New Wave Group (NEWA) Q3 2024 earnings summary

Executive summary

• Net sales for January–September 2024 were SEK 6,701.4 million, down 1% year-over-year, with stable performance in local currencies and continued market share gains despite industry declines.

• Net sales in local currencies increased 2% in Q3, outperforming a market that declined 7–9% across key segments.

• Operating result for the nine-month period was SEK 799.7 million, a decrease from SEK 1,058.4 million last year, mainly due to lower sales and higher personnel and marketing costs.

• CEO highlighted strong cost control, improved cash flow, and a record-high equity ratio, emphasizing resilience in a challenging market.

• Investments in teamwear and market expansion in the US and Europe are ongoing, with early signs of success in Europe and significant opportunity anticipated in the US.

Financial highlights

• Q3 net sales were SEK 2,308.3 million, down 1% year-over-year, with currency effects negatively impacting by 3%.

• Q3 operating profit margin was 13.6%, down from 16.3% last year; gross margin reached a record high, up 0.2% year-over-year.

• Cash flow from operating activities improved to SEK 191.4 million in Q3 and SEK 732.6 million for the nine months.

• Equity ratio reached a record 60.7% as of September 30, 2024, up from 55.8% a year earlier.

• Net debt decreased to SEK 1,927.5 million, with net debt to equity ratio at 29.3%.

Outlook and guidance

• Management remains cautious on short-term recovery, especially in Sweden, despite recent interest rate cuts and improving macro indicators.

• No signs of deteriorating order intake; pre-selling orders for Craft are increasing.

• Continued focus on gaining market share, preparing for growth, and pursuing selective acquisitions.

• Continued investments in marketing and cost control are prioritized.