New Wave Group designs, acquires and develops owned apparel brands — Craft, Cutter & Buck and others — sold through corporate/promo and retail channels. It is an acquisitive brand roll-up: FY2025 added Cotton Classics (goodwill +SEK 215m), and goodwill plus trademarks (SEK 1,814m) are 26% of equity, indefinite-life and unimpaired.
The economics are thin: adjusted ROIC 8.8% barely clears the 8% WACC and economic profit is just +SEK 77m (0.8% margin on IC). The defining feature is working-capital intensity — inventory of SEK 5,776m is 57% of LTM revenue and turns only 0.9x, so IC is ~96% working capital plus intangibles and ROIC swings on inventory efficiency.
A deliberate investment phase (ERP/IT, the Dallas warehouse) is compressing margins near-term (operating margin 8.6% Q1'26 vs 9.7%) against an aspirational 20%-through-cycle target versus ~11% LTM, while leverage rises (net debt SEK 3,021m, cover 6.0x from 8.3x) and the dividend is cut to SEK 3.00.
Capitalising adjusted NOPAT of SEK 856m: at zero growth EV is ~SEK 10.7bn versus the actual ~SEK 15.4bn, so the market already prices ~2% perpetual growth. Netting SEK 3,021m debt over 132.7m shares, GDP-growth fair value is ~SEK 85 — slightly below the SEK 93 price. There is no reverse-DCF discount at a time when margins are compressing.
Base SEK 85 (−9%) de-rating toward through-cycle economics with margins still soft; bull SEK 120 if the margin target advances, working capital normalises and operating leverage lifts EP; bear SEK 62 on a consumer downturn, inventory write-downs and further margin compression on the levered, WC-heavy balance sheet.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~8.4%, limited by ROIC 9% ≈ WACC 8%) it cannot reach the current EV. No-growth value is SEK 62/share (66% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 120 | ≥8% | +29% | 25% | Margin target advances + WC normalises + operating leverage |
| Base | SEK 85 | ≥8% | -9% | 45% | De-rate toward through-cycle economics; margins still soft |
| Bear | SEK 62 | +1% | -33% | 30% | Consumer downturn, inventory write-downs, further margin compression |
| Prob-weighted | SEK 87 | — | -7% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 90 | 97 | 101 | 107 | 111 | 122 |
| 7.25% | 74 | 78 | 80 | 83 | 86 | 90 |
| 8.00% (base) | 62 | 64 | 65 | 66 | 67 | 68 |
| 8.75% | 52 | 53 | 53 | 53 | 53 | 50 |
| 9.50% | 45 | 45 | 44 | 43 | 42 | 37 |
Green = fair value above the current price of SEK 93.00. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Craft and Cutter & Buck give some brand pull and a platform for geographic and channel expansion.
The ERP/warehouse investment phase, once through, could lift the operating margin toward the through-cycle target.
Faster inventory turns from the current 0.9x would free capital and lift ROIC materially — the key swing factor.
A long history of integrating brand acquisitions (Cotton Classics latest) with no goodwill impairments.
Torsten Jansson's control aligns long-term stewardship, and the dividend cut signals capital discipline.
New Wave is a founder-led brand roll-up that clears its cost of capital only thinly (ROIC 8.8%, EP +SEK 77m) on a working-capital-heavy, cyclically-exposed model, and the market already prices in growth it is not currently delivering. HOLD, medium conviction; base target SEK 85 (−9%).
The path to a better entry is margin recovery toward the through-cycle target plus faster inventory turns — until then valuation offers no cushion and the risk sits with WC intensity and rising leverage.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| LTM net sales | 10,164 | Consolidated income statement, 12 months apr-mar 2025/26 📄 p.4 | LTM rolled column shown directly in Q1 2026 IS (FY2025 10,019 - Q1'25 2,184 + Q1'26 2,328 = 10,164). |
| LTM operating result (adj EBIT) | 1,129 | Consolidated income statement, 12 months apr-mar 2025/26 📄 p.4 | Clean APM — reported operating result used as adjusted EBIT, no restructuring bridge disclosed. |
| Inventory | 5,776 | Consolidated balance sheet 31 Mar 2026 📄 p.9 | Largest single IC component (57% of revenue); core capital-intensity risk of apparel wholesaler. |
| Total equity | 7,097 | Consolidated balance sheet 31 Mar 2026 📄 p.9 | IC equity base at latest interim snapshot; NCI = 0. |
| Accumulated OCI (Reserves) | 586 | Changes in equity — Reserves 442 (2025-12-31) + 144 Q1'26 OCI 📄 p.6558 | Translation/hedge reserve stripped from equity so IC reflects deployed operating capital, not FX swings (SEK strength drove -709 translation in FY2025). |
| Interest-bearing debt ex-lease | 2,647 | Net debt to credit institutes 2,076 + cash 571 📄 p.10 | Credit-institute debt separated from lease liabilities per company's own net-debt-to-credit-institutes definition. |
| Lease liabilities in IC | 945 | Total IB liab 3,592 - ex-lease 2,647 📄 p.9 | Store/warehouse ROU leases are primary operating assets -> capitalized in IC; no NOPAT add-back under IFRS 16. |
| Goodwill | 1,252 | Note 8 Intangible assets — closing book value 📄 p.7342 | Brand-rollup goodwill (Corporate 614 / Sports & Leisure 576 / G&HF 61); indefinite-life, tested at 8.5% WACC, no impairment. |
| Trademarks | 562 | Note 8 Intangible assets — closing book value 📄 p.7342 | Indefinite-life brand intangibles (Orrefors, Kosta Boda, Craft, Cutter & Buck); PPA amort ~5m/yr kept in opex. |
| Tax rate (LTM effective) | 0.242 | LTM tax 245 / pretax 1,013 📄 p.4 | LTM effective rate used for NOPAT (Q1 2026 effective rate 23.1%). |