New Wave Group Aktie

Yes. Welcome to the presentation of Q1. I can start describe it as a very stable quarter. We are a bit -- or I'm a bit disappointed that we still don't see any better markets. I say that it's the longest period ever for me. And then we have been on the stock exchange for 30 years when it's weak markets and unstable every time. And Fortunately, I can say that I'm not the only one that I thought that the market should improve in the last 3 years, but it's still not happening. And I think as long as we have all this unsecurity about the wars in Ukraine and in Iran now and also in [ Gaza ] before, together with politics that we have in U.S. right now with -- or have had for a while with heads and unsecurity and I don't think it will come a quick turnaround. But I'm happy anyhow that we continue to take market shares. We continue to grow. We have quite good growth in U.S. actually. I see that U.S., I would describe as a better market than Europe, which is a surprise in some ways because I was more worried for U.S. and Europe, if I go back. 2,800 -- just about 2,800 employees, 28 countries now. And we're selling in a few countries more than that where we have agents and distributors. And the same 3 segments as before. Yes, this year, all new, I think, corporate, sport leisure and. If I should comment the market a little bit, the corporate market is more stable. It's not good, but it's more stable than retail. I saw some statistic I think it was last week on clothing in Sweden, and that was actually growing with the clothing retail was growing at 7%. So I thought maybe it will be a turnaround. And then come the e-commerce out today or yesterday, minus 90% in Sweden for March. So it was the worst month for e-commerce in a long, long time. But the corporate is more stable. The retail is more tough and a big part of the distribution and clients in Sports & Leisure and Gifts & Home is, of course, retail and clients then. If we look at the quarter, first of all, the currency still had a very, very big impact. So the growth in local currencies was 13.2%, which is not really enough to really make good results. You can say we are close to -- we need a 3%, 4% higher organic growth to really deliver good and improve net profits and operating margins again. But I'm quite sure and confident that sooner or later, we will have that growth because we should remember that we are still in a tough market. Organic growth, 2.9% and here, we do everything we can to get that up to 5%, 6%. And if we succeed with that, it will be -- it will come down to the last line as well. Gross margin, very, very strong, I would say, 50.4% or 50%, sorry. And that's part of the explanation is that we have lower volumes on trading. But we should also remember that Q1 last year, we did not have Cotton Classic that are around 25%. So I think it's a record high gross margin if we consider that they are into the figures. And operating profit,[ SEK 200 million ], just a little bit lower than last year. And I think it's a stable result. I think on most areas, we are delivering still much, much better than competition. If you compare the bigger retail brands like Puma and Nike and so on, it's far better figures. And the costs continue to be high, 2 reasons -- 2 main reasons, ERP systems that we changed, and that will go on for another year.

2 years.

For another 2 years. And a lot of this is, of course, extra cost because we're operating 2 systems right now. I don't know how many have we implemented in? How many companies are they new? France, Netherlands, -- so hopefully, it gets smoother and smoother as more companies come through this. And the second thing is, of course, investments we are doing in new markets and also in new warehouses and automatization. The really big one going on now is that we open up in Texas. Hopefully, we're in operation 1st of October. And that is a pure investments for the future. We are not service South U.S. in a good way right now as we do in North since we are based with the 2 warehouses we have. We are based in Seattle and in Renton. [ -- no sorry, in Kentucky ]. And this is -- the investment in Texas is much, much bigger than the normal warehouse investment because we go for a full operation, same as Seattle within Brody and automatization from day 1 and everything. And it will cost some money in the beginning, but I'm very, very confident it will be a good investment. I think it's around SEK 200 million. We invest there. now. And then we should not forget smaller investments like we opened up a warehouse in Ireland in January this year and so on. So we are on a pretty high cost level for the moment, which will not be a problem actually if we just can get this 3%, 4% more growth. Sales, plus 6.6%, again in Swedish krona. Local currency is 13.2%. Promo channel increased 10.8%, retail down 0.9%. There we should also remember that Cotton Classic comes into the corporate. So that's what makes it such a huge difference between them. And the growth is in promo. It's, of course, the acquisition, but also the new launch we did that you have behind you, [ Avic ] Movement. And also cat is doing very, very good, both in U.S. and Europe actually. It's not so much to able to comment this. If we look geographically, in the U.S., it's minus, and that's only currency. Enter which one is Enter. Yes. you have an organic growth in U.S. by 7% in local currencies. So it's really affected the currency there. Sweden is nice to be back on a very small growth, which I think is a very, very strong sign in this environment. Benelux is doing well. Nordic countries, excluding Sweden, growth as well. Rest of Europe also and other countries is a little bit down. And there, you have the trading. So you can say in local currencies, all regions are growing, excluding than other countries that are mainly the trading business. Gross margin, I'm very, very happy with. I think it's very few companies and competitors that actually report higher gross margins in this environment. And we will try to keep it there. Of course, it can be or will be in the future also if we have quarters where the trading comes up a lot. It can be down, but I think it's very, very stable due to all our own brands. External costs up and there we should -- it's [ SEK 8.

92 million ] up. And there, we also have for us, positive currency effect. So actually, the cost increase are even higher if you look at local currencies there. Yes, that's mainly then operating profit we have talked about. If we look at the different segments then, Sports & Leisure are improving a little bit. Corporate a little bit down and Gifts and Home Furnishing a small, small improvement. We should also remember that for some of the companies, Q1 is an extremely small quarter, not even at the time when -- or the best years, for example, in [indiscernible] , it was profitable Q1. So I think this picture will change a lot when we are at the end of the year. Cash flow, I would also describe as very stable. And that's good. I feel very happy for the balance sheet that we have today that give us quite a lot of space for continued growth in investments and also a lot of security that we feel very, very safe in this. And now we probably will have a little bit lower cash flow or worser cash flow in maybe in your eyes when Texas come through because it's not only the investments, we have also built up the stock there. It's no idea to have an empty warehouse. And that's quite a lot of money. So we can be prepared on that. Balance sheet, again, very, very strong, I would say, probably one of the strongest if we compare with competitors in all 3 segments with an equity on over 55%. So it Yes, it's a good feeling. And also, it's nice to say it because even if the -- so to say, the markets don't improve, if we can keep a decent profit level and this balance sheet, we are in an extremely strong position. And we are, I would say, one of few sometimes that could be really patient and continue also long-term investment in more tough times. Cotton Classic is, I would say, doing very good. And the implementation of our brands are doing well. We launched them first month in September, actually 15 last year, came the first catalog out. But then no of our brands were still in their main catalog that are released in January. And now all those plus 3 new is in their main catalog, which comes out actually in mid-January and the road -- the road show is from mid-January to mid-February. So actually, if you look at the first quarter, it's more fair to say that they have sold our brands for 2, 2.5 months than 3 months. And was it 4% now? So already now 3.4% of their total sales is our brands -- in March, sorry. And interesting is also to see that the gross margin on our brands is between 2 and 3x higher than the gross margin that they have on the distributed brands as an outcome actually, not what we think. So I'm happy with that, and it's also a new CEO in place that we have a good feeling for. So that's basically that sense. I think we open up for questions.

Carl Johan Ban, DNB Carnegie. Looking at the global environment for the moment, obviously, stress in lot part of the system. And -- but how do you see it affecting your sourcing opportunities? And have you been caught up in any of the flow problems that might be out there for the moment?

It's not really any very big effects, but the number of small delays and small problems have, of course, increased. But I'm -- as I said in the earlier report, I'm very happy that we also moved a lot of the production in good time to Africa. If we are as depending on China today as we were 3, 4 years ago, then it would be huge problems. And then we will see what's happening with the freight cost is, of course, a bit worrying. Oil prices, we talked about in the beginning, will probably -- I mean, our CDO and buying manager expect if the oil prices on this level, we expect a 20% decrease on raw material on polyester raw material within 6 months. So -- but again, also, we have -- I'm not nervous about that because we have always been able to change our pricing and not be so effective. In one way, it can be positive if the prices start to increase a little bit for the sales...

And obviously, fantastic gross margins in the quarter, particularly looking underlying. It seems like there is a big, say, craft and Cat Back effect, as you mentioned. Could you describe a little what's going on underlying there?

But it's on record levels, and I'm very happy with it, but we have a very strong positioning for several of the brands. Like you mentioned, the 2 most obvious is Cat Back and Craft, of course. So I feel very, very confident and also the new collections like Anti Movement have been received very, very well in the market. And it also opened up new clients for us. For example, if you take theoretically because we don't have them, but theoretically, we can sell under moment as merchandise to every club, whether they are contracted by Adidas, Nike, Firma or ourselves because those don't have the merchandise on stock. And now with the neutral label, it's opened up quite a lot of new markets.

And one last as well. Looking at the ERP rollout, give us some idea of what you have learned so far from the countries where you have done it. And I understand now you are targeting some of the bigger countries in the next 6 to 12 months.

I pass that to you.

It's correct.

Yes. Now we are doing the implementation in the U.S. with Cutter & Buck, which will be made step by step. So we don't implement it in one time. So we start with implementing one of the warehouses, then the second warehouses, then we also changed the financial part. But it's an important step also doing the development of the template that we use. And after that implementation, it will be smoother and more cost effective when we continue the rollout.

But if I remember correctly, when we changed the ERP system in Cutter & Buck, was it 20 other systems that was affected? So it's not -- yes, you put in one thing and then you're ready.

When you speak of weak market, what exactly is weak and what is driving this? Grateful for more color on this and how it affects New Wave's business.

The retailer market is, as I said before, especially weak compared with the corporate that are more stable. You have a quite, I would say, weak market and negative best case, neutral consumers in most of the European countries. And I think the reason for that is again the unstability that creates in a politic way today and also all the wars that have or are going on. and the consumer are definitely holding back their spending's. And that, I would say, it's valid for, I would say, more or less all European countries, maybe Switzerland is an exception. They live their own life. But otherwise, it doesn't matter if you look at U.K. or Germany or also Nordic countries.

What was the gross margin for Cotton Classics in Q1?

I don't think I have that figure even, but they were in the past on 25%, I think, 24.

We don't subsidiary.

You said that the rollout of the new ERP system will continue another 2 years. Will the quarterly costs related to the implementation go up or down in the coming quarter? And what was the impact on Q1 EBIT?

I pass that to one of you.

We don't give details about how much the cost was in Q1, but the cost will decrease in the future when we continue the implementations and rollout of the system.

Thank you. Do you see any potential to improve efficiency in Cotton Classic warehouse operations?

Definitely, but this will take some time. And I think the best thing to do is to actually, which we are looking into establish a totally new warehouse because going with automatization in the current one is -- would be maybe not a nightmare, but very difficult at least. So what we see in ForeFront is a new cotton Classic warehouse probably in North Germany and then continue with old warehouse for distribution in the East and Austria and those countries.

Maybe you already answered this, but in Q4, you gave the underlying margin adjusted for Cotton plastics. Would you care to do that here also in Q1? -- [ underlying margin ].

The same question, but it's -- we don't give specific margins for specific companies, but undiluted from the acquisition of Cotton Classic, it was 52.5%.

Could I please ask what drives the weak Sports & Leisure margins?

What...

What drives the weak Sports & Leisure margins?

Very good question. But I think a lot of the investments we are doing there is hitting that area because the Cutter & Buck, where we do the new investments in Texas is belonging to that segment. Crafts establishment in U.S. that are quite loss-making in the beginning is that segment and so on. So it's much more investments and costs going on there than it is in corporate. But it's also interesting because Cutter & Buck is a part of Sports & Leisure because that was classified that way when we acquired it. But today, the majority of the sales in Cotton Classic are corporate. So it's not 100% fair. But most of the investment is in Craft and Cutter & Buck.

And also regarding Cutter & Buck in Sports & Leisure, it's the big currency headwind. So it was minus 13% from currency really. So that, of course, affects Sports & Leisure most.

And we should remember that Cutter & Buck is one of the most profitable companies we have, both in operating margin and growth and so on that performed very well. So when you get a hit there, such a big on the currency, it's also hitting that segment.

How do you view the possibility of obtaining a refund on tariffs in the United States?

Good question. We discussed that yesterday actually. And I think we will try. I read now that some of the biggest corporations are avoiding it because they're scared of Trump. But I don't think we are so big, so we will be focus. So I think we should dare to try. But then we should also remember it's not extremely much money, if it would be that we would have worse result last year, so to say. But we will try to recover what we can, but it's not much. And of course, it's depending on again that a lot of the goods we have taken in the U.S. the last 1.5, 2 years has been Africa, not the countries that have been hitting worse by the tariffs.

How do you view the decline in gifts and home furnishing linked to the fact that the overall retail share has decreased for several years?

Yes, it's the toughest job we have is to turn around that part of the -- or that segment, and it's still very, very tough. So I mean, we try to continue to decrease costs. We try to have higher efficiency in the production, and we try to find new distribution channels. But it's a headache. That's the only part in a way where I'm happy if it's a small part.

I think that was it....

I maybe can add also to this question about Gifts and Home that if you look at all big acquisitions we have done in the last years has been in the other areas because we are not happy at all ourselves with Gifts and Home Furnishing.

Okay, thank you very much.

Okay. Welcome to this presentation of New Wave Group's Quarter 4 and Full Year 2025 Figures. My name is Goran Harstedt, and I'm the Vice President of New Wave. And together with me, we have Anna Gullmarstrand, CFO at New Wave. New Wave Group, we are a growth-orientated international company, and we are focusing on acquiring, developing and creating brands for 3 business segments, and that's the promo, the Sports & Leisure and Home & Gifts Furnishing.

Here we have a slide about the growth in net sales and profit during the years. And we have a good development, especially regarding the turnover the last years. Logistics and sourcing is one of the main drives for New Wave and our activities and one of our most impressive strengths compared with the competitors. We have a big sourcing operations in Asia, where we had a head office in Shanghai and working in a number of countries and now also in Africa in order to source our products in a competitive way and also in a sustainability way.

Here's our 3 operating segments and sales channels. And you can see here the brands that we are using in these segments. It's especially the Sports & Leisure and Gifts and Home Furnishings brands that are known for the public due to that the corporate brands are more service brands for the concept towards the resellers who sell it to the companies which then is using their own logos or message on the items.

A brief summary of the quarter. We signed a new financing agreement in December, and it have a prolongation for 3 and up to 7 years, and it amounts to SEK 3.8 billion, of which SEK 2.7 billion are used at the moment.

Cotton Classics is consolidated for the full quarter for the first time in Q4. And during the last quarter, we also finalized the discussions and negotiations with the U.S. Department of Justice regarding the forgiving PPP loans. And the result was in line with the cost that we were taking in Q3. We also have quite huge effects on the currency for the year and especially the quarter.

Then we have the financial information, please, Anna.

Yes. Thank you. So the quarter in brief, we have, in short, growth in both sales channels and all 3 segments. In local currency, we grew by 17.7%, of which 11.7% is from the acquisition of Cotton Classics and 6% from organic growth in local currency. And as Goran mentioned, we have a headwind from currency, which is minus 6.5%, but still reporting a growth of 11.2%.

Looking at this, I think given the tough times and troublesome -- a bit troublesome times, it's -- we're quite happy with the 6% organic growth and feel that it's a proof maybe of the model that we have with diversified diversification and different sales channels and are happy to show 6% organic growth.

Looking at the operating profit, it was SEK 435 million, which is a bit lower than last year. And the operating margin ended at 13.8%.

And going into the details, I can see here about the sales per sales channel. The sales were SEK 3.145 billion for the quarter, which is, as we mentioned, quite higher than last year. And as you can see, we have increased in both promo and in retail. And of course, in promo, Cotton Classics is one of the big parts, but we also have growth within several brands like both Cutter & Buck and Craft are doing really well. And we also see growth in the trading and Tenson has also had a good quarter. So -- and this is the sales per operating segment.

Again, currency has been tough on us this quarter, but we show increase and growth in all 3 segments. As shown and again, of course, [ in corporate gift ] and Cotton Classics.

The currency, we keep coming back, but it's -- this is a picture where we can illustrate. This is the sales divided by the geographic areas that we report on. And as you can see, looking at this, it even looks like there are 3 areas that we might have a decrease instead of a growth. And if we look -- talking about currency, you can see the American dollar has been really tough in this quarter is minus 13% to us. And the euro, not as much, but it's all -- this is what makes up the net of the minus 6.5%. So taking that into account, this is the organic change, the change in local currency. So what started as a minus, you can see we have a really good development in North America, which we're really happy for. And also looking at this, it's actually only one area where it's still a minus, and it's the other Nordic countries. And that is actually explained quite easily.

I think many of you remember that in the beginning of 2025, there was a Nordic Ski World Championships in Trondheim. And if Torsten would have been here, he would have told you exactly how many athletes were competing in Craft, winning in some kind of medal. I don't remember that number. But of course, in Norway, we had a lot of sales in the end of 2024. We did not only address the athletes, a lot of other sales as well. So that kind of sale, we didn't have it at the end of 2025. So that is mainly what explains other Nordic countries.

Move on to the gross margin. For the quarter, it's 48.5%, which is lower compared to last year of 50%. This is the first quarter that we have included Cotton Classics, an entire quarter. And they've affected the gross margin by 2.8%, which is natural because they have a different kind of business. So looking at like-for-like, gross margin would have been 51.3%, which we think is really good because it's actually better than what we had last year, looking like-for-like.

Moving down to external costs and personnel costs. They amounted to SEK 1 billion compared to SEK 887 million last year, which is an increase of SEK 108 million. And of this, Cotton Classics, the acquisition is half of the explanation of this increase. And in the fourth quarter, we also have a lot of costs regarding our new ERP system. It's actually an investment. But as accounting regulations are these days, instead of putting it in the balance sheet and taking it through 10 years, for example, this comes as a cost day 1. So it's not anything that makes the ERP more expensive, but the cost is shown much earlier in the P&L. So these 2 items together make up for 80% of the increase in external costs and personnel costs.

Yes, as we said earlier, operating profit, 13.8% in operating margin. And the operating result is divided like this, as you can see here on the slide between the 3 segments. Yes. Nothing to add there.

Cash flow for the quarter, SEK 534 million from operating activities. And what's worth to mention, it's fairly in line with last year, but it's worth to mention here that all the investments that we make in the ERP system, no matter if they are directly in the P&L or if it's somehow accrued in the balance sheet, it's always in the operating activities. So that never goes as investing. That can be good to know.

And as you can see, investing activities, we also have a lot, and we have been investing both in automization of inventories and buildings and -- that's mainly we can see by the end of December or by the end of the year, in December really, we started -- we've told you that we are building a new fulfillment center in Dallas. So the first investment in that took place during December. So we're looking ahead. We're also looking at Ireland for a new warehouse.

And also the warehouse in France...

Yes, of course.

We were completed in December. And we are also building a new facility for Toppoint in Poland with printing, et cetera. It's a larger big establishment we make in Poland that will be ready during late spring this year.

That's our investment. Happy to have a new finance agreement.

Okay. So the full year, you know about this really now when you know the quarter, but it's happy to have Torsten here too, on picture at least. For the first time, above SEK 10 billion in sales, which is a milestone and encouraging, as he says, and we're looking forward to a journey of growth many years ahead.

Looking at the sales divided by sales channels for the year. We have -- for the year, the increase is 5.1% reported increase, which gives an organic growth of 9.5% in local currency since currency effect is minus also for -- minus 4.3% for the year. So promo has an increase and retail is fairly even compared to last year.

Looking at the segments, we have, even though it's small for Gifts & Home Furnishings, a growth despite the currency again through the year. Corporate, of course, includes 4 months now of Cotton Classics since they are included as from September 1.

This is the same we can see the geographic areas. And I haven't added the currency here, but it's the same, of course, and headwind. But in local currencies, we show growth. And you see rest of Europe, it seems like there's a lot of growth. It's, of course, one important matter there is that that's where Cotton Classics is included.

So looking at the P&L for the entire year. Gross profit, 49%, which is compared to 49.4% last year. Looking like-for-like, again, we have actually improved the gross margin compared to 2024 since that would have been 50.1%, which we're really happy about.

External costs and personnel costs have increased by 6.9%. And again, it's -- they are affected by investments in the ERP system, but also other IT-related or investments. Like Goran mentioned, we have warehouse optimization and -- we -- in the fourth quarter, we also see some increase in legal expenses. It's not in general but specific areas, for example, that we finalized the -- we'll be working with finalizing the deal with the District of Justice Department in the U.S. and such.

Operating profit is SEK 1,141 million, which is a bit lower than last year and gross margin is for the year is 11.4% compared to 13% last year. Gross margin here, of course, at the year result also includes the SEK 66 million that we informed you about and took the cost for in Q3 regarding this DOJ matter with the previously forgiven PPP loans. So net result, SEK 783 million, which gives us a result for this year of SEK 5.90 per share.

A little bit about Cotton Classics. They've been included for 4 months in 2025 since we acquired them on September 1. And from mid-September, we introduced the first brands. In 2025, we introduced 5 brands, Printer, James Harvest, Cutter & Buck, Clique and Harvest & Frost. And as from 2026, we will also add part of Teamwear for Craft. We will also introduce some parts of Untagged Movement and also Projob. They will not have full collections, but part of it will be introduced.

So we are really happy with the start in Cotton Classics, who are included within the year sales of SEK 429 million and an operating result of about SEK 34 million.

And yes, and this is not sales, but the result per operating segment. Looking at the balance sheet, it's really strong. The equity ratio is 53%, well above our target. And again, also -- as well as the P&L, also the balance sheet, of course, is affected by the changes with currency with the negative translation effects, which affects, for example, the equity ratio actually by minus 2.5%. So it's quite big changes in currency this year.

Cash flow, same as in the quarter really, shows that we are investing quite heavily, but this also shows the investment in Q3 in Cotton Classics.

Looking at the share, we have just below 35,000 shareholders as of December. And earnings we mentioned is SEK 5.9 per share. And the Board has suggested a dividend of SEK 3 per share, which is compared to the year-end price, a dividend yield of 2.62%. This is the development of the share in the past 10 years. So we're still happy about that. But looking to the future, hoping for more.

So even though he's not here, we'll let Torsten summarize this with his comment that he is very optimistic about the future. We are stronger than ever and have managed to maintain profitability despite an exceptional volatile period, a challenging market and high level of investment. That very much summarizes this year-end closing. Thank you.

Thank you. Any questions?

Nicklas Skogman, Nordea. A couple of questions from me, please. Maybe we can start off where we ended on the high level of investments. Where do you see 2026 compared to '25 in terms of investments in both systems and sales force and marketing, et cetera?

Yes. Regarding the system, I think Torsten mentioned it already last quarter that we see that we will continue to invest in IT through 2026. We have been investing in a model, a template for the group, but it needs adjustment in each country where we come. So -- and like I mentioned in the beginning, we take this -- the greatest part of this would put directly in the P&L. So through 2026, we still expect to have additional costs regarding IT.

So higher next year or just additional cost?

No. Additional in regard to what's normal, but we have had additional the entire year. So it's -- I think the level will stay with IT cost through 2026.

Okay. And the other parameters there, marketing and sales force, et cetera?

Of course, those are more guided of what we see that we think is profitable at the time. So it's harder. But the legal advice was specific for this year. So that's not anything that we plan for next year and specific areas like the PPP loans, for example. So we expect those to be lower.

Yes. great. And then on the -- I think the growth in the Sports & Leisure division was the big positive surprise in this report, at least for me. What did you see -- I estimate almost, I think, 12% organic growth. You can correct me if I'm wrong, but what do you see driving this growth in this quarter specifically?

In the third -- fourth quarter, sorry, we can see, I mentioned both Cutter & Buck and Craft doing really well. Good sales, good margin. So they've done -- I think they are driving it in Sports & Leisure.

We can also say that the sports retail was quite bad also during Q4. But our sports brand were quite good in the teams, cross team were developing very, very good, not connected in that way to the sports retail. So I would say that the main factor that we increased quite good in sport was due to Craft Teamwear and also Cutter & Buck.

Yes.

Okay. Perfect. But then I mean, the profitability in that division was down a lot. So what's going on there then?

It's partly it's the investments. We took some marketing costs, and that was mostly in Sports & Leisure in the quarter.

Okay. So did you have any negative impact from tariffs in the quarter?

It's really hard to say exactly what the effects from tariffs are, but I'd say not that we haven't had any negative impact at the P&L for 2025. Prices were increased in June. So we could take up the prices. And that has very much faced the incremental tariffs that we have had. So altogether, we don't think that has had an impact.

Okay. Great. And then the last one, just looking at your markets generally for all segments, do you see any changes in the last couple of months or so?

He's nodding or shaking. What we could say is that we think that the fourth quarter is -- gave us some positive feelings. It's always hard to tell what that will bring us in the future. But looking at the last quarter, we saw some positive signals. For example, like we mentioned Craft and Cutter & Buck, had really good sale.

Alice Beer, ABG here. Just a quick follow-up on the margin in the Sports & Leisure sort of segment. The margin hasn't been great all year. Could you talk a bit about the dynamics there and what needs to happen for that to change going forward?

The gross margin or...

The EBIT margin in the Sports & Leisure?

EBIT margin. Well, it's been a tough market. You all know, especially in retail. So I think today, if you look in Sweden, all big chains have had some kind of reconstruction or like. So of course, it's been tough. Again, that's why we are happy to see that the fourth quarter and especially for us, we see that our competition -- competitors, they have even lost sales, and we are actually growing both reported and organically. So we're quite happy about that. But it is a tough market, of course.

So we're happy to -- we spoke about our business model. And what we see now is that it gives us strength, having these different channels where we can offer our products to more customers in more ways. And also, like Goran mentioned, Teamwear, not being as sensitive for market changes since you're going to let your kids do sport. You take away many things before you take away that. So that's why we think we've seen positive trends for our sake.

Okay. Great. Just a couple more for me then. Unemployment rates have been very high in the quarter, and they've grown year-over-year. But still, I mean, 16% promo growth, it's quite impressive given that. Could you just speak a bit about the demand in the promo channel? What's the appetite like there?

Yes. Of course, that is including the acquisition of Cotton Classics. It's in the promo, but it's good to see. We're happy to see because we've been discussing this that unemployment rate is tough for the promo, of course. But we've been successful. And we see that there is different demands like for -- in U.S. the promo business with the embroidery and everything is also in sporting areas and events, and there are many different -- not only companies and company names. So yes, we're happy about the growth in promo.

Okay. Great. And then just about Cotton Classics, have you learned anything in the quarter that might change your view on how long it will take to get the margins up there? And also, just could you remind us of the EBIT seasonality in Cotton Classics?

Well, we have only had them for 4 months. So we're still learning. And I think to be honest, I'd guess these are the 4 best months of the year that we've had the honor to include Cotton Classics in our group. We are learning consistently, and we are very happy to -- only 4 months into owning them, we have already introduced 5 brands, which have been very well received and are introducing more brands. So yes, if we've learned something from that, maybe we learned more from the B2C, which make us faster this time. I'd say, what you've been around longer. Do you have a comment?

Yes. We can say that what we learned from B2C, it's the same thing with the Cotton Classics, and we see that they really are the same. So we can use the knowledge that we have received from B2C also in Cotton Classics. And we also learned from B2C that it takes a bit longer time to get the turnover on our own brands through their customer base than what we thought when we acquired B2C. And that's the same thing here. But as Anna mentioned, it's been very well taken by the customers. And the cooperation with the management and the old owner is really working well. So yes, we are confident that we will have a good development there.

Just a final one then. Inventories were up in the quarter. Should we view that as you're expecting higher demand? Or are you just preparing to fill up the new warehouses?

Both really. We are expecting higher demand, and we have learned that having the stock is the key to getting the sales. For example, now Cutter & Buck has done really well, and they were really -- they built up the inventories, which is one of the key success factors to giving them this growth in the fourth quarter or during the entire year 2025, actually. So -- but also, of course, having new stocks, we are setting up also the brands that need to go to Cotton Classics for our brands and setting Ireland, Goran mentioned France. So a combination really.

I can also comment here that it's a bit -- quite many inbound deliveries are at the end of the year. And how much comes in December and how much comes in January could be -- so I think this year, it was a bit more in December than it was last year that came a week later in January instead. So that also affects.

Any more questions?

We have some from the YouTube audience.

Yes. No tricky ones now.

Well, I guess, yes. Can you please provide more detailed seasonal variations for Cotton Classics? I think I recall you said in Q3 that the result would have been negative if they have been consolidated from January. What should we expect now going on to [ Q2 ] from quarter-to-quarter?

We don't have that data, so we cannot elaborate in detail. But of course, if you look at the market in general, the way promo works, the first quarter is generally a tougher one and the fourth, a better one. So we expect Cotton Classics to follow the same pattern.

Yes. Can you give more color on the improved organic growth and discuss the demand since both in promo and in retail? What does that mean for the 2026 outlook?

How do we color the organic growth? Organic growth is color. No, it's -- we're, of course, very happy to have organic growth and that we show it in all areas. We have increased the inventory, which, of course, is a sign that we are expecting, not only hoping, but -- or maybe both hoping and expecting for continuously good sales in 2026.

Yes. What's the reason for the decrease of the dividend?

Actually, we have this dividend policy of 40% of the result over a cycle. And this year, we're just sticking to the policy really. And this year, looking at the result, of course, we had an additional cost for the PPP loans. We've been doing a lot of investments. And we also believe we do a lot of good things with the cash within the company. So -- but sticking to the policy really.

Thank you. Have you seen some effect during the second -- first quarter or even the quarter we just experienced with, consider the cold in the Europe -- in the Nordic due to winter weather.

Yes, we'll be freezing every morning. No, of course, that came after the year-end. So we don't give any forecast information, but it's not hard to guess that we have had better sales in winter clothing in the beginning of 2026 than we had in '25.

I understand. Can you also tell us how you -- a little bit more to understand the view of the operational expenses in 2026, including certain temporary high costs for ERP, automation, IT and marketing?

Yes. The ERP is easier because we are -- we do know that we are going to go in -- we are launching -- we launched France January 14. We're launching U.S. during spring in second quarter. And we're also launching in Belgium, the [ Texas ] companies. So we do have ERP costs going through 2026. That's for sure. Marketing, of course, is more to a situation, we can choose if it's good, we're going to have the cost or if it's not good, we're not going to have it. So that's more -- we have to see what happens in the market.

How is the Cotton Classics acquisition split across the segments as in how much is in Corporate and how much in Sports?

Everything is in Corporate. That was an easy one.

Investments for future growth has been high in 2025 and the operating margin continued down. What can we expect in terms of cost level in full year 2026 relative to 2025?

We don't give any forecast, of course. But again, Cotton Classics will be included for an entire year. That will have an effect, of course, but also on sales. So -- and regarding ERP, I think we have additional extra costs like we mentioned, and that's probably going to stay about the same through '26. But apart from that, it's more from what happens in the market.

And a follow-up question on the first one. How will the focus on -- will the focus improving the operating margin -- will there be more focus on improving the operating margin ahead?

Yes. I think that's the long-term goal, of course. I'm happy to see that, that doesn't make us scared to make short-term decision or long-term decision that have short-term impact like these investments have had. We do them, of course, for a good reason that we see future growth, future profit, future increase in the EBIT margin. So looking at a really short period of time, it might have a negative impact, of course. But we -- for the long run, this is actually -- we're, of course, looking to improve the margin by doing this.

IT investments alone impacting this quarter's result by approximately SEK 32 million. Could you provide some guidance on when we can expect these investment levels to normalize?

Actually, SEK 32 million is external expenses. So including the personnel costs, it's even SEK 35 million. We are -- as mentioned earlier, we are expecting to have -- the fourth quarter, I need to mention was extra high on this IT cost, but we are expecting to have, like we mentioned earlier, additional costs for IT through 2026, especially in maybe the first 3 quarters, but let's say, 2026.

Okay. A question about the CapEx. CapEx level Q4 was high. How does this look for 2026?

The CapEx included also apart from automization because the CapEx doesn't include the ERP, as we mentioned earlier, it's in the -- it's not in there. So it's -- Goran mentioned, we have a new facility in Poland that affected quite a lot in Q4. We also have started to build the fulfillment center in Dallas, almost SEK 30 million and almost SEK 100 million for Poland. So those are -- of course, we have also a new facility in Holland or in the Netherlands, as it's called now, which were -- the premiere was in November. So we have -- and also like Goran again mentioned, France. So yes, lots of investments.

How do you view the current inventory levels looking at your growth ambitions for next year -- for this year, 2026?

If Torsten would have been here, he always thinks they are too low. So no, like we said earlier, it's -- the level of the inventory is meant to reflect what we are expecting and what we want to sell. So what's the question again, sorry?

How do you view levels looking on the current inventory levels for your -- how does that affect your growth ambitions for 2026?

Hopefully, we have the inventory that will help us grow. It's a key for growth to have the inventory. That's the line of business that we have. Having the inventory is the way we can serve our customers, and it's a service we are paid for. So...

Is the ERP system delivering as promised in countries where it has been operational?

Actually, it's only operational in one country yet. So -- and it's been all well.

Two.

Yes. And after year-end, it's another country. We also -- of course, we don't only do the ERP when we are doing things, we also improve on our warehouse management system and in both Holland and in France, which we went live here 2 weeks ago. They have a new automization system called HAI Robotics, which is implemented at the same time. But so far, it works really well. So it's going to be even better the more when we get all the companies, of course, in the same system because then we're going to really see the use of being in this new system. But it's been really good. So far, so good.

Yes. We're nearing on our last questions here. Seeing Craft Teamwear growing, is that negative for Sports & Leisure margin at the moment given investments in the U.S.?

Teamwear, say it again.

Seeing the Craft Teamwear is growing. Is that negative for Sports & Leisure margin at the moment?

No. The Sports & Leisure margin is doing well, and the gross margin is up as well.

And the follow-up question is from the same guy here is, can you give us some more details on the development in Teamwear U.S. and in Germany?

We don't give as much specific, but we -- as we mentioned -- have mentioned earlier, Teamwear in the U.S. is quite in its birth, but it's in the beginning. So it takes time to process a market like that to gain -- open all the doors, but they -- they're working on getting new clients. It's only about plus 1 year ago, we had only one client. Now we have many clients, which then are working on their clients. So it takes time, but so far, it's positive.

Thank you. Can you -- and this is the last question. Can you give any hint about the development for Tenson Q4 and ahead of 2026?

Yes, hints we gave. Tenson was -- I think the expectation of Tenson has been quite high, and we've been hoping for this to come sooner, but we now see -- even though we still think we should be bigger by now, we see growth in the fourth quarter, both in retail and in corporate for promo. And we are really looking forward into 2026 to hopefully see some more growth within -- also within promo. Tenson is going to be launched in the U.S. as well. So yes, positive ending for Tenson in 2025.

And that was all the questions. I leave the microphones to you for final remarks, both of you.

Thank you. Yes, as mentioned, we think that we made a quite good year last year, both margin-wise with the gross margin and especially the turnover. And we think that we have a good base for continuing to take market shares. We invested more in marketing activities and took marketing costs on the corporate side last year because we saw the opportunity to take market share, and that we've been successful with, and we will gain very much from that in the coming years. Thank you for your interest, and thank you for coming.

Very, very welcome to the presentation of Q3 and to this day that we hopefully will spend together all of us.

If we start with Q3, I'm quite happy with the quarter, or you can say I'm actually happy with all points, excluding the one-off cost we had in the U.S. But otherwise, the growth is up to 8.3% if you combine organic with acquired in local currencies, I should say, because in the whole P&L, the currency effect quite a lot on all lines. So we have come closer to the minimum of 10% again that we want to have in growth.

Here is really nothing new. The number of employees will increase the coming quarter due to Cotton Classic that are -- if I understood correct, Anna, is in this figure with 1 12 part of the employees there. So that will increase. We are out in 25 countries now and the segments you know.

Yes, nothing have changed here. I think I recognize most of you, so I think you are familiar with those 3 different segments. The only thing the big change is actually under Corporate, where you now have done since 1st of September, Cotton Classic in. But the external brands they are selling, we will not take up as a brand here, and they have started to sell our, and I will come back to that in the afternoon.

Yes. On the 1st of September, we consolidated Cotton Classic, which is very, very nice. We have that as a point in the afternoon, so I will not talk much about that in this presentation. We had one-off costs for the COVID loans in the U.S. that are taken in Q3, and we also announced it before the report a couple of weeks before. I don't remember the exact date. And the currency continue to have negative reflections for us. I think that it will be more stable, but no one knows.

Quarter in brief, 8.3% sales increase and including currencies -- in local currencies and including the -- I thought it was closed, sorry. But in SEK, it's 4.2% then. Promo channel was very, very strong, I would say, with 7.2%. Retail was much weaker. And you can say the spread we have between those 2 distribution channels, I'm very, very happy with because if we were only depending today on retail, it would be a very, very tough situation. In general, I was quite disappointed when they released, for example, the Swedish Sport Index for the third quarter. If I remember correctly, it was first 13 quarters in a row that were negative. And then Q1, Q2 was a little bit up. And I hope that, that was a real change. But now Q3 came out with a small minus again. So I'm very, very happy for the Promo channel.

And also if we see on a certain brand, like Craft, if we're only depending today on selling out from shop and didn't have Teamwear. Corporate, it would be a very, very tough situation because the market on consumers is tough all over Europe actually. And it's a little bit hard to understand for me because now people have started -- consumers have started to have more money again, but obviously, they don't spend them. And I talked to a lot of operators for restaurants, and they have the same tendency even in Stockholm, where the restaurants actually are quite full. People spend less. They buy more cheaper wines or 2 glass of wine instead of 1 bottle and so on. And it's a bit strange. The only segment that's really doing well in retail today is the low-price segment. But it's a good combination.

All regions are continue to grow in local currencies. Operating profit, if we exclude this one-off in the U.S. on SEK 66 million, it was just above last year, which I think is very, very strong actually because we have a very high pace of investments in automatization and systems and also new markets now. So that could have been actually much, much worse. Also, I think we should point out an extremely strong gross margin. So you can say we don't use discounts and such things to hold up the sales. And that's also very, very nice. And this comes down in operating profit then after one-off on SEK 253 million.

Yes, sales, SEK 2.390 billion. I hope we soon can have a first quarter over SEK 3 billion. Sales, plus 3.6% and organic, we have talked about. And I think if retail becomes a little bit better or the situation in the sports retail, especially where which are the biggest retail channels for us, I think we can have and will have a very, very nice growth actually.

Corporate, net sales, we have talked about Sports & Leisure, also Gifts & Home was a little bit down. And this is then not in local currencies, I should say, because then it looks quite different. And geographical markets, North America continued to be the biggest one. What's happened there? North America is biggest. Sweden actually had a quite nice growth, which are a little bit surprising because we have very high market shares here now on most things.

Benelux, #3, and it's -- we have just taken Benelux out from the rest of Europe. And the Nordic regions, quite flat or flat. Rest of Europe is up. And there, of course, in rest of Europe, Cotton Classic comes in nowadays. And we will look at that for not next year, but the year after because now all Cotton Classic sales going into -- I think it is -- is everything going into Austria, Anna?

Yes, the rest of Europe.

Yes. So -- and there, we should divide if we can, when we have had it for a year, the different markets. Gross margin, I mentioned, I think it's a very strong margin. It actually surprised me a little bit as well. And that also, I think, show our position on the market because with this weak market, a lot of companies discounting extra and so on, and we can actually continue to grow with full gross margin. And the quarter on 51.1, I think is -- I'm not 100% sure of what I say now, but I think it's the highest ever actually. So that's very, very nice.

External cost increase. We have -- we will start to increase the IT costs again from at least 2027, I would say. And the reason that the IT cost increase is that we just right now pay actually for 2 systems, the old one and the new one. So it's not so much we can do about it. Operating profit, SEK 253 million, and the contribution from Cotton Classic was SEK 14 million this quarter.

Here's the operating segments. And it's not so much to comment, I think. Of course, they are affected then very much on Sports & Leisure on the one-off costs and also a little bit actually on Gifts & Home because it's all related, of course, to the U.S. entities. Cash flow, operating minus SEK 249 million, and that's planned. So that's nothing that worry us at all. It's both that we increased stocks and the new investments and launch we are doing with Teamwear in U.S.

We also opened up now in a new warehouse in Ireland outside Dublin in January. And we also launched a new concept in Corporate and merchandising called Untagged Movement, where the launch actually was this week, first at an exhibition in Germany, Germany and Belgium. And then it should be rolled out in all countries in January, all European countries, I should say.

For 9 months, Sales increased by 2.6% and Promo up 5%. I also wrote in the report that it's -- I hope that we have the toughest time behind us on Corporate because the growth has been better and better. And also, we today meet much more positive clients, and clients are more active today than they were a year ago. Then we can say it's very hard to predict because what is good today can be bad tomorrow because of what's happened around in the world, and it's still very unstable. But hopefully, it's a trend.

And per operating segment, it looks like this. And the geographical areas. And now this is in SEK. So for example, North America is much, much better in local currencies. And that's a little bit surprising for me that U.S. is still -- I wouldn't describe it as strong, but it's much more stable on the market than I expected with all those things that has been and you wake up one morning and it should be 100% duty on China, next day, it's 50% and the third day, it's -- they delay it. And yes, it's a total mess actually. So I'm surprised that the market there are as strong as it is.

Gross margin also, yes, 0.1% higher than last year if we look at the 9-month period. And the rest is more or less the same comment as it's on the third quarter. And operating segments, operating profit on different segments. And here, you can say I'm -- I would be quite happy with all segments, except Gifts & Home Furnishing if it was not for the SEK 66 million in the U.S. then.

Still a very strong balance sheet after consolidation of Cotton Classic, we still have 52% equity. So we can continue growing both by more acquisitions if we find the right ones. And also, of course, we want to speed up the organic growth with the new investments, with the new warehouses and also with a lot of new products. We have I think I can say that we haven't had so much new products launched in many, many years. I think last time we had so much new was actually when we launched Craft Teamwear. So we have a very good pipeline on products.

Cash flow, it's not so much to comment. Rolling 12 months, we are on SEK 9.7 billion in sales. I -- we would have been over SEK 10 billion if we had the same currency in the past, but I hope still we can go over SEK 10 billion very soon in the rolling. Gross margin good. Costs, we have talked about. Operating margin, 12.1%, which I'm, of course, not happy with. But I think we -- if we can be between 12% and 15% until we are coming down a little bit in investments, I think it's still very good. And I think we then have a very, very strong position to actually start climbing up against our goal that of 20. Yes.

Yes. That's more or less what I had to say. And then we can open up for questions, if you have any.

Magnus Roman, [ SPF ] Markets. Yes. First, I'd like to ask about the underlying gross margin being so strong. I think you said it's a record. I think looking back at Q3, it is. If you look at absolute quarters, you have had a better Q4. But how would you describe the main drivers here behind the strong gross margin? I mean you mentioned that you have not been discounting, but can you help us understand the viability of this?

A little bit is the product mix and that we grow, for example, in Craft Teamwear, where we have good gross margins. One part this quarter is also that the trading was less, which is what we operate with the lowest margin in the group. But then also, I think we have a very, very strong position, and we have had a strong service for a long time now. So I would say on the market, we have an extremely good reputation. We gain clients, very few or no one leave us. And we don't need to use the prices and argument as it is now.

So it's a totally different situation that we had, for example, 12, 13 years ago when we had [ taken ] down the stocks and couldn't service the client and clients left us. And if you want to keep them, you have to give them extra support and discounts and so on. So I feel quite confident that we will continue with a high gross margin, and maybe not on this level because another quarter, the trading can come up, for example, and then it goes down a bit. But on the main business, I think we can continue to have a very good gross margin. And we should also remember that Cotton Classic operate on around 25% that take the gross margin down also not so much in Q3 because it was only 1 month in the figures. But -- so if you include that as well, I think Q3 was very, very good.

Yes. And speaking of which, you mentioned that we will speak more about Cotton Classics later, but one -- can't help just to ask one quick question here on the EBIT of September. Is there anything you would like to highlight to make us not too enthusiastic because if we analyze this EBIT, we might get very enthusiastic about the prospects here.

I'm enthusiastic. No, it's -- again, I mean, I have -- if you exclude -- and I think I said that also after Q2, if you exclude the first 6 months of the pandemic and the last quarter and the first 2 quarters of '08, '09, I think this is the absolutely most difficult situation to navigate in with the different wars, Ukraine, Gaza, now also Sudan. You have Trump where we don't know sometimes from week to week what duty we will pay in the U.S., depending on country, of course. So it's -- I mean, right now, I'm feeling quite optimistic and it looks better, but that can be changed on Monday. So it's a very tricky situation. So I think that a bigger turnaround in the market, in general, we will not have before we have a more stable situation.

And you mentioned the tariff and we might hear more about that in the presentation later perhaps. But can you -- do you know or can acknowledge if you expense the cost of the tariff at the point of sale of that good that you brought in that was tariff or if it is already at the point of purchase?

The problem is -- now it's going into the purchase, of course. And then I don't know, I think...

So when we will see the gross margin -- negative gross margin effect essentially if it is at the point of sale of these goods. I believe in the case of H&M, for example, they have warned off later into this year that we will see increasing negative effects due to that effect.

Sometimes, sometimes not. And it depends on if the goods are already sold when it's shipped, which is a minor part. Otherwise, we also adjust the selling prices. I mean, if they increase tariffs from 20% to 100%, we can't absorb that. But as it is now, I would say we had a few millions, I think, in extra costs in Q2. Q3, I actually don't know the figure. I don't know if you have any figure on that, Anna?

[indiscernible].

I said I think the result was directly affected with some millions due to tariffs in Q2. But I don't know about Q3, if we had anything there.

The result is affected in many ways. It's a bit tricky to navigate because it's both in cost and also increases in price. But for example, I know that since May, going forward, [indiscernible], for example, has had $3 million additional tariffs. But that is not in the P&L because it's a net effect in the P&L so far.

But you can at least say, I can add that I'm extremely happy that we start moving a lot of production already last period to mainly Africa because if we should be stuck totally in China now, then it would be a huge problem.

Any other questions? In that case, we have some questions that have been sent to us. Cotton Classic contributing with 14% profit margin in Q3, still see 5%...

Sorry, SEK 14 million, if I remember correct, not 14%.

All right, SEK 14 million in Q3. Still see 5% as a good level for 12 months period. There's no question mark there. So I don't really know...

Yes, you can say that September, they had a very good month. Of course, we hope that continue. But I think that -- still that it will take some years even if we have been much, much faster with those with B2C before we get them up. So if they can do like 5%, 6%, 7%, I think it's good. We should also remember that they are a typical company that look as New Wave did in the past when we only have Corporate.

So September, October, November is very strong months. If we were consolidated them 1st of January, they will have contributed with a big loss because generally, they have all the marketing costs and low seasonal sales. So it's also a question on timing and that we should change their operating margin very, very fast that I don't believe in. Maybe we can climb 2%, 3% a year with the start from half year or something because I don't want to answer more now because then it's not interesting enough.

Maybe you already answered this, but how did FX and tariffs impact gross income and EBIT in the quarter?

We don't -- I don't know exactly, but you maybe can repeat, Anna.

I didn't hear the question.

Yes. Maybe you should move so you're here.

How did FX and tariff impact gross income and EBIT in the quarter?

We don't have the figure. We released how the revenue is affected.

Another one here as well. You have improved the result for Gifts & Home Furnishings. What have you done there in connection with the business in Kosta? What do you need to do to improve more?

Yes. It's a long list, I can say. But I think there is maybe the area that we are most affected, excluding retailing maybe in Craft because there we're really depending on the consumers. And there, we can also -- I didn't refer to Kosta before when I talked about restaurants. But for example, in August, we were in -- have record visitors, but we didn't have record sales. So people spend less and so on. So we need a general turnaround a little bit.

And then, of course, we have a lot of things we are doing in the companies, everything from product development to of course, try to improve the operations. But that has also been a very tough market. It was very much up during the pandemic when everybody was working from home, they spend a lot of money in these categories, and that we paid back after.

But it's a tough job. And you can also say that we, as management, have 2 options, try to do what -- try to put our time into the companies that are doing already good and improve them to be even better or spend a lot of time trying to improve quite little down there. And now I must say we have worked more than improving with improving the already good business. And also, of course, the integration of Cotton Classic can take quite a lot of time for finance, but also for me regarding products and marketing and so on.

Thank you. Any more questions in here?

Andreas Lundberg with SEB. You talked a lot about inventory, but receivables were up quite a bit. Could you talk about the general dynamics of your receivables and whether that was an effect of strong September sales?

I think it's 2 effects there. One is that September was strong. The second one, help me if I'm wrong, Anna, was that we took in Cotton Classic. So when they get consolidated, we get 100% of their receivables into our balance sheet, of course. So I think it's those 2 things.

And I don't know how much the contribution -- do you want to fill in, Anna?

You're completely correct.

And because I think the average time we get paid on have not increased a lot. So...

But the strong sale at the end of September is, of course, affecting.

Cool. And then maybe a general question on competitive behavior. You experienced big difficulties during the financial crisis basically. Are you seeing a sort of similar behavior among today's competitors that cannot afford or have the guts to keep inventory or...

Not as it was 2009. But you see in some cases that they have less good service. So it's a little bit in that direction, but not at all that it was '09. I mean then everybody or a lot was panicking at the same time. And I think our Chairman, Olof described it quite good because he said it's not a crise anywhere, but it's like a wet blanket over everything. So it's not as bad as it was then, but it's -- we see some tendencies.

But do you think it relates to uncertainty, financial situations or knowledge or what have you.

But I think it's uncertain, definitely. It's not my opinion, I can be wrong, of course, but it's not the financial situation. And I mean, if you look at -- we have a lot of -- I think you know this better than me, but I guess, for example, that people are still saving much more money in the past. I'm just guessing because it's not that they don't have the money. And you can say that some segments are still doing quite well. And low price, as we said before, is fantastic. But that, for me, means that people spend maybe not -- yes, they are more careful on what they spend on also. But I think it is uncertainty. And I think now it will be very interesting to see what's happened in the U.S. after the elections that was in New York and some other places. But we need a more stable world.

Okay. Then I say thank you very much for listening in, and then I should leave to Stefan and [indiscernible]. Thank you.

[Abrupt start] Q2 of first half year. Q2 was a bit less good than we thought. We knew before that it should be tougher than Q1. We had a positive calendar effect in Q1 due to Easter and that came out to negative in Q2 that we know from the beginning. Then we also have quite high effects on currencies.

So in the end, I was hoping for 3%, 4% organic growth in local currencies, and we ended up with 1 point something. So it was less good than planned. The market was very tough. I thought for a long time now that the market will be better, but we still don't see any big signs on that. And I think that all the worry and things and news all the time about duties and tariffs and no one will know really what will happen and so on put a wet blanket on the market.

And I think that we will continue to see at least 1 or 2 more quarters with a tough market situation. But we are pretty sure that we will continue to take market shares, and we continue to invest. We have the same speed investing in both sales, marketing and automatization of both warehouses and IT and so on. And we will not pull on the brake because of this, we will continue the same way.

One very good thing, hopefully, you never know that before, of course. But one thing I'm very happy for is the acquisition of Cotton Classics that give us a very, very strong position in several countries. So we have been the market leader in Sweden, Norway, Finland, Benelux for quite a long time. Now we are very, very clear market leader in Switzerland, also Austria after this.

And we come in as #3 or 4 in Germany. And they also have quite a lot of activity in Eastern countries. So Czech Republic is a big country for them where we are not there at all. Same with Hungary, Australia. So it's also opened up Eastern Europe a bit for us where we have been. And -- this is also much easier for us than it was to acquire B2C. B2C is a very similar operation.

But since they were outside EU, it took us quite a long time before we could start introducing our own brands. And the upside both in D2C and Cotton Classics is really to introduce our own brand that have more than double gross margin than they have on the distributed brands today. And here, we could be much, much quicker to actually introduce not full collections, but partly of Click and Harvest and printer and already, kind of back already now in September catalog.

So we were quite time pressed at the end of the acquisition because they released their collections twice a year on that September and January. And if it wouldn't be ready for 1st of September, nothing we couldn't have done anything before January. But that was quite a lot of work, but I think it's very, very important for the position in the future. Yes.

So better I will not repeat this. Nothing really changed here. You can say after the quarter, it's not a very big thing. But after the quarter, we signed also an agreement now on the new warehouse in Ireland. So we will also be much more active in Ireland. And I think it's also an important step that for us because it's not a big market, but it's, again, inside the EU still.

And the market in Ireland is dominated by companies in the U.K., which give them a lot of problem with tariffs and duties and so on. So that will start hopefully in October. Yes, nothing has changed here really. So I jumped in.

Here, I have a familiar story that or not we should have that on [indiscernible] on some -- now on Monday, I think it was. And we produced a T-shirt with a big Macrolite enrolled under [indiscernible]. I call this is not so funny, when you use English. That was very appreciated. And it's nice to see -- here you can also see the importance of speed and stock because it was -- the sales was starting directly after the game and the day after they have sold, I think it was 2,300 shirts.

So pretty nice. Yes, this is the same. Second quarter then, as I already said, a very, very tough market. And I actually think it was developed in general in the wrong way compared with Q1. Acquisition of Cotton Classics, I talked about. And I think it's a very, very important thing for us for -- especially for future growth in the Eastern Europe as well.

Then we have one thing that we don't know, where it will end and the Department of Justice in the U.S. have started an investigation where they claim we have done wrong or it's not any criminal investigation. But we have different -- they count the number of employees in a different way than we did. So we have a possibility that we can be forced to pay back some of the -- some or all or nothing. We actually don't know of the loans that was forgiven during COVID.

And the total amount is $5.4 million. We have not taken anything into the P&L because, again, we don't know if it will be 0 or if it will be all or if it will be in the middle, and we don't know if it take 3 months or 12 months or 2 years. But we think it's such an important information. So we want to inform about it to be transparent. So it's not come as a surprise like this if something happened.

And the currency affected us, of course, a lot, especially on the P&L this time. Last report, it was on the balance sheet that had the biggest effects. But now it's on the P&L. We have strengthen presence in Central Europe and I would say also Eastern Europe with Cotton Classics. And you can say right now, we hope to have the permission from the competition authorities in Austria this week 18th of August.

18th of August. That's the last day when they need to inform that they want deeper investment.

But we don't see any high risk that we have now, but it also says a little bit about what kind of market shares we start to get and should get it. And Cotton Classics have a fantastic platform, actually, much better than ours and also B2C's. So that will also be interesting if we can also take that the other way. And as I said, we're now working very, very hard to introduce as much of our own brands as possible as fast as possible.

And this is, again, much more easier than it was in B2C, since we already have stocks in a lot of EU countries that we can use also for Cotton Classics. Otherwise, it's a very similar business to B2C. Maybe also I should add there that, for sure, they will take down our operating margin for a while because they come in on 5.5%, 6% in operating margin and it's such a big turnover on more than SEK 1 billion. So it will affect the operating margin. So that isn't any surprise for you, and it will not be for us either, and it will take a few years to take them up.

We have 1.3% in organic growth. Again, as I said, I'm not happy with it, but the expectation from my own side was more 3%, 4%. It was not very high that quarter during Easter, but it's still a little bit lower than I thought. And the currency we have talked about. Promo channel was down 2%, retail by 8%. That must be in SEK.

Yes. So it's not -- and operating profit amounted to SEK 241 million and operating margin, 10.5%. And I think that it's still an okay result actually because, again, we continue investing and take market shares and spend money. We were also affected a bit about in May, first of May, I think it was, the first company in New Wave Group that are New Wave Holland, the Netherlands that are quite big entity for us was the first company that installed high robotics, totally new picking and they had -- at the same time, they was the first company out with a new ERP system.

So that was quite a high risk, and it went okay, but it was affected in May, June, July, they were 100% up running everything. But now we're quite happy to have done this because now it will be easier if we implement both by robotics and in other warehouses, but also the new ERP system in other companies. But I had a very, very tired CEO there.

So SEK 2.3 billion decrease then in SEK, 4.1%, but again, organic in local 1.3%. There's not so much to comment. I can say maybe that on the retail side here, especially retail, it's still a very, very tough situation. You have a few clear winners the last quarters. And that's, for example, [indiscernible] and it's the low price chains. All other are struggling and struggling a lot when you talk sports and also when you talk home furniture gifts.

So it's a quite tough situation in the retail side. And I would say that corporate is more stable. The good thing, I think, on the retail side is that most of the clients have a lower -- much lower stock positions themselves than they had 1 or 2 years ago. So when it starts building up, I think we will see quite high effect on it. There's not maybe so much to comment.

Gross profit down a bit, and it's not price decreases and not increased buying prices. It's a big effect there is that trading took a bigger part of the total turnover last quarter. And as you know, since before, trading is very up and down. So the gross margin in the other business are stable. As it is today, we were affected. I don't have any amount, but we were a little bit affected by tariffs in the U.S. -- some of the U.S. companies.

I don't know, a couple of million SEK maybe. It was not a big effect. But even if we really have worked hard and fast to move production, we are not able to move 100% of it. So you have some effects, but not any big ones. And you will have some effect in the coming quarters as well. But again, not a huge amount, but it's a couple of million, I guess, each quarter.

And the only thing you can comment here is that on the operating profit, I must say corporate are very stable if you compare with the times of retail and Gifts and Home and Gifts and Home is also majority retail, had a much tougher quarter than corporate. Cash flow is not so much to say about.

We have planned and I think I'm sure I said already fourth quarter last year that we will go into a period with less good cash flow, depending on that we're building up the stock and we continue the investment in warehouses and IT. So it was no surprise that either. If we look on half year, we had a sales increase by 2.3%, and that is in SEK. So I don't have that in my head. What was it in local currencies? Do you have? Anna?

Sorry.

The growth in local currencies January, June because 2.4% must be in SEK.

Yes, SEK 2.4 is in SEK. It's so for -- is it a quarter?

No, half year. For the quarter I had.

Sorry. I just lost it.

If you can say -- more then 3.9% and retail 1.4%. And you will have soon this in local currencies, but I think 5 something.

4.8% is in local currency.

That was nearly 5.5%, around 5%. Yes. There's not so much to say, but I mean, the half year figures, of course, looks better than the second quarter, since we had a very strong first quarter. Gross profit, SEK 48.9 million compared with SEK 49.3 million. So as I said before, it's stable. External costs increased a bit, and that's mainly again, sales and marketing, but also IT is quite huge investment to change all the ERP systems and everything.

And of course, [indiscernible] of warehouses and then operating profit on SEK 453 million. And here, you can say yes, not so much to say there. Balance sheet still come at SEK 6.5 million in equity, which gives it's a strong balance sheet, you can say. And then the first quarter was very affected by currency with -- was it SEK 0.5 billion?

Yes.

If I remember correctly. So the big difference in equity now compared with end of the year is actually currency. It's a whole effect, you can say.

Yes. And also, we have a dividend.

Yes. That's good. Yes, cash flow is still stable, I would say. Rolling 12 months then SEK 9.6 million in sales and an operating profit above -- just above SEK 1.2 million is 12.8%. And we will, of course, work as hard as we can to get up. I'm not very happy with 12.8%, I must say, even if I know why.

Yes. I think I have said all of this. And I think also the important thing for us to say, we will not put the break on cost before as long as we see it, we take market shares, even if it continues to be a tough market 1 or 2 or 3 quarters. Cotton Classics, we have talked a lot about. I think we have a very strong position for the future, actually stronger than a year ago, which will become even stronger with Cotton Classics.

So I think we have big opportunities, both in retail and in promo. The launch of Teamwear in U.S. is still doing quite well, and it's going, I would say, as planned or even maybe a bit better than planned. I'm also very happy for our balance sheet because most of the competitors today have a much, much tougher situation, which means that they can't invest in the same way as what we are doing. And we will continue to look at more acquisitions as well. That was basically Q2 and first 6 months. I open up for questions.

Nicklas Skogman, Nordea. A couple of questions, please. You mentioned that the gross margin was relatively strong. But if you look at Q1, it was -- you had an even larger impact from your trading operations. And then the gross margin was up 10 basis points. And now in this quarter with a lower impact from the trading business, it was down 100 basis points. So...

But the gross margin in the trading business is variation a lot. So we take orders down to, I would say, 8%, 9%. And when we take really -- when we have really good gross margin in the trading business can be up to 30%. So it depends very, very much on that. You can say, for example, the biggest order, now it's a few years old, but was 400,000 units of the same Polo Piqué to Costco. And then I'm very happy to close that deal on 8%, 9%, 10%. So it's a variation also inside there a lot. But in general, you can say that I think we end in general on a gross margin of maybe 16%, 17%, 18% in average, but it's still very different in the different quarters.

Okay. And then on the -- you mentioned that B2C had been a bit more tricky than you perhaps thought when it came to bringing in your own assortment. So what level of your own assortment do you currently have at B2C? I assume it started from summer.

Up to now, it's more or less only harvest printer and not full collections. And it will be full collections from 1st of -- from mid-January next year. But I would -- I shouldn't say it has been more tricky, but it is taking longer time, since they are outside EU. I mean there's no idea for us to import from the warehouse in Netherlands to launch in the U.K. with double duties and so on. So it's more that than...

And where will you be in terms of share of volumes do you think by June next year for B2C of you are being -- of your own assortment?

In the end of next year, I hope we can have up to 20%. But you can say today, it's -- the interesting thing is that printer that are the biggest brands there, they are brand #10 today, if you look on all the brands they are selling in sales, but they are #4 in gross margin in money. So it's a huge impact if we can move this.

Okay. And where do you need -- or where would you like to go with the Cotton Classics acquisition in terms of your own assortment?

I would say that that's the same in B2C and Cotton Classics, hopefully, up to maybe 40% because we should also remember that they distribute also low-priced brands that gives them a lot of clients, and we don't have those products, and we don't want to develop those products. So we will continue with that. And that's the strength, for example, Cotton Classics in the future is that they have the full range. Now they are much more orientated to low-priced basics.

Emanuel Jansson, Danske Bank. So staying on Cotton Classics then, in terms of profitability, I think you stated around 5%, 6% EBIT margin, right? And where do you think the potential is there to raise the profitability over time?

15%. They will never be the -- neither them or B2C can come up to 20%, 25% because to be up there, which we are with several of our corporates companies. For example, I think Netherlands has been on -- can be average 25% for a couple of years, but that we can't reach with external brand standing for 60 -- 60% or something. But I think we can get them up to 50%.

And perhaps difficult to estimate, but how long do you think that will take?

3, 4 years, I guess. It's quite a long process because first, we should have the stock, then we should sell in samples to all the clients, so they have in their showroom and then they should start selling. So I mean it's -- and in the past, sometimes we have underestimated the time a little bit. So far, when we have established countries or made acquisitions, I think we have succeeded in all cases on corporates 100% score.

But quite often, it's 1 or 2 years longer time than we thought when we did it. And it's the same when we establish on sketch. Hopefully, we have learned something about now. So we don't -- now we are a little bit more defensive in how long time it will take, for example, in Ireland more realistic.

Great. That's very clear. And you think that you can use Cotton Classics also to maybe find some synergies via the Teamwear establishment in Germany, for example?

Yes. But it's a little bit tricky because you can say that the current distribution is mainly in Mid and North Europe, the sport chains like Intersport and Stadium and so on, if you take Swedish examples. And in Germany, you have one big player or you have 2 big players, you have 11 Teamsport and more. And 11 Teamsport also belong to Intersport even if it's not a shop.

And it's not very, very popular to put in 45,000 clients they have Cotton Classics, if I remember correctly. They will not be extremely happy if 45,000 new clients all over Europe get access to the Teamware, but we can do it partly at least. But I don't say we could introduce the whole Teamwear collection through them without negative effects on the chains.

Okay. Great. And moving to the U.S. market, still seems a bit uncertain how everything will develop in the near term. But would you say that this has postponed any of your investments in the U.S. regarding Teamwear...

No. I mean we don't postpone and we don't put the foot on the brakes either. And we still have the same planning with establishment one more warehouse in U.S., South U.S., probably Texas as soon as we can and so on. So I prefer -- I mean, I think it's 27 years we've been public now. And I think the development during those 27 years is quite good. So it's better to take this.

If we make a little bit less profit, we should still remember that we are quite profitable even this quarter was down. I prefer to have a few quarters that are tougher and standing very, very strong in the coming 5, 6, 10 years. So it doesn't change our plan at all. We have -- as I said before, we have signed a new warehouse on Ireland. We will sign in South U.S. as soon as we find the right facilities and so on. So we continue the same speed.

And where are you now in your Teamwear establishment in the U.S., you would say?

Still step one, I would say. It's -- but we have gained some very good clients, one quite biggest challenger, for example, and we start gaining more and more resellers. But that's, of course, step 1 is really to gain our clients. And then step 2 is that our clients then should convince -- in this case, the school, I normally say the clubs, but it's more school business in the U.S. than here.

And most often, they are under contract with some other brands then for -- the time is up to 5 years, same as the clubs here. So I mean, it will take 5 years because we even have had the chance to offer everybody we want if you're talking about the end users. And it's the same in Europe, but then it's more sports club. It's like Hammarby, for example, that we -- I think our agreement with them now is 2030, if I remember correct.

So no one else can get in at that time, and it's opposite with other clubs. So we have a long, long list in Europe for the first 2, 3 divisions in each country when the contracts are ending, and we will try to do the same with the schools, but clubs and schools in U.S.

Okay. Great. And perhaps you were mentioning, I think, in the CEO wording that you are seeing some positive market signals, and we can also see that you're starting to also increase your inventory levels. Can you maybe give us some more color on that?

I'm pretty sure it will turn around, but I have no clue and I thought it should come quicker than it have done. And I didn't expect that we should thought that the second quarter in general in the market should be tougher than the first. But if you see our clients don't have big stocks today. So as soon as the sales start for them, they need to start ordering better again or more again, which was not the situation if you go back for 1 year or something when a lot of them have too big stocks themselves, especially on retail.

The only thing that we know now in Scandinavia is that it's a little bit too much winter garments after this winter on stock in the retail chains, but it's a much better situation. And then you can say also people start talking more positive, at least even if we don't see it in the figures. And on corporate, I think it has stabilized. We were down 2%. I think it was.

And that, I think, is quite good in this situation. And the only public ones, we can see there in Sweden is a league that big client to us. And I think they were down 3.9% or something in the last report, if I remember correctly. On the retail, it's much, much tougher. I don't know the sales exactly, but I looked briefly on the stock rate -- the stock value for Adidas, Puma and Nike, and it was not such a good development this year. So it has been tough there.

Great. And maybe final one then, you're mentioning this high robotics. I think previously, I mainly have out-of-store solutions. Any particular reason or...

Can you help me?

High robotics is a newer automation system. And in existing warehouses, it could be easier and more cost effective to have high robotics. But we're also looking into to have very new -- completely new warehouses. But we want to try both and compare and see which is the best on the long run.

But I think also that high robotics is a higher grade of automatization when we flow the goods in and out then.

Yes. And it's also more flexible. If you increase the warehouse and build it up so we have a larger area, then it's easier with high robotics to be doing more robots than extending an existing store.

Okay. Then we move on to the question that has been sent to us. It's a fair amount. The first one is turbulence on tariff has it caused any inefficiencies for you to date changed the overall sourcing landscape that is tougher or easier to get volumes from where you want them?

No, I wouldn't say that. But of course, it takes time to move so much production from some countries to other countries, but it has not been a huge problem for us. If it have cost something it have done cost a little bit on the lead times that we have a little bit longer lead times right now than we had before in the production because it's not easy for factories located in other countries either to suddenly have a lot of order that they didn't know about 1 year ago or 2 years ago.

Could you talk a little bit about the trend for Craft and Craft shoes?

Yes, it's continued to increase. We knew that it was -- it will be a long race, but we continue to increase all the time. And now we also launched, I think it's 10 months, we also launched indoor, where we think we also will have easier actually to get in since we are -- we have a lot of teams and clubs in indoor in another way than you can create on running.

So for example, we have several teams in both basketball and handball in not only the Swedish league in Bundesliga in Germany and so on. We just signed the basketball national team in Austria. We have Swedish handball team and so on. So we think that, that will be much quicker, but we continue.

Thank you. Is the Cotton Classic acquisition now closed? And if so, when will you consolidate it into New Wave?

It's closed in a way that we have made all agreements and that perspective. But it's -- as with your answer before, it's 18th of August, where it's the last day that the competition authorities in Austria can protest. And if they don't, which we expect they don't, then we will take it in from 1st of September.

Thank you. Could I please ask for a bit more detail on why Sports and Leisure growth was weaker in its corresponding margin? How is it affected by Easter? I thought that was more of a corporate effect?

Yes, definitely, Easter is more on corporate, but retail has been very, very weak. You can say now I think in July is the first time where the sports index actually were a little bit up. Before that, I think it was down for 13 quarters in a row. So the environment on retail has been much worser than on corporate.

Thank you. Do you see any call for actions to improve the results from the gift section?

I beg your pardon.

Do you see any call for actions to improve the results for the gift section?

Yes, we'll try to take action there every day. So but not any big changes, but yes.

And a follow-up there. NewWave has increased the staff under the period. Will there be any change in number of employees in Sweden this year?

Any change in.

Number of employees in Sweden this year.

Not much.

Not much. Okay.

It's increasing the number of people, for example is a big part of sales and that we don't need more salespeople in Sweden or in Scandinavia, we don't need more. It's very focused on U.S. and Germany. It will be on Ireland and so on. And then you can say that during this quarter, we also have an effect on warehouses where we have to take in more people when we temporary when we make the automatization, we have to deliver to the clients in a decent way even if we have -- then you should fill up all the systems and so on.

So actually, every automatization we do, you've got a short-term negative effect in number of employees before you reach efficiency and instead you go the other direction less and less.

Moving on to the last one here. You mentioned targeted onetime campaigns impacting marketing spending in the quarter. Does this type of investment pay off in the current market? And did you see the impact you were after? And will there be the same approach in the coming quarters?

It's not any big things planned in the coming quarters right now. And it's mainly 2 bigger events. It was New York Marathon, where we did a lot about Craft shoes and it was Stockholm Marathon. And they will not come back. If they pay off or not, we know 3, 4 years later. I mean, we don't run the marketing and the campaigns to increase the sales those days. It's brand building more you can say.

So -- but I think it's us because if we -- I mean, we have continued growth most years for a very long time. But it's not the -- I mean, building brand is not working the way as another retail company that can make an and give a discount and they sell day 1. This is more long-term marketing.

That was all the questions we had. So thank you so much for your presentation.

Thank you all. Thanks.