New Wave Group Annual Report 2020 English | Page 58

NWG // FINANCIAL INFORMATION

levels have also negatively affected the segment ’ s sales . Despite these negative effects , investments in the Craft brand have continued during the year and a cooperation with the Gothenburg football club IFK Göteborg was announced at the beginning of the year . The US market was hit hard by the pandemic , causing several of our companies in the segment to shut down during a period . The companies have made large cost savings and adjusted their business according to the current volumes . The segment as a whole reduced its net sales by 25 % compared to the previous year .

Gifts & Home Furnishings increased net sales by 4 %. The segment has had a split development during the year . Due to COVID-19 , Destination Kosta has had a lower number of visitors and thus significantly lower net sales . The other brands have had a better development and are on par with or better than the previous year . In this segment , cost savings have also been implemented and together with improved net sales the operating loss last year has been turned to an operating profit this year .

The Group ’ s gross profit margin decreased compared to the previous year and amounted to 43.2 ( 46.4 ) %.

The Group quickly took actions and implemented cost savings , as well as adjusted the business to a lower volume . External costs and personnel costs have decreased by SEK 514.3 million or 20.8 %. In addition to the measures the companies themselves have implemented , several companies have received government support . Such supports are recorded as other operating income and are reported in note 26 . The cost savings resulted in improvements in both operating result and operating margin compared to the previous year .

The capital tied up in stock has been adjusted to the lower sales volume , which has positively affected cash flow during the year . This resulted in a lower net debt and reduced interest expenses . The tax expense for the year increased slightly , mainly related to a negative adjustment of deferred tax . Result for the year amounted to SEK 363.0 ( 370.1 ) million .

Cash flow from operating activities amounted to SEK 1,206.6 ( 99.5 ) million . The improved cash flow is mainly attributable to lower merchandise purchases . Investing activities decreased and amounted to SEK 57.5 ( 148.7 ) million .

The equity ratio improved and amounted to 53.4 ( 44.9 ) %, and the Group ’ s net debt decreased by SEK 1,147.2 million and amounted to SEK 1,817.6 ( 2,964.8 ) million .

Net sales

Net sales amounted to SEK 6,098.8 million , which was 12 % lower than last year ( SEK 6,903.5 million ). Exchange rate effects had a negative effect on sales , and net sales in local currencies were 10 % lower than the previous year .

Net sales in the US decreased by 36 %, which was related to Sports & Leisure and Corporate . In Sweden , net sales decreased by 3 %, with decreases in Corporate and Sports & Leisure while Gifts & Home Furnishings increased . Sales in Central Europe decreased by 15 %, which was attributable to Corporate and Sports & Leisure . The Nordic countries excluding Sweden had 17 % lower net sales than last year , also related to Corporate and Sports & Leisure . Southern Europe increased by 11 %, attributable to several major trading shipments in the Corporate segment . Other countries increased by 14 %, which was related to the trading business in Asia within the Corporate segment .

The promo sales channel deceased by 5 %. Corporate and Sports & Leisure decreased , while Gifts & Home Furnishings increased . The retail sales channel decreased by 21 %, with lower sales in all segments .

058 // ANNUAL REPORT