New Wave Group AB (publ)

during those three months. The only new thing on the market is that we have started the introduction of teamware in craft in the US and Canadian market, which I will come back to. On the purchasing side, we have also started to be more active in Africa through our Egypt office. Otherwise, it's the same countries that are the main suppliers as well. Brands, nothing new for Q2. It's the same as before and also the different business segments. And this I actually jump because it's very, very old. Lounge of craft in Canada and US. We have finally started. We have planned it for a couple of years actually. And I think that the clients have really reacted in a very positive way. We still don't have any bigger stock there. We built up that in Q3. And Q4 and Q1. But if we get the same success in Europe, this can really be something that will make us grow much, much quicker again in percentage. And of course, in the beginning now, for the first year, it will cost some money. And as usual, I see it as an investment, but it's booked over the P&L. But it's a very very interesting thing and we're also now in January or on the biggest fair. So we expose it quite broad from January and forward. So that's it. Otherwise it's no news here so we jump into the quarter. uh i'm a little bit disappointed on one thing and that's the sales uh is even if the sales actually are over uh estimations uh so and we're back on growth which are nice uh but i thought that the market will turn around uh when they cut down the interest rates and start talking about cutting it more i i more today have the opposite feeling that the consumers especially are quite pressed and the prices that have been in the past for energy and also higher interest level have actually come and hit the consumers more now than before. And I thought that it would be enough to be a little bit more positive about interest rates and so on. to make the open the wallet again so on that point even if we had to grow and I'm very happy for that and definitely we take quite big market shares I think it's very few companies that are growing at all and you can see the market on corporate we think it's down between five to ten percent or think we're quite sure on that a little bit depending on the countries and we still have a small increase and the retail especially of course the sports market have had tough times it's no secret there you have a couple of public companies as well that is more easy to follow and we have an increase on ten percent so in one way I'm happy but I actually would or did expect a little bit more Otherwise, I think it's a very, very stable report. We have a strong cash flow. We have a fantastic balance sheet.

We continue the investment in the market.

growth to create growth and I think I had the some of the questions earlier today that why don't we cut down costs if it's a bit tougher and I think opposite if it's any time we should invest it's when our competitors are weaker And it's cheaper to buy marketing and do investments. And again, most of this I see as investment, even if it hit the P&L. We have also made a big move. We had two subsidiaries in Stockholm, that we have moved to Enköping. and put together in one and that's our cost was I think around 10 million mainly in both Q1 and Q2 but mostly Q2 but there will be a saving instead from next year it's a totally automatic warehouse again So in general, I'm quite happy. I'm also quite happy for the gross margin, which I think is very, very stable in this market. And operating margin, it's far away from our goal and a bit lower than last year. But we should also remember there that normally Q1 and Q2 are quite weak if you compare with the rest of the year. So we also have the best years in front of us, actually. Yeah, sales up a little bit and actually a whole time high for Q2. And promo channel increased by 2%. And as I said, it's in the market that we think decreased between 5 and 10 and retail 9% up. And we know we are on retail, we have a good network because it's quite few clients, it's bigger chains and we know that there's been tough times for them. Here's not so much to comment actually. If we look at the different markets on the quarter. Yeah, we take half a year here actually. Or I don't know, we take the quarter. U.S. is up 5%. I would say that the U.S. economy, I personally think it's a little bit weaker than it was before. Not dramatically, but a little bit. Sweden I would say is quite fantastic with the market we have here and how the situation is among consumers to have 6% growth. I think it's actually one of the better figures we have produced if we compare with how the market is. Central Europe 6%, Nordic countries excluding Sweden 10%. So at least they are doing our goal for growth. Southern Europe was a little bit down and other countries a little bit down. And other countries is mainly due to our trading activities in Asia. Gross margin, 49%. And again, I think it's very, very stable. And as I said already in Q1, we see actually a deflation in some of the segments, especially on basic textile. And we should also remember that we see the sales figures. But we keep stable and we have not felt that we need to cut down prices or margin to defend the sales. So there I'm quite happy. External costs, you have, of course, some part of it that are increased inflation that have been in salaries and rents and so on, of course, hitting us as well. But I would say most of it is volume related and to increase market activities. And also, as I mentioned, the moving costs for job and exit. So I would say it's under very good control. And a lot of it is also easy, if, which I don't think, but that really the times will be even tougher. Most of the marketing activities and so on, we can actually take down again and we'll be six months in advance or something like that. And as I said, the cost for job and taxes will turn around to be a saving instead from next year. It normally takes six to 12 months before you are really rich, full efficiency in a new warehouse like that. operating result it's never funny to have a lower than the year before and it's nothing we are used to the last years but I think it's easy to understand why now it is and also quiet business contributed with minus 9.9 million. So we still have a lot of companies actually doing and reaching our goal. Also BTC that was the latest requirement before Tenzon is taking down the average operating margin as well. And will do for at least this year and maybe next year because they were quite far from 15-20% when we applied. If we look at Per Segment Corporate. It's not so much to say it's a very, very stable area for us. Sports and leisure. Increased sales in all regions except other countries and increased sales in both channels. Gross margin a little bit lower. and acquired operations affected than SEC 9.9. And that's then tens on, 100% tens on. Which we, of course, have big I hope to create growth and nice profits in Tencent in the future. I don't know if you have seen, but for example, I don't think they have had any marketing for the last two, three years before we were acquired. And I would say we invest more or less what we sell for in advertising and to build up the brand again. Gifts, Home and Furnishing is I would say disappointed. I'm disappointed on again and there we have to work hard to improve it. It's not the right development there. I mean it was what I think quite bad result already last year which have decreased more. So that's an area there we really need to do better work you can also say that for that area most of the profits always coming from q4 you have a christmas that have the christmas gifts both for companies and for consumers so so i'm not so so worried about it for the first half a year i hope we can do it much better the second half and especially q4 cash flow Still very strong and if we look at our balance sheet we are over 60% again in equity ratio which is a very very nice situation to have because we have room financially both for new establishment and for organic grow and to increase the stock when that day has come so that we see an increase in the market. and also for acquisitions and I thought last year that I will never see so many suggestions for acquisitions but actually they've increased and stuff and then you can say three out of four we maybe spend 50 minutes on Euro and then we'll say it's not interesting but it's a lot of opportunities with that said we should be As we have been in the past careful we should buy the right things and we should only buy companies that really fit in to the group and that we can do something good with in the future. But I have quite big hope that we can at least do and announce one or a couple the coming year. Palanquita I mentioned which are Very, very strong. We have quite high amounts in credits that are not used today. So it's a nice situation. Rolling 12. Not so much to comment. I hope I soon don't have to see 9.5 something in sales again. I want to break the 10 as soon as possible. Otherwise, it's not so much to say there. And January, June is... Quite the same picture. A difference of course, Q1 was lower. We also had, I should say, a small positive effect in the calendar for Q2. And Q1 was a quite big negative effect of that. But sales on post-op here is down 1%. So it's a clear improvement if you compare Q2 and Q1. There's not so much to comment. And here we can see that Q1 was, I think US in the quarter was up five. And here one, and Sweden was actually down here compared with six up in Q2. So it's an improvement if you compare those two quarters. And it's also quite interesting to see that Sweden has been number two after US always in how we show the figures. And actually now it has been passed also in Central Europe. Yeah, gross profit again stable. Costs we have talked about and it's the same picture if you take off a year. It's not so much to say there. And the cash flow then a big improvement. half a million which also of course half a billion sorry that that also depends on that we have decreased the stock a bit and I think we have a very balanced stock now for what we think about sales personally I say like always that I would have liked to see a bit bigger stock because that has would have meant that we thought the market should turn around quick which we don't think now so it's quite often there when I'm opposite to the market when the market thinks the stock is too high I think it's good so but we will continue with I think a good cash flow yeah the last comments growth four percent one percent core currency We continue to gain market shares, and I think on the corporate, I think we have taken more market shares than ever in the short period, actually. All-time high for net sales, strong gross profit and cash flow. But again, I'm a bit disappointed on the sales, even if it was a growth. And minus one January, June that I'm not happy at all with. But that was mainly Q1 then, or it was Q1. Cash flow we are very happy with. Future, I'm as always quite optimistic and you can say I see the slowdown in the economy was as a big possibility for us as I mentioned. If you look at, we have had IT crashes, we have financial crashes, we have a pandemic and so on and we've always come out stronger. And I'm very, very convinced that we will do that again. much thank you to very strong balance sheets that you do that we can use the situation we continue to take market shares will which means that we will gain even more when the markets get a little bit stronger and we continue to looking at acquisitions so yeah that's it so we open up for Q&A's Yeah, you need the microphone.

Thank you. So I think if we start off with some of your comments in the CEO words, you're mentioning that your confirmed orders are also looking better than last year. Can maybe give some more flavors on that?

It's mainly due to Kraft that have bigger pre-orders this fall than last fall and also better than it was for the spring.

Okay. So that's mainly related to the retail?

I would say it's 100% related to retail more or less. On corporate you have more of this day-to-day business and you don't have that kind of pre-orders that you have on the retail side.

And what are the general takes out there in the retail markets? What are your thoughts about it? And is the growth now primarily driven by restocking or consumers starting to be more active again?

I would say it's mainly due to market shares. And even if still the shoes, for example, is a very small part of us, we're growing there all the time. And also on the teamwear, we get stronger and stronger. So a lot of that is the growth we had is due to shoes and teamwear. Or opposite if we calculate money, teamwear and shoes. So it's more market shares. We have not seen that they start to restock a lot yet. But on the opposite side, we have seen that they don't cut down anymore. So it's more stable again. But it's the same there. I think that if our clients should start increasing their stocks on the retail side, they must believe in a turnaround with the consumer, which I still don't think they do.

I see, I see. And can you maybe also give us some more details about the current investments in Germany when it comes to the teamwork? Do we see some of these investments maybe hampers the results in this quarter?

Yeah, you do. Not very much because we have actually so far failed to take the big clubs or failed is maybe the wrong word because we have The one we have negotiated with, we have the feeling that they're too expensive still, so we take it easy there. You see a part of it where employed but mainly salaries i would say because we have increased the sales forces and of course some of the new sponsoring agreements and and so as well we had quite much publicity through the what's the name in english on swedish that we have the german team and so on during the olympics so yeah it's not it's not a huge negative effect if i remember right It could be about 500,000 euro compared with last year or something like that. Okay. So, but it's affecting a bit. And if you, of course, if you add on the moving cost and you add on the tens on history and you add on Germany, it's quite a lot of money.

Yeah, I see. And given on what kind of development we have seen on the balance sheet when it comes to inventory levels and looking at the second half here, we're also facing easier comparable figures year over year since you, Frank, last year in Q3 and Q4. What do you think we should expect of the second half of this year?

I expect growth. and at least at the same level or better, hopefully better than we had in Q2. We don't need to increase the stock in this situation excluding the team wearing US. That's our own story and that's our pure investment for the future there on that market. But otherwise we have a balanced stock so I think we will continue to see a quite nice cash flow. and you think that we should are we going to continue to see this pattern with increased spend on opex in the coming quarters related to marketing activities etc yes i i think it will be because uh i again think it's it's the right time to do this investment we have a lot of competitors that are really weak at the moment And also the marketing, excluding the bigger sponsorships, has also come down in cost. So I think it's the right time to really take market shares and so on. And if we don't see any big downturn again in the economy, I think it's worth to do it, even if it takes six or 12 months to pay off.

And a final question from my side, I think the development in the promovare business is really impressive, given the market environment. Also looking for the next coming six months or so, you think that you must see a decrease in interest rate in order to see that start growing? Or can you already see the start of growing?

No, the market has not turned around. clients we have that are public in that sector they have I think all reports decreases in Q2 and I think they have a quite tough start on Q3 as well then it's very different in different segments I mean a nightmare right now in Sweden for example is the construction companies so that's I shouldn't say the mark is standing still but it's not so far away but also I'm quite optimistic for the fall because we launched now and made a quite huge investment on jacket collections where we really have synergies between our different brands so we have a stronger product program I would say in the fall and corporate that we had in the spring so but I have it's hard to say I don't think the interests yeah for sure it affects for example workwear and construction companies okay fair enough thank you very much thank you all my questions for now anybody else just a quick question then on the on the craft launch the team were in the US what are your early findings and when should we expect you to increase your inventory in that market or starting Q3 because I start with inventory Q3 more Q4 and also Q1 as we have to build a step-by-step also depending on lead times what surprised me about the the US market and Canadian market especially there is that we found it very similar to Europe even if it's a bit different distribution and we found our competitor have the same weaknesses as in Europe which are maybe not strange in one way because several of them are global brands so I hope we can make a quite quick and big move there then you can say it always takes one and a half year before you have the distribution in place and so on uh but I would say I'm optimistic for it and it's less differences than I thought so the brand seems to work work well in the US yes and and but you can say the good thing is that on the teamwork side we're not only competing with the brand because I'm still not so crazy as I think that craft is beating a Nike in a brand image But you're also competing with the logistic to be able to supply, to be trustful and a lot of other things. So the brand is one part of it. And we have a lot of other ingredients as well. How much products you have for females, etc. So we have very good argues there as we have them had in Europe.

Okay, perfect.

Thank you. Good to learn about the Kraft Teamware North America entry. An estimate on investment impact in Q2, mid-term potential growth for profit impact?

You can say the investments is not huge and that's make it maybe more difficult for you because you have the loss in tents on that or so much, you have the move of job money, you have the investment in US, you have Germany and each of them could be 5 to 10 million SEK but in total It's quite a lot of money. I think we will reach profit if you take only the US market and Canada on TeamWare. I would say that we will be profitable 2026. I also think 2025 will cost some money if we really want to make a footprint there. And that's what we want.

Thank you. The table tennis player Truls mentioned your relationship in a previous interview and thank you for your commitment to the sport. Do you have any plans to sponsor table tennis more long term in the future?

You can say we are involved in table tennis with Kraft quite a lot. We have actually many of the clubs and we have a cooperation with Stiga and so on. I don't think, I think Truls can affect Stiga. But I don't think it will affect us so much. And we have no plans to increase. We're doing what we should in that sport. So no big changes for us there. But since I'm an old table tennis player, I think it's fantastic what happened in the Olympic Games. And we really see an increase, for example, in the table tennis club in Kosta. And we have the same report from most table tennis clubs. So it's nice to see, but it will not be a big changement or effect in our business.

Thank you. Can you elaborate on Tenzone sales development, which looks weaker than expected? Will you stick to the target of 500 million SEK in sales 2026?

Thank you, Paul.

Can you elaborate on Tenzone sales development, which looks weaker than expected? Will you stick to the target of 500 million SEK in sales 2026? Yes.

We do. I wouldn't say it's weak and unexpected. I mean, we know it would take some time. So I'm not disappointed that way. And I think visually, most of you can see that we really have increased the marketing and so on. And of course, we need to build it a while. But I believe very, very strong in the brand.

You state in the report that you have started the launch of craft teamwork in North America. Can you please comment a bit on the potentials in the launch of the coming years? Also, will this have any material effects on the inventory levels?

If we start with the inventory level, it will have an effect. I estimate it can be like 100 million this year, but there's an estimation, which means that it can be between 70 and 140. And then I think we need to increase during 26 up to maybe 250 million. Because again, it's no idea to enter a new market and not be better than the existing ones. And the second question was the sales. That's part of the question I meant.

Yeah, the other part was the inventory level. But can you please comment a bit on the potential you see in the launch over the coming year?

The potential is enormous. And then I have all the respect that it takes sometimes. But the potential is not less there, maybe even bigger than Europe is. So if we are sitting here five years from now and don't have a quite big turnover there, it's we that have failed and done a bad job. It's not the market. So the market is wide open. But again, it takes time. You should break relations. They have bought from others in many, many years. Some clubs that maybe want you today can't take you today because they have an existing agreement on two or three years and so on. But I'm very positive. But again, it will take some time to really break it.

Thank you. If we look at Tenzon, any early signs of improved order already ahead of autumn slash winter season?

We have a little bit better for this fall than last year, but not so much. And then the big pest is really the pre-selling for fall-winter 2025.

Can you give any picture of how the operations in Kostar are going?

Yeah, as the figure shows, not so well the first half of the year. Now we need to improve that. When I said that we see clearly on the retail side and sport leisure that it's a tougher market, we have seen that there as well. I would say thanks to the Danish, it's not a catastrophe, but the tourist season and those parts have not been as expected. And it's not the number of visitors, it's more that each visitor spends a little bit less money, which I think is obvious also for a lot of other companies, both in retail and restaurants and so on. So we have a lot of improvement to do there.

Thank you. You say you are looking for buying one or more sport brands the coming year. Can you tell us something more here? What kind of sports brands are you looking for? You have a team. We are cross country skiing and craft, outdoor skiing in Tencent and golf. Can you see yourself as the owner of a bike brand?

Can we absolutely do? Then we should also remember that then it has to be a very, if you take bike, it has to be a very strong brand because craft are quite active in bike. If you look at possible acquisitions, we look more into product areas than to brands, I would say, because it's no idea to add on a lot of brands with exactly the same products or assortment and start competing internally. So it's more, for example, we are big today in coping for football, for example. But we don't have the shoes, we don't have the protection, we don't have what you practice with. And that's the situation we have in most sports. Also outdoor is an area we want to be stronger. Tension is an outdoor. But we are still not in cooking equipment, tents, or we could be more on high skiing and all this kind of outdoor areas. That can be acquisitions or it can be a product broadening in terms of. So it's a lot of possibilities in it. But again, we are quite picky when it comes to acquisitions because we should also be 100% convinced that we really can do something good with them in the future. So we're not just acquire to acquire or to show growth.

Any more questions here?

So just on the Teamware side, have you seen any indications that your competitors are changing their offerings or trying to find corporations to match your full service offering? And the second part, could you imagine supporting brands in other markets where you're not in with the rest of their offering to be partly like you are?

You can say that the only changements we see from competitors on Teamware is in some countries they increase their spending on sponsoring and that's also the reason why we have said no thank you to a couple of bigger more famous clubs. But we don't see any change in behavior on our really strong sites. And one of our really strong offers is the whole merchandising. And I mean, we can offer, as we have talked about before, we can offer Hammarby, for example, if we take Stockholm. Everything from beer glasses to wine glasses to cotton t-shirts to hoodies and everything from stock, which really increase their sales of merch. And I think it's a very long run for competitors that only doing teamwear. to start supplying hardware and glasses and stock a lot of cotton items and so on. And I think the last figures now I got from Hammarby, I think we have tripled the sales on their merchandise since we started the agreement. So, and the second question, absolutely. I mean, if we, theoretically, find someone that are very good on hardware in a sport in the US, we can, of course, add on craft to that distribution. So your graphical acquisitions could be interesting. And that's not only in sports, that's also on corporate. We still have some big countries where we have too few clients, according to me, that we might can acquire distribution companies and then introduce our brands on that client list.

Perfect.

Any more questions?

I think that was all. Okay. Thank you all very, very much for listening. Have a good day. No, that was the question he asked. Yes, they had a lot of questions. Okay. Thank you very much. And I wish you all a good day.