Year end report New Wave Group AB  (publ) - January–December 2013

Regulatory News:

PERIOD 1 OCTOBER–31 DECEMBER 2013

• Sales amounted to SEK 1,140 million, which was 3% lower than last year (SEK 1,176 million).
• Acquired units contributed by SEK 11 million in turnover and SEK -0.3 million in profit after tax.
• Operating profit amounted to SEK 111.6 (151.7) million.
• Profit after tax amounted to SEK 90.3 (100.7) million.
• Earnings per share amounted to SEK 1.35 (1.51).
• Cash flow from operating activities amounted to SEK 213.1 (276.1) million.

PERIODEN 1 JANUARI–31 DECEMBER 2013

• Sales amounted to SEK 4,047 million, which was 5% lower than last year (SEK 4,280 million).
• Acquired units contributed by SEK 27 million in turnover and SEK 2.2 million in profit after tax.
• Operating profit amounted to SEK 290.7 (73.1) million.
• Last year included restructuring costs of SEK -212.0 million.
• Profit after tax amounted to SEK 187.1 (5.8) million.
• Last year included restructuring costs of SEK -161.5 million.
• Earnings per share amounted to SEK 2.82 (0.08).
• Cash flow from operating activities amounted to SEK 358.5 (341.1) million.
• Equity ratio improved by 5.7 percentage points and amounted to 49.8 (44.1)%.
• Net debt to equity ratio decreased by 17.4 percentage points and amounted to 60.1 (77.5)%.                    

CEO Comments

FOURTH QUARTER 2013

The turning point is approaching – it is my conclusion after the fourth quarter – but we need more inventory! Sales dropped ”only” by 3% during the quarter, which also ended with an increase in December. How can we be satisfied with that? The explanation is partly because I am convinced that we would have had higher growth if our stock situation had been better, and partly due to the fact that we had the mildest weather I can remember for a fourth quarter, which hit sales of winter products hard, in particular, Sports & Leisure. Our inventory, which I wrote about in my last CEO comments, will now gradually start to increase from a low level of 1,449 MSEK at year-end. Profit of 99.2 MSEK before tax is clearly acceptable, given the fact that we increased sales and marketing activities at the end of the quarter as well as commenced our recruitment of more salesmen, with increased costs as a result and partly in view of the mild winter and low inventory levels.

FULL YEAR 2013

I’m not happy with sales of 4,047 MSEK, but we know what went wrong and we will correct it as soon as possible. Nor am I happy with the profit of 234.5 MSEK pre-tax, but it will be considerably better going forward. The balance sheet is a record high, which is good considering that we are now going to create growth. However, the balance sheet is almost too strong for the type of business that New Wave is in, where it’s easy to create a positive cash flow when needed. An equity ratio of 49.8% and an interest coverage ratio of 4.7 times, means that we are financially very strong.

THE FUTURE

I welcome 2014 and 2015 with a strong belief that we will see growth from the third quarter, maybe even earlier. Inventories will gradually increase to cope with growth. Growth for me means both sales and earnings. I feel a degree of uncertainty for this in terms of the first half year, but nevertheless more certain that the second half will show growth - and this on its own merits and not through cyclical fluctuations. Otherwise, we are well positioned for expansion, not only due to a strong balance sheet, but also because we have a management that is both better and more committed than ever. Neither I nor my manage-ment has had such positive confidence for nearly six years. Now the fun begins again, after several years which are comparable with treading water – pedaling and pedaling but getting nowhere. Here we go! Now it’s full steam ahead – no standing still.

Torsten Jansson
CEO

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 7 February 2014.

This information was brought to you by Cision http://news.cision.com