New Wave Group AB

Welcome to this presentation of Q3 and the first nine months. It's nothing really that have happened on the map so to say. The only thing you can say is that or repeat is that we have started to invest in the team where in the in the US and we built slowly up the stock during a small build up in Q3 but mainly Q4, Q1 and Q2 next year. And we've been quite active among clients in the US and we think it's quite a big opportunity. It's at least what Europe has been and Europe so far has been very successful on the Timware. So we have quite big hope there, but it of course will take some time. in the different segments uh it has really not happened anything special for us uh you can say it's uh has been a very tough market i come back to that i think it's the first time ever actually when when corporates and gifts and home furnishing are down at the same time uh during the financial crash for example it was extremely tough on the corporate uh but on the other side we had a very strong for example for retail market for sports for example Now, if we take corporate, we measure it, so it can be maybe a little bit wrong, but when we measure the corporate market among our clients, not what we sell, what the clients actually sell to the end users, it's down between 7% and 9% in Q3. If we look at sports and leisure as official figures, and if you take Sweden as example there, it was minus 1.5 in Q3. And that doesn't sound so much, but then we should remember that it's down 11 quarters in a row. And On gifts and home furnishing, the index for Q3 was down 9%. And that was 9% up on 1% last year. So it has been a very, very tough quarter and more tough than I expected, actually, if you look at the general market. And then still, I'm a little bit disappointed because in some of the countries, we grow too slow. In the big ones, with big market shares, it's very, very tough to perform uh so much better than the market we do it better than the market and i think if you look at the market share i think is the strongest quarter we've done in a long time uh because every mortgage market in this three segments or let's say it's seven percent down six six seven down and we are at least two percent up if you look at local currencies uh but still i i think that in in some countries we are uh we we should be able to do it better Corporate. Yeah, I jumped those because it's actually no news. Crop shoes, we can talk a little bit about. We continue to grow. It's still that we missed distribution. We hope now to get into some of the bigger Swedish chains next year. And the shoes and tests and everything has fantastic results. And Andrea, We have the possibility so far where we are selling, we are selling very good. So for example, if you go into Löplabbet and talk with them, it's really increasing. At the same time, you can say that we are not really there yet. So if we have like Löplabbet that are a specialist that have more stuff in the shop, we are selling very good, which I can explain. But we're still not strong enough on shoes. So if you put just a big shelf in a big sports shop, with hookah, Nike, Croft, very few go in picking Croft. So we still have a long way to go there, but it's in the right direction. And we had fantastic reactions. Now we released the most technical show we ever have done. It was released a week ago in New York, where we had a pop-up store on Broadway. And it was, of course, a lot of happenings around the New York Marathon. And we were very, very happy how that shoe was received and the reactions on it. Nothing new there. That's not so much to say. One thing you can say there, and that is that it's actually a very good beer, non-alcoholic. I must say it's, okay, I'm a part of it, but it's the absolutely best non-alcoholic beer I ever have tried. But it's a very small business. I think it comes for less less than 001% of our sales. So the quarter net sales, local currencies up 2%. And again, I want to repeat that in one way, I think it's the best quarter in a very long time, according to how the market was. But I'm still not the guy or we are still not the guys that are very happy for 2%. And you can say that I would expect a little bit more, not only 10%, but I think we should have been able to make maybe 4, 5% plus, even in this climate. So it's mixed feelings in one perspective. I'm not happy. And in one perspective, if I look at and compare it with the market, I think we've done it good anyhow. Operating result a bit down compared with previous year. And the operating margin a bit down. I still think compared with the market and the economy we have around the world, it's still very, very good figures. I get the question all the time about our target for operating margin. But if we can do 13.6% in a quarter when it's an extremely tough market, 20% long term don't scare me at all. And we even have some companies doing above 20 also under these circumstances. And one thing that of course takes down the operating margin is still the acquisition we made in the UK that starts improving, but from very low levels. If we look at the sales in total and including currency, it was down 1%. And we will see what's happened now with the dollar, especially when the election is done there. Promo sales decreased 1%, retail increased 1%. Here is not so much to say. You can say that one thing that I'm not happy at all about is the result on gifts, home and furnishing. On the other side, you can say we were down 1% and the market was down 9%. So even there, we gain a lot of market shares. The different markets, US is much more positive than the other countries. And you can see there it's really Sweden where we have the biggest decrease. If you look at Southern Europe, it's more, I would say, timing effects. We will not continue to be down 6% there. So it's Sweden that are tougher. Central Europe still up. And then you can say in the US, it's more the existing business that are growing. It's not the new investments on Teamway yet. I mean, we have still almost no stock there and we can't deliver. We have just started it. So it's done by mainly Katrin Backen and Click as brands, I would say. Other countries, it's always ups and down. I think you that follows know that it's mainly the trading company that's over there and Canada. But what is down is mainly the trading business. Gross margin, I'm extremely happy with. 0.2% higher than last year when actually most companies going down in gross margins due to price decreases and so on. So if we also there include the BTC or the UK business that are much lower in the group, I think it's a record high gross margin. And of course, one way could have been to give a bigger discounts and so on and increase the sales more. But I think it's right that we would focus more than keep the margins up than on maximum the sales in a top market. External cost a bit up. There's also currency affecting it down. So the cost increase in local currencies are higher. I don't know if you have the figure loss, but No, we don't. But I think we have the costs under good control and we continue to invest in marketing and sales, even if it's a bit tougher. And I think it's now when it's a bit tougher, we also can gain market shares and we will fulfill the planned investments in marketing and sales. And there you don't see so much, for example, on personal. I think we are five more employees than last year. same quarter but you have a change there so we get more and more efficient on warehousing, administration and so on and get more and more people out on the field working on the sales. But there I think you all know that when you employ a new salesman it takes at least a year before they contribute with the positive results. Then they of course start selling a little bit but you should build a relation with the clients and you should come into it. So in the end, 13.6% in operating profit for the quarter. I don't know if you want to comment anything, Lars, about this EF-August 16 impact.

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And we also had some special incomes previous year that we don't have this year. Yeah, I think we have talked about most of the things here what we maybe should point out is again under gifts and home furnishing even if it's a small part of the business we actually in sweden have a increase in sales and that's compared with minus nine percent in the index i'm feel rather confident that we're doing the the right things there even if it's a bit tougher Yeah. Cash flow. July, September, nearly 200 million improvement from last year. And a little bit same thing as I said last year, I would have preferred a higher believe in the coming two quarters, a bigger stock and a less good cash flow. But anyhow, it's good to see quarter after quarter that we produce a good free cash flow and we're standing still or have small increases. Balance sheet, again, record high. I would maybe even there preferred a little bit lower. and that we've been able to do some of the acquisitions and so on. But an equity ratio on 60.7%, that's almost double our own goal before the financial cash flow was actually 40. And then we raised it to, was it 35? And now it's up on six over 60%. So we still have really a lot of room to make things, but we must find the right things. And I feel more and more questions about why do you don't acquire, why don't you buy back shares and so on. But if it's any time, we should have a strong balance sheet and be prepared to really do something. It's now. So we will continue to have that until we find the right thing to do. January, September, it's yeah it's very looking very much the same as the quarter sales flat or decreased one percent but one percent was currency so it's really exactly flat yeah And there you can see that on a corporate, we are minus three sports and less than still plus two. Very much thanks to Teamwear, I would say, on that segment and to the US market. And gifts and home furnishing flat in a market that decreased quite heavy. More or less the same picture here, Southern Europe. and Sweden is the most difficult ones and the US is up also on the nine months. Gross margin on nine months, a little bit lower, but I think still we hold it quite well. External costs then up. And again, it's personal cost increase. That's mainly inflation, but you also have, again, a swift from more salesmen and less administration warehousing. And you can say one salesman is more expensive than one warehouse worker as well. But it's also, of course, an effect of the inflation we have seen on salaries in many, many countries. And it comes down to operating profit on 11.9% or 800 million nearly. And you can say that we hopefully stand in for in our strongest quarter in Q4. Hopefully I say because I I think it might can help a little bit that they cut down the interest rate today in Sweden with 50 points, I think it was. And as you've seen before, Sweden has been the most difficult country for us. But I misjudged that before. I actually thought the market should become better already in the spring. And now I'm not so positive in the short term, so I hope I'm wrong again. And it will be positive. Yeah, not so much to comment here. Again, it's the part that are not inflation is related to sales and marketing activities, especially then in the US and Germany. I'm more happy in one way in the U.S. because there, as you see, we increase sales. I'm more disappointed. I think it's taking a little bit too long time in Germany. But it's very hard to say again, because if it takes six or 12 months before it's pay off, you never know. And I think it's at least it have to pass 12 to 18 months to evaluate the investments we have done, if they will give us the effect that we think or not. And cash flow so far this year 732 million which are also of course I'm quite happy with and we need strong cash flow now and we are standing more or less still to be able to do a high growth later on. Yeah, good cost control. I think this the extra money we spend, we know what we're spending. And that's on activities or investment that should pay off. Yeah. So it's not so much more to comment there. The future we continue to gain market shares. And of course, I think we hope it should be good, very good growth from the market turnaround. If we can continue to take market shares and have a positive market with plus a few percent instead of a big minus in general, it should pay off good. Very strong balance sheet and we continue to looking at acquisitions. That was mainly that, so I open up for questions if you have any. Yes.