New Wave Group Annual Report 2020 English | Page 6

NWG // 2020
The cost savings resulted in improvements in both operating result and operating margin compared to the previous year .
2020
Sports & Leisure has been negatively affected by COVID-19 due to cancelled sport events with reduced sales as a result and the sport retailers ’ high inventory 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 .
Key figures Operating result per operating segment ,
2020 2019 Net sales , SEK million 6 098.8 6 903.5 Gross profit margin , % 43.2 46.4 EBITDA , SEK million 775.4 768.1 Operating result , SEK million 545.9 535.0 Result for the year , SEK million 363.0 370.1 Equity , SEK million 3 855.5 3 770.7 Return on equity , % 9.5 10.3 Return on capital employed , % 8.4 8.6 Net debt to equity ratio , % 47.1 78.6 Net debt in relation to working capital , % 59.5 77.1 Equity ratio , % 53.4 44.9 Average number of employees 2 064 2 579 Earnings per share , SEK 5.51 5.66 Equity per share , SEK 57.96 56.59
For definitions of alternative performance measures , see pages 124-125 .
SEK million
350 300 250 200 150 100 50 0
-50 Corporate
2019
Sports & Leisure
2020
Gifts & Home Furnishings
006 // ANNUAL REPORT