INTERIM REPORT FOR THE THIRD QUARTER 2020

KUNGÄLV, Sweden, Nov. 6, 2020 /PRNewswire/ -- NEW WAVE GROUP AB

PERIOD 1 JULY - 30 SEPTEMBER 2020

• Net sales amounted to SEK 1,470.1 million, which was 13% (9% in local currencies) lower than last year (SEK 1,685.5 million).
• Operating result amounted to SEK 176.3 (129.1) million.
• Result for the period amounted to SEK 118.9 (94.4) million.
• Earnings per share amounted to SEK 1.81 (1.45).
• Cash flow from operating activities amounted to SEK 283.2 (-131.1) million.

PERIOD 1 JANUARY - 30 SEPTEMBER 2020

• Net sales amounted to SEK 4,225.6 million, which was 13% (13% in local currencies) lower than last year (SEK 4,879.3 million).
• Operating result amounted to SEK 262.3 (294.6) million.
• Result for the period amounted to SEK 154.8 (204.1) million.
• Earnings per share amounted to SEK 2.38 (3.13).
• Cash flow from operating activities amounted to SEK 649.1 (-187.3) million.
• Equity ratio amounted to 49.0 (44.0) %.
• Net debt to equity ratio amounted to 62.1 (82.8) %.

CEO COMMENTS

JULY-SEPTEMBER

I am very proud of and pleased with our third quarter. Our organization has really made a fantastic achievement during a turbulent and challenging time. Net sales decreased by 13% from SEK 1,685.5 million to SEK 1,470.1 million, but with the current market situation where all major events and sports competitions are cancelled, games are played without an audience, clubs and associations have limited activities and larger conferences and congresses become digital, it is still a good result.

The fact that we then increased the operating result by 37% from SEK 129.1 million to SEK 176.3 million and thereby improved the operating margin by 4.3 percentage points from 7.7% to 12.0% is a very good development. An operating margin of 12% or higher in a third quarter has actually only been reached by us once before - in 2008. Then we reached 12.8%. This makes 2020 second best ever. We achieved a cash flow from operating activities in the quarter of SEK 283.2 million, which is an improvement of SEK 414.3 million compared to the same period last year and once again shows how fast we can adapt when crises occur.

During the third quarter net sales for the Corporate segment decreased by 1%, Sports & Leisure decreased by 29%, but Gifts & Home Furnishings experienced a growth of 11%. Geographically, the main challenge is the US, where net sales decreased by 43% (including 5% negative exchange rate effect). Most positive is that Sweden had a 4% growth in the quarter - a strong development in a weak market.

JANUARY-SEPTEMBER

The year started very good, then crash landed in March, April and May and has since then slowly recovered. The spring months were very intense as we accomplished a major work to lower our costs and secure a good cash flow. Thanks to these measures, and probably previous years' investments in products and brands, we have, this far, quickly recovered. Net sales decreased by 13%, and the US is the major challenge during this period as well with minus 39% and accounts for SEK 495.7 million of the total drop of SEK 653.7 million. The operating result decreased by SEK 32.3 million from SEK 294.6 million to SEK 262.3 million, but it is notable that the operating margin actually improved from 6.0% to 6.2%. It is gratifying to see how quick and decisive our organization has succeeded in lowering the costs and adapting to the current situation.

CASH FLOW AND BALANCE SHEET

In addition to the result development, I am very satisfied with our cash flow. For the nine-month period, cash flow from operating activities amounted to SEK 649.1 million, an improvement of SEK 836.4 million compared to the same period the previous year. Total credit limit amounted to SEK 3,133.2 million and net debt to credit institutes to SEK 1,629.8 million, which gives an available credit of SEK 1,503.4 million. We have also strengthened the equity ratio, which now amounts to 49.0%. We have never had a balance sheet that strong and an available credit that large.

THE FUTURE

It is still very hard to assess the coming quarters. COVID-19 has once again increased in several countries and regions during October, and there is still a great uncertainty about when the US will recover. We will do our best to perform as well as possible during the coming quarters as well. Looking past the COVID-19 crisis, I am totally convinced that we will come out stronger and our assessment is that we gain market shares and develop better than our competitors in basically all areas. I am looking forward to accelerating growth again after the crisis - but still with focus on the operating margin - and continue towards new achievements.

Torsten Jansson, CEO

FOR MORE INFORMATION, PLEASE CONTACT:

CEO and Group CEO
Torsten Jansson
Phone: +46-31-712-89-01
E-mail: torsten.jansson@nwg.se

CFO
Lars Jönsson
Phone: +46 31-712-89-12
E-mail: lars.jonsson@nwg.se

This information is information that New Wave Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons detailed above, at 7.00 a.m. CET on November 6, 2020.

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SOURCE New Wave Group