Craft ranked as the #1 Teamwear supplier
in Germany by the magazine SAZ Sport.
SUMMARY OF 2018
Net sales amounted to SEK 6,290.6 million which was an
improvement by 12 % (9 % excluding currency changes) compared
to last year. The Group has experienced growth in each quarter and
has also increased sales in all regions and in both sales channels.
The promo sales channel increased its net sales by 16 % and the
retail sales channel by 8 %. The sales and marketing efforts made
during the year have been geared toward both sales channels.
All segments have improved their gross profit margins and for the
group as a whole this amounted to 46.6 (46.1) %.
Segment Corporate* increased by 16 %, which is a result of our
efforts regarding good delivery service and expanded marketing
activities. Besides a well-balanced stock, we have invested in larger
warehouses, as well as better IT systems to improve our level of
service. In addition, we have launched a number of new products,
among others within workwear, which strengthens our overall
product portfolio in the segment.
The Group has continued its high level of marketing activities and
new employments within sales, warehouses and customer service.
Gifts & Home Furnishings has made start-ups in Kosta. Besides
the above-mentioned activities, even volume-related costs have
contributed to the total cost increase compared to last year.
Within Sports & Leisure a number of investments in Craft have
started to take effect. Craft Teamwear development continues
and has, among other things, been named best supplier within
the category "Team Sports" by the German magazine SAZ Sport.
Besides all the smaller clubs and associations that make up our base,
there are even a number of major European football clubs such as
Dresden, Darmstadt, Zwolle and Gent who have chosen to play in
Craft's products. Craft has also signed a three-year agreement with
Spartan USA. Spartan stages 287 obstacle course races per year in
32 countries, of which about 150 are in the United States.
The agreement covers both clothes and shoes and has an estimated
sales value of USD 30 million during the three-year agreement
term. The agreement may be regarded as a breakthrough for
the brand in the United States. Within Cutter & Buck we will
continue expanding our sales organization in the United States,
but also strengthen our operations in Canada and Europe.
The segment has increased its marketing activities during the year
and all in all, the efforts produced results. Sales for the segment
have increased by 11 % for the whole year, however, growth was
20 % in the second half.
Net financial items improved due to a new funding agreement
which contributed to lower interest rates. The tax expense for
the year has increased compared to last year. Last year included
a positive change in deferred tax liabilities, which is related to a
lower corporate tax rate in the United States. The period's result
amounted to SEK 360.0 (354.0) million.
Cash flow from operating activities amounted to SEK
222.6 (207.8) million. This is partly due to a higher operating result
but also a higher influx of goods resulting in an increased debt to
suppliers. Stocks have risen due to continued stock build-up in
Canada as well as new product lines, primarily within Craft and
work wear and amounted to SEK 3,230.9 (2,643.4) million. Cash
flow from investment activities amounted to SEK-163.2 (-110.6)
million, which is mainly related to our investments in distribution
centers and IT.
As a result of our stock increase, equity ratio decreased slightly
to 48.6 (50.9) %. Net debt increased by SEK 193.7 million and
amounted to SEK 1,831.0 (1,637.3) million. Net debt to equity
ratio and net debt in relation to working capital decreased and
amounted to 53.3 (54.1) % and 57.0 (57.4) % respectively.
Gifts & Home Furnishings had a growth of 2 %, despite the fact
that the hot weather didn’t favour the all-important summer
months of activities at Kosta. The segment has made a number
of start-ups and has expanded marketing efforts which have
burdened this year’s result.
* The segment Corporate Promo has been renamed to Corporate.
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