Good morning, and welcome to this presentation of New Wave Group's interim report for the first quarter, 2024. My name is Göran Härstedt, and I'm the Vice President of the group. New Wave Group, we are a growth company that designs, acquires, and develops brands. We work in two sales channel in order to have a good risk diversification, and that's the promo market and the retail market. We are operating within three segments: Corporate, Sports and Leisure, and Gifts and Home Furnishing. Within these segments, we are working with both sales channels, the promo and the retail. The vision for the corporate segment is to become the leading supplier of promotional products to corporations in Europe and one of the leading suppliers in the U.S.
And this we want to achieve by offering a broad product range, strong brands, advanced expertise and service, and a superior all-inclusive concept. The vision for Sports and Leisure is to establish Craft as the world leading sportswear brand and making Cutter & Buck a world leading golf apparel brand. The brand Auclair should take a leading position on gloves in Europe. We also use the Paris Glove strong distribution in Canada for establishing our other brands in Canada. Overall, we want to be one of the leading sports suppliers, both in Sweden and in other European countries and in the U.S. All in all, our brands should give us a position among the largest sport suppliers in the world.
The third segment, Gifts and Home Furnishings, where the vision is to make Orrefors and Kosta Boda one of the world's leading glass and crystal suppliers. A part of vision is also to involve utilizing innovative and playful design to make Sagaform a prominent player in Northern Europe, in both promo and retail markets. If we then look into the quarter, net sales decreased 7%, to about SEK 2 billion. We had a challenging market for both promo and retail. We had a negative impact due to the Easter. That was in March this year, instead of April, as it was last year, where we lost two-three business days, which mostly affected the promo sales. We probably have some shifts in sales within Sports and Leisure into the second quarter.
We believe that we continue to take market shares, depending on the result of the other competitors. The net profit decreased about SEK 100 million due to lower sales and increased costs for marketing and pre-sales measures. We have a stable gross profit margin, around 50%, and we had a positive cash flow development during the quarter. As mentioned, we had the net sales amounted to almost SEK 2 billion, which is about 140 million SEK lower than last year. We had no effect of currencies, and acquisition stood for 1% of the sales. If we look into the sales channels, we had a decrease of 6% in promo and 8% within retail. Here you see the three different segments and the net sales development compared with last year. Okay [audio distortion]. Wait a second.
If we look to the net sales in the different geographic areas and the operating segments, it looked like this. If we look into the Corporate, we had a decrease in all regions. Sports and Leisure, we had an increase in Central Europe, but decrease in all other regions, and Gifts and Home Furnishing was slightly decreased in the regions. The gross profit margin amounted to 49.7%, compared with 50.7% last year. It's mainly Corporate that had a lower gross profit due to a slightly price pressure on basics, the more cheaper products. Also, Sports and Leisure had a decreased gross profit margin, while Gifts and Home Furnishing had an increase in the margin. The external costs and personnel costs increased from SEK 717 to SEK 749.
That's mainly due to the acquired business of Tenson, and also increased primarily related to some higher rental costs and higher costs for sales and marketing. Operating result amounted to SEK 185.5 million, compared with SEK 313.5 million, and that's due to lower sales, and the Tenson acquisition reduced the operating result by SEK 3.3 million. The result for the period amounted to SEK 121.1 million. If we then look into the different segments, corporate, as mentioned before, we had lower sales in all regions, lower gross profit margin, and slightly higher cost level. Sports and Leisure increased sales in Central Europe, while the other regions decreased. Slightly lower gross profit margin.
We have increased marketing activity within Sports and Leisure, and the acquired business of Tenson had a negative impact of SEK 3.3 million. Gifts and Home Furnishing, lower net sales related to the Nordic countries, slightly improved gross profit margin, and a lower result, mainly related to lower net sales. The cash flow, the cash flow from operating activities increased with about SEK 400 million, from -193 million SEK to +203.7 million SEK. The investing activities increased a bit, with about 23 million SEK, mainly due to continued automation of warehouses. We continue to have a very strong balance sheet, with an equity of more than 6.8 billion SEK, an equity ratio of more than 63%, and a net debt of about SEK 2 billion .
If we look into the rolling twelve months, continued good turnover and gross profit margin despite a challenging market. Net sales, about SEK 9.4 billion. Operating result, SEK 1.45 billion, and a result of about SEK 1 billion. CEO comments, which are more described in the quarter report. We had a tough start on 2024, but we continue to take market shares. We have a stable gross profit margin and a good cost control. We had a good cash flow, and inventory is at a good level, which provides better conditions in the coming periods. Operating margin amounted to 9.3%, compared to 14.7% previous year. If we look on the future, we are very strong in all our areas of operations.
Sports and Leisure has an exceptional good growth opportunity going forward, with all the investments we have made in Craft, Cutter & Buck, and Tenson. We have invested in product development, automation of warehouses, and also marketing activities. The corporate segment is also well-equipped for growth, with a good inventory level and a high level of service, and investments has been made in products, marketing, and sales organizations. Within Gifts and Home Furnishing, we believe that the slowdown has almost ended, and that growth is on the horizon. Our lead words, we strive to make everyone who buys our products happy customers, and if you choose to invest in New Wave Group, we want you to know that we promise to take care of our investment in the best possible way we can through long-term thinking, growth, stability, and hard work.
Now it's time for questions, and we will use a microphone, so also, the public that follow us on the net could hear the questions. Please?
Thank you, Andreas Lundberg with SEB. I think you talked already in relation to Q4, that the first quarter will be challenging for various reasons. But were anything that surprised you, now when you have the quarter completed?
No, I won't say so. First quarter is also always a bit difficult for us to see how, where it's going. That's the quarter where we have most variances between the years. And it... This quarter, nothing special happened, besides that we had a rather tough market, and especially the sport retailers still have a tough market. We can see that the sports chains still have a decrease in the sales, also in Q1. If we look into the Swedish sports retailers, as an example, they had a decrease of 5.2% in first quarter. And we see that they also still use their stock, overstock they had since the past. But no major issues according to our opinion in Q1.
You also touched upon that you, you see growth soon within the gifts category. What about the other two major areas of your business?
We see growth opportunity in all three segments and not the least in the sports sector. We see so many positive trends, indications in the market. It's more a timing, if it will come very soon or if it will take some months before the sales pick up again. But we see many positive indicators within that segment. But also in the Promo market, we see more and more positive indicators that should be able to get us growth within that segment, too.
Lastly, from me, you touched upon you gained market share, and some of your competitors are having problems. Can you more explain it more in detail what has happened, and why are you gaining share versus others?
Mm, mm
... and so forth?
We don't have so many public figures to get in the promo market. We have some in the U.S. we can see, but we get quite much information anyhow by being on the market. We can see that most of the other promo wholesalers are suffering much more than we do. And that's mainly because they don't have the stock that we have. And then most competitors have had harder times to get the stock in time also, and that's especially within the sports where we have been much more successful to get the goods in delivered to our warehouses without especially much delays. Please?
Carl Johan Bonnevier from DNB Markets. Looking at the phasing of sales cost, marketing cost, have you done anything different this year compared to previous year? Or is it just a continued increased investment that indirectly is hitting the quarter?
Well, we have followed a plan regarding marketing and sales investments, so we have not done anything strange in that way. But we have increased; we have been present at more exhibitions during quarter one than we did last year. We have invested more in catalogs and marketing materials than we have done in the past, in order to meet a demand that we believe will be coming during this year. And according to the accounting rules, we take the cost immediately, even though it's meant for the whole year or the full season.
Makes full sense. And when listening to your commentary, it still sounds like you are very, you're still planning for a sales acceleration, if not in Q2, then in the second half of the year.
Yes, we do. Yes, we do.
Coming back also to the comment about you gaining market share. When you look at your promo resellers, is there, say, is it good, decent business momentum for them, or have you experienced, say, the increasing in receivables outstanding and these kind of things? Are they in good shape?
They are in quite good shape, but they also see a tough market, of course, as we do. And quite many companies have been more careful with the spendings on promo. Just take that away. Which we have seen the last year, and that's followed the recession, so to say. But facing the recession we have now, we think we are performing and also our customers is performing very well.
No increasing bad debt problems for you, for you at this stage or anything like that?
No, no.
Excellent. Thank you very much.
Mm.
Any more questions?
We have a few questions from the web. We'll start with the first one. Can you provide some more color on the remarks that Sport Trade looks to improve in Q2?
Maybe you're looking into the comment that we see a shift in sales into Q2. And then that's a part of the Easter effect, you can say. That since the pre-order to the sport retail was lower this year, we count on or trying to compensate that through more daily orders to the sports retail, and there we saw an increase at the end of Q1 that was quite good, which will hopefully continue in Q2.
What can you say about the margin pressure within promo? Do you see this continuing throughout the year?
Maybe not for the full year, but it will at least continue the rest of the first half year. And as mentioned, it's on the basic, the more cheap styles.
We take one final question here from the web.
Yep.
You have previously expected a turnaround for the sports and leisure business in Q2. Is this still the case?
Yes. We believe that we will have a good Q2 for the sports and leisure. Absolutely.
Mm.
Thank you. Thank you, very much for coming.
Thank you.