NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 60

NWG // FINANCIAL INFORMATION
Gross profit
The gross profit margin was 46.4 (46.6)%. Corporate as well as
Sports & Leisure were on the same level, while Gifts & Home
Furnishings had a slightly lower margin than last year.
Other operating income and
Other operating expenses
Other operating income increased by SEK 3.1 million to SEK 77.9
(74.8) million. Other operating income is attributable to operating
currency gains and other remunerations and should be compared
to the result row Other operating expenses, where primarily
currency losses are reported. Both years include a positive result
from business combinations, which amounted to SEK 11.4 (8.4)
million. Other operating expenses decreased by SEK 5.2 million
and amounted to SEK -39.6 (-44.8) million. The net of the above
items amounted to SEK 38.3 (30.0) million.
Costs and depreciations
External expenses decreased by SEK 23.7 million and amounted
to SEK -1,312.7 (-1,336.4) million. Accounting in accordance
with IFRS 16 has reduced external costs by SEK 135.6 million.
Excluding IFRS 16, costs have increased, which is mainly related to
higher sales and marketing initiatives such as increased inventory
capacity, improved service level and marketing. The higher net
sales have also increased volume-related costs. Personnel costs
increased by SEK 96.9 million and amounted to SEK -1,159.9
(-1,063.0) million, which is related to more employees in primarily
warehousing and sales, but also in areas such as marketing, product
development and customer service. Exchange rate changes have
increased the above costs by SEK 100.3 million.
Amortizations, depreciations and write-downs were higher
compared to last year and amounted to SEK -233.1 (-77.9) million.
The increase is primarily a result of IFRS 16, which affected
depreciations by SEK -126.4 million. The higher depreciations are
also related to new investments in warehouses and a write-down
of goodwill in the Gifts & Home Furnishings segment, which
amounted to SEK -11.4 million.
Operating margin
Operating result improved by SEK 52.8 million and amounted to
SEK 535.0 (482.8) million. The operating margin is at the same
level as the previous year and amounted to 7.7 (7.7) %.
Net financial items and taxes
Net financial items amounted to SEK -68.2 (-40.9) million.
Accounting in accordance with IFRS 16 affected financial
expenses by SEK -20.0 million. The Group has higher interest
expenses due to a higher net debt.
The tax expense for the period was SEK -96.7 (-81.8) million
and the effective tax rate was 20.7 (18.5) %. The increased tax rate
is mainly due to the fact that last year includes a positive change
in deferred tax.
060 // ANNUAL REPORT
Result for the year
Result for the year amounted to SEK 370.1 (360.0) million and
earnings per share amounted to SEK 5.66 (5.48).
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 EBITDA. The operating segments are based on the Group's
operational management.
Corporate
Net sales for the year increased by 9% to SEK 3,356.0 (3,069.0)
million. All regions increased their net sales except Sweden, which
decreased slightly compared to last year. It was mainly within the
promo sales channel that sales increased. EBITDA increased by
SEK 107.4 million and amounted to SEK 460.5 (353.1) million.
The improved result is related to the increased net sales, but
the segment also had higher costs. The higher costs were in the
form of more sales and marketing activities and higher costs for
distribution units. The cost increase for the distribution units was
related to larger premises as well as other improvement measures
to increase the service level. IFRS 16 had a positive impact on
EBITDA of SEK 88.0 million.
Sports & Leisure
Net sales for the year increased by 12% to SEK 2,887.4 (2,573.7)
million. Sales increased in both sales channels, with promo
increasing by 10% and retail by 13%. The segment experienced
growth in all regions. EBITDA increased by SEK 90.9 million
and amounted to SEK 309.1 (218.2) million. The improvement in
result is related to higher net sales, but the segment also had higher
costs for sales, marketing and distribution units. IFRS 16 had a
positive impact on EBITDA of SEK 37.9 million.
Gifts & Home Furnishings
Net sales for the year increased by 2% to SEK 660.0 (647.8) million.
Sales increased in Sweden, Central Europe and Asia, while the
Nordic countries (excluding Sweden) declined. Both sales channels
increased their net sales. EBITDA improved compared to last year
and amounted to SEK -1.5 (-10.6) million, which is attributable to
a positive result of SEK 11.4 million from a business combination
and that the new accounting standard IFRS 16 had a positive
impact on EBITDA with SEK 10.1 million. Excluding these items,
EBITDA decreased, which is related to lower gross profit margin
and higher costs in the form of more market activities.