KUNGÄLV, Sweden, April 22, 2020 /PRNewswire/ -- PERIOD 1 JANUARY - 31 MARCH 2020
- Net sales amounted to SEK 1,440.9 million, which was 4 % (7 % in local currencies) lower than last year (SEK 1,504.9 million).
- Operating result amounted to SEK -24.1 (46.0) million.
- Result for the period amounted to SEK -36.9 (26.0) million.
- Earnings per share amounted to SEK -0.54 (0.41).
- Cash flow from operating activities amounted to SEK 114.6 (-65.1) million.
- Equity ratio amounted to 46.8 (45.9) %.
- Net debt to equity ratio amounted to 74.6 (73.7) %.
The year started strongly with good earnings growth in January and February. The joy of it was short-lived when the corona crisis hit with full force in March. Several of our companies were hit very hard, not only by reduced demand, but also by having to close some warehouses. The worst hit was Italy, where our company is located in Codogno and also where the corona outbreak started in Italy. The warehouse there was basically closed throughout March. March was arguably the most dramatic month I've experienced since New Wave was founded.
Sales ended at minus 4% (minus 7% in local currencies), which was completely impossible to plan for or anticipate. In addition to a rapidly reduced demand, several of our warehouses were also closed for all or part of March. Sales for our retail customers fell dramatically and in some countries stores have not even been allowed to open, which gave us an extreme decline in orders received, that not only affected the retail sector but also promo.
Operating result ended with a loss of SEK -24.1 million compared to a profit for the previous year of SEK 46.0 million - a decrease of SEK 70.1 million. Result for the period decreased by SEK 62.9 million to a loss of SEK 36.9 million. In addition to sales, earnings were negatively affected by a lower gross margin that fell from 47.1% to 43.8%. We also made provisions of SEK 10 million more than the previous year regarding customer losses.
We continue to have a very strong balance sheet with an equity ratio of 46.8%, which feels good in this painful barrier. The balance sheet is likely to grow over the next six months, especially in terms of stock, just as during the financial crisis it takes about six months to redirect purchases.
The impact that we are now exposed to has negative effects on our cash flow and thus on the company's liquidity situation. We have an ongoing dialogue with our creditors to manage liquidity risk and secure our funding.
Cash flow improved by SEK 187.4 million compared with the previous year and amounted to SEK 84.0 million after investments.
OUR CRISIS MANAGEMENT
I am very pleased with our organization and how it acted in the beginning of the corona crisis. We were one of the first companies to introduce meeting and travel restrictions, which in retrospect feels very good. We have already made significant savings and cost reductions going forward and this work will, of course, continue. Many in management were involved in the recent financial crisis and although this crisis looks to be getting far worse, it is still noticeable that many within management have long experience and I feel as CEO that this is a great support.
It is, of course, extremely difficult to say anything about the future - at least in the shorter term. No one knows for certain how long this will last, nor how hard different countries and regions will be affected or what action different countries will take.
I had really been looking forward to 2020 as the year that would be the best ever for New Wave Group. Instead, I now look forward to lead New Wave through yet another crisis. This crisis is similar to any other we have gone through, but if you think back, it is in part similar to, for example, SARS, mad cow disease, bird influenza, the IT crash of the early 2000s and the financial crisis of 2008/2009. So in a way, from the experience of these crises, my goal is that New Wave will be strengthened even from this crisis, but it will be both tough and difficult. In the end, I can at least say that we are entering this crisis with strong brands, a good organization, a strong balance sheet and hopefully we will come out of this crisis even more competitive.
Torsten Jansson, CEO
FOR MORE INFORMATION, PLEASE CONTACT:
CEO and Group CEO
Phone: +46 31-712 89 01
E-mail: [email protected]
Phone: +46 31-712 89 12
E-mail: [email protected]
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 April 22, 2020.
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The following files are available for download:
Interim Report for New Wave Group AB January - March 2020 (PDF)
SOURCE New Wave Group