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Hmm, I believe they have already stated they're preparing for when their sales start to drop and that they know future sales won't stay this high.

bouncingboredom wrote:
If you look at the finanical figures for GW from last year, everything was kind of flat until the Brexit vote, then their sales went mental. Notably, their UK sales didn't budge much (their retail business was and still is a basket case). If you look at the US and EU sales to trade however (third party suppliers/FLGS etc) you'll see massive spikes in sales. Remember that these suppliers already get a hefty discount from GW and were then handed another 15% odd on top. They've basically filled their boots with GW product while it's going cheap and will likely continue to do so for the forseeable future.

The moral of the story being a) GW is doing handsomely at the minute, but b) don't expect them to go all warm and fuzzy and start doing nice things for you all of a sudden, they probably will pocket the cash their making now, and c) judging by the way they've worded their financial statements it's entirely plausible that they think most (90%) of this success was down to them and as such haven't accepted some of the underlying weaknesses in their business. See the thread about "Chapter Approved" for warning signs that they've learned nothing in the last twelve months.

Can you extrapolate on this? I cannot find corroboration. GW sets their own prices in every country they do business, so there would have been no additional discount for distributors and FLGS.

In fact, the only statements I've seen from GW compare real to constant currencies, and most of their report is based on the constant currency valuation (ie, how the company is doing if there had not been a substantial change in their primary currency).

It's not about what price they set, and no those wouldn't have changed. It's that getting paid in dollars suddenly got profitable as each dollar of the wholesale price was worth more pounds overnight. Anyone exporting from the UK and not being paid in sterling benefitted.

 judgedoug wrote:


Can you extrapolate on this? I cannot find corroboration. GW sets their own prices in every country they do business, so there would have been no additional discount for distributors and FLGS.

In fact, the only statements I've seen from GW compare real to constant currencies, and most of their report is based on the constant currency valuation (ie, how the company is doing if there had not been a substantial change in their primary currency).

Traders buy directly in bulk from GW. They don't pay a fixed price like people entering a GW store. They'll speak to a sales agent from GW and negotiate a bespoke price based on a variety of factors, largest among which will be how big of an order they place. This will be priced in UK pounds, so if they're buying in a foreign currency then the price can go up/down based on currency movements. This is how virtually all retailing works, though often with a third layer (wholesalers) involved in the middle for smaller outlets. A bulk retail buyer can expect to get anywhere from 25-35% off the RRP, sometimes even more. This is why various retailers in the UK are able to sell GW products at less than the GW store price, because they're passing some of their bulk saving onto customers in order to secure sales.

Constant currency is just a way of making sure that currency changes don't fiddle the figures. It's hard to explain, but basically all it's doing is letting you compare total sales figures in a fair manner.

bouncingboredom wrote:

 judgedoug wrote:


Can you extrapolate on this? I cannot find corroboration. GW sets their own prices in every country they do business, so there would have been no additional discount for distributors and FLGS.

In fact, the only statements I've seen from GW compare real to constant currencies, and most of their report is based on the constant currency valuation (ie, how the company is doing if there had not been a substantial change in their primary currency).

Traders buy directly in bulk from GW. They don't pay a fixed price like people entering a GW store. They'll speak to a sales agent from GW and negotiate a bespoke price based on a variety of factors, largest among which will be how big of an order they place. This will be priced in UK pounds, so if they're buying in a foreign currency then the price can go up/down based on currency movements. This is how virtually all retailing works, though often with a third layer (wholesalers) involved in the middle for smaller outlets. A bulk retail buyer can expect to get anywhere from 25-35% off the RRP, sometimes even more. This is why various retailers in the UK are able to sell GW products at less than the GW store price, because they're passing some of their bulk saving onto customers in order to secure sales.

Constant currency is just a way of making sure that currency changes don't fiddle the figures. It's hard to explain, but basically all it's doing is letting you compare total sales figures in a fair manner.

That's not how it works with GW, the wholesale discount was 45% before VAT on generally available items, and 10% on anything that was direct only. It didn't matter if you order 1 of a product or 1000, there is no negotiating. I doubt that's changed in the last two years since I last dealt with them.

As far as I am aware all sales over seas are dealt with in that countries currency. If a shop ordered €1000 last year, order the same this year it resulted in GW have more £ sterling in their pocket. Given that the pound fell in value against basically all other currencies this means all sales outside of the UK were worth more to GW this year than last.
Following the brexit vote, being a Uk based manufactorer selling goods abroad has been a great time, unless the raw materials you buy were coming from abroad, in which case the cost of producing your goods has sky rocketed.

The constant currency bit of there annual report is the important bit, thats how we will be able to see what sort of sales increase, in terms of number of sales they have had. But I'm not an accountant and I couldn't tell you how they calculate or show that.

 Tamereth wrote:

That's not how it works with GW, the wholesale discount was 45% before VAT on generally available items, and 10% on anything that was direct only. It didn't matter if you order 1 of a product or 1000, there is no negotiating. I doubt that's changed in the last two years since I last dealt with them.

As far as I am aware all sales over seas are dealt with in that countries currency. If a shop ordered €1000 last year, order the same this year it resulted in GW have more £ sterling in their pocket. Given that the pound fell in value against basically all other currencies this means all sales outside of the UK were worth more to GW this year than last.
Following the brexit vote, being a Uk based manufactorer selling goods abroad has been a great time, unless the raw materials you buy were coming from abroad, in which case the cost of producing your goods has sky rocketed.

The constant currency bit of there annual report is the important bit, thats how we will be able to see what sort of sales increase, in terms of number of sales they have had. But I'm not an accountant and I couldn't tell you how they calculate or show that.

Different people have reported different numbers when dealing with GW. When Shadow War was released, US retailers were able to negotiate different prices with the GW agents based on number of units purchased. A number of other retailers over the years have had the same experience, being able to reap a bigger discount for buying larger quantities. This is pretty much standard across the world of retailing, but obviously your own experience is what it is.

Overseas sales are done in the currency of the sellers choice. In some cases it's easier to make the buyer convert the currency themselves and pay you in that, for others they'll take the currency of the buyer and convert it at a time that suits them. If I remember correctly one of the complaints that Miniwargaming had was that GW forced them to buy in Canadian dollars, instead of allowing them to use US dollars. Taking payment in foreign currency can be handy if you have a lot of bills to pay in said currency, such as related to shipping, marketing, staffing etc. I can't tell you what GW's current practice is. The price they charge will however have to take into account the pound cost of producing and selling the items, being a UK based company.

The main benefit of the currency shift is that everything is cheaper for foreign buyers, so $1000 buys them a lot more stock than it did before. Now is the time for them to stock up, which appears to be what they're doing, which benefits GW from greatly increased sales. And while input costs for manufacturers have gone up in some cases (depends where you're getting your inputs from and how far you paid in advanced/whether you currency hedged or not and to what extent) generally you can pass on the increase to customers and still see a profitable price reduction, because the input is just a fraction of the cost, whereas the output price covers the whole cost.

The constant currency bit of their financials is basically just a way of saying "we've taken the movement of currency out of the raw total figures. Here's what our sales are like, compared fairly with the year before". It's the difference between saying "last year we sold $1000 of stock in the US, but this year we've sold $2000! Double the sales!!" when in actual fact you sold £1000 of stuff in the US both years, it's just that the dollar halved in value against the pound (in this particular hypothetical). The real world constant currency numbers show that GW's US sales have genuinely increased, on the order of almost 50% in the case of trade sales. Constant currency does not however deny the fact that this is because their goods are cheaper to American buyers now, which has made it highly profitable for those buyers to stock up now, sell chunks of the stock at a discount while likely keeping hold of some reserves of common stuff like Tac marines so they don't have to buy as many later if the pound strengthens again against the dollar.

So what is your point exactly? GW had a really good year, but not a really really good year?

 EnTyme wrote:
So what is your point exactly? GW had a really good year, but not a really really good year?

No, I was trying to offer some support on a point made earlier by someone else; GW has had an excellent year, but a lot of it seems to be down to a factor outside of their control. As such, people should be cautious about making statements that GW has turned a corner when it comes to dealing with their customers or expecting GW to suddenly become a virtuous benefactor. Further, people should be really, really cautious about the idea that GW has learned the lessons of the past. Lots of people seem to be attributing their success to a variety of factors that would appear to have no actual relationship to their financial results.

Is GW the only publicly-traded company in the UK with international distribution? If not, why aren't those other companies ranked as the fastest-growing in the UK? The strong about-face GW made when it comes to customer interaction was a MAJOR factor in their growth over the last two years alongside the release of a new edition. You can't write that off just because the pound fell in value.

 EnTyme wrote:
Is GW the only publicly-traded company in the UK with international distribution? If not, why aren't those other companies ranked as the fastest-growing in the UK? The strong about-face GW made when it comes to customer interaction was a MAJOR factor in their growth over the last two years alongside the release of a new edition. You can't write that off just because the pound fell in value.

If you go back and read my first post I addressed these issues directly. To recap, in order to save you having to go back a few pages;

- British fashion house Burberry saw a significant growth in sales in China in the wake of Brexit, largely driven by the reduction in the pound. Their sales growth in this region was comparable with GW's growth in trade sales to the US and EU.
- Car maker Aston Martin reported a five fold (500%) year on year increase in its expected EBITA back in February, largely driven by strong demand in the wake of Brexit for its new DB11 model in places like Japan. For the first time in a decade it was looking at back to back quarters of growth.
- GW's financial statements earlier this year showed very little increase in UK earnings. It showed staggering growth in US and EU trade sales growth. If it was GW policy changes that had made the difference we should have seen strong UK sales growth as well. Instead we're seeing what appears to be currency related discounting driving bulk trade sales.

If you look at the actual exchange rate history with the dollar, the pound fell off a cliff in July 2016 and hit its lowest point in October 2016. Since then it has been gradually rising. So the pound would undoubtedly have a big impact on last year's numbers, but the impact this year would arguably be less. That makes this year's result even more impressive. I have attached a graph for reference.

bouncingboredom wrote:

Different people have reported different numbers when dealing with GW. When Shadow War was released, US retailers were able to negotiate different prices with the GW agents based on number of units

This would have been a singular exception. Trade accounts give set percentage discounts regardless of order-size. (Speaking as someone who has had a trade account and who knows several people who have/had them)

I suspect the biggest effect of the price drop from the fall of the pound was to get a bunch of folk in the USA who hadn't bought GW in a while but hadn't totally given up on them some incentive to buy something

and once they started buying the realised that a bunch of the stuff they had got fed up with had (begun to) change plus the minis were as good as they remembered

 OrlandotheTechnicoloured wrote:
I suspect the biggest effect of the price drop from the fall of the pound was to get a bunch of folk in the USA who hadn't bought GW in a while but hadn't totally given up on them some incentive to buy something

and once they started buying the realised that a bunch of the stuff they had got fed up with had (begun to) change plus the minis were as good as they remembered

Speaking only for myself, obviously, the changes brought in by 8th got me to spend my money. The prices on the models in store didn't change at all.

The new rule set and the willingness to do what they did from 2nd to 3rd with a system "reset" button (i.e. no codex survives the edition transition) was the most appealing reason to jump back in. Codex information and army capability wise, after sitting out an edition, being able to start on the ground floor with everyone else was a major selling factor.

The more money GW make, the more awesome models we get. This is good news all round!

Hear hear!

They also make more games and open the doors to more community input to keep the train rolling.

Chikout wrote:If you look at the actual exchange rate history with the dollar, the pound fell off a cliff in July 2016 and hit its lowest point in October 2016. Since then it has been gradually rising. So the pound would undoubtedly have a big impact on last year's numbers, but the impact this year would arguably be less. That makes this year's result even more impressive. I have attached a graph for reference.

If you look at the right of the graph you'll notice that the pound has barely recovered past where it was in the immediate wake of Brexit. It still has a long way to go before it reaches pre-Brexit levels.

Hollow wrote:
This would have been a singular exception. Trade accounts give set percentage discounts regardless of order-size. (Speaking as someone who has had a trade account and who knows several people who have/had them)

There's actually been a number of quotes out there from different people who have run trade accounts with GW who have supported the idea that they can get bigger discounts by ordering in bulk. Not that this really matters, it's the currency change that's important. But again, if that's your experience then I'm not going to tell you that your personal experience is wrong. It's possible that it's a territory thing or based off the size of the buyer.

OrlandotheTechnicoloured wrote:I suspect the biggest effect of the price drop from the fall of the pound was to get a bunch of folk in the USA who hadn't bought GW in a while but hadn't totally given up on them some incentive to buy something

and once they started buying the realised that a bunch of the stuff they had got fed up with had (begun to) change plus the minis were as good as they remembered

It's possible that many people felt this way, but the biggest rise was in trade sales and it should be pointed out that they were doing really big increases before 8th edition dropped. Their massive jump in 2016/17 numbers occured from the point of the Brexit vote to the end of the financial year (which pre-dated 8th edition). It's more likely that what we're seeing is just a continuation of that trend, with added oomph from the release of 8th.

An Actual Englishman wrote:The more money GW make, the more awesome models we get. This is good news all round!

And this is precisely what I was cautioning about. GW has been quite clear over recent years that when it makes a lot of cash its business strategy is to hand this cash over to investors, not to pump it all into new lines.

Well for one there's a lot of new blood in charge since those days and secondly it doesn't matter on that front as they are constantly releasing better and better models despite a booming sales rate or not.

So I'll just go on believing in GW, the new policies of community support and their amazing products, thank you.

I really doubt the brexit drop had a huge influence on sales volume as just as GW haven't changed their MSRP during the brexit drop, I also doubt they changed their wholesale price much and it's not like independent retailers are suddenly giving away stuff for lower price either.

So the effect on the end consumer has been almost nothing unless they were importing GW stuff (which GW made difficult to do with their trade agreements) or buying direct from FW.

And one thing people do forget is while brexit most definitely helped GW overall, GW also has significant infrastructure in other countries. They don't just put their crap on a boat and wave goodbye to it, they have distribution centres in other countries and have stores in other countries. So along with the rise in revenue from brexit they've had a rise in costs, paying rent, wages and transport costs for their US distribution chain also jumped. Those things are a huge chunk of GW's expenses.

 OrlandotheTechnicoloured wrote:
I suspect the biggest effect of the price drop from the fall of the pound was to get a bunch of folk in the USA who hadn't bought GW in a while but hadn't totally given up on them some incentive to buy something

and once they started buying the realised that a bunch of the stuff they had got fed up with had (begun to) change plus the minis were as good as they remembered

I think every US player can agree that the price for GW models has decreased in no way since or before the pound's change. Though I will say that FW resin products are about as expensive for us as the GW plastics are last I looked, which is a change.

AllSeeingSkink wrote:
I really doubt the brexit drop had a huge influence on sales volume as just as GW haven't changed their MSRP during the brexit drop, I also doubt they changed their wholesale price much and it's not like independent retailers are suddenly giving away stuff for lower price either.

So the effect on the end consumer has been almost nothing unless they were importing GW stuff (which GW made difficult to do with their trade agreements) or buying direct from FW.

And one thing people do forget is while brexit most definitely helped GW overall, GW also has significant infrastructure in other countries. They don't just put their crap on a boat and wave goodbye to it, they have distribution centres in other countries and have stores in other countries. So along with the rise in revenue from brexit they've had a rise in costs, paying rent, wages and transport costs for their US distribution chain also jumped. Those things are a huge chunk of GW's expenses.

Pretty sure Gw pay the expenses they have in other countries with the revenu they make in them. So i dont think the brexit really rise their operating cost.

I'm not happy about this.

Prices and rules are still gak.

GW should he punished, not rewarded for their behavior.

Mitochondria wrote:
I'm not happy about this.

Prices and rules are still gak.

GW should he punished, not rewarded for their behavior.

I love it when there are financial threads on here about GW, you can taste the salty tears

8th is great, AoS is superb, and they are finally supporting games that we all wanted back. Added to that, they are making the prettiest models they ever have done.

There is plenty of Warmachine in clearance bins all over the UK, and on eBay. I'm sure you could find a game that doesn't make you cross.

 BrotherGecko wrote:
I think every US player can agree that the price for GW models has decreased in no way since or before the pound's change. Though I will say that FW resin products are about as expensive for us as the GW plastics are last I looked, which is a change.

You're missing the point. Big retailers are buying up product cheap, storing it, and selling it on at the regular price. You aren't seeing a discount because the price difference is going into the retailer's pocket.

 Zethnar wrote:

 BrotherGecko wrote:
I think every US player can agree that the price for GW models has decreased in no way since or before the pound's change. Though I will say that FW resin products are about as expensive for us as the GW plastics are last I looked, which is a change.

You're missing the point. Big retailers are buying up product cheap, storing it, and selling it on at the regular price. You aren't seeing a discount because the price difference is going into the retailer's pocket.

This is not true. I'm a US retailer. GW's wholesale and retail prices haven't changed at all. GW has a US headquarters through which they sell to all US stores and distributors. They sell using fixed USD pricing that doesn't fluctuate one cent based on the value of the pound. The weaker pound is making them more money not because anyone anywhere else in the world is now able to get their products cheaper (we aren't), but because money spent in USD is now worth more to them than it used to be. Unlike a typical exporter, GW sets fixed pricing for the local currency in every country in which they do business and accepts that their profits will fluctuate with the strength of the pound, a luxury afforded by their astronomically high prices compared to costs. Their increase in sales volume, on the other hand, is entirely because 8th edition 40K has been extremely popular, bringing many former players back into the fold as well as attracting new players for the first time since prices skyrocketed a few years back. My own store's 40K sales are up about 300% over last year, even though our profit margin and pricing remains the same.

Forge World, on the other hand, functions more like a traditional exporter, dealing only directly with customers and dealing only in GBP. It's definitely cheaper for the rest of the world to buy Forge World now than it was a year and a half ago.

Mitochondria wrote:
I'm not happy about this.

Prices and rules are still gak.

GW should he punished, not rewarded for their behavior.

Punished for what behavior exactly?

streetsamurai wrote:
And it's not that the brexit increased the sale volume in units, its that compared to before the brexit, the same amount of money in foreign currency is now worth a lot more in pound. For example, if because of the brexit, the pound has lost half its value compared to the usd (it hasnt lost that much value, but it makes it easier to explain), even if the profit made in the us stays exactly the same, when translated in pound, it means a 100% increase in profit.

Except their figures are adjusted for constant currency so we know that's not the case. We know that they have seen a marked increase in sale volume, with more product being shifted.

Benn Roe wrote:

 Zethnar wrote:


The weaker pound is making them more money not because anyone anywhere else in the world is now able to get their products cheaper (we aren't) ........ Their increase in sales volume, on the other hand, is entirely because 8th edition 40K has been extremely popular, bringing many former players back into the fold as well as attracting new players for the first time since prices skyrocketed a few years back. My own store's 40K sales are up about 300% over last year, even though our profit margin and pricing remains the same.

As with others, I'm not going to tell you your experience is wrong, but other retailers have seen discounts. Possibly differing trading terms from different times when agreements were signed? Though my understanding is GW has one set of terms it expects everyone to follow. As for the second part, the increase in their sales volume significantly predates the release of 8th edition. 8th has likely given them a big additional boost, but we can draw the beginning of this "boom" back to before that point, back to the Brexit vote.

If im not mistakem, only the revenue are adjusted at constant currency, not the profit.

Edit: after looking more closely at the latest financial, the profit is also given in cc in some later page. And the growth is still fairly impressive. So GW growth seems to be in no way mainly dependant on the brexit

 streetsamurai wrote:

AllSeeingSkink wrote:
I really doubt the brexit drop had a huge influence on sales volume as just as GW haven't changed their MSRP during the brexit drop, I also doubt they changed their wholesale price much and it's not like independent retailers are suddenly giving away stuff for lower price either.

So the effect on the end consumer has been almost nothing unless they were importing GW stuff (which GW made difficult to do with their trade agreements) or buying direct from FW.

And one thing people do forget is while brexit most definitely helped GW overall, GW also has significant infrastructure in other countries. They don't just put their crap on a boat and wave goodbye to it, they have distribution centres in other countries and have stores in other countries. So along with the rise in revenue from brexit they've had a rise in costs, paying rent, wages and transport costs for their US distribution chain also jumped. Those things are a huge chunk of GW's expenses.

Pretty sure Gw pay the expenses they have in other countries with the revenu they make in them. So i dont think the brexit really rise their operating cost.

Their operating costs in other countries would have gone up by the same proportion as their revenue in those countries.

Obviously a drop in the GBP is good for GW, which is why I said "brexit most definitely helped GW overall" I was just pointing out that GW is not an exporter, they have infrastructure they need to support in other countries as well, so they can't really leverage the drop in the GBP the same way some other companies might (as GW was being compared to other companies in posts prior to mine).

For example a company that operates wholly in the UK might have 50M operating costs, 30M revenue in the UK and 30M revenue in the US, thus 10M profit. If the GBP drops by a third, their US revenue might jump to 40M (either through increased volume or better return for the same volume) but they don't incur additional costs and thus they have doubled their profits. That's NOT how GW operates, they have significant operating costs in the US as well so their operating costs also have to be adjusted.

Still a net positive, but not nearly as significant as a company that keeps their operational costs in the UK (I imagine companies like Aston Martin keep much of their costs in the UK so can really leverage a weaker GBP in a way GW can't).

Brexit will have played its part, but is not going to be the only reason they have had a bumper year.

For a company that sells 70% of its product overseas it would have made an extra 10-20% when converting the USD to GBP since the Brexit vote depending on the time of conversion and up to 18% on Euro transactions.

It sounds like they have made considerably more than the extra 20% (absolute maximum from currency conversions) in revenue this year.

I'm pleased for GW to have been making more money than recent history. They appear to be reinvesting it in new miniatures and listening to what their player base wants to some degree. Sure they're not perfect, but I doubt they'll ever be able to please everyone with such a wide spanning range.