Interim Report for New Wave Group AB - JANUARY–SEPTEMBER 2015

PERIOD 1 JULY – 30 SEPTEMBER 2015

  · Sales amounted to SEK 1,272 million, which was 13% higher than last year
(SEK 1,122 million).
  · Operating profit amounted to SEK 96.3 (95.7) million.
  · Result for the period amounted to SEK 65.1 (66.9) million.
  · Earnings per share amounted to SEK 0.98 (1.01).
  · Cash flow from operating activities amounted to SEK -161.2 (-290.7) million.

PERIOD 1 JANUARY – 30 SEPTEMBER 2015

  · Sales amounted to SEK 3,559 million, which was 18% higher than last year
(SEK 3,014 million).
  · Operating profit amounted to SEK 146.8 (137.8) million.
  · Result for the period amounted to SEK 82.0 (85.0) million.
  · Earnings per share amounted to SEK 1.22 (1.28).
  · Cash flow from operating activities amounted to SEK -246.0 (-229.6) million.
  · Equity ratio amounted to 42.8 (45.9)%..
  · Net debt amounted to 92.1 (76.0)%.

CEO COMMENTS

JULY - SEPTEMBER
I’m quite satisfied even with our third quarter. Sales increased by 13% (of
which 8% currency) but we should bear in mind that our growth began to take off
in the corresponding quarter last year - when we had a growth rate of 8% (of
which 4% currency). Sales of SEK 1,272 million is the highest ever for us during
a third quarter. Most pleasing is the promo sales channel with a growth of 19%.
It is also extra pleasing to see growth in this sales channel in Sweden, which
amounted to 14%.
Operating profit of SEK 96.3 million is fully approved as we still find
ourselves in an investment phase.

JANUARY - SEPTEMBER
I can only say that our actions and investments have given the desired result on
sales. A growth of 18% for the first nine months feels incredibly strong.
Operating income is almost SEK 10 million better – in spite of major investments
in sales, marketing and inventory.

THE FUTURE
We are in a very strong position in every way and I look forward to the next few
years. The only thing that worries me for the fourth quarter is the weather –
the incredibly warm October has not really given us the sales start I wished
for. At the time of writing, and when I look at the long-term forecast for
Gothenburg, it shows 10-12 degrees above zero for quite some time to come.
However, as CEO it is still nice to feel secure with everything else – and no
other concern than the weather.
We are strongly equipped for the next quarter and year, and even if any
individual quarter happens to be worse than your and my own expectations, I feel
great confidence going forward!

TORSTEN JANSSON
CEO New Wave Group

SUMMARY OF THE QUARTER JULY-SEPTEMBER

The Group increased its sales by 13% (5% excluding currency fluctuations)
compared with last year. The operating segment Corporate Promo had a growth of
17%, which is related to the promo sales channel as well as the regions Europe,
Sweden and the USA. Sports & Leisure increased by 11% which is primarily related
to positive currency changes. Gifts & Home Furnishings increased their sales by
15% and here the increase is in both sales channels. The promo sales channel
increased by 19% as a result of increased marketing activities and product
launches, as well as an improved security of supply. The retail sales channel
increased by 9%.

The gross profit margin was slightly higher than last year.

Our planned investments in sales and marketing continued during the quarter and
costs have therefore increased compared with last year. We intend to continue
marketing our product launches as well as the expansion of our sales force.
Costs will therefore be higher even in the coming quarters.

Operating profit was slightly higher than last year. The improvement is mainly
attributable to the higher turnover but our increased investments in sales and
marketing have reduced the effectiveness of sales growth. Increased interest
expense due to higher net debt had a negative impact on financial costs and
profit for the period was slightly lower than last year.

Cash flow from operating activities amounted to SEK -161.2 (-290.7) million,
whereby the improvement is related to lower commodity purchases as we now have a
good inventory and service level. Inventories, however, increased by SEK 674
million compared to 30 September 2014 and amounted to SEK 2,648 (1,974) million.
Exchange rate fluctuations have increased inventory by SEK 101 million. Net debt
increased by SEK 600 million and amounted to SEK 2,290 (1,690) million, of which
SEK 128 million related to changes in exchange rates. The net debt to equity
ratio increased and amounted to 92.1 (76.0)%, which is related to the above
mentioned stock building.

JULY-SEPTEMBER

TURNOVER
Turnover amounted to SEK 1,272 million, which was 13% higher than last year (SEK
1,122 million). Exchange rates affected turnover positively by SEK 89 million
(8%).

The operating segment Corporate Promo increased by 17%, Sports & Leisure
increased by 11% and Gifts & Home Furnishings by 15%. Of the Group’s sales
channels, promo increased by 19% while retail sales increased 9%.

Turnover in Sweden increased by 8% and it is the promo sales channel that
accounts for the bulk of the increase. The USA increased by 17%, which is
attributable to positive currency changes. Net sales in local currency decreased
by 4%, which is related to a major order last year which was not repeated this
quarter. The order affected the region by 10%. Other Nordic countries decreased
by 1%, which is related to Finland. Sales in Central and Southern Europe have
increased by 20% and 22% respectively, which is related to the promo sales
channel.

GROSS PROFIT
The gross profit margin increased slightly compared to last year and amounted to
45.1 (44.6)%.

OTHER OPERATING INCOME
AND OTHER OPERATING EXPENSES
Other operating income increased by SEK 17.0 million to SEK 22.1 (5.1) million.
Other operating income is mainly attributable to operating currency gains but
also invoiced expenses as well as capital gains. These should be compared to the
result row ”Other operating expenses” where mainly operating currency and
capital losses are reported. Other operating expenses increased by SEK 5.2
million and amounted to SEK -9.3 (-4.1) million. The net total of the above
items amounted to SEK 12.8 (1.0) million. The improvement is mainly due to a one
-time revenue in connection with a minor acquisition.

COSTS AND DEPRECIATION
External costs increased by SEK 56.4 million and amounted to SEK -273.0 (-216.6)
million. The increase is primarily related to increased investments in sales and
marketing.

Personnel costs amounted to SEK -202.8 million which is SEK 28.0 million higher
than last year (SEK -174.8 million). The increase is related to an increased
number of employees, mainly within sales and customer service.

Currency exchange rates had a negative impact on costs by SEK 42 million.

Depreciation decreased slightly compared to last year and amounted to SEK -13.7
(-14.4) million.

OPERATING MARGIN
Our increased investments in sales and marketing have given a lower operating
margin. The operating margin for the period amounted to 7.6 (8.5)%.

NET FINANCIAL ITEMS AND TAXES
Net financial items amounted to SEK -17.6 (-11.0) million. This deterioration is
related to a worse net interest due to higher net debt.

Tax on profit for the period amounted to SEK -13.6 (-17.8) million. The slightly
lower percentage rate is related to a one-off effect due to a non-taxable other
income.

RESULT FOR THE PERIOD
Result for the period amounted to SEK 65.1 (66.9) million and earnings per share
amounted to SEK 0.98 (1.01).

JANUARY-SEPTEMBER

TURNOVER
Turnover amounted to SEK 3,559 million, which was 18% higher than last year (SEK
3,014 million). Exchange rates affected turnover positively by SEK 305 million
(10%).

The operating segment Corporate Promo increased by 21%, Sports & Leisure
increased by 19% and Gifts & Home Furnishings by 5%. Of the Group’s sales
channels, promo increased by 24% while retail sales increased 12%.

Turnover in Sweden increased by 7%, which is related to the promo sales channel.
Retail is at the same level as last year. The USA increased by 26% which is
primarily attributable to the positive currency change. Net sales in local
currency increased slightly and was mainly in the promo sales channel. Other
Nordic countries increased by 10%, this increase is took place in all countries
and mainly within the promo sales channel. Sales in Central and Southern Europe
have increased by 18% and 30% respectively, and even here it is mainly related
to the promo sales channel.

GROSS PROFIT
The gross profit margin amounted to 45.1 (45.2)%. The slightly lower margin is
due to the mix of products, customers and countries.

OTHER OPERATING INCOME
AND OTHER OPERATING EXPENSES
Other operating income increased by SEK 21.6 million to SEK 39.2 (17.6) million.
Other operating income is mainly attributable to operating currency gains but
also invoiced expenses as well as capital gains and should be compared to the
result row ”Other operating expenses” where mainly operating currency and
capital losses are reported. Other operating expenses increased by SEK 25.4
million and amounted to SEK -34.5 (-9.1) million. The net total of the above
items amounted to SEK 4.7 (8.5) million, where the deterioration in earnings is
primarily attributable to foreign exchange losses associated with the Swiss
Franc as it abandoned its EURO cap.

COSTS AND DEPRECIATION
External costs increased by SEK 139.0 million and amounted to SEK -802.0 (
-663.0) million. The increase is related to increased investment in sales and
marketing.

Personnel costs amounted to SEK -620.1 million which is SEK 89.1 million higher
than last year (SEK -531.0 million).

The increase is related to an increased number of employees, mainly within sales
and customer service.

Currency exchange rates had a negative impact on costs by SEK 129 million.

Depreciation increased slightly compared to last year and amounted to SEK -42.9
(-40.0) million. The increase is mainly related to currency movements.

OPERATING MARGIN
Sales growth resulted in an improved operating profit, while the operating
margin was slightly lower compared with last year and amounted to 4.1 (4.6)%.
The margin was negatively affected by our increased marketing activities.

NET FINANCIAL ITEMS AND TAXES
Net financial items amounted to SEK -46.4 (-28.7) million. This deterioration is
related to a worse net interest due to higher net debt.

Tax on profit for the period amounted to SEK -18.4 (-24.1) million.

RESULT FOR THE PERIOD
Result for the period amounted to SEK 82.0 (85.0) million and earnings per share
amounted to SEK 1.22 (1.28).

REPORT OF OPERATING SEGMENTS

New Wave Group AB divides its operations into segments - Corporate Promo, Sports
& Leisure, and Gifts & Home Furnishings. The Group monitors the segments’ and
brands’ sales and profit (EBITDA). The operating segments are based on the
Group’s operational management.

CORPORATE PROMO
Turnover increased by 17% and amounted to SEK 457 (392) million. The result
(EBITDA) amounted to SEK 26.6 (40.4) million. It is the promo sales channel
which has increased and growth occurs in Sweden, Europe and the USA. Sales
growth is due to increased sales and marketing activities, as well as improved
inventory structure and level of service. The deterioration in earnings is
primarily related to increased investment and costs for sales and marketing as
well as a slightly lower gross profit margin (mix of products).

During the period January-September turnover increased by 21% and amounted to
SEK 1,464 (1,208) million. The result (EBITDA) amounted to SEK 88.1 (96.5)
million. Sales growth occurred in all regions and is due to increased sales and
marketing activities, as well as an improved inventory structure and level of
service. The lower profit is related to the projected cost increases in sales
and marketing as well as a slightly lower gross profit margin (mix of products).
SPORTS & LEISURE
Turnover amounted to SEK 674 (608) million, which is 11% higher than last year.
The result (EBITDA) amounted to SEK 77.8 (75.8) million. The segment has a
significant portion of its sales in the American market and the exchange rates
have affected turnover positively. Sales grew in promo sales channel and reduced
at retail. This quarter last year included a major order which was not repeated
in this quarter, which has had an impact on the segment’s net sales negatively
by 6%. The improvement in earnings is attributable to higher turnover but even
here the result has been negatively affected by increased sales and marketing
costs.
During the period January-September turnover increased by SEK 1,720 (1,450)
millions, which is 19% higher than last year. The segment has a significant
portion of its sales in the American market and the exchange rates have affected
turnover positively. Sales increased mainly in the promo sales channel and in
the regions of USA and Europe. The result (EBITDA) amounted to SEK 113.3 (102.6)
million. The improved result is related to the increased turnover but has also
been negatively affected by increased costs for sales and marketing.

GIFTS & HOME FURNISHINGS
Turnover increased by 15% and amounted to SEK 140 (123) million. The result
(EBITDA) amounted to SEK 5.6 million which was a marked improvement on last
year’s SEK -6.1 million. Sales growth is taking place in both sales channels.
The improvement in earnings is attributable to the higher turnover but also a
slightly improved gross profit margin.

During the period from January to September, turnover amounted to SEK 375 (357)
million. The result (EBITDA) improved and amounted to SEK -11.7 million against
last year’s SEK -21.3 million. The improved result is related to the higher
turnover and a slightly improved gross profit margin.

CAPITAL TIED UP

Capital tied up in stock amounted to SEK 2,648 (1,974) million and increased by
SEK 674 million compared to the same period last year. Changes in exchange rates
for conversion to SEK have affected the stock value by SEK 101 million. The
increase is a planned increase and is mainly related to the promo sales channel
and its supplemental purchases within its basic range of goods as well as its
new base collections. The turnover rate in stock is lower than last year because
of our stock build-up and amounted to 1.1 (1.3). The inventory value is expected
to be on a higher level than before even in the coming quarters, mainly because
of our extended Corporate Promo range as well as new and upcoming base
collections.

+----------------------------------------------------------------+-------+------
-+
|SEK million                                                     |2015-09|2014
-09|
+----------------------------------------------------------------+-------+------
-+
|Raw materials                                                   |   25.3|
    |
|                                                                |       |
21.8|
+----------------------------------------------------------------+-------+------
-+
|Work in progress                                                |       |
    |
|                                                                |    3.2|
1.8 |
+----------------------------------------------------------------+-------+------
-+
|Goods in transit                                                |  119.8|
181.2|
+----------------------------------------------------------------+-------+------
-+
|Merchandise on stock
|2,499.9|1,769.7|
+----------------------------------------------------------------+-------+------
-+
|Total                                                           |2,648.2|1,974.
5 
|
+----------------------------------------------------------------+-------+------
-+

Stock was written down by SEK 118 (101) million, of which SEK 11 (13) million
pertains to raw materials. Write-down related to merchandise on stock amounted
to 4.1 (4.7)%.

Accounts receivable amounted to SEK 921 (819) million, where growth is primarily
turnover related. However, even currency fluctuations when converted into SEK
increased this amount.

INVESTMENTS, FINANCING AND LIQUIDITY

Consolidated cash flow from operations during the quarter was negative and
amounted to SEK -161.2 (-290.7) million. This is due to the seasonal build-up of
inventories for the coming quarter. In addition to this normal build-up there is
also an increase due to new products in our basic range of goods. The cash net
investments amounted to SEK -15.1 (-12.2) million. The increase is related to
tangible fixed assets.

During the period January-September, the Group’s cash flow from operations
amounted to SEK -246.0 (-229.6) million, where the increase is related to higher
operating receivables. The cash net investments amounted to SEK -81.0 (-44.7)
million. The increase is related to tangible fixed assets.

Net debt increased by SEK 600 million to SEK 2,290 (1,690) million, which is
primarily related to our planned build-up of stock. Exchange rates have
increased the debt by SEK 128 million. The increase in stock means that our net
debt in relation to shareholders’ equity and working capital has increased to
92.1 (76.0)% and 76.0 (72.6)% respectively.

As a result of our stock build-up, our equity ratio decreased by 3.1 percentage
points and amounted to 42.8 (45.9)% as of 30 September.

The Group has a funding agreement which extends up to 12 November 2016. Total
credit facility at the end of the quarter amounted to SEK 2,812 million, of
which the principal agreement amounts to SEK 2,562 million. The credit facility
amount is limited to and dependent on the value of some underlying assets. The
principal agreement means that financial ratios (covenants) must be fulfilled in
order to maintain the agreement. Interest is based on each respective currency’s
base rate and fixed margin. Work on a new funding agreement has begun.

Based on the present forecast, management estimates that the Group will be able
to meet these covenants.

PERSONNEL AND ORGANISATION

The number of annual employees as of 30 September 2015 was 2,361 (2,186) of whom
50% were woman 50% were men. Of the total number of employees 589 (513) work in
production. The production contained within New Wave group is attributable to
Ahead (embroidery), Cutter & Buck (embroidery), Paris Glove, Orrefors Kosta
Boda, Seger, Dahetra, Termo and Toppoint.

INTANGIBLE ASSETS AND IMPAIRMENT
TESTING

The breakdown of intangible assets between segments are based on the ratio as of
the acquisition date for each company / brand and assigned to the operating
segments as it is considered to belong to. New Wave Group monitors cash
-generating units on a segment level. Goodwill is based on local currency and in
the consolidated financial statements give rise to currency translation effects.
The value of goodwill is reviewed annually to ensure that the value does not
deviate negatively from book value, but can be tested more frequently if there
are indications that the value has decreased. Write-down of operating segments
containing goodwill and brands is based on the calculation of its value in use.
This value is based on cash flow projections for the next five years and a
terminal period. The segments’ cash flows are influenced by commercial factors,
including market growth, competitiveness, cost developments, levels of
investment and working capital. When discounting, an assessment of financial
factors such as interest rates, borrowing costs, market risk, beta values and
tax rates will be carried out.

Assumptions made in the test are the Board’s best estimate at this stage of the
economic conditions expected to prevail over the forecast period. Current market
conditions and the economic situation make forecasting for future periods
difficult to predict. Furthermore, it is the fourth quarter that is historically
the most important in terms of earnings for the group and is an important
indicator of how the market develops. The first five years 2016-2020 are based
upon the Board’s established internal forecasts and for the subsequent periods
an average growth rate of 3 (3)% for the terminal period has been used.
Sensitivity analyses have been made of all operating segments.

In calculating the present value of expected future cash flows, a weighted
average cost of capital (WACC) of 11.2 (11.2)% before taxes is used. Discounted
cash flows are compared with book value per cash generating unit / operating
segments. Based on the tests and analyses carried out, there is, in the current
situation, no write-down requirement.

RELATED PARTY TRANSACTIONS

There are lease agreements with affiliates. Affiliates of the CEO have bought
merchandise and received payments for consulting services performed. All
transactions are on market terms.

THE PARENT COMPANY

Total income amounted to SEK 96.5 (72.1) million. Result before appropriations
and tax amounted to SEK -2.7 (-33.8) million, which includes dividends paid by
subsidiaries of SEK 77.3 million. Income was negatively impacted by SEK 64.6
million and relates to the write-down of tangible assets. This is attributable
to a capital injection into a subsidiary to cover losses. This capital injection
is not considered to add any further value to the subsidiary and thus burdened
the result. Net borrowing amounted to SEK 2,136 (1,532) million, of which SEK
1,947 (1,184) million relates to the financing of subsidiaries. Net investments
amounted to SEK -20.9 (-20.1) million. The balance sheet total amounted to SEK
3,852 (3,083) million and shareholders’ equity, including 78% of untaxed
reserves, to SEK 1,253 (1,071) million

RISKS AND RISK CONTROL

New Wave Group’s international operations mean that it is continuously exposed
to various financial risks. The financial risks are currency, borrowings and
interest rate risks, as well as liquidity and credit risks. In order to minimize
the affect these risks may have on earnings, the Group has established a
financial policy. For a more detailed description of the Group’s risk management
please refer to the Annual Report 2014; www.nwg.se.

The Group’s policy is to have short fixed-interest agreements resulting in quick
effects on the Group’s net interest as the short-term interest rate changes.

The Group’s reported risks are deemed to be essentially unchanged.

ACCOUNTING PRINCIPLES

This report is prepared in accordance with IAS 34 Interim Report and the Annual
Accounts Act.

No new or revised IFRS which came into force 2015 has had any significant impact
on the Group.

The interim report for the parent company has been prepared according to the
Annual Accounts Act as well as the Swedish Financial Accounting Standards
Council’s recommendation RFR2 - Accounting for Legal Entities. Applied
accounting policies are in accordance with the Annual Report for 2014.

NOMINATION COMMITTEE

The nomination committee for the board election at the 2016 annual general
meeting is:

  · Johan Ståhl, representative of Lannebo Fonder and Chairman of the Nomination
Committee
  · Torsten Jansson, CEO and representative of Torsten Jansson Förvaltnings AB
  · Arne Lööw, representative of Fjärde AP-fonden

For more information about the nomination committee and its work, please see
www.nwg.se/en/investor-relations.html.

CALENDAR

  · 11 February 2016: Year-end report 2015
  · 21 April 2016: Interim report for the first quarter
  · 11 May 2016: Annual general meeting 2016
  · 18 August 2016: Interim report for the second quarter
  · 10 November 2016: Interim report for the third quarter

The Board and the CEO certify that the financial report gives a true and fair
view of the company’s and the Group’s financial position and results and
describes the principal risks and uncertainties that the Company and the
companies included in the Group face.

GOTHENBURG 12 NOVEMBER 2015
NEW WAVE GROUP AB (PUBL)

Anders Dahlvig       Christina            M Johan Widerberg
                     Bellander
Chairman of the      Member of the        Member of the Board
Board                Board


Helle Kruse Nielsen  Mats Årjes           Torsten Jansson
Member of the Board  Member of the Board  CEO

FOR MORE INFORMATION, PLEASE CONTACT:

CEO Torsten Jansson
Phone: 031–712 89 01
E-mail: torsten.jansson@nwg.se

CFO Lars Jönsson
Phone: 031–712 89 12
E-mail: lars.jonsson@nwg.se

The information in this report is that which New Wave Group is required to
disclose under the Securities Market Act and/or the Financial Trading Act. The
information was released for publication at 7 am (CET) on 12 November 2015.