2023 was a subdued year for Nilörn, as shown in the Q4 report.
The results were driven by an oversupply of clothing, as purchasing managers ordered excessive inventory due to the COVID-19 era and supply chain difficulties. This meant that Nilörn, which is further upstream in the value chain, did not accumulate orders as it had in previous years. However, things are moving in a better direction. Free cash flow was strong at 71 million SEK, as inventories were successfully reduced (orders were fulfilled from stock).
In previous analyst calls, the CEO has spoken of 2019 as a benchmark for the company’s business, as according to him, 2021 and 2022 were better than usual. Companies can have certain “sweet spots” where the scale of business is at an optimal level from an organizational structure perspective. This has also been highlighted in the company’s annual report. However, the surprise in the latest report was that the board has given the green light for capacity investments in growth markets: Bangladesh, Portugal, and Vietnam. For this reason, the dividend was also cut to one SEK per share. Nilörn does not finance its operations through share issues.