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2011 will be a good year, New Wave CEO
28
Apr '11
New Wave Group AB announced Interim report Q1 January-March 2011.

1 January – 31 March, 2011

• Sales turnover amounted to SEK 928 million, which was 8% better than last year in local currencies and 1% better in SEK (SEK 915 million).
• Operating profit amounted to SEK 17.7 million (SEK 16.9 million).
• Profit after tax amounted to SEK 5.7 million (SEK 7.6 million).
• Earnings per share amounted to SEK 0.08 (SEK 0.11).
• Cash flow from operating activities amounted to SEK -142.6 million (SEK 65.4 million).
• Equity ratio amounted 44.0% (41.5%).
• Net debt to equity ratio amounted 81.1% (93.8%).

Views On 2011

For 2011 we expect a higher sales turnover and better result than the 2010 outcome.

Torsten Jansson, CEO Comments

On the whole, the year has started more or less as we expected. We had perhaps expected somewhat better Sports & Leisure sales. Quite likely the extremely good winter sales from last quarter back lashed a bit as spring sales got a slow start due to the long winter.

The lower Sports & Leisure result was expected as we also made major market investments with Craft in the quarter, i.a. the cross country World Championships in Oslo, Norway and professional cycling team Leopard, so for the full year I feel confident that the business area will develop well. The Corporate Promo business area is strong and developing nicely and we expect this to continue.

Our stock levels are starting to reach the levels we would like and the delivery situation is getting better again. We estimate that this will be a strong year for promo. Our continued challenge is Gifts & Home Furnishings, primarily Orrefors Kosta Boda where we are investigating further actions to reach an acceptable improvement of the result.

Altogether, I think 2011 will be a good year, even if the retail business seems to be a bit weaker now than before.

Summary of the quarter

The Group's growth in local currencies amounted to 8%. We are seeing increased activity in the Corporate Promo business area where improvements are happening in virtually all markets. Sports & Leisure has developed well in the North American market, but is weaker in the Mid European market. Gifts & Home Furnishings has had a lower sales turnover due to a weaker market, mainly in Sweden. Within the Group's sales channels – promo and retail – there is better growth in the promo sales channel.

The retail area has a weaker development, mainly in Sweden and Mid Europe. Gross margin for the quarter was lower than last year. The Group has lost margin on sales, mainly within Sports & Leisure and Gifts & Home Furnishings where the retail sales channel has been weaker.

The Group's costs increased somewhat during the quarter due to increased sales and marketing activities, where some of the activities for Craft have been the cross country World Championship in Oslo, Norway and the cooperation with LEOPARD TREK.

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