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New Wave Group AB Annual Report 2019
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Annual Report
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2019
YEAR-END REPORT January – December
1
TRADEMARKS IN FOCUS
CORPORATE
YEAR-END REPORT NEW WAVE GROUP AB
PERIOD 1 OCTOBER - 31 DECEMBER 2019
- Net sales amounted to SEK 2,024.1 million, which was 4 % (1 % in local currencies) higher than last year (SEK 1,943.4 million).
- Operating result amounted to SEK 240.3 (209.4) million.
- Result for the period amounted to SEK 165.9 (158.9) million.
- Earnings per share amounted to SEK 2.53 (2.42).
- Cash flow from operating activities amounted to SEK 286.7 (174.4) million.
PERIOD 1 JANUARY - 31 DECEMBER 2019
- Net sales amounted to SEK 6,903.5 million, which was 10 % (5 % in local currencies) higher than last year (SEK 6,290.6 million).
- Operating result amounted to SEK 535.0 (482.8) million.
- Result for the period amounted to SEK 370.1 (360.0) million.
- Earnings per share amounted to SEK 5.66 (5.48).
- Cash flow from operating activities amounted to SEK 99.5 (222.6) million.
- Equity ratio amounted to 44.9 (48.6) %.
- Net debt to equity ratio amounted to 78.6 (53.3) %.
DIVIDEND
The Board of Directors has decided to propose to the AGM a dividend of SEK 2.20 (2.00) per share equal to SEK 146.0 (132.7) million.
SEK MILLION
CEO COMMENTS
OCTOBER - DECEMBER
Once again a quarter with growth. Net sales increased by 4 % (1 % in local currencies) to SEK 2,024.1 million, which is the highest sales we have ever had in a quarter.
Gross profit remains stable and amounted to 46.7 (46.4) %.
External costs decreased by SEK 6.1 million (SEK 46.8 million incl. IFRS 16) compared with the previous year. Operating result thus amounted to the highest ever for a quarter and was SEK 240.3 (209.4) million, an increase of 15 %. The operating margin improved by 1.1 percentage points and amounted to 11.9 %.
It feels good that our previously stated focus to prioritize costs, earnings and cash flow had an effect already in the fourth quarter.
At the end of the quarter, we were negatively affected by the warm weather and sales of winter products have been tough for both us and our customers.
FULL YEAR 2019
2019 was another year of growth. Net sales increased by 10 % (5 % in local currencies) and amounted to SEK 6,903.5 million.
It was the sixth year in a row of growth and during those years we have grown by SEK 2.9 billion.
Operating result amounted to SEK 535.0 million and result for the period amounted to SEK 370.1 million, both new all-time highs.
The year was characterized by great success for many of our operations. The only thing we are not satisfied with is the development in Gifts & Home Furnishings where we also took a goodwill write-down of Sagaform of SEK -11.4 million. Actions have taken to improve the development.
We were negatively affected at the end of the year in terms of sales of winter products such as jackets, gloves, hats, scarves, etc. The warm weather mainly affected our sports brands, but also workwear to some extent. Unfortunately, the warm weather has continued into the first quarter.
BALANCE SHEET AND CASH FLOW
I am very happy and satisfied with our balance sheet and cash flow.
We are now entering a phase where we will focus on earnings and positive cash flow instead of strong growth, investments in new brands and inventory.
We enter this phase with an equity of SEK 3,770.7 million and an equity ratio of 44.9 %. We have all the potential to further improve this, but it is still a nice feeling and a great security.
It is also pleasing that we for the fourth consecutive year propose an increased dividend and at the same time increased sales and strengthened the balance sheet.
THE FUTURE
I feel confident and optimistic and we are strong in virtually all areas and brands.
The major investment we have made in club and teamwear brings with it a new market for many of our brands, even if it is most important for Craft.
Craft develops very well in teamwear and meets the high expectations that we had. We win small and medium sized associations every day, but we are also rapidly expanding among Sweden's and Europe's top teams.
Perhaps the hardest sport to break into is football and in next year's men's premier division in Sweden we have three teams, Hammarby Fotboll, IFK Göteborg and Varberg BOIS. Internationally we have FC Luzern, PEC Zwolle, KAA Gent, SG Dynamo Dresden and SV Darmstadt. We are very happy and proud of this development and we also harvest great success when it comes to women's football teams.
In conclusion, I would like to finish the CEO comments with almost the same words as 2018. Our brands, our sales capacity, our delivery capacity, our organization and our balance sheet have never been better, bigger or stronger.
Thanks to all customers, employees, shareholders and others who made this development possible.
" The major investment we have made in club and teamwear brings with it a new market
SUMMARY OF THE QUARTER OCTOBER - DECEMBER COMMENTS
Net sales increased by 4% (1% in local currencies). The Corporate segment grew by 7% and increased in all regions except Sweden. Sports & Leisure increased by 3%, with all regions except the US growing. Gifts & Home Furnishings decreased by 5%, which is mainly related to Sweden.
The promo sales channel increased by 7%, while retail was at the same level as last year. The improvement in promo took place mainly in the Corporate segment, but Sports & Leisure also increased slightly.
The gross profit margin improved slightly compared to the previous year and amounted to 46.7 (46.4)%.
The Group's external costs decreased during the quarter. Most of the decrease is related to the new accounting standard IFRS 16, but also excluding the effects from this standard, external costs decreased. Personnel costs increased due to exchange rate changes when translated to SEK and were at the same level in local currencies. The Group's costs decreased as a proportion of net sales (also excluding IFRS 16).
Operating profit improved by SEK 30.9 million compared to the previous year and amounted to SEK 240.3 (209.4) million. Result for the period amounted to SEK 165.9 (158.9) million.
Cash flow from operating activities amounted to SEK 286.7 (174.4) million. The higher cash flow is primarily an effect of improved operating result and the timing of goods purchases. Inventories increased by SEK 327.0 million and amounted to SEK 3,557.9 (3,230.9) million, of which the exchange rate change when translated to SEK has increased the value by SEK 67.8 million. Apart from currency changes, the increase is mainly attributable to new product ranges.
OCTOBER - DECEMBER
NET SALES
Net sales amounted to SEK 2,024.1 million, which was 4% higher than last year (SEK 1,943.4 million). Exchange rate effects had a positive impact on sales of SEK 63.7 million, corresponding to 3%.
Net sales in Sweden decreased by 1%, which is related to the promo sales channel. Retail were at the same level as last year. The US increased its net sales, which is related to the exchange rate change when translated to SEK. Net sales in local currency decreased by 5%. The retail sales channel decreased while the promo sales channel increased compared to the previous year. The Nordic countries excluding Sweden had sales growth of 4% and both sales channels increased. Net sales in Central Europe have increased by 10%, which is related to both promo and retail. Southern Europe increased by 8% and the promo sales channel improved. Other countries increased by 10%, which is related to the operations in Canada and Asia and the promo sales channel.
GROSS PROFIT
The gross profit margin was slightly better than the previous year and amounted to 46.7 (46.4) %. Corporate as well as Sports & Leisure improved their margin while Gifts & Home Furnishings had a lower margin.
OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES
Other operating income increased by SEK 4.0 million to SEK 32.3 (28.3) million. Other operating income is mainly attributable to currency gains, but also other remunerations, and should be compared to the result row Other operating expenses, where mainly currency losses are reported. Both years include a positive result from business combinations that amounted to SEK 11.4 million (SEK 8.4 million). Other operating expenses increased by SEK 2.6 million and amounted to SEK -12.4 (-9.8) million. The net of the above items amounted to SEK 19.9 (18.5) million.
COSTS AND DEPRECIATIONS
External expenses decreased by SEK 46.8 million and amounted to SEK -343.8 (-390.6) million. The decrease is mainly related to the new accounting standard IFRS 16, which reduced costs by SEK 40.7 million, but cost savings have also contributed to the reduction. Personnel costs increased by SEK 9.6 million and amounted to SEK -307.6 (-298.0) million. The increase is related to exchange rate changes. Exchange rate changes increased the external costs and personnel costs by SEK 20.7 million.
The Group's costs as a proportion of sales decreased (also excluding IFRS 16), which applies to both external costs and personnel costs.
Amortizations, depreciations and write-downs were higher compared to last year and amounted to SEK -73.6 (-21.6) million. The increase is primarily an effect of IFRS 16, which affected depreciations by SEK -38.7 million, but also impairment of goodwill in the Gifts & Home Furnishings segment had an impact of SEK -11.4 million.
OPERATING RESULT
Operating result improved by SEK 30.9 million and amounted to SEK 240.3 (209.4) million. The operating margin also improved in relation to the previous year and amounted to 11.9% (10.8%).
NET FINANCIAL ITEMS AND TAXES
Net financial items amounted to SEK -21.3 (-12.8) million. Accounting in accordance with the new accounting standard IFRS 16 affected financial expenses by SEK -6.1 million. The Group's net debt has increased, which has also contributed to higher interest costs.
Tax on result for the period in absolute terms amounted to SEK -53.1 (-37.7) million and the effective tax rate was 24.2 (19.2)%. The higher tax rate is related to changes in deferred tax.
RESULT FOR THE PERIOD
Result for the period amounted to SEK 165.9 (158.9) million and earnings per share amounted to SEK 2.53 (2.42).
SUMMARY OF 2019
Net sales amounted to SEK 6,903.5 million, which was an improvement of 10% (5% excluding currency change) compared to the previous year. The Group has seen growth during all quarters and has also increased sales in all regions and in both sales channels.
Corporate increased their net sales by 9%. During the year, the Group continued its efforts to improve its service level and made further investments in new distribution centers. This work includes larger warehouses as well as improvements in IT systems. In addition, the segment has continued its efforts on the sales side, such as an increase in the number sales staff and a high level of marketing activities.
Sports & Leisure's investments in the Craft brand and their teamwear collection have intensified in 2019. In addition to agreements with smaller clubs and associations that form our base, Craft signed new agreements with Hammarby Fotboll, Swedish National Team in Handball and extended the agreement with the Swedish Athletics Association. For the second year in a row, the brand was named best supplier in the "Team Sports" category by the German magazine SAZ sport. Cutter & Buck is also developing well and has good growth in Europe and Canada. The segment as a whole increased its net sales by 12% compared to last year. In addition to more marketing activities (mainly related to teamwear), the segment expanded its warehouse space and made improvements in IT systems.
Gifts & Home Furnishings increased its net sales by 2%. However, the improvement in sales was not sufficient to cover the higher cost structure established in the segment. EBITDA became negative and measures were taken to improve earnings. In addition, a business combination has been made. This is expected to complement existing brands.
Both sales channels improved their net sales. Promo increased by 9% and retail by 10%. The efforts made in the form of expanded warehouses and improved IT systems are related to both sales channels.
The Group's gross profit margin is at the same level as last year and amounted to 46.4 (46.6)%.
The new accounting standard IFRS 16 has had a positive impact of SEK 135.6 million on the Group's external costs compared with the previous year. Excluding IFRS 16, the Group increased its expenses during the first half of the year, which was related to an increase in marketing activities and new recruitments within sales, warehousing and customer service. The rate of increase decreased during the second half of the year and the fourth quarter was on par with last year. In addition to these activities, volume-related costs have also contributed to an increase in total costs for the full year compared with the previous year.
Our expanded product range and establishments in new markets have contributed to a higher capital tied up in inventories with
subsequent higher net debt and interest expenses. This year's tax expense increased slightly, which is mainly related to the fact that last year includes a positive change in deferred tax. Result for the year improved to SEK 370.1 (360.0) million.
Cash flow from operating activities amounted to SEK 99.5 (222.6) million. The lower cash flow is largely due to the timing of payment of accounts payable related to our increased merchandise purchases. Investment activities decreased slightly and amounted to SEK 148.7 (163.2) million.
In September, the Group signed a supplement to the existing financing agreement and increased its total credit limit by an additional SEK 500 million.
The equity ratio decreased and amounted to 44.9 (48.6) %, which is related to the introduction of the new accounting standard IFRS 16. Excluding the effects from this standard, the equity ratio improved by 1.1 percentage point to 49.7%. Net debt increased by SEK 1,133.8 million, of which SEK 803.8 million is related to IFRS 16, and amounted to SEK 2,964.8 (1,831.0) million. The remainder of the increase is mainly due to financing of our expanded product range and thus higher inventories. The net debt to equity ratio and net debt in relation to working capital amounted to 78.6 (53.3) % and 78.1 (57.0)% respectively, see also note 8 regarding the effect of IFRS 16 on page 29.
During the autumn, the Group arranged a capital market day where the theme was brands and CSR. The Group's three largest brands - Clique, Cutter & Buck and Craft - were presented, as well as a review of the Group's CSR work.
New Wave Group was one of eight companies that received full marks - 6 points out of 6 possible - when Dagens Industri, Aktuell Hållbarhet and the School of economics and management at Lund University ranked how over 170 listed companies relate to Agenda 2030 and the UN's global sustainability goals. The ranking analyzed how the companies have adapted their sustainability work to the UN's global sustainability goals. Companies must demonstrate that they work systematically to identify their impact and how they should work strategically to best contribute to the achievement of Agenda 2030.
Craft 's partnerships within teamwear continue. The brand's latest contract includes the football team IFK Göteborg and a sponsorship with pro runner Tommy Rivs.
JANUARY - DECEMBER
NET SALES
Net sales amounted to SEK 6,903.5 million, which was 10% higher than the previous year (SEK 6,290.6 million). Exchange rate effects had a positive impact on sales of SEK 275.9 million, corresponding to 5%.
Net sales in Sweden increased by 5% and the improvement was achieved in the retail sales channel. The US increased by 12% and the increase occurred in both channels. The exchange rate change when translated to SEK had a positive impact on sales and sales in local currency increased by 3%. The Nordic countries excluding Sweden increased by 7% and both sales channels increased. Net sales in Central Europe improved by 9%, which is related to both promo and retail. Southern Europe increased by 13% which is related to the promo sales channel. Both European regions were positively affected by exchange rate changes when translated to SEK and sales in local currencies improved by 6% and 10% respectively. Other countries increased by 14% which is related to operations in Asia and Canada and the promo sales channel.
GROSS PROFIT
The gross profit margin was 46.4 (46.6)%. Corporate as well as Sports & Leisure were on the same level, while Gifts & Home Furnishings had a slightly lower margin than last year.
OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES
Other operating income increased by SEK 3.1 million to SEK 77.9 (74.8) million. Other operating income is attributable to operating currency gains and other remunerations and should be compared to the result row Other operating expenses, where primarily currency losses are reported. Both years include a positive result from business combinations, which amounted to SEK 11.4 (8.4) million. Other operating expenses decreased by SEK 5.2 million and amounted to SEK -39.6 (-44.8) million. The net of the above items amounted to SEK 38.3 (30.0) million.
COSTS AND DEPRECIATION
External expenses decreased by SEK 23.7 million and amounted to SEK -1,312.7 (-1,336.4) million. Accounting in accordance with IFRS 16 has reduced external costs by SEK 135.6 million. Excluding IFRS 16, costs have increased, which is mainly related to higher sales and marketing initiatives such as increased inventory capacity, improved service level and marketing. The higher net sales have also increased volume-related costs. Personnel costs increased by SEK 96.9 million and amounted to SEK -1,159.9 (-1,063.0) million, which is related to more employees in primarily warehousing and sales, but also in areas such as marketing, product development and customer service. Exchange rate changes have increased the above costs by SEK 100.3 million.
Amortizations, depreciations and write-downs were higher compared to last year and amounted to SEK -233.1 (-77.9) million. The increase is primarily a result of IFRS 16, which affected depreciations by SEK -126.4 million. The higher depreciations are also related to new investments in warehouses and a write-down of goodwill in the Gifts & Home Furnishings segment, which amounted to SEK -11.4 million.
OPERATING RESULT
Operating result improved by SEK 52.8 million and amounted to SEK 535.0 (482.8) million. The operating margin is at the same level as the previous year and amounted to 7.7 (7.7)%.
NET FINANCIAL ITEMS AND TAXES
Net financial items amounted to SEK -68.2 (-40.9) million. Accounting in accordance with IFRS 16 affected financial expenses by SEK -20.0 million. The Group has higher interest expenses due to a higher net debt.
The tax expense for the period was SEK -96.7 (-81.8) million and the effective tax rate was 20.7 (18.5)%. The increased tax rate is mainly due to the fact that last year includes a positive change in deferred tax.
RESULT FOR THE PERIOD
Result for the period amounted to SEK 370.1 (360.0) million and earnings per share amounted to SEK 5.66 (5.48).
REPORTING OF OPERATING SEGMENTS
New Wave Group divides its operations into the segments Corporate, Sports & Leisure and Gifts & Home Furnishings. The Group monitors the segments' and brands' sales as well as EBITDA. The operating segments are based on the Group's operational management.
CORPORATE
Net sales for the period October-December increased by 7% to SEK 1,048.0 (977.5) million. Sales growth occurred in all regions except Sweden, which had slightly lower net sales than last year. It was mainly the promo sales channel that increased its sales. EBITDA increased by SEK 40.1 million and amounted to SEK 185.1 (145.0) million. The improved result is related to higher net sales but also to the new accounting standard IFRS 16, which had a positive impact of SEK 28.2 million. However, the segment also has higher costs in the form of more sales and marketing activities and higher costs for distribution units. The cost increase for the distribution units was related to larger premises as well as other improvement measures to increase the service level.
Net sales for the year increased by 9% to SEK 3,356.0 (3,069.0) million. All regions increased their net sales except Sweden, which decreased slightly compared to last year. It was mainly within the promo sales channel that sales increased. EBITDA increased by SEK 107.4 million and amounted to SEK 460.5 (353.1) million. The improved result is related to the increased net sales, but the segment also had higher costs. The higher costs were in the form of more sales and marketing activities and higher costs for distribution units. The cost increase for the distribution units was related to larger premises as well as other improvement measures to increase the service level. IFRS 16 had a positive impact on EBITDA of SEK 88.0 million.
SPORTS & LEISURE
Net sales during the fourth quarter increased by 3% to SEK 771.7 (750.1) million. Sales increased in both sales channels. The segment had growth in all regions except the US. EBITDA increased by SEK 30.8 million and amounted to SEK 115.2 (84.4) million. The improvement in result is related to higher net sales, cost savings and that IFRS 16 had a positive impact on EBITDA of SEK 8.8 million.
Net sales for the full year increased by 12% to SEK 2,887.4 (2,573.7) million. Sales increased in both sales channels, with promo increasing by 10% and retail by 13%. The segment experienced growth in all regions. EBITDA increased by SEK 90.9 million and amounted to SEK 309.1 (218.2) million. The improvement in result is related to higher net sales, but the segment also had higher costs for sales, marketing and distribution units. IFRS 16 had a positive impact on EBITDA of SEK 37.9 million.
GIFTS & HOME FURNISHINGS
Net sales during the period October-December decreased by 5% to SEK 204.4 (215.7) million. The lower net sales are mainly related to Sweden, but other Nordic countries also declined. Sales decreased in both sales channels. EBITDA was higher than last year and amounted to SEK 13.6 (1.8) million. The improvement is related to a positive result from business combinations of SEK 11.4 million and from IFRS 16 that had a positive impact on EBITDA of SEK 4.0 million. Excluding the effects of these two items, the result decreased slightly, which is related to lower net sales and a lower gross profit margin.
Net sales for the year increased by 2% to SEK 660.0 (647.8) million. Sales increased in Sweden, Central Europe and Asia, while the Nordic countries (excluding Sweden) declined. Both sales channels increased their net sales. EBITDA improved compared to last year and amounted to SEK -1.5 (-10.6) million, which is attributable to a positive result of SEK 11.4 million from a business combination and that the new accounting standard IFRS 16 had a positive impact on EBITDA with SEK 10.1 million. Excluding these items, EBITDA decreased, which is related to lower gross profit margin and higher costs in the form of more market activities.
CAPITAL TIED UP
Capital tied up in stock amounted to SEK 3,557.9 million and increased by SEK 327.0 million compared with the previous year (SEK 3,230.9 million). The increase is mainly related to new product ranges but also to exchange rate changes. When translated to SEK, inventory value increased by SEK 67.8 million. The Group has a well-balanced inventory and the service level is good. Inventory turnover is on par with the previous year and amounted to 1.1 (1.1) times.
| SEK million | 31 Dec 2019 |
31 Dec 2018 |
|---|---|---|
| Raw materials | 49.3 | 40.3 |
| Work in progress | 12.6 | 14.0 |
| Goods in transit | 195.0 | 222.6 |
| Finished goods | 3,301.0 | 2,954.0 |
| Total | 3,557.9 | 3,230.9 |
Accumulated write-downs of inventories amounted to SEK 136.7 (121.5) million and write-downs related to finished goods amounted to 4.0 (4.0)%.
Accounts receivable amounted to SEK 1,192.8 M (1,084.1), where the increase is related to higher net sales.
INVESTMENTS, FINANCING AND LIQUIDITY
This quarter's cash flow from operating activities amounted to SEK 286.7 (174.4) million. The improved cash flow is mainly attributable to higher operating result and lower merchandise purchases. Cash flow from investing activities amounted to SEK -42.2 (-39.7) million.
Cash flow from operating activities for the full year amounted to SEK 99.5 (222.6) million. The lower cash flow is mainly related to the timing of payments of the Group's merchandise purchases. Cash flow from investing activities was slightly lower than last year and amounted to SEK -148.7 (-163.2) million.
Net debt increased by SEK 1,133.8 million, of which SEK 803.8 million is related to IFRS 16, and amounted to SEK 2,964.8 (1,831.0) million. The remainder of the increase is mainly due to financing of our expanded product range and thus higher inventory. The net debt to equity ratio and net debt in relation to working capital amounted to 78.6 (53.3)% and 77.1 (57.0)% respectively, see also Note 8 regarding the effect of IFRS 16 on page 29.
The equity ratio decreased by 3.7 percentage points compared to the previous year and amounted to 44.9 (48.6)%. The decrease is attributable to IFRS 16, which reduced the equity ratio by 4.8 percentage points.
In September, the Group signed a supplement to the existing financing agreement and increased its total credit limit by an additional SEK 500 million. As of 31 December, the Group's total credit limit thus amounted to SEK 3,212 million, of which SEK 2,150 million runs until March 2022, USD 24 million through January 2024 and SEK 339 million has maturity extending until August 2027. The other SEK 500 million has a term between three months and six years. The credit limit is limited in amount to and dependent on the value of certain underlying assets. The financing agreement means that key ratios (covenants) must be met for maintenance of the credit limit.
Based on the current forecast, management estimates that the Group will be able to meet these key figures with a satisfactory margin.
PERSONNEL AND ORGANISATION
The number of employees as of 31 December was 2,579 (2,566), of which 52% were women and 48% were men. Of the total number of employees, 588 (604) work in production. The production within the New Wave Group is attributable to AHEAD (embroidery), Cutter & Buck (embroidery), Dahetra, Kosta Boda, Orrefors, Paris Glove, Seger, Termo and Toppoint.
INTANGIBLE ASSETS
The Group's intangible assets with indefinite useful life consist of goodwill and trademarks. The useful lives are assessed to be indefinite because they are well established strategic brands in respective markets which the Group intends to maintain and develop further. The brands with greater value, listed at their acquisition values, are well-known brands such as Orrefors and Kosta Boda within Gifts & Home Furnishings as well as mainly Cutter & Buck within Sports & Leisure. The value of the Group's goodwill and trademarks, which are based on local currency and can give rise to currency translation effects in the consolidated financial statements, have been allocated between the cash-generating units they are considered to belong to. These units are also the Group's segments. The value of these intangible assets is reviewed annually to ensure that the value does not deviate negatively from book value, but can be tested more frequently if there are indications that the value has decreased. In order to assess whether there are indications of impairment, the recoverable amount needs to be determined by a calculation of the respective cash-generating unit's value in use. The value in use is based on established cash flow projections for the next five years, and a long-term growth rate, so-called terminal growth. The most important assumptions in determining the value in use include growth rate, operating margin and discount rate (WACC). When calculating the discount rate, an assessment of financial factors such as interest rates, borrowing costs, market risk, beta values and tax rates will be carried out. As the cash generating units have different characteristics, each unit is assessed after its commercial factors. The estimated cost of capital (WACC) is considered to be representative of all cash-generating units.
The cash-flow forecasts that are basis for the impairment tests are based on the five year forecast adopted by the Board (2020-2024) and thereafter a terminal growth of 3.0 (3.0 %). In calculating the present value of expected future cash flows, a weighted average cost of capital (WACC) of 10.2 (10.2) % before tax is used.
Based on the tests and analyzes that have been carried out, there is currently no need for impairment in the Corporate and Sport & Leisure segments. Gifts & Home Furnishings recorded an impairment of goodwill during the fourth quarter of SEK -11.4 million.
RELATED PARTY TRANSACTIONS
Lease agreements exist with related companies. Associated companies to the CEO have purchased merchandise and received compensation for consultancy services performed. In addition, there are transactions with related parties at immaterial values. All transactions have been made on market terms.
THE PARENT COMPANY
Total revenue for the quarter amounted to SEK 38.9 (42.0) million. Result before appropriations and tax amounted to SEK 45.6 (89.5) million. The decrease is attributable to lower net income from shares in Group companies. Net debt amounted to SEK 2,074.2 (1,725.3) million. The Parent Company's net financing for Group companies amounted to SEK 2,060.9 (1,665.6) million. Cash flow from investing activities amounted to SEK 0.0 (-55.1) million where last year included long-term loans to Group companies of SEK -50.1 million. The total assets amounted to SEK 4,730.8 (4,368.0) million and equity, including the equity portion of untaxed reserves, amounted to SEK 2,099.4 (1,961.7) million.
Total income for the period January-December amounted to SEK 140.4 (145.6) million. Result before appropriations and tax amounted to SEK 213.9 (151.1) million. The improved result is attributable to dividends from Group companies. Cash flow from investing activities amounted to SEK -9.9 (-86.6) million. Last year included a net capital contribution to Group companies of SEK -39.5 million and long-term loans to Group companies of SEK -50.1 million.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on May 13 at 1.00 p.m. CET in Kosta. The annual report is scheduled to be available on April 17 at the company's headquarters in Gothenburg, Sweden.
DIVIDEND
The Group's dividend policy is that 40 % of the Group's net profit will be distributed over a business cycle. The Board has decided to propose to the AGM a dividend of SEK 2.20 (2.00) per share, amounting to SEK 146.0 (132.7) million. This proposal corresponds to 39 (37) % of the year's net income
NOMINATION COMMITTEE
The nomination committee for the board election at the 2020 Annual General Meeting is:
- Arne Lööw, representantive of Fjärde AP-fonden
- Torsten Jansson, CEO and representative of Torsten Jansson Förvaltnings AB
- Ulf Hedlundh, representantive of Svolder
For more information about the nomination committee and its work, please see www.nwg.se.
CALENDAR
The company's auditors have not conducted any review of the report for the fourth quarter of 2019.
The Board of Directors and CEO declare that the year-end gives a true and fair overview of the company's and Group's operations, financial position and earnings, and describes the significant risks and uncertainty factors that the company and the companies included in the Group face.
GOTHENBURG, FEBRUARY 6, 2020 NEW WAVE GROUP AB (PUBL)
OLOF PERSSON Chairman of the Board
Member of the Board
JONAS ERIKSSON Member of the Board
CHRISTINA BELLANDER Member of the Board
MATS ÅRJES Member of the Board
MAGDALENA FORSBERG Member of the Board
FOR MORE INFORMATION, PLEASE CONTACT:
CEO AND GROUP CEO Torsten Jansson Phone: +46 (0) 31–712 89 01 E-mail: [email protected]
CFO Lars Jönsson Phone: +46 (0) 31–712 89 12 E-mail: [email protected]
This information is information that New Wave Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons detailed above, at 7.00 a.m. CET on February 6, 2020.
CONSOLIDATED INCOME STATEMENT
| SEK million | Note | 3 months Oct - Dec 2019 |
3 months Oct - Dec 2018 |
12 months Jan - Dec 2019 |
12 months Jan - Dec 2018 |
|---|---|---|---|---|---|
| Net sales | 3, 4, 5 | 2 024.1 | 1 943.4 | 6 903.5 | 6 290.6 |
| Goods for resale | -1 079.2 | -1 042.3 | -3 701.0 | -3 359.4 | |
| Gross profit | 944.9 | 901.1 | 3 202.4 | 2 931.2 | |
| Other operating income | 8 | 32.3 | 28.3 | 77.9 | 74.8 |
| External costs | 8 | -343.8 | -390.6 | -1 312.7 | -1 336.4 |
| Personnel costs | -307.6 | -298.0 | -1 159.9 | -1 063.0 | |
| Amortizations, depreciations and write-downs of tangible and intangible fixed assets |
3, 8 | -73.6 | -21.6 | -233.1 | -77.9 |
| Other operating costs | -12.4 | -9.8 | -39.6 | -44.8 | |
| Share of associated companies' result | 0.6 | 0.1 | -0.2 | -1.1 | |
| Operating result | 3 | 240.3 | 209.4 | 535.0 | 482.8 |
| Financial income | 2.8 | 1.5 | 8.8 | 5.5 | |
| Financial expenses | 8 | -24.1 | -14.2 | -77.0 | -46.4 |
| Net financial items | -21.3 | -12.8 | -68.2 | -40.9 | |
| Result before tax | 219.1 | 196.6 | 466.7 | 441.8 | |
| Tax expense | 8 | -53.1 | -37.7 | -96.7 | -81.8 |
| Result for the period | 165.9 | 158.9 | 370.1 | 360.0 | |
| Other comprehensive income: Items that can be reclassified into profit or loss: Translation differences Cash flow hedges |
-126.6 | 4.3 | 99.6 | 157.3 | |
| Sum | -6.3 | -2.0 | -2.2 | 0.5 | |
| Income tax related to components of other comprehensive income |
-132.9 | 2.2 | 97.5 | 157.8 | |
| Total other comprehensive for the period | 1.4 -131.5 |
0.5 2.7 |
0.5 97.9 |
-0.1 157.7 |
|
| Total comprehensive income for the period | 34.4 | 161.6 | 468.0 | 517.6 | |
| Result for the period attributable to: | |||||
| Shareholders of the Parent company | 167.7 | 160.3 | 375.5 | 363.4 | |
| Non-controlling interest | -1.8 | -1.4 | -5.5 | -3.4 | |
| Total comprehensive income attributable to: | 165.9 | 158.9 | 370.1 | 360.0 | |
| Shareholders of the Parent company | 35.8 | 163.1 | 472.1 | 520.2 | |
| Non-controlling interest | -1.4 | -1.6 | -4.1 | -2.6 | |
| 34.4 | 161.6 | 468.0 | 517.6 | ||
| Earnings per share (SEK)* | 2.53 | 2.42 | 5.66 | 5.48 | |
| The average number of outstanding shares* | 66 343 543 | 66 343 543 | 66 343 543 | 66 343 543 | |
| *Earnings per share and the average number of outstanding shares are the same before and after dilution. |
CONSOLIDATED CASH FLOW STATEMENT
| Note SEK million |
3 months Oct - Dec 2019 |
3 months Oct - Dec 2018 |
12 months Jan - Dec 2019 |
12 months Jan - Dec 2018 |
|---|---|---|---|---|
| Operating activities | ||||
| Operating result | 240.3 | 209.4 | 535.0 | 482.8 |
| Adjustment for items not included in cash flow | 65.6 | 16.9 | 231.9 | 74.4 |
| Received interest | 2.7 | -1.4 | 7.9 | 2.2 |
| Paid interest | -23.9 | -11.4 | -76.1 | -43.2 |
| Paid income tax | -22.6 | -29.4 | -93.6 | -86.5 |
| Cash flow from operating activities before changes in working capital |
262.1 | 184.1 | 605.0 | 429.7 |
| Changes in working capital | ||||
| Increase/decrease of inventories | 180.9 | 44.6 | -241.7 | -494.0 |
| Increase/decrease of current receivables | -47.5 | -3.6 | -51.5 | -27.5 |
| Increase/decrease of current liabilities | -108.8 | -50.7 | -212.3 | 314.4 |
| Cash flow from changes in working capital | 24.7 | -9.7 | -505.6 | -207.1 |
| Cash flow from operating activities | 286.7 | 174.4 | 99.5 | 222.6 |
| Investing activities | ||||
| Investments in tangible fixed assets | -31.3 | -37.0 | -124.7 | -147.1 |
| Sales of tangible fixed assets | 1.2 | 1.1 | 6.9 | 4.3 |
| Investments in intangible fixed assets | -5.4 | -2.9 | -21.7 | -15.4 |
| Investments in associated companies | -0.3 | -0.5 | -0.8 | -2.0 |
| Business combinations | -8.5 | 0.0 | -8.5 | 0.0 |
| Raised long-term receivables | 0.5 | -0.3 | -1.6 | -2.9 |
| Repayment of long-term receivables | 1.6 | 0.0 | 1.6 | 0.0 |
| 3 Cash flow from investing activities |
-42.2 | -39.7 | -148.7 | -163.2 |
| Cash flow after investing activities | 244.6 | 134.7 | -49.3 | 59.4 |
| Financial activities | ||||
| Loan raised | 0.0 | 0.0 | 314.9 | 152.1 |
| Amortization of loan | -115.6 | -15.9 | 0.0 | 0.0 |
| Amortization of lease liabilities | -7.0 | 0.0 | -103.0 | 0.0 |
| New issue of shares in companies with non-controlling interest | 0.0 | 0.0 | 1.2 | 0.0 |
| Dividend paid to the shareholders of the Parent company | 0.0 | 0.0 | -132.7 | -112.8 |
| Cash flow from financial activities | -122.6 | -15.9 | 80.4 | 39.3 |
| Cash flow for the period | 121.9 | 118.8 | 31.2 | 98.7 |
| Liquid assets at the beginning of the period | 238.4 | 192.6 | 312.2 | 202.4 |
| Translation differences in liquid assets | -9.1 | 0.8 | 7.9 | 11.1 |
| Liquid assets at period-end | 351.3 | 312.2 | 351.3 | 312.2 |
| Liquid assets | ||||
| Cash at bank and in hand | 351.3 | 312.2 | 351.3 | 312.2 |
CONSOLIDATED BALANCE SHEET
| 31 Dec 31 Dec Note SEK million 2019 ASSETS Intangible fixed assets 1 501.0 1 469.4 Tangible fixed assets 8 1 436.5 587.4 Shares in associated companies 39.0 39.3 Other long-term receivables 14.7 13.5 Deferred tax assets 8 112.8 111.1 Total non-current assets 5 3 103.9 2 220.6 Inventory 3 557.9 Current tax receivables 44.8 Accounts receivable 1 192.8 Other receivables 82.4 8 61.2 Prepaid expenses and accrued income 351.3 Liquid assets 5 290.4 Total current assets TOTAL ASSETS 8 394.3 3, 6 EQUITY Share capital 199.0 Other capital contributions 219.4 Reserves 531.0 Retained earnings including result for the year 2 804.9 2 561.6 Equity attributable to shareholders of the Parent company 3 754.4 Non-controlling interest 16.3 Total equity 8 3 770.7 LIABILITIES Long-term interest-bearing liabilities 7, 8 2 818.3 1 795.5 Pension provisions 19.3 18.3 Other provisions 0.9 3.1 Deferred tax liabilities 144.8 144.6 Total non-current liabilities 2 983.3 Short-term interest-bearing liabilities 7, 8 497.8 Accounts payable 623.2 Current tax liabilities 94.6 Other liabilities 139.8 Accrued expenses and prepaid income 285.0 Total current liabilities 1 640.3 Total liabilities 3, 6 4 623.6 TOTAL EQUITY AND LIABILITIES 8 394.3 |
||
|---|---|---|
| 2018 | ||
| 3 230.9 | ||
| 38.1 | ||
| 1 084.1 | ||
| 90.3 | ||
| 85.2 | ||
| 312.2 | ||
| 4 840.8 | ||
| 7 061.4 | ||
| 199.0 | ||
| 219.4 | ||
| 434.9 | ||
| 3 415.0 | ||
| 19.2 | ||
| 3 434.2 | ||
| 1 961.6 | ||
| 347.7 | ||
| 752.2 | ||
| 78.0 | ||
| 172.3 | ||
| 315.4 | ||
| 1 665.6 | ||
| 3 627.2 | ||
| 7 061.4 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| SEK million | Share capital | Other capital contributions |
Reserves | Retained earnings incl. result for the year |
Total | Non controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance 2018-01-01 | 199.0 | 219.4 | 279.4 | 2 308.7 | 3 006.6 | 22.6 | 3 029.2 |
| Result for the year | 363.4 | 363.4 | -3.4 | 360.0 | |||
| Other comprehensive income | |||||||
| Translation differences | 157.3 | 157.3 | 157.3 | ||||
| Cash flow hedges for the year | 0.5 | 0.5 | 0.5 | ||||
| Reclassification of previous years' cash flow hedge | -2.2 | 2.2 | 0.0 | 0.0 | |||
| Income tax related to components of other comprehensive income |
-0.1 | -0.1 | -0.1 | ||||
| Transactions with shareholders | |||||||
| Dividends to shareholders of the Parent company | -112.8 | -112.8 | -112.8 | ||||
| Closing balance 2018-12-31 | 199.0 | 219.4 | 434.9 | 2 561.6 | 3 415.0 | 19.2 | 3 434.2 |
| SEK million | Share capital | Other capital contributions |
Reserves | Retained earnings incl. result for the year |
Total | Non controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance 2019-01-01 | 199.0 | 219.4 | 434.9 | 2 561.6 | 3 415.0 | 19.2 | 3 434.2 |
| Result for the year | 375.5 | 375.5 | -5.5 | 370.1 | |||
| Other comprehensive income | |||||||
| Translation differences | 98.2 | 98.2 | 1.4 | 99.6 | |||
| Cash flow hedges for the year | -2.2 | -2.2 | -2.2 | ||||
| Reclassification of previous years' cash flow hedge | -0.5 | 0.5 | 0.0 | 0.0 | |||
| Income tax related to components of other comprehensive income |
0.5 | 0.5 | 0.5 | ||||
| Transactions with shareholders | |||||||
| Dividends to shareholders of the Parent company | -132.7 | -132.7 | -132.7 | ||||
| Non-controlling interest through new issue of shares | 1.2 | 1.2 | |||||
| Closing balance 2019-12-31 | 199.0 | 219.4 | 531.0 | 2 804.9 | 3 754.4 | 16.3 | 3 770.7 |
| Jan - Dec | Jan - Dec | ||||||
| Accumulated translation differences in equity | 2019 | 2018 |
| Accumulated translation differences at end of year 541.2 |
441.6 |
|---|---|
| Translation differences in foreign Group companies for the year 99.6 |
157.3 |
| Accumulated translation differences at the beginning of the year 441.6 |
284.3 |
FINANCIAL KEY FIGURES
| 3 months Oct - Dec 2019 |
3 months Oct - Dec 2018 |
12 months Jan - Dec 2019 |
12 months Jan - Dec 2018 |
|
|---|---|---|---|---|
| Net sales growth, % | 4.2 | 19.2 | 9.7 | 12.4 |
| Organic growth, % | 0.9 | 13.8 | 5.4 | 9.1 |
| Number of employees | 2 579 | 2 566 | 2 579 | 2 566 |
| Gross profit margin, % | 46.7 | 46.4 | 46.4 | 46.6 |
| Operating margin before depreciations, % | 15.5 | 11.9 | 11.1 | 8.9 |
| Operating margin, % | 11.9 | 10.8 | 7.7 | 7.7 |
| Profit margin, % | 10.8 | 10.1 | 6.8 | 7.0 |
| Net margin, % | 8.2 | 8.2 | 5.4 | 5.7 |
| Return on shareholders' equity, % | 10.3 | 11.2 | 10.3 | 11.2 |
| Return on capital employed, % | 8.6 | 9.4 | 8.6 | 9.4 |
| Equity ratio, % | 44.9 | 48.6 | 44.9 | 48.6 |
| Net debt, SEK million | 2 964.8 | 1 831.0 | 2 964.8 | 1 831.0 |
| Net debt to equity ratio, % | 78.6 | 53.3 | 78.6 | 53.3 |
| Net debt in relation to working capital, % | 77.1 | 57.0 | 77.1 | 57.0 |
| Interest coverage ratio, times | 10.1 | 14.8 | 7.1 | 10.5 |
| Capital turnover, times | 0.9 | 1.0 | 0.9 | 1.0 |
| Inventory turnover, times | 1.1 | 1.1 | 1.1 | 1.1 |
| Cash flow before investments, SEK million | 286.7 | 174.4 | 99.5 | 222.6 |
| Net investments, SEK million | -42.2 | -39.7 | -148.7 | -163.2 |
| Cash flow after investments, SEK million | 244.6 | 134.7 | -49.3 | 59.4 |
| Shareholders' equity per share, before and after dilution, SEK | 56.59 | 51.47 | ||
| Share price as of the balance sheet date, SEK | 59.80 | 47.40 | ||
| Dividend/share, SEK | 2.00 | 1.70 | ||
| P/E-ratio | 10.56 | 8.65 | ||
| P/S-ratio | 0.57 | 0.50 | ||
| Share price/Shareholders' equity | 1.06 | 0.92 |
For definitions of alternative performance measures, please go to p. 32. For the effect of IFRS 16 on each financial key figure, please see note 8 on p.29
INCOME STATEMENT
| SEK million | 3 months Oct - Dec 2019 |
3 months Oct - Dec 2018 |
12 months Jan - Dec 2019 |
12 months Jan - Dec 2018 |
|---|---|---|---|---|
| Net sales | 25.5 | 31.0 | 103.7 | 105.3 |
| Other operating income | 13.4 | 11.0 | 36.8 | 40.4 |
| Total income | 38.9 | 42.0 | 140.4 | 145.6 |
| External costs | -17.1 | -24.6 | -68.0 | -77.1 |
| Personnel costs | -11.4 | -9.9 | -38.7 | -35.7 |
| Amortizations, depreciations and write-downs of tangible and intangible fixed assets |
-1.5 | -1.6 | -5.8 | -6.4 |
| Other operating costs | -9.9 | -6.9 | -27.1 | -32.6 |
| Operating result | -1.0 | -1.0 | 0.9 | -6.2 |
| Net income from shares in Group companies | 32.7 | 76.4 | 172.0 | 131.4 |
| Changes in write-downs of financial assets | 11.3 | 9.9 | 24.5 | 9.9 |
| Financial income | 13.9 | 12.3 | 55.2 | 49.4 |
| Financial expenses | -11.3 | -8.1 | -38.7 | -33.5 |
| Net financial items | 46.6 | 90.5 | 213.0 | 157.3 |
| Result before appropriations and tax | 45.6 | 89.5 | 213.9 | 151.1 |
| Appropriations | 55.7 | 56.9 | 55.7 | 56.9 |
| Tax expense | -9.0 | -13.2 | -12.4 | -14.6 |
| Result for the period | 92.3 | 133.2 | 257.2 | 193.3 |
Total comprehensive income for the period corresponds with result for the period.
CASH FLOW STATEMENT
| SEK million | 3 months Oct - Dec 2019 |
3 months Oct - Dec 2018 |
12 months Jan - Dec 2019 |
12 months Jan - Dec 2018 |
|---|---|---|---|---|
| Operating activities | ||||
| Operating result | -1.0 | -1.0 | 0.9 | -6.2 |
| Adjustment for items not included in cash flow | 1.9 | 1.8 | 5.3 | 6.4 |
| Received dividends | 0.0 | 0.0 | 27.1 | 0.0 |
| Received interest | 13.9 | 12.3 | 55.2 | 49.4 |
| Paid interest | -11.3 | -8.1 | -38.7 | -33.5 |
| Paid income tax | -4.0 | -3.6 | -13.4 | -16.0 |
| Cash flow from operating activities before changes in working capital |
-0.5 | 1.5 | 36.4 | 0.2 |
| Changes in working capital | ||||
| Increase/decrease in current receivables | 161.3 | 76.6 | -105.2 | -197.7 |
| Increase/decrease in current liabilities | -68.1 | -57.8 | -124.8 | 271.8 |
| Cash flow from changes in working capital | 93.2 | 18.7 | -229.9 | 74.1 |
| Cash flow from operating activities | 92.7 | 20.2 | -193.5 | 74.3 |
| Investing activities | ||||
| Shareholder contributions to Group companies | 0.0 | -2.3 | 0.0 | -39.5 |
| Repayment of shareholder contributions from Group companies | 0.0 | 0.0 | 0.0 | 9.4 |
| Investments in associated companies | 0.0 | -0.5 | -0.8 | -2.0 |
| Investments in tangible fixed assets | 0.0 | -0.1 | -0.7 | -0.5 |
| Investments in intangible fixed assets | -1.0 | -0.1 | -2.0 | -1.8 |
| Acquisition of shares | 0.0 | 0.0 | -18.6 | 0.0 |
| Changes in long-term loans to Group companies | 1.0 | -50.1 | 13.1 | -50.1 |
| Raised long-term receivables | 0.0 | -2.0 | -0.9 | -2.0 |
| Cash-flow from investing activities | 0.0 | -55.1 | -9.9 | -86.6 |
| Cash-flow after investing activities | 92.6 | -34.9 | -203.4 | -12.3 |
| Financial activities | ||||
| Loan raised | -75.5 | 39.0 | 352.3 | 128.3 |
| Dividend paid to shareholders of the Parent company | 0.0 | 0.0 | -132.7 | -112.8 |
| Cash-flow from financial activities | -75.5 | 39.0 | 219.6 | 15.5 |
| Cash flow for the period | 17.2 | 4.1 | 16.2 | 3.2 |
| Liquid assets at the beginning of the period | 3.4 | 0.4 | 4.5 | 1.3 |
| Liquid assets at period-end | 20.6 | 4.5 | 20.6 | 4.5 |
| Liquid assets | ||||
| Cash at bank and in hand | 20.6 | 4.5 | 20.6 | 4.5 |
BALANCE SHEET
| Note SEK million |
31 Dec 2019 |
31 Dec 2018 |
|---|---|---|
| ASSETS Intangible fixed assets |
8.7 | 11.0 |
| Tangible fixed assets | 2.6 | 3.3 |
| Shares in Group companies | 2 275.7 | 2 324.6 |
| Shares in associated companies | 42.8 | 43.0 |
| Receivables on Group companies | 369.7 | 370.4 |
| Other long-term receivables | 6.3 | 4.5 |
| Total non-current assets | 2 705.7 | 2 756.8 |
| Accounts receivable | 0.3 | 0.0 |
| Receivables on Group companies | 1 959.5 | 1 563.7 |
| Current tax receivables | 0.0 | 4.0 |
| 35.0 | 29.7 | |
| Other receivables | ||
| Prepaid expenses and accrued income | 9.6 | 9.5 |
| Liquid assets Total current assets |
20.6 2 025.1 |
4.5 1 611.3 |
| TOTAL ASSETS | 4 730.8 | 4 368.0 |
| EQUITY | ||
| Share capital | 199.0 | 199.0 |
| Restricted reserves | 249.4 | 249.4 |
| Total restricted equity | 448.4 | 448.4 |
| Retained earnings | 1 295.1 | 1 234.5 |
| Share premium reserve | 48.0 | 48.0 |
| Result for the period | 257.2 | 193.3 |
| Total unrestricted equity | 1 600.4 | 1 475.8 |
| Total equity | 2 048.8 | 1 924.3 |
| Untaxed reserves | 64.9 | 47.9 |
| LIABILITIES | ||
| Long-term interest-bearing liabilities 7 |
1 748.6 | 1 429.3 |
| Total non-current liabilities | 1 748.6 | 1 429.3 |
| Short-term interest-bearing liabilities 7 |
346.2 | 300.5 |
| Accounts payable | 242.3 | 366.5 |
| Liabilities to Group companies | 268.3 | 268.5 |
| Current tax liabilities | 3.4 | 8.3 |
| Other liabilities | 1.1 | 16.2 |
| Accrued expenses and prepaid income | 7.3 | 6.5 |
| Total current liabilities | 868.5 | 966.6 |
| Total liabilities | 2 617.1 | 2 395.8 |
| TOTAL EQUITY AND LIABILITIES | 4 730.8 | 4 368.0 |
STATEMENT OF CHANGES IN EQUITY
| SEK million | Share capital | Restricted reserves |
Retained earnings |
Share premium reserve |
Result for the year |
Total equity |
|---|---|---|---|---|---|---|
| Opening balance 2018-01-01 | 199.0 | 249.4 | 997.3 | 48.0 | 350.0 | 1 843.8 |
| Transfer according to decision at AGM | 350.0 | -350.0 | 0.0 | |||
| Result for the year | 193.3 | 193.3 | ||||
| Total changes excluding transactions with shareholders |
0.0 | 0.0 | 0.0 | 0.0 | 193.3 | 193.3 |
| Dividends | -112.8 | -112.8 | ||||
| Closing balance 2018-12-31 | 199.0 | 249.4 | 1 234.5 | 48.0 | 193.3 | 1 924.3 |
| SEK million | Share capital | Restricted reserves |
Retained earnings |
Share premium reserve |
Result for the year |
Total equity |
|---|---|---|---|---|---|---|
| Opening balance 2019-01-01 | 199.0 | 249.4 | 1 234.5 | 48.0 | 193.3 | 1 924.3 |
| Transfer according to decision at AGM | 193.3 | -193.3 | 0.0 | |||
| Result for the year | 257.2 | 257.2 | ||||
| Total changes excluding transactions with shareholders |
0.0 | 0.0 | 0.0 | 0.0 | 257.2 | 257.2 |
| Dividends | -132.7 | -132.7 | ||||
| Closing balance 2019-12-31 | 199.0 | 249.4 | 1 295.1 | 48.0 | 257.2 | 2 048.8 |
NOTES NOTE 1 - ACCOUNTING POLICIES
This report is prepared in accordance with IAS 34 Interim Financial Reporting and the Annual Accounts Act. The interim report for the Parent Company has been prepared according the Annual Accounts Act as well as RFR 2 Reporting for Legal Entities. Applied accounting policies are otherwise consistent with the 2018 Annual Report, with the exception for reporting of leases.
NEW ACCOUNTING POLICIES FOR 2019
As of January 1, 2019, New Wave Group applies IFRS 16 Leases. The Group has applied the simplified transition method and has not recalculated the comparative figures. The simplification rule, that the right of use asset shall correspond to the lease liability, has been applied at the transition and no transition effect is therefore recorded in the equity of the Group. Complete accounting policies for leasing as well as information about transition and transition effects are presented in the 2018 Annual Report, Note 1 Accounting Policies under New and amended accounting policies, p. 70-71.
The Parent company has chosen to apply the exemption rules in RFR 2, which imply that the lease fees are recognized as a cost on a linear basis over the lease period and that no right of use assets or lease liabilities are reported in the balance sheet.
NOTE 2 - RISKS AND RISK CONTROL
New Wave Group's international operations mean that it is continuously exposed to various financial risks. The financial risks are interest rate risks, currency and liquidity and credit risks. In order to minimize the effect these risks may have on earnings, the Group has a financial policy. For a more detailed description of the Group's risk management please refer to the Annual Report 2018, Note 17, p. 92-98. The Annual Report is available at the Group's headquarters in Gothenburg, Sweden, as well as on www.nwg.se.
The Group's policy is to have short fixed-rate interest periods, which means that fluctuating short-term interest rates have a rapid impact on the Group's net interest income.
The Group's reported risks are deemed to be essentially unchanged.
NOTE 3 - REPORTING OF OPERATING SEGMENTS
NET SALES AND EBITDA PER OPERATING SEGMENT
| SEK million | 3 months | 3 months | 12 months | 12 months |
|---|---|---|---|---|
| Corporate | Oct - Dec 2019 |
Oct - Dec 2018 |
Jan - Dec 2019 |
Jan - Dec 2018 |
| Net sales | 1 048.0 | 977.5 | 3 356.0 | 3 069.0 |
| EBITDA | 185.1 | 145.0 | 460.5 | 353.1 |
| Sports & Leisure | ||||
| Net sales | 771.7 | 750.1 | 2 887.4 | 2 573.7 |
| EBITDA | 115.2 | 84.4 | 309.1 | 218.2 |
| Gifts & Home Furnishings | ||||
| Net sales | 204.4 | 215.7 | 660.0 | 647.8 |
| EBITDA | 13.6 | 1.8 | -1.5 | -10.6 |
| Total net sales | 2 024.1 | 1 943.4 | 6 903.5 | 6 290.6 |
| Total EBITDA | 313.9 | 231.0 | 768.0 | 560.7 |
| Total EBITDA | 313.9 | 231.0 | 768.0 | 560.7 |
| Amortizations, depreciations and write-downs | -73.6 | -21.6 | -233.1 | -77.9 |
| Net financial items | -21.3 | -12.8 | -68.2 | -40.9 |
| Result before tax | 219.1 | 196.6 | 466.7 | 441.8 |
ASSETS AND LIABILITIES PER OPERATING SEGMENTS
| SEK million | Total assets |
Fixed assets* |
Deferred tax assets |
Net investments |
Amortizations, depreciations and write-downs |
Total liabilities |
|---|---|---|---|---|---|---|
| 31 Dec 2019 | ||||||
| Corporate | 4 407.8 | 1 231.1 | 40.7 | -91.3 | -143.2 | 2 949.3 |
| Sports & Leisure | 3 289.4 | 1 392.5 | 49.5 | -33.9 | -68.7 | 1 194.2 |
| Gifts & Home Furnishings | 697.2 | 313.9 | 22.5 | -23.5 | -21.1 | 480.1 |
| Total | 8 394.3 | 2 937.5 | 112.8 | -148.7 | -233.1 | 4 623.6 |
| 31 Dec 2018 | ||||||
| Corporate | 3 564.8 | 682.9 | 38.4 | -101.0 | -40.4 | 2 274.8 |
| Sports & Leisure | 2 757.3 | 1 087.5 | 50.1 | -33.9 | -32.6 | 860.2 |
| Gifts & Home Furnishings | 739.3 | 286.4 | 22.5 | -28.2 | -4.9 | 492.2 |
| Total | 7 061.4 | 2 056.8 | 111.1 | -163.2 | -77.9 | 3 627.2 |
* Financial fixed assets are not included
NOTE 4 - NET SALES PER SALES CHANNEL
| SEK million | ||||
|---|---|---|---|---|
| Sales channel promo | 3 months Oct - Dec 2019 |
3 months Oct - Dec 2018 |
12 months Jan - Dec 2019 |
12 months Jan - Dec 2018 |
| Corporate | 1 019.8 | 952.0 | 3 263.9 | 2 981.4 |
| Sports & Leisure | 212.2 | 197.5 | 762.5 | 690.7 |
| Gifts & Home Furnishings | 32.1 | 32.8 | 86.5 | 85.6 |
| Total | 1 264.1 | 1 182.3 | 4 113.0 | 3 757.7 |
| Sales channel retail | ||||
| Corporate | 28.3 | 25.7 | 92.1 | 87.7 |
| Sports & Leisure | 559.4 | 552.5 | 2 124.9 | 1 883.0 |
| Gifts & Home Furnishings | 172.3 | 182.9 | 573.5 | 562.1 |
| Total | 760.0 | 761.0 | 2 790.6 | 2 532.8 |
| Total net sales | 2 024.1 | 1 943.4 | 6 903.5 | 6 290.6 |
NOTE 5 - REPORTING OF GEOGRAPHIC AREAS
NET SALES PER GEOGRAPHIC AREA
| SEK million | 3 months Oct - Dec 2019 |
Share of net sales |
3 months Oct - Dec 2018 |
Share of net sales |
Change SEK million |
Change % |
|---|---|---|---|---|---|---|
| USA | 488.1 | 24% | 482.0 | 25% | 6.1 | 1% |
| Sweden | 504.1 | 25% | 508.5 | 26% | -4.4 | -1% |
| Central Europe | 326.9 | 16% | 297.3 | 15% | 29.6 | 10% |
| Nordic countries excl. Sweden | 236.5 | 12% | 226.7 | 12% | 9.8 | 4% |
| Southern Europe | 242.1 | 12% | 223.3 | 11% | 18.8 | 8% |
| Other countries | 226.4 | 11% | 205.6 | 11% | 20.8 | 10% |
| Total | 2 024.1 | 100% | 1 943.4 | 100% | 80.7 | 4% |
| SEK million | 12 months Jan - Dec 2019 |
Share of net sales |
12 months Jan - Dec 2018 |
Share of net sales |
Change SEK million |
Change % |
|---|---|---|---|---|---|---|
| USA | 1 774.5 | 26% | 1 579.7 | 25% | 194.8 | 12% |
| Sweden | 1 610.0 | 23% | 1 529.9 | 24% | 80.1 | 5% |
| Central Europe | 1 078.1 | 16% | 986.4 | 16% | 91.7 | 9% |
| Nordic countries excl. Sweden | 861.0 | 12% | 807.1 | 13% | 53.9 | 7% |
| Southern Europe | 812.2 | 12% | 716.5 | 11% | 95.7 | 13% |
| Other countries | 767.7 | 11% | 670.9 | 11% | 96.8 | 14% |
| Total | 6 903.5 | 100% | 6 290.6 | 100% | 612.9 | 10% |
FIXED ASSETS AND DEFERRED TAX ASSETS PER GEOGRAPHIC AREA
| SEK million | 31 Dec 2019 Fixed assets * |
Deferred tax assets |
31 Dec 2018 Fixed assets * |
Deferred tax assets |
|---|---|---|---|---|
| USA | 1 138.9 | 50.8 | 988.2 | 53.8 |
| Sweden | 716.3 | 19.7 | 593.0 | 16.8 |
| Central Europe | 382.1 | 13.6 | 230.7 | 12.9 |
| Nordic countries excl. Sweden | 301.6 | 4.5 | 63.1 | 4.8 |
| Southern Europe | 275.7 | 18.1 | 140.0 | 17.1 |
| Other countries | 123.0 | 6.1 | 41.9 | 5.7 |
| Total | 2 937.5 | 112.8 | 2 056.8 | 111.1 |
* Fixed assets classified as financial assets are not included.
NOTE 6 - FINANCIAL INSTRUMENTS
| SEK million | 31 Dec 2019 |
31 Dec 2018 |
|---|---|---|
| Assets at fair value | 0.0 | 0.0 |
| Assets at amortized cost | 1 625.8 | 1 485.2 |
| Total financial assets | 1 625.8 | 1 485.2 |
| Liabilities at fair value | 2.2 | 1.2 |
| Liabilities at amortized cost | 4 355.9 | 3 373.9 |
| Total financial liabilites | 4 358.1 | 3 375.1 |
Financial instruments are measured at fair value or amortized cost according to classification in the balance sheet. Financial instruments include, in addition to financial net debt, also accounts receivable and accounts payable. Financial instruments measured at fair value in the balance sheet belongs to level two or three in IFRS 13 hierarchy.
NOTE 7 - PLEDGED ASSETS AND CONTINGENT LIABILITIES
| GROUP | ||
|---|---|---|
| Pledged assets | 31 Dec | 31 Dec |
| SEK million | 2019 | 2018 |
| Floating charges | 690.5 | 537.5 |
| Property mortgages | 178.0 | 171.8 |
| Net assets in Group companies | 3 143.5 | 3 158.1 |
| Shares in associated companies | 8.3 | 0.0 |
| Stock and accounts receivable | 613.5 | 521.0 |
| Total | 4 633.9 | 4 388.5 |
| Contingent liabilities | 31 Dec | 31 Dec |
| SEK million | 2019 | 2018 |
| Duty guarantees | 11.4 | 10.0 |
| Rent guarantees | 177.7 | 189.1 |
| PRI | 0.0 | 2.0 |
| Other guarantees | 1.0 | 0.4 |
| Guarantees for associated companies | 6.0 | 6.0 |
| Total | 196.1 | 207.5 |
| PARENT COMPANY | ||
| Pledged assets | ||
| SEK million | 31 Dec 2019 |
31 Dec 2018 |
| Floating charges | 30.0 | 30.0 |
| Shares in Group companies | 1 751.4 | 1 771.4 |
| Shares in associated companies | 8.3 | 8.3 |
| Total | 1 789.7 | 1 809.7 |
| Contingent liabilities | 31 Dec | 31 Dec |
| SEK million | 2019 | 2018 |
| Guarantees for Group companies | 820.9 | 940.1 |
| Guarantees for associated companies | 6.0 | 0.0 |
| Total | 826.9 | 940.1 |
NOTE 8 - IFRS 16 LEASING
Presented below is the impact IFRS 16 has had on the financial reports for the period.
| Consolidated balance sheet | 31 Dec 2019 |
of which effect from IFRS 16 |
31 Dec 2019 excl. effect from IFRS 16 |
|---|---|---|---|
| Tangible fixed assets* | 1 436.5 | 806.0 | 630.5 |
| Deferred tax assets | 112.8 | 2.1 | 110.7 |
| Prepaid expenses and accrued income | 61.2 | -12.7 | 73.9 |
| Total equity | 3 770.7 | -8.4 | 3 779.1 |
| Long-term interest-bearing liabilities* | 2 818.3 | 689.9 | 2 128.4 |
| Short-term interest-bearing liabilities* | 497.8 | 113.8 | 383.9 |
| Consolidated income statement | Oct - Dec 2019 |
of which effect from IFRS 16 |
Oct - Dec 2019 excl. effect from IFRS 16 |
Jan - Dec 2019 |
of which effect from IFRS 16 |
Jan - Dec 2019 excl. effect from IFRS 16 |
|---|---|---|---|---|---|---|
| Other operating income | 32.3 | 0.0 | 32.4 | 77.9 | 0.3 | 77.7 |
| External costs | -343.8 | 40.7 | -384.4 | -1 312.7 | 135.6 | -1 448.4 |
| Amortizations, depreciations and write-downs of tangible and intangible fixed assets |
-73.6 | -38.7 | -34.9 | -233.1 | -126.4 | -106.7 |
| Financial expenses | -24.1 | -6.1 | -18.0 | -77.0 | -20.0 | -57.0 |
| Tax expense | -53.1 | 0.8 | -53.9 | -96.7 | 2.1 | -98.8 |
| Total | -462.2 | -3.4 | -458.9 | -1 641.5 | -8.4 | -1 633.1 |
| EBITDA per operating segment | Oct - Dec 2019 |
of which effect from IFRS 16 |
Oct - Dec 2019 excl. effect from IFRS 16 |
Jan - Dec 2019 |
of which effect from IFRS 16 |
Jan - Dec 2019 excl. effect from IFRS 16 |
|---|---|---|---|---|---|---|
| Corporate | 185.1 | 28.2 | 156.9 | 460.5 | 88.0 | 372.5 |
| Sports & Leisure | 115.2 | 8.8 | 106.4 | 309.1 | 37.9 | 271.2 |
| Gifts & Home Furnishings | 13.6 | 4.0 | 9.6 | -1.5 | 10.1 | -11.6 |
| Total | 313.9 | 41.0 | 273.0 | 768.0 | 135.9 | 632.1 |
| Financial key figures | Oct - Dec 2019 |
of which effect from IFRS 16 |
Oct - Dec 2019 excl. effect from IFRS 16 |
Jan - Dec 2019 |
of which effect from IFRS 16 |
Jan - Dec 2019 excl. effect from IFRS 16 |
|---|---|---|---|---|---|---|
| Operating margin before depreciations, % | 15.5 | 2.0 | 13.5 | 11.1 | 1.9 | 9.2 |
| Net debt, SEK million | 2 964.8 | 803.8 | 2 161.1 | 2 964.8 | 803.8 | 2 161.1 |
| Net debt to equity ratio, % | 78.6 | 21.4 | 57.2 | 78.6 | 21.4 | 57.2 |
| Net debt in relation to working capital, % | 77.1 | 21.1 | 56.0 | 77.1 | 21.1 | 56.0 |
| Interest coverage ratio, times | 10.1 | -3.3 | 13.4 | 7.1 | -2.3 | 9.4 |
| Equity ratio, % | 44.9 | -4.8 | 49.7 | 44.9 | -4.8 | 49.7 |
*The opening balance for the right of use assets and lease liabilities respectively was SEK 641 million under IFRS 16 as at January 1, 2019
CONDENSED QUARTERLY CONSOLIDATED INCOME STATEMENTS
SEK million
| 2019 | 2018 | 2017 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Net sales | 2 024.1 | 1 685.5 | 1 689.0 | 1 504.9 | 1 943.4 | 1 551.2 | 1 523.2 | 1 272.8 | 1 630.3 | 1 331.1 | 1 371.7 | 1 264.2 |
| Goods for resale | -1 079.2 | -923.2 | -903.3 | -795.3 | -1 042.3 | -835.3 | -804.2 | -677.5 | -886.8 | -692.8 | -745.7 | -692.8 |
| Gross profit | 944.9 | 762.3 | 785.7 | 709.6 | 901.1 | 715.8 | 719.0 | 595.4 | 743.5 | 638.2 | 626.0 | 571.4 |
| Gross profit margin % | 46.7 | 45.2 | 46.5 | 47.1 | 46.4 | 46.1 | 47.2 | 46.8 | 45.6 | 47.9 | 45.6 | 45.2 |
| Other operating income | 32.3 | 12.9 | 15.5 | 17.2 | 28.3 | 19.3 | 11.3 | 15.9 | 22.9 | 10.4 | 7.0 | 10.9 |
| External costs | -343.8 | -300.3 | -330.2 | -338.4 | -390.6 | -323.5 | -305.1 | -317.2 | -304.9 | -265.4 | -270.1 | -288.6 |
| Personnel costs | -307.6 | -278.7 | -290.5 | -283.0 | -298.0 | -257.7 | -260.9 | -246.4 | -262.2 | -217.1 | -233.0 | -228.1 |
| Depreciations and write-downs | -73.6 | -55.7 | -52.8 | -51.0 | -21.6 | -20.2 | -18.5 | -17.6 | -18.2 | -16.4 | -15.7 | -15.0 |
| Other operating costs | -12.4 | -11.3 | -7.7 | -8.2 | -9.8 | -15.0 | -8.3 | -11.8 | -6.1 | -7.4 | -3.9 | -7.8 |
| Share of associated companies' result | 0.6 | -0.2 | -0.3 | -0.2 | 0.1 | -1.3 | -0.3 | 0.4 | -2.5 | 0.6 | 0.2 | 0.4 |
| Operating result | 240.3 | 129.1 | 119.6 | 46.0 | 209.4 | 117.5 | 137.3 | 18.6 | 172.5 | 143.0 | 110.5 | 43.2 |
| Financial income | 2.8 | 2.5 | 2.2 | 1.3 | 1.5 | 0.7 | 1.8 | 1.5 | 1.3 | 1.6 | 1.0 | 1.3 |
| Financial expenses | -24.1 | -19.5 | -18.1 | -15.3 | -14.2 | -12.3 | -8.2 | -11.7 | -14.3 | -14.8 | -14.1 | -13.8 |
| Result before tax | 219.1 | -17.0 | 103.6 | 32.0 | 196.6 | 105.9 | 130.9 | 8.4 | 159.4 | 129.8 | 97.4 | 30.7 |
| Tax expense | -53.1 | -17.6 | -19.9 | -6.0 | -37.7 | -17.5 | -24.2 | -2.4 | -12.6 | -24.5 | -20.3 | -5.8 |
| Result for the period | 165.9 | 94.4 | 83.7 | 26.0 | 158.9 | 88.4 | 106.8 | 6.0 | 146.8 | 105.3 | 77.0 | 24.9 |
| Total other comprehensive income | ||||||||||||
| for the period | -131.5 | 126.9 | 16.2 | 86.3 | 2.7 | -37.8 | 121.1 | 71.7 | 45.3 | -43.3 | -42.4 | -12.2 |
| Total comprehensive income for the period |
34.4 | 221.4 | 99.9 | 112.3 | 161.6 | 50.5 | 227.9 | 77.7 | 192.1 | 62.0 | 34.7 | 12.7 |
| Earnings per share before and after dilution (SEK)* |
||||||||||||
| 2.53 | 1.45 | 1.28 | 0.41 | 2.42 | 1.36 | 1.60 | 0.10 | 2.20 | 1.60 | 1.16 | 0.38 | |
| 2016 | 2015 | 2014 | ||||||||||
| Quarter | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Net sales | 1 548.6 | 1 300.4 | 1 257.3 | 1 130.8 | 1 405.3 | 1 272.0 | 1 191.3 | 1 096.1 | 1 259.5 | 1 122.3 | 983.3 | 908.5 |
| Goods for resale | -832.3 | -693.3 | -685.0 | -616.3 | -773.5 | -697.8 | -659.1 | -595.7 | -669.6 | -621.9 | -531.8 | -497.7 |
| Gross profit | 716.3 | 607.1 | 572.3 | 514.5 | 631.8 | 574.2 | 532.2 | 500.4 | 589.9 | 500.4 | 451.5 | 410.8 |
| Gross profit margin % | 46.3 | 46.7 | 45.5 | 45.5 | 45.0 | 45.1 | 44.7 | 45.7 | 46.8 | 44.6 | 45.9 | 45.2 |
| Other operating income | 14.9 | 14.5 | 12.2 | 9.4 | 8.0 | 22.1 | 7.8 | 9.3 | 10.1 | 5.1 | 5.4 | 7.1 |
| External costs | -300.1 | -268.5 | -249.6 | -279.8 | -284.0 | -273.0 | -258.9 | -270.1 | -260.5 | -216.6 | -216.9 | -229.5 |
| Personnel costs | -242.9 | -208.3 | -213.0 | -217.4 | -231.5 | -202.8 | -212.0 | -205.3 | -204.7 | -174.8 | -176.7 | -179.5 |
| Depreciations and write-downs | -15.2 | -14.1 | -13.4 | -13.2 | -14.2 | -13.7 | -14.3 | -14.9 | -14.2 | -14.4 | -13.2 | -12.4 |
| Other operating costs | -6.2 | -5.8 | -8.1 | -5.6 | -1.7 | -9.3 | -6.7 | -18.5 | -7.4 | -4.1 | -2.6 | -2.4 |
| Share of associated companies' result | 0.2 | 0.0 | -0.2 | 0.2 | 0.0 | -1.2 | 0.6 | 0.9 | -1.0 | 0.1 | 0.5 | 0.0 |
| Operating result | 167.0 | 124.9 | 100.2 | 8.1 | 108.4 | 96.3 | 48.7 | 1.8 | 112.2 | 95.7 | 48.0 | -5.9 |
| Financial income | 0.0 | 1.0 | 0.9 | 1.2 | 0.7 | 1.4 | 3.2 | 1.9 | 1.2 | 1.1 | 1.2 | 1.4 |
| Financial expenses | -15.9 | -16.4 | -15.7 | -15.0 | -28.6 | -19.0 | -16.9 | -17.0 | -14.5 | -12.1 | -10.6 | -9.7 |
| Result before tax | 151.1 | 109.5 | 85.4 | -5.7 | 80.5 | 78.7 | 35.0 | -13.3 | 98.9 | 84.7 | 38.6 | -14.2 |
| Tax expense | -23.3 | -23.0 | -18.4 | 1.1 | -17.2 | -13.6 | -7.2 | 2.4 | -7.0 | -17.8 | -9.2 | 2.9 |
| Result for the period | 127.8 | 86.5 | 67.0 | -4.6 | 63.3 | 65.1 | 27.8 | -10.9 | 91.9 | 66.9 | 29.4 | -11.3 |
| Total other comprehensive income for the period |
35.1 | 26.4 | 47.2 | -15.5 | -36.9 | 7.1 | -43.9 | 101.7 | 91.2 | 53.1 | 53.5 | 1.4 |
| Total comprehensive income for the period |
162.9 | 112.9 | 114.2 | -20.1 | 26.4 | 72.2 | -16.1 | 90.8 | 183.1 | 120.0 | 82.9 | -9.9 |
| Earnings per share before and after | 1.90 | 1.31 | 1.01 | -0.06 | ||||||||
| dilution (SEK)* | 0.94 | 0.98 | 0.41 | -0.17 | 1.38 | 1.01 | 0.44 | -0.17 |
* The average number of outstanding shares. before and after dilution, has been 66,343,543 in all periods in the table.
CONDENSED QUARTERLY CONSOLIDATED CASH FLOW STATEMENTS
SEK million
| 2019 | 2018 | 2017 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Cash flow from operating activities before | ||||||||||||
| changes in working capital | 262.1 | 149.9 | 143.8 | 49.3 | 184.1 | 116.1 | 128.3 | 1.2 | 154.9 | 153.3 | 105.0 | 37.8 |
| Increase/decrease of inventories | 180.9 | -256.4 | -108.0 | -58.3 | 44.6 | -310.4 | -110.8 | -117.4 | 129.5 | -200.4 | -63.7 | -73.9 |
| Increase/decrease of current receivables | -47.5 | -34.3 | -95.9 | 126.2 | -3.6 | -128.6 | -36.2 | 140.9 | -78.5 | -113.8 | -40.4 | 113.0 |
| Increase/decrease of current liabilities | -108.8 | 9.7 | 69.1 | -182.3 | -50.7 | 239.9 | 143.2 | -18.1 | -71.4 | 150.5 | 49.2 | -43.3 |
| Changes in working capital | 24.7 | -281.0 | -134.8 | -114.4 | -9.7 | -199.1 | -3.7 | 5.4 | -20.4 | -163.7 | -54.9 | -4.2 |
| Cash flow from operating activities | 286.7 | -131.1 | 9.0 | -65.1 | 174.4 | -83.0 | 124.6 | 6.6 | 134.5 | -10.4 | 50.1 | 33.6 |
| Investing activities | -42.2 | -32.6 | -35.6 | -38.3 | -39.7 | -42.1 | -41.6 | -39.8 | -37.7 | -36.9 | -16.0 | -19.9 |
| Cash flow after investing activities | 244.6 | -163.8 | -26.6 | -103.4 | 134.7 | -125.1 | 83.0 | -33.2 | 96.8 | -47.3 | 34.1 | 13.7 |
| Increase/decrease of | ||||||||||||
| interest-bearing liabilities | -122.6 | 210.1 | 75.3 | 49.2 | -15.9 | 104.9 | 58.0 | 5.1 | -54.6 | 30.2 | 47.1 | -39.4 |
| Transactions with owners | 0.0 | 1.2 | -132.7 | 0.0 | 0.0 | 0.0 | -112.8 | 0.0 | 0.0 | 0.0 | -89.6 | 0.0 |
| Cash flow from financial activities | -122.6 | 211.2 | -57.4 | 49.2 | -15.9 | 104.9 | -54.8 | 5.1 | -54.6 | 30.2 | -42.5 | -39.4 |
| Cash flow for the period | 121.9 | 47.4 | -84.0 | -54.2 | 118.8 | -20.2 | 28.2 | -28.1 | 42.2 | -17.1 | -8.4 | -25.7 |
| Liquid assets at the beginning of the period | 238.4 | 182.5 | 265.0 | 312.2 | 192.6 | 215.4 | 180.5 | 202.4 | 155.6 | 178.9 | 191.9 | 218.9 |
| Translation differences in liquid assets | -9.1 | 8.5 | 1.5 | 7.0 | 0.8 | -2.6 | 6.7 | 6.2 | 4.6 | -6.2 | -4.6 | -1.3 |
| Liquid assets at period-end | 351.3 | 238.4 | 182.5 | 265.0 | 312.2 | 192.6 | 215.4 | 180.5 | 202.4 | 155.6 | 178.9 | 191.9 |
| 2016 | 2015 | 2014 | ||||||||||
| Quarter | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Cash flow from operating activities | ||||||||||||
| before changes in working capital | 132.0 | 116.2 | 89.4 | -4.2 | 90.6 | 73.8 | 54.6 | -9.2 | 129.1 | 93.1 | 38.8 | -7.1 |
| Increase/decrease of stock | 151.2 | -109.6 | 62.4 | -49.7 | 175.6 | -132.1 | -88.5 | -200.6 | -126.1 | -309.6 | -86.8 | -50.6 |
| Increase/decrease of current receivables | 31.9 | -106.8 | -76.9 | 85.3 | 85.2 | -117.2 | -23.0 | 129.5 | -40.7 | -124.2 | -28.0 | 172.3 |
| Increase/decrease of current liabilities | -34.2 | 115.7 | 13.7 | 32.5 | 24.1 | 14.3 | 1.0 | 51.4 | -16.9 | 50.0 | 48.3 | -25.8 |
| Changes in working capital | 148.9 | -100.7 | -0.8 | 68.1 | 284.9 | -235.0 | -110.5 | -19.7 | -183.7 | -383.8 | -66.5 | 95.9 |
| Cash flow from operating activities | 280.9 | 15.5 | 88.6 | 63.9 | 375.5 | -161.2 | -55.9 | -28.9 | -54.6 | -290.7 | -27.7 | 88.8 |
| Investing activities | -26.3 | -25.8 | -21.2 | -16.3 | -24.1 | -15.0 | -40.7 | -26.7 | -29.4 | -12.4 | -17.5 | -11.3 |
| Cash flow after investing activities | 254.6 | -10.3 | 67.4 | 47.6 | 351.4 | -176.2 | -96.6 | -55.6 | -84.0 | -303.1 | -45.2 | 77.5 |
| Increase/decrease of | ||||||||||||
| interest-bearing liabilities | -211.4 | 22.9 | 16.1 | -74.6 | -349.1 | 173.9 | 179.1 | -13.9 | 121.3 | 289.8 | 129.6 | -109.8 |
| Transactions with owners | 0.0 | 0.0 | -66.3 | 0.0 | 0.0 | -1.0 | -66.3 | 0.0 | 0.0 | 0.0 | -66.3 | 0.0 |
| Cash flow from financial activities | -211.4 | 22.9 | -50.2 | -74.6 | -349.1 | 172.9 | 112.8 | -13.9 | 121.3 | 289.8 | 63.3 | -109.8 |
| Cash flow for the period | 43.2 | 12.6 | 17.2 | -27.0 | 2.3 | -3.3 | 16.2 | -69.5 | 37.3 | -13.3 | 18.1 | -32.3 |
| Liquid assets at the beginning of the period | 172.9 | 157.1 | 136.3 | 165.5 | 167.7 | 169.5 | 159.0 | 216.0 | 169.6 | 176.0 | 153.1 | 185.1 |
| Translation differences in liquid assets | 2.8 | 3.2 | 3.6 | -2.2 | -4.5 | 1.5 | -5.7 | 12.5 | 9.1 | 6.9 | 4.8 | 0.3 |
| Liquid assets at period-end | 218.9 | 172.9 | 157.1 | 136.3 | 165.5 | 167.7 | 169.5 | 159.0 | 216.0 | 169.6 | 176.0 | 153.1 |
DEFINITIONS OF ALTERNATIVE PERFORMANCE MEASURES
Guidelines concerning non-IFRS performance measures for companies with securities listed on a regulated market in the EU have been issued by ESMA (The European Securities and Markets Authority). These guidelines are to be applied to alternative performance measures (APM) applied as of July 3, 2016. The Interim Report refers to a number of non-IFRS performance measures used to assist investors and company management to analyze the company's operations. Because not all companies calculate the financial measures in the same way, these are not always comparable to measures used by other companies. These financial measures should not be seen as a substitute for measures defined under IFRS. A description of the various non-IFRS performance measures used as a complement to the financial information reported according to IFRS and how they are used, is presented below. A reconciliation of alternative performance measures is available on www.nwg.se/investor-relations.
PERFORMANCE MEASURES DEFINITION/CALCULATION PURPOSE GROSS PROFIT MARGIN Net sales less goods for resale in percent of net sales. The measure is used for showing the Group's margins before the effect of costs such as selling and administrative costs. OPERATING MARGIN Operating result as a percentage of the period's net sales. The measure is used to show operating profability and how the Group meets its targets. PROFIT MARGIN Result before tax as a percentage of the period's net sales. The measure enables the profitability to be compared across locations where corporate taxes differ. NET MARGIN Result after tax as a percentage of the period's net sales. The measure is used to show net earnings in relation to income. ORGANIC GROWTH Organic growth refers to sales growth from existing operations cleared from currency effects. The currency effect is calculated by recalculating this year's sales in local currencies to last year's rates and compared to previous year's sales. The measure is used to show growth in existing business since currency effects are beyond the Group's control and to measure how the Group meets its targets. EBITDA Operating result before depreciation, amortization and write-downs of tangible and intangible fixed assets. The measure is used to show result from operating activities, regardless of depreciation, amortization and write-downs. NET FINANCIAL ITEMS The total of interest income, interest expenses, currency differences on borrowings and cash equivalents in foreign currencies, other financial income and other financial expenses. The measure reflects the Group's total costs of the external financing. RETURN MEASURES DEFINITION/CALCULATION PURPOSE RETURN ON CAPITAL EMPLOYED Rolling 12 month's result before tax plus financial expenses as a percentage of average capital employed. The average capital employed is calculated by taking the capital employed per period end and the capital employed at year-end for the previous year divided by two. The measure is used to analyze profitability by putting result in relation to the capital needed to operate the business. RETURN ON EQUITY Rolling 12 month's result for the period according to the income statement as a percentage of average equity. The average equity is calculated by taking the equity per period end and the equity at year-end for the previous year divided by two. For the Parent company it is calculated as result after tax as a percentage of average adjusted equity. In adjusted equity, the equity part of untaxed reserves is included. The measure is used to analyze profitability over time, given the resources available to the Parent company's owners.
DATA PER SHARE DEFINITION/CALCULATION PURPOSE
EQUITY PER SHARE Equity at the end of the period excluding non-controlling interests divided by number of shares at the end of the period.
Equity per share measures the net asset value per share and determines if a company is increasing shareholder value over time.
| CAPITAL MEASURES | DEFINITION/CALCULATION | PURPOSE | |||||
|---|---|---|---|---|---|---|---|
| EQUITY | The equity reported in the consolidated balance sheet consists of taxed equity increased by the equity portion of the untaxed reserves and non-controlling interests. Deferred tax liability in untaxed reserves has been calculated at the applicable tax rates for the companies in each country, as decided and communicated at the balance sheet date. |
The measure is the difference between the Group's assets and liabilities, which corresponds to the Group's equity contributed by owners and the Group's accumulated profits. |
|||||
| CAPITAL EMPLOYED | Total assets less provisions and non-interest bearing liabilities, which consist of accounts payable, current tax liabilities, other liabilities and accrued expenses and prepaid income. |
The measure indicates how much capital is needed to run the business, regardless of type of financing (borrowed or equity). |
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| WORKING CAPITAL | Total current assets, excluding liquid assets and current tax receivables, less short-term non-interest bearing liabilities excluding current tax liabilities. |
The measure is used to show how much capital is needed to finance operating activities. |
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| NET DEBT | Interest-bearing liabilities (current and non-current) less cash and cash equivalents. |
The measure shows financing from borrowings. | |||||
| CAPITAL TURNOVER | Rolling 12 month's net sales divided by average total assets. | The measure shows how efficiently the Group uses its total capital. |
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| INVENTORY TURNOVER | Rolling 12 month's goods for resale in the income statement divided by average inventory. |
The measure is used to show the inventory's turnover per year, since the inventory is central for the Group to keep a good service level, i.e. to be able to deliver goods fast. |
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| NET DEBT TO EQUITY RATIO |
Net debt as a percentage of equity. | The measure helps show financial risk and is useful for management to monitor the level of the indebtedness. |
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| NET DEBT IN RELATION TO WORKING CAPITAL |
Net debt divided by working capital. | The measure is used to show how much of the work ing capital is financed through net debt. |
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| INTEREST COVERAGE RATIO |
Result before tax plus financial costs divided by financial costs. | The measure is used to calculate the Group's ability to pay interest costs. |
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| EQUITY RATIO | Equity as a percentage of total assets. | The measure shows how much of the Group's assets are financed by the shareholders through equity. An equity ratio is a measure of financial strength and how the Group meets its targets. |
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| OTHER MEASURES | DEFINITION/CALCULATION | PURPOSE | |||||
| EFFECTIVE TAX RATE | Tax on profit for the period as a percentage of result before tax. | This measure enables comparison of income tax across locations where corporate taxes differ. |
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| EFFECTIVE INTEREST RATE | Net financial items in relation to average net debt. | The measure enables comparison of cost for the net debt. |
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| CASH FLOW FROM OPERATIONS |
Cash flow from operating activities including changes in work ing capital and before cash flows from investing and financing |
The measure is used to show the cash flow generated by the company's operations. |
The measure is used to regularly estimate how much capital is used for investments in operations and for expansion.
analysis which includes investments and divestments of buildings, acquisitions, investments in tangible and intangible
activities.
NET INVESTMENTS Cash flow from investing activities according to the cash flow
assets and raised long-term debt.
New Wave Group is a growth group that designs, acquires and develops brands and products in the corporate, sports, gifts and home furnishings sectors.
The Group shall achieve synergies by coordinating design, purchasing, marketing, warehousing and distribution of the assortment. The Group shall offer its products to the promo market and the retail market in order to achieve good risk diversification.
NEW WAVE GROUP AB (publ) Corp. id number 556350-0916 Kungsportsavenyen 10, SE-411 36 Gothenburg Phone +46 (0) 31 712 89 00 | [email protected] www.nwg.se