New Wave Group AB feb_6_q4_en_hq | Page 4

CEO COMMENTS OCTOBER - DECEMBER Once again a quarter with growth. Net sales increased by 4 % (1 % in local currencies) to SEK 2,024.1 million, which is the highest sales we have ever had in a quarter. Gross profit remains stable and amounted to 46.7 (46.4) %. We were negatively affected at the end of the year in terms of sales of winter products such as jackets, gloves, hats, scarves, etc. The warm weather mainly affected our sports brands, but also workwear to some extent. Unfortunately, the warm weather has continued into the first quarter. External costs decreased by SEK 6.1 million (SEK 46.8 million incl. IFRS 16) compared with the previous year. Operating result thus amounted to the highest ever for a quarter and was SEK 240.3 (209.4) million, an increase of 15 %. The operating margin improved by 1.1 percentage points and amounted to 11.9 %. BALANCE SHEET AND CASH FLOW It feels good that our previously stated focus to prioritize costs, earnings and cash flow had an effect already in the fourth quarter. I am very happy and satisfied with our balance sheet and cash flow. We are now entering a phase where we will focus on earnings and positive cash flow instead of strong growth, investments in new brands and inventory. At the end of the quarter, we were negatively affected by the warm weather and sales of winter products have been tough for both us and our customers. We enter this phase with an equity of SEK 3,770.7 million and an equity ratio of 44.9 %. We have all the potential to further improve this, but it is still a nice feeling and a great security. FULL YEAR 2019 2019 was another year of growth. Net sales increased by 10 % (5 % in local currencies) and amounted to SEK 6,903.5 million. It is also pleasing that we for the fourth consecutive year propose an increased dividend and at the same time increased sales and strengthened the balance sheet. It was the sixth year in a row of growth and during those years we have grown by SEK 2.9 billion. THE FUTURE Operating result amounted to SEK 535.0 million and result for the period amounted to SEK 370.1 million, both new all-time highs. I feel confident and optimistic and we are strong in virtually all areas and brands. The year was characterized by great success for many of our opera- tions. The only thing we are not satisfied with is the development in Gifts & Home Furnishings where we also took a goodwill write-down of Sagaform of SEK -11.4 million. Actions have taken to improve the development. The major investment we have made in club and teamwear brings with it a new market for many of our brands, even if it is most important for Craft. 4