INTERIM REPORT NEW WAVE GROUP AB
PERIOD 1 JANUARY – 31 MARCH 2018
- Net sales amounted to SEK 1,272.8 million, which was 1 % (3 % in local currency) higher than last year (SEK 1,264.2 million).
- Operating result amounted to SEK 18.6 (43.2) million.
- Result for the period amounted to SEK 6.0 (24.9) million.
- Earnings per share amounted to SEK 0.10 (0.38).
- Cash flow from operating activities amounted to SEK 6.6 (33.6) million.
- Equity ratio amounted to 51.3 (49.4) %.
- Net debt to equity ratio amounted to 54.5 (60.6) %.
NET SALES AND OPERATING RESULT
The first quarter gave a good start to the year. Since Easter this year occurred in March instead of April, we had a negative calendar effect. January and February had a growth of 5 %, while March decreased 5 %. This, combined with the fact that April sales have started well, makes the picture of this calendar effect clear. I also believe that the cold spring has meant that sales for the season are late – especially within retail. Despite this, we managed to increase net sales by 1 %, which feels psychologically important as it is the 15th quarter in a row we deliver growth.
The development was strong in the promo sales channel but weaker in retail. The promo sales channel increased by 7 % which feels very good. Unfortunately, the retail sales channel decreased by 7 % which we are not satisfied with. We believe that it has to do with above items – calendar effect and a late spring – but also that we have had a negative currency effect when converting sales into SEK. Regardless of the reasons, we will take extra actions in this sales channel.
Our investments in marketing and sales increased our costs. External costs increased by SEK 28.6 million and personnel costs increased by SEK 18.3 million, in total SEK 46.9 million. Despite the negative calendar effect and the investments in marketing, we managed to deliver an operating result that amounted to SEK 18.6 million. This was thanks to a strong gross profit margin which amounted to 46.8 (45.2) %. This is a start that we are pleased with.
THE BALANCE SHEET
The balance sheet continues to strengthen and the equity ratio amounted to 51.3 (49.4) %. Net debt to equity ratio decreased to 54.5 (60.6) %. It feels good to have a strong balance sheet that will help us in our continued work for sales growth but also in case of acquisitions.
OUR NEW PRODUCTS
Our new products have been received well. Craft Teamwear is strong and our expectations are high for the coming 3-5 years. Craft running shoes sold out almost immediately – although it should be noted that our purchasing volumes were low - but it is still pleasing with such a debut and that consumers have shown that they have a high level of confidence in the brand.
I continue to be positive for 2018 and the coming years. Our base orders for the autumn within Craft shows good development and our new product range should increase our growth from existing level. Even our impressive marketing and increased sales forces should start to give effect during the second half of the year.
Thank you for the first quarter!
Torsten Jansson, CEO
FOR MORE INFORMATION, PLEASE CONTACT:
Phone: +46 31–712 89 01
Phone: +46 31–712 89 12
The information in this report is that which New Wave Group is required to disclose under the Securities and Market Act and/or the Financial Trading Act. The information was released for publication at 7 am (CET) 26 April 2018.