New Wave Group Annual Report 2022 NWG_Annual_Report_2022_EN | Page 66

NWG // FINANCIAL INFORMATION

Other operating income and other operating expenses

Other operating income increased by SEK 12.4 million to SEK 123.9 ( 111.5 ) million . Last year ' s figure includes forgiven government loans ( PPP loans ) in the USA of SEK 44.2 million . See also note 26 regarding information related to COVID-19 . In addition to that support , other operating income primarily includes the operation ' s exchange rate gains and must be offset against the profit line other operating expenses where the operation ' s exchange rate losses are reported . Other operating expenses increased by SEK 45.7 million and amounted to SEK -67.4 ( -21.7 ) million . The net of the above-mentioned items amounted to SEK 56.5 ( 89.8 ) million .

Costs and depreciations

External costs increased by SEK 402.4 million and amounted to SEK -1,470.3 ( -1,067.9 ) million . The increase was mainly due to volume-related costs but also higher marketing activities . Personnel costs increased by SEK 188.4 million and amounted to SEK -1,205.3 ( -1,016.9 ) million . This year ' s increase is mainly due to savings that were made in previous years and that the business had now adapted to current volumes .

Exchange rate changes have increased the above costs by SEK 137.4 million and acquired operations increased costs by SEK 39.5 million ( incl . acquisition costs ).

Depreciation and write-downs were slightly higher compared to the previous year and amounted to SEK -249.2 ( -227.3 ) million . The increase is related to depreciation of the right-of-use asset linked to leasing .

Operating result

Operating result increased by SEK 499.2 million and amounted to SEK 1,505.1 ( 1,005.9 ) million . The improvement was related to higher net sales and gross profit margin . The operating margin improved and amounted to 17.0 ( 15.0 ) %. Acquired operations contributed SEK 20.8 million ( after acquisition costs ).

Net financial items and taxes

The financial net decreased compared to the previous year , amounting to SEK -55.0 ( -43.0 ) million . The net debt has increased during the year due to inventory build-up and company acquisitions , which increased interest costs at the same time as interest rates increased during the last quarter of the year .

The tax cost for the period amounted to SEK -281.3 ( -202.9 ) million . The effective tax rate amounted to 19.4 ( 21.1 ) %, where the year was positively affected by changes in deferred tax assets . Last year also had a positive impact due to non-taxable income in the form of forgiveness of government loans in the USA .

Result for the year

Result for the period amounted to SEK 1,168.8 ( 760.0 ) million and earnings per share amounted to SEK 17.62 ( 11.46 ).

Reporting of operating segments

New Wave Group divides its operations into the segments

Corporate , Sports & Leisure and Gifts & Home Furnishings . The Group monitors the segments ’ and brands ’ sales as well as operating result . The operating segments are based on the Group ’ s operational management .

Corporate

Net sales for the year amounted to SEK 4,152.0 ( 2,971.6 ) million . Acquired operations had a positive impact of SEK 247.0 million or 8 %. All regions had improved net sales . The promo sales channel increased , while the retail trade decreased compared to last year . Operating result improved by SEK 372.3 million and amounted to SEK 813.1 ( 440.8 ) million . The higher result is mainly related to the higher net sales and a higher gross profit margin . Acquired operations contributed SEK 20.8 million ( after acquisition costs ).

Sports & Leisure

Net sales for the period January-December increased by 35 % and amounted to SEK 3,782.3 ( 2,792.5 ) million . The segment had higher net sales in all regions and both sales channels increased . Operating result increased by SEK 181.3 million and amounted to SEK 647.3 ( 466.0 ) million . The improvement is mainly related to the higher net sales , but the segment also has higher costs . Last year ' s operating result had a positive impact from government forgiven loans ( PPP loans ) in the USA of SEK 35.2 million .

Gifts & Home Furnishings

Net sales for the period January-December decreased by 5 % and amounted to SEK 909.3 ( 954.5 ) million . The lower net turnover is mainly related to Sweden . However , the Nordic region excluding Sweden improved its net sales . Sales decreased in both sales channels . Operating result decreased by SEK 54.4 million compared to the previous year and amounted to SEK 44.7 ( 99.1 ) million . The lower result is because the companies in Sweden had the opportunity for an extra tax deduction for gifts to staff of SEK 2,000 per employee during the COVID-19 pandemic . This extra deduction was removed in 2022 . The segment also had higher costs related to market investments , energy costs and more employees .

Net sales and operating result per operating segment

066 // ANNUAL REPORT