Welcome to this presentation of Q1 2025. We have had a quite good start, and it's probably a small positive effect by the Eastern, comes into Q2 instead. In sports and leisure and corporate, in gift and home furnishing, we have the opposite effect, actually, where Eastern is a very strong period in Costa that comes into Q2 instead. In total, I would say it's a small positive effect by Eastern. I think it feels very, very stable. I read newspapers every day that it's ups and downs everywhere. I think it's a less good environment now than three months ago, especially in the U.S., where people and companies are more negative and more worried. We're still growing there as well. New Wave Group, it hasn't changed so much since last quarter, but just below 2,000 employees, 25 countries, and three different segments.
If I should point out something that makes me more happy than other things, it's that we are growing actually in both channels, both retail and corporate, in all three segments and on all geographical markets. I think that is really a proof on how strong we are today. Important on this map is also the sourcing activities. I can't say that we foresee what Trump should do, and we still can't. We thought some years ago that it was a chance that he would be reelected again. We know that it was ups and downs about tariffs and things also last time he was there. I am very happy we started upsourcing in Africa as well. We are very, very well prepared for the situation that maybe will occur. It seems to change every day.
We have moved quite a lot of production already before this to Ethiopia, to Kenya, and to Egypt. Also, the new buying office in Alexandria in Egypt that will handle Africa is working very, very well today. I am not so worried about whatever tariff it will be. You can say the only thing is that it can hit us in a very short term if they put in tariffs that are valued from tomorrow. The goods, for example, on the sea will have a duty that we have not counted on. I also think that it is a good outcome if it is a minimum duty of 10% on all countries, because then it is quite neutral compared with competitors. It does not matter so much where you produce. I guess China will be higher than that, however. The operating channels, corporate has a good growth.
Sports leisure, I would say, compared with the market, a fantastic growth. If we should point out on corporate, it's hard to point out something special. We've done investments in more or less all the brands, new collections, and so on during the last years. Of course, we also increased sales forces in some countries, especially Germany. On sports and leisure, it's again Craft and teamwear that are doing fantastically well. We have a good growth also in Sweden. Here we already have big market share. We guess we are number one today as a brand on teamwear in Sweden and still growing. It's also nice to see that we are really accepted now in what in one way for us is new sports. I mean, everybody knows Craft, I think, from cross country, from underwear and so on.
We are really considered to be a really good brand also in football and handball and basketball, volleyball, and so on. I still think we have a very, very good chance to continue to grow also in existing countries with Craft. Also, the shoes start to get more and more visible, and we come into more and more distribution. You can say that we also are helped a little bit that some competitors, it started with Nike, but now also On, for example, is cutting down their number of distributors. That actually opened up the doors for us. I hope we can take the next step now within one year to also launch Craft on indoor for different sports. Gifts and home furnishing is, as usual, less good than all other things.
We had a seasonal negative effect, as I said, but not so big. We still have to try to really improve that area. You can also say that about sports and leisure, that it is very, very profitable what we are doing there, which you also, I think, can see on how the profit increased in that area. Yeah, corporate, I jumped those. We will go very, very offensive now in North America. As you know, since before we introduced teamwear, and we have started now to have some stock. We do not have enough yet, but we will continue to build up Craft teamwear there. We have had a very good start. We signed some weeks ago, I think it was, one of the biggest football clubs, or football clubs. It is run by a school, but I say clubs, in the US with 4,000 active young players.
We think the competition there is definitely not harder in this area than it is in Europe, maybe opposite, actually. I am very optimistic there. We will launch ProJob in Canada during 2026 and Harvest Sprinter. 2026 is beginning 2026, first quarter properly. Harvest Sprinter will be launched during the end of this year, beginning next year. Craft teamwear we are also going to Canada with from hopefully end of this year. It depends a little bit on the lead time and the production because we need to have enough stock before we really push on the bottom there. Latest Q1 2026. We also look at more launches in the US. What is very actual is a warehouse in South US. We have still quite bad service on Katrenbach and Clique in South.
We think we can improve that a lot through a third warehouse for Clique and Katrenbach. Sports and leisure is going very well. I already talked a bit about it. Here you have the IFA, the New England Football Academy, I talked about. We're signing up, I would say, new clubs and new distributors more or less every week. I think that will really contribute to the growth in 2026. We should also remember that here we have the lead time as we had in Sweden from the beginning, or in all countries from the beginning. When we start a new market, it is more or less very few clubs or schools that are not under contract. Maybe we get access to 15% of the potential market year one, 15% year two, and the agreements are up to five years.
I mean, if we look at ourselves, for example, we have signed both Hammarby and Gothenburg up to more than five years when we prolonged it. It will take some time, but it looks very, very good. To really also go for football, we're taking Jan Andersson in the board of Craft. He has, what I think, very high knowledge about both clubs from small clubs up to national teams. We need to strengthen the competence inside those team sports. We have a very good competence, for example, in cycling in the company and in running and so on in the sports we have been for a long time. We need to really build a good network in the big team sports as well. Gifts and home, it's not so much more to say. We fight with it. It's tough.
When it comes to acquisition, for example, we will not look into this area before we are profitable enough in what we already have, which we are not today. The quarter, organic growth on 9%, which I think is much, much higher than the market on all segments. It's actually also, I haven't checked that one, but I think it's an all-time high in sales for Q1. I think we'd be better if we were beating also 2023. The promo, 12%, and the retail channel, 6%. I'm curious now to see what the sport index will be in different countries. I'm actually not surprised if it's a minus again for the 13th or 14th, maybe quarter in a row, but it's not published yet. It would be a good benchmark.
The sports and leisure as a segment, plus 11%, which means that we take very much market shares if I'm right in that the market actually is down. Operating profit increased by SEK 26 million, still below 2023's level, but compared with the investments we're doing in the market, I'm quite pleased with it. Also the operating margin improved a little bit. I had some comment earlier today that it's far below the goal, and it is, but we should also remember that Q1 are always the quarter with the worst profit levels. Historically, it has been like that for, I think, 30 years. It is not so surprising. Good stable start, as I said. The markets continue to be challenging, and we think it will continue that way.
We see in some countries now, in general, for example, Germany, it seems that the economy is going in the wrong direction from a quite bad level. We trust in what we're doing ourselves and will continue to grow anyhow. The only thing that scares me a little bit is if you have a total crash in the economy that some people think might come depending on the U.S. political. If we have a situation that was last quarter, 2008, or first quarter, 2009, or the beginning of the pandemic, of course, it will be more or less impossible for us to grow if the market's really crashing. I don't think that will happen. Sales on tour nearly SEK 240 billion. As I said, all channels increased and also all geographical areas.
In one way, I'm especially happy for Sweden, actually, where we have a high market share and still had good growth. Here's more or less what I just have said about the tariffs. I think it's, as it always is, that people get panic at the same time and so on. The question earlier today if we should slow down our investments in the US and also Europe. My answer is opposite. If it's any time we should invest, it's when competitors are shaky, they couldn't fulfill the service levels and so on. If we should go in any direction compared with what we have said, it's actually to increase investments. It's better that we drop a little bit in profit and are extremely strong when the turnaround is coming.
Financially, sales were talked about, organic growth in average 9% and the different channels, promo 12 and retail six. I guess that, and this is a guess, but I guess the corporate side is more or less on the same level as last year. It's not, we don't think it's minus the total market. We think around zero. And retail, we think is minus, but we don't know yet. Yeah, the different segments you can see also, it's like we said, growth in all of them. That's what I also think is very good if the market gets a little bit more shaky, that we are very diversified. For example, if you see on the teamwear business, I don't think we will see that the market goes down even if the economy really slows down.
I think it's one of the last things actually parents do are telling their kids that they have to stop playing football or stop running or something. I think that market will be stable whatever happen, actually. Yeah, North America, a plus. Oh, sorry. Yeah, plus on 26% of the sales now. New from here is that we include Canada in North America, correct? Yes. We go for North America as a region. Only Canada, yeah, yeah, yeah. Sweden, you could say we're quite good growth. The share that Sweden has of the sales is down again now to 20%. Benelux, also positive development. There you can say we are also consider ourselves as market leader today, especially on the corporate, not on retail. Nordic countries also very stable.
There finally, Norway starts to pay off the investment we made there in all the skiing teams or national skiing teams. Rest of Europe, 22%. Other countries that are only now, I think, the Hong Kong and Chinese activities, Asia. Yeah. Yeah, and that's also from Asia. Gross margin very stable. Actually, a small plus, 0.1%. That is solid as it's impossible to plan for. It can be a product mix or a big trading order or not that quarter and so on. At least you can say it's very stable. It's increased in sports and leisure. I think as bigger the teamwear part of the total business there is, it can go even a bit higher there. A little bit lower margins than in corporate and gifts. External and personal costs are up. It's mainly two reasons.
It's the investments we're doing in the markets and the salesforces and so on, plus the inflation. I mean, we are not immune against salaries going up in most countries and so either. I think the cost of it is under very, very good control. Operating profit done a bit better than last year and operating margin a bit higher. It's a good start, I would say. Here's maybe not so much that we haven't talked about. Corporate was a little bit down in North America. That's new, actually. There's been a growth until now. Trading operation was up. Sports and leisure, as I said, very strong developments. Also growth in Katrenbach there. Gifts and so on, a little bit down. Up in sales and a little bit down in profit. Sweden was good, but the other region was less good there.
Cash flow also, I would say, very stable from operations, SEK 290 million. Compared with SEK 104 million. Investments are increasing. That should not be any surprise for anybody since we continue with optimizations in the warehouses and also are just changing ERP system. We are in the middle of that, maybe.
No, we are rolling out the first now. Yeah, we are in the middle of the work, but the first rollout implementation is done now in May. Yeah.
It is exciting in some places. For example, it is in one of the warehouses in the Netherlands. We have a new system, High Robotics, that we launch with automatic picking. At the same time, it is a new ERP system. That will be, yeah, exciting to see. Is it first of May in operation? First of June. First of June. It is all new at the same time. Continuous strong balance sheets.
The only thing we can point out there is that we had a hit on SEK 400 million on capital due to especially the dollar rate. Again, I'm not looking so much at that. I'm more interested in how the development is in local currencies. Anyhow, we kept actually the equity percent, a small increase even in equity ratio. We should also remember we had some years when the equity was increasing, when the dollar was increasing. It is ups and downs with the currencies. Rolling 12 months. I hope we can break at least the SEK 10 billion this year for the first time and go up there. Operating result on rolling 12 is 13.3% or nearly SEK 1.3 billion. That is more or less Q1. I open up for questions if you have any. I saw in the quarter that you're starting to give.
Thank you very much. Collie Wanborn here from DNB Market. I saw in the quarterly report that you're starting to give us some new data on gross margin per segment and trading operation size. Are those numbers that you will continue to give us so we can keep following it?
Yes. We have to continue.
No, no, no. We are junkies for information, you know. And on those, what is your own reading of what's happening in those? You commented something here, but if you're looking at the trends over the year and how did this affect Q1 and then how we can work with these numbers going forward? I think the only big effect is what we have said but not written some years that the trading business is very up and down.
It can be an order on 50 million coming in Q1 one year and next year Q2 or you lose it and so on. It is on a very low gross margin. That is the main reason we are doing it. Otherwise, I would say it is very stable in the different channels. It more depends, the outcome of the gross margin in corporate is more depending on how big part of the turnover that actually goes to pure basics, one-color T-shirt, one-color polos, one-color sweatshirt, than anything else. In sports, I would say the main trigger there, if the gross margin is up or down, is how much of the sales that we will go into to the teamwear where we have higher.
You can say on the opposite side of sports, as more as we increase shoes in % of the sales, if we do, which I do not think because teamwear is growing so quick, but shoes have a lower gross margin. The reason we have not published it before is mainly because we are, especially on corporate, it is more or less no public companies. It is information that actually is in one way market-wise, it is not so good to give. Excellent. I also saw in the annual report that, coming back to your discussion about Trump impacts and logistics flow and so on, you have scaled the Egyptian operation in a fantastic way during last year. Is that still an opportunity to scale it even more and to compensate things here if you need to do that? It is already done.
I met the owner of the main Egyptian factory in China a few weeks ago. We will double the capacity on that. We have already confirmed that we can double the capacity. It is already done. Yes, it is just trying to manage the fluent situations and good luck with it. Thank you. No, I mean, it is impossible to foresee what will happen, but we are very well equipped. We have a lot of different countries on different continents. It does not scare me at all. I mean, and then up on that, you can say, especially on corporate, most of our clients are in Europe or in the US. We do not have any multinational competition. That has also made that we can move supplies.
I mean, we can stop some production in China tomorrow if we want and take those without being a problem for the factories because we can take that capacity to Europe instead and then start immediately and produce for the US in a bigger way in, for example, Egypt. The only thing that is a little bit tricky is the most complicated functional garments like complicated jackets, for example, because there is not so much alternative to China today. On cotton garments and all the basics and so on, I do not see any problem. Teamwear is also already spread out between Asia and Egypt and so on and so on.
Hi, Danny Lindkvist, Danske Bank. Just quickly on the US operation with the inventory, how much inventory is in place in the US right now? When will you be at the levels you aim for?
On teamwear? On the teamwear side. Totally as well. You can say we will not be on what we're aiming for before the end of this year. I actually don't know the exact figures that are on stock now, but I would guess SEK 100 million. We will need at least two-three times that. Cool. Thanks. I'll take another one then. Looking at growth opportunities for the moment compared to the inventory, how do you see that? Do you have what you need for the growth, so to say? I would say we have, but not yet in some areas like teamwear US, we don't have enough yet. In general, I would say we have.
To get things off the ground, like you now indicated for North America in late 2025, 2026, is there, say, big variability how you see this coming thing into the calendar? Is it, say, a fluent decision or have you already done the decision now for the things you basically are indicating?
We have done the decisions. We should also remember that we do several things also in Europe. We open up a new warehouse as soon as we find one in Ireland. Ireland today, it is one perspective, a small market, but if we can do like SEK 600 million-SEK 700 million in Norway, I think Ireland is very interesting because it is in the EU today. It is dominated by English companies that are not in the EU. It is no one either on teamwear or corporate that have a warehouse in Ireland.
We launch teamwear in the U.K. Also will start properly second half of the year. Again, depends on the lead times where the capacity we can get in production. We will launch Spain. It is a lot of things going on in Europe also. It is good to see that you are talking growth again. You seem excited about it. I am. I think the possibilities are bigger than ever. I think I feel or we feel very, very confident with both the teamwear side and the sports and also with the corporate. I think I am pretty sure that we are on corporate the absolute best company to work with in Europe for the reason. It is still not in the U.S. because our assortment is too small there compared with the one that have really broad assortments.
That is also something we should do in the future to broaden it up there. We already do, for example, in Canada with Harvest, Sprint, and those launches. I feel we're in a very strong position and a lot of competitors are weak. You can't say that, of course, that some of the biggest brands in sports are weak. On the corporate side, we're probably one of the two, three, four strongest companies in the world right now, both financial status, collections, products, service. It was a long time since we felt so confident. Of course, as I said, if the economy is totally crashing, it is the same situation as in the beginning of the pandemic or financial crash of 2008 or 2009. Of course, it will affect us also.
I think we can, in most situations, we will be able to continue to grow whatever happens with the internal situation we have. Also, very good and stable management. Yeah. Probably and hopefully some more really good opportunities will come up on acquisitions also because it's quite many competitors that are not strong today. It can actually increase. Maybe we should hope it should be a little bit more shaky if we think longer than six months. Just quickly on Germany, you touched upon it briefly. What's your ambition level in Germany now? Are you holding back somewhat due to the economy or just the status? We are not holding back. I think we will have not as good development as we thought and hoped when we thought the economy should turn around. Again, a lot of competitors track back.
They can't fulfill service. They have much weaker balance sheets and so on and so on. I prefer to have two, three, four quarters that are a little bit less good, a little bit less good maybe in operating profit than to stop investments. We will continue. As I said in the beginning, if we should go in any direction, we should even increase investments if the market gets even more shaky. The takeaway today is basically US is the easiest way forward at this point. The highest ambitions that. I wouldn't underestimate teamwear in Europe either, actually. I mean, I think we are a market leader already after six years in Sweden on teamwear. I think we pass Adidas now also.
I do not think we will do that in Germany, but if we can take 3%-5% maybe market shares, it is huge amounts of money. I think we are able to do that also, for example, in the U.K. and so on. We should not. I believe very hard in that too.
Thanks.
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Could you please provide more detail on the respective drivers of the strong sale growth, ideally also volume versus price taken?
No, but you can say the big thing there is the investments we have said we have done the last one, one and a half years where we have increased sales forces in some countries like Germany. We have developed new products and we grow very much on the teamwear side.
It is no secret. Yeah, it is normal work, you can say, but we work a little bit faster now than we did some years. Investments in tangible fixed assets are quite a bit higher. What is referring to? Automatization of warehouses and the ERP system. On the tariffs, is it not correct that 100% tariffs on China have been effective for two weeks now? Did you have any shipments arriving to the US during this period and have received any info on how it was handled and what tariffs were imposed on such shipments, if any? Actually, honestly, I do not know if we have had some shipments, but in that case, it is not any big amounts because then I would have known. Thank you. How is Tenson doing in this challenging market? Slower than we expected, but still okay and growing.
I think Tenson will be very, very good within a few years. I have not changed my mind there. You can say also, of course, when the sports, especially sports retail, has a very tough time, it is more tough to be a new brand also because then they should throw an old brand out in case. It is a tougher market there, but I think we are doing okay.
Thank you. How much of Craft's sales are done through its own e-commerce? A very small part. Do you know the percentage?
I do not know the percentage, but it is a minor portion of the total. Absolutely.
A follow-up question. How well is that business work? Any delivery time complaints or anything like that?
In what?
In the e-commerce segment for Craft. I will not, as I am aware of.
Again, it's a small portion and maybe it's therefore we're so profitable.
That was all the questions we had here.
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Okay, thank you all for listening.