Nilörngruppen Aktie

Yes. First of all, a big excuse for the concern regarding the technical issue we had with Teams this morning. We're doing this completely ourselves, so we don't have an agency and so on. So I hope you -- and I think there was some sort of update with it what I heard regarding Teams. So there was some concern there. But now I'm really glad that you all are on this call. And as usually, this call will be recorded. So we put that out on our web page later on. And also, as usual, Maria Fogelstrom, our CFO, joined this call and will help me answer questions and so on, if any.

And also, Maria, yes, for questions, how to do when you want to ask questions.

[Operator Instructions]

Good. Thank you. Thank you. And I will start by sharing my screen. And I hope you all see that screen now. Jumping directly into the numbers here for the Q1 reporting. And as you can see or saw that the order intake is decreased by 18%. We have a big currency effect in the quarter, and I will come back in a separate slide about the currency effect and how that is calculated and why and so on.

That's been quite cautious. Also the Q4 last year in order intake was quite strong and that also impacted the Q1 order intake this quarter. But as I said, a big currency effect. Looking at the sales, sales number was down actually in consolidated Swedish krona numbers by 16% -- and actually, the currency effect stands for 10%. And so the sales adjustment, the currency effect was minus 60% (sic) [ 6% ]. And then there is also another specific order that last year came in, in Q1 and this year, it will come in Q2.

So it's nothing that we have lost and so on. It's a calendar effect depending on it comes in Q1 or in Q2 this year, it comes in Q2. And after all these adjustments or these adjustments, there was a quite flat quarter. It's still -- I mean, it's still a bit cautious out in the market, luxury and also outdoor. And I think what's happened in the Middle East, it doesn't improve the situation. So I think in general, the end consumer is a little bit more cautious also affecting our first quarter.

Coming back to the currency effect is how that is calculated. There is a consolidation in financial numbers. And the balance sheet is consolidated using the balance sheet end of date 31st of March numbers, currency rate and the profit and loss is calculated by using the average numbers for the quarter. And the way we calculated the currency effect, we don't have almost no invoicing in Swedish krona, all invoicing is done abroad, either in euro or in Hong Kong dollar or U.S. dollar and so on.

And when -- the way we calculated the currency effect that we -- first of all, of course, we're consolidating the group by using the average rate for the P&L and the balance sheet for the balance sheet and then we got the consolidated numbers. And then we do the similar consolidation again, but using the rate we had end of March last year, the difference that we get there is the currency effect, the way we calculate it is, that means that, yes, in Hong Kong, we calculate by Hong Kong dollar, in China with Chinese yuan and Bangladesh with BDT, et cetera.

And on this slide, you can see here the big impact if you compare first quarter last year with the quarter this year. And here on this table, you have the average rate on the below table, you have the balance sheet rate. And the balance sheet is for the balance sheet at the end of date rate and here is the average rate during the quarter.

And as you can see, and as you most likely know, the Swedish krona has been quite volatile during the quarter from being really strong in the beginning and then getting weak in the end. So that also has a big impact if you take like Hong Kong dollar, 40% in average and stronger Swedish krona and the Indian rupees and so on.

And if you look at the balance sheet rate, the Hong Kong dollar here is 5.9% as per balance sheet date end of March. So these rates here impact the P&L and these rates here impact the balance sheet. So it's a difference. The reason I explained this is that I sometimes get a question how -- because some look at only the end of the quarter rate, I can compare. But here is the average rate during the quarter, which has an impact on the P&L.

We had an operating profit of SEK 15.4 million versus SEK 23 million last year. We had some nonrecurring costs of SEK 2.3 million, where SEK 1.8 million is related to structural project cost. And what is that? It is -- I mean, we want to grow. So we have taken cost for project. I'm not going into detail, I cannot do that now. And will something good come out of this? What will come out of this? It's too early to say, and I will come back on that if and when it happens.

And when if it happens, I don't know yet. But this is something we're working on, and we have taken cost for this project, but it is that we want to grow. So that is part of that. And then other personnel cost is that we want to move and we need to have focusing on the right things. So that means that we are decreasing costs in some areas, increasing costs in some areas. And during this change, there will be one-off costs, and that was here in the quarter.

It was not much normally, I probably not would mention that, but this together with this one makes SEK 2.3 million. So I thought to be transparent for you, I think it was worth mentioning. And adjusted for this, the operating profit is SEK 17.7 million. This year, we also have some other costs also, I would say, offensive growth costs that we've taken. And hopefully, this will -- the intention of this will bear fruit in the coming quarters. Holland, we started up a new company, taking the cost here. U.S., we employed 3 more employees last year that was not in the Q1. And the Sri Lanka, we started up a new company as well.

So we are putting efforts in for the future growth. We have a strong balance sheet with a net cash position of SEK 56 million that we need for the growth and what we are aiming for. The income, as you know, most likely, it's very much volume-driven -- sorry, a quarter with lower volumes also gives less operating profit and operating margin.

The goal here is to be between 10% to 12% minimum. So we have a way to go, and that is -- how to reach that is by both volume driven, but also looking at the cost side. So this is exercise we are working on.

Looking at '25 compare on product group with 2026, there has been a decrease in packaging from 20 to 14. At the same time, if you remember, I used to say that now we're putting more efforts into packaging, so this is contradictory. But the order that I mentioned in Q1 that will come in Q2, that is a packaging order. So that will mean that this packaging will be stronger in Q2 versus the Q1.

Looking at the quarterly here, the Q1, we had a really strong gross margin. The strong -- if you compare to the history, the last years, the strong gross margin, it depends on the things. One is the product mix as we didn't get this packaging order, the packaging has, in general, lower margin that will have an impact on the Q2 lower gross profit in the Q2. But in Q1, that also made the opposite to the -- was a really strong gross margin.

So the product mix is one thing. Also the more in-house production we get, the higher gross margin we also get. So we had -- yes, especially in Bangladesh and Portugal. And then, of course, also that the U.S. dollar has some impact here. The weaker U.S. dollar as we are selling some in euro, there will be some -- that we are buying in U.S. dollar. That has also some dollar effect.

Cost side, as I mentioned, we are looking now to move costs from one side to another, and we will do some sort of cost saving program. But at the same time, we will spend efforts in other areas as well. So it's to be having the right resources at the right areas. Operating margin, as I mentioned, we are not pleased with that in the quarter, and the goal is to be 10% to 12% in the future. This is showing the numbers, but in the graph with the lower sales in Q1 and also the lower operating profit here. Jumping further. And here is the balance sheet, Maria.

Yes. And as Krister mentioned, we have a strong balance sheet with a net cash of SEK 56 million. As you can see here, we have cash amounting to SEK 102 million, which is quite much, but we have also chosen not to pick it out as we have upcoming investments in Bangladesh. So we have intentionally left money in Bangladesh to be able to finance the investments there.

I also want to highlight the inventory levels because I see that we already have received a question about the inventory levels. And that is a constant focus area for us. And the levels we have now are reasonable, but of course, they will depend on the sales as well. But we keep focusing on the inventory level and the levels are reasonable for now.

And as you can see, they have decreased compared to Q1 last year. And on the cash flow side, some short comments as well. And as you can see, there is quite a big effect in the accounts receivables during the period. We have that in Q1 2025 as well. And that is mainly related to seasonal effects within the quarter, where, for example, March was a stronger period than January.

And it is also related to specific clients with different payment terms, which can have quite a big impact on the accounts receivables levels. There is also quite a big change for the other liabilities. But a big portion of that is also related to timing differences between other liabilities and account payables.

Very good. Thank you. Key financial indicators. I will not go through this in detail. I just want to mention every number of employees that has gone up since 2021. As you can see, mainly in Bangladesh and Portugal. And at the moment, I don't foresee that we will increase the number of employees until the new factory in Bangladesh is ready.

We have increased number of employees in for existing production, both in Bangladesh and Portugal, and we also build up the new factory in Vietnam and so on. So here, we will be relatively stable until the factory in Bangladesh will be ready, which we predict to be in the middle of next year sometime.

Some comments, cautious market in Q1. We talked about a big cash effect. We have talked about -- yes, the proposed dividend is still the SEK 1.50 that we said in the last interim report. We have managed to succeed with the science-based target, something that to be approved here. So that is really good and also good for some of our clients are asking for that.

So we are one of the few label companies that has been approved for this now. So that is really good. And also in terms of marketing that we show that we are a reliable supplier. In Portugal, we have now a new Managing Director that with a long international experience. I'm really happy to announce that, to have that in Nilorn board. Elizabeth, the previous MD is now retiring. So there will be a period of overlapping, but I'm really confident that this new MD will take Nilorn Portugal taking the next step.

So really good on that. Nilorn Bangladesh factory, the new project is ongoing. It's a lot of getting all these designs and so on. So we have the land now, and we have not started with the building project, not yet. So it's a lot of getting all compliance and so on in place.

So not so much more to update on that, but we expect to be ready to move into the factory like in middle of 2027. And then, of course, it takes time until the factory is up and running full. We will -- we have expected half of the investment of this USD 10 million to be machineries. Machineries will be invested, not all at once. We will invest during a period once we get the orders and so on.

So -- but of course, we will need to have a original setup of machineries and so on and start and then we will add on more as the order comes and the turnover start. We have done quite a big investment in the past. Now what I meant by that is that we are really strong in these areas. And we can see that if we compare Nilorn with other smaller competitors, the market is quite fragmented with a few really big players and smaller ones. And this is also why we see that more and more smaller companies are up for sales.

So -- and this is also the demand from our clients. That's also why we're focusing on all this with the specialists and they do both the sustainability, CSR compliance, sourcing material specialist and packaging. So we will have a much stronger offer towards our clients. We increased the production capacity. That is also in terms of higher margin once we will do this, but also in terms of demand from our clients to be a more relevant supplier.

And also in terms of CSR compliance, that is more easy when you have your own production. Market strengthening in the U.S., we now at leaste in Holland, and we are still not employed Chief Commercial Officer. That is something that we will continue to work on. We have quite pick on this one to find the right person here, and we still have not found it. So we're still looking for that.

Consolidation in the market, we want to take place, take part of that. So we are working on that. Here, I showed this also earlier. This is where we were 5 years ago, and this is where we expanded and we have always been strong in design. We have had a strong balance sheet, and we have a strong balance sheet. We can take the next step. We have moved out in the packaging, having in our category management to be able to support and taking that next step.

We have been really strong, moved out in the sustainability CSR employing [indiscernible] units. And I don't know if you've seen, but would give you an advice, look at the Nilorn annual report, where we also have the sustainability report. It's really impressive, I would say, the job we are doing here. We also say quite much about Nilorn and the steps we have taken. Nilörn:CONNECT digital solution, coming back to that a little bit later. Here is the moves that we want to take the coming 5 years. We want to be stronger within RFID. We want to be strong within heat transfer. Heat transfer, we have many clients working with heat transfer in the outdoor industry.

And here, we are not strong in that. We have so much to be done here. And also the packaging will continue to move out digital solution and increase our own production to move that out. And why heat transfer? What is heat transfer. Heat transfer is on the when it's pressed with heat and it's not printed into the textile, we deliver this and it's printed or pressed on the garment in the factory, in the garment factory. So this is heat transfer. And why we have not been strong in that in the past is that heat transfer is a very technical product.

So we need more knowledge in-house. So that -- this is an area if we can make some sort of acquisition. So I think heat transfer will be really suitable for us. We have a client and -- but we are not strong in this. So the synergies would -- as I see it, is good here. Nilörn:CONNECT is our digital solution. And this is something that we -- it's a demand from our client to help and enable them to connect with the end consumers and to fulfill the DPP and legislation within that.

So we -- this is mainly through QR codes and connecting to that. And then we have RFID. It's with antenna inside, as you can see down here, it's an antenna in these labels. And this is more on the logistics side. And this we also have -- this started with the really, really big retailers and then it's moving down for the medium and small clients as well.

So this is becoming much more frequent also for us. And this is that we will -- and here, it's super volume driven and you need to have bigger volumes to have a good margin because it's a quite low-margin product. So here, we will work on getting the bigger volumes in here as well.

I can see the time is running. We're aiming for the operating margin of at least 10%. So that this is what we should get back to. And when we will do that, I think we will look at the cost side, but also once we get more and more in-house production, we will come up here again. Will it be this year or will be next year? I cannot say, but this is clearly a goal for us to work on that. So that was very much on the presentation side. Sorry for rushing at the end, but I see the time is flying, and I have also a presentation for the staff coming up here very soon. Maria, any questions?

Yes. Thank you, Krister. And we have received some questions. Some of these have already been addressed during the presentation. So I will hit the ones that I think are the most relevant and that we haven't discussed so much in detail. So we have received one question about the volumes. And it is, can you raise your volumes significantly by bringing in new customers? Or are you dependent on your existing customers?

Good questions. We are now focusing more and more on the bigger clients and bigger clients getting bigger clients on board. And we have some, but it's -- that is the beauty. The disadvantage with this business, I would say, it takes time to get new clients on board, but it's also very -- the client you have is also very loyal. But we're waiting for getting new clients on board.

At the same time, we're also working on getting a wider range of the product range on the existing clients. So we're working actually on both things. So -- but getting more focus on that, focusing on the big clients and less on the small. We have a quite long tail of small clients, but we are shifting focus now within the group.

Yes. Thank you. We also received a question about the luxury segment. Do you still expect normalizing in luxury during summer?

Good questions, and we see some uncertainty in that. So I'm a little bit more hesitant about that. I think maybe more towards the autumn time now than in the summertime as we predicted in the past.

I see the time is running out, but there are 2 more questions I would like to ask, so we will take these 2 as well. The first one was about the order intake. You mentioned a strong pipeline, but can you give us any concrete metrics on pipeline size and conversion time lines to help us gauge where orders are heading in Q2 and for the half year?

Yes. The biggest impact between the quarters is this the packaging one that I declared that will come in Q2, that was in Q1 last year. It is a certain uncertainty in the market. We especially I think what's going on in the world at the moment, it's not one client. It's more a general trend. But we foresee that we are in the market, and we think that it will come up again here. And we also, as I mentioned earlier, there's a big currency impact on this. But we don't -- no lost client or anything like that. It's more a time lag.

And one final question that I thought was interesting. How are customers reacting to Nilörn:CONNECT? Do the customers want to have their data in your system? Or can it be integrated within the company's own data systems?

Absolutely. Good question, and it is our -- I would say that our is the [ navy ] in the center where we're collecting data from the client system, and we can share with the end consumers, and we collect data from different systems. And so we are not owner of the data. We own all of those statistics and then we package it in a nice way that we present for the end consumers, but also back to the brand owners. So we can take data from different systems, different sources of system. So -- and we will be there in the center helping our client out with this. And also for them to fulfill the legislation, I think it start off very much to fulfill the DPP regulations and then also supporting and for them to have the possibility to talk with the end consumers through the QR code mainly.

That sounds good. And unfortunately, I think that was all for today. But for you, who feels that you haven't really got any answers to your questions, please feel free to reach out to me or Krister, and we will come back to you separately.

Thank you very much for listening and sorry once again for the hassles we have in the beginning. And hopefully, we will be the next time so we can start on time. But thank you very much for being with us. Thank you.

Thank you.

Good morning. Good morning, everybody, and welcome to the Nilörn year-end report. For your information, we will record this presentation. And as usual, together with me is Maria Fogelstrom, the CFO of Nilörngruppen. So we will try to guide you through the last quarter and what we are doing in the group and the expectations here what we're actually working on at the moment.

So here, I share my screen with you. So I hope you all see that now. And that is always is a financial presentation here. Starting off with the order income. It was up 5% in the quarter. And for you who saw this last quarter in Q3, you also remember that we had a big packaging order that affected and that came in Q4 this year instead of Q3 in 2024. So that has an impact of SEK 80 million for the order intake.

So adjusted for that, the order intake is slightly down, but there is also a huge currency effect also in the order intake. We have not written about that for this interim -- for the specific quarter, but we have written about that for the accumulated numbers. So adjusted for the currency effect, I would say that the order income in the quarter is quite breakeven.

Sales was down 6% to SEK 219 million. And also here, we have a huge currency effect. Adjusted for that, it's up actually to SEK 246 million. So we are a very international group. We have all invoicing is done in foreign currency. We have very, very little or minor invoicing in Swedish krona. The remaining part -- or the majority part is in U.S. dollar or U.S. dollar-denominated currency like in Hong Kong dollar, Chinese yen, Bangladeshi taka and so on, and they all follow the U.S. dollar quite well. So when the Swedish krona strengthen up, that has a big impact on the Nilörngruppen.

It is especially on the top line on the sales numbers. As we consolidated, we got sales in local currency and then we consolidated that up to the group in Swedish krona, and that will have -- that has a big impact. Cost-wise, we are quite well hedged. We have cost in the local currency. We have offices and sourcing and so on production in the local countries. But the net effect, the net profit from each country will then be converted back into Swedish krona, and that has an impact on the profitability.

Operating profit in the quarter was SEK 8.1 million versus SEK 19.5 million. And for -- if you remember, in 2023, the operating profit in the quarter was SEK 9 million point something -- SEK 9.5 million, I think. The quarter has had impact both on nonrecurring cost that is -- we're doing some change in the group and taking some costs for personnel staff that affected SEK 3.3 million and also cost for auditing the sustainability report has affected the quarter by SEK 1 million.

And why I mentioned the cost for auditing because that is a new cost that we have not had that in the past. So auditing the sustainability report is a new cost for this quarter. We will -- going forward, that is an extra high cost in '24 depending on setting up the procedures and so on for the auditors to come in. They promised us that the cost will be lower for the coming years, and that we will have to monitor to make sure we get there. So very expensive doing this sustainability report and auditing.

Accumulated numbers, order income is up 1%. And also here, we have a huge impact of the currency effect, which adjusted for the currency is actually up to SEK [indiscernible] million. So a big impact on the currency, also on the order income. Sales remain unchanged. Also a big impact on the currency, and we are actually now above SEK 1 billion if we adjusted for the currency effect. So first time ever, we have been above SEK 1 billion in sales.

Operating profit, SEK 73.4 million also here affected by the weaker Q4 where we have this nonrecurring cost. Nilorngruppen is sensitive in that sense that it is very volume-driven, a quarter with a lower sales also impact the operating profit quite much. We have the cost in the group and lower volume means lower gross profit means lower operating profit. And it's -- as always, it's a mixture of open the throttle and pushing the brakes. So it's a balanced act to make this work and because we want to make sure that we are strong in different areas in the future. So I'm coming back to that as well in the presentation here.

We see that the outdoor industry continue to go well. And I think it will continue to do so, also looking at the good winter we have. Luxury segment is still weak, and that is especially some client of us that has too much stock and their expectation is that, that will come down in the middle of half year on this year in 2026. There's still some uncertainty in the market.

And one effect that has impacted Q4 is the Chinese New Year. Some might say that Chinese New Year comes every year, and that's correct. This year, it's quite late though. It is now -- it's starting up now the 17th of February, Chinese New Year in 2027 -- in 2026, sorry, and in 2024, it was actually in the end of January. So that also has an impact on the calendar effect.

Operating margin for the quarter is 2.3%, also including the effect for nonrecurring and so on. Split by product group. Just want to mention here the tax also in this slide here. Tax rate was 29% in the quarter. Accumulated is 25%. Nilörn, we are in a quite low tax countries. So many of them are quite low tax, but we also in some high-tax countries. So it's depending on where we make the profit. So if it goes up and down. There was also some dividend contribution tax, especially from Bangladesh, where we take out as we did in the Q4 here, a big dividend payout from Bangladesh that also has an impact on the tax.

Split by product group, not so much to say about this. I just wanted to inform RIS, what we call here is retail information services. That is all the variable data care labels, price tax, care instructions and so on. That stands now for 31% of our total turnover. You also have here RFID and so on.

Packaging, it's all sort of packaging. It is boxes for underwear. It is recycled poly bags, et cetera. So that now stands for 17%. That is also an area that we continue to spend the resources in, and we see big potential in that area. I will come back to that later on.

The quarterly income, we can see that the sourcing and production, the gross margin looked over time has gone up. That is also very much depending on that we're now getting more and more own production and then we should see that. And also that we have strengthened up our sourcing team. Operating cost here is also included the nonrecurring in Q4 and the operating margin where we have as a goal and you who has been with us for some time know that we used to be between 10% and 12% operating margin.

And then during '21 and '22, we were up to 60%, 70% very high. And we have come down here and the Q4 was 3.7%. The goal is still to be back to 10%, 12%. And absolutely, now when we increase our own production, that is the minimum we should add for. But as I said, it's a give and take. We have done quite many investments. We need to make sure that they take -- contribute to the group. And I will come back to all the efforts we have done. And I think that is the right thing to do even though you cannot see that in the number at the moment, in this quarter at least.

Quarterly comparison, same thing here, but as a graph, you have the Q4 numbers in the past, it was always Q2 and Q4 that was the strongest. That has changed over time. So it's much more even out now. And the quarterly comparison of the operating profit. Balance sheet, still strong equity, and you can see the proposal of dividend is to make the same dividend payout as last year, which means that we will keep a strong balance sheet with a strong equity. That is also good as we are now doing some quite big investment in Bangladesh and Portugal. And for the factory, coming back to that as well.

Cash, you can also question why we have so much cash in the group. It is -- we are in so many countries, we are like in 19 countries and in countries where it's not that easy to take money in and out on a daily basis like in Bangladesh. We take out dividends several times there. We had a big dividend payout in December for Bangladesh. But in total, when it adds up, it makes quite some money.

Here, I want to mention the equity. As I said, we are -- to being a relatively small company, we are super international. We have so many subsidiaries and most of the business sales and so on outside Sweden. And so we have a big impact on the equity. As you can see here, SEK 38 million of the total equity has decreased in equity. And what that comes from is when we have equity in these countries and when we consolidated that back to Sweden, the equity in Hong Kong dollar, for example, will be less in Swedish krona. So that is a pure translation effect when we converted equity in the different currency back to the Swedish krona, and that has a big impact on the group.

We have here financial indicators. I will not go through them all. I just wanted to see here the average number of employees. As you see, we increased a lot here when we -- especially in production, especially in Bangladesh and in Portugal, we can now see that here is quite stable and not increasing that much any longer.

Just a summary for the group here. We're more cautious in Q4. We have had a big currency impact one-off cost, proposed dividend is SEK 1.50 per share, keeping up a strong balance sheet. We have been approved for a science-based target initiative, which is a very positive thing for us as a group and also a strong message to our clients that we are good in this area.

Portugal factory, we continue to invest. We have done a restructuring of the company -- not restructuring of the company, but the change of the layout in the factory and preparing that for the lean. And we're doing the same in Bangladesh, also changing the existing factory for the lean and also the big project operating -- building the new factory. What we have done is that we are now taking the land, bought the land and what currently doing is working on design and so on. So there's still expectation for the new factory in Bangladesh is to be ready in Q2 2027. So still time to go there.

Other investments we have done on our transformation journey is we have not only in this quarter, but I mean in the last 4, 5 years, we employed people within sustainability CSR. We now have that team in many countries. We have a compliance specialist materials, specialist and packaging and all these CSR and that is supporting the clients being part of that and making sure that we can be a reliable partner on their journey, on the client's journey and being a reliable supplier to them.

Packaging, we have hired a packaging specialist in the group, supporting sales so we can sell -- and this is, as I mentioned earlier, underwear packaging and luxury packaging and so on to the client, but also recycled poly bags.

Production capacity, we continue to increase, especially in Bangladesh and in Portugal. We have increased geographical expansion in Vietnam and Sri Lanka, both countries in 2025. We talked about digitalization and Nilörn:CONNECT earlier RFID, heat transfer and packaging is area that we're now focusing on areas that we have not -- traditionally not been so strong in, but we see big potential here. We have the client and the packaging, we already started in by hiring a packaging specialist, but we see to do the same in these 2 areas. I will come back to explain to you what also -- what heat transfer and RFID, what they are actually.

And marketing strengthening what we have done there. We employed in 2025, 3 new salespeople in U.S. So now we have total 4 person in U.S. We have established a subsidiary in Holland and recruited [ Martin ]. He is an experienced person from the industry and knowing the Dutch market and the nice brands that are in that market. We're currently recruiting a Chief Commercial Officer to the group to help out because we are in many countries, we have many small companies, and we want them to be and to get the support from group that they deserve and so not invent to be more efficient and to be more powerful towards the client. So I think this will be a super welcome role to the group and will put -- will help us building the group even stronger.

We see consolidation in the market is still going on, and Nilörn wants to take part of that, as I talked earlier, that also we have put much more effort into this than we have done in the past and we have the strong balance sheet. So if and when opportunities arise, we have the opportunity to take part of this. I showed this earlier, and this is areas that we have moved in to strengthen our efforts. And what we're now looking into for the coming -- that was what we have done in the last 5 years, and this is what we will focus on the coming 5 years now, is to be much stronger within RFID, much stronger within heat transfer, much stronger within packaging and a digital solution.

And heat transfer, just for you who are not sure what that is, that is a transfer that is put on paper or in this case, some plastics that is then pressed through heat into the garment and that put on example this area like a jacket. And as you know, outdoor business is a big business for us. And we have the clients. So we think by being much stronger in this area, we can contribute with a lot towards the client. So that's an area we are working on.

Nilörn:CONNECT that is our working name for all the digital solutions we have towards the client, where we have this with the QR code and where we have a system where they can scan the QR code, the end consumer can scan the QR code, and we have a system behind where they can get all the information, the end consumer can see and get the information behind the garment. And why we're doing that, this is a legal compliance, especially product -- digital product passport that is coming, EU Fiber Directive and other local regulations. This also enables our customers to have repair, resell, recycle for the government to have information through that, but it's also consumer engagement. They can communicate with the end consumer, drive sales, create loyalty and acquire new customers.

Another digital solution is RFID. In the beginning, it was -- that has been going on and developing for quite some time. And in the beginning, it was mainly the really big retailers working going for this. But we see more and more now -- more and more clients demand for this. It's quite price driven, but it's a must to support our clients because they want to go into this area. And this is -- you can see on this label here is a QR code, but it's -- and also RFID. And RFID here you see here, it's a chip that is in the label that you cannot see, but it's in there, but you can scan it. And it's more for logistic purpose. So when the brand owners, they know exactly how much they have on stock and so on because you don't need to count them one by one. You can just go in with this scanner and scan and then you know how much you have on stock.

Financial targets. We have said that we -- the growth should be above 7% over time and operating margin at least 10%. This year 2025 was no growth at all, except if you -- depending on the calculating in the local currency or not an operating margin of 7.8%.

Good. Now I will stop to talk here and see if we have any questions, Maria?

Thank you for the presentation. I would like to start with other valuable insights. And actually, we haven't received any questions at all this time.

Okay. Okay. That was good. Hopefully, it was really detailed so you understand. And of course, we are here and to ask you -- to answer any questions over time. So don't hesitate to e-mail or call later on if any questions. Thank you for participating and being part of this presentation. And looking forward to see you again after Q1. Thank you very much.

Thank you.

Good morning, everybody, and welcome to the Nilörn Q3 interim report presentation. I know that today is a lot of presentations, a lot of companies. So I really appreciate that you take your time to join our presentation here to myself and in Portugal at our factory here, As you probably know, with the big adjustments in the factory -- uplift in the factories, so here to follow that. So it's an interesting project going on. So I think that will be really good for the Nilörn in the future.

But I'm sitting here on a small laptop, so I think it will work out well. So I will start sharing my screen and put that on presentation.

Yes. Now we start. The Q3, we are quite pleased with the Q3. The order intake here was negative 13%. But if we take into consideration that we had a big packaging order in Q3 last year on SEK 18 million, and that will come now in Q4 instead. That is around 7% of the explanation. We also have another currency effect, explained another 6%. So adjusted for the currency effect and this packaging order is quite flat, in general, then it's a difference between the segments. Luxury segments is still quite weak, though the Outdoor and the other segments are quite strong. So still weakness in the luxury segment, no big improvement there.

Sales, up 10%. And adjusted for the currency effect, it's actually up 18%. I think it's partly -- we had a quite weak Q2. So it is spillover from the Q2, looking at the different months, which was quite strong both in July, August and September. So we're quite even throughout the quarter. And here, we see also in the Outdoor segment and the other segments, but are still a bit weaker in the luxury segment.

Operating profit, SEK 26.3 million versus SEK 15 million last year, and that gives an operating margin of 11.4% in the quarter. And as you probably know, the goal has been [ over is ], should be between 10% to 12% is the a goal we have set. So we this quarter, we target that.

Looking at the P&L here. Also, we have a quite strong currency impact on the whole P&L and not only the top line. As you know, most of our business is handling outside Sweden. In Sweden, it's mainly sales companies but we don't do any invoicing from Sweden at all. And then we have the headquarter costs. So we have some costs in Swedish krona, but the majority and all the invoicing is outside Sweden,

Yes. And what I want to say more here is also looking at the tax rate, tax rate for the quarter is 24.6%, and that is in line also with the accumulated number. We'll see what happens with the tax rate in the fourth quarter. It's always adjustments, and everyone is doing proper calculation, really the calculation of the tax. But we do think it will be in line with this 24.6% also for the full year.

Personnel costs, it's quite been stabilized now on this level, I would say, also currency impact on this level and other external costs. I'll come back to that a little bit later.

Split by product growth, not so big difference compared to last year. It's mainly in packaging. That has gone down and it's contradictory to what we do now. We're putting quite a lot of effort into the packaging. And the reason why packaging was cut down here is that due to the luxury segment, as we still have quite big packaging delivery to the luxury segment. But they are overstocked, so it will take some time. So I think it will take like in mid 2026 until we are back into normal deliveries for the luxury segment in packaging.

Looking at the quarterly income statement and the gross margin. Normally, the Q3 is a quite strong gross margin and also this quarter, as you can see here, if you're looking at the historical level the reason for that is we have less packaging, packaging has a lower gross margin, and less packaging in Q3 normally and also this quarter. Operating cost is also lower normally in Q3 and also this quarter, and that is due to the holiday. Most countries take holiday in July, especially in Europe. So that's why that has a big impact on the quarter 3.

Operating profit. As you see, it was a strong operating profit this quarter. And as I explained, not only one single month, I think it was strong all the July, August and September. And of course, you have learned Nilörn now, it's very much volume driven. Once we get good volumes in a quarter or in a year, we also get a good profit. It goes a long way down. So we're very much depending on getting volumes.

And then if you look at the similar but in a graph and also is to say that in the past, it was always Q2 and Q4 that was sticking out as the best quarter. Nowadays, we see it very much flat. So it's the change of purchasing pattern from our customers. So they even out much more, buying much more into season and much more shorter lead times. And that makes our pattern different than it used to be.

And here is also following the profitability, just in a graph. And you can see here now Q3, that was quite strong.

Balance sheet. We have a strong balance sheet, an equity level of almost SEK 350 million. And that is good because we're now taking more and more time to search and see for acquisitions and so on. I will come back on that. And we're doing at the moment both a big investment in Bangladesh and also in Portugal, also coming back to that later in the presentation.

Just one raise here as we are a international company, relatively our size, we are in 19 countries and with only the headquarters in Sweden. And therefore, we have a big part of our equity abroad. And that also had a big -- the currency has a bigger impact there when we translate the equity in different countries into the Swedish krona. And this, now in 2025, that's had a negative impact on the equity of SEK 32 million. And of course, in the past, we also have had positive impacts. But now, due to the relatively strong Swedish krona, that has an impact.

Financial indicators, I will not go through them in detail so much. But I just want to mention here, we are almost 700 employees. And as you can see here over these years, we have increased that quite much. That is mainly in the production companies, mainly in Bangladesh, I would say. But also we have invested in the specialist areas where we employ people to be in forefront with the competitors. And we also invested in countries like U.S., also coming back to that later on. In U.S. now we have 4 people.

This one, this is to explain the movement we have done between year 2020 and today. We, by heritage, has been really strong in design, and we continue to be work on that. So design is a strong unique competence for Nilörn. We have in packaging started and done much more here effort. We have a really good collection. We have a Category Manager working with that. And so we're really taking a big step forward in packaging.

Packaging, as I mentioned, we also deliver into the luxury segment. But we're also packaging for sports and for the Outdoor segment. We're talking here about underwear packaging, [ socks ] and so on. So it's not packaging for corrugated standard brown packaging. It's more for undergarments and for luxury segment.

Financial strength. We have had a strong balance sheet for many years, but we even now has even stronger. Sustainability, so our compliance is an area where we have put a lot of efforts and employed people all around the world to build up that, which gives us also -- in the past, we were talking about design. But I would say now sustainability is another core competence that is unique -- and we're not so unique, but for Nilörn, what we push for and where the clients appreciate our offer.

Digital solutions and Nilörn:CONNECT, this one [indiscernible]. We had digital solutions like RFID in the past and so on, but now we're taking even more steps into this. I will explain -- coming back to Nilörn:CONNECT what is that is all about a little bit later. Global deliveries. What I mean by that is that we're setting up distribution companies in new countries like in Vietnam in the last year and also now in Sri Lanka. But also we have setting up a company in U.S. So we're getting more and more international.

Big currency impact both on the top line and in the balance sheet. I'm pleased to say that we are quite well hedged. We match the cost with the income. So we take a country like Hong Kong, We have big income there. And then we have all the costs matching that. And then in the end, we have a net profit. So in different countries, we are matching quite well. But in the end, we have a profit that will be converted back to Swedish krona. And in my example, the Hong Kong dollar will have an impact, as you saw earlier on the equity.

As I mentioned, still volatility in the luxury market. And we see now less uncertainty due to the tariffs. We've learn to live and also, I would say, it doesn't affect us directly. It's more indirect effect. It's our client that export to U.S. that has been affected. And I think the uncertainty is most of that -- I mean, as long as you have the uncertainty, you don't dare to move. But now the uncertainty moves away so it's more a movement in the market.

Operating profit, we mentioned already, Portugal factory where I am at the moment. We have been here in Portugal like in 14 years. So the factory needs an uplift. We looked at moving the whole factory, but we decided to stay. We think there is less risk in that. And we moved out the warehouse to get more space in the factory. And at the moment, we are changing the complete layout inside the factory and to get a much more flow into the factory and also implementing LEAN. So that is good. I think Nilörn Portugal had tough times in 10, 15 years ago, but that is now one of also a competitive edge for Nilörn to have a factory good factory in Europe.

Building for the future, that was where we now employed or built up this specialists we have within the group, where we have compliance packaging materials. And that is supporting sales. So I would say being a salesperson in Nilörn today versus 5, 10 years ago is a totally different story. In the past, we were out selling labels. Now it's all about selling a concept. And the client is much more demanding now as it has been in the past, yes, especially still in areas.

And then the increase in production capacity, here, we also have Bangladesh. We are currently -- I mean, we've got the land now and we're doing soil test. And we are working on that, but it will take some time. And we said earlier that it probably most likely will be ready by end of 2026. Now we say it will be ready, and it's in first half year 2027. We've done geographical expansion, as I mentioned.

We see a consolidation in the market. We've seen [indiscernible] and all the companies are taking part of that. And we also see companies now that are for sale and actively selling, looking at the label market as such. There are a few big players. They are quite -- it's a mid-segment and there's quite a long tail of small niche players that is working in one market or with a few products. And for Nilörn, we come to the stage now that we're putting much more effort into this, and we have a team dedicated to search for this.

And what are we looking for? I think here, we will search for companies that can contribute either geographical expansion in areas and countries where we are that strong in. It could be like France, it could be Holland, it can be Spain. It could be U.S., where we can take a more geographical expansion. Or it can be vertical integrations in areas where we are not strong like in heat transfer or in RFID or in packaging. So we're not sure that we will succeed, but we now definitely take this seriously and put much more effort into that.

Coming back to -- I presented this earlier. There are some new slides. I will just adding quite quick here what Nilörn:CONNECT is about. Nilörn:CONNECT is the QR code that you can see on the jacket here, where we have a system. It is a system behind that is the Nilörn:CONNECT. And it's a QR code and an NFC or RFID.

And why Nilörn:CONNECT? We see three reasons why people want to go into buying Nilörn:CONNECT. One is the legal compliance, the legislation Digital Product Passport, that is here to come. They will come. I would also present that soon here. So this will be a must for our clients.

So this is a headache and that we, through our Nilörn:CONNECT, can be part of solving their problems. Then there are more nice to have for them. We can be part of the trend. Now we see repair, resell, recycle, where you have this QR code and the information carrier. And consumer engagement. They, through the QR code, can have a consumer engagement and communicate with end consumers. And that will drive sales, create loyalty and acquire new customers.

Just the time line regarding the DPP. It has been going on for some years and been a lot of discussions, a lot of preparation. Some clients are in this already, not in the DPP but into the Nilörn:CONNECT and have this providing information to the end consumers about the government and the sustainability. And in 2026, [indiscernible] expected for the first product groups and the first is a period [indiscernible]. And in 2027 batteries, we go for live with DPP at the mid of '27. We expect that the DPP will be full for textile.

And through this QR code, when you scan it. You can have carbon footprint. You can have different certificate they have on the government, production history in the country where it's produced and so on, recycle instruction. All that is within the DPP fulfillment. To the brand owners, we provide them with information. So they can see what countries they have been logged in. You can see how many scans they have had, what garments they are scanning. We can see if they have a QR code outside the jacket and inside the jacket and they see the difference how that is scanned.

So we also provide information to the brand owners. And like this, they can see [indiscernible] is scanned. And also what we have been working on is an AI now tool talking to the product. And it's when you're scanning the QR code, you get to that page where you can write and communicate through an AI tool and ask questions. I got this spot on my jacket here, how should I remove that and so on. And that we also do in cooperation with brand owners. So we make sure that we provide the information that they want. We can go out widely in the Internet or we can just provide in their database and provide information that they have in their database.

And this, you have seen in the past, the financial target and so on for Nilörn. Yes, we should achieve 7% growth with an operating margin above 10%.

Yes. I will stop sharing this, and coming back to you and see here -- and Maria's also with me, I forgot to mention at the beginning, Maria, the CFO for Nilörn. And Maria, do we have any questions for us?

Yes. Actually, we have only received one question. And that is the question about the sales split between outdoor and luxury, the percentage for each segment.

Yes. outdoor still the biggest, absolutely biggest. Luxury segment, we started off with a few years ago and we see that the luxury segment is coming and we think we can do much more there. And the split here, I don't have the exact numbers, but I would guess that the outlook is between 25%, 30% and luxury is between 5% to 10%.

But what's interesting with luxury is that we can do much more. Luxury is in the country is France, it's in Italy, Outdoor is mainly in -- and Outdoor, I would say outdoor sport, it's mainly in Scandinavian countries, in Germany and in the U.K.

Thank you for that. Now we received some more so I will continue here. So we also got a question about the EBIT. Could you elaborate on how much of the EBIT that comes from operating leverage and how much that is due to recent efficiencies?

I think most is -- I mean, as I mentioned, the volume is met a lot. I talked also last time, we intend to do cost savings. We have a program here. We have not launched all of that yet. And cost is -- but we're also taking on cost here, moving into the countries and so on. So for me, this quarter is volume driven, I would say.

And continuing on the cost savings because actually, we got the question about that as well. And the question is you previously commented on reducing your cost base in Turkey and doing a similar analysis on other parts of the group? Do you have any updates on that front?

Absolutely. We have done that in Turkey. So that is being implemented and fully -- and we are now working on other countries. And this is partly also that we are moving now volumes from a country like Hong Kong, China into Vietnam and Sri Lanka. So that's a moving cost. And at the same time, doing cost savings. And so that is mainly in the Asian area but partially also in Europe. But at the same time, we're also taking on more and more employees in new assets. They are expensing and so on. So my goal is that we can be more clear on that once we have done the instruction that we are in the middle of.

Thank you. And now we got a question about the outlook for 2026. Has anything happened during the quarter that changes your view of the market outlook for 2026, specifically regarding different product groups?

I cannot say. I think it's nothing new regarding the product group. I hope and think that luxury segment will be back in the swing again, but I think it will take until mid-2026. For other product, I don't see any major change. Not the cities at the moment, at least. We had, as you know, the Outdoor obviously peaking due the pandemic, and then it was really bounced back. But that is back to normal now.

Thank you. And the last question that we have received is, are there any ongoing discussions to include segment reporting in the quarterly reports?

Segment and maybe qualify what -- because we do segments reporting in the interim report with country-wise. But I assume here is more on group levels, isn't it?

Yes. I would say.

Absolutely, that's a good point, I think. That is something that we should consider maybe and see what we can do there. We have not done that in the past but it's a good point.

Thank you. And that was all of the questions we have received.

So good. Thank you very much for participating today. I know that's a super hectic day with a lot of companies presenting. And thank you very much, and have a great weekend. Thank you.

Thank you.

Good morning, everybody, and welcome to Nilörngruppen's Q2 Interim Report Presentation. And as usual, we will record this presentation and share later on our website. So I hope that is okay with everyone. And together with me today is Maria Fogelström, Nilörngruppen's CFO.

So I will start sharing my screen. Yes, Nilörn Q2 presentation and starting up with the financial performance of the quarter. It has been a quarter with ups and downs. So coming back to that a little bit in the reporting here. First of all, the order income was down 1% in the quarter to SEK 205 million and the sales was down 10% to SEK 237 million. It's a big currency effect in the quarter, spanning SEK 24 million or 10%. It's a big impact of the currency effect. And that is, as you probably already know, by this stage that all sales are outside Sweden. We almost -- it was nothing in Swedish krona. Everything else in U.S. dollars, Hong Kong dollars or in euro and other currencies, Turkish lira and so on. But all our invoicing is done outside Sweden.

It has been a quite volatile market. We have seen still a comeback on the Outdoor segment going really well, but the Luxury segment is suffering. And for Luxury segment, they are mainly in the packaging the luxury segment, that they can also be seen in the different categories that we are selling.

We've also seen that the European clients are a little bit hesitant, especially the clients that are exporting to U.S., due to the tariffs and uncertainty in the market. And some clients are more cautious. That means that they are placing the orders later in the season to be more safe. So we also see a change in the ordering pattern to be more later in the season.

We also have had in the quarter a few clients that have gone into administration. So we've been cautious and made provision on that. And all this has been affecting then the operating profit. So this quarter operating profit was SEK 16 million compared to SEK 25.6 million last year same quarter. We continue to doing investments, but I'm coming back to that to show what kind of Nilörn we are building going forward and the strength that gives us in the future.

Accumulated numbers. Order income (sic) [ intake ] up 7%, was a really strong order intake in the Q1, as you remember. Sales down 1%, and adjusted for the currency effect, the accumulated sales is up 3%. Operating profit, SEK 39 million versus SEK 48 million. And why it's so big impact in the currency effect is that in the profit and loss, you calculate the currency effect with the average rate. And what happens in the end of Q1 was that the Swedish krona strengthened a lot, but the impact of the Q1 was low due to the way they calculated.

It's calculated with an average of -- so even though the Swedish krona strengthened at the end of Q1, the impact was low. But as also mentioned in the Q1, there would be a big impact in the Q2, which we have seen as well. So even though there would be no turnover at all in one quarter, and the whole P&L is recalculated based on the average currency effect of that quarter, and as I mentioned, as all turnover and so on is outside Sweden, that has a big impact when the Swedish krona strengthened.

Here's the P&L. And you can see that gross profit is strong -- still strong. The gross profit is a mixture for Nilörn, but I must say that our sourcing operation has done a good job. We set up a global sourcing team since 2020, built up that. That means that we are much stronger now when we have global tenders. Instead of each local sales companies going out and doing the sourcing, now we have a global tender sourcing, so much stronger and that impacting and making sure that we have consistency in pricing and so on with the different sites, but also impacting the gross profit makes the product group and the clients. So product group like packaging and so on has lower margin, and other programs has higher. So it's also a different product mix that affects the gross margin.

And then the third one that affects the gross profit or gross margin is own production. The more own production we have, the higher gross margin and, of course, higher investments and so on. So there should be higher margin on that one. And as you know, the big 2 sites we have production is Portugal and Bangladesh, and those are going really well.

We can also see that personnel cost has gone up in relation to total sales and that also depends on the own staff that goes in own production here. We increased the staff a lot in Bangladesh, but also in Portugal. We're also going into new countries like Vietnam, where we now have 22 employees, relatively low production so far, but it is to come. And here is, when you're moving, as we are doing now, moving volumes from one country to another, we're moving from China, Hong Kong, into Vietnam and other countries. That takes time also to adjust the cost, because we increase in one country and it takes time until we decrease in other countries.

We also employed people now in U.S. So coming back to that also, I think we have seen a really nice trend in U.S., and therefore, it's worth investing more in that to ride on the trend there. We are now 681 staff. So the number of staff has increased. But as I mentioned, the big number of increase in number of employees is in Vietnam and in Bangladesh.

Tax rate is 24% for the quarter, and that is depending on the different countries where we make the money. We are in so many countries and some are high tax and some are very low tax. So this is a mixture. And this is booked tax, and at the year-end, we will see the actual tax rate coming up.

[ Distribution by ] product group, '24 and '25. And as you can see here, packaging has gone down from 21% to 18%, even though packaging is an area where we spend resources now and we think there is a good potential for Nilörn growing. As you remember, we have now our own packaging manager for the group, and we see big efforts going in here, though the packaging is going down. And the reason why packaging goes down is linked to the luxury market where we have big sales in packaging. And that is not that we have lost any client or anything like that, but it's just that they are overstocked. So we've been told that it will be slow this year for the luxury market, and it will come back 2026.

Gross margin, as I mentioned, has gone up. So we see quite strong gross margin, but the operating margin is not that strong. The aim is that we should be back on 10%, 12%. That is the goal. And so we will look into that. We've done some investments, coming back to that later. And so the aim is to be back here at 10%, 12%.

Turnover-wise, slightly lower turnover, as you already know now about the numbers, but also here in the graph for the Q2. We can also see the trend that in the past, always Q2 and Q4 was the strongest. Now the trend is that it's even out very much. And that is due to the change of ordering pattern. So it's the seasonal change and that also the quarterly comparison of the operating profit. And here we can say that, I mean, volume is important, volume matters. If the volume goes down, the profit follows with that. So we have the cost now for the different departments and so on. So when the volume comes, we also see a big increase in profit and vice versa.

Balance sheet is strong. As you know, we have done -- the dividend this year was quite low -- relatively low compared to what it used to be. And we are now being prepared to doing the investment in Bangladesh. We got now everything formalized to take over the land in Bangladesh, so that will be the next step. So the investment in Bangladesh will start from now on. And the goal is to have the Bangladesh production up and running end of 2026.

Also here in the equity has a big impact of the currency translation differences during the year, SEK 28 million almost. That is from -- yes, all the equity we have around in the group. When we convert that into the Swedish krona, we get less than we would get in the past due to the strong Swedish krona. So this is just translation differences. But I just wanted to show you that it has a big impact on a group like Nilörn, where we are in 19 countries international.

Key financial indicators. In the bottom here, you can see the number of employees. We are now at 681 from year 2020, where we were 500. So we increased quite a lot. That is, I would say, mainly number of employees is in Bangladesh here. We increased also in Portugal and in other countries as well, but the main is in Bangladesh, and also mentioned like Vietnam.

As a summary of what is said in the report is that as predicted in Q1, big currency impact, as we knew that at the end of Q1 that was a big -- the Swedish krona strengthened, but that was not seen in the P&L as much at that time, but that has now come. And volatile market. Luxury is down, but the Outdoor is still strong. Uncertainty due to tariffs, a couple of clients in administration. We don't see -- we still see strong sales in U.S. for U.S. clients, and that's why we spend even more -- doing more investments now in staff there, but we see uncertainty from European clients selling into U.S. Operating margin of 7% in Q2. The goal is, as I mentioned, 10% to 12%. So 7% is below what we are targeting towards.

We've done in the quarter cost savings in Turkey. Turkey is a country where we still have a super-high inflation, even though it's coming down, but it's still very high. And then there's a market that we have been suffering and also the whole textile market in Turkey is suffering at the moment. So we decided to size down in Turkey in order to save cost.

The concept, and we have seen this and we're building it for the future. It's all about selling a concept. In the past, it was all about selling a label. Now it's so much more about supporting clients in CSR, in compliance, new material for packaging and so on. So it's so much more nowadays than only selling label.

So what we see is that the small players have tough in the market and all the big players are gaining. We've done investments to be in the forefront, but it's also, as you can understand, important for us to monitor on the cost levels. And here is some areas where we've done big investments in.

Bangladesh factory, as I mentioned, we now signed a contract, and that we'll be starting now to do all the groundwork and architect and so on. So that is really good, and we've reached an agreement. We have taken a long time to go through the agreement for the land, but now we are finally there to be signed within a week or 2. Portugal factory, we're going in for the LEAN production. We're also expanding with more looms and moving out their warehouse to get more space in the factory. So that is also going according to plan.

Expanding in U.S. We employed initially 2 more people in U.S., and now this quarter we also employed a third one. We think we find the right people, also catch the momentum there. And we have a momentum in U.S. We said that -- we decided that this is the moment where we should expand. We know that it's not cheap. It's quite expensive in U.S. to expand, but we think the market is huge. So we have so much more to be done there. Sri Lanka, we signed up and just employed persons there to set up. It will be a very small operation in the beginning, but we need to be there to serve our client, client that now going into Sri Lanka as well.

The Nilörn:CONNECT. We've done quite big investment in Nilörn:CONNECT. I will just show you a few slides about that. It is the door opener for the client, and it will be supporting clients on the DPP journey. Production is still strong and Nilörn is well equipped to handle both challenges and opportunities. So for us, it's a matter of opening the throttle and also pushing the brakes at the same time, finding where we should invest in.

See the time is flying, but I will just mention here for you. I've mentioned this in the past, but I want to make sure that you understand the Nilörn:CONNECT. And we see the 3 different areas. One is the legal compliance where we support the client now, where the client has a challenge and where we can support them. The other one is circular solutions, repair, recycle, to be more sustainable. And the third one is the consumer engagement to drive sales where they can have a loyalty program and acquire new customers through the QR code and so on. So this is an area where we have invested quite a lot in. I think we are there. We don't need to invest that much, but it is for us a really good door opener to be and getting a reason talking to the client.

Yes, the financial targets, yes, it's still the 10% to 12% operating margin. We are aiming to come back to that.

Good. I see the time is flying, Maria. And do you see -- do we have any questions?

Yes, we have received 2 questions. I think we can take them. The first one is, could you please provide some color on the clients that have entered restructuring? Which segment are they related to and which countries are they from?

Yes. Of course, we don't release any clients' names and so on. It's in the U.K. market, and it's also in Germany. And yes, it's brand owner and retailer.

Yes. And the second question is, does the market momentum for packaging versus other product groups differ?

It differs. And I think here the beauty with the packaging is that we have the client and we are selling very little packaging. Can we be strong here? We're talking to the client and we can help them also with the packaging area. But the momentum in general for packaging is that -- the reason why we suffer for -- packaging was lower is mainly due to the Luxury segment where we have been selling quite a lot of packaging, and that has decreased now in this quarter. Not that we have lost any clients, but it's a slowdown, and we expect that to come back again in 2026. So for us, I think packaging is a nice area for us to expand in. And instead of just chasing new clients, we can also add packaging into that. So that is a good view for us, good momentum, I would say.

Thank you. And as we are running out of time, I think we'll have to leave the questions there.

Very good. Thank you all for listening. Thank you, and see you next quarter. Thank you. Bye.

Thank you.