to be compared with minus SEK 381 million in Q4 2021, which is an improvement of SEK 473 million. The main driver of the positive cash flow in Q4 2022 comes from accounts receivables. And the main difference to Q4 2021 is that there was the inventory buildup in Q4 2021 that consumed cash. Capital expenditure was SEK 67 million in the quarter to be compared with SEK 156 million in Q4 2021. The big difference is mainly explained by timing differences between quarters. And for the full year of 2022, the CapEx was SEK 444 million against SEK 506 million in 2021.
Thank you.
Thank you, Jonas. We turn to Slide 9, where we look at the product categories and how they performed for the full year and also by region. I'm not going to stay very long on this slide because we're going to talk about each category separately afterwards. But it's, of course, clear to note that you have the 2 categories that have, by far, the biggest exposure to bike related are the 2 dipping quarters -- dipping categories in 2022 versus the exceptional '21.
So in Sport&Cargo Carriers, bike carriers is a very significant chunk of the business, and in Juvenile & Pet, we are the world leader in premium bike trailers and one of the top players in child bike seats, and those of course are actually the majority of our business in Juvenile & Pet today. In coming years with more pet products and more car seats and other things, that will, of course, decrease. But it still is the significant chunk of those 2 categories. We do have, as I said, also bike-related products in the other 2 categories but to a much smaller extent.
So let's then as I said go straight into Sport&Cargo Carriers, which is Page 10. And if you look at Sport&Cargo Carriers, you can see that the decline was very similar in both regions. It was 16% in Europe and Rest of World but 18% in Americas. If you look at it, very simply, it is the bike racks. We had the bike racks, bike carriers going well at the start of the year and then we had a very weak end of the year. Exceptionally sell versus extreme comps in '21, but actually a weak also versus what would have been normal as we saw really most retailers wanting to sell out whatever they had on stock. So we had a strong preseason, as I said, in '22 when retailers having felt that they could have sold more in '21 if they had it at home went very early and bought a lot and, in fact, too much. And then we got the bullwhip effect in the second half, which will hurt us also in the first quarter of '23.
Within the field of cargo carriers, we have done very strongly this. And then we're very excited about the work with both our roof boxes, but also baskets and other solutions that helps you bring cargo on your car. We're also very excited and I'll talk more about that a little bit later on, on some very innovative launches we've just done in the month of February in moving some of the cargo solutions to the rear of car in a very smart way. Within the roof rack category, we had a solid year. And there were some automotive accounts that were performing weaker.
If you look at our roof rack category, it is out of all the subgroups, the one that we still sell in more of the more traditional automotive retail channels. And in some of those, we saw a relatively weaker performance, while in other channels where we sell our roof racks, we did better. We also are a producer of some car manufacturers' roof racks, and there it's more associated with specifically which car model. We are the supplier of that car branded roof rack and some of those did not perform as well. But overall, it was a solid year, which is also what applies to the rest of our business aside actually from water sport products, which were partly also pandemic-boosted in '21 for a longer season when people went kayaking or surfing around. But overall, a solid performance. So it really was the bike rack category that was having issues.
When we now look at 2023, we have some very exciting launches. But we also have to remember, we have high inventory levels in bike retail now when we enter the season, which means we will be seeing a slow start in Q1. We are very much getting the signal that inventory is going down, not as much as we would have liked or not as much as the retailers would have liked, but it's going down. But there is a clear fear factor now from many retailers to prefer to even go short for a period of time because they don't have the confidence at the moment. Since we are a next-day delivery company that is now up to our old, very high on time, in full, we also in all our discussions with our sales teams around the world, when they talk to their customers, the customers now feel very certain that they can get next day, what they ordered the day before from us. So we will truly see pickup in bikes from a significant point of view only as we enter the normal consumer high season, which tends to be in mid-April and onward.
We have a very cool -- I can't tell you more because then my marketing team would kill me since we have a very limited PR launch that is targeted on a specific date but we have this much, I can tell you, we have a new top-of-the-line rear car bike carrier that hits the market in May. And then in our next quarterly call, we will have passed the date when it's been publicly announced so I can share all the cool bells and whistles that this world's best roof -- towbar-mounted bike carrier will have. But as I said, rear of car cargo solutions, we have launched already now in February. And we are launching, so it's public, some very nice-looking rooftop platforms that create flexibility for that more adventurous type of bringing your gear. I'm going to show you some images of those in a little while.
Let's then go to the next page where we talk about the very successful RV Products category. Once again here, I think our team has done an astonishingly good job because actually, the overall European category, which is where we do 92% of our sales within RV Products was not doing so well. Overall, it had a double-digit drop in number of vehicles sold and also in number of vehicles manufactured. And the reason for that was mostly the fact that there was long order book still from consumers wanting to buy motor homes, but there were still -- manufacturers were struggling to catch up with demand due to lack of chassis to build these motor homes on. So overall, we had a very strong growth of 17%. As you see, we had 43% in Region Americas, but it's a very small niche where we are playing with some smaller van solutions, still very nice. But the chunk of the business, the lion's share of the business is definitely those 92% in Europe. But a very strong performance considering the sector overall.
Then consumer demand, which is the interesting one going forward now, is there. But we have said, and I'm probably the one accused most of anybody as a cry wolf person when it comes to can it really continue in the RV Products sector? So I've been wrong a few times when I've said, it seems a little bit optimistic. What we can say is that the trend of consumers wanting to do this type of vacationing is very strong, especially among the young, especially among the type of people that we love. They're very active, they want to go biking, kayaking, et cetera, and want to be flexible, how they move around. So the smaller vehicles speak to our favor, the more active people being now not only at 55, but plus -- I mean, 56 plus, soon it's 57 plus. So I know also the more senior a group, as we're called, also more active than ever before, that fits our product and it fits our brand.
That's the biggest concern, I think, anybody has and the 3 stock-listed companies that represent about 60% of all motor homes sold in Europe. So [indiscernible] the Ford Group with their European brands and [indiscernible] all mentioning the fact that their order books are still very long. The question that they are starting to pose, and I think correctly so, and we are posing to ourselves, is that if you are a consumer that truly wanted to do this, you probably haven't changed your mind on one thing to do it. But what might have since you were placed in that order book changed is 2 things. The price for that vehicle is now clearly higher than you -- when you mentally committed to it because costs have gone up significantly since these order books were starting to grow. The second point with a concern of bigger ticket item, so differently from a bike carrier for EUR 500 to EUR 900, you're talking about the commitment of a full vehicle of EUR 50,000 to EUR 70,000, EUR 80,000. That is a bigger financial undertaking in what might be a more uncertain world.
I said a few times before that we shouldn't look too much back on the big dip that the RV industry had in the financial crisis in European '07, '08 and '09 because there were 2 things that made that dip happen at that time. One was the true concern by the consumer of will I be able to afford this? Can I do it? But there was also, at that time, a very clear actual limitation when the banks told them, "You can't borrow money on your home or your apartment to buy this." So what the industry in the RV sector did very smartly since was they set up their own financing solutions, where it will now be purely this decision from the consumer's point of view, saying, "I'm not prepared to pay these monthly costs for this."
We believe that although the order books are strong, it will be making some people walk out of line. There is only so long you can wait on your dream and if it's, at the same time, also gets more expensive. So we will see, I think, throughout this year, a situation where this will clarify as the supply chain starts catching up for the vehicles. We will see if the consumer is still there standing in the same queue waiting for it and prepared to pull up a clearly higher bill for it. So we are cautious for the industry. But once again, for all the years I've been here, and the team has been driving this category, we've always beaten the market. I'm convinced our team will continue to beat the market also in the future.
If we then go to our next page, Page 12, and look at Juvenile & Pet. And we all know that at the moment, it's juvenile but it will soon be pet, so that's why the name is there. If you look at it, also here, a similar performance in percentages across the 2 regions but a difference within the stroller category, where we've already announced late last year that we were not happy with our performance on strollers in the U.S. market and therefore triggered some staff changes. But aside, the overarching picture is the same. The bike-related products were definitely hurt during the year in the similar way versus that fantastic '21 we had in the bike-related juvenile product.
So the bike trailers clearly were hurt and child bike seat for us. So same logic there. Strollers did well, but aside from U.S. and as the U.S. is a big market, that's, of course, something we needed to act upon and have acted upon and we're wanting and striving to turn that trend around in the U.S. and get better. Overall, we feel very good with our assortment and the work we're doing to be a bigger player.
Then of course, when we now look forward, there is this momentum in bike that is not so much us, it's the industry. It is us fixing our own stroller approach in the U.S. And now a lot of the work is ensuring that we go the right go-to-market approach for our new products and product categories, the car seats for children and dog-related transport solutions. So every market we're in, we're doing those evaluations and talking to those partners, looking at where we will be. And in some cases, we can already say, we will choose to only go direct to consumer for some of the products. In some cases, we will apply the products across to those current customers. And in some cases, it will be new retail channels to meet. So there's a lot of work ongoing, not only from a product development approach but very much so in a commercial approach for being successful with those new categories.
If we then go to the next page, Page 13, and look at the strong Packs, Bags & Luggage performance. It is, to be honest, a little bit also the same here. We shouldn't be too much patting ourselves on the back because we also are comparing with weak comps. So if we all the time repeat strong comps and have that as an excuse, which is true, we also have to admit that '20 and '21, the whole Packs, Bags & Luggage category went down a lot. It really went down a lot less, one, because we were a small player; and two, because the types of bags that we did and do are less focused on international air travel and sliding around the terminal with the bag and more around general travel and commuting and working in the city or going out hiking, et cetera. So we were less exposed but we were clearly exposed to a significantly reduced back to work and back to campus and traveling in '20 and '21. Therefore, the comps are relatively easier.
It's still nice to see now a 51% growth, as you see also this one, very similar across the 2 regions. And the biggest driver was the back to work but clearly also our successful launches of a number of collections for more international travel. In the image you see, our hugely successful Thule Aion series with 100% recycled material. And it's one of those I often joke about who -- and when I meet investors, I always try to tease them to see which product they would like. This is one of the cases where every time I have my 26-year-old and 25-year-old daughter home with their boyfriends, there's one of these bags missing in my home because they grab them. That's always a very nice sign.
When we look at this carefully, we also have to remember, although we don't want to speak to you investors too much about it, but we do admit it, we have some legacy products here. We mentioned it many times over the years. They continue to shrink. It's the camera bags, it's the tablet folders, et cetera, where we play clearly a game of last man standing, making money on them as we have them but not focusing new efforts on them. They continue to decline and they will continue to decline, and we will continue to play that smart game of making money on them while we can.
In '23, I am very happy with what the team -- our design team that has done a tremendous job if I look at all the collections we've launched the last 18 months. And our new product management lead where we have strengthened our team is definitely hitting it the right way. We see the ones coming as well. I am sure you will see much more Thule bags around the world in the coming period because we have a number of very strong collections, but also because, let's be honest, there were a number of brands that died during the pandemic.
If you were a pure, smaller or midsized player in Packs, Bags & Luggage during the pandemic, you're most likely not around. Or if you are around, you have reduced every spend, every design effort, et cetera, to much more. There are, of course, some formidable competitors still around. You have the Samsonite Group, you have many more, but there was clearly a -- some spaces on the map that became wide. With our strength, doing also other categories, the great design teamwork and a new product managements we've had in place now for more than a year, I am convinced that we will be one of the winners in the coming years.
There is challenges, though, also here, because here we have a challenge like everybody in Packs, Bags & Luggage that now, we are struggling to meet demand for bags. And the logic is simple. When an entire industry went down as much as 50%, 60%, 70% in how many bags were sold, what happened was a lot of those Southeast Asian-based suppliers and ours are mostly in Vietnam, actually had to close down. And when they then were about to open up, there weren't as many around and some of them will never commit to the Packs, Bags & Luggage category again, which means there is a constant struggle for all of us as brands to get those suppliers up to the capacities we would like. There is also a fact that throughout '22, we still had some quite aggressive COVID restriction measures around those markets where these products are being produced. So we and everybody else in this industry are now hoping for a more normalized supply chain. So good things ahead also for Packs, Bags & Luggage.
If we then finally, before we open up for Q&A, look at Slide 14, we can talk about what's the focus for the coming period. And when you look at the coming period, it is really more of the same. If the same is brilliant, then why change it, right? So we have a very big focus on continuing to drive our growth-oriented strategy that we've had for many years. which means we're going to work on our total commercial offer, we're going to keep on hitting with product is king and we're going to work with that flexible supply chain set up to meet changes as they occur and, of course, keep on having a slim line and effective back end.
So if you look at it, I know I'm going to get the question anyway, so we might as well anticipate, then what about prices for 2023? So we did several price increases in '21 and '22, in fact, 4, which is, of course, something that was necessary with everything going on in the market. When you therefore look at going into '23, we announced to our customers that aside from Packs, Bags & Luggage where there are clear price increases, there are, with a few exceptions, no price increases in 2023. There will still be a positive price impact in '23 versus '22 because our final price increase in '22 was only done midyear in July. And as you also are then aware, since we had a relatively weak second half of the year, the volumes that came out with those relatively higher prices were limited. Those will now be of course applied to the full year. So we do have a low pricing effect happening also in 2023.
So if you look at the work, the marketing team is doing a great work. I'm showing on the right-hand side 2 examples of how we communicate in social media. They just launched Thule Arcos. So since there are some images and it says, "Bring more, go further," I want to give you a little bit more about this brilliant new product. So there has been boxes and things back on the car before. We have had those. But here, we went into what is truly doing something from scratch with a logic of with more and more electrical vehicles and more and more range in sight, we need to make it easier for consumers to go on those trips to do those fun things they want to do. And that's exactly what the Thule Arcos sells. By moving the cargo solution and by the patented design we have of this product to ensure that it is very energy efficient in terms of wind drag, et cetera, we have found a way of making this happen. And we can give you some examples, and you will see when it comes out in various magazines reviewing this product. There are cases with certain models of e-cars, like the ID4, for example, where actually applying the Thule Arcos at the rear car reduces your battery consumption and allows you to go further than if you didn't have the box. So generally, you can say very, very limited negative impact, in some cases, even positive contribution versus a roof box, which we do know does impact. And of course, for the truly super outdoorsy person, it also allows you, for example, instead to put the Thule approach rooftop on the top of your car and still have the cargo solution at the back of your car. So a brilliant product, which I already see here on the parking lot outside the head office on many of my colleagues cars,and very good start on our sales of the Thule.
And then in a few months, we are launching in the stores to the Thule Caprock. And as you can see on the imagery here, we're talking about those true rugged outdoor fans that want to bring lots of gear on top of a vehicle. It doesn't have to be a Land Rover or Granadier, it can also be a normal car where you put this platform on top and allowing you to really store lots of cool stuff and lots of gear to bring. Then already pretty pleased, big bike carrier launch. There's lots of other cool products coming out as well.
We are also continuing generally our big push of ensuring that both online and brick-and-mortar customers do get better sales supporting tools. And we are doing a huge uplifting of our own to thule.com. With that, it also allows us to further boost the fast-growing direct-to-consumer sales, which grew 85% in 2022 from very low levels, but still, we have a momentum. And there is a -- in the long-term strategic plan, we've agreed with the Board a much more ambitious growth plan going forward with direct-to-consumer. So we feel very good about those efforts.
We will continue to push our product portfolio expansion and our product development spend and feel very blessed to have had the opportunity to have people truly back in our state-of-the-art product development center that I know a number of you visited when we had our Capital Markets Day in May. And those facilities are being used in a very good way. It is inspiring to work and getting prototypes ready and get it done very quickly. So the output level in terms of new patents applied doubled in 2022 versus 2021. And it shows this working together at the premises with the right things with the right teams, as we have, truly generate lots of cool new ideas.
The little bit tougher news is clearly if you're a CEO of a company and you have employees that you cannot have a job for. So here, the situation is that when you sit with high inventory levels, which we do, it is clear that we are not going to build up even more inventory. We will use and sell out that inventory, which is great from a cash flow perspective in reports in the financial market, but it also means that we will have fewer workers in our plants. We have very successfully been able to deploy our free tiered approach with fixed employees, seasonal employees and a large amount of temporaries, but -- from agencies. But we have to say we've also had to reduce within the fixed workforce. It's something we do not take lightly, but we are, of course, ensuring that we can run the company in the best way. When we compare now here at the season, we're about 800 people fewer than we were when we ended December. So that is a sign of how we have used this flexibility as we will also much later this year start to ramp up.
We will need to take in temporary and seasonal staff also this year, but that will come much later and to a lesser extent as we instead use and sell out the product we have in stock. We are doing other factors that also from a future perspective will mean that the staffing won't need to go up as much in the future should those, as we expect, quantities come again. And that is because we have had a very high degree of automation focus on all our more new launches. So these new lines these new products are significantly more automized than they used to be. Now we've designed the product from the beginning with a true sustainability thinking in terms of which recycled materials and what that means for the design, et cetera, but also from which automation methodology do we want to be able to use, so we design it correctly from the beginning.
You are aware that we have had 2 years with much higher CapEx levels than historical. That was due to catching up with the capacity demand from a pure being able to satisfy the capacity. It has also been related to some big automation investments for some of the new production lines. Of course, it's been associated with the fact of preparing our plans for the assembly of Thule related products and car seats, and as we also mentioned, for the big investments in our development center and our world-class Thule Test Center. We will now go back down towards more normalized levels. We have some of those last big automation things happening not last, but for the current launches. Some were relatively large automation investment. But CapEx levels will be going down significantly if you look forward now. Really, as I said, we will generate strong cash now. We are selling from inventory. Cash generation will be strong.
So if I conclude before we open up the floor for questions. We will have very tough comps, especially in the Q1. So the first 4 months was very strong last year because we had this bike season. We will have a very easy comp period in the second half of the year because of the very extreme handbrake pull by the bike retail. Overall, we all know there are many uncertainties around the world in terms of consumer economy in terms of how confident our retailers. All the signals we are getting is that bike retail has its view of coming back in the season but not in the preseason, but in the season starting to roll again. Same thing is all the indications we're getting from all of our other product categories. I did put in an asterisk and a warning about a potential further slowdown in the RV industry, but I know our team will do everything they can to overcompensate that with continuous market share wins. And we need to be flexible. And that's why we have been cautious offering as many staff back as we normally would have it this year because we want to have that flexibility.
And then finally, addressing the elephant in the room. As you have seen yesterday evening in the press release, there will be a new CEO of the Thule Group, Mattias Ankarberg, currently CEO of Max Swedish, the DIY chain. And he will -- has also been on the Board of the Thule Group since 2018. He will take over as of August 9. Well, everybody that knows me, and luckily there is a lot of people in the company to do that and some of you out there, hopefully have the same view as my colleagues have. They know I'm an all-in type of person. I've had 17 brilliant years with Thule. It's been engaging, fun and also I would argue myself, very successful. So I'm very, very focused on making sure that all those great colleagues, all of you investors, will get the best of Magnus Welander in the coming 6 months, enabling Mattias to get off to a brilliant start because, in the end, the Thule Group was super successful for decades before I took over. It's been very successful during my reign, and I am 100% sure, with those great colleagues that we have, that fantastic global lifestyle brand and a very well set up supply chain, we will see a fantastic Thule also when Mattias take over.
With that, I can still say you're going to hear my voice for 2 more quarterly reports, so don't give up on it yet. Therefore, we open up the floor for questions.
[Operator Instructions] The first question today comes from the line of Daniel Schmidt from Danske Bank.
Maybe 2 questions from me, though, if that's okay. And then firstly, addressing the elephant in the room, maybe. Given the downturn yet you are currently in, sort of what explanation has the Board given you when it comes to this being a good timing to make changes on when it comes to the CEO.
The Board, I think -- as per the press release, the Board has done as a Board should do their evaluation of succession planning and who should be running the company. They've chosen the time. So I think that is a question for the Board.
Okay. But you don't want to give any sort of indication on why this is a good timing, they think?
I think as per the press release, the Board feels, as clearly outlined in the press release, that we have a very exciting future ahead. We're about to enter a number of new product categories and to have a new leader in charge as those categories and the current business will grow with more direct-to-consumer and more commercial push. I think they see a -- that's my understanding, they see a profile with that as a good timing to come in.
I don't know. I just think that it will be more sensible to do that once you're out of this slump, but maybe that's just me. Moving on then, and you mentioned, of course, that sort of retailers' inventories are moving in the right direction, although maybe not as fast as you've hoped. And it sounds like you're expecting you to be -- sort of you're planning to be back to normal production maybe in April. What does that sort of require in terms of sell-through performance up until mid-April?
Even in a very conservative assumption, and we actually don't have that conservative of an assumption when you look at it compared to a long past history. But you have to remember how it's extremely good 2022 Q1 was, right? It was 63% up versus 2019. It was an exceptional first quarter. But otherwise, we will see lesser sales than normal in bike-related, but we see they are selling our products. So we feel very good about Q2 picking up. And therefore, we are going to be cautious in bringing in those temps, but we will need to add on to that. There's no chance that our own staff will be able to cope with the volumes even in a negative scenario. So that flexibility of meeting a more normal scenario or even a positive scenario will be handled by temps coming in.
And on that topic then, sort of when it comes to the bike season, do you feel that, that's going to be driven by e-bikes again? Or is there any sort of mix shift going on in the market currently? What's your sense there?
It's clearly e-bikes are winning even more despite this, I think, obvious concern from any analysts or from anybody watching the industry because the e-bike is so much more expensive than normal bikes. But it is no doubt, all the data, all the statistics, all our discussions are saying, in '23 the share of number of bikes sold, so not in value but number of bikes, will continue to grow significantly with e-bikes at a fast track because it's also partly, as I'm sure you're seeing in the streets of Stockholm when you see a lot of commuters going, when you see -- after a while, when you've seen so many people going with that e-bike trend, there is also this whole everybody's getting used to it. Everybody is starting to accept what that price point means. And it is still a very, very efficient commuting tool at a relatively, versus what you can do with it, low expense versus many other commuting tools.
All right. Good. Maybe just one last one. Anything sort of -- could you give any guidance in terms of product development spending for '23?
Yes. I think if you look at it, it will be in over 5% again. We will see that will always trigger up, but it will be clearly above 5%. I don't think it will be 6%, but it will be above 5%.
The next question today comes from the line of Gustav Hagéus from SEB.
A follow-up on Daniel's first question there. So admittedly, both you and I and many others underestimated the bull whip effect of the bike-related products last year. But I think if you would challenge the performance you've had as a CEO over the past 17 years, probably very few have that track record in terms of organic growth and shareholder value. So with that in mind, could you perhaps still shed some light on if this discussion with the Board has been a gradual one over the last year or if this was more of a surprise to you and if you have understanding for the Board's decision or if you would have rather kept on going?
I think sometimes when -- I think it's very clear even in the press release that I would have preferred to still be the CEO of the Thule Group. So that -- I'm not hiding away from it's not me making the decision. I would have preferred that. But I understand that it's the Board's role to look at the future and long term for a company. It's the Board's role to judge what they see as the best way for not just in the short while or for just one person but for what they think is the company is. From -- it's clear that they do succession planning continuously and, of course, although I don't consider myself that old, I am 57 soon. And they must have challenged long term that over the years. And now when the decision comes, the decision comes, and I've been informed. How that went on for how long is the exact decision, when it comes, it comes.
Because the market cap currently is down some 18% and I think the deviation to your EBIT on a full year basis is less than 1%. So clearly, the market was not as thrilled about this change as the Board may be. But yes, let's leave it at that. And I'll hand over to the next questions.
The next question today comes from the line of Karl Duesenberg from Carnegie.
So a few questions from my side, Q4 development here. You disclosed on the full year development and also here on Slide 4 on the sort of bike-related development here on the rolling 12 months basis, and I just wanted to ask you sort of isolated for Q4. I know that's a smaller sort of share of the group sales. But has the year-on-year development in Q4 been fairly similar in bike-related as you saw in Q3? And following up on that, are you still growing on an organic basis in Q4 in your non bike-related categories? That's my first question.
Yes. We are growing in the non-bike related in Q4. And the reason why we are so low on bike is mostly because normally the bike season in the big Northern Hemisphere markets where we do the majority of our sales is normally a relatively low period in Q4 for bike-related. But as I mentioned, in North America, we were catching up still in '21 Q4. And that's why the drop in performance by region is some more distinct in North America because we had more, let's say, very late far behind normal season, lots of bike sales in Q4 in the Region Americas, in U.S. and Canada then. If you look at the Southern Hemisphere markets, which are smaller for the Thule Group.
So we're talking about Latin America countries, some Southeast Asia mostly and South Africa, for example, and Australia and New Zealand, very strong markets for us, there if you look at the buying retail purchases, they're not nearly down as much as the European ones. And the reason is due to their seasonality versus when pandemic hit versus seeing signs of bull whip, et cetera, they didn't go as wild. So if you look at it, the answer to your question, yes, we're growing on our rest of the Thule Group. And yes, it is similar trends actually due to that -- for bike due to the fact that we sold so much bike when we normally don't sell it in Region Americas in Q4 '21.
Okay, very well. And following up on another topic, I wanted to ask a bit on the gross margin here. It's down quite a bit here in Q4, I guess, fairly sort of easy comparison if I can say that. I understand, let's say, partly due to the mix of lower bike-related sales here. But could you say anything sort of with regards to with the other effects that you're highlighting here in your report, sort of the effect of the lagging freight rates, et cetera, et cetera. Given the inventory you're entering the new year with, so how long should we expect that sort of lagging negative effect to persist into 2023?
From an underabsorption point of view, which is clearly a significant factor that we are not utilizing our plant as much, you can say that clearly is the case, that we have been very efficient to adjust our direct wage component, right? So we're not having any higher direct wages, they're actually proportionately lower. But our production overhead because of very low capacity utilization has gone up a few percentage points. So that's hinting across. As you just heard me say, that we'll be penalizing us also in Q1 because we're not producing nearly as much. So it is the underutilization of the capacity due to the fact that rather than keeping on filling up inventory, we will sell down the inventory we have. We'll be hitting throughout Q1 and then normalize again in Q2.
Okay, very well. And my final question was with regards maybe to Jonas with regards to the net financials here in Q4, up a bit here sequentially. And I just wonder if you could sort of remind us of the term structure of your interest-bearing debt. I guess the net debt will come down here in '23 given the expected inventory release. But could you just remind us sort of the loan structure that you're carrying? And is that of floating interest? Or anything on that item would be very helpful going into '23.
Yes. And we have -- we are in long-term debt, and we are quite normal due period for our long-term debt. And the due period is definitely beyond when we expect to come down again with our reduction of the inventory. It's -- if I remember top on my head, it's average 2 years from now.
Okay. And is that mostly on floating? Or are you on fixed interest on those stronger terms?
No, it's floating.
The next question today comes from the line of Karri Rinta from Handelsbanken.
I have 2. First, going back to the press release last night and after talking to some investors this morning, it seems that there's few theories that might explain this. One is that you have pushed too hard into these new categories and have been misaligned with Board's view on how aggressive you should be. And maybe you have already refuted that when you said that with Board's approval, you have continued to invest into this. So maybe you can confirm that, that you're fully aligned with...
I can confirm that. Yes, I can definitely -- Karri, I can definitely confirm, the Board and management are 100% aligned on the strategic direction of the company and the efforts we're doing. So there's absolutely no view from the Board on the strategy. They have fully bought into it. They're fully buying into it still. So it's not about the strategy of where we're going. Definitely not.
And then the second theory is that given the weaker-than-expected profitability development, that THULE will need to enter into a cost-cutting phase. But my spontaneous response has been that, well, there isn't that much cost to cut. So what -- theoretically, what could you do if you were tasked with cutting costs?
So I'm not going to speculate on a hypothesis that others have, but I think I've shown throughout the years, and I know the Board is very confident with that, we've had very close interaction with the Board about our plans of staff reductions, utilizing our flexibility, doing the right things at the right time, which we also showed very much so during the initial phases of the pandemic where we're -- management was very clearly aligned with the Board with frequent discussions. So definitely, we don't have any difference of view there from the Board or management perspective in being quick to act if we have to act and being still very much long-term winning over time. There is a perfect alignment there from the Board or management there on that aspect.
Perfect. And then more back to business. They nonbike-related and the solid performance that you had there throughout into 2022. So if we would strip away FX and price was non-bike related up last year.
When I take away, it always depends on versus which period. But if you look -- you also see a mix effect. If you take, for example, within cargo, we have seen a very strong performance on our more, I would say, better boxes. We have good, better, best. So our better box roof box segment has done fantastically well throughout 2022 both in units and in share versus others. So there is a combination factor. Clearly, since we always report our category numbers and our regional numbers with FX adjusted as well because, clearly, with the weak Swedish krone, otherwise, we would look much better than we are. But the reality is that if you clean that out, you can see that in, for example, roof box, we're doing really, really well. But there are differences. I did mention, for example, water sport versus '21. We did not do as well. And clearly, since we've discussed it a few times, Karri, about we have done price increases 4x. It is clear that if you go further back, the price is a significant chunk of the growth in some of those categories. But there is clear volume growth versus prepandemic as well on most of our categories and definitely on things like RV Products, Packs, Bags & Luggage and boxes and roof racks, there is.
All right. Then the final follow-up, if that's all right. If it turns out that the demand for non bike-related weakens during the year, is your level of flexibility in reacting to that higher than what it is in bike-related? Because a lot of the bike-related at products that where you are -- where you have a high degree of vertical integration, i.e., that you assembled in yourselves and you source components, sales force and luggage, you do a lot of that outsourcing, so to speak. So you have better flexibility in non-bike related.
I think better flexibility is a little bit of a -- depending on how we interpret the word, our flexibility in terms of being quick to respond is phenomenally strong on the things we produce ourselves. But there is a downside if then there is a complete stop in ordering or a very dramatic shift, absolutely so, as we've admitted in capacity underutilization. So if you take it across the categories, you're 100% right. Packs, Bags & Luggage is a 100% sourced product. We don't do them ourselves, which theoretically, from a pure cost point of view, gives you a lot of flexibility. From a purely operational point of view, it actually makes it a little bit less quick to ramp up, and ramp down, I would argue, because it's not like you can move these back to any supplier. You have a few limited suppliers.
They are further away. They're in Vietnam and other places in Southeast Asia. So from a cost, if the market would go down, you're absolutely right, about the [bike services]. Within our Juvenile & Pet, we have a mix. We do some of the assembly ourselves, we buy some of the products from suppliers. So there is a little bit of a mix. And in RV Products, we do the product and production ourselves in our site in Mein and in Belgium. If you therefore look at it, there is a flexibility in all of these, which is based on the 3-tiered approach: fixed employees, seasonal employees and temps. And then we had '21 where we had very, very many temps that almost didn't become temps from the agents anymore because they were there for such a long time. But there were still agents who worked with that flexibility.
If you now then look at what that means, I can give you an example. I was visiting our Polish site, phenomenally improved after the big CapEx we've had over the last few years. really state-of-the-art manufacturing assembly plants together with our Global Head of Supply Chain, Ricard Anderson, last week. And when you look at that site now not needing to produce as much because we have too much bike carriers on. But we, for example, have 20 Polish employees in our Neumark Germany box plant because we are selling so many roof boxes that we otherwise would have had to take in temps from outside. So we're trying to create that constant flexibility in the whole sector. But there is, as always, in business, even if you have a subsupplier, there is a certain level of your flexibility. At a certain point, it starts to hit on your fixed costs.
The next question today comes from the line of Adela Dashian from Jefferies.
Most of my questions have already been answered, but I do have one. And that is that there's been a couple of reports of product recalls during the fourth quarter, especially in the U.S. and Canada or -- in the U.S. and Canada. Is that something out of the ordinary for you? And did it have an effect on sales in the Americas region? And if so, by how much?
So if you're a safety-oriented and quality-first company, you will always have product recalls. You want to limit them, of course, to a minimum and you want to be efficient. Since safety and concern and quality of our lifestyle brand comes first, you want to go out proactively. What these are all about is convenience issues for when you operate the product. We are then quickly replacing or supporting how to fix those things. None of it has impacted anything on sales. But of course, it does impact extra work in your operational item. These have been very small limited quantities that we could fix very efficiently. But you'll never like them. It's never good.
The next question today comes from the line of Mats Liss from Kepler Chevreux.
Well, a couple of questions. First, I mean, inventories are on the high side, and there you mentioned that you will sort of reduce them gradually. But to see any sort of need to have an extra push there and marketing campaign or et cetera, to make the reduction? Or are you still sort of -- well, keeping the inventories for yet another year, would that -- I mean, you have mentioned that products are sort of sellable and don't get older. Could you say something about that?
Yes, absolutely. I think in general, you have to split it in 2 parts. For example, when you look at the bike-related product, to try to push them when bike retail isn't interested is just wasting money, honestly. You need to see the bike season coming. And since when we see the bike season coming, we will quickly start producing in the bike inventory as we're not producing nearly as much bike product as we would normally do at this time of the year. So there, it wouldn't make any sense. What we are doing, as you do always as a company, is that you constantly evaluate all your product in your portfolio. We do that every year and we've done it in the past years. If you, for example, are about to launch a new product to replace an old one, there is always that ending part where you need to choose what you do.
Sometimes, you feel that it's better to sell it off in some markets or to some retailers over a longer time. Sometimes you feel that it's better when the market knows that there is a new model coming like the bike industry always does, right? There is a new mountain bike coming and then there is a certain level of discounting. But it's good for us. It's normally the retailers doing that discounting and not us. Sometimes you want to help them with that. You don't do it by lowering the price because they already have the product, you do it by helping them, as you said, maybe with some social media campaign and some imagery, et cetera. But there is, as I've said before, no plan whatsoever from the THULE group to start doing huge discounting because we are confident that we will sell down this inventory anyway.
Okay. Great. And I guess, I mean, it's a lot of -- sort of consumers are between a rock and hard place in many ways, and you see them trading down, choosing more affordable products. Do you see any sort of risk of that happening to you?
I think there is -- the trading down question is a little bit tainted by fast-moving synergies, where that is clear from all the reports you're seeing from [ Coop ] and Lidl and everybody else, right? What happens when you look at seldom purchased consumer goods in tougher times, which has been proven by a lot of studies by a lot of firms, right, is that who struggles is the middle man because the people that normally like a quality product think even more about it. Knowing I can sell this THULE bike trailer in 4 years' time for 60% to 70% of the value on [ Blocket ], why not by a really good quality thing that I can really use and be comfortable with and then sell on versus an okay competitor.
Then as also is obviously, some of the very low end will win. We never played at that low end or the lower part of the mid-price segment. So that part doesn't affect us. But we are not worried that those customers evaluating that premium offer would walk away. They would rather buy the quality product and the quality brand they wanted and feel good about how they utilize it, how long it will last, how sustainable it's been made and how they also can sell it as a second half time.
Okay. Great. And just finally about -- I mean, gearing. You ended the year with some gearing, anyway. And well, you tend to reduce the inventory and so on. But do you just think that the current level is sort of limiting the opportunities to, well, explore new opportunities and do things? Or I mean, you also mentioned that CapEx is sort of coming down. Yes. Could you say something about that?
We saw no limitations on the -- we share a very clear common view with the Board about we have the necessary funds to do all the initiatives we want to do, and we have a gearing that is very comfortable for that. So no, when it comes to how many initiatives and what we do, it's more about needing the right resources and having not too many things on your plate because if you have too many things in your plate, your'e at risk of not doing them well. So very strong alignment from us and Board on the money there. The initiatives are there. It's just let's make sure we focus on the right ones and get them to deliver.
The next question today comes from the line of Peter Testa from One Investments.
I would just briefly echo the sentiments of the other people about the news last night just briefly. But the questions I have, firstly, just on the non-bike channel. You talked a bit about maybe some caution among automotive. And I was wondering if you could just give some sort of sense as to what sort of behavior you see in the non-bike channel and how that might be perversely reinforced by your capability of delivering.
I think in general, what you can say, Peter, is you see retail not just by retail. You see all retailers being cautious. It would be strange if they were not. They have seen what happened in the bike sector, they see the signals. So there is a greater level of caution, I would argue, from all major retail chains. And you can see that in the ones that have public reports like Halfords or REI in the U.S., et cetera. There is a caution level in there. I think over time, it speaks to our favor because we are very good of not forcing them to keep it on stock or take full container's load from China, et cetera. So over time, it is strengthening our market positioning with our approach. But of course, I mean, it means that we're not going to have the easy wins. We were joking, myself and our Head of Sales over in North America, Hillary Heartly, about -- it's a lot of discussions when we are meeting with our sales organization. Those huge big orders from even big retailers aren't happening. So we are winning very many small orders at the moment, and that's the reality, I think, will pan out throughout the year.
Yes, okay. And then just a question on price cost. I mean, it sounds like price cost was relatively neutral in the fourth quarter. And I was wondering if you have any visibility on the cost side improving as you go through this year and how that then works vis-a-vis price and the extent to which you may use some of the rollover benefit to either manage margin or to manage competitiveness?
I think it's a reality, you're right. We were very nicely matched with price and cost from a pure input cost point of view. If we wouldn't have had too much on stock, which we did have to admit we have, we would look very nice now with our price increases from mid-last year rolling through and cost as they are. Now we have some of those too much that we bought at those prices, which were relatively higher with freight, et cetera. So the positive impact of that price increase is rolling through the full year effect, and the cost will come more as we come into versus midyear.
Yes, okay. and then the last question was just on -- you were about 35%, 36% above 2019 in Q4. And I know you don't want to give a precise number. But when you look at the and a range of seasonality going forward, and that is a -- 2019 as a base. Is that something we should think about as we look at sort of Q1, Q2, et cetera? Or any other comment?
We will be not doing as well in bike and do better in the other. So -- and the logic is this. Normally, even in '19 and in other prepandemic years, we would have some precision sell into some retailers that prefer to have a little bit too much on stock before the season started. We will have fewer of those people doing that this year. So bike will start slower even versus '19. The rest of the business, I'm confident, will continue to outperform significantly in 2019. So that's, I would say, from a like-for-like comparative reality, that's the difference with Q1. And then the opposite then, of course, takes effect in Q3, where normally we have a pretty strong ending season of the bike-related, which we absolutely will have this year as well where we then have more normalization. So Q1 will be the most specific also -- not only versus extreme '22, but also versus a more normal.
[Operator Instructions] Our next question today is a follow-up question from Daniel Schmidt from Danske Bank.
So just a follow-up from me then, Magnus and Jonas. Coming back to sort of retailers' inventories. Could you shed some light on if there's any big difference between the North American market and the European market, where we are in that sort of destocking?
There isn't a big difference in destocking versus what they used to have before the pandemic. Retailers in the U.S. have always had much more stock than retailers in Europe, though. That's always been the case, and you know that I've been talking about that for many years, right? It's a factor of life. Of course, then when you are then more afraid and more cautious, there is also a greater opportunity, so to speak, for a U.S. retailer to take out even more than there is -- for the European retailers to take out even more than they used to have. But from a versus their historical past, it is more the fact that there is more fat to trim, if they truly wanted to trim, in U.S. retailers. And that will be the thing watch out, I think, for any brand when you look at the first half of the year, if those U.S. retailers realize that this might be the year they decide to go on back and start to have more like European retail levels of inventory.
And is it fair to say that is also what happened in Q4, if you look at progression on both continents.
I think no, the significant factor in Q4 was actually the comparative logic. The most significant was that '21 was so boosted with us catching up with demand of bike, which is normally not something we sell. But you're partly right, but this most significant factor was that bike selling in a weird off-season in '21. And then part of it is I think they are slowly but truly realizing, in U.S. retail, that if you have strong brands that can deliver why do we have so much in store?
Thank you. This concludes today's question-and-answer session. So I'd like to pass the conference back over to Magnus Welander for any closing remarks. Please go ahead.
Thank you very much, and thanks, everybody, for listening in. We look forward to an exciting Q1 report when we will be able also to tell you more how the whole bike market and what is happening in retail. I will be allowed to share without being smacked on the fingers by my Head of PR and Marketing, the very cool new products we're doing in bike. And we'll share some other news of how the business is developing. So thank you, and have a great Friday.