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PERIOD 1 JANUARY – 31 MARS 2017
• Sales amounted to SEK 1,264 million, which was 12 % higher than last year (SEK 1,131 million).
• Operating profit amounted to SEK 43.2 (8.1) million.
• The periods result amounted to SEK 24.9 (-4.6) million.
• Earnings per share amounted to SEK 0.38 (-0.06).
• Cash flow from operating activities amounted to SEK 33.6 (70.6) million.
• Equity ratio amounted to 49.4 (46.2) %.
• Net debt to equity ratio amounted to 60.6 (75.0) %.
IT IS WITH PLEASURE THAT WE CLOSE THE FIRST QUARTER WITH A SALES INCREASE OF 12 %, RESULTING IN SALES FOR SEK 1,264 MILLION. THIS IS AN ALL-TIME HIGH FOR A FIRST QUARTER.
In addition, the operating profit increased from SEK 8.1 million to SEK 43.2 million, an improvement of SEK 35.1 million. This is is also the best result for a first quarter ever, which makes it even more gratifying. The average operating profit over the past five years is SEK 4.5 million – so SEK 43.2 million is a really strong start to the year.
If you look at sales, we have growth in virtually all regions. Within the segments, Corporate Promo increased by 17 %, Gifts & Home Furnishings by 15 % and Sports & Leisure by 6 %. Of our sales channels, promo increased by 16 % and retail by 7 %.
We have now had growth in 11 consecutive quarters which is incredibly satisfying.
If we look at the result for the period, it is now the fifth quarter in a row it has improved and we see in the last 11 quarters that operating income improved in ten of them.
If we look at a rolling full year, sales are now SEK 5,370 million, EBITDA SEK 493.0 million, operating profit SEK 435.3 million and net profit SEK 306.2 million – an all-time high.
THE BALANCE SHEET
The equity ratio at 49.4 % is a very strong figure. Net debt was cut during the quarter to SEK 1,714 million and the net debt to equity ratio is now down to 60.6 %.
Financially, we have never been stronger. This allows for both acquisitions and continued investments for organic growth.
In the short term, I would firstly like to point out that we had a positive calendar effect in the quarter which is difficult to assess but can be estimated to be 3-4 % which affects us negatively in the next quarter.
We are going to invest even more heavily in continued expansion of sales forces, mainly in the United States and Canada, but also in marketing and in October we will open a new large warehouse in Toronto, Canada. Further investments will also be made during the coming quarters.
We are also in the midst of several large projects, where the largest is Craft Teamwear. Although this launch received a better reception than we had hoped for, it is not yet paired in terms
of earnings. The first year's gross profit does not even cover the marketing costs, if one is thinking in the short term, and even with better and better results, we will continue investing in the future.
These investments taken together make it very difficult to assess the earnings trend in the coming quarters but are investments which will give an even bigger, more profitable and stronger New Wave in the future.
In the longer term (+ 12 months) I am extremely positive, but in the short term, there may be one or more quarters that are affected by the high investment costs.
My coworkers and I are working tirelessly to further improve the operating margin.
NEW WAVE GROUP
The information in this report is that which New Wave Group is required to disclose under the Securities Market Act and/or the Financial Trading Act. The information was released for publication at 7 am (CET) on 26 April 2017.
Interim Report January-Mars 2017
Full report [PDF]