New Wave Group AB (publ)

Welcome to this presentation of Q1 2025. We have had a quite good start and it's probably a small positive effect by the Eastern. It comes into Q2 instead in sports and leisure and corporate. In gift and home furnishing we have the opposite effect actually. where Eastern is a very strong period in Costa that comes into Q2 instead. But in total, I would say it's a small positive period effect by Eastern. But I think it feels very, very stable. I read newspapers every day that it's ups and downs everywhere. But I think it's less good environment now than three months ago, especially in the U.S., where people and companies are more negative and more worried. But we're still growing there as well. New Wave Group is It hasn't changed so much since last quarter, but just below 2,500 employees, 25 countries and three different segments. And if I should point out something that makes me more happy than other things is that we are growing actually in both channels, both retail and corporate in all three segments and on all geographical markets. That I think is really a proof on how strong we are. today. Important on this map is also the sourcing activities. I can't say that we foresee what Trump should do and we still can't. We thought some years ago that it was a chance that he would be re-elected again. And we know that it was ups and downs about tariffs and things also last time he was there. So I'm very happy we started upsourcing in Africa as well. So we are very, very well prepared for the situation that maybe will occur. It seems to change every day. uh and we have moved quite a lot of production already before this to ethiopia to kenya and to egypt and also the new buying office in alexandria in egypt that will handle africa is working very very well today so i'm not so worried about whatever tariff it will be. You can say the only thing is that it can hit us in a very short term if they put in tariffs that are valued from tomorrow. So the goods, for example, on the sea will have a duty that we haven't counted on. And I also think that it's a good outcome if it's a minimum duty on 10% on all countries, because then it's quite neutral compared with competitors. It doesn't matter so much where we produce. I guess China will be higher than that, however. The operating... channels corporate has a good growth sports leisure on was I compared with the market, the fantastic growth. And if we should point out, on corporate, it's hard to point out something special. We've done investments in more or less all the brands and new collections and so on during the last years. Of course, we also increase sales forces in some countries, especially Germany. On sports and leisure, it's again Kraft and Teamwear that are doing fantastically well. And we have a good growth force in Sweden. Here we already have big market share. We guess we are number one today. as a brand on teamwear in Sweden and still growing. It's also nice to see that we are really accepted now in what in one way for us is new sports. I mean, everybody know Croft, I think, from cross country, from underwear and so on. But now we are really considered to be a really good brand also in football and handball and basketball, volleyball and so on. So I still think we have a very, very good chance to continue to grow also in existing countries with Croft. And also the shoes start to get more and more visible and we come into more and more distribution. There you can say that we also are helped a little bit that some competitors It started with Nike, but now it's on, for example. It's cutting down their number of distributors. That's actually opened up the doors for us. And I hope we can take the next step now within one year to also launch craft on indoor for different sports. Gifts and home furnishing is, as usual, less good than all other things. We had a seasonal negative effect, as I said, but not so big. So we still have to try to really improve that area. You can also say about sports and leisure that it's very, very profitable what we're doing there, which you also, I think, can see on how the profit increased in that area. Yeah, corporate, I jumped those. We will go very, very offensive now in North America. As you know, since before we introduced Teamware and we have started now to have some stock. We don't have enough yet. But we will continue to build up. Croft team were there. And we've had a very good start. We signed some weeks ago, I think it was. One of the biggest football clubs in... It's run by school, but I say clubs. In the US, we have 4,000 active young players. And we think the competition there is... Definitely not harder in this area than it's in Europe, maybe opposite actually. So I'm very optimistic there. We will launch ProJob in Canada during 2026 and Harvest Printer in 2026. It's beginning 2026, first quarter probably. harvest printer will be launched during end of this year beginning next year craft team where we're also going to canada with from hopefully end of this year it depends a little bit on the lead time in the production because we need to have enough stock before we're really push on the bottom there. So latest Q1 2026. And we also look at more lounges in the US. What is very actual is warehouse in South US, we have still quite bad service on Cut & Back and Qlik in South. We think we can improve that a lot through a third warehouse for Qlik and Cut & Back. Sports and leisure is going very well. I already talked a bit about it. Here you have the IFA, the New England Football Academy I talked about. And we're signing up, I would say, new clubs and new distributors more or less every week. So I think that will really contribute to the growth 2026. And we should also remember that here we have the lead time as we had in Sweden from the beginning or in all countries from the beginning. But when we start the new market, it's more or less very few clubs or schools. that not are under contracts. So maybe we get access to 15% of the potential market year one, 15% year two, and the agreements are up to five years. I mean, if we look at ourselves, for example, we have signed both Hammarby and Gothenburg up to more than five years when we prolonged it. So it will take some time, but it looks very, very good. To really also go for football, we take in Jan Andersson in the board of Kraft. And he has, what I think, very high knowledge about both clubs, from small clubs up to national teams. And we need to strengthen the competence inside. those team sports we have a very good competence for example in cycling in the company and in running and so on in the sports we have been for a long time but we need to really build a good network in the big team sports as well Gifts and home. It's not so much more to say I'm... We fight with it. It's tough. And when it comes to acquisition, for example, we will not look into this area before we are profitable enough in what we already have, which we are not today. The quarter... Organic grow on 9%, which I think is much, much higher than the market on all segments. It's actually also, I haven't checked that one, but I think it's an all-time high in sales for Q1. I think it would be a bet. We were beating also 23. And the promo, 12%. And the retail channel, 6%. I'm curious now to see what the sport index will be in different countries. I'm actually not surprised if it's a minus again for the 13th or 14th, maybe quarter in a row, but it's not published yet. So it would be a good benchmark. The sports and leisure is a segment plus 11%, which means that we take very much market shares if I'm right in that the market actually is down. Operating profit increased by 26 million, still below 23 years level, but compared with the investments we're doing in the market, I'm quite pleased with it. And also the operating margin improved a little bit. And here I had some comment earlier today that it's far below the goal. And it is, but we should also remember that Q1 are always the quarter with the worst profit levels. Historically, it has been like that for, I think, 30 years. So it's not so surprising. Good stable start, as I said. And The markets continue to be challenging and we think it will continue that way. We see in some countries now In general, for example, Germany, it seems that the economy is going in the wrong direction from a quite bad level. But we trust in what we are doing ourselves and will continue to grow anyhow. The only thing that scares me a little bit is if you have a total crash in the economy that some people think might come depending on the US political. So if we have situation that was last quarter 2008 or first quarter 2009 or the beginning of the pandemic of course it will be more or less impossible for us to to grow with the markets really is crashing but i don't think that will happen sales on two nearly 2.2 billion And as I said, all channels increased and also all geographical areas. And in one way, I'm especially happy for Sweden actually, where we have a high market share and still had a good growth. Yeah, here's more or less what I just have said about the tariffs. I think it's... as it always is, that people get panic at the same time and so on. I had the question earlier today if we should slow down our investments in the US and all the Europe. And my answer is opposite. If it's any time we should invest, it's when competitors are shaky, they couldn't fulfill the service levels and so on. if we should go in any direction compared with what we have said, it's actually to increase investments. And it's better that we drop a little bit in profit and are extremely strong when the turnaround is coming. Financially, sales share talk about organic growth in average 9%. And the different channels, Promo 12 and Retail 6. I guess that, and this is a guess, but I guess the corporate side is more or less on the same level as last year. We don't think it's minus the total market. We think around zero. And retail we think is minus, but we don't know yet. The different segments you can see also, it's like we said, growth in all of them. And that's what I also think is very good if the market gets a little bit more shaky, that we are very diversified. For example, if you see on the Teamware business, I don't think we will see that the market goes down even if the economy really slows down. I think it's one of the last things actually parents do or telling their kids that they have to stop playing football or stop running or something. So I think that market will be stable whatever happens actually. Yeah, no remark. Plus, sorry, plus 26% of the sales now. New from here is that we include Canada in North America, correct? Yes, so we go for North America as a region. Only Canada, yeah. And Sweden, you can say, with quite good growth and the share. that Sweden has for the sales is down again, now to 20%. Benelux, also positive development. And there you can say we are also consider ourselves as market leader today, especially on corporate, not on retail. Nordic countries, also very stable and there finally norway starts to pay off the investment with the made there in all the skiing teams or natural skiing teams rest of europe 22 and then other countries that are only now i think the hong kong and chinese activities asia yeah yeah and that's also from asia Gross margin, very stable. Actually a small plus, 0.1%. But that's as solid as it's possible to plan for. It can be a product mix or a big trading order or not that core transform. But at least you can say it's very stable. And it's increased in sports and leisure. And I think as bigger the team where part of the total business there is, it can go even a bit higher there. and a little bit lower margins than incorporating gifts. External and personal costs are up. And it's mainly two reasons. It's the investments we're doing in the markets and the sales forces and so on, plus the inflation. I mean, we are not immune against salaries going up in most countries and so either. But I think the cost of this is under very, very good control. an operating profit done a bit better than last year, an operating margin a bit higher. So it's a good start, I would say. And here's maybe not so much that we haven't talked about. Corporate was a little bit down in North America. That's new, actually. It's been a growth until now. The trading operation was up. Sports in Leicester, as I said, very strong developments. And also growth in Katarzynek. there and Gibson's home a little bit down up in sales and a little bit down in profit and Sweden was good but the other region was less good there cash flow also I would say very stable from operations 290 million paired with 204 so And investments or increasing that shouldn't be any surprise for anybody, since we continue without musicians and the warehouses and also are in just changing your pieces them well in the middle of it, maybe now we're rolling out the first now.

middle of the work. yeah it's.

exciting in some places. For example, in one of the warehouses in the Netherlands, we have a new system, High Robotics, that will launch with automatic picking. And at the same time, it's a new air-free system. So that will be exciting to see. Is it 1st of May in operation?

1st of June.

So it's all new at the same time. Continue strong balance sheets. The only thing we can point out there is that we had a hit on 400 million on capital due to the, especially the dollar rates. But again, I'm not looking so much at that. I'm more interested in how the developments is in local currencies. And anyhow, we kept actually the equity percent of the small increase even in equity. ratio and we should also remember we had some years when the equity was increasing when the dollar was increasing so it's ups and down all the currencies rolling 12 months i hope we can can break the at least the 10 billion this year for the first time and go up there and uh operating result on rolling 12 is 14.3 percent or nearly 1.3 billion That's more or less Q1. So I open up for questions if you have any.

I saw in the quarterly report that you're starting to give us some new data on gross margin per segment and trading operation size. Are those numbers that you will continue to give us so we can keep following it? Yes. excellent yeah no no we are junkies for information you know so and on those what what is your own reading of what happened in those you commented some some something here but if you're looking at the trends over the year and how did this affect q1 and and then how we can work with these numbers going forward i think the only big effect is uh what we have said about not written uh some years that the trading business is very up and down

and it can be an order on 50 million coming in Q1 one year and next year Q2 or you lose it and so on and it's on a very low gross margin so that's the main reason we're doing it otherwise I would say it's very stable in the different channels it's more depends the outcome of the gross margin and incorporate this more depending on how big part of the turnover that actually go to pure basics one color t-shirt one color polos one color sweatshirt than anything else and in in sports i would say the the main trigger there if the gross margin is up or down is is the how much of the sales that we will go into to the team where we have higher. And you can say on opposite side of sports, as more as we increase shoes in percentage of the sales, if we do, which I don't think because teamwork is growing so quick, but shoes have a lower gross margin. And the reason we haven't published it before is mainly because we are, especially on corporate, it's more or less no public companies So it's information that actually is in one way, market-wise, it's not so good to give.

Excellent. And I also saw in the annual report that coming back to your discussion about Trump impacts and logistics flow and so on, that you have scaled the Egyptian operation in a fantastic way during last year. Is that still an opportunity to scale it even more and to compensate things here if you need to do that?

It's already done. I met the owner of the main gym factory in China a few weeks ago. We will double the capacity on that. We have already confirmed that we can double the capacity. So it's already done.

I guess it's just trying to manage the flu and situations and good luck with it.

Thank you. No, but I mean, it's impossible to foresee what will happen, but we are very well equipped. We have a lot of different countries on different continents. It doesn't scare me at all. I mean, and then up on that, you can say, especially on corporates, Most of our clients is in Europe or in US. We don't have any multinational competition. And that's also make that we can move supplies. I mean, we can stop some production in China tomorrow, if we want, and take those without being a problem for the factories, because we can take that capacity to Europe instead, and then start immediately and produce for US in a bigger way in, for example, Egypt. So the only thing that are a little bit tricky is the most complicated functional garments, like complicated jackets, for example. because it's not so much alternative to China today. But on cotton garments and all the basics and so on, I don't see any problem. And teamwear is also already spread out between Asia and Egypt and so on and so on.

Hi, I'm Daniel Inglis, Danske Bank. So just quickly on the US operation with the inventory, how much inventory is in place in the US right now? When will you be at the levels you aim for?

On TeamWare? On the TeamWare side. You can say we will not be on what we're aiming for before the end of this year. And I actually don't know the exact figures that are on stock now, but I would guess 100 million seconds. And we will need at least two, three times that.

Cool, thanks.

I'll take another one then. So looking at growth opportunities for the moment compared to the inventory, how do you see that? Do you have what you need for the growth, so to say?

I would say we have but not yet in in some areas like Tim, where us we don't have enough yet. But in general, I would say we have.

And to get things off the ground, like you now indicated for North American 20, late 2526. Is there, say, big variability, how you see this coming thing into the calendar? Is it a say,

a fluent decision or or do you have you already done the decision now for the things you're basically indicating we have done the decisions and we should also remember that we do several things also in europe we open up a new warehouse as soon as we find one in ireland ireland today is it's a one perspective a small market but but if we can do like 600-700 million in Norway. I think Ireland is very interesting because it's outside the EU today. Sorry, it's in the EU today. And it's dominated by English companies that are not in the EU. And it's no one, either on Teamware or cooperated, have a warehouse in Ireland. And then we launched Teamware in the UK. Also, we'll start probably second half of the year again depends on the lead times we have the capacity we can get in production and also we will launch pain so it's a lot of things going on in europe also it's good to see that you're talking gross again so you seem excited about it so i am i think the possibilities are bigger than ever And also, I think, I feel, or we feel very, very confident with both the team, which I am, and the sports, and also with the corporate. And I think we, I'm pretty sure that we are, on corporate, the absolutely best company to work with in Europe for the reason. Still not in the US, because our assortment is too small there, compared with the one that have really broad assortments. But this is also something we should... do in the future to broaden it up there. And we already do, for example in Canada, with Horvath Sprint and those launches. So I feel we're in a very strong position and a lot of competitors are weak. You can't say, of course, that some of the biggest brands in sports are weak. But on the corporate side, we're probably one of the two, three, four strongest companies in the world right now, both financial status, collections, products, service. So... it was a long time since we felt so confident then of course as I said if the economy is totally crashing so it's the same situation in the beginning of the pandemic or financial crash or 8 or 9 of course it will affect us also but I think we can in most situations we will be able to continue grow whatever happens with the internal situation we have and also very good and stable management so yeah And probably and hopefully some more really good opportunities will come up on acquisitions also. Because it's quite many competitors that are not strong today. So it can actually increase. So maybe we should hope it should be a little bit more shaky. If we think longer than six months.

So just quickly on Germany, you touched upon it briefly. What's your ambition level in Germany now? And are you holding back somewhat due to the economy?

No, we are not holding back. But I think we will have not as good development as we thought and hoped when we thought the economy should turn. around but but again a lot of competitors track back they can't fulfill service they have much weaker balance sheets and so on so i prefer to have two three four quarters with that are a little bit less good a little bit less good maybe in operating profit than to stop investments uh so we will continue and as i said in the beginning if we should go in any direction we we we should even increase investments if the market gets even more shaky uh

But the takeaway today is basically U.S. is the easiest way forward at this point.

I wouldn't underestimate TeamWare in Europe either, actually. I mean, I think we are a market leader or rather after six years in Sweden on TeamWare. And I think we passed Adidas now also. And I don't think we will do that in Germany, but if we can take 3, 4, 5% maybe market shares, it's huge amounts of money. And that I think we are able to do also, for example, in UK and so on. So we shouldn't, I believe very hard in that too.

Okay, thanks.

Do you have any more questions? Could you please provide more detail on the respective drivers of the strong sale growth, ideally also volume versus price taken?

You can say the big thing there is the investment we have said we have done the last one, one and a half year where we have increased sales forces in some countries like Germany. We have developed new products and we grow very much on the team website. So it's no secret. It's normal work, you can say, but we work a little bit faster now than we did some years.

And investments in tangible fixed assets are quite a bit higher. What is it referring to?

Automatization of warehouses and the ERP system.

On the tariffs, isn't it correct that 100% tariffs on China have been effective for two weeks now? Did you have any shipments arriving to the US during this period and have it received any info on how it was handled and what tariffs were imposed on such shipments, if any?

The honest answer is that I don't know if we have had sunset shipments, but in that case it's not a big amount because then I would have known.

Thank you. How is Tencent doing in this challenging market?

Slower than we expected, but still okay and growing. I think Tencent will be very very good within a few years so I haven't changed my mind there but then you can say also of course when the sports especially sports retail has a very tough time it's more tough to be a new brand also because then they should throw an old brand out in case it's a tougher market there but I think we're doing okay.

Thank you. How much of Kraft's sales are done through its own e-commerce?

A very small part. Do you know the percentage?

I don't know the percentage, but it's a minor portion of the total. Absolutely. Yeah.

And a follow-up question. How well does that business work? Any delivery time complaints or anything like that?

In what?

In the e-commerce segment for Kraft.

No, not as I'm aware of. But again, it's a small portion and maybe it's there for we're so profitable. That was all the questions we had there.

Okay, thank you all for listening.