To the Thule Group year-end report. My name is Tyler, I'll be the coordinator for today's conference. I would now like to hand over to Magnus Welander to begin.
Thank you. Good morning, everybody, and welcome to our year-end report for 2017. It's a report I'm very happy to give as we conclude a fantastic year. If we go to the first page, we can look at a summary of the smallest quarter for the year in Q4 of 2017. Good to see is that we continued a good performance in the business also in this smaller quarter. We grew our net sales to SEK 1.6 billion, and that meant that we had a 6.5% currency-adjusted growth. That is nice to see. We also had a positive continuous development of our EBIT, and we delivered SEK 65 million.
That meant that we also partially mark small improvement on our underlying EBIT margin as this quarter is the quarter where we every year spend a lot of money in product development efforts versus a relatively smaller revenue quarter. Net income for the business was SEK 40 million negative. Lennart will come back to that when we talk about some of the things that have happened during the quarter. Overall, a strong cash flow in the quarter. Also, as the board has proposed an ordinary dividend of six SEK per share versus the SEK 3.40 last year, can take that point directly since it's here on the first page.
I think a key message to be delivered in how to interpret the proposal of the significant raise of the ordinary dividend is simply that we, as management, are very convinced of the company's ability in this year and in the coming years to deliver a very strong operational cash flow. Considering that, and considering our strong financial position where we feel comfortable with the ability with our current leverage target, but also, if needed for a bigger acquisition, borrow money for that. We know that we can drive the business and do the necessary investment on top of that, doing smaller M&A should they arise, and still be a strong dividend-yielding company. This is a directional push on higher dividends as ordinary dividends going forward. If we then look at what the last quarter delivered for the full year, it is, as I said, a fantastic year.
We then grew our top line with 9.5%. That includes a little bit of the acquisition growth as we acquired the Yepp company in mid-2016. Pure organic constant currency growth was 8.8%, but still a 10.7% reported top-line growth and a 13.3% constant currency EBIT growth. That meant that we ticked up to 18.2%, 0.6% EBIT margin improvement. 18.2% EBIT margin, which brings us in a good direction towards our long-term goal of 20%. It feels very strong as a platform to build on that margin that we deliver. I am especially happy to note that, and comment on, that we are achieving this while we are in a very aggressive investment period in terms of product development efforts for future growth. Looking on some of the key events that happened in last quarter.
I think important to note is that although the growth in region Americas was lower than it's been in the strongly performing region, Europe and Rest of World, we've had the fourth quarter in a row with growth in region Americas. That's, of course, important looking going forward that we continue to see region Americas contributing to the top-line growth of the company. Region Europe and Rest of World delivered a very strong growth also in quarter four, leading the region with a 12.7% constant currency growth over the years, extremely strong in Europe and Rest of World. I've already mentioned the fact that presented also on the Capital Markets Day in September of last year, that we are in the most intensive period ever in the company in terms of product development push.
The reason for that, as communicated in previous presentations and in the Capital Markets Day, is that on top of the growth that we are driving in our traditional categories, Sport & Cargo Carriers and RV products, where we always will spend a lot of money on delivering new exciting products to market. We are currently spending a lot of money on several parallel development projects in the new categories, specifically targeting strollers and luggage. As those two categories, strollers and luggage, are relatively turnover-wise small at the moment, that means that there is a potential push that is significant. As those categories will grow in 2019 and 2020, I am confident that we will go back. I think we are a few slides too fast forward here, if we can move back one slide, operator?
What we also have done is that our new Polish plant, which you saw on one of the images on slide four in the presentation, was opened in October last year, and we are ramping up as we speak in the Polish plant. That plant now will be then both doing some of the traditional Sport & Cargo Carrier products. A number of bike carriers are being assembled there already. We have also moved into assembling some of our juvenile products, things like child bike seats, and it will be the assembly plant for our new stroller that is hitting the market in the autumn of 2018. Another positive thing to note is that we finally reached a settlement in the court with the German tax authorities for two audits that were carried out in previous years.
This has been something that has been on our books already since the prospectus ahead of our IPO, and it's been in every annual report. Therefore, it is very positive to note that finally there has been a conclusion and final closing of that. What it was very positive to note is also that from an original request of more than EUR 27 million, the settlement in the end was EUR 3 million. Considering that we had already accrued for EUR 7 million, it means we have a positive outcome for our results, thanks to that closing of that tax. We've already also sent out a press release in regards to what the effects of our company was on the U.S. tax reform, we've noted a negative impact of $13.4 million, and that is the write-down of our deferred tax asset.
As Lennart will come back to, it does have long-term small positive effect on our tax situation as a whole. Once again, summarizing and looking at the sales by region, you can say that Region Europe and Rest of World have delivered a very strong year, and we have felt that we have seen a strong performance actually across all the countries, where both the mature markets, so markets like Central Europe with Germany and Benelux, Nordics and the U.K., but also in some of the emerging markets where we have very strong performance in Eastern Europe and also in some Southeast Asia and in countries like South Africa.
In Region Americas, we grew for the fourth quarter in a row, as I mentioned, for the full year, our growth has been 3.4% currency adjusted, that means a solid performance, although not at the level of Europe and Rest of World. We are also there growing actually in all the sub-regions. We have seen growth in Latin America as well as U.S. and Canada. On a positive trend, although not as strong as for Europe and Rest of World. If we then look at the page where you can see our product categories, how they are doing in the various regions, so slide six. You can see that we continue to deliver a very strong performance in Sport & Cargo Carriers. In Sport & Cargo Carriers, which is still two-thirds of our business, it was 65% actually in 2017.
We have a similar size of this business in both regions. It's around two-thirds both in Europe and Rest of World and in Region Americas. As you can see, we grew 6.4%. With a global market-leading position, it is us driving the entire category's growth. I'm therefore very happy to see how strong we are. The 4% growth in the Region Americas was met despite the fact that we do have a small business with some accessories to pickup trucks that we have decided from a strategic point of view to not focus on as it's a lower margin business and where we've seen some decline. Overall, it's very strong.
In RV products, we have a big business in Europe and a very small business in Region Americas. We have seen a very strong growth where we are beating the market growth, and that's very nice to see. In juvenile, actually with kids products, we have seen a very strong growth in both regions. The sole underperforming category is packs, bags, and luggage, where we, despite growth of some of the new luggage and sports packs, have not been able to compensate for some of the legacy and early decline. What is good to note, though, is that the decline is significantly smaller than it's been in the previous year, and I see a light at the end of the tunnel finally in that category.
If you look a little bit deeper into Sport & Cargo Carriers and also look a bit forward on what we see to happen on slide seven. Focus has been and will continue to be to grow our market-leading position. The way we are doing that is, yes, successful product launches, it is crucial in this type of business, and we are definitely out-innovating our competition in this category, as we should as the undisputed global market leader. It is also about a strong delivery performance. We've mentioned a number of times, and I think all of you that follow retailers around the world know that retail is pushing brands to be taking a bigger responsibility on what can be done for them to have an efficient supply chain and them not having so many things in stock. That puts pressure on a company to deliver well.
We are doing that in a very cost-efficient and very efficient way. On top of that, you want to attract consumers to the stores, and you want to make life easier, both for onliners and physical stores in terms of an improved retail support. We have, during the year, rolled out a number of improved tools for retail, both onliners and brick-and-mortar. We had some very big launches, some big products hitting in 2017 that helped the result, and two that I've mentioned a few times in quarterly reports are worth mentioning, was the award-winning Thule EasyFold XT. It's a fantastic tow bar mounted bike carrier, one that I have myself, so I can strongly recommend it. It is the Thule Motion XT, a modern roof box family with a design language, but also with technical solutions that fit the modern consumer.
Overall, a strong performance, and although it might seem boring, it's very simple to say what we will do in 2018. It's just more of the same. We will continue to push with some great new products hitting the market this year. We are having a very big focus on our delivery performance. We are tweaking and helping retailers even more on how we can attract consumers to their stores and how we can make it easier for their kid on the floor to sell our product. If we take the next category, packs, bags, and luggage, the category where we did not grow in 2017, but where we definitely want to focus on ensuring we drive growth as a category in 2018 and beyond. You can really say that that category has four subsets.
We have an old legacy business where there are CD wallets, camera bags, phone cases, other things which we are not focusing on as much going forward. In that business, we also group together some OE business where we are a sub-supplier of making simple cases for example, medical devices. Similar to the way you bring your headsets with you in a little nice case, if you have a small medical device, a breathing apparatus or something like that, you will also bring that in a small case. That business is not our focus, and we will be focusing more on the EBIT contribution of those businesses rather than volume growth, plus that we have a market for some of those categories that definitely is declining. That will continue to decline, and we need to then compensate that with the three other categories.
In two of those, I'm very happy with the results in 2017. I'm very happy with our successful launch with the Thule Subterra collection of luggage. It's only our first really serious step into luggage, but there will be more to come, and it's, of course, important that your first step is successful, so you don't stumble on step one. We did have a very solid success around the world with Thule Subterra, which means we have a base to continue to build on. I'm also very happy with what we've done in sport and outdoor packs, where we are gaining fast growth and credibility thanks to some successful launches of new tech packs and new sports transport cases. The product category or subcategory that I'm least satisfied with in the entire group is the smaller everyday packs.
Here we're talking about the small backpack that a university student goes back to campus with or the business bag that you travel with back and forth to daily work. Here we are doing well. We are growing, but not as much as we wanted and not as much as we aspire to do going forward. This is a core category for us to drive more growth going forward. We do know it's very competitive, but we think with what we are doing in terms of design and in terms of look and feel and in terms of brand credibility, that we will be able to see a better growth going forward.
If we look at the next category, RV products, it is, of course, easier to have a category like RV products, where caravan and camper manufacturers are in a booming market, than it is to sell a CD wallet. Yes, we are helped by the market dynamic here. Since we focus on the more premium-oriented European market, we look at really how is the market developing for RV products in Europe. It's been a fantastic year. If you've been listening to manufacturers like Trigano or sub-suppliers to the industry like Dometic, you will have been hearing also on their quarterly reports over the year that it's been a fantastic strong year. Most people say that the market has grown somewhere between 14%-16%, let's say 16% market growth in Europe.
Good to see then is that we are generating 27% growth, and that is, of course, by us not only then growing with the market, but actually taking significant market share. The way we're doing that is very similar to what we do in Sport & Cargo Carriers. We simply have better products than competition, but on top of that, we've been able to cope with a volume uplift and still been able to deliver to our customers. That's, of course, when you're growing 27%. You realize that that puts a lot of pressure on our organization. I have to say, a lot of kudos for our Belgium-based team on being able to cope with that fantastic growth and still have such a good delivery performance.
We have a very, very small business in the region Americas, as historically the market there has been targeted on much, much lower-end type of products, where it's more difficult to make the necessary margins. We have had some success on a very small base with some niche products in what we hope will be slowly but surely a growing, more premium market also in the region Americas. It is Europe that is the focus of the growth. If we look at it for 2018 and beyond, this is a market, of course, where there is, as we've said, some cyclicality historically. We do not think that 2018 will be as strong as 2017, but we feel very comfortable that the market is still positive going into 2018. Might not be as hot as in 2017, but it's definitely not getting cold either.
It's a market with a good momentum, and we are convinced that we will continue to out-innovate competition and be able to also cope with those delivery demands that the growth puts. Looking forward to another strong year for RV products. When we look then at the last category, but definitely not the least, if you look at opportunity going forward, active with kids, we did in 2017 have some fantastic product launches. We updated our multi-sport bike trailer category, the Thule Chariot, and we launched new child bike seats with the Thule Yepp Nexxt. Both of those two products became really significant award winners. Not only award winners in winning the Oscars of product design, like the iF Gold Award or the Red Dot: Best of the Best, but really also becoming the winners among consumers.
If you look at the ratings, the reviews, and the type of feedback we're getting on these products, it's been fantastic throughout the year. A very strong driven launch of products in these new things helps us to grow in those two segments. In the strollers category, which is long-term the biggest opportunity due to its size of market, we did not launch any new product in 2017. In fact, we're launching two new products in 2018. Still, we grew very well with the first generation targeted stroller, Thule Urban Glide. The reason for that, a product that now has been in the market for three years, has been it's been gaining credibility and momentum as it's been getting great reviews around the world, and we're getting more and more placements.
When we look at 2018, the big, big focus for us in this category is two big stroller launches. We now have an incredibly fresh portfolio in child bike trailers and the world's best portfolio in child bike seats. We are sitting very nicely there when it comes to product, and there is a continued growth of that product categories driven by those products. Within strollers, we are launching two new collections, a second generation updated Thule Urban Glide 2, which has already hit the market since some weeks ago, and our first four-wheel stroller launch in the autumn of 2018 with the Thule Sleek. Limited impact on Thule Sleek in terms of money this year, but of course, a key opportunity going into 2019 and beyond on the platform that creates growth.
A very exciting year within strollers for us in 2018 to continue to broaden our base and also drive future growth. With this, I will leave it to Lennart to go through some of the more details of the financials.
Thank you very much, Magnus. If we look at slide 11, the income statement, I will mention some highlights. If we look at our gross margins, year to date, we ended at 41.2%, versus prior year of 41.4%. Decline is due to unfavorable currency development, actually -0.3 percentage points. We have negative raw materials prices that we have been able to compensate by positive product and customer mix, combined with our normal price increases we are doing within Sport & Cargo Carriers. If we look at our SG&A costs, we see that we have been able to maintain our administration expenses flat. As you can see also, there is a quite dramatic increase in our selling expenses, which consist of both sales, marketing, and product development, which is in line with what we have been communicating, that we are driving for future sales growth.
In line with what we have said, happy to see that we have kept the administration costs there flat. The financial net was -SEK 14 million in the quarter versus prior year -SEK 9 million, year to date -SEK 52 million versus -SEK 36 million. When it comes to borrowing costs, actually no big difference between the years. The only difference between the two years are that in 2017, we had a negative FX effect on revaluation of our FX accounts for loans and cash in the local entities, which is the big driver for the difference between the years. As Magnus mentioned, we have had two exceptional big tax items in the quarter. The U.S. tax reform, where the changed federal tax rate caused a write-down on our deferred tax assets affected us negatively SEK 114 million.
Going forward, we anticipate that this, of course, should be good for us because what used to be around 35% corporate tax in the U.S. will now be around 25% for us, including some state taxes. I can anticipate this question, we have a guidance of effective tax rate between 22%-25% since we came public, and we have been around 24%, 25% since that. We still believe that we will be in that range, 22%-25%, hopefully slightly below where we are today. We will wait and see for that. Secondly, very happy that finally, after more than 5 years of work, we settled the German tax case with a fantastic outcome.
Compared to what we have accrued for in our books over the years, EUR 7 million, and the settlement ended at EUR 3 million, we had a positive income in this quarter of EUR 4 million. If we exclude those two one-off items, the effective tax rate in 2017 was 24.4%. If we then look at slide 12, the operating working capital and operational cash flow. 2017, another year where we managed operating working capital very well in spite of increased sales and expanding into new product categories. We'd maintained very good delivery performance. End of this year, we ended with approximately SEK 900 million tying up in working capital, which is 15% of the last 12 months of sales versus 16.7% prior year. Good improvement despite overall performance-based improvements in the company.
The good working capital, in combination with a good financial performance, ended the year with an operational cash flow of SEK 988 million. Prior year was SEK 929 million, which corresponds to a cash conversion of 87%. Our CapEx this year ended at SEK 144 million, which is 2.5% in relation to our sales. The biggest single item was the building of our second assembly plant in Poland. With that, I hand it back to you, Magnus, for the target session.
Thank you, Lennart. Yes. If we look at the four targets as updated at the Capital Markets Day last autumn, we kept the organic sales growth target of at least 5% every year in constant currency, pure organic growth, excluding any M&A. Delivering 8.7% means that we're significantly overachieving on that one. Of course, that's a very positive thing to note a strong year. The second target, which we raised at the Capital Markets Day from the previous target when we entered 2017, was 17%. We felt with the strong performance and our plans going forward, that it was time to have a more ambitious long-term growth target there. Our underlying EBIT margin target was set to above 20%. We are now at 18.2%, we are performing very well and on a good path going towards our long-term growth, long-term EBIT target.
We also gave a new range for our leverage, 1.5 to 2.5 times EBITDA. We are now at 1.5 times, we feel very solid in our financial setup looking forward. Finally, we do have a dividend policy that at least 50% of the net income should be given out as ordinary dividend every year. With the proposal from the board of SEK 6 per share, that means we will then be at 87%. As I mentioned before, this is related to the fact that management and the board feel very comfortable with this company's ability to generate significant cash going forward. Considering leverage targets as we have, combined with future growth aspirations, we feel that we will be able to drive the full agenda, including M&A, also with larger ordinary dividends moving forward.
Finally, because I know you're all more keen on what we see coming forward than what we've done. What's our view on looking forward? We are looking, which is very nice to be able to say, for the most exciting year ever in 2018. I've now been in this company for 12 years and been the CEO for almost nine, I've been able to say that every year, and my strong ambition is that we will be doing that as long as I'm here, definitely. It's true. 2018 is a very exciting year. One thing that is key is that strategy has worked for us. When a strategy works, you shouldn't change it. There is no need to change something if it's not broken. That strategy is pretty simple. It's to drive the profitable organic sales growth via great product.
To do that, as we've mentioned a few times, we are spending more money than ever to ensure that we truly deliver some fantastic great product, not only 2018, but more importantly, also in the following years for 2019 and 2020. Secondly, it is to continuously strengthen our fantastic Thule brand, which today is now 79% of the Thule Group's sale in 2017. It has its fantastic motto, "Bring your life," which we are trying to load every time into, that it's more than the product. It is what those products do for you when you buy things from us.
Thirdly, we have communicated as of last year that we are having a long-term ambition, we will not be able to meet that completely in one year, in 2018, but we do have a very clear long-term ambition to be a very serious contender for the podium in the large categories of travel and luggage. As I said, that will take many years to do, but we do need to take steps in the right direction for 2018, which I'm convinced we will. Finally, the strategy builds on the utilization of a very strong backend organization to generate very cost-efficient growth.
You heard Lennart mentioning not needing to increase admin costs at all in a year with the fantastic top-line growth we have is an example of that. Other examples is the way we cost efficiently have been able to handle without issues the volume growth in terms of supply chain and distribution setup. If you look at it, the product portfolio and development push we're doing is meaning that we have several large projects going on and many major launches happening within the traditional sporting good carriers in 2019. I'm not going to tell you exactly what they are because we haven't told retailers yet. It will be some very big improvements coming in our portfolio for 2019 in that traditional category.
That means we will be peaking at the spend of around 6% of sales during this year, which we then forecast that in 2019 and 2020 will slowly reduce down a little bit, although never becoming too small because we will generate future growth as well. I mentioned the supply chain. I'm extremely proud of what our supply chain team has been able to do over the last few years. We have changed every single distribution center in the world. We've built a new Polish assembly plant. We have done some major changes and set up changes to our Belgium, U.K., and Swedish plants. We built a new roof box plant in the U.S. While doing all of those things, we have delivered to our customers on time in full despite significant volume growth.
That's a kudos for them being able to really deliver on both aspects of building for the future and delivering for the present. Well done there, definitely from the team. With those changes we have done over the last few years with new distribution centers, more set and ready to handle the demanding retail experience of today with later and later orders, more pick and pack, et cetera. It provides a very solid base for cost-efficient volume growth going forward. It doesn't mean we have done everything. We're continuing to invest in our distribution centers and tweaking them and improving. Now we have a very, very good platform to do those improvements and tweaks from.
Last but not least, in what we're doing for our retailers is we are spending significant efforts in both improving the online sales tools in making our thule.com and the various B2B tools we're providing even easier to use and better for them to create a cost-efficient sales growth for them as retailers. We also, as of Q4 last year, started rolling out a completely new concept and rejuvenated concept for brick-and-mortar retails that has already seen a number of mono-brand shops opened by partners around the world in the new concept. We feel very good on all of those aspects. All of that really leads to that we feel very comfortable with that we will continue to generate a very strong cash generation that will allow us to continue to look at M&A. I can anticipate one question I'm sure I will get.
Yes, we are looking at a number of companies and have looked at a number of companies, we will continue to do so. No, if we would have had any big news to update you, we would have already done it. With that, I leave it for questions and answers.
To ask a question today, please press star one on your telephone keypad now. To remove yourself from the queue, press star two, please check you are muted locally. As a reminder, star one to ask the question. Magnus, your first question today comes from Gustav Sandstrom from SEB. Gustav, your line is open. Please go ahead.
Thank you, operator. Good morning, everyone. My first question would be regarding the dividend net that is roughly in line with last year, so lower in terms looking in relation to EBITDA and the cash flow metrics as you stated, perhaps one could argue that the business today is a bit more stable than it was a year ago given the recent divestitures. Even so, total dividends are down, maybe ordinary or special, but total dividends are down year-over-year. My question would be, is this a more conservative view on the balance sheet which can be connected to your change in your debt target from the board, or is it that you would assume cash flow metrics to deteriorate, or are you closer to perhaps do something more on the M&A side or what to read into this, please?
Yeah, I think you should read into things. We did a very large extraordinary dividend last year, that's, of course, not something. That's the whole name, is extraordinary. What we're looking at is, you're right, we are doing at the moment, negotiating with banks for a new refinancing of the company's debt structure. We have plenty of time to do that, so there is no hurry. At the same time, we want to ensure that we have the right type of debt structure going forward, in line also a little bit with the direction of what we have set the leverage targets to be. Secondly, we do want to have dry powder in our books, so to speak, to be able to pursue an interesting M&A as it should appear.
What we're doing is really setting more of a long-term direction of saying, "Yes, this company will be a very large dividend yielder in terms of ordinary dividend going forward," and saving anything that would have been extraordinary to ensure that we can do the refinancing negotiations on debt structure and to have dry powder for potential M&A.
Okay. Regarding M&A, I heard you underlining that you wouldn't comment specifically.
Right.
In general terms, there's been some notable competitors within the baby stroller market for sale. Would you consider on a theoretical level, also bigger targets to sort of accelerate your new market positions within luggage or maybe baby strollers? Are we primarily looking for bulk of smaller scale acquisitions?
Yeah. I can say as we actually did at the Capital Markets Day, the 2 categories where we would like and potentially look at the right merger acquisitions are the 2 you mentioned, stroller and luggage. It's not a secret that Bain Capital acquired, just recently, Bugaboo. I can say we were also interested in Bugaboo. That could have been a company, due to strong products historically, which could have been interesting, potentially, to take a bigger step. You also have to find a situation where you think the valuation of the company, not just the products that they've been able to launch, is at the right level. We did not consider it at the right level. It was not something we would be pursuing at those type of valuations. Otherwise, those 2 categories, yes.
A larger one if it's the right one, not just because we sit on money and there's companies available. If it is a leading brand, a leading position where we could significantly speed up our entry, we would be interested.
Right. Question on gross margins, obviously up in the quarter driven by price mix, by currency headwinds. Would you expect a similar strategy to filter through to improving gross margins also in 2018, be it price mix? Could you put this in relation to the higher R&D spending? What's the bigger effect here going into 2020?
If we look at it, potentially, if you would take out product development spend only, we would be deteriorating our EBIT margin. We are convinced with all the other measures. One, a sales growth with a very strict and maintained level of spend on admin. On top of that, a positive mix shift of categories with higher margins selling more and categories with lower margins growing less. If you look at our mix split, those are the two factors that are compensating for that additional spend. I got the question last quarterly, do we expect 2018 to be another year with significant EBIT margin pickup? We said at that time, and I still think that's a valid point to make, it's not the year where we should do a significant margin pickup, but we do not expect our margin to go down.
Right. Final one for me. Actually, I did lose my train of thought here, so I'll get back into line. Thank you.
No problem. Thank you.
Your next question today comes from Stellan Hellström of Nordea Bank. Sellen, your line is open. Please go ahead.
Hi. Thank you. I just want to see if you can help me maybe understand a little bit how your key product launches have helped you in achieving your organic growth for the strong organic growth for the, I'm thinking the EasyFold XT and the Motion XT. Also, if you can maybe sort of help us understand your new launches for this year, how those compare or.
You can say in general, that if you look at the growth we've generated, there have been a few key launches that drive bigger volumes. That's partly, of course, some of these are pure new things we do, right? If you do a Thule Subterra luggage and you don't have a luggage to replace, there is no cannibalization by one in, one out. That, of course, makes a nice boost to the growth of a luggage collection like that as it goes out there. We have categories like the ones I mentioned, where we already had the world's best bike carriers, right? It wasn't like we had a bad bike carrier. We had the world's best, and then we've replaced that with an even better one.
For impure growth, because that's of course some cannibalization, you take away an older model and you add on. You need to, a little bit, take that difference away so you don't get too excited about a volume product that is replacing another volume product. Generally, why I mentioned the Thule Force XT and the Thule Motion XT is that they clearly have been key contributors to that 8% growth that we saw in Europe and the 4% growth we saw in region Americas. We do need these new products, right? They're always there every year, but one reason why we were above the five, which is of course tougher in Sport & Cargo Carriers than in juvenile, in active kids, was that they were very successful this year. They clearly hit the spot. They've been big contributors.
Those two collections, Thule Slide XP and Thule Motion XT, have been good contributors to that growth. Specifically, if you looked at the Thule Chariot, that was a fantastic growth pickup, despite, once again, replacing what was already the world's best. The previous model of Thule Chariot was the world's best bike trailer. The new one was so much better that it not only found what I would consider normal volume growth, it actually found a completely new consumer group, because it was more urban designed and it came into some juvenile stores. Those four, if you look at the total, the luggage, the Thule Chariot, and those two Sport & Cargo Carriers were strong contributors. If we look at 2018 and look at what we're seeing, we have two that we are extremely excited about.
It's the new Thule Urban Glide 2, the new generation, and of course, the Thule Sleek that's coming late the year. We do have inside, as always, in Sport & Cargo Carriers, some really nice, exciting new products. We are getting very positive feedback from retailers where we showed it in the autumn, and they're just about to hit the stores, most of them, because if you look at sport and cargo carrier products, they are coming now in February. The only one already in store is the Thule Urban Glide 2, and I can say, although very early days, it's got a great reception. Very good feedback on sales of the updated, refreshed stroller, Thule Urban Glide 2. We step into the year, as boring as it might seem, like we say every year. We have got a nice permission to play from retail.
Now it's going to be up to the consumers if they like it as much as retailers are liking it. It's early days yet, but it is promising.
Great. I think in the support you also mentioned a strong contribution from retail or some contribution at least positive from Eastern Europe and Asia. Just wonder if you can help us to maybe say how much you sell from those regions, or if you think this is something happening here in the market.
Yeah. If you look at Europe and rest of world as a full region growing as much as it did with close to 13% constant currency growth in the region, that's of course fantastic. What we've seen is that higher than that average growth in percentage has been proven in a number of the Southeast Asian markets and in Eastern Europe. Those markets are performing very strongly. Part of that is a general economy situation with more consumers every year in those markets finding that financial situation, but also that spare time desire to go and do things. I think we are connected to a positive trend and at the same time we're also becoming more and more known as a brand. As we do other products, it actually helps in these markets, maybe even more so than in some of the mature markets.
Some of the new categories actually help the traditional categories and brand recognition. That is especially valid for example, Southeast Asia, where our luggage collection launch has been extremely successful. We are getting good traction, which in itself makes the brand more known. We see, I think it's a general market macro that is helping us with more middle income earners in those countries wanting to do these activities. We are doing a good job with some of the new listings we're getting with the new right retailers to drive that.
All right. Thank you, Magnus.
Currently your last question comes from Peter Reilly of Jefferies. Peter, your line is open. Please go ahead.
Good morning. I've got three questions, please. Maybe if I can start with Sport & Cargo Carriers. Very good growth performance in 2017. You can't tell us much currently about the new products coming in 2018, because they haven't been launched yet, but you obviously had two very successful launches last year. On a relative basis, is this going to be a slightly slower year than last year because it was such a big year for launches this year? Are you just as excited about 2018 as you were about 2017, which obviously turned out very well? Secondly, I wanted to ask for a bit more color on where you are with the Thule Sleek.
There were some new comments in the report saying you're recruiting 100 people in Poland, which is quite a lot for a company of your size, and I wonder if that gives us an early indication of the positive outlook for Thule Sleek. I guess you're now in fairly detailed or advanced negotiations with retailers about who's going to stock it, what the initial orders are going to be, and also hopefully you've got some idea of whether it's just traditional people who've stocked your more active jogging range, or whether it's new retailers with a slightly more mainstream than your current retail channel. Can you help us on those two? I'll come back on the third afterwards.
Absolutely. If you take Sport & Cargo Carriers, we did have some very key launches in 2017. There will not be the same amount of high volume new introductions. There's a lot of introductions, but in terms of in high volume products, not as many. I still feel very good about 2018 because if you look at the way we do business in Sport & Cargo Carriers, it's not that we're heavily advertising or promoting anything new. It is very much a word-of-mouth thing. What happens is now after having had, for example, Thule Motion XT in the market for a while, a lot of people have seen it on the parking lot at the ski resorts or on the holiday vacation, and they've liked it, and they've heard the good comments about the new features of opening, et cetera.
The same applies for some of the other products where often a year number 2 is a very important year for us with big launches. The combination of a year 2 of some big successful launches should spill over into 2018, plus a number of more new launches of several different new products, maybe not with the same volume, means that we feel good about also 2018 in Sport & Cargo Carriers. If you take the Thule Sleek and the Polish factory, I want to point out it's not only Thule Sleek we do in the Polish factory. We do child bike seats, which is growing very nicely for us, and some other things that we've moved in there. We do even some models for bike carriers. So all the 100 will not be working with Thule Sleek.
I can also say that we feel very positive about the fact of the listings we've gained because it is not only, which is of course key for us, so a good point, Peter. It was not only the type of players that had been listing a jogging stroller or a multi-sport stroller. This is a product that will also be listed in a number of markets with some of the leading, more typical inner city stroller retailers, both online and physical stores. We have some very positive initial feedback and first orders and commitments, so to speak, in terms of what we will be in for type of shops when the Thule Sleek. Doesn't say a lot about volume because then the consumer needs to love the product as well.
It is at least giving us the true opportunity to be in the type of retail outlet where a consumer would want to go if they wanted to buy that type of stroller. That is a positive signal there.
Great. If I can move on to Bags, Packs and Luggage. Obviously, a small revenue decline is not really an accurate description because you've got a big revenue decline in the legacy OE business and the strong growth in the newer product areas. As the legacy gets smaller, the balance shifts. Is 2018 the year where you can actually resume organic growth, do you think, in Bags, Packs and Luggage because of the ongoing mix effect? Will it still be quite challenging to try and grow that business?
I will be greatly disappointed. I can say that I've said it internal to everybody. I would be hugely disappointed if we don't grow this year.
Cool. I will look forward to seeing the positive result then.
I do as well.
Since I was announced as the last person on the queue, maybe I can ask some more questions, if you don't mind.
Sure.
Coming back to the dividend, I just want to make sure I understand the body language here. This is effectively you rebasing it to a lower level from which you would hope not to have to reduce it because you can fund even medium-sized M&A without having to make a change there, without having to rebase the dividend back to a lower level. Have I got that right?
The logic is this. I think there is always this classical confusion on what is something you should be able to expect every year to come, which is a little bit the direction you want to do as a company on an ordinary dividend. Then people might speculate that over a few years, if you have a little bit too much and you don't do M&A every few years, but not every year and not every second year, but every now and then, maybe a company, if we should not do the M&A, will have to do also in the future, an extraordinary dividend.
What we wanted to set as the company has been established on the stock market, we've defined new targets and new leverage targets, is a signal of saying our ordinary dividend level will be higher than it was the last years where it was around SEK 3. We're really setting a bottom threshold a little bit mentally on saying SEK 6 is going forward and you should expect this company to be giving out at least this type of money. There might be that in the future, but not every year or every second year. If we do not find the right M&A target, also in the future for extraordinary dividends. We do want to have that dry powder for the M&A. With a new leverage structure, a refinancing, this sets a little bit the base for what can seed as a high yielding cash generative company.
Okay. I've got two more, if you don't mind. The small everyday packs where you've been disappointed. Have you just basically overpriced them, you think, and been trying to ambitious in a market which is way more price sensitive? The target customers you're talking about are not people for whom price is no object. You're talking about back to college students and so forth. Do you think you've got the pricing wrong? Is it more just it takes time to establish yourself in the marketplace? The other last question, then Which is sort of related. You talked previously about having some problems with U.S. retail channels with bankruptcies and bicycles and people moving some of your products off shelves and some of the other sales channels. You haven't mentioned that this time.
Are your U.S. retail channels more stable now than you've been seeing previously?
Yeah. I'll take the last one first, since it's pretty straightforward. I feel that U.S. retail has calmed down a bit. We've seen some big wobbles, big shakes. I do think it's more stable. It's not a booming retail market. You can follow any companies in the retail industry in the U.S., and you'll realize it is not. It is less itchy, and there are fewer concerns. A little bit more stable situation in the U.S. retail market as we see it, at least the types of retail we do. If you look at your question on the small everyday packs, we're actually doing really well at our higher price packs. That's where we're seeing the biggest growth. No, I'm not worried about our pricing. We are actually doing well with those.
What we're not happy with here in this performance is more some of the older models we've had, where we maybe haven't been doing enough tweaks to those, because we're not talking about huge innovation, but more small tweaks to keep them interesting at all times. Also, some of the older Case Logic packs, for example, in some of the markets. I would say it's a combination. It is a challenging retail reality, and there's a lot of brands out there. It's not our pricing. We've actually done really well on our highest priced product. It's more making sure the portfolio is constantly fresh with the right product.
That's great. Sorry for asking so many questions.
No problem. We're happy.
Magnus, that was the last question. I'll hand back to you.
Thank you very much, everybody, for listening in and listening to us recap a fantastic 2017. As I said, we look forward to an exciting 2018. We hope you are all super active out there in the spring, you travel around and see and use and buy a lot of Thule products. Talk to you soon. Thank you.
That does conclude today's call. Thank you for joining, and enjoy the rest of your day.