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New Wave Group AB — Interim / Quarterly Report 2018
Apr 26, 2018
3081_10-q_2018-04-26_cef210d9-f5fb-4721-b14b-2833c0860438.pdf
Interim / Quarterly Report
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2018
INTERIM REPORT January - March
TRADEMARKS IN FOCUS
CORPORATE PROMO
SPORTS & LEISURE
GIFTS & HOME FURNISHINGS
INTERIM REPORT NEW WAVE GROUP AB
PERIOD 1 JANUARY - 31 MARCH 2018
- Net sales amounted to SEK 1,272.8 million, which was 1 % (3 % in local currency) higher than last year (SEK 1,264.2 million).
- Operating result amounted to SEK 18.6 (43.2) million.
- Result for the period amounted to SEK 6.0 (24.9) million.
- Earnings per share amounted to SEK 0.10 (0.38).
- Cash flow from operating activities amounted to SEK 6.6 (33.6) million.
- Equity ratio amounted to 51.3 (49.4) %.
- Net debt to equity ratio amounted to 54.5 (60.6) %.
CEO COMMENTS
NET SALES AND OPERATING RESULT
The first quarter gave a good start to the year. Since Easter this year occurred in March instead of April, we had a negative calendar effect. January and February had a growth of 5 %, while March decreased 5 %. This, combined with the fact that April sales have started well, makes the picture of this calendar effect clear. I also believe that the cold spring has meant that sales for the season are late – especially within retail. Despite this, we managed to increase net sales by 1 % (3 % in local currency), which feels psychologically important as it is the 15th quarter in a row we deliver growth.
The development was strong in the promo sales channel but weaker in retail. The promo sales channel increased by 7 % which feels very good. Unfortunately, the retail sales channel decreased by 7 % which we are not satisfied with. We believe that it has to do with above items – calendar effect and a late spring – but also that we have had a negative currency effect when converting sales into SEK. Regardless of the reasons, we will take extra actions in this sales channel.
Our investments in marketing and sales increased our costs. External costs increased by SEK 28.6 million and personnel costs increased by SEK 18.3 million, in total SEK 46.9 million. Despite the negative calendar effect and the investments in marketing, we managed to deliver an operating result that amounted to SEK 18.6 million. This was thanks to a strong gross profit margin which amounted to 46.8 (45.2) %. This is a start that we are pleased with.
THE BALANCE SHEET
The balance sheet continues to strengthen and the equity ratio amounted to 51.3 (49.4) %. Net debt to equity ratio decreased to 54.5 (60.6) %. It feels good to have a strong balance sheet that will help us in our continued work for sales growth but also in case of acquisitions.
OUR NEW PRODUCTS
Our new products have been received well. Craft Teamwear is strong and our expectations are high for the coming 3-5 years. Craft running shoes sold out almost immediately – although it should be noted that our purchasing volumes were low - but it is still pleasing with such a debut and that consumers have shown that they have a high level of confidence in the brand.
THE FUTURE
I continue to be positive for 2018 and the coming years. Our base orders for the autumn within Craft shows good development and our new product range should increase our growth from existing level. Even our impressive marketing and increased sales forces should start to give effect during the second half of the year.
Thank you for the first quarter!
Torsten Jansson, CEO
SUMMARY OF THE QUARTER JANUARY - MARCH COMMENTS
Net sales in the first quarter amounted to SEK 1,272.8 million, which was 1 % (3 % in local currency) higher than last year (SEK 1,264.2 million). The quarter's sales have been affected by the fact that Easter this year, unlike the previous year, was in the first quarter (the so called calendar effect).
The Corporate Promo segment increased its sales by 5 %. The improvement occurs mainly in USA and Other countries (Canada and Asia) and it is the promo sales channel that is increasing. Sports & Leisure sales decreased by 4 % and occur mainly in Sweden, Nordic countries (excl. Sweden) and USA. USA was affected negatively by exchange fluctuations when converted into SEK and sales in local currency have increased. The Sport & Leisure segment had an increase in the promo sales channel while retail decreased. Gifts & Home Furnishings sales was on par with last year and even here it is the promo sales channel that increased while retail decreased.
Of our sales channels, promo increased by 7 % and retail decreased by 7 %.
Our gross profit margin improved and amounted to 46.8 (45.2) %. We have a good level of service and the margin for each segment shows improvement in Corporate Promo and Sports & Leisure but Gifts & Home Furnishings has a lower margin.
The Group's external costs have increased compared to last year, which is related to investments in sales and marketing. The investments are primarily done in North America but the Group is also continuing its activities in the Nordic countries and Central Europe. The increase in personnel costs is related to more employees, primarily in sales. These costs will increase in the coming quarters as we get the full-year effect of earlier employments.
Operating result amounted to SEK 18.6 million, which was SEK 24.6 million lower compared to last year (SEK 43.2 million). The decrease is attributable to the higher costs in relation to investments in sales and marketing. Financial expenses have decreased which is attributable to an improved interest net.
Inventories increased by SEK 256.2 million to SEK 2,810.3 (2,554.1) million. The increase is related to an extended product range and our new warehouse in Canada. Cash flow from operating activities was lower compared with last year and amounted to SEK 6.6 (33.6) million. This is attributable to the lower operating result. Net debt decreased slightly and amounted to SEK 1,692.2 (1,714.3) million. The net debt to equity ratio decreased by 6.1 percentage points and as of March 31 amounted to 54.5 (60.6) %.
JANUARY - MARCH
NET SALES
Net sales amounted to SEK 1,272.8 million, which was 1 % higher than last year (SEK 1,264.2 million). Exchange rates affected sales negatively by SEK 23.2 million, corresponding to 2 %. The quarter´s sales have also been affected by the fact that Easter this year occurred in March instead of April.
Net sales in Sweden decreased by 3 % compared with last year, attributable to the retail sales channel. The USA decreased by 4 %. The decrease is related to foreign exchange fluctuations when converted into SEK. Turnover in local currency increased by 5 % and the improvement occurs in the promo sales channel. The Nordic countries (excl. Sweden) were on par with last year. However, the sales in the promo channel increased while retail decreased. Net sales in Central Europe and Southern Europe increased by 3 % and 8 % respectively. Sales growth in Central Europe is attributable to foreign exchange fluctuations when converted into SEK. Turnover in local currency was on par with last year. Southern Europe increased in the promo sales channel. Other countries increased by 11 %. The improvement occurs in Canada and Asia as well as the promo sales channel.
GROSS PROFIT
Gross profit margin improved and amounted to 46.8 (45.2) %. The improvement is related to the segments Corporate Promo and Sports & Leisure while Gifts & Home Furnishings decreased.
OTHER OPERATING INCOME AND OTHER OPERATING EXPENSE
Other operating income increased by SEK 5.0 million to SEK 15.9 (10.9) million. Other operating income is mainly attributable to operating currency gains but also other remunerations and should be compared to the result row "Other operating expenses" where mainly operating currency losses are reported. Other operating expenses increased by SEK 4.0 million to SEK -11.8 (-7.8) million. The net total of above items amounted to SEK 4.1 (3.1) million.
COSTS AND DEPRECIATION
External costs increased by SEK 28.6 million to SEK -317.2 (-288.6) million. The increase is related to increased investments in sales and marketing.
Personnel costs amounted to SEK -246.4 million which is SEK 18.3 million higher than last year (SEK -228.1 million). The increase is related to more employees, mostly in sales.
Depreciation was slightly higher compared to last year and amounted to SEK -17.6 (-15.0) million.
Currency exchange rates decreased costs by SEK 11.8 million.
OPERATION MARGIN
Operating margin amounted to 1.5 (3.4) % where the decrease is related to higher costs in connection with increased sales and marketing activities.
NET FINANCIAL ITEMS AND TAXES
Net financial items amounted to SEK -10.2 (-12.5) million. The improvement was related to lower interest expenses.
Tax on profit for the period amounted to SEK -2.4 (-5.8) million.
RESULT FOR THE PERIOD
Result for the period amounted to SEK 6.0 (24.9) million and earnings per share amounted to SEK 0.10 (0.38).
REPORTING OF OPERATING SEGMENTS
New Wave Group AB divides its operations into the segments Corporate Promo, Sports & Leisure, and Gifts & Home Furnishings. The Group monitors the segments' and brands' net sales and EBITDA. The operating segments are based on the Group's operational management.
CORPORATE PROMO
Net sales for the first quarter amounted to SEK 620.5 (589.7) million. The increase in turnover is due to increased sales and marketing activities. It is the promo sales channel which increased and mainly the regions USA and Other countries (Canada, Asia). EBITDA amounted to SEK 42.8 (37.4) million. The improvement in EBITDA is related to the increased turnover and higher gross margin. The segment has also been adversely affected by increased costs for sales and marketing.
SPORTS & LEISURE
Net sales decreased somewhat and amounted to SEK 530.5 (553.0) million. Sales increased in the promo sales channel but decreased in retail. It is mainly in the regions of Sweden and Nordic countries (excl. Sweden) that the increase occurs. EBITDA amounted to SEK 13.2 (29.2) million. The lower result is primarily related to lower turnover and higher costs for marketing. However, the segment has improved its gross profit margin compared with last year.
GIFTS & HOME FURNISHINGS
Net sales in the segment was on par with last year and amounted to SEK 121.8 (121.5) million. The segment increased its sales in the promo sales channel and decreased in retail. EBITDA amounted to SEK -19.9 million which was SEK 11.4 million lower than last year (SEK -8.5 million). The lower result is related to a lower gross profit margin and higher costs for marketing activities.
CAPITAL TIED UP
Capital tied up in inventories has increased by SEK 256.2 million compared to last year's first quarter and amounted to SEK 2,810.3 (2,554.1) million. The increase is related to our extended product range and the construction of our warehouse in Canada. The turnover rate in inventories has therefore decreased slightly and amounts to 1.0 (1.1) times. The inventory value is expected to be at a higher level than before even in the coming quarters.
| SEK million | 2018-03 | 2017-03 |
|---|---|---|
| Raw materials | 34.5 | 27.3 |
| Work in progress | 10.3 | 7.0 |
| Goods in transit | 146.7 | 116.2 |
| Merchandise in stock | 2 618.8 | 2 403.6 |
| Total | 2 810.3 | 2 554.1 |
Accumulated write-down of inventory amounted to SEK 106.0 (112.5) million, of which SEK 0 (6.5) million relates to raw materials. Write-down related to merchandise in stock amounted to 3.9 (4.2) %.
Accounts receivable amounted to SEK 856.5 (800.4) million and the increase is related to higher turnover.
INVESTMENTS, FINANCING AND LIQUIDITY
Due to the lower operating result, cash flow from operating activities decreased by SEK 27.0 million and amounted to SEK 6.6 (33.6) million. The cash net investments amounted to SEK -39.8 (-19.9) million. The increase is related to investments in our warehouses and production sites.
Net debt decreased somewhat compared to the same period last year and amounted to SEK 1,692.2 (1,714.3) million. Our net debt to equity ratio and our net debt in relation to working capital have decreased and amounted to 54.5 (60.6) % and 57.7 (63.6) % respectively.
The equity ratio has improved by 1.9 percentage points in relation to last year and amounted to 51.3 (49.4) %.
The Group's total credit facility as of 31 March amounted to SEK 2,532 million. The credit facility amount is limited to and dependent on the value of some underlying assets. The funding agreement means that financial ratios (covenants) must be fulfilled in order to maintain the credit facility.
On April 11, the Group signed a new credit facility. For more information, see section: Subsequent events.
PERSONNEL AND ORGANISATION
The number of employees amounted to 2,527 (2,419), of whom 52% were female and 48% male. Of the total number of employees 656 (658) work in production. The production contained within the New Group is attributable to Ahead (embroidery), Cutter & Buck (embroidery), Dahetra, Orrefors Kosta Boda, Paris Glove, Victory, Thermo and Toppoint.
RELATED PARTY TRANSACTIONS
There are lease agreements with related companies. Related companies to the CEO have bought merchandise and received payments for consulting services performed. In addition, there are transactions with related parties to immaterial values. All transactions are on market terms.
THE PARENT COMPANY
Total income in the first quarter of the year amounted to SEK 31.9 (28.0) million. Result before appropriations and tax amounted to SEK 2.6 (-0.4) million. Net debt amounted to SEK 1,578.4 (1,670.9) million. The parent company's net financing to subsidiaries amounted to SEK 1,434.8 (1,847.3) million. Net investments amounted to SEK -1.9 (-0.4) million. The balance sheet total amounted to SEK 3,846.8 (3,753.0) million and shareholders' equity, including 78% of untaxed reserves, SEK 1,866.2 (1,589.5) million.
SUBSEQUENT EVENTS
On 11 April, the Group signed a new credit facility agreement. The total credit facility amount to SEK 2,782 million of which SEK 2,000 million runs until March 2022, USD 34 million has a term that extends to January 2024. The remaining SEK 500 million has a term of between three months and six years. The credit facility amount is limited to and dependent on the value of some underlying assets. The funding agreement means that financial ratios (covenants) must be fulfilled in order to maintain the credit facility.
Based on the present forecast, management estimates that the group will be able to meet these ratios with a satisfactory margin.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on 16 May at 13.00 in Kosta. The annual report is available at the company's head office in Gothenburg and on its website www.nwg.se.
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 a dividend of SEK 1.70 (1.35) per share, amounting to SEK 112.8 (89.6) million. This proposal corresponds to 32 (32) % of the year's net result.
NOMINATION COMMITTEE
The nomination committee for the board election at the 2018 Annual General Meeting is:
- Arne Lööw, representative of Fjärde AP-fonden and Chairman of the Nomination Committee
- Torsten Jansson, CEO and representative of Torsten Jansson Förvaltnings AB
- Johan Ståhl, representative of Lannebo Fonder
For more information about the nomination committee and its work, please visit www.nwg.se.
CALENDAR
Interim report for the third quarter 8 NOV
The company's auditors have not conducted any review of the report for the first quarter of 2018.
The Board of Directors and CEO declare that the interim report 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 26 APRIL 2018 NEW WAVE GROUP AB (PUBL)
OLOF PERSSON Member of the Board
ELISABETH DAHLIN Member of the Board
CHRISTINA BELLANDER Member of the Board
MATS ÅRJES
Member of the Board
M JOHAN WIDERBERG Member of the Board
TORSTEN JANSSON 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 and Market Act and/or the Financial Trading Act. The information was released for publication at 7 am (CET) 26 April 2018.
CONSOLIDATED INCOME STATEMENTS
| 3 months Jan - Mar 2018 |
3 months Jan - Mar 2017 |
12 months Jan - Dec 2017 |
12 months Jan - Dec 2016 |
|
|---|---|---|---|---|
| SEK million Net income |
1 272.8 | 1 264.2 | 5 597.3 | 5 237.1 |
| Goods for resale | -677.5 | -692.8 | -3 018.1 | -2 826.9 |
| Gross profit | 595.4 | 571.4 | 2 579.2 | 2 410.2 |
| Other operating income | 15.9 | 10.9 | 51.2 | 51.0 |
| External costs | -317.2 | -288.6 | -1 128.9 | -1 098.0 |
| Personnel costs | -246.4 | -228.1 | -940.3 | -881.6 |
| Depreciation and write-downs of tangible and intangible fixed assets |
-17.6 | -15.0 | -65.3 | -55.9 |
| Other operating costs | -11.8 | -7.8 | -25.2 | -25.7 |
| Share of associated companies' result | 0.4 | 0.4 | -1.6 | 0.2 |
| Operating result | 18.6 | 43.2 | 469.1 | 400.2 |
| Financial income | 1.5 | 1.3 | 5.1 | 3.1 |
| Financial expenses Net financial items |
-11.7 -10.2 |
-13.8 -12.5 |
-57.0 -51.9 |
-63.0 -59.9 |
| Result before tax | 8.4 | 30.7 | 417.2 | 340.3 |
| Tax on result for the period | -2.4 | -5.8 | -63.2 | -63.6 |
| Result for the period | 6.0 | 24.9 | 354.0 | 276.7 |
| Other comprehensive income: | ||||
| Items that can be reclassified into profit or loss | ||||
| Translation differences | 69.9 | -14.0 | -54.2 | 88.9 |
| Cash flow hedge | 2.3 | 2.4 | 2.2 | 5.5 |
| Sum | 72.2 | -11.7 | -52.0 | 94.4 |
| Income tax related to components of other comprehensive income | -0.5 | -0.5 | -0.5 | -1.2 |
| Total other comprehensive income net after tax for the period | 71.7 | -12.2 | -52.5 | 93.2 |
| Total comprehensive income for the period | 77.7 | 12.7 | 301.5 | 369.9 |
| Result attributable to: | ||||
| Shareholders of the parent company | 6.6 | 25.4 | 354.0 | 276.1 |
| Non-controlling interest | -0.6 | -0.5 | 0.0 | 0.6 |
| 6.0 | 24.9 | 354.0 | 276.7 | |
| Total comprehensive income attributable to: | ||||
| Shareholders of the parent company | 77.8 | 13.4 | 301.9 | 368.6 |
| Non-controlling interest | -0.1 | -0.6 | -0.4 | 1.3 |
| 77.7 | 12.7 | 301.5 | 369.9 | |
| Result per share (SEK) | 0.10 | 0.38 | 5.34 | 4.16 |
| The average number of outstanding shares | 66 343 543 | 66 343 543 | 66 343 543 | 66 343 543 |
CONSOLIDATED CASH FLOW STATEMENT
| SEK million | 3 months Jan - Mar 2018 |
3 months Jan - Mar 2017 |
12 months Jan - Dec 2017 |
12 months Jan - Dec 2016 |
|---|---|---|---|---|
| Operating activities | ||||
| Operating result | 18.6 | 43.2 | 469.1 | 400.2 |
| Adjustment for items not included in cash flow | 21.9 | 17.0 | 76.4 | 56.2 |
| Received interest | 1.5 | 1.3 | 3.7 | 3.1 |
| Paid interest | -11.6 | -13.8 | -55.5 | -63.0 |
| Paid income tax | -29.2 | -9.9 | -42.7 | -63.1 |
| Cash flow from operating activities before changes in working capital |
1.2 | 37.8 | 451.0 | 333.4 |
| Changes in working capital | ||||
| Increase/decrease of stock | -117.4 | -73.9 | -208.5 | 54.3 |
| Increase/decrease of current receivables | 140.9 | 113.0 | -119.7 | -66.5 |
| Increase/decrease of short-term liabilities | -18.1 | -43.3 | 85.0 | 127.7 |
| Cash flow from changes in working capital | 5.4 | -4.2 | -243.2 | 115.5 |
| Cash flow from operations | 6.6 | 33.6 | 207.8 | 448.9 |
| Investing activities | ||||
| Investments in tangible fixed assets | -34.1 | -20.5 | -86.9 | -77.1 |
| Sales of tangible fixed assets | 0.8 | 1.0 | 5.5 | 0.9 |
| Investments in intangible fixed assets | -2.5 | -0.3 | -29.4 | -9.9 |
| Acquisition of financial fixed assets | -1.5 | 0.0 | 0.0 | -2.4 |
| Raised long-term receivables | 0.0 | -0.1 | 0.0 | -1.1 |
| Repayment of long-term receivables | -2.5 | 0.0 | 0.2 | 0.0 |
| Cash flow from investing activities | -39.8 | -19.9 | -110.6 | -89.6 |
| Cash flow after investing activities | -33.2 | 13.7 | 97.2 | 359.3 |
| Financial activities | ||||
| Loan raised | 5.1 | 0.0 | 0.0 | 0.0 |
| Amortization of loan | 0.0 | -39.4 | -16.7 | -247.0 |
| Dividend paid to the shareholders of the parent company | 0.0 | 0.0 | -89.6 | -66.3 |
| Cash flow from financial activities | 5.1 | -39.4 | -106.3 | -313.3 |
| Cash flow for the period | -28.1 | -25.7 | -9.1 | 46.0 |
| Liquid assets at the beginning of the period | 202.4 | 218.9 | 218.9 | 165.5 |
| Translation differences in liquid assets | 6.2 | -1.3 | -7.5 | 7.4 |
| Liquid assets at period-end | 180.5 | 191.9 | 202.4 | 218.9 |
| Liquid assets | ||||
| Cash at bank and in hand | 180.5 | 191.9 | 202.4 | 218.9 |
CONDENCED CONSOLIDATED BALANCE SHEETS
| 31 Mar 31 Mar 31 Dec SEK million 2018 2017 2017 ASSETS Intangible fixed assets 1 410.0 1 449.6 1 393.9 Tangible fixed assets 444.4 403.6 415.5 Shares in associated companies 55.0 55.1 53.3 Long-term receivables 13.0 10.4 10.2 Deferred tax assets 96.9 113.4 91.5 Total non-current assets 2 019.3 2 032.2 1 964.5 Stock 2 810.3 2 554.1 2 643.4 Tax receivables 24.5 33.6 21.2 Accounts receivable 856.5 800.4 982.8 Prepaid expenses and accrued income 63.4 64.0 76.5 Other receivables 99.2 53.9 62.3 |
|
|---|---|
| 31 Dec | |
| 2016 | |
| 1 469.4 | |
| 399.2 55.0 |
|
| 10.0 | |
| 114.1 | |
| 2 047.7 | |
| 2 496.4 | |
| 27.2 | |
| 906.2 | |
| 81.1 | |
| 46.7 | |
| Liquid assets 180.5 191.9 202.4 |
218.9 |
| Total current assets 4 034.4 3 697.9 3 988.6 |
3 776.5 |
| TOTAL ASSETS 6 053.7 5 730.1 5 953.1 |
5 824.2 |
| EQUITY | |
| Share capital 199.1 199.1 199.1 |
199.1 |
| Other capital contributions 219.4 219.4 219.4 |
219.4 |
| Reserves 348.9 319.5 279.4 |
337.4 |
| Retained earnings including result for the period 2 317.5 2 069.7 2 308.7 |
2 038.7 |
| Equity attributable to shareholders of the parent company 3 084.9 2 807.8 3 006.6 |
2 794.6 |
| Non-controlling interest 22.0 22.1 22.6 |
22.6 |
| Total equity 3 106.9 2 829.9 3 029.2 |
2 817.2 |
| LIABILITIES | |
| Long-term interest-bearing liabilities 1 799.8 1 826.4 1 757.5 |
1 864.5 |
| Pension provisions 17.7 15.6 16.5 |
15.1 |
| Other provisions 1.9 4.2 2.0 |
6.0 |
| Deferred tax liabilities 132.6 161.7 129.9 |
164.2 |
| Total non-current liabilities 1 952.0 2 008.0 1 905.9 |
2 049.8 |
| Short-term interest-bearing liabilities 73.0 79.8 82.2 |
103.3 |
| Accounts payable 545.8 460.1 536.7 |
492.5 |
| Current tax liabilities 35.3 36.1 53.3 |
32.2 |
| Other liabilities 127.2 127.4 108.7 |
111.8 |
| Accrued expenses and prepaid income 213.5 188.7 237.1 |
217.4 |
| Total current liabilities 994.9 892.1 1 018.0 |
957.2 |
| Total liabilities 2 946.8 2 900.2 2 923.9 |
3 007.0 |
| TOTAL EQUITY AND LIABILITIES 6 053.7 5 730.1 5 953.1 |
5 824.2 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| SEK million | Share capital | Other capital contributions |
Reserves | Retained earnings incl. result for the period |
Sum | Non-controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance 2017-01-01 | 199.1 | 219.4 | 337.4 | 2 038.7 | 2 794.6 | 22.6 | 2 817.2 |
| Result for the period | 25.4 | 25.4 | -0.5 | 24.9 | |||
| Other comprehensive income | |||||||
| Translation difference | -14.0 | -14.0 | -14.0 | ||||
| Cash flow hedge | 2.4 | 2.4 | 2.4 | ||||
| Reclassification of previous years' cash flow hedge | -5.6 | 5.6 | 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 | 0.0 | 0.0 | 0.0 | ||||
| Closing balance 2017-03-31 | 199.1 | 219.4 | 319.6 | 2 069.7 | 2 807.9 | 22.1 | 2 829.9 |
| SEK million | Share capital | Other capital contributions |
Reserves | Retained earnings incl. result for the period |
Sum | Non-controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance 2018-01-01 | 199.1 | 219.4 | 279.4 | 2 308.7 | 3 006.6 | 22.6 | 3 029.2 |
| Result for the period | 6.6 | 6.6 | -0.6 | 6.0 | |||
| Other comprehensive income | |||||||
| Translation difference | 69.9 | 69.9 | 69.9 | ||||
| Cash flow hedge | 2.3 | 2.3 | 2.3 | ||||
| Reclassification of previous years' cash flow hedge | -2.2 | 2.2 | 0.0 | 0.0 | |||
| Income tax related to components of other comprehensive income | -0.5 | -0.5 | -0.5 | ||||
| Transactions with shareholders | |||||||
| Dividends | 0.0 | 0.0 | 0.0 | ||||
| Closing balance 2018-03-31 | 199.1 | 219.4 | 348.9 | 2 317.5 | 3 084.9 | 22.0 | 3 106.9 |
| Accumulated translation differences in equity | 3 months 2018 |
3 months 2017 |
|||||
| Accumulated translation differences at the beginning of the period | 284.3 | 338.5 | |||||
| Translation difference in foreign subsidiaries for the period | 69.9 | -14.0 | |||||
| Accumulated translation differences at end of period | 354.2 | 324.5 |
FINANCIAL HIGHLIGHTS
| 3 months Jan - Mar 2018 |
3 months Jan - Mar 2017 |
12 months Jan - Dec 2017 |
12 months Jan - Dec 2016 |
|
|---|---|---|---|---|
| Sales growth, % | 0.7 | 11.8 | 6.9 | 5.5 |
| Number of employees | 2 527 | 2 419 | 2 495 | 2 396 |
| Gross profit margin, % | 46.8 | 45.2 | 46.1 | 46.0 |
| Operating margin before depreciation, % | 2.8 | 4.6 | 9.5 | 8.7 |
| Operating margin, % | 1.5 | 3.4 | 8.4 | 7.6 |
| Profit margin, % | 0.7 | 2.4 | 7.5 | 6.5 |
| Net margin, % | 0.5 | 2.0 | 6.3 | 5.3 |
| Return on shareholders' equity, % | 0.8 | 3.6 | 12.2 | 10.4 |
| Return on capital employed, % | 1.6 | 3.6 | 9.8 | 8.6 |
| Equity ratio, % | 51.3 | 49.4 | 50.9 | 48.4 |
| Net debt to equity ratio, % | 54.5 | 60.6 | 54.1 | 62.1 |
| Net debt in relation to working capital, % | 57.7 | 63.6 | 54.7 | 64.7 |
| Net debt, SEK million | 1 692.2 | 1 714.3 | 1 637.3 | 1 748.9 |
| Interest cover ratio, times | 1.7 | 3.2 | 8.3 | 6.5 |
| Capital turnover, times | 0.9 | 0.9 | 1.0 | 0.9 |
| Stock turnover, times | 1.0 | 1.1 | 1.2 | 1.1 |
| Cash flow before investments, SEK million | 6.6 | 33.6 | 207.8 | 448.9 |
| Net investments, SEK million | -39.8 | -19.9 | -110.6 | -89.6 |
| Cash flow after investments, SEK million | -33.2 | 13.7 | 97.2 | 359.3 |
| Shareholders' equity per share, before and after dilution, SEK | 46.83 | 42.65 | 45.66 | 42.46 |
| Share price as at December 31, SEK | - | - | 54.50 | 55.25 |
| Dividend/share, SEK | - | - | 1.35 | 1.00 |
| P/E-ratio | - | - | 10.20 | 13.30 |
| P/S-ratio | - | - | 0.60 | 0.70 |
| Share price/Shareholders' equity | - | - | 1.20 | 1.30 |
| For definition of alternative performance measures, |
please go to p. 27.
INCOME STATEMENT
| SEK million | 3 months Jan - Mar 2018 |
3 months Jan - Mar 2017 |
12 months Jan - Dec 2017 |
12 months Jan - Dec 2016 |
|---|---|---|---|---|
| Net income | 22.3 | 21.1 | 69.8 | 101.2 |
| Other operating income | 9.5 | 6.8 | 22.4 | 22.1 |
| Total income | 31.9 | 28.0 | 92.2 | 123.3 |
| External costs | -15.8 | -18.4 | -65.2 | -91.9 |
| Personnel costs | -8.7 | -5.4 | -29.3 | -23.5 |
| Depreciation of tangible and intangible fixed assets | -1.5 | -1.3 | -5.2 | -5.2 |
| Other operating costs | -8.5 | -6.4 | -19.2 | -19.6 |
| Operating result | -2.6 | -3.5 | -26.7 | -16.8 |
| Net income from shares in Group companies | -0.2 | 0.0 | 387.2 | 420.4 |
| Write-down of financial fixed assets | 0.0 | 0.0 | -76.5 | -2.4 |
| Financial income | 15.7 | 16.8 | 66.5 | 66.6 |
| Financial expenses | -10.4 | -13.8 | -51.7 | -61.6 |
| Net financial items | 5.2 | 3.1 | 325.6 | 423.0 |
| Result before appropriations and tax | 2.6 | -0.4 | 298.9 | 406.2 |
| Appropriations | 0.0 | 0.0 | 61.0 | 33.9 |
| Tax on result for the period | 0.0 | 1.2 | -9.9 | -5.0 |
| Result for the period | 2.6 | 0.8 | 350.0 | 435.0 |
Total comprehensive income for the period correspond with result for the period.
CASH FLOW STATEMENT
| SEK million | 3 months Jan - Mar 2018 |
3 months Jan - Mar 2017 |
12 months Jan - Dec 2017 |
12 months Jan - Dec 2016 |
|---|---|---|---|---|
| Current operations | ||||
| Operating result | -2.6 | -3.5 | -26.7 | -16.8 |
| Adjustment for items not included in cash flow | 1.5 | 1.3 | 5.2 | 5.2 |
| Received dividends | 0.0 | 0.0 | 42.7 | 0.0 |
| Received interest | 15.7 | 16.8 | 66.5 | 66.6 |
| Paid interest | -10.4 | -13.7 | -51.7 | -61.6 |
| Paid income tax | -7.0 | 1.1 | -5.8 | -2.8 |
| Cash flow from current operations before changes in working capital |
-2.8 | 2.0 | 30.2 | -9.4 |
| Changes in working capital | ||||
| Decrease/increase in stock | 0.0 | -0.5 | 0.0 | 0.8 |
| Decrease/increase in current receivables | -23.3 | -22.2 | 298.7 | 458.9 |
| Decrease/increase on short-term liabilities | 19.3 | 57.4 | -116.2 | -147.3 |
| Cash flow from changes in working capital | -4.0 | 34.7 | 182.5 | 312.4 |
| Cash flow from operations | -6.8 | 36.7 | 212.8 | 303.0 |
| Investing activities | ||||
| Shareholders contribution to subsidiaries | 0.0 | 0.0 | -56.4 | -19.0 |
| Shareholders contribution to associated company | -1.5 | 0.0 | 0.0 | 0.0 |
| Investments in tangible fixed assets | -0.3 | -0.4 | -0.7 | -2.9 |
| Investments in intangible fixed assets | -0.1 | 0.0 | -6.4 | -0.2 |
| Acquisition of shares | 0.0 | 0.0 | 0.0 | -2.2 |
| Reduction share capital | 0.0 | 0.0 | 0.0 | 30.2 |
| Cash-flow from investing activities | -1.9 | -0.4 | -63.5 | 5.9 |
| Cash-flow after investing activities | -8.7 | 36.3 | 149.3 | 308.9 |
| Financial activities | ||||
| Loan raised | 12.8 | 0.0 | 0.0 | 0.0 |
| Amortization of loan | 0.0 | -40.6 | -62.9 | -241.3 |
| Dividend paid to shareholders of the parent company | 0.0 | 0.0 | -89.6 | -66.3 |
| Cash-flow from financial activities | 12.8 | -40.6 | -152.5 | -307.6 |
| Cash flow for the period | 4.1 | -4.3 | -3.2 | 1.3 |
| Liquid assets at the beginning of the period | 1.3 | 4.5 | 4.5 | 3.2 |
| Liquid assets at period-end | 5.4 | 0.2 | 1.3 | 4.5 |
BALANCE SHEET
| SEK million | 31 Mar 2018 |
31 Mar 2017 |
31 Dec 2017 |
31 Dec 2016 |
|---|---|---|---|---|
| ASSETS | ||||
| Fixed assets | ||||
| Intangible fixed assets | 13.1 | 10.8 | 14.2 | 11.7 |
| Tangible fixed assets | 4.1 | 4.9 | 4.1 | 4.8 |
| Financial assets Shares in Group companies |
2 123.3 | 1 510.2 | 1 517.7 | 1 510.2 |
| Shares in associated companies | 56.0 | 54.6 | 54.5 | 54.6 |
| Receivables on Group companies | 298.5 | 980.0 | 903.2 | 998.0 |
| Other long-term receivables | 4.0 | 2.4 | 2.4 | 2.4 |
| Total financial assets | 2 481.7 | 2 547.2 | 2 477.8 | 2 565.2 |
| Total fixed assets | 2 498.9 | 2 562.9 | 2 496.1 | 2 581.7 |
| Current assets | ||||
| Current receivables | ||||
| Stock | 0.0 | 0.5 | 0.0 | 0.0 |
| Accounts receivable | 0.0 | 0.2 | 0.0 | 0.6 |
| Receivables on Group companies | 1 304.0 | 1 167.8 | 1 283.2 | 1 145.9 |
| Tax receivables | 3.2 | 0.0 | 0.0 | 0.2 |
| Other receivables | 29.5 | 10.3 | 25.2 | 8.4 |
| Prepaid expenses and accrued income | 5.8 | 11.1 | 7.6 | 11.8 |
| Total current receivables | 1 342.5 | 1 189.9 | 1 316.0 | 1 166.9 |
| Cash at bank and in hand | 5.4 | 0.2 | 1.3 | 4.5 |
| Total current assets | 1 347.9 | 1 190.1 | 1 317.3 | 1 171.4 |
| TOTAL ASSETS | 3 846.8 | 3 753.0 | 3 813.5 | 3 753.1 |
| EQUITY AND LIABILITIES Equity Restricted 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 equity | ||||
| Retained earnings | 1 347.3 | 1 086.9 | 997.3 | 651.8 |
| Share premium reserve | 48.0 | 48.0 | 48.0 | 48.0 |
| Result for the period | 2.6 1 397.9 |
0.8 1 135.7 |
350.0 1 395.3 |
435.1 1 134.9 |
| Total equity | 1 846.4 | 1 584.2 | 1 843.8 | 1 583.4 |
| Untaxed reserves | 25.4 | 6.8 | 25.4 | 6.8 |
| Non-current liabilities | ||||
| Overdraft facilities | 1 274.9 | 1 304.3 | 1 308.9 | 1 293.3 |
| Bankloan | 246.9 | 301.5 | 197.6 | 371.0 |
| Total non-current liabilities | 1 521.8 | 1 605.8 | 1 506.5 | 1 664.3 |
| Current liabilities | ||||
| Short-term interest-bearing liabilities | 62.0 | 65.3 | 61.3 | 66.2 |
| Accounts payable | 214.1 | 182.9 | 217.1 | 163.9 |
| Liabilities to Group companies | 167.7 | 300.4 | 146.1 | 256.9 |
| Current tax liability | 1.9 | 1.9 | 5.7 | 1.8 |
| Other liabilities | 1.2 | 0.8 | 1.1 | 2.4 |
| Accrued expenses and prepaid income | 6.2 | 5.0 | 6.4 | 7.4 |
| Total current liabilities | 453.3 | 556.2 | 437.8 | 498.6 |
| TOTAL EQUITY AND LIABILITIES | 3 846.8 | 3 753.0 | 3 813.5 | 3 753.1 |
CHANGES IN EQUITY
| SEK million | Share capital | Restricted reserves |
Retained earnings |
Share premium reserve |
Result for the period |
Total equity |
|---|---|---|---|---|---|---|
| Opening balance 2017-01-01 Transfer according to Annual General meeting |
199.1 | 249.4 | 651.8 435.1 |
48.0 | 435.1 -435.1 |
1 583.4 0.0 |
| Result for the period | 0.8 | 0.8 | ||||
| Total change in net assets excluding transactions with shareholders |
0.0 | 0.0 | 0.0 | 0.0 | 0.8 | 0.8 |
| Dividends | 0.0 | 0.0 | ||||
| Closing balance 2017-03-31 | 199.1 | 249.4 | 1 086.9 | 48.0 | 0.8 | 1 584.2 |
| Share capital | Restricted reserves |
Retained earnings |
Share premium reserve |
Result for the period |
Total equity |
|
| SEK million Opening balance 2018-01-01 |
199.1 | 249.4 | 997.3 | 48.0 | 350.0 | 1 843.8 |
| Transfer result previous year | 350.0 | -350.0 | 0.0 | |||
| Result for the period | 2.6 | 2.6 | ||||
| Total change in net assets excluding | 0.0 | 0.0 | 0.0 | 0.0 | 2.6 | 2.6 |
| transactions with shareholders | ||||||
| Dividends | 0.0 | 0.0 | ||||
| Closing balance 2018-03-31 | 199.1 | 249.4 | 1347.3 | 48.0 | 2.6 | 1 846.4 |
NOTES ACCOUNTING PRINCIPLES
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". New accounting principles for 2018 are described in the Annual Report for 2017, "Note 1 Accounting Policies" under "New and amended IFRS introduced ". Applied accounting principles are otherwise consistent with the 2017 annual report.
NEW ACCOUNTING PRINCIPLES FOR 2018
On 1 January 2018, IFRS 15 Revenue from contracts with customers and IFRS 9 Financial Instruments came into force.
IFRS 9 "Financial Instruments" has been applied by the Group since 1 January 2018. The transition to IFRS 9 has not resulted in any differences in the Group's classification of financial assets and liabilities. The Group's hedge accounting is consistent with the new hedge accounting rules.
Under IFRS 9, credit losses are reported earlier than under the group's previous model. New Wave Group applies the simplified model of expected credit losses for accounts receivable under which total expected credit losses for the remaining maturity of the receivable are reported. When assessing future expected credit losses, historical and forward-looking information is taken into account.
The transition has not resulted in any transition effect that needs to be presented.
For a more detailed description of the new accounting principles, see the Annual Report 2017, "Note 1 Accounting Policies" and "New and amended IFRS introduced".
IFRS 15 "Revenue from Contracts with Customers" has been applied by the Group since 1 January 2018 and has been implemented with limited retroactivity. The transition has not resulted in any transition effect that needs to be presented.
Most of New Wave Group's revenue comes from sales of goods, which is reported when the control of the goods is transferred to the customer. Variable compensation such as discounts, bonuses and returns is estimated and part of the transaction price.
Revenues from commission, royalties, licenses, and membership fees for customer clubs constitute performance commitments that are met over time as the control is transferred to the customer.
IFRS 15 implies additional disclosure requirements regarding revenue, which results in New Wave Group's revenue being presented in more categories than before. Therefore, revenue is also presented allocated to our two sales channels, promo and retail, as presented in the notes.
NEW ACCOUNTING PRINCIPLES FOR 2019
IFRS 16 "Leases" will replace IAS 17 "Leases" as of 1 January 2019. The effect of implementing IFRS 16 will be an increased balance sheet total with higher tangible fixed assets and higher financial liabilities. There will also be a shift in the consolidated income statement with a positive effect on operating result and a negative impact on net financial items. The Group will continue to evaluate the full impact of IFRS 16 during the year.
RISKS AND RISK CONTROL
New Wave Group's international operations mean that it is continuously exposed to various financial risks. The financial risks are currency, borrowings and interest rate risks, as well as liquidity and credit risks. In order to minimize the impact these risks may have on earnings, the Group has established a financial policy. For a more detailed description of the Group's risk management please refer to the Annual Report 2017, note 17, p.81–85. www.nwg.se.
The Group's policy is to have short fixed-interest agreements resulting in quick effects on the Group's net interest as the short-term interest rate changes.
The Group's reported risks are deemed to be essentially unchanged.
NET SALES AND EBITDA PER OPERATING SEGMENT
| 3 months Jan - Mar |
3 months Jan - Mar |
12 months Jan-Dec |
12 months Jan-Dec |
|---|---|---|---|
| 2016 | |||
| 620.5 | 589.7 | 2 648.7 | 2 388.6 |
| 42.8 | 37.4 | 289.7 | 250.8 |
| 530.5 | 553.0 | 2 311.5 | 2 260.8 |
| 13.3 | 29.2 | 230.3 | 194.5 |
| 121.8 | 121.5 | 637.1 | 587.7 |
| -19.9 | -8.5 | 14.4 | 10.8 |
| 1 272.8 | 1 264.2 | 5 597.3 | 5 237.1 |
| 36.2 | 58.2 | 534.4 | 456.1 |
| 36.2 | 58.2 | 534.4 | 456.1 |
| -17.6 | -15.0 | -65.3 | -55.9 |
| -59.9 | |||
| 8.4 | 30.7 | 417.2 | 340.3 |
| 2018 -10.2 |
2017 -12.5 |
2017 -51.9 |
NET SALES PER SALES CHANNEL
| SEK million Sales channel promo |
3 months Jan - Mar 2018 |
3 months Jan - Mar 2017 |
12 months Jan-Dec 2017 |
12 months Jan-Dec 2016 |
|---|---|---|---|---|
| Corporate Promo | 603.5 | 574.1 | 2 575.6 | 2 319.1 |
| Sports & Leisure | 145.1 | 127.6 | 587.1 | 539.0 |
| Gifts & Home Furnishings | 15.1 | 13.4 | 84.1 | 81.5 |
| Total | 763.7 | 715.1 | 3 246.8 | 2 939.6 |
| Sales channel retail | ||||
| Corporate Promo | 17.0 | 15.6 | 73.1 | 69.7 |
| Sports & Leisure | 385.4 | 425.4 | 1 724.4 | 1 721.6 |
| Gifts & Home Furnishings | 106.7 | 108.1 | 553.0 | 506.2 |
| Total | 509.1 | 549.1 | 2 350.5 | 2 297.5 |
| Total net sales | 1 272.8 | 1 264.2 | 5 597.3 | 5 237.1 |
NET SALES PER GEOGRAPHIC AREA
| SEK million | 3 months Jan - Mar 2018 |
Part of net sales |
3 months Jan - Mar 2017 |
Part of net sales |
Change SEK million |
Change % |
|---|---|---|---|---|---|---|
| Sweden | 296.1 | 23% | 304.2 | 24% | -8.1 | -3% |
| USA | 313.4 | 25% | 326.2 | 26% | -12.9 | -4% |
| Nordic countries excl. Sweden | 163.5 | 13% | 163.1 | 13% | 0.4 | 0% |
| Central Europe | 224.1 | 18% | 218.2 | 17% | 5.8 | 3% |
| Southern Europe | 158.9 | 12% | 147.3 | 12% | 11.6 | 8% |
| Other countries | 116.9 | 9% | 105.2 | 8% | 11.7 | 11% |
| Total | 1 272.8 | 100% | 1 264.2 | 100% | 8.6 | 1% |
| SEK million | 12 months Jan - Dec 2017 |
Part of net sales |
12 months Jan - Dec 2016 |
Part of net sales |
Change SEK million |
Change % |
|---|---|---|---|---|---|---|
| Sweden | 1 463.8 | 26% | 1 383.3 | 26% | 80.5 | 6% |
| USA | 1 423.7 | 25% | 1 409.9 | 27% | 13.8 | 1% |
| Nordic countries excl. Sweden | 727.7 | 13% | 706.1 | 13% | 21.6 | 3% |
| Central Europe | 891.1 | 16% | 831.9 | 16% | 59.2 | 7% |
| Southern Europe | 630.8 | 11% | 571.3 | 11% | 59.5 | 10% |
| Other countries | 460.2 | 8% | 334.5 | 6% | 125.7 | 38% |
| Total | 5 597.3 | 100% | 5 237.0 | 100% | 360.3 | 7% |
Starting from 2018, the Group's net sales will be presented in accordance with the brand reporting. Previous years' figures have been adjusted to allow comparison.
ASSETS AND LIABILITIES PER OPERATING SEGMENTS
| SEK million | Total assets |
Fixed assets* |
Deferred tax assets |
Investments | Deprecation and write-downs |
Total liabilities |
|---|---|---|---|---|---|---|
| 31 Mar 2018 | ||||||
| Corporate Promo | 3 160.5 | 611.5 | 35.6 | -24.1 | -8.9 | 1 849.4 |
| Sports & Leisure | 2 288.9 | 1 033.5 | 49.7 | -8.0 | -7.5 | 640.3 |
| Gifts & Home Furnishings | 604.3 | 209.4 | 11.6 | -7.7 | -1.2 | 457.1 |
| Total | 6 053.7 | 1 854.4 | 96.9 | -39.8 | -17.6 | 2 946.8 |
| 31 Mar 2017 | ||||||
| Corporate Promo | 2 951.2 | 626.0 | 36.3 | -6.5 | -6.9 | 1 900.3 |
| Sports & Leisure | 2 227.9 | 1 034.5 | 62.4 | -10.4 | -6.9 | 616.0 |
| Gifts & Home Furnishings | 551.0 | 192.7 | 14.7 | -3.0 | -1.2 | 384.2 |
| Total | 5 730.1 | 1 853.3 | 113.4 | -19.9 | -15.0 | 2 900.5 |
| 31 Dec 2017 | ||||||
| Corporate Promo | 3 074.0 | 585.0 | 35.2 | -43.8 | -32.6 | 1 902.3 |
| Sports & Leisure | 2 272.0 | 1 020.0 | 44.4 | -42.4 | -28.0 | 589.5 |
| Gifts & Home Furnishings | 607.1 | 204.4 | 11.9 | -24.4 | -4.8 | 444.3 |
| Total | 5 953.1 | 1 809.4 | 91.5 | -110.6 | -65.3 | 2 936.1 |
* Fixed assets classified as financial assets are not included.
FIXED ASSETS AND DEFERRED TAX ASSETS PER AREA
| 31 Mar 2018 Fixed assets* |
Deferred tax assets |
31 Mar 2017 Fixed assets* |
Deferred tax assets |
31 Dec 2017 Fixed assets* |
Deferred tax assets |
|
|---|---|---|---|---|---|---|
| Sweden | 499.4 | 14.3 | 476.8 | 15.9 | 496.2 | 14.3 |
| USA | 930.8 | 44.7 | 983.8 | 58.8 | 916.0 | 39.4 |
| Nordic countries excl. Sweden | 39.1 | 4.0 | 27.8 | 8.4 | 34.2 | 4.1 |
| Central Europe | 226.0 | 22.9 | 201.1 | 22.7 | 208.5 | 23.2 |
| Southern Europe | 101.6 | 5.5 | 158.0 | 2.9 | 94.4 | 4.9 |
| Other countries | 57.5 | 5.5 | 5.8 | 4.8 | 60.1 | 5.6 |
| Total | 1 854.4 | 96.9 | 1 853.3 | 113.4 | 1 809.4 | 91.5 |
* Fixed assets classified as financial assets are not included.
FINANCIAL INSTRUMENTS
| SEK million | 31 Mar 2018 |
31 Mar 2017 |
31 Dec 2017 |
31 Dec 2016 |
|---|---|---|---|---|
| Assets at fair value (derivaties) | 6.7 | 3.3 | 2.5 | 6.4 |
| Assets at amortised cost | 1 137.5 | 1 062.7 | 1 254.8 | 1 178.5 |
| Total financial assets | 1 144.2 | 1 066.0 | 1 257.3 | 1 184.9 |
| Liabilities at fair value (derivaties) | 1.3 | 3.6 | 1.3 | 5.0 |
| Liabilities at amortised cost | 2 749.6 | 2 673.5 | 2 715.1 | 2 780.5 |
| Total financial liabilites | 2 750.9 | 2 677.1 | 2 716.4 | 2 785.5 |
Financial instruments are measured at fair value or amortised cost according to classification in the balance sheet. Financial instruments include in addition to financial net debt, also accounts receivable and accounts payble. Financial instruments at fair value in the balance sheet belongs to level 2 in IFRS 13 hierarcy.
PLEDGED ASSETS AND CONTINGENT LIABILITIES
| GROUP | ||||
|---|---|---|---|---|
| Pledged assets | 31 Mar | 31 Mar | 31 Dec | 31 Dec |
| SEK million | 2018 | 2017 | 2017 | 2016 |
| Floating charges | 537.5 | 663.5 | 543.5 | 663.5 |
| Property mortgages | 190.3 | 147.8 | 183.2 | 147.6 |
| Net assets in subsidiaries | 2 844.0 | 2329.5 | 2 152.0 | 2 323.0 |
| Stocks and accounts receivable | 420.8 | 311.4 | 465.9 | 368.1 |
| Total | 3 992.7 | 3 452.2 | 3 344.7 | 3 502.2 |
| Contingent liabilities SEK million |
31 Mar 2018 |
31 Mar 2017 |
31 Dec 2017 |
31 Dec 2016 |
| Duty guarantees | 14.5 | 15.4 | 16.3 | 15.6 |
| Rent guarantees | 109.2 | 13.3 | 104.8 | 0.0 |
| PRI | 2.0 | 2.0 | 2.0 | 2.0 |
| Other guarantees | 2.5 | 0.5 | 1.9 | 0.4 |
| Guarantees for associated companies | 6.0 | 6.0 | 6.0 | 6.0 |
| Total | 134.2 | 37.3 | 131.0 | 24.1 |
| PARENT COMPANY | ||||
| Pledged assets | 31 Mar 2018 |
31 Mar 2017 |
31 Dec 2017 |
31 Dec 2016 |
| Floating charges | 30.0 | 30.0 | 30.0 | 30.0 |
| Shares in subsidiaries | 1 758.0 | 1 183.8 | 1 152.3 | 1 183.8 |
| Shares in related companies | 8.3 | 8.3 | 8.3 | 8.3 |
| Total | 1 796.3 | 1 222.1 | 1 190.6 | 1 222.1 |
| Contingent liabilities SEK million |
31 Mar 2018 |
31 Mar 2017 |
31 Dec 2017 |
31 Dec 2016 |
| Guarantees for subsidiaries | 704.6 | 460.9 | 671.5 | 471.2 |
| Total | 704.6 | 460.9 | 671.5 | 471.2 |
QUARTERLY CONSOLIDATED INCOME STATEMENTS
SEK million
| 2018 | 2017 | 2016 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||
| Net sales | 1 272.8 | 1 264.2 | 1 371.7 | 1 331.1 | 1 630.3 | 1 130.8 | 1 257.3 | 1 300.4 | 1 548.6 | |||
| Goods for resale | -677.5 | -692.8 | -745.7 | -692.8 | -886.8 | -616.3 | -685.0 | -693.3 | -832.3 | |||
| Gross profit | 595.4 | 571.4 | 626.0 | 638.2 | 743.5 | 514.5 | 572.3 | 607.1 | 716.3 | |||
| Gross profit margin, % | 46.8 | 45.2 | 45.6 | 47.9 | 45.6 | 45.5 | 45.5 | 46.7 | 46.3 | |||
| Other operating income | 15.9 | 10.9 | 7.0 | 10.4 | 22.9 | 9.4 | 12.2 | 14.5 | 14.9 | |||
| External costs | -317.2 | -288.6 | -270.1 | -265.4 | -304.9 | -279.8 | -249.6 | -268.5 | -300.1 | |||
| Personnel costs | -246.4 | -228.1 | -233.0 | -217.1 | -262.2 | -217.4 | -213.0 | -208.3 | -242.9 | |||
| Depreciations and write-downs | -17.6 | -15.0 | -15.7 | -16.4 | -18.2 | -13.2 | -13.4 | -14.1 | -15.2 | |||
| Other operating costs | -11.8 | -7.8 | -3.9 | -7.4 | -6.1 | -5.6 | -8.1 | -5.8 | -6.2 | |||
| Share of associated companies' result | 0.4 | 0.4 | 0.2 | 0.6 | -2.5 | 0.2 | -0.2 | 0.0 | 0.2 | |||
| Operating result | 18.6 | 43.2 | 110.5 | 143.0 | 172.5 | 8.1 | 100.2 | 124.9 | 167.0 | |||
| Financial income | 1.5 | 1.3 | 1.0 | 1.6 | 1.3 | 1.2 | 0.9 | 1.0 | 0.0 | |||
| Financial expenses | -11.7 | -13.8 | -14.1 | -14.8 | -14.3 | -15.0 | -15.7 | -16.4 | -15.9 | |||
| Result before tax | 8.4 | 30.7 | 97.4 | 129.8 | 159.4 | -5.7 | 85.4 | 109.5 | 151.1 | |||
| Tax | -2.4 | -5.8 | -20.3 | -24.5 | -12.6 | 1.1 | -18.4 | -23.0 | -23.3 | |||
| Result for the period | 6.0 | 24.9 | 77.0 | 105.3 | 146.8 | -4.6 | 67.0 | 86.5 | 127.8 | |||
| Total other comprehensive income net after tax for the period | 71.7 | -12.2 | -42.4 | -43.3 | 45.3 | -15.5 | 47.2 | 26.4 | 35.1 | |||
| Total comprehensive income for the period | 77.7 | 12.7 | 34.7 | 62.0 | 192.1 | -20.1 | 114.2 | 112.9 | 162.9 | |||
| Earnings per share before and after dilution (SEK)* | 0.10 | 0.38 | 1.16 | 1.60 | 2.20 | -0.06 | 1.01 | 1.31 | 1.90 | |||
| 2015 | 2014 | 2013 | ||||||||||
| Quarter | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Net sales | 1 096.1 | 1 191.3 | 1 272.0 | 1 405.3 | 908.5 | 983.3 | 1 122.3 | 1 259.5 | 877.3 | 995.3 | 1 035.0 | 1 139.8 |
| Goods for resale | -595.7 | -659.1 | -697.8 | -773.5 | -497.7 | -531.8 | -621.9 | -669.6 | -456.8 | -529.1 | -564.9 | -626.2 |
| Gross profit | 500.4 | 532.2 | 574.2 | 631.8 | 410.8 | 451.5 | 500.4 | 589.9 | 420.5 | 466.2 | 470.1 | 513.6 |
| Gross profit margin, % | 45.7 | 44.7 | 45.1 | 45.0 | 45.2 | 45.9 | 44.6 | 46.8 | 47.9 | 46.8 | 45.4 | 45.1 |
| Other operating income | 9.3 | 7.8 | 22.1 | 8.0 | 7.1 | 5.4 | 5.1 | 10.1 | 8.6 | 7.7 | 7.7 | 9.3 |
| External costs | -270.1 | -258.9 | -273.0 | -284.0 | -229.5 | -216.9 | -216.6 | -260.5 | -222.9 | -209.7 | -205.4 | -215.2 |
| Personnel costs | -205.3 | -212.0 | -202.8 | -231.5 | -179.5 | -176.7 | -174.8 | -204.7 | -174.7 | -177.9 | -162.5 | -182.7 |
| Depreciations and write-downs | -14.9 | -14.3 | -13.7 | -14.2 | -12.4 | -13.2 | -14.4 | -14.2 | -11.8 | -14.6 | -13.9 | -11.9 |
| Other operating costs | -18.5 | -6.7 | -9.3 | -1.7 | -2.4 | -2.6 | -4.1 | -7.4 | -3.8 | -1.9 | -2.9 | -2.3 |
| Share of associated companies' result | 0.9 | 0.6 | -1.2 | 0.0 | 0.0 | 0.5 | 0.1 | -1.0 | 0.2 | 0.4 | -0.3 | 0.8 |
| Operating result | 1.8 | 48.7 | 96.3 | 108.4 | -5.9 | 48.0 | 95.7 | 112.2 | 16.1 | 70.2 | 92.8 | 111.6 |
| Financial income | 1.9 | 3.2 | 1.4 | 0.7 | 1.4 | 1.2 | 1.1 | 1.2 | 1.8 | 1.4 | 1.8 | 1.8 |
| Financial expenses | -17.0 | -16.9 | -19.0 | -28.6 | -9.7 | -10.6 | -12.1 | -14.5 | -17.8 | -16.1 | -14.9 | -14.2 |
| Result before tax | -13.3 | 35.0 | 78.7 | 80.5 | -14.2 | 38.6 | 84.7 | 98.9 | 0.1 | 55.5 | 79.7 | 99.2 |
| Tax | 2.4 | -7.2 | -13.6 | -17.2 | 2.9 | -9.2 | -17.8 | -7.0 | 0.0 | -16.6 | -21.9 | -8.9 |
| Result for the period | -10.9 | 27.8 | 65.1 | 63.3 | -11.3 | 29.4 | 66.9 | 91.9 | 0.1 | 38.9 | 57.8 | 90.3 |
| Total other comprehensive income net after tax for the period |
101.7 | -43.9 | 7.1 | -36.9 | 1.4 | 53.5 | 53.1 | 91.2 | -38.9 | 57.8 | -31.5 | 36.6 |
| Total comprehensive income for the period |
90.8 | -16.1 | 72.2 | 26.4 | -9.9 | 82.9 | 120.0 | 183.1 | -38.8 | 96.7 | 26.3 | 126.9 |
| Earnings per share before and after dilution (SEK)* |
-0.17 | 0.41 | 0.98 | 0.94 | -0.17 | 0.44 | 1.01 | 1.38 | 0.00 | 0.60 | 0.87 | 1.35 |
* The average number of outstanding shares, before and after dilution, has been 66 343 543 in all periods in the table.
QUARTERLY CONSOLIDATED CASH FLOW STATEMENTS
SEK million
| 2018 | 2017 | 2016 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||
| Cash flow from operating activities before changes in working capital |
1.2 | 37.8 | 105.0 | 153.3 | 154.9 | -4.2 | 89.4 | 116.2 | 132.0 | |||
| Increase/decrease of stock | -117.4 | -73.9 | -63.7 | -200.4 | 129.5 | -49.7 | 62.4 | -109.6 | 151.2 | |||
| Increase/decrease of current receivables | 140.9 | 113.0 | -40.4 | -113.8 | -78.5 | 85.3 | -76.9 | -106.8 | 31.9 | |||
| Increase/decrease of current liabilities | -18.1 | -43.3 | 49.2 | 150.5 | -71.4 | 32.5 | 13.7 | 115.7 | -34.2 | |||
| Changes in working capital | 5.4 | -4.2 | -54.9 | -163.7 | -20.4 | 68.1 | -0.8 | -100.7 | 148.9 | |||
| Cash flow from operating activities | 6.6 | 33.6 | 50.1 | -10.4 | 134.5 | 63.9 | 88.6 | 15.5 | 280.9 | |||
| Investing activities | -39.8 | -19.9 | -16.0 | -36.9 | -37.7 | -16.3 | -21.2 | -25.8 | -26.3 | |||
| Cash flow after investing activities | -33.2 | 13.7 | 34.1 | -47.3 | 96.8 | 47.6 | 67.4 | -10.3 | 254.6 | |||
| Loan raised | 5.1 | 0.0 | 47.1 | 30.2 | 0.0 | 0.0 | 16.1 | 22.9 | 0.0 | |||
| Amortization of loan | 0.0 | -39.4 | 0.0 | 0.0 | -54.6 | -74.6 | 0.0 | 0.0 | -211.4 | |||
| Dividend paid | 0.0 | 0.0 | -89.6 | 0.0 | 0.0 | 0.0 | -66.3 | 0.0 | 0.0 | |||
| Cash flow from financial activities | 5.1 | -39.4 | -42.5 | 30.2 | -54.6 | -74.6 | -50.2 | 22.9 | -211.4 | |||
| Cash flow for the period | -28.1 | -25.7 | -8.4 | -17.1 | 42.2 | -27.0 | 17.2 | 12.6 | 43.2 | |||
| Liquid assets at the beginning of the period | 202.4 | 218.9 | 191.9 | 178.9 | 155.6 | 165.5 | 136.3 | 157.1 | 172.9 | |||
| Translation differences in liquid assets | 6.2 | -1.3 | -4.6 | -6.2 | 4.6 | -2.2 | 3.6 | 3.2 | 2.8 | |||
| Liquid assets at period-end | 180.5 | 191.9 | 178.9 | 155.6 | 202.4 | 136.3 | 157.1 | 172.9 | 218.9 | |||
| 2015 | 2014 | 2013 | ||||||||||
| Quarter | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Cash flow from operating activities before changes in working capital |
-9.2 | 54.6 | 73.8 | 90.6 | -7.1 | 38.8 | 93.1 | 129.1 | -18.7 | 55.3 | 86.7 | 103.3 |
| Increase/decrease of stock | -200.6 | -88.5 | -132.1 | 175.6 | -50.6 | -86.8 | -309.6 | -126.1 | 27.8 | 28.2 | -3.1 | 145.3 |
| Increase/decrease of current receivables | 129.5 | -23.0 | -117.2 | 85.2 | 172.3 | -28.0 | -124.2 | -40.7 | 131.1 | -44.0 | -84.8 | -32.7 |
| Increase/decrease of current liabilities | 51.4 | 1.0 | 14.3 | 24.1 | -25.8 | 48.3 | 50.0 | -16.9 | -34.1 | 2.3 | -1.3 | -2.8 |
| Changes in working capital | -19.7 | -110.5 | -235.0 | 284.9 | 95.9 | -66.5 | -383.8 | -183.7 | 124.8 | -13.5 | -89.2 | 109.8 |
| Cash flow from operating activities | -28.9 | -55.9 | -161.2 | 375.5 | 88.8 | -27.7 | -290.7 | -54.6 | 106.1 | 41.8 | -2.5 | 213.1 |
| Investing activities | -26.7 | -40.7 | -15.0 | -24.1 | -11.3 | -17.5 | -12.4 | -29.4 | -8.8 | -8.8 | -21.2 | -7.2 |
| Cash flow after investing activities | -55.6 | -96.6 | -176.2 | 351.4 | 77.5 | -45.2 | -303.1 | -84.0 | 97.3 | 33.0 | -23.7 | 205.9 |
| Loan raised | 0.0 | 179.1 | 173.9 | 0.0 | 0.0 | 129.6 | 289.8 | 121.3 | 0.0 | 0.0 | 0.0 | 0.0 |
| Amortization of loan | -13.9 | 0.0 | 0.0 | -349.1 | -109.8 | 0.0 | 0.0 | 0.0 | -157.3 | 24.2 | -12.0 | -146.7 |
| Dividend paid | 0.0 | -66.3 | -1.0 | 0.0 | 0.0 | -66.3 | 0.0 | 0.0 | 0.0 | -66.3 | 0.0 | 0.0 |
| Cash flow from financial activities | -13.9 | 112.8 | 172.9 | -349.1 | -109.8 | 63.3 | 289.8 | 121.3 | -157.3 | -42.1 | -12.0 | -146.7 |
| Cash flow for the period | -69.5 | 16.2 | -3.3 | 2.3 | -32.3 | 18.1 | -13.3 | 37.3 | -60.0 | -9.1 | -35.7 | 59.2 |
| Liquid assets at the beginning of the period | 216.0 | 159.0 | 169.5 | 167.7 | 185.1 | 153.1 | 176.0 | 169.6 | 229.7 | 168.0 | 163.0 | 123.7 |
| Translation differences in liquid assets | 12.5 | -5.7 | 1.5 | -4.5 | 0.3 | 4.8 | 6.9 | 9.1 | -1.7 | 4.1 | -3.6 | 2.2 |
| Liquid assets at period-end | 159.0 | 169.5 | 167.7 | 165.5 | 153.1 | 176.0 | 169.6 | 216.0 | 168.0 | 163.0 | 123.7 | 185.1 |
SHARE NEW WAVE GROUP'S
The share capital in New Wave Group 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 results. Each Series A share is entitled to ten votes and each Series B is entitled to one vote. New Wave's Series B shares are listed at OMX Stockholm Mid Cap.
DIVIDEND POLICY
SHAREHOLDERS
The Board's aim is that the dividend will account for 40 % of the Group's result after taxes over a business cycle.
The number of shareholders amount to 14 458 (12 095) on 31 March, 2018. Institutional investors accounted for 50 % of the capital and 13 % of the votes. At the same time the ten largest shareholders held 64 % of the capital and 90 % of the votes. Non-Swedish shareholders accounted for 14 % of the capital and 4 % of the votes.
NEW WAVE GROUP'S TEN MAJOR SHAREHOLDERS 2018-03-31
| Shareholder | Number of shares |
Number of votes |
Capital % | Votes % |
|---|---|---|---|---|
| Torsten Jansson through companies | 21 843 277 | 199 212 397 | 32.9% | 81.7% |
| Avanza Pension | 4 720 091 | 4 720 091 | 7.1% | 1.9% |
| Fjärde AP-Fonden | 3 637 993 | 3 637 993 | 5.5% | 1.5% |
| Unionen | 2 400 000 | 2 400 000 | 3.6% | 1.0% |
| City Bank New York | 2 185 989 | 2 185 989 | 3.3% | 0.9% |
| Svolder AB | 2 182 000 | 2 182 000 | 3.3% | 0.9% |
| Spiltan Aktiefonder | 1 409 977 | 1 409 977 | 2.1% | 0.6% |
| Hans Diding | 1 356 662 | 1 356 662 | 2.0% | 0.6% |
| Handelsbanken fonder | 1 336 242 | 1 336 242 | 2.0% | 0.5% |
| State Street Bank | 1 029 012 | 1 029 012 | 1.6% | 0.4% |
| Total | 42 101 243 | 219 470 363 | 63.5% | 90.1% |
SHAREHOLDER DISTRIBUTION IN NEW WAVE GROUP 2018-03-31
| Number of shares |
Number of votes |
Capital % | Votes % | |
|---|---|---|---|---|
| Sweden | 57 316 525 | 234 685 645 | 86.4% | 96.3% |
| Shareholders outside Sweden. excl.USA | 4 384 096 | 4 384 096 | 6.6% | 1.8% |
| USA | 4 642 922 | 4 642 922 | 7.0% | 1.9% |
| Total | 66 343 543 | 243 712 663 | 100.0% | 100.0% |
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 Annual 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.
| 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 company'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 estimate operating profability. |
| 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 |
| EBITDA | Operating result before depreciation/amortization and impairment of non-current assets. |
The measure is used to show profit (loss) from operating activities, regardless of depreciation/ amortization. |
| NET FINANCIAL ITEMS | The total of interest incomes, interest expenses, exchange differences on borrowings and cash equivalents in foreign currencies, other financial income and other financial expences. |
The measure reflects the company's total costs of the external financing. |
| RETURN MEASURES | DEFINITION/CALCULATION | PURPOSE |
| RETURN ON CAPITAL EMPLOYED |
Operating result plus finacial income as a percentage of average capital employed. |
The measure is used to analyze profitability by putting result in relation to the capital needed to operate the business. |
| The average capital employed is calculated by taking the capital employed per period end and the capital employed by period end of the Comparative period in the previous year divided by two. |
||
| RETURN ON EQUITY | Result for the period according to the income statement as a percentage of average equity. |
The measure is used to analyze profitability over time, given the resources available to the parent company's owners. |
| For the parent company it is calculated as result after tax as a percentage of average adjusted equity. In adjusted equity, 78 % of untaxed reserves are included. |
| 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 Group's untaxed reserves and noncon trolling interests. Deferred tax liability in untaxed reserves has been calculated at a 22.0 % rate for Swedish companies and at the applicable tax rate for foreign companies in each country outside Sweden. |
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). |
| WORKING CAPITAL | Total current assets, excluding liquid assets, less shortterm non-interest bearing liabilities. |
The measure is used to show how much capital is needed to finance day to day operations. |
| NET DEBT | Interest-bearing debt (current and non-current) less cash and cash equivalents. |
The measure shows financing from borrowings. |
| STOCK TURNOVER | Goods for resale in the income statement divided by average stock. |
The measure is used to show the inventory's turnover per year. |
| 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 company's indebtedness. |
| NET DEBT IN RELATION TO WORKING CAPITAL |
Net debt divided by working capital. | The measure is used to show how much of the working capital is financed through net debt. |
| INTEREST COVERAGE RATIO | Result before tax plus financial costs divided by financial costs. |
The measure is used to calculate the company's ability to pay interest costs. |
| EQUITY RATIO | Equity as a percentage of total assets. | The measure shows how much of the company's assets are financed by the shareholders through equity. An equity ratio is a measure of financial strenght. |
| DATA PER SHARE | DEFINITION/CALCULATION | PURPOSE |
| EQUITY PER SHARE | Equity at the end of the period divided by number of shares at the end of the period. |
Equity per share measures the net asset value backing up each share of the company's equity and determines if a company is increasing shareholder value over time. |
| 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. |
| CASH FLOW FROM OPERATIONS |
Cash flow from operating activities including changes in working capital and before cash flows from investing and financing activities. |
The measure is used to show the cash flow generated by the company's operations. |
| NET INVESTMENTS | Cash flow from investing activities according to the cash flow analysis which includes investments and divestments of buildings, acquisitions, invest ments in tangible and intangible assets and raised long-term debt. |
The measure is used to regularly estimate how much cash is used to maintain operations and for expansion. |
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) Corp. id number 556350-0916 Kungsportsavenyen 10, SE-411 36 Gothenburg Phone +46 (0) 31 712 89 00 | [email protected] www.nwg.se