New Wave Group (NEWA) Q4 2024 earnings summary

Executive summary

• Net sales increased by 3% in Q4 2024 despite challenging market conditions, with profile/promo channel sales up 5% and retail unchanged; full-year sales were stable at SEK 9,528.7 million.

• Operating profit for Q4 was SEK 462.7 million, down from SEK 518.7 million last year, with an operating margin of 16.4%; full-year operating profit declined to SEK 1,262.3 million and margin to 13.2%.

• Cash flow improved to SEK 1,278.3 million for the year, and the equity ratio strengthened to 63.7%.

• Continued investments in market expansion, especially in North America and Germany, and in automation and warehousing.

• The board proposes a dividend of SEK 3.50 per share, paid in two installments.

Financial highlights

• Q4 net sales: SEK 2,827.3 million (up 3% year-over-year); full year: SEK 9,528.7 million (flat year-over-year).

• Q4 operating profit: SEK 462.7 million (down from SEK 518.7 million); full year: SEK 1,262.3 million (down from SEK 1,577.2 million).

• Q4 gross margin: 50.0% (down from 52.0%); full year: 49.4% (down from 50.3%).

• EPS for the year: SEK 6.63 (down from SEK 8.43); Q4 EPS: SEK 2.60.

• Cash flow from operations: SEK 1,278.3 million (up from SEK 963.8 million); net debt reduced to SEK 1,818.8 million.

Outlook and guidance

• Management expects market conditions to improve during the year, with investments in the USA and Germany anticipated to drive sales growth in the second half.

• Additional brand and product launches are planned for North America and Europe, especially in the promo segment.

• Tenson revenue target of SEK 500 million for 2026 remains possible, depending on retail contracts.

• If market conditions do not improve, EBIT margin is expected to remain around current levels.

• The company remains open to further acquisitions, but only if attractive opportunities arise.