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New Wave Group AB Interim / Quarterly Report 2009

Aug 25, 2009

3081_ir_2009-08-25_de058502-8137-4f49-ab30-426084dc1fb1.pdf

Interim / Quarterly Report

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Interim Report for New Wave Group AB (publ) Q2 JANUARY – JUNE 2009

Interim report in brief

The Period 1 April –30 June 2009

  • • Sales amounted to MSEK 1,023, which was 18 % lower than the previous year (MSEK 1,245).
  • • The result after tax amounted to MSEK 60.5 (85.8).
  • • The result per share amounted to SEK 0.91 (1.22).
  • • The cash flow from operating activities increased by MSEK 401 to MSEK 373 (-28).
  • • The equity ratio amounted to 35.8 (27.1) %.
  • • The net debt to equity ratio decreased considerably to 129.7 (200.1) %.

The period 1 January – 30 June 2009

  • • Sales amounted to MSEK 2,002, which was 11 % lower than the previous year (MSEK 2,260).
  • • The result after tax amounted to MSEK 7.2 (70.8).
  • • The result per share amounted to SEK 0.10 (1.07).
  • • Restructuring costs have affected the result after tax by MSEK 56.4.
  • • The cash flow from operating activities increased by MSEK 452 to MSEK 235 (-217).

Views on 2009

• Market development was weaker than expected in the Promo and Sports & Leisure business areas during the second quarter. New Wave Group's assessment at present is that sales and result before tax will not amount to the same levels as 2008. The Group expects the third quarter to be weaker than the previous year and the fourth quarter to be somewhat stronger than the previous year.

CEO Comments

It is incredibly exciting to be back as CEO of New Wave Group. It is definitely a challenge considering the global economic situation – but I love challenges!

Our focus during the second quarter has been, and will continue to be for the rest of the year, to decrease our stock and build a steady cash flow and consequently decrease the company's debt. Of course this must also come about with as good profitability as possible in the meantime. Especially Sports & Leisure and Promo experienced a weaker development during the quarter than we had previously expected and the result was therefore poorer – in spite of this, we present a substantial stock decrease and our strongest cash flow in the company's history. It is very satisfying that our cash flow during the quarter was MSEK 373.

We have also reached a new agreement regarding the terms for our financing. This gives us confidence for the coming years even if the economy will be weaker, which I today believe will not happen.

We will continue to focus on decreasing our stock levels and improving our cash flow during the rest of the year. Considering the quarter's weak market I am not completely satisfied with our result this quarter and it is our assessment that we will have a continued weak market for the remainder of 2009. In spite of cost savings and personnel decreases we are still forced to expect the full-year result to be weaker than it was the previous year.

Torsten Jansson

Sales

200 Result before tax

Comments

APRIL – JUNE

Sales

The turnover for the period was MSEK 1,023 (1,245), which was 18 % lower than the previous year. Exchange rates have had a positive effect on sales by MSEK 108.

Sales decreased in all business areas, but mainly in Promo (20 %) and Sports & Leisure (18 %). Gifts & Home Interiors show a smaller decrease of 7 %.

Sales decreased by 26 % in the Nordic countries, mainly in Sweden and Finland. Sales in Europe decreased by 11 % and in North America by 11 %. Positive exchange rate effects mainly occurred in Euro countries and USA.

The decrease in sales is mainly due to the current global economic situation as well as last years sales of sports and promo wear for the European Football Championship.

Gross margin

The gross margin amounted to 49.2 (49.7) %. The decrease is related to the American promo wear market's weak economic situation.

Other incomes and other costs

Other incomes increased by MSEK 15.6 to MSEK 22.0 (6.4). The increase is related to the selling of Orrefors' glass collections and properties which generated a capital gain of MSEK 16.4. Remaining revenues are mainly related to the operation's exchange gains and should be set against the result row "Other costs" where primarily the operation's currency exchange losses are reported.

Costs and depreciations

External costs decreased by MSEK 50.5 to MSEK -220.1 (-270.6). Costs for personnel have decreased by MSEK 4.1 to MSEK -182.8 (-186.9). Both cost elements have been affected positively due to savings, but negatively when recalculating foreign subsidiaries to SEK.

Depreciations amounted to MSEK 19.0 (16.7) %.

The operating margin amounted to 9.3 (11.9) %. The decrease is mainly due to weaker sales.

Finance net and taxes

Net financial items amounted to MSEK -12.8 (-36.3). The decrease is due to lowered interest rate levels. It is the Group's policy to have a short interest rate guarantee resulting in quick effects on the Group's net interest as the short-term interest changes.

Tax expenses in absolute numbers amounted to MSEK 22.1 (26.7) and the tax rate to 26.7 (23.8) %. Last year's lower tax rate was due to accrual of recorded deferred tax assets. The tax rate for the first six months of the year is at the same level as the previous year.

Result

The result after tax amounted to MSEK 60.5 (85.8) and the result per share to SEK 0.91 (1.22).

JANUARY – JUNE

Sales

Turnover for the period was MSEK 2,002 (2,260), which was 11 % lower than the previous year. Exchange rates have had a positive effect on sales by MSEK 216.

The decrease has occurred in all business areas, Promo 14 %, Sports & Leisure 10 %, and Gifts & Home Interior 6 %.

During the period, sales decreased by 20 % in the Nordic countries, mainly in Sweden and Finland. Sales in the rest of Europe were somewhat better with a decrease of 5 %, where mainly Switzerland had better development. Sales in North America decreased by 7 %. The positive exchange rate effects mainly occurred in Euro countries and USA.

The decrease in sales is mainly due to the current global economic situation as well as last years sales of sports and promo wear for the European Football Championship.

Gross margin

The margin amounted to 47.7 (48.7) %. The gross margin has been affected by restructuring costs in Orrefors Kosta Boda, which affected the first quarter's earnings by MSEK 25. Several markets have increased and this is mainly due to increases in prices made during 2008 and 2009. However, the weak American economic situation has affected the margin negatively.

Other income and other costs

Other income increased by MSEK 32.2 to MSEK 44.8 (12.6). The increase is mainly related to the selling of Orrefors' glass collections and properties which generated a capital gain of MSEK 16.4 in total. Remaining revenues are mainly related to the operation's exchange gains and should be set against the result row "Other costs" where primarily the operation's currency exchange losses are reported. Other costs increased by MSEK 16.5 to MSEK -23.3 (-6.8). The result of these two items amounts to a net loss of MSEK 0.7.

Costs and depreciations

External costs decreased by MSEK 60.2 to MSEK -487.8 (-548.0). The costs have been affected positively due to savings, but negatively when recalculating foreign subsidiaries to SEK. Restructuring costs of MSEK 7.1 have affected external costs in connection with changes in Cutter & Buck's division for direct sales to customer.

Costs for personnel have increased by MSEK 48.5 to MSEK -414.0 (-365.5). The costs have been affected positively due to savings, but negatively when recalculating foreign subsidiaries to SEK. The effect of the restructuring of Orrefors Kosta Boda, which resulted in a personnel decrease of 154 persons, was reported during the first quarter. This meant that the company made an appropriation for restructuring in the form of a one-time cost of MSEK 70.1 total in the financial statement for the first quarter 2009. Of these, MSEK 45.1 is declared as personnel costs and MSEK 25.0 as gross profit as they are attributable to a decreased production result.

Depreciations amounted to MSEK 37.5 (29.2).

The operating margin amounted to 1.9 (7.3) %. The decrease is due to restructuring costs and lower volumes.

Finance net and taxes

Net financial items amounted to MSEK -28.3 (-68.4). The decrease is due to lowered interest rate levels. It is the Group's policy to have a short interest rate guarantee resulting in quick effects on the Group's net interest as the short-term interest changes.

The tax rate amounted to 26.5 (26.3) %.

Result

The result after tax amounted to MSEK 7.2 (70.8) and the result per share to SEK 0.10 (1.07).

The result has during the first quarter been affected by restructuring costs of MSEK 77.2 total before tax. With a tax rate of 26.9 % for concerned companies, the net impact of the restructuring costs is MSEK -56.4.

REPORT OF THE CORPORATE SEGMENTS/BUSINESS AREAS

New Wave Group AB divides its operations into three business areas; Promo, Sports & Leisure, and Gifts & Home Interior. Each brand has been placed into the business area it is considered to belong to (see attachment to see which brand belongs to which business area). The Group observes the areas' and the brands' sales and results (EBITDA). The business segments are based on the Group's operational management.

Promo

During the period April-June, sales decreased by 20 % to MSEK 499 (626) and the result (EBITDA) decreased by MSEK 56.4 to MSEK 71.3 (127.7). Both the turnover and the result were lower in the Nordic countries, mainly in Sweden and Finland. The results for Europe also showed a decrease, but have been compensated by a positive currency effect. The decrease is a result of the global economic situation.

During the period January-June, sales decreased by 14 % to MSEK 941 (1,100) and the result (EBITDA) decreased by MSEK 62.0 to MSEK 94.1 (156.1). Both the turnover and the result were lower in the Nordic countries, mainly in Sweden and Finland. The results for Europe also showed a decrease, but have been compensated by a positive currency effect. The decrease is a result of the global economic situation.

Sports & Leisure

During the period April-June, sales decreased by 18 % to MSEK 368 (451) and the result (EBITDA) decreased by MSEK 17.5 to MSEK 28.7 (46.2). Craft sales were in line with the previous year. The continued weak American market has had a negative effect on sales in Cutter & Buck. Sales have also decreased due to last year's European Football Championship. The result decrease is mainly related to lower sales this year in comparison to last year's European Football Championship.

During the period January-June, sales decreased by 10 % and amounted to MSEK 781 (862). The result (EBITDA) decreased by MSEK 30.3 to MSEK 48.1 (78.4). Craft has showed continued positive turnover and results. The weak American market has had a negative effect on Cutter & Buck. Cutter & Buck USA has also been affected by restructuring costs of MSEK 7.1 due to changes in the division for direct sales to customer. The result decrease is also related to lower sales this year in comparison to last year's European Football Championship.

Gifts & Home Interior

During the period April-June, sales decreased by 7 % to MSEK 157 (168), but the result (EBITDA) increased by MSEK 22.8 MSEK 14.4 (-8.4). The lower sales is related to the Swedish retail market for Orrefors Kosta Boda. The improved result is partly related to the selling of Orrefors' glass collection and properties which generated a gain of MSEK16.4 and partly to the company's cost savings program taking effect. Sales and results for Sagaform indicate a small increase.

During the period January-June, sales decreased by 6 % to MSEK 281 (298) and the result (EBITDA) decreased by MSEK 25.7 to MSEK -66.6 (-40.9). The lower sales is related to the Swedish retail market for Orrefors Kosta Boda and the decreased result to the company's restructuring costs of MSEK 70.1 which were declared during the first quarter. Sales and results for Sagaform are in line with the previous year.

New Wave Group and Emmaboda municipality have made an agreement regarding a sale of Kosta Boda's glass collection. The sale is expected to be finalized during third quarter.

GEOGRAPHICAL DISTRIBUTION

A table showing sales in the regions Nordic Countries, Mid-Europe, Southern Europe, North America and Other Regions is displayed on page 15.

During the period April-June, sales decreased by 26 % in the Nordic region, which is mainly related to Sweden and Finland. Europe was affected by a positive currency effect where local currency sales were somewhat better than in the Nordic region. Sales in North America decreased by 11 %, the exchange rate development had a positive effect and sales in local currency in the region decreased by 32 %. Increased sales in other markets are mainly attributable to China.

During the period January-June, sales decreased by 20 % in the Nordic region, which is mainly related to Sweden and Finland. Europe was positively affected by the currency effect, where Switzerland showed a stronger development than the other countries. Sales in North America decreased by 7 %, the exchange rate development had a positive effect and sales in local currency in the region decreased by 32 %. Increased sales in other markets are mainly attributable to China.

NEW ESTABLISHMENTS

Sweden's first glass hotel has opened its doors. The opening ceremony for the Kosta Boda Art Hotel was held on 27 June in front of 240 guests. The hotel has 102 rooms, a restaurant, a conference centre, and spa & fitness area.

The Kosta Boda artists have each decorated a part of the hotel as well as the hotel's seven wings. Anna Ehrner, Kjell Engman, Åsa Jungnelius, Ludvig Löfgren, Ulrica Hydman-Vallien, Bertil Vallien and Göran Wärff have all put their unique mark on each hotel room.

CAPITAL TIED UP

Capital tied up in stock amounted to MSEK 2,081 (2,063). The weakened Swedish krona affects the declared value when converting to SEK. This has affected the stock during the period by MSEK 163, which means that the decrease with unchanged exchange rates was MSEK 145. Obsolescence reserve as of 30 June 2009 amounted to MSEK 88 (82) or about 4 % of the declared stock value.

The stock turnover rate for the period January-June amounted to 1.0 (1.2).

Accounts receivable decreased by MSEK 119 to MSEK 789 (908).

Measures to decrease capital tied up have started to take effect, which is estimated to generate continued results during the second half-year 2009.

INVESTMENTS, FINANCING AND LIQUIDITY

The Group's cash flow from operations during the period April-June amounted to MSEK 373 (-28) and after investments to MSEK 373 (-49). The Group's cash-effecting net investments amounted to MSEK 0 (-21), which includes MSEK 17.8 for disposal of tangible assets.

The Group's cash flow from operations during the period January-June amounted

to MSEK 235 (-217) and after investments to MSEK 228 (-254). The Group's casheffecting net investments amounted to MSEK -7 (-37), which includes MSEK 19.9 for disposal of tangible assets.

The net debt decreased during April-June by MSEK 309 and amounted to MSEK 2,352. During the corresponding period last year, the net debt increase by MSEK 110 to MSEK 2,661. Currency changes have increased the debt by MSEK 139. Net debt in relation to equity decreased and amounted to 129.7 (200.1) %.

The net debt decreased during January-June by MSEK 224 and amounted to MSEK 2,352. Currency changes have decreased the debt by MSEK 8 since the turn of the year. The corresponding period last year showed an increase by MSEK 304. Net debt in relation to equity decreased during the first six months of the year and amounted to 129.7 % compared to 140.5 % per 31 December 2008.

The Group had a credit line of approximately MSEK 3,425 as at 30 June 2009 and the credit agreement runs up until April 2011. The interest is based on each respective currency's prime interest rate and fixed margin. It is the Group's policy to have a short interest rate guarantee resulting in quick effects on the Group's net interest as the short-term interest changes.

New Wave Group has reached a new agreement regarding the terms for financing. The new agreement involves a covenant regarding equity ratio and the total credit line being lowered from approximately MSEK 3.425 per 30 June 2009 to MSEK 2.875 per 31 December 2009 and that there is to be a successive instalment down to MSEK 2.475 per 30 April 2011. The new agreement replaces earlier agreed upon terms and covenants.

PERSONNEL AND ORGANISATION

The number of full time employees as of 30 June 2009 was 2,370 (2,720) people, of which 48 % were women and 52 % were men. Out of the 2,370 employees, 653 people work in production. The production owned by New Wave Group belongs to Orrefors Kosta Boda, Seger, Dahetra, Toppoint and Cutter & Buck (embroidery).

SUBSCRIPTION OPTIONS IN NEW WAVE GROUP AB (PUBL)

New Wave Group has four outstanding programs for subscription options.

A new program for senior executives was introduced during June 2009. The program consists of 1.000.000 options, expires in June 2012 and has an exercise price of SEK 26.10. The option subscription premium was SEK 0.21 per option.

Two option programs were launched in July 2008, one for senior executives and one for the Board of Directors. The senior executives program consists of 1,800,000 options, expires in June 2011 and has an exercise price of SEK 64.05. The option subscription premium was SEK 1.11 per option. The Board of Directors program consists of 200,000 options, expires in June 2013 and has an exercise price of SEK 85.40. The option subscription premium was SEK 0.88 per option.

The previous program was launched in July 2007 and consists of 1,653,250 options, expires in June 2010 and has an exercise price of SEK 102.50. The option subscription premium was SEK 7 per option. 2,000,000 options were originally issued, of which 346,750 have later been cancelled.

Acquired premiums for all programs above have been based on market value.

VIEWS ON 2009

Since the Promo and Sports & Leisure markets have not developed as we had hoped during the second quarter, New Wave Group's assessment at present is that sales and result before tax will not amount to the same levels as 2008.The third quarter is expected to be weaker and the fourth quarter somewhat better than the previous year.

THE PARENT COMPANY

Sales amounted to MSEK 88 (70). Profit after financial items amounted to MSEK 23.7 (-27.2). Net borrowing amounted to MSEK 2.286 (1.690), of which MSEK 1.870 (246) refer to financing of subsidiaries. Cash flow from investing activities amounted to MSEK 156 (-59). Total assets amount to MSEK 3.794 (2.874) and equity to MSEK 1.076 (757).

RISKS AND RISK CONTROL

Having international operations, New Wave Group is continuously exposed to different kinds of financial risks. These financial risks are currency, borrowings and interest exposure, as well as liquidity and credit exposure. In order to minimize the affect these risks may have on the result, the Group has drawn up a financial policy. For a more detailed description of how the Group handles risks, please refer to the Annual Report 2008; www.nwg.se.

It is the Group's policy to have a short interest rate guarantee resulting in quick ef-

fects on the Group's net interest as the short-term interest changes.

The Group's accounted exposures are in all material aspects unchanged. The current market conditions and financial turbulence have however created an uncertainty, which means that the financial risks on the market have increased.

ACCOUNTING PRINCIPLES

This report has been prepared according to IAS 34 Interim Report and the Annual Report Law as well as the Swedish Financial Accounting Standards Council's standards FRF 2 regarding the parent company. Applied accounting principles are in accordance with the Annual Report for 2008.

CALENDAR

  • • 12 November 2009
  • Interim Report for Q3
  • • 19 February 2010 Year End Report 2009
  • • 23 April 2010 Interim Report for Q1

The Board and the CEO assure that the Interim Report gives a true and fair view of the company and the Group's operations, position and result and describes the material risks and uncertainties that the company and the Group face.

Gothenburg 25 August 2009 New Wave Group AB (publ)

Anders Dahlvig Kinna Bellander Göran Härstedt
Chairman of the Board Member of the Board Member of the Board

Helle Kruse Nielson Mats Årjes Torsten Jansson Member of the Board Member of the Board CEO

FOR MORE INFORMATION, PLEASE CONTACT:

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]

The information in this report is that which New Wave Group is required to disclose under the Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. It was released for publication at 07.00 (CET) on 25 August, 2009.

Income Statements – Group

3 months 3 months 6 months 6 months 12 months 12 months
Apr–Jun Apr–Jun Jan–Jun Jan–Jun Jan–Dec Jan–Dec
MSEK 2009 2008 2009 2008 2008 2007
Net sales 1 022.9 1 245.4 2 002.4 2 260.4 4 604.2 4 194.0
Goods for resale -519.3 -626.8 -1 047.4 -1 159.1 -2 371.8 -2 196.1
Gross profit 503.6 618.6 955.0 1 101.3 2 232.4 1 997.9
Other income* 22.0 6.4 44.8 12.6 56.5 37.7
External costs -220.1 -270.6 -487.8 -548.0 -1 105.6 -921.3
Personnel costs -182.8 -186.9 -414.0 -365.5 -731.0 -647.2
Depreciation of tangible and -19.0 -16.7 -37.5 -29.2 -64.2 -53.9
intangible fixed assets
Other costs -8.7 -2.0 -23.3 -6.8 -20.4 -7.4
Share of associated companies result 0.4 0.0 0.9 0.0 1.1 0.0
Operating profit 95.4 148.8 38.1 164.4 368.8 405.8
Interest income 0.7 2.6 5.0 5.2 12.4 15.0
Interest expenses -13.5 -38.9 -33.3 -73.6 -148.4 -105.8
Net financial items -12.8 -36.3 -28.3 -68.4 -136.0 -90.8
Profit before tax 82.6 112.5 9.8 96.0 232.8 315.0
Tax on profit for the period -22.1 -26.7 -2.6 -25.2 -84.9 -83.7
Profit/loss for the period 60.5 85.8 7.2 70.8 147.9 231.3
Related to:
Equity holders of the parent company 60.6 81.2 7.0 66.2 144.6 229.3
Minority interest -0.1 4.6 0.2 4.6 3.3 2.0
60.5 85.8 7.2 70.8 147.9 231.3
Profit per share
Profit per share before dilution 0.91 1.22 0.10 1.07 2.18 3.46
Profit per share after dilution 0.91 1.17 0.10 1.02 2.18 3.33
Weighted number of shares before dilution 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543
Weighted number of shares after dilution 66 343 543 69 496 793 66 343 543 69 496 793 66 343 543 68 843 543

* Rate of exchange profit and capital gain

Cash Flow Analysis – Group

3 months
Apr–Jun
3 months
Apr–Jun
6 months
Jan–Jun
6 months
Jan–Jun
12 months
Jan–Dec
12 months
Jan–Dec
MSEK 2009 2008 2009 2008 2008 2007
Current operation
Profit/loss before financial items 95.4 148.8 38.1 164.4 368.8 405.8
Items not included in cash flow -9.1 19.4 3.2 48.2 29.2 60.5
Received interest 0.7 2.6 5.0 5.2 12.4 15.0
Paid interest -13.5 -38.9 -33.3 -73.6 -148.4 -105.8
Paid income tax -8.2 -16.9 -28.1 -35.6 -98.9 -116.2
Cash flow from current operations 65.3 115.0 -15.1 108.6 163.1 259.3
before changes in working capital
Cash flow from changes in working capital
Increase of stock 199.3 -82.4 133.8 -200.8 -194.2 -119.0
Increase/decrease of current receivables 47.3 -168.3 54.5 -59.6 153.0 -26.5
Increase/decrease of short term liabilities 61.5 107.4 61.5 -65.2 -389.9 -30.8
Changes in working capital 308.1 -143.3 249.8 -325.6 -431.1 -176.3
Cash flow from operations 373.4 -28.3 234.7 -217.0 -268.0 83.0
Investing activities
Investments in tangible assets -17.9 -20.4 -22.3 -21.7 -61.3 -64.9
Sales of tangible assets 17.8 1.7 19.9 1.7 8.5 8.5
Investments in intangible assets 0.0 0.3 -3.3 0.0 -0.1 0.0
Acquisition of subsidiaries* 0.0 -0.7 0.0 -0.7 -0.6 -1 087.3
Investments in financial assets -0.2 -1.7 -0.9 -15.9 -11.7 -22.0
Cash flow from investing activities -0.3 -20.8 -6.6 -36.6 -65.2 -1 165.7
Cash flow after investing activities 373.1 -49.1 228.1 -253.6 -333.2 -1 082.7
Financial activities
Loan raised 1.7 0.0 1.7 0.0 0.0 0.0
Amortization of loan -339.4 125.9 -313.2 263.6 441.4 1 136
Option premium 0.2 0.0 0.2 0.0 2.1 11.5
Dividend -11.9 -66.3 -11.9 -66.3 -66.3 -66.3
Cash flow from financial activities -349.4 59.6 -323.2 197.3 377.2 1 081.5
Cash flow for the year 23.7 10.5 -95.1 -56.3 44.0 -1.2
Opening cash balance 77.9 41.1 191.2 115.5 115.5 114.2
Currency translation -6.4 0.7 -0.9 -6.9 31.7 2.5
Closing cash balance 95.2 52.3 95.2 52.3 191.2 115.5
*The item includes:
Goodwill - - - - 0.1 -403.2
Trademarks - - - - - -251.0
Customer relations - - - - - -15.0
Working capital - -0.7 - -0.7 -0.7 -223.7
Fixed assets - - - - - -23.1
Transferred loans - - - - - -171.3
Effect on the cash flow 0.0 -0.7 0.0 -0.7 -0.6 -1 087.3

Balance Sheets – Group

30-June 30-June 31-Dec 31-Dec
MSEK 2009 2008 2008 2007
ASSETS
Intangible fixed assets 435.8 381.3 444.6 387.9
Goodwill 827.1 745.6 831.1 764.7
Fixed assets 400.7 376.7 415.3 380.8
Other long-term receivables 189.6 199.0 190.6 186.7
Total fixed assets 1 853.2 1 702.6 1 881.6 1 720.1
Stock 2 081.2 2 062.9 2 200.3 1 862.1
Accounts receivable 789.3 908.2 835.8 883.0
Other short-term receivables 246.2 191.2 261.8 229.0
Liquid funds 95.2 52.3 191.2 115.5
Total current assets 3 211.9 3 214.6 3 489.1 3 089.6
TOTAL ASSETS 5 065.1 4 917.2 5 370.7 4 809.7
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 1 813.2 1 329.9 1 833.8 1 438.2
Long term loans 2 415.8 2 675.0 2 716.5 2 414.9
Other long term liabilities 187.9 268.2 203.0 210.0
Total long term liabilities 2 603.7 2 943.2 2 919.5 2 624.9
Short term loans 31.6 38.0 51.0 57.6
Other liabilities 616.6 606.1 566.4 689.0
Total short term liabilities 648.2 644.1 617.4 746.6
Total liabilies 3 251.9 3 587.3 3 536.9 3 371.5
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5 065.1 4 917.2 5 370.7 4 809.7

Changes in Equity – Group

Retained earnings
Share Other capital Other incl. profit/loss Minority
MSEK capital contributed reserves the year Total interest Total equity
Opening balance 2008-01-01 199.1 217.1 -86.7 1 096.8 1 426.3 11.9 1 438.2
Translation difference, change for the year - - 285.9 - 285.9 - 285.9
Cash flow hedges - - 10.1 - 10.1 - 10.1
Total change in net assets recognized 0.0 0.0 296.0 0.0 296.0 0.0 296.0
directly in equity, excluding transactions
with shareholders
Profit/loss for the year - - - 144.6 144.6 3.3 147.9
Total change in net assets, excluding 0.0 0.0 0.0 144.6 144.6 3.3 147.9
transactions with shareholders
Dividend - - - -66.3 -66.3 - -66.3
Option premiums - - - 2.1 2.1 - 2.1
Equity change in minority - - - - 0.0 15.9 15.9
Balance at year end 2008-12-31 199.1 217.1 209.3 1 177.2 1 802.7 31.1 1 833.8
Retained earnings
Share Other capital Other incl. profit/loss Minority
MSEK capital contributed reserves the year Total interest Total equity
Opening balance 2009-01-01 199.1 217.1 209.3 1 177.2 1 802.7 31.1 1 833.8
Translation difference, change for the period - - -14.2 - -14.2 - -14.2
Cash flow hedges - - -1.1 - -1.1 - -1.1
Total change in net assets recognized 0.0 0.0 -15.3 0.0 -15.3 0.0 -15.3
directly in equity, excluding transactions
with shareholders
Profit/loss for the period - - - 7.0 7.0 0.2 7.2
Total change in net assets, excluding 0.0 0.0 0.0 7.0 7.0 0.2 7.2
transactions with shareholders
Dividend - - - -11.9 -11.9 - -11.9
Option premiums - - - 0.2 0.2 - 0.2
Equity change in minority - - - - 0.0 -0.8 -0.8
Balance at end of period 2009-06-30 199.1 217.1 182.3 1 172.5 1 782.7 30.5 1 813.2

Translation difference

6 months 6 months Year Year
2009 2008 2008 2007
Balance brought forward 205.7 -80.2 -80.2 -32.6
Change for the year -14.2 -117.2 285.9 -47.6
Balance at end of period 191.5 -197.4 205.7 -80.2

Financial highlights – Group

6 months 6 months 12 months 12 months
Jan-June Jan-June Jan-Dec Jan-Dec
2009 2008 2008 2007
Sales growth % -11.4 30.1 9.8 18.8
Number of employees 2 370 2 720 2 562 2 350
Gross profit margin % 47.7 48.7 48.5 47.6
Operating margin before depreciation % 3.8 8.6 9.4 11.0
Operating margin % 1.9 7.3 8.0 9.7
Profit margin % 0.5 4.2 5.1 7.5
Net margin % 0.4 3.1 3.2 5.5
Return on shareholders' equity % 0.8 9.6 9.2 17.1
Return on capital employed % 2.0 8.6 9.0 12.8
Equity ratio % 35.8 27.1 34.1 29.9
Net debt - Equity ratio % 129.7 200.1 140.5 163.9
Net liabilities MSEK 2 352.1 2 660.9 2 576.3 2 357.0
Interest cover ratio times 1.3 2.3 2.6 4.0
Capital turnover times 0.8 0.9 0.9 1.0
Stock turnover times 1.0 1.2 1.2 1.3
Cash flow before investments MSEK 234.8 -217.0 -268.0 83.0
Net investments MSEK -6.6 -36.6 -65.2 -1 165.7
Cash flow after investments MSEK 228.2 -253.6 -333.2 -1 082.7
Shareholders' equity per share SEK 27.33 20.05 27.64 21.68
Shareh. equity per share after dilution SEK 27.33 19.14 27.64 20.89
Share 31 december SEK - - 6.25 67.50
Dividend/share SEK - - 0.18 1.00
P/E-ratio - - 2.87 19.36
P/S-ratio - - 0.09 1.07
Rate/Shareholders' equity - - 0.23 3.11

Definitions

Return on shareholders' equity

Profit/loss after full tax as a percentage of the average shareholders' equity.

Return on capital employed

Profit/loss after net financial items plus financial costs in percent of capital employed in average.

Gross margin

Sales for the period, less product costs, as a percentage of sales.

EBITDA

Operating profit before depreciation.

Rate of capital turnover

Sales divided by the average Balance Sheet total.

Net margin

Net result as a percentage of sales.

Net debt/equity ratio

Interest-bearing liabilities, less interest bearing assets, as a percentage of shareholders' equity.

Interest cover ratio

Profit after financial items plus interest expenses divided by interest expenses.

Operating margin

Operating profit/loss after depreciation as a percentage of sales.

Equity ratio

Equity including minority in percent of balance sheet total.

Capital employed

Balance Sheet total reduced by interest-free liabilities and interest-free provisions.

Profit margin

Profil/loss after financial items as a percentage of sales.

Income Statements – Parent Company

6 months 6 months 12 months
Jan-June Jan-June Jan-Dec Jan-Dec
MSEK 2009 2008 2008 2007
Net sales 74.6 68.5 133.0 87.0
Other operating income* 13.6 2.2 16.8 5.0
Total income 88.2 70.7 149.8 92.0
External expenses -52.5 -52.6 -101.2 -73.1
Personnel costs -12.6 -17.1 -26.7 -24.7
Depreciation of tangible and intangible fixed assets -3.0 -1.5 -2.7 -3.1
Other costs -12.2 -3.4 -11.1 -3.0
Operating profit/loss 7.9 -3.9 8.1 -11.9
Profit/loss from financial investments 0.0 0.0 302.7 115.2
Interest income 28.3 16.9 150.5 99.3
Interest expenses -12.5 -40.2 -186.7 -121.1
Net financial items 15.8 -23.3 266.5 93.4
Profit/loss after financial items 23.7 -27.2 274.6 81.5
Disposals 0.0 0.0 24.0 -5.0
Tax on net profit/loss for the period -6.3 -2.0 -0.1 10.4
Profit for the period 17.4 -29.2 298.5 86.9

* Rate of exchange profit and capital gain

Cash Flow Analysis – Parent Company

6 months 6 months
12 months
Jan-June Jan-June Jan-Dec Jan-Dec
MSEK 2009 2008 2008 2007
Current operations
Operating profit before financial items 7.9 -3.9 8.1 -11.9
Adjustments for non-cash items 1.2 1.4 1.3 0.4
Received dividends 0.0 0.0 266.5 115.2
Interest received 28.3 16.9 150.5 99.3
Interest paid -12.5 -40.2 -186.7 -121.0
Tax paid -2.7 -11.5 -37.3 -14.7
Cash flow before change in working capital 22.2 -37.3 202.4 67.3
Cash flow from change in working capital
Decrease/increase in short term receivables 262.7 233.2 -164.4 113.1
Decrease/increase on short-term liabilities -179.0 -149.5 30.4 238.3
Changes in working capital 83.7 83.7 -134.0 351.4
Cash flow from operations 105.9 46.4 68.4 418.7
Investing activities
Shareholders contribution to subsidiaries 0.0 0.0 -48.6 -8.8
Intra-group transaction 60.4 -42.9 725.4 7.1
Aquisition of tangible assets 0.0 -0.5 -0.7 -2.1
Aquisition of intangible assets 0.0 0.2 1.7 -3.9
Aquisition subsidiaries 0.0 0.0 0.6 -1 118.2
Decrease/increase of other financial assets 95.9 -15.9 -802.8 0.0
Cash-flow from investing activities 156.3 -59.1 -124.4 -1 125.9
Cash-flow after investing activities 262.2 -12.7 -56.0 -707.2
Financial activities
Loan raised 0.0 79.0 120.1 707.4
Amortization of loan -250.3 0.0 0.0 0.0
Dividend paid to shareholders of the parent company -11.9 -66.3 -66.3 -66.3
Received/paid Group contribution 0.0 0.0 2.2 65.8
Cash-flow from financial activities -262.2 12.7 56.0 706.9
Cash flow for the period 0.0 0.0 0.0 -0.3
Liquid funds at the beginning of the year 0.0 0.0 0.0 0.3
Liquid funds at the end of the period 0.0 0.0 0.0 0.0

Balance Sheet – Parent Company

30-June 30-June 31-Dec 31-Dec
MSEK 2009 2008 2008 2007
ASSETS
Fixed assets
Intangible fixed assets 1.5 4.4 2.4 5.6
Tangible fixed assets 1.0 1.6 1.3 1.8
Financial fixed assets
Shares in Group companies 1 424.7 2 159.9 1 485.2 2 117.0
Shares in associated companies 51.3 53.6 51.2 37.7
Receivables on Group companies 1 497.8 0.0 1 593.7 0.0
Total financial fixed assets 2 973.8 2 213.5 3 130.1 2 154.7
Total fixed assets 2 976.3 2 219.5 3 133.8 2 162.1
Current assets
Short-term receivables
Accounts receivable 0.6 0.1 0.6 0.2
Receivables on Group companies 763.6 623.8 1 033.5 833.5
Tax receivable 37.4 8.8 36.0 0.0
Other receivables 9.0 14.5 3.0 27.1
Prepaid expenses and accrued income 7.2 7.1 6.0 17.9
Total short-term receivables 817.8 654.3 1 079.1 878.7
Cash and bank 0.0 0.0 0.0 0.0
Total current assets 817.8 654.3 1 079.1 878.7
TOTAL ASSETS 3 794.1 2 873.8 4 212.9 3 040.8
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Restricted shareholders' equity
Share capital 199.1 199.1 199.1 199.1
Restricted reserves 249.4 249.4 249.4 249.4
448.5 448.5 448.5 448.5
Unrestricted shareholders' equity
Retained profits 537.2 248.8 250.6 228.4
Share premium reserve 48.0 48.0 48.0 48.0
Profit/loss for the year 17.4 -29.2 298.5 86.9
602.6 267.6 597.1 363.3
Total shareholders' equity 1 051.1 716.1 1 045.6 811.8
Untaxed reserves 33.4 57.3 33.4 57.3
Long-term liabilities
Overdraft facilities
Total long-term liabilities
2 285.8
2 285.8
1 689.9
1 689.9
2 536.0
2 536.0
1 610.9
1 610.9
Short-term liabilities
Accounts payable 22.7 20.2 15.7 27.7
Liabilities to Group companies 391.8 378.1 573.2 520.3
Tax liabilities 5.0 0.0 0.0 0.6
Other liabilities 0.0 0.6 0.0 0.7
Accrued expenses and prepaid income 4.3 11.6 9.0 11.5
Total short-term liabilities 423.8 410.5 597.9 560.8
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3 794.1 2 873.8 4 212.9 3 040.8

Changes in Equity for the parent company

Restricted Share premium Profit/loss
MSEK Share capital reserves Retained profits reserve for the year Total equity
Opening balance 2008-01-01 199.1 249.4 228.4 48.0 86.9 811.8
Transfer according to General meeting 86.9 -86.9 0.0
Group contribution 1.6 1.6
Profit/loss for the year 298.5 298.5
Total change in net assets excluding 0.0 0.0 1.6 0.0 298.5 300.1
transactions with shareholders
Dividend -66.3 -66.3
Balance at year end 2008-12-31 199.1 249.4 250.6 48.0 298.5 1 045.6

Group contribution of MSEK 1.6 concerns received contribution of MSEK 2.2 with a calculated tax effect of MSEK -0.6

MSEK Share capital Restricted
reserves
Retained profits Share premium
reserve
Profit/loss
for the year
Total equity
Opening balance 2009-01-01 199.1 249.4 250.6 48.0 298.5 1 045.6
Transfer according to General meeting 298.5 -298.5 0.0
Group contribution 0.0 0.0
Profit/loss for the period 17.4 17.4
Total change in net assets excluding 0.0 0.0 0.0 0.0 17.4 17.4
transactions with shareholders
Dividend -11.9 -11.9
Balance at end of period 2009-06-30 199.1 249.4 537.2 48.0 17.4 1 051.1

Sales and result per business area

April–June April–June Change Jan–June Jan–June Change
Business Area Corporate Promo 2009 2008 MSEK 2009 2008 MSEK
Net sales 498.5 625.8 -127.3 941.0 1 099.8 -158.8
Result EBITDA 71.3 127.7 -56.4 94.1 156.1 -62.0
Business Area Sports and Leisure
Net sales 367.8 451.1 -83.3 780.6 862.2 -81.6
Result EBITDA 28.7 46.2 -17.5 48.1 78.4 -30.3
Business Area Gifts and Home furnishing
Net sales 156.6 168.5 -11.9 280.8 298.4 -17.6
Result EBITDA 14.4 -8.4 22.8 -66.6 -40.9 -25.7
Total net sales 1 022.9 1 245.4 -222.5 2 002.4 2 260.4 -258.0
Total result EBITDA 114.4 165.5 -51.1 75.6 193.6 -118.0

Sales per area

Aprl-June Part of April–June Part of Change Change
2009 turnover 2008 turnover MSEK %
Nordic countries 462 45% 623 50% -161 -26%
Mid-Europe 188 19% 209 17% -21 -10%
Southern Europe 130 13% 146 12% -16 -11%
USA 209 20% 235 19% -26 -11%
Other countries 33 3% 32 2% 1 3%
Total 1 022 100% 1 245 100% -223 -18%
Jan-June
2009
Part of
turnover
Jan–June
2008
Part of
turnover
Change
MSEK
Change
%
Nordic countries 866 43% 1 079 47% -213 -20%
Mid-Europe 385 19% 399 18% -14 -4%
Southern Europe 251 13% 264 12% -13 -5%
USA 414 21% 446 20% -32 -7%
Other countries 86 4% 72 3% 14 19%
Total 2 002 100% 2 260 100% -258 -11%

Quarterly Income Statements – Group

MSEK 2009 2008 2007 2006
Quarter Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Net sales 979.5 1 022.9 1 015.0 1 245.4 1 117.3 1 226.5 760.4 977.5 1 124.7 1 331.4 755.3 896.7
Goods for resale -528.1 -519.3 -532.3 -626.8 -549.8 -662.9 -399.5 -508.3 -591.8 -696.5 -407.7 -468.8
Gross profit 451.4 503.6 482.7 618.6 567.5 563.6 360.9 469.2 532.9 634.9 347.6 427.9
Gross profit % 46.1 49.2 47.6 49.7 50.8 46.0 47.5 48.0 47.4 47.7 46.0 47.7
Other income 22.9 22.0 6.2 6.4 23.2 20.7 2.3 18.6 6.8 10.0 1.8 5.5
External costs -267.7 -220.1 -277.4 -270.6 -259.9 -297.7 -189.7 -204.7 -252.6 -274.3 -199.9 -184.4
Personnel costs -231.2 -182.8 -178.6 -186.9 -167.5 -198.0 -134.1 -150.2 -163.2 -199.7 -129.4 -132.3
Depreciations -18.5 -19.0 -12.5 -16.7 -16.5 -18.5 -10.7 -10.1 -16.4 -16.7 -9.4 -9.3
Other costs -14.7 -8.7 -4.8 -2.0 -4.0 -9.6 -2.0 -2.9 0.3 -2.7 -0.8 -3.7
Share of associated companies result 0.5 0.4 0.0 0.0 0.0 1.1 0.0 0.0 0.0 0.0 0.0 0.0
Operating profit/loss -57.3 95.4 15.6 148.8 142.8 61.6 26.7 119.9 107.8 151.5 9.9 103.7
Interest income 4.3 0.7 2.6 2.6 2.6 4.6 1.4 2.0 4.1 7.5 2.0 4.2
Interest expenses -19.8 -13.5 -34.7 -38.9 -41.8 -33.0 -16.3 -21.4 -31.3 -36.9 -14.8 -18.8
Profit before tax -72.8 82.6 -16.5 112.5 103.6 33.2 11.8 100.5 80.6 122.1 -2.9 89.1
Tax 19.5 -22.1 1.5 -26.7 -28.9 -30.8 -3.1 -26.5 -23.2 -30.9 0.8 -23.4
Profit/loss for the period -53.3 60.5 -15.0 85.8 74.7 2.4 8.7 74.0 57.4 91.2 -2.1 65.7
Related to:
Equity holders of the parent company -53.6 60.6 -15.1 81.2 78.9 -0.4 8.6 74.0 55.8 90.8 -2.8 66.2
Minority interest 0.3 -0.1 0.1 4.6 -4.2 2.8 0.1 0.0 1.6 0.4 0.7 -0.5
-53.3 60.5 -15.0 85.8 74.7 2.4 8.7 74.0 57.4 91.2 -2.1 65.7
Profit per share
Profit per share before dilution -0.81 0.91 -0.23 1.22 1.19 -0.01 0.13 1.12 0.84 1.37 -0.04 1.03
Profit per share after dilution -0.81 0.91 -0.22 1.17 1.15 -0.01 0.13 1.09 0.84 1.27 -0.04 1.00
Weighted number of 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 66 343 543 64 517 776 64 517 776
shares before dilution
Weighted number of 66 343 543 66 343 543 68 996 793 69 496 793 68 446 793 66 343 543 67 843 543 67 843 543 66 448 692 68 843 543 66 003 728 66 040 365
shares after dilution

Quarterly Cash Flow Analysis – Group

2009 2009 2008 2008
MSEK Q1 Q2 Q1 Q2
Current operation
Profit/loss before financial items -57.3 95.4 15.6 148.8
Items not included in cash flow 12.3 -9.1 28.8 19.4
Received interest 4.3 0.7 2.6 2.6
Paid interest -19.8 -13.5 -34.7 -38.9
Paid income tax -19.9 -8.2 -18.7 -16.9
Cash flow from current operations before changes in working capital -80.4 65.3 -6.4 115.0
Cash flow from changes in working capital
Increase of stock -65.5 199.3 -118.4 -82.4
Increase/decrease of current receivables 7.2 47.3 108.7 -168.3
Increase/decrease of short term liabilities 0.0 61.5 -172.6 107.4
Cash flow from operations -58.3 308.1 -182.3 -143.3
Changes in working capital -138.7 373.4 -188.7 -28.3
Investing activities
Investments in tangible assets -4.4 -17.9 -1.3 -20.4
Sales of tangible assets 2.1 17.8 0.0 1.7
Investments in intangible assets -3.3 0.0 -0.3 0.3
Acquisition of subsidiaries* 0.0 0.0 0.0 -0.7
Investments in financial assets -0.7 -0.2 -14.2 -1.7
Cash flow from investing activities -6.3 -0.3 -15.8 -20.8
Cash flow after investing activities -145.0 373.1 -204.5 -49.1
Financial activities
Loan raised 0.0 1.7 0.0 0.0
Amortization of loan 26.2 -339.4 137.7 125.9
Option premium 0.0 0.2 0.0 0.0
Dividend 0.0 -11.9 0.0 -66.3
Cash flow from financial activities 26.2 -349.4 137.7 59.6
Cash flow for the year -118.8 23.7 -66.8 10.5
Opening cash balance 191.2 77.9 115.5 41.1
Currency translation 5.5 -6.4 -7.6 0.7
Closing cash balance 77.9 95.2 41.1 52.3
*The item includes:
Goodwill - - - -
Trademarks - - - -
Customer relations - - - -
Working capital - - - -0.7
Fixed assets - - - -
Transferred loans - - - -
Effect on the cash flow 0.0 0.0 0.0 -0.7

New Wave Groups's share

The share capital in New Wave amounted to SEK 199 030 629 distributed among a total of 66 343 543 shares, each with a quota value of SEK 3.00. The shares carry identical rights to the Company's assets and profits. Each Series A share is entitled to ten votes and each Series B share is entitled to one vote. New Wave's Series B shares have since December 11, 1997, been listed at the Stockholm Stock Exchange and are now listed on the Mid Cap list. A trading lot amounts to 100 shares.

Utdelningspolitik

The Board's aim is that the dividend will account for at least 30 % of the Group's profit after taxes over a trade cycle.

Aktieägare

The number of shareholders amounted to 13 216 (12 410) on June 30. Institutional investors accounted for 39 % of the capital and 10 % of the votes. At the same time, the ten largest shareholders held 60 % of the capital and 89 % of the votes. Non-Swedish shareholders accounted for 14 % of the capital and 4 % of the votes.

New Wave Group's ten major shareholders 2009-06-30

Shareholder Number of shares Number of votes Capital % Votes %
Torsten Jansson through companies 20 707 680 207 076 800 31.2% 81.4%
Fjärde AP-Fonden 5 280 026 5 280 026 8.0% 2.1%
AFA Försäkringar 4 851 336 4 851 336 7.3% 1.9%
Home Capital 2 866 881 2 866 881 4.3% 1.1%
UBS 2 305 668 2 305 668 3.5% 0.9%
Nordnet Pensionsförsäkring 857 027 857 027 1.3% 0.3%
Avanza Pension 760 563 760 563 1.1% 0.3%
Robur 715 048 715 048 1.1% 0.3%
Andra AP-Fonden 632 746 632 746 1.0% 0.2%
Domani AB 603 960 603 960 0.9% 0.2%
39 580 935 225 950 055 59.7% 88.8%
Shareholder distribution in New Wave Group 2009-06-30 Number of shares Number of votes Capital % Votes %
Sweden 57 081 036 243 450 156 86.1% 95.6%
Outside Sweden, excl USA 8 773 741 10 573 741 13.2% 4.2%
USA 488 766 488 766 0.7% 0.2%
Total 66 343 543 254 512 663 100.0% 100.0%

Brands per business area

Business Area Corporate Promo
Business Area Sports and Leisure
Business Area Gifts and Home furnishing

New Wave Group in brief

New Wave Group is a growth company creating, acquiring, and developing promo, sports, gift and interior design trademarks and products. The group shall achieve synergies by coordinating design, purchasing, marketing, logistics, 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) Org nr 556350-0916 Orrekulla Industrigata 61, SE-425 36 Hisings Kärra Phone +46 (0)31 712 89 00 Fax +46 (0)31 712 89 99 [email protected] www.nwg.se