FINANCIAL INFORMATION
BOARD OF DIRECTORS' REPORT
The Board of Directors and CEO of New Wave Group AB (publ), 556350-0916, based in Gothenburg, hereby submit the financial
statements and consolidated financial statements for the financial year 1 January 2017 to 31 December 2017.
OPERATIONS
New Wave Group is a growth company that creates, acquires and develops brands and products in the corporate promo, sports, gifts
and home furnishings sector. The Group will achieve synergies by coordinating the design, purchasing, marketing, warehousing, and
distribution of the product range. To ensure the good allocation of risks, the Group will offer its products in the promo market and
the retail market.
New Wave Group’s competitiveness lies primarily in its strong brands, considerable expertise, high level of service, and a well-deve-
loped overall concept. Products are primarily manufactured in Asia, and to a lesser extent in Europe. Thanks to its relative size, New
Wave Group has good purchasing prices and efficient logistics. The Group’s most well-known wholly-owned brands include AHEAD,
Auclair, Clique, Cottover, Craft, Cutter & Buck, Grizzly, James Harvest Sportswear, Jobman, Kosta Boda, Orrefors, PAX, ProJob,
Sagaform, Seger and Toppoint.
SUMMARY OF 2017
The Group has continued its high level of marketing activities whereby we have increased the number of employees in sales, continued
high activity in advertising and made a number of new product launches. We had growth of 7 % and sales increases in all quarters.
Marketing investments are made in all operating segments, but mainly for the promo sales channel.
Operating segment Corporate Promo increased its sales by 11 %. We have growth in all regions and in both sales channels. Sports &
Leisure turnover increased by 2 %, which mainly occurs in the regions of Central Europe and Sweden. It is mainly the promo sales
channel that increased. Gifts & Home Furnishings increased its turnover by 8%, which is related to the Swedish market. We see an
improvement in both sales channels.
Of the Group's sales channels, promo increased by 10 % and retail by 2 %.
The gross profit margin was on par with last year and amounted to 46.1 (46.0) %.
Our external expenses increased during the year as a result of the marketing investments that have been made. Even staff costs have
increased as the number of employees in sales, warehouses and customer service have increased. Total expenses are expected to increase
next year as we expand our advertising in North America, hiring more salespeople, as well as the full cost effect occurring on the
appointments made during this year.
Result for the period increased by SEK 77.3 million and amounted to SEK 354.0 (276.7) million. The improvement in profit is related
to higher turnover.
Cash flow from operating activities decreased and amounted to SEK 207.8 (448.9) million. The lower cash flow is related to increased
purchases of goods for product launches of basic collections and a new warehouse in Canada but even increased accounts receivable
(turnover related). The Group's inventory as of 31 December 2017 amounted to SEK 2,643.4 (2,496.4) million. The turnover rate has
improved slightly and amounted to 1.2 (1.1).
Our equity ratio improved by 2.5 percentage points to 50.9 (48.4) % and our net debt decreased by SEK 111.6 million to SEK 1,637.3
(1,748.9) million. Exchange rate changes have reduced net debt by SEK 88.9 million compared with last year. The net debt to equity ratio
decreased and amounted to SEK 54.1 (62.1) %. Even our net debt by working capital decreased and amounted to SEK 57.4 (64.7) %.
50 | NWG 2017