New Wave Group Annual Report 2023 | Page 66

NWG // FINANCIAL INFORMATION

Other operating income and other operating expenses

Other operating income increased by SEK 6.8 million to SEK 130.7 ( 123.9 ) million . Other operating income is primarily attributable to the operation ' s exchange rate gains and must be set against the profit line other operating expenses where the operation ' s exchange rate losses are reported . Other operating expenses decreased by SEK 12.9 million and amounted to SEK -54.5 ( -67.4 ) million . The net of the abovementioned items amounted to SEK 76.2 ( 56.5 ) million . The improvement is primarily due to receiving electricity subsidies , a positive profit effect in connection with the acquisition of Tenson AB in addition to capital gains from the sale of property .

Costs and depreciations

External costs increased by SEK 192.7 million and amounted to SEK -1,663.0 ( -1,470.3 ) million . The increase is mainly related to volume-related costs , rental costs but also more marketing activities . Personnel costs increased by SEK 147.5 million and amounted to SEK -1,352.8 ( -1,205.3 ) million . This year ' s increase is mainly due to acquired units and the savings made in previous years . The business is now adapted to current volumes .

Exchange rate changes have increased the above costs by SEK 112.6 million and acquired operations affected the costs by SEK 97.0 million .

Depreciation and write-downs were slightly higher compared to the previous year and amounted to SEK -263.2 ( -249.2 ) million . The increase is related to depreciation of right-of-use assets linked to leasing and investments in our warehouses .

Operating result

Operating result increased by SEK 72.1 million and amounted to SEK 1,577.2 ( 1,505.1 ) million . The improvement is mainly related to a higher gross profit margin . The operating margin was slightly lower than last year but still above our target and amounted to 16.6 ( 17.0 ) %. Acquired businesses contributed SEK 37.3 million .

Net financial items and taxes

The financial net increased compared to the previous year , amounting to SEK -137.7 ( -55.0 ) million . Net debt increased during the first nine months of the year due to inventory build-up and last year ' s acquisition that took place on September 1 . This has increased interest costs at the same time as interest levels have increased compared to last year .

The tax cost for the period amounted to SEK -320.4 ( -281.3 ) million . The effective tax rate amounted to 22.3 ( 19.4 ) %, where last year deferred tax assets had a positive effect .

Result for the year

Result for the year amounted to SEK 1,119.0 ( 1,168.8 ) million and earnings per share amounted to SEK 8.43 ( 8.81 ).

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 4,757.1 ( 4,152.0 ) million . Acquired operations had a positive impact of SEK 445.6 million or 11 %. Central and Southern Europe and the Nordics ( excl . Sweden ) increased their net sales , while the regions USA , Sweden and Other countries decreased . Both sales channels increased their net sales . Operating result improved by SEK 129.6 million and amounted to SEK 942.7 ( 813.1 ) million . The higher result is mainly related to the higher net sales . Acquired unit contributed SEK 28.1 million .

Sports & Leisure

Net sales for the period January-December increased by 2 % and amounted to SEK 3,874.6 ( 3,782.3 ) million . Acquired operations had an impact of SEK 74.9 million or 2 %. The segment had higher net sales in all regions except the Nordics ( excl . Sweden ) and Other countries . Both sales channels increased . Operating result decreased by SEK 29.6 million and amounted to SEK 617.7 ( 647.3 ) million . The decline in earnings is related to higher costs but has an improved gross profit margin . Acquired unit contributed SEK 2.7 million and a positive profit effect was reported in connection with the acquisition of SEK 6.5 million .

Gifts & Home Furnishings

Net sales for the period January-December decreased by 3 % and amounted to SEK 881.1 ( 909.3 ) million . All regions have a lower net turnover and it is the promo sales channel that is decreasing . Retail sales are on par with last year . Operating result decreased by SEK 27.9 million compared to the previous year and amounted to SEK 16.8 ( 44.7 ) million . The lower result is related to the lower net sales and higher costs in the form of more market activities and a higher number of employees .

Net sales and operating result per operating segment

066 // ANNUAL REPORT