Acquisition
New Wave Group has,
by way of an asset
acquisition, acquired ON
Interiör’s business, includ-
ing the trademarks ByON,
Victorian and Vakinme.
SUMMARY OF 2019
Net sales amounted to SEK 6,903.5 million, which was an impro-
vement of 10% (5% excluding currency change) compared to the
previous year. The Group has seen growth during all quarters and
has also increased sales in all regions and in both sales channels.
Corporate increased their net sales by 9%. During the year,
the Group continued its efforts to improve its service level and
made further investments in new distribution centers. This work
includes larger warehouses as well as improvements in IT systems.
In addition, the segment has continued its efforts on the sales side,
such as an increase in the number sales staff and a high level of
marketing activities.
subsequent higher net debt and interest expenses. This year's tax
expense increased slightly, which is mainly related to the fact that
last year includes a positive change in deferred tax. Result for the
year improved to SEK 370.1 (360.0) million.
Sports & Leisure's investments in the Craft brand and their
teamwear collection have intensified in 2019. In addition to agre-
ements with smaller clubs and associations that form our base,
Craft signed new agreements with Hammarby Fotboll, Swedish
National Team in Handball and extended the agreement with the
Swedish Athletics Association. For the second year in a row, the
brand was named best supplier in the "Team Sports" category by
the German magazine SAZ sport. Cutter & Buck is also deve-
loping well and has good growth in Europe and Canada. The
segment as a whole increased its net sales by 12% compared to last
year. In addition to more marketing activities (mainly related to
teamwear), the segment expanded its warehouse space and made
improvements in IT systems.
Cash flow from operating activities amounted to SEK 99.5
(222.6) million. The lower cash flow is largely due to the timing of
payment of accounts payable related to our increased merchandise
purchases. Investment activities decreased slightly and amounted
to SEK 148.7 (163.2) million.
In September, the Group signed a supplement to the existing
financing agreement and increased its total credit limit by an addi-
tional SEK 500 million.
Gifts & Home Furnishings increased its net sales by 2%. However,
the improvement in sales was not sufficient to cover the higher cost
structure established in the segment. EBITDA became negative
and measures were taken to improve earnings. In addition,
a business combination has been made. This is expected to
complement existing brands.
The equity ratio decreased and amounted to 44.9 (48.6) %, which
is related to the introduction of the new accounting standard
IFRS 16. Excluding the effects from this standard, the equity ratio
improved by 1.1 percentage point to 49.7%. Net debt increased
by SEK 1,133.8 million, of which SEK 803.8 million is related
to IFRS 16, and amounted to SEK 2,964.8 (1,831.0) million.
The remainder of the increase is mainly due to financing of our
expanded product range and thus higher inventories. The net
debt to equity ratio and net debt in relation to working capital
amounted to 78.6 (53.3) % and 78.1 (57.0)% respectively, see also
note 8 regarding the effect of IFRS 16 on page 29.
Both sales channels improved their net sales. Promo increased by
9% and retail by 10%. The efforts made in the form of expanded
warehouses and improved IT systems are related to both sales
channels.
The Group's gross profit margin is at the same level as last year and
amounted to 46.4 (46.6)%.
During the autumn, the Group arranged a capital market day
where the theme was brands and CSR. The Group's three largest
brands - Clique, Cutter & Buck and Craft - were presented, as well
as a review of the Group's CSR work.
The new accounting standard IFRS 16 has had a positive impact
of SEK 135.6 million on the Group's external costs compared with
the previous year. Excluding IFRS 16, the Group increased its
expenses during the first half of the year, which was related to an
increase in marketing activities and new recruitments within sales,
warehousing and customer service. The rate of increase decreased
during the second half of the year and the fourth quarter was on
par with last year. In addition to these activities, volume-related
costs have also contributed to an increase in total costs for the full
year compared with the previous year.
New Wave Group was one of eight companies that received full
marks - 6 points out of 6 possible - when Dagens Industri, Aktuell
Hållbarhet and the School of economics and management at
Lund University ranked how over 170 listed companies relate
to Agenda 2030 and the UN's global sustainability goals. The
ranking analyzed how the companies have adapted their sustai-
nability work to the UN's global sustainability goals. Companies
must demonstrate that they work systematically to identify their
impact and how they should work strategically to best contribute
to the achievement of Agenda 2030.
Our expanded product range and establishments in new markets
have contributed to a higher capital tied up in inventories with
8