NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 61

NWG // FINANCIAL INFORMATION
Net sales and EBITDA per operating segment
SEK million
Corporate
Net sales
EBITDA 2019
3 356.0
460.5 2018
3 069.0
353.1
Sports & Leisure
Net sales
EBITDA 2 887.4
309.1 2 573.7
218.2
660.0
-1.5 647.8
-10.6
6 903.5
768.0 6 290.6
560.7
Gifts & Home Furnishings
Net sales
EBITDA
Total Net sales
Total EBITDA
Capital tied up
Capital tied up in stock amounted to SEK 3,557.9 million and
increased by SEK 327.0 million compared with the previous year
(SEK 3,230.9 million). The increase is mainly related to new
product ranges but also to exchange rate changes. When trans-
lated to SEK, inventory value increased by SEK 67.8 million. The
Group has a well-balanced inventory and the service level is good.
Inventory turnover is on par with the previous year and amounted
to 1.1 (1.1) times.
SEK million
Raw materials
Work in progress
2019-12-31 2018-12-31
49.3
12.6 40.3
14.0
Goods in transit 195.0 222.6
Finished goods 3 301.0 2 954.0
Total 3 557.9 3 230.9
Accumulated write-downs of inventories amounted to SEK
136.7 (121.5) million and write-downs related to finished goods
amounted to 4.0 (4.0)%.
Accounts receivable amounted to SEK 1,192.8 (1,084.1)
million, where the increase is related to higher net sales.
Investments, financing and liquidity
Cash flow from operating activities amounted to SEK 99.5 (222.6)
million. The lower cash flow is mainly related to the timing of
payments of the Group's merchandise purchases. Cash flow from
investing activities was slightly lower than last year and amounted
to SEK -148.7 (-163.2) million.
Net debt increased by SEK 1,133.8 million, of which SEK 803.8
million is related to IFRS 16, and amounted to SEK 2,964.8
(1,831.0) million. The remainder of the increase is mainly due
to financing of our expanded product range and thus higher
inventory. The net debt to equity ratio and net debt in relation
to working capital amounted to 78.6 (53.3)% and 77.1 (57.0)%
respectively, see also note 30 regarding the effect of IFRS 16.
The equity ratio decreased by 3.7 percentage points compared
to the previous year and amounted to 44.9 (48.6)%. The decrease
is attributable to IFRS 16, which reduced the equity ratio by
4.8 percentage points.
In September, the Group signed a supplement to the existing
financing agreement and increased its total credit limit by an
additional SEK 500 million. As of 31 December, the Group's total
credit limit thus amounted to SEK 3,212 million, of which SEK
2,150 million runs until March 2022, USD 24 million through
January 2024 and SEK 339 million has maturity extending until
August 2027. The other SEK 500 million has a term between
three months and six years. The credit limit is limited in amount
to and dependent on the value of certain underlying assets. The
financing agreement means that key ratios (covenants) must be
met for maintenance of the credit limit.
Based on the current forecast, management estimates that the
Group will be able to meet these key figures with a satisfactory
margin.
Intangible assets
The Group's intangible fixed assets consist mainly of goodwill
and trademarks. The trademarks with greater value recorded
at cost 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 to assess whether any need for impairment exists.
The assets' value is determined by discounting cash flow fore-
casts 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,
there is currently no need for impairment in the Corporate and
Sport & Leisure segments. Gifts & Home Furnishings recorded
an impairment of goodwill during the fourth quarter of SEK -11.4
million. For more information about the Group's intangible fixed
assets and impairment testing, see note 8.
Personnel, organization and
remuneration
The number of employees as of 31 December was 2,579 (2,566), of
which 52% were women and 48% were men. Of the total number of
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