NWG // FINANCIAL INFORMATION
Capital tied up Acquisition
Capital tied up in inventories increased by SEK 2,360.1 million compared to the previous year , amounting to SEK 5,297.7 ( 2,937.6 ) million . Exchange rate changes have increased the inventory value by SEK 289.5 million and acquired operations affected by SEK 264.8 million . The inventory ' s turnover rate decreased slightly compared to the previous year and amounted to 1.1 ( 1.2 ) times .
As of December 31 , 2022 , total obsolescence deductions ( the difference between the lowest of acquisition value and fair value ) for inventory amounted to SEK 164.4 ( 140.5 ) million and obsolescence reserve in relation to finished goods inventory amounted to 3.5 ( 5.2 ) %.
Accounts receivable amounted to SEK 1,664.1 ( 1,359.6 ) million , where the increase was primarily related to the higher net sales .
Investments , financing and liquidity
Cash flow from operating activities amounted to SEK -360.0 million , which was SEK 1,567.4 million lower than the previous year ( SEK 1,207.4 million ). The lower cash flow was mainly related to more merchandise purchases and thus a higher inventory . The cash flow from investment activities amounted to SEK -522.2 ( -114.2 ) million , of which SEK -398.7 million relates to business acquisitions .
Net debt increased by SEK 1,260.8 million and amounted to SEK 2,329.6 ( 1,068.8 ) million . The net debt ratio and net debt through working capital increased and amounted to 39.5 ( 23.4 ) % and 44.7 ( 35.7 ) % respectively . Indebtedness has increased due to higher inventory and the acquisition of B . T . C . Activewear Ltd .
SEK million 31 Dec 2022 31 Dec 2021
Raw materials |
63.4 |
41.1 |
Work in progress |
1.8 |
1.9 |
Goods in transit 544.4 356.8 Finished goods 4 688.1 2 537.8 Total 5 297.7 2 937.6
The equity ratio decreased by 5.8 percentage points and amounted to 53.8 ( 59.6 ) %. The lower equity ratio is attributed to higher net debt in connection with acquisitions and inventory build-up .
In the last quarter , the group took up a new long-term loan that runs through 2030 . The total credit line therefore amounted to SEK 2,881.2 million as of December 31 , of which USD 7.0 million runs through January 2024 , SEK 2,150.0 million runs through December 2025 , SEK 207.8 million runs through August 2027 and SEK 200.0 million has a term that runs through December 2030 . The other SEK 250.0 million has a term of between three months and five years . The credit line is limited in amount to and dependent on the value of certain underlying assets . The financing agreement means that key figures ( covenants ) must be met in order to maintain the credit line .
On September 2 , New Wave Group AB acquired 100 % of the shares in the British profile clothing company B . T . C . Activewear Limited . The purchase price amounted to GBP 33 million , see also note 27 .
B . T . C . Activewear has its distribution center and head office in Birmingham . The company is the UK ’ s third largest wholesale distributor within its sector , offering approximately 50 leading international apparel brands . B . T . C . Activewear ’ s sales model showcases the potential of e-commerce for B2B sales , as approximately 90 % of orders are placed via the company ’ s website www . btcactivewear . co . uk ( includes additional information about the company ).
In 2021 , B . T . C . Activewear ’ s revenue was £ 53.0 million . The acquisition has had a positive impact on New Wave Group ’ s result already this current year but will have a negative impact on the group ’ s gross and operating margin , as these are lower in B . T . C . Activewear than in New Wave Group . The introduction of New Wave Group ’ s own brands to the company ’ s portfolio will however allow for a considerable increase in both the gross and operating margin of B . T . C . Activewear in the coming years .
The UK is one of Europe ’ s biggest markets for promotional products , with a clear trend towards increased focus on own-brand products . Together with B . T . C . Activewear , who has a broad and well-established customer base , New Wave Group will have a strong platform for the distribution of the group ’ s brands in the UK .
Intangible assets
The Group ' s intangible fixed assets consist mainly of goodwill and trademarks . The trademarks with the largest book values are well-known trademarks such as Orrefors and Kosta Boda within Gifts & Home Furnishings as well as mainly Cutter & Buck within Sports & Leisure . The Group ’ s book values are tested annually , or more often if required , to assess whether any need for impairment exists .
The assets ' value in use is determined by discounting cash flow forecasts for the next five years , including a terminal growth period , using a weighted average cost of capital ( WACC ). The most important assumptions in determining the value in use include growth rate , operating margin and WACC .
Based on the tests and analyzes that have been carried out during the year , there is currently no need for impairment . Nor was there any need for impairment for the comparison year . For more information about the Group ' s intangible fixed assets and impairment testing , see note 8 .
ANNUAL REPORT // 067