Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Order income increased by 24% in the quarter, driven by a bounce back in the outdoor and sports brand segments.
- Sales rose by 14% to SEK262 million compared to SEK230 million in the previous year.
- Operating profit significantly improved to SEK24.8 million from SEK12.7 million last year.
- The company has a strong equity position and reduced interest-bearing debt, leading to lower interest costs.
- The Nilörngruppen AB's digital platform, Nilörngruppen:CONNECT, is gaining traction and supporting clients with EU legislation compliance.
Negative Points
- Personnel costs have increased due to higher employee numbers and salary increments, including bonuses.
- Net financial income decreased to SEK872,000, primarily due to currency loss effects.
- The luxury segment showed weaker development compared to previous strong performance.
- Cash reserves have decreased slightly due to dividend payouts and debt repayments.
- The company faces challenges in predicting the exact timing of order income realization between Q3 and Q4.
Q & A Highlights
Q: Did you mention in the last report that you expect a recovery in sports and outdoor in Q3 2024? Would you say that this still applies?
A: Yes, as I mentioned, the strong order income we see now in this quarter is mainly a bounce back from the outdoor and the sports brand, and that will take effect here in Q3 and Q4. It's hard to predict whether it will be in Q3 or Q4, but the order income will most likely turn up.
Q: The order intake appears to continue to normalize. Is this mostly due to sports and outdoor clients?
A: Yes, I would say so. The outdoor and sports brands are coming back, which was predicted in the past. However, the luxury segment is not as strong as we have seen previously.
Q: You wrote about a weaker development in the luxury segment. Do you expect there to be as much volatility in the luxury segment as there has been in the sports and outdoor segment?
A: No. The volatility in the outdoor sports brand was very much dependent on the pandemic. During the pandemic, there was a strong demand for sports and outdoor brands, which has now normalized. I don't predict the same volatility in the luxury segment, which has been really strong for us.
Q: The gross margin was quite strong this quarter. Was there less packaging in your sales mix this quarter?
A: Yes, if you compare to Q2 2023, there was slightly less packaging. This is very much dependent on the client and product mix.
Q: Could you explain a bit more about the bonuses impacting the costs in the quarter? Are these to be considered one-offs or something that will continue as long as sales remain strong?
A: The bonuses are correlated with high performance. As long as we perform well, the salary level, including bonuses, will continue on a higher level. It's hard to predict the exact impact, but it is tied to the performance of the group.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
