Release Date: July 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nilorngruppen AB (LTS:0GB5, Financial) reported a strong gross profit, attributed to effective global sourcing operations.
- The company has seen a positive trend in the Outdoor segment, which continues to perform well.
- Investments in the US market are yielding positive results, with increased staffing to capitalize on market momentum.
- Nilorngruppen AB is expanding its production capabilities, particularly in Bangladesh and Portugal, which are performing well.
- The company is strategically investing in Nilorn:CONNECT, enhancing client engagement and offering circular solutions.
Negative Points
- Order income and sales have decreased, with sales down 10% to SEK237 million.
- The Luxury segment is underperforming, particularly affecting the packaging product group.
- Currency fluctuations, particularly the strengthening of the Swedish krona, have negatively impacted financial results.
- Some European clients are hesitant due to market uncertainty and tariffs, affecting order patterns.
- Operating profit has decreased to SEK16 million from SEK25.6 million in the same quarter last year.
Q & A Highlights
Q: 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?
A: We don't release any clients' names, but they are in the UK and Germany markets, specifically in the brand owner and retailer segments.
Q: Does the market momentum for packaging versus other product groups differ?
A: Yes, it differs. The packaging segment has been impacted mainly due to a slowdown in the Luxury segment, where we have been selling a lot of packaging. However, we expect this to recover by 2026. Packaging remains a promising area for expansion, allowing us to add value to existing client relationships.
Q: What are the key factors affecting the operating profit this quarter?
A: The operating profit was affected by a significant currency impact, a volatile market, and a few clients entering administration. Additionally, there was a change in ordering patterns, with clients placing orders later in the season.
Q: How is the company addressing the challenges in the Turkish market?
A: We have implemented cost savings in Turkey due to the high inflation and challenges in the textile market. We decided to downsize operations there to manage costs effectively.
Q: What are the strategic investments being made for future growth?
A: We are investing in expanding our production capabilities in Bangladesh and Portugal, and increasing our presence in the US and Vietnam. Additionally, we are focusing on Nilorn:CONNECT to support clients in compliance and sustainability, which serves as a door opener for new business opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.