New Wave Group AB

Welcome to the presentation of Q2 and the first half a year. I'm pretty happy with Q2 actually, where we show a growth in both sales and earnings. And it also feels a little bit, for the first time in many years actually, that the markets start to be a bit more positive. It's only one point I'm not happy with in this report, and that is the organic growth, where I was hoping for more than 4-5%. And I think we pretty soon will be there. We should also remember that we have several things that is happening this fall. For example, Dallas will start selling from all distribution from 1st of October. I think the costs on Dallas is around 10 million for the first six months and it will continue to cost money in the coming quarter. And then hopefully, and what I believe is that, and that is one of our biggest investments in many, many years, it will start contributing sales-wise, of course, from October, and profit-wise, I think it will be three to six months, and we will be up running at least break even there. So it's lots of interesting thing in front of us. Today, 2,877 employees, 28 countries, and three different segments as you know and maybe there I should say also that Sweden is now down to 20% of the sales and it will continue to decrease due to the investments we are doing and the acquisition of Cotton Classic that are not there yet yeah here's not much to comment We had, and I think based on questions I've had earlier today, we have maybe a small misunderstanding regarding the tariffs, because back to the result, it's only the tariffs on sold goods. The rest is deduction of the stock value that will strengthen the margins coming quarters instead. And if you look at the figures for half of the year, it's not any big effect of it. The result in Q1 should have been better than it was. And the result in Q2 slightly lower. So you know that. And one big investment we also have done that we have not talked so much about is Toppoint, our company that producing pens, water bottles and so on. that moved into a new fantastic facility which was opened up in May. Also a pretty big investment. I don't have the numbers in my head, but it's another 250 million second investment there. The quarter net sales plus 14.6%, 12.3% are coming from Cotton Classic and the integration there is going pretty well. That's include also what they sell of our own brands today. that are also increasing all the time and 2.2 percent from organic growth and again that there I'm not really happy at we should be higher on the organic growth especially due to all investments we have done and all the products we have launched last years and so on. If we look at the different countries, you can say I'm actually happy with all countries right now, excluding UK. That has been very, very tough and it continues to be very, very tough. And we also know that our competitors there have decreased their volumes. Actually, most of them more than we, but it's not a good development there. operating profit 295 million and there I must say due to all these investments we are doing with Dallas with top points and so on I'm very very happy and the underlying profitability is very very good I would say and we should also remember here that the second quarter and the first half a year we didn't have Cotton Classic last year. So when we compare, we have taken in acquisitions on roughly one billion in a year, little over, with an operating margin on six, seven percent, approximately. So if we look at, so to say, the old group excluding investment, I think those results are very, very good and could have been much, much worse, actually. And what's holding it up is also, of course, a very strong gross margin. and I think I've said that for a few years now when it has been tough times that we will keep our gross margins we will not use the price to deduct margin to increase sales and that of course sometimes it can be tempting to do that to blow up the growth but I also know based on those 30 years that it's very very difficult to raise again if you once have start cutting April-June, 14.5%, say 2.6 billion. And currency was negative with only 1% this report. When it was its worst, we discussed that before. For example, in January this year, US was contributing minus 19% in currency. Then it's a bit hard to show growth, actually. Promo 17.5 and the reason the main reason of that that they are going very strong is of course the Cotton Classic the acquisition that are in that channel. Also retail sales up 5% which I think is pretty good. I'm a little bit afraid actually on the backlash amid in South Europe in the third quarter due to that has been very very warm I don't have any figures to base that on but when I'm talk with the retailers there it has been quite empty in the shops when it has been those really warm conditions Cut and back continue to grow Well, and I think that that growth will really increase. We also launched Tenzon in US through Kattenbach right now. And when Dallas opened up, it gives us a very, very good chance to serve that part of US. As an example, you can say, if I take a simple example, all the sales before Thanksgiving, for example, that we have on the net we have to quit three days earlier or cut order taking three days earlier in South US today than we do in North US because we can't deliver before so that will mean a lot and I think they will actually continue to increase and they have a very good growth and in retail it was in this quarter mainly Kraft but also Qlik we were a bit lucky there we were not involved in any way you can say with in the world championships of football we had no unfortunately yet no national teams playing in kraft either but what we did and what really shows the strength again about the stock is that sweden was qualifying so late so the chains couldn't pre-order or they didn't dare to pre-order since in time and we could supply from stocks. Actually, we sold into Swedish merchandise, you can say, to Intersport, Åhléns, Team Sportia, everybody, excluding Stadium. So that was very, very good. And it's nice to don't pay the sponsoring fee and then get the merchandise. Yeah, here you also see the different segments. In one way, I'm also pretty happy there that all three is growing, even if it was very little, 2.7% on gifts and home furnishing, it's at least a growth. yeah sales pair geographic area North America increased and Sweden was a very nice increase I will say because if you look at the market share who already have and continue grow it's a very strong development and Benelux slightly up Nordic up and there are Norway going quite strong now we finally see the effect of all the national teams we have in Norway it took longer time than we thought but now it's paying off and rest of Europe heavily up and that's mainly due to Cotton Classic acquisition and others quite heavily down and that's only trading and as we have said every report trading is extremely volatile up and down so you can have two weeks coming in with the weekly sales plus 100% and then you have one week minus 70% and so on and that's how that business is it's still very profitable for us and it's a very good cash flow so we want to continue this but there you have to get used to that it can come a very good quarter and next quarter can instead be looking bad and then it's good again so it will continue that way and the reason is of course that it's quite few number of clients compared with other channels and it's very big orders so here it's more or less if you are unlucky to or lucky to deliver in the right quarter if you look at the short term yeah as the margin we have talked about And there we should also remember that the majority, I think, 65 million a SEC, if I remember correctly, is right down on the stocks due to the tariffs, which give us a good chance to hold a strong margin in the US market the coming quarters. And we will continue the same way. We will not use discounts and so on. Very good gross margin the coming quarters that we have in front of us. and we should also remember that again Cotton Classic came in in the figures you compare with with more than 1 billion in sales with a gross margin on what is it now it has increased a little bit by 27 and it was 25 so if you take away acquisition I think actually it's the strongest gross margin we ever have had External and personal costs continue to increase and they will continue to increase. But I think also that we will see a more normal cost increase and especially investments that are taking as cost from latest third quarter maybe next year it's a little bit hard to say but then I talk more about existing business if we do more acquisitions during that time and so on or we decide to establish one more new big warehouse which I don't think we will do within one year but if we do it cannot cause effect but if you look at the normal business it will come down and there we maybe should point out once again because I had some question on that too that the different now when we in the past when you change ERP systems you put it into the balance sheet and then you write it off on five years now it's in the cloud and you have to take a big part of it as cost day one so if you look for the coming years we will have quite much lower depreciations of that and I think those changes in in the bookkeeping it's really not good because it's very difficult sometimes for analysts and investors to compare I think with the old do you dare to guess if it was working the same way as in the past you took it as an investment in the balance sheet the results so far this year would improve

I don't dare to say, but it's a big difference because we have only started to use the system in two entities and we have a majority of the cost for the entire template. So it's a huge difference.

And therefore, again, I say if we can hold... an operating margin on this level due to all those investments at the same time. I take it as a proof that 20% is absolutely reachable. Again, excluding acquisitions. You know that we love to buy companies for one sec and one sec companies is not very profitable. And we will continue. We want to continue the same type of acquisitions if we can and if we find them and you can say that all those kind of acquisitions has been quite successful over time excluding Oroforskostaboda so we are continue to look at companies that are in a problem it's of course not easy to buy them and especially not to find them but excluding that, I think that the margins are very, very good. Yeah, 11.3 in operating and you can see on corporate since Cotton Classic is 100% into the corporate sector. It's lower there. Sports and leisure increased quite good. And they're also the majority of the minority of the money we came back from tariffs is in sports and leisure. That's also one reason. and gifts and home at least finally positive margin and not negative and there I think that in that area we will never reach any 20% but we should manage 20% in average anyhow but I'm very happy if we can actually come up to at least 10% so we can quit consider it as a problem cash flow is also quite okay I think due to the again to the investment we are doing I think it's even strong and in the cash flow the effects is not yet seen by the tariffs either so I'm quite positive to that yes and also in addition Torsten mentioned the European investments they are not shown in investment investing activities the cancer from operating activities that's why that balance sheet continue to be I would say very strong which are we are very happy for we still have room for more acquisitions and later on more establishment which I think it's also very very important to have a strong balance sheet Dallas, 10 million units we can store there. And it's the most advanced in automatization and technology in the whole group, including auto store embroidery, direct to government decoration and so on. And the main reason is, of course, that we have a lot of actually also existing clients that we don't serve in a good way today. in that part of US so I think it will go quite quick to come up to breakeven and if we can reach breakeven six months or something on that fulfillment center I think it's very good and it will really means a lot for the future growth in the US market I got a question earlier today how big we can be in US or what is the level we can take and we should remember that we are still extremely small in US I haven't counted the market shares because I don't have enough zeros in my calculator so if we really succeed there it can should be nothing is easy but theoretically if we can at least do 10 times what was it doing today within six seven eight years so it's a very interesting market and it's also interesting because I was misjudging US as I said in an earlier report because I thought that US should be our most difficult market due to all things with everything from tariffs to Trump's different decision to the war in Iran and so on. But I repeat that it seems that the Americans have some kind of gene in the body that we don't have in Europe, that they just continue buying whatever happens. That's actually a feeling. So the US, I think, will have ever been one of the strongest markets also in general the last years. So it will be a very interesting and I'm quite excited to this and I go to US on Saturday morning and we'll meet the people responsible on Monday. Top point we have not talked so much about before but it's a company we have doing hardware located from the beginning a Dutch company but located with their production nowadays in Poland since quite many years but there we start up 35,000 square meter big production facility started in May it's also cost a lot of money also in actually decreased sales for a short while it's very modern 25 different printing techniques that we are quite alone about many products available in 24 hours we do do that we are at the same level or better than the competition after this so this would also be very very interesting to to see what we can do there and you can say we had still two areas on the corporate There we are in a European perspective or quite small and top point and hardware is one of them and the other one is workwear. So it would be theoretically easier for us to continue taking market shares in this area than it is on corporate in most European countries. As I mentioned, without stock we have lost all the sales, just so you know. This is again a proof that especially on merchandise and happenings and those things, it's speed to market that are the absolute most important thing. So now we hope that in more of our big countries in the future the countries qualify but very late. Too early is not good. For the first time also we have champion playing in Kraft it was Aarhus that won Danska Superligan which we were very happy for and Kraft is really moving forward on the teams another nice example was that you had the first game I think the second game is still left to play between EFK Gothenburg and KAA Ghent. I think it was the first time it was two teams playing in Kraft in a European Cup. So it's really moving and here we can also see sometimes it's very very difficult for us to also give forecasts on some things because if Aarhus wouldn't win then we probably have sold merchandise for 20 million lower so this is also quite important so I have nothing against Sirius but now I hope that Hammarby is pausing And it would be very nice to have both Danish and Swedish champions as well. This is one of the biggest events we ever have supplied. Rogel Run in Denmark. 112,000 runners. I think it was in six cities or eight cities maybe even. And all of them, those 112,000 run in a Croft T-shirt. It's fantastic also, not only fantastic for the sales, it's also fantastic for the exposure of the brands. so it's happened quite a lot in those areas half a year it's not very much to say there in one way because it's more or less falling Q2 and you don't have any big effect of tariffs if you look at the half a year figures as I said before Q1 would be a bit better Q2 a little bit worse or half a year is quite correct yeah 4.9 billion million not billion yet 10.2 percent up in sales incorporates 14.4 and retail 2.0 and again the big difference there is also that Cotton Classic of course was not in first or half year last year yeah not so much to say here Geographically, you have pretty much the same picture. North America minus 2% is due to currency and the currency effect there for first half year I don't have in my head, but do you have that or not? soon okay Sweden plus six percent there I must say that if I'm a little bit negative surprised in for example Great Britain I'm positively surprised in Sweden because to have that grow rate with the big market shares we have here is very good and especially when you don't use discounts and so on you really grow on full margins minus 8.6 so on half a year the local currency US is plus 6% Benelux plus 5 and there we now start to see positive effects of the automatizations we did in New Wave Netherlands last year we have been operating there since May last year and for a while we lost sales due to bad service when we had all the movement and so on now we start increasing again so that's good at the Nordics 5% and the rest of Europe plus 43 and the reason for plus 43 the main reason I should say not the only reason but the main reason is again cotton classic then and others minus 23 and that's one single reason and that's the trading came in low in Q2 Corporate minus 33 million. Sports and leisure plus 57 and gifts and furnishing and improvement on 17 million. Cash flow also pretty happy with that also if you look at half a year. and that's of course also one of the reasons we continue to have a strong balance sheet which will keep strong even if we do acquisitions so that's more or less that I think we open up for questions instead yes yes you should

Thank you Andreas Lundberg with SCB. If I start on the outlook comments, it seems that you turned somewhat more positive versus previous quarters. What are you seeing? Where do you see it and where do you don't see it?

We see more positive clients, more positive comments. We see better figures. But again, I'm a little bit scared without having figures how it was in mid Europe during this summer. but otherwise sports retail for example has the index there have improved the clients are more positive when I talk with them and it feels also more stable than I should maybe add that it can still be surprises because I go to bed in the evening and I don't know what I'm doing during the night when I wake up so it can I think it can still be A little bit up and down, but it feels much better than six months ago. And the first also, the first time we really will see if I'm right is pretty soon because we start doing the pre-sales in sports retail right now and do it for six, eight weeks in forward. And then we will see if the chains really also act as they say that they are more positive and increase the pre-ordering. because if you look for example in a if the sports index is good in Q2 we will notice that in Q3 when they place pre-order and we will get into our P&L in Q1 Q2 when we deliver the pre-orders but also corporate market feels a little bit more not a little bit it feels more stable and people are also there talking more positive then you can say sometimes it's difficult to to judge if it's of that they are more positive because we have launched new new products and do all this investment or they are if they are more positive in in average in average in general but we feel I feel more confident than six months ago

A different topic. You mentioned a few things about the Dallas factory. Can you more broadly talk about what it will mean for your distribution of logistics in the US and how will the other facilities be affected? Thank you.

I don't think it will be affected so much. And I should also say now we will not invest in a new big warehouse in the US at least for coming three, four years. But if the outcome is what we think on the Dallas warehouse, we need another two facilities in the US to really cover the country. But that will be earliest in three or four years. But we don't think it will hurt so much because we really give a poor service in that part of US. We are covering down to, I shouldn't say South US because we are pretty fast down to California. But if you come to Southeast or South Mid, we are very, very slow. And we have several competitors there with the warehouses in that area. And they are today much better than we are. And they will not be better than we are three months from now.

If I may last one, and I will let someone else in. Speaking about the US and the TeamWare set up, can you give us an update on TeamWare Club in the North American business?

It's moving forward. I could say that it's a little bit less than I expected. Takes a little bit longer time and it's also Some differences we really need to learn. For example, I think you all know that most of the TWS business is running through schools and not through teams and so on. You have that in several sports. The whole league is blocked because they sell the league, they don't sell the teams. and so on but it's a positive development and I still believe in it on the same level as I did from the beginning and it's working due to service and so on that really have been one of our weapons in Europe the competitors is not better in US than they are in Europe so yeah And before we ask, I can also comment that the shoes also continue to increase. But a bit slower there, too.

I'll take the chance to jump in. Karl-Johan von Neu-Dienbeck, Carnegie. You mentioned that you would have expected 4-5% organic growth in the quarter and still Kraft looks good and a couple of other things. Where do you see the shortfall compared to your expectations?

Mainly, you can say it's actually trading. and it's also if you look geographically Great Britain then I thought we should be have a better effect also on the launches or the merge of our two companies there so it's I don't know the organic growth if trading had delivered the same have you checked that

And look in UK, is that BTC that is not really working at up until compared to your expectations?

Yes, yes. You can say that Cotton Classic is actually doing at least what we thought and maybe even better. So it's going quicker. BTC are going slower. You're correct.

Looking at the custom duties refunds, you mentioned most of it's coming through in sports and leisure, as I understand it.

I should be clear there, as a segment. But this is very tricky. Because if you look at channels, I mean, Katranback that have received most is in the segment, sports and retail. But their main sales is a channel corporate. So it's a difference between those and it's this bloody IFRS.

We can agree on that, I think, but the table is an approach. And looking at both the inventory impact and the cost of goods sold impact, when would you see the similar kind of effect on cash flow? Because I guess there is delay there compared to what you see in the P&L. And when you look now at the inventory levels at the end of the quarter, so you had a continued inventory build up in Q2, what kind of growth rates do you see that being able to sustain if the market is there in the second half?

Organic, we can at least go up to 10% if we can sell so much. But the warehouse or the stock is not a problem. Excellent.

Thank you.

But don't take that as we will have 10% organic as we could due to the stock.

Emanuel Jansson, Danske Bank. Jumping on, moving forward to the organic then. I mean, given that you are in this heavy investment phase, is it fair to assume that you need to grow by double digits organic in order to sustain higher EBIT margin at moment?

We have a very big, so to say, fall through in the P&L. So we don't need to go up to 10. But if we really should be able to deliver a high operating margin with 8% organic. But we should also remember that, sorry to say, Dallas all the time, but we can take top point also. When you open up something, I mean, Dallas, we take the cost every day and we'll not start sending out one single garment from there. Start will be October. Top point decreased sales for the first time in many years during the period when they had all the moving and everything. So I think we can be there and we also have now launching in Tencent in the US. It will not be any big effect this fall, but hopefully next fall. And we also have some new products and lines we will launch in January and incorporate. Kraft is coming with indoor shoes, which we think is actually in one way an easier market than expensive running shoes. So we have a lot also in pipeline there. we have taken a lot of costs in the P&L that we have no income at all on yet.

But that's how we have done it many, many, many, many years. And did I understand you correctly that that will continue until the third quarter as of next year?

Some of them will, of course, always continue. I mean, we need to develop new products all the time. It's just that we have done it more than normal the last two years with Antec Movement and all those things. But we can never stop that because then we will Probably have a negative growth three years later. But some of the costs, for example, automatization of warehouses, a lot of warehouses is done. Then it's another story if we, for example, make a decision and say that we need to optimize that warehouse. We are a bit keen on the coming two years, maybe. established a warehouse in Germany that are automized for Cotton Classic. But most of them, what can it be, 75-80% of their warehouses is now done. There we actually need automatization. So it's much less investments in future in that perspective than it has been the last years.

So you're happy if you're able to defend the EBIT margin from this level until next year?

Yes, I think we can start and really see an improvement again. Again, excluding acquisitions. We will see an improvement from the second half next year in operating margin as well. and if we can hold it until then through those investments period I think it's very good because if you then look at the underlying profitability it's really nice.

Perfect, thanks. That's very clear. And just curious, we have seen several other retail names reporting Q2 numbers describing the weak German markets, Revolution Race, Phoenix Outdoor, H&M, and also I think Klarna also mentioned the weak consumer sentiment. You don't experience that? We do, but not...

so bad as we write the report but Germany I think as a country is under a lot of pressure and the consumers there are in one perspective weak. I can take one example we had the formal CEO in Intersport with us on a trip to I met them in Germany and me and Göran was down to Poland afterwards and there we have I think that I was a little bit surprised over. You can see how fast things are changing because the German intersport dealers on the border to Poland just a few years ago had the problem that consumers in Germany was buying in Poland instead because it was cheaper. Now the shops in the border in Germany is going very well because it's Polish people coming over and buying in Germany. So it's really fast changes. And I think with everything with the car industry and so on in Germany, it will be a tough market. And we should also remember it's a market that everybody wants to be because it's so big. So the competition there are much, I would say, much tougher than in many other countries.

Perfect. And final question. You mentioned Kraft. And is it fair to assume that both the team were running business doing well, but also the retail business within Kraft?

Retail business in Kraft has not done well for some years. And it's not like we are losing shares to other. But as you know, the sports retail has been terrible in several countries the last, I think it's three years.

And it's still not doing well in this quarter, the retail business.

But again, before you see it in our figures, just everybody knows that if, for example, Q2 comes out strong for the retailer, they will increase the buying, the pre-orders they place to us in Q3. which we will deliver Q1 and Q2 the year after. You always have this lead time so we need before we really will see a positive effect in general from better retail sales it will take six to nine months and then of course sometimes we can have a small effect that they need to buy in season if they are doing very very well but so good is it not yet.

But I guess the cold weather in Q1 and also Sport Index data was quite good in Q2 as well. The inventory level should be quite good. Much lower than before is what we expect. And we expect higher pre-orders.

But you never know. And now I hope that in one way, I hope... that they don't place too much for the winter I would say is most sensitive because in the past it has been many many times that they do a big winter or a good winter then they think that next winter will be even better and then they place two big orders and then that winter is not so good and then you have a bad effect the year after again so yeah thank you

Hi, Alice Spear from APG here. Just a few questions. First on Cotton Classics. What's the gross margin like for Q2 compared to last year for it? How is that earnings development going inside of Cotton Classics?

I don't have actually.

I have, but we don't release that. Okay. But it's improved a little bit.

Yeah. What we actually measure all the time is how many percentage, but we don't publish that either, but how many percentage of Cotton Classics total sales is turning into new wave brands.

Yeah, and I was just about to ask that, has that increased in the pace that you expected or how much would you say that's now?

I would say at least in the same as we have expected, maybe even faster, especially on some brands, but that's also product groups that don't have any competition with external brands. So for example, Kraft is doing very good in Kopen Classic, but they didn't have any sportswear before. And the competitors don't have any sportswear either. So the teamwear, for example, is doing very, very good in Kopen Classic.

Okay, great. And then a more general question. There are a lot of moving parts affecting both sales and EBITs and some things you can control, some things you can't. Short term, looking at maybe age too, what are your priorities for increasing or stabilizing margins or increasing organic growth out of the things you actually can control?

I think goal number one to do that is to keep the gross margin on a high level. because if we yeah you can calculate yourself if we would have discounted more and be down on 46 47 it wouldn't have been looking so good so we will really do everything we can to keep the gross margins up and then I don't think we can do so much more than we already are doing to increase the organic grow actually of course it will help with the launches we're doing in the US and Tencent and so on. But again, it takes six to 12 months at least before you see any effect in it. But hopefully also we have done a lot this first six months that hopefully will pay off better. Okay, perfect.

That was it for me.

Niklas Skogban, Nordea. Did you raise prices in the US to offset the impact from tariffs? So do you then expect...

It's so much depending on In a total, I don't have any good picture because it depends so much on what products they get hit. You know, if the tariffs hit a one-color T-shirt, it's extremely difficult to take a price increase on that because the competition is extremely, extremely hard. If it's hitting a craft jacket, the consumers really don't know if the price should be $90 or $99.

so so and and how would that have spread out an average I I can't answer all right so you don't expect sort of prices going down in the US market and no no no okay and then going back to the corporate segment so if you strip out trading it was minus 3.8 organic growth right yes yeah no no no what do you think it was it was plus 3.8 not minus yeah see if you see if you strip out the trading impact okay all right then I miscalculate that one um or we yeah I'll I'll I want a correction if you're wrong. So in the first half, through underlying cost increases around 12% for external and personal costs. Stripping out acquisitions and FX. So is that sort of, do you expect that level also in the second half? External and personal.

this first half year than we will do H2. Since in 2025, we had very little costs in external expenses referring to the ERP. But as from Q3 2025, we have started taking costs for the ERP. And so like when you compare now in Q3 2026 to Q3 2025,

it would be more comparable. Okay.

That's it for me. Stefan Stjernholm, Handelsbanken. A question on the gift and home furniture segment. You said long-term you can reach 10% margin.

I hope.

Apart from a recovered market, what is needed? Is it time for another structure measures?

Probably also some more cut-downs in our own production. which we are working with.

So they will be more outsourced?

yeah if we really strengthen the gross margin it's need to be that but at the same time it's no plans to close production because it still means a lot in the total but but we have too big production capacity today that we gain too low margins on but it's also certain product different in different products if you look at art glass We have fantastic gross margin. But if you look at the hand-blown wine glass made in Sweden, it's very bad. Excluding actually the new line that Björn Fransén is behind. There you can hold a pretty good margin, even if it bruises with.

Cool, Andreas. Again, some confusion maybe from my side on the cost of the temporary costs that you partly will normalize next year. But if you look at the last 12 months and look 12 months forward, how will that figure change in absolute terms? Thank you.

I don't think it will change so much the coming 12 months. I think we calculated and I wrote that it will start to go down the second half of the year next year. if I remember correctly, from my head.

DRP and we have also, like Torsten mentioned, for Dallas now, we have third-party warehouses that we will keep having if we have moved the stocks completely into Dallas and some other additional costs.

But it also depends a little bit how you mean, because according to sales, and turnover, it will hopefully be down because, again, to repeat Atlas, we spend a lot of money there, both in investment and cost. We're not one single extra income in sales. So if you look at, yeah, in percentage of sales, it will hopefully start going down earlier than second half next year.

Right. Meaning that your organic growth and gross margin will be the drivers of your operating margin in the next quarters. Thank you.

Yes, we got some questions from the web. And first, Costa Köpmanshus, which New Wave co-owns with Lessebo Municipality, has been valued at a potential sale. Are you interested in increasing your ownership stake in the property?

No.

Thank you. Yes. Computer software in your intangible fixed assets continue to increase in 2025. Should we interpret your statement about transition to cloud computing as that this figure in the balance sheet should start declining in 2026 and onwards?

Yeah, I can repeat.

Computer software in your tangible fixed assets continue to increase in 2025. Should we interpret your statement about the transition to cloud computing as that this figure in the balance sheet should start declining in 2026 and onwards?

The thing about the cloud solution is that we don't get it as an intangible solution.

We don't get it as an intangible asset.

So it is the small part that is put in the balance sheet is put there as a prepayment and dissolved over the license period and the rest is going directly in the P&L's expense. Even though on day one, even though we consider this as an investment, it's something that we do that we will use for at least 10 years. But the cost is up front, even though we're not even using the system yet.

The answer is yes on the question. But maybe you will not see any big effect in 2026, I can't say, but But the result again, when you take a lot of the ERP system as costs instead of putting into balance sheets is that we will have in one perspective lower depreciations in future than we would have with the old bookkeeping system.

Yes, we won't even get any depreciation. all will be in the external expenses instead. So it's a shift in that perspective as well between the clients.

Yes, perfect. That was all of the questions.

Okay, any more questions around the table? Good. Thank you very, very much.

Thank you.