Nilörngruppen — Interim / Quarterly Report 2021

Feb 9, 2022

Year End Report for Nilörngruppen AB (publ) Q4, January - December 2021

Period October - December

• Order bookings increased by 12 percent to MSEK 211 (189).
• Revenue increased by 35 percent to MSEK 234 (173).
• Operating profit amounted to MSEK 40.1 (21.2).
• Profit for the period amounted to MSEK 30.3 (14.5).
• Earnings per share amounted to SEK 2.66 (1.28).

Period January - December

• Order bookings increased by 32 percent and amounted to MSEK 864 (653).
• Revenue increased by 28 percent to MSEK 788 (618).
• Revenue adjusted for currency effects amounted to MSEK 824 (618), i.e. an underlying organic increase of 33 percent.
• Operating profit amounted to MSEK 119.6 (50.8).
• Operating margin amounted to 15.2 (8.2) percent.
• Profit for the period amounted to MSEK 87.4 (33.5).
• Earnings per share amounted to SEK 7.67 (2.94).
• Net cash excluding IFRS16 amounted to MSEK 75.1 (24.8).

Significant events after the quarter

• The Board of Directors has decided to propose to the Annual General Meeting a dividend of SEK 5.00 (2.00) per share, equivalent to MSEK 57.0 (22.8).

CEO'S STATEMENT

Dear Shareholders,

The trend has remained strong and the fourth quarter also developed in the same direction. For the year, both sales of SEK 864 million and operating profit of SEK 119.6 million are clearly better than the previous record year, where we had sales of SEK 715 million in 2019 and in 2018 had an operating profit of SEK 85.2 million.

The positive earnings trend, where we have now achieved an operating margin of 15.2 (8.2) percent, is attributable to higher sales and thus also a high utilization rate in our own production. There has been a positive development among many of our customers in sports and e-commerce, but retail customers are also doing better. This relates to most markets, but there has been a particularly positive development for our companies in Sweden, England, Portugal and Germany. In Portugal, we invested in increased production capacity a couple of years ago and are now benefiting from more and more customers moving their purchases back to Europe for more local production driven by costs and sustainability.

The business in Bangladesh has developed strongly where our own production that guarantees quality, availability and sustainability has given us a competitive advantage. During, the year, the factory has had a high capacity utilisation, which have resulted in efficient production and strong results. We also have a positive development in our own production in Hong Kong, England and Portugal. The positive development in our own production facilities has strengthened the gross margin while we have seen sharply increased raw material prices, freight and energy shortages.

Managing the situation, from a major downturn in 2020 to an unexpectedly strong recovery in 2021, has been challenging for the entire organization. At the same time, we have strengthened our CSR team further, built a new purchasing organization, hired expertise in compliance, started a new Material Team, developed digital products and continued to develop our IT systems. All these areas are closely linked and together they contribute to increased efficiency and to achieve our sustainability goals.

Our digital focus has made us more efficient through increased internal training, strengthened information sharing and less time spent on travel. This has led to increased efficiency, flexibility and level of knowledge, while achieving costsavings and reducing our carbon consumption.

Net cash (excluding IFRS16) amounted to SEK 75 (25) million. We also have approximately SEK 120 million in external bank credits, so despite the proposed dividend of SEK 5 (2) / share (a total of SEK 57 million), we are strongly equipped for the future.

We invests even more resources in strengthening sustainability work with the goal of "becoming the best in class". It is a comprehensive program of work that requires both time and resources, but I am convinced that the improvement measures we are implementing will strengthen us for the future and that Nilorn will continue its positive trend.

Krister Magnusson CEO

Period October - December

Order bookings

Order bookings increased by 12 percent to MSEK 211 (189).

Net revenue

Revenue increased by 35 percent to MSEK 234 (173). Several new customers during the year contributed to high sales, where an early Chinese New Year 2022 has also had some impact. Currency effects were marginal during the quarter.

Gross margin

The gross margin was 45.4 (44.1) percent and has been positively affected by Nilorn's own production, which had a high utilization rate. At the same time, we are now increasingly affected by increased freight costs, increased raw material prices and energy shortages in China.

Costs and depreciations

Other income amounted to MSEK 4.8 (5.4) of which MSEK 2.3 last year was attributable to government contributions for furlough in Europe and Hong Kong. The external costs increased to MSEK 19.4 (16.1) and personnel costs increased to MSEK 42.9 (36.2). Last year, personnel costs were lower attributable to voluntary reductions in working hours and this year's personnel costs have been negatively affected by more employees and higher provision for bonuses. Depreciation increased to MSEK 7.0 (5.8).

Operating profit

Operating profit amounted to MSEK 40.1 (21.2), for an operating margin of 17.1 (12.3) percent. The higher operating margin is an effect of higher sales and thus better efficiency in the Group, despite higher costs for bonuses, freight, raw materials, energy, etc.

Net finance items, taxes and profit for the period

Net finance items amounted to MSEK −1.2 (-1.0). Taxes paid amounted to MSEK −8.6 (-5.7) which gives an average tax rate of 22.1 (28.3) percent. The period's profit amounted to MSEK 30.3 (14.5) and earnings per share amounted to SEK 2.66 (1.28).

Cash flow, capital expenditures, financing and liquidity

Cash flow from operating activities amounted to MSEK 18.4 (23.3). Cash flow attributable to inventories was SEK -21.7 million, which is partly a function of building up inventory for a number of new customers.

Cash flow from investment activities amounted to MSEK -3.0 (0.3).

Equity

Consolidated equity amounts to MSEK 278.2 (209.8). The increase is attributable to the profit in the amount of MSEK +87.4, paid out dividend of MSEK -22.8 and the period's translation difference of MSEK 3.8. The translation difference is the net effect of conversion of equity in the non-Swedish subsidiaries to SEK and has been negatively affected by a strengthening of the Swedish krona.

Period January - December

Order bookings

Order bookings amounted to MSEK 864 (653).

Net revenue and profit

Net revenue increased by 28 percent to MSEK 788 (618). Net revenue adjusted for currency effects amounted to MSEK 824 (618), i.e. an underlying organic increase of 33 percent. The gross margin was 46.2 (44.0) percent.

SEK has strengthened during the year compared to all currencies related to Nilorn, which has had a major impact on the turnover for the year. However, the Group's revenue is met by costs in each respective currency, which minimises the effect on profit.

Other income amounted to MSEK 11.9 (19.1) of which MSEK 12.3 last year is attributable to government contributions for furlough in Europe and Hong Kong. External costs decreased to MSEK 62.0 (62.7). Personnel costs increased to MSEK 163.9 (146.6). The increase in personnel costs is attributable to more employees and increased bonuses.

Depreciation remained unchanged at MSEK 25.9.

Operating profit amounted to MSEK 119.5 (50.8), which translates to an operating margin of 15.2 (8.2) percent.

Taxes paid amounted to MSEK -28.8 (-13.6), for a total tax expense of 24.8 (28.8) percent. Profit after taxes amounted to MSEK 87.4 (33.5). Nilorn operates in both low- and high-tax countries and the average tax depends on the development in each country.

Segments

As shown in the segment accounting in Note 2 all segments have increased in both revenue and profit.

Cash flow, capital expenditures, financing and liquidity Cash flow from operating activities amounted to MSEK 78.1 (74.7).

Cash flow from investment activities amounted to MSEK −11.7 (−10.0).

Net liabilities at the end of the period stood at MSEK 40.7 of which the transition to the new lease standard IFRS 16, increased interest-bearing liabilities by MSEK 34.0 (38.0). Comparable numbers not including the effect of IFRS 16 is net liabilities of MSEK 75.1 (24.8).

Personnel

The average number of employees in the Group was 540 (520), of whom 219 (209) were women. Of the total number of employees 303 persons or 56 percent are active in production and warehouses. Nilörn has and will continue to hire to be involved in the development of the business. The areas we are now strengthening are in CSR, purchasing, compliance, sales and IT.

Transactions with closely related parties

There were no transactions between the Nilörn Group and closely related parties affecting the Group's profit and financial position during the period, except for dividends to the Parent Company's shareholders. The Parent Company's transactions with subsidiaries refer to design, product development, IT and other services.

Parent Company

The Parent Company's operations largely consist of handling group-wide functions, such as branding and design, product development, finances, administration, information and IT. The average number of employees was 23 (20).

Net revenue for the period amounted to MSEK 29.7 (27.8). The operating result was MSEK −2.8 (−2.8) and profit after taxes was MSEK 19.8 (36.7) with most of the profit attributable to dividends from subsidiaries.

Significant events after the balance sheet date

• The Board of Directors has decided to propose to the Annual General Meeting a dividend of SEK 5.00 (2.00) per share, equivalent to MSEK 57.0 (22.8).

Risks and uncertainty factors

With its international operations, Nilorrngruppen is constantly exposed to various financial risks. The significant risks and uncertainties to which the Nilorn Group is exposed are currency risks, political risks in individual countries, credit risks and IT security, as shown in Nilörngruppen's Annual Report 2020, Note 2.

There is continued uncertainty abroad, which has an impact in the possibility of obtaining deliveries and in obtaining provision for the company's products.

What we are now seeing is high freight and energy costs, high costs on raw materials (cotton, plastics and paper) and a lack of semiconductors and thus increased prices for RFID inserts. We have so far compensated for the increased prices through increased efficiency in our own production.

Election committee

Nilörngruppen does not have an appointed election committee since the ownership structure is clear as Traction AB owns the majority of the votes. However, shareholders are always welcome to submit comments and/or suggestions with respect to the composition of the Board of Directors to the Chairman of the Board of Directors, Petter Stillström, telephone +46-8-506 289 00.

Dividend

The Group's dividend policy states that 60-90 percent of consolidated comprehensive profit is to be paid as dividend. The Board of Directors has decided to propose to the Annual General Meeting a dividend of SEK 5.00 (2.00) per share, equivalent to MSEK 57.0 (22.8). The proposal is equivalent to dividend of 65 (68) percent.

Annual General Meeting

The Annual General Meeting is scheduled to be held on Tuesday, May 3, 2022 at 5 p.m. at Nilörngruppen's head office in Borås. In view of the risk of infection and the uncertainty that prevails, a definitive decision on the location and voting procedure will be given in the notice to the Annual General Meeting.

The Annual Report will be available on the Company's website no later than three weeks before the Annual General Meeting.

Review

This report has not been subject to review by the Company's auditors.

Calendar

• 21 April 2022 Interim report Q1
• 3 May 2022 Annual General Meeting
• 15 June 2022 Interim report Q2
• 26 October 2022 Interim report Q3
• 10 February 2023 Year end report
• •

This information is information that Nilörngruppen is under obligation to publish in accordance with the EU Market Abuse Regulation. The information herein was provided by the contact person named below for publication at 08:00 a.m., 09 February 2022.

BORÅS, 9 February 2022 NILÖRNGRUPPEN AB (PUBL)

Krister Magnusson CEO

FOR FURTHER INFORMATION, CONTACT:

Krister Magnusson, CEO Mobile: +46-704 85 21 14 E-mail: krister.magnusson@nilorn.com

Nilörngruppen AB Box 499 503 13 Borås www.nilorn.com

Summary Financial Reports

	3 months			12 months
		October - December		January - December
Amounts in SEK thousand	2021	2020	2021	2020
Net revenue	234,458	173,392	788,305	618,233
Raw materials, supplies and goods for resale	-127,993	-96,961	-424,174	-346,109
Gross profit	106,465	76,430	364,131	272,123
Other operating revenue	4,784	5,432	11,877	19,126
Other external costs	-19,418	-16,136	-61,953	-62,686
Personnel costs	-42,946	-36,198	-163,876	-146,640
Depreciation, amortisation and impairment charges	-6,972	-5,760	-25,941	-25,854
Other operating costs	-1,793	-2,524	-4,691	-5,307
Operating profit	40,120	21,245	119,547	50,763
Net finance items	-1,153	-975	-3,343	-3,698
Profit before taxes	38,967	20,270	116,204	47,065
Taxes	-8,617	-5,730	-28,766	-13,551
Net profit for the period	30,350	14,540	87,438	33,515
Average number of shares outstanding (thousands)	11,402	11,402	11,402	11,402
Average number of shares outstanding after dilution (thousands) 11,402		11,402	11,402	11,402
Earnings per share, SEK	2.66	1.28	7.67	2.94
Earnings per share, SEK after dilution	2.66	1.28	7.67	2.94

Consolidated Statement of Comprehensive Result

Amounts in SEK thousand	October - December		January - December
	2021	2020	2021	2020
Net profit for the period	30,350	14,540	87,438	33,515
Other comprehensive result that may be reposted to net profit for the period
Translation differences	-436	-7,479	3,817	-10,405
Total profit for the period	29,914	7,061	91,255	23,110
Total profit for the period attributable to:
The Parent Company's equity holders	29,914	7,061	91,255	23,110

Quarterly Income Statements

Amount in MSEK)	2021				2020				2019				2018
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Net revenue		175.2 175.2 203.4 234.5			155.5		142.3 147.0 173.4 178.1			195.8	170.8	170.6	152.0	202.6		171.7 185.7
Raw materials, supplies and goods for resale	-93.9		-91.8 -110.5 -128.0		-82.8	-88.2	-78.2		-97.0 -103.9 -114.0		-94.4	-95.3		-84.8 -113.4		-94.0 -103.8
Gross profit	81.3	83.4		92.9 106.5	72.7	54.1	68.8	76.4	74.2	81.8	76.4	75.3	67.2	89.2	77.7	81.9
Gross margin													46.4% 47.6% 45.7% 45.4% 46.8% 38.0% 46.8% 44.1% 41.7% 41.8% 44.7% 44.1% 44.2% 44.0% 45.3% 44.1%
Other income	3.5	1.7	1.8	4.8	1.5	6.9	5.3	5.4	2.5	0.7	1.2	0.7	1.7	1.4	2.0	4.2
Operating costs	-51.7	-55.8	-58.9	-64.2	-58.5	-54.2	-47.0	-54.8	-55.8	-56.5	-51.8	-58.0	-54.3	-61.3	-58.5	-58.2
Depreciation, amortisation and	-6.2	-6.3	-6.5	-7.0	-6.7	-6.7	-6.6	-5.8	-5.8	-5.8	-6.5	-6.4	-1.2	-2.0	-2.1	-2.5
impairment charges Operating profit	26.9	23.0	29.3	40.1	9.0	0.1	20.5	21.2	15.1	20.2	19.3	11.6	13.4	27.3	19.1	25.4
Operating margin		15.4% 13.1% 14.4% 17.1%			5.8%		0.1% 13.9% 12.2%			8.5% 10.3% 11.3%		6.8%		8.8% 13.5% 11.1% 13.7%
Operating profit per share	2.4	2.0	2.6	3.5	0.8	0.0	1.8	1.9	1.3	1.8	1.7	1.0	1.2	2.4	1.7	2.2

Quarterly development of: Net revenue Operating profit

	1 January – 31 December
KEY FINANCIAL INDICATORS	2021	2020	2019	2018	2017	2016	2015
Revenue growth, %	27.5	-13.6	0.5	7.5	11.5	15.8	15.2
Operating margin, %	15.2	8.2	9.3	12.0	12.1	12.3	9.6
Profit margin, %	14.7	7.6	8.8	11.8	12.1	12.1	9.5
Average equity	244.0	198.3	183.7	167.3	145.9	125.6	113.8
Return on equity, %	35.8	16.9	25.7	42.3	44.6	44.8	34.3
Equity ratio, %	50.0	51.3	45.3	53.0	49.2	50.8	48.8
Interest-bearing net cash (liabilities –), MSEK*	40.7	-13.2	-89.6	-2.5	9.2	9.7	5.0
Interest-bearing net cash (liabilities –), MSEK, excl IFRS16	74.1	24.8	-33.6	-2.5	9.2	9.7	5.0
Earnings per share, SEK	7.67	2.94	4.14	6.20	5.70	4.93	3.42
Equity per share, SEK	24.40	18.40	16.37	15.85	13.50	12.08	9.94
Dividend per share, SEK**	5.00	2.00	-	4.00	4.00	3.60	3.00
Average number of shares outstanding	11 401 988	11 401 988	11 401 988	11 401 988	11 401 988	11 401 988	11 401 988
Number of shares outstanding at end of period	11 401 988	11 401 988	11 401 988	11 401 988	11 401 988	11 401 988	11 401 988
Average number of employees	540	520	502	482	446	358	335

* Interest-bearing net cash (liabilities –), has been effected by 38 MSEK by the introduction of IFRS 16

** Proposed dividend for 2021

Consolidated Balance Sheet

Amounts in SEK thousand	2021-12	2020-12
Assets
Intangible non-current assets	25,617	23,486
Other non-current assets	133,320	131,591
Inventories	145,917	106,648
Trade receiveables	114,216	72,012
Other current assets	20,632	21,323
Cash and cash equivalents	116,367	66,276
Total assets	556,069	421,336
Equity and liabilities
Equity	278,259	209,809
Long-term interest-bearing liabilites	46,131	51,274
Long-term non-interest-bearing liabilities	5,713	3,594
Current interest-bearing liabilities	29,583	28,179
Current non-interest-bearing liabilities	196,383	128,480
Total equity and liabilities	556,069	421,336

Changes in Consolidated Equity

2021		Other		Retained earnings
	Share	contributed		including net profit		Total
Amounts in SEK thousand	capital	capital	Reserves	for the period	Total	equity
OPENING EQUITY 2021-01-01	2,850	43,231	,156	163,573	209,810	209,810
Net profit for the period				87,438	87,438	87,438
Other total profit
Translation differences during the period				3,817	3,817	3,817
Revaluation of pension scheme				0	0	0
Transactions with shareholders
Dividend				-22,806	-22,806	-22,806
CLOSING EQUITY 2021-12-31	2,850	43,231	,156	232,022	278,259	278,259
2020
Amounts in SEK thousand
OPENING EQUITY 2020-01-01	2,850	43,231	,156	140,463	186,700	186,700
Net profit for the period				33,515	33,515	33,515
Other total profit
Translation differences during the period				-10,405	-10,405	-10,405
Revaluation pension scheme				0	0	0
Transactions with shareholders
Dividend				, 0	, 0	, 0
CLOSING EQUITY 2020-12-31	2,850	43,231	,156	163,573	209,810	209,810

Consolidated Cash Flow Statement	October - December		January - December
Amounts in SEK thousand	2021	2020	2021	2020
Operating activities
Operating profit	40,120	21,245	119,547	50,764
Adjustment for items not included in cash flow
Depreciation, amortisation and impairment charges	6,972	57,660	25,941	25,854
Other non cash generated items	-5,552	-2,422	-18,402	-15,663
	41,540	24,583	127,086	60,955
Interest income	234	5 4	654	606
Interest expense	-82	-803	-751	-2,002
Paid taxes	-3,519	-5,581	-12,529	-10,442
Cash flow from operating activities before changes in working	38,173	18,252	114,460	49,116
Cash flow from changes in working capital
Inventories	-21,660	4,721	-37,684	-293
Trade receivables	-4,530	15,956	-35,278	-12,996
Other short-term receivables	6,689	-181	692	-752
Trade payables	14,448	7,877	32,053	24,176
Other liabilities	-14,768	-23,328	4,582	15,474
Cash flow from operating activities	18,352	23,297	78,825	74,725
Investment activities
Acquisition of tangible non-current assets	-1,571	-1,078	-4,719	-5,398
Acquisition of intangible non-current assets	-1,042	839	-6,122	-5,209
Acquisition of financial non-current assets	0	-30	0	0
Sales of fixed assets	0	341	0	341
Change in long-term receivable	-421	189	-899	282
Cash flow from investment activities	-3,034	261	-11,740	-9,984
Financing activities
Repayment/raising loans	688	-16,000	861	-24,320
Paid dividend	0	0	-22,806	0
Cash flow from financing activities	688	-16,000	-21,945	-24,320
Cash flow for the year	16,006	7,559	45,140	40,421
Cash and cash equivalents at beginning of period	99,843	62,224	66,276	32,292
Translation difference in cash and cash equivalents	518	-3,507	4,951	-6,438
Cash and cash equivalents at end of period	116,367	66,275	116,367	66,276

Parent Company Income Statement	3 months		12 months
Amounts in SEK thousand	October - December		January - December
	2021	2020	2021	2020
Net revenue	10,010	7,560	29,575	27,560
Other operating income	4 4	6 4	145	224
Total revenue	10,053	7,624	29,720	27,784
Other external costs	-3,024	-2,365	-9,548	-10,348
Personnel costs	-5,483	-4,955	-20,458	-17,875
Depreciation, amortisation and impairment charges	-628	-626	-2,494	-2,388
Operating profit	918	-322	-2,780	-2,828
Net finance items	9 3	1,952	13,605	39,513
Profit after finance items	1,011	1,630	10,825	36,686
Year-end appropriations	-	-	10,484	1,893
Taxes	-1,512	-181	-1,550	-261
Net profit for the period	9,983	3,343	19,759	38,318

Since there are no comprehensive profit items, comprehensive income coincides with the period's results.

Parent Company Balance Sheet

Amounts in SEK thousand	2021-12	2020-12
Assets
Intangible non-current assets	23,573	21,132
Tangible non-current assets	657	797
Financial non-current assets	117,347	117,233
Short-term receivables	80,294	87,514
Cash and cash equivalents	43,305	27,656
Total assets	265,176	254,331
Equity and liabilities
Equity	181,341	184,386
Untaxed reserves	12,800	9,936
Long-term liabilities	-	-
Current liabilities	71,035	60,010
Total equity and liabilities	265,176	254,331

Notes

1. Accounting policies

As was the case with the Annual Accounts for 2020, the Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by EU, recommendation No 1 (RFR 1) of the Swedish Financial Reporting Board. As was the case with the Annual Accounts for 2020, the Parent Company prepares its financial statements in accordance with the Annual Accounts Act and recommendation No 2 (RFR 2) of the Swedish Financial Reporting Board. The Year-end Report is prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. Disclosures in accordance with IAS 34.16 are found in the financial reports and its notes as well as in the other parts of the interim report.

From 1 January 2019 Nilörngruppen applies IFRS 16 Leases. The Group has applied the simplified transition method and has thus not recalculated comparative data for 2018. The simplification rule, that the right-of-use asset shall be equivalent to the lease liability, has been applied in the transition. No transition effect is therefore reported in equity. A complete description of the accounting policies for leases will be found in the 2020 Annual Report. Also refer to Note 3 for the effect of IFRS 16 on the quarter.

The Parent Company has chosen to apply the simplification rules in RFR 2, which means that all leases be reported as operating leases.

New accounting policies for 2021

No new accounting policies with significant impact on Nilörn have entered into force in 2021.

2. Information by geographic area

Period January - December 2021	region	Europe	Asia	Group	Total
Revenue
External revenue	55,034	244,702	488,569	-	788,305
Total revenue	55,034	244,702	488,569	,0	788,305
Profit
Operating profit	13,177	41,228	66,636	-1,494	119,547
Interest income				,653	,653
Interest expense				-3,996	-3,996
Taxes on the on the period's profit				-28,766	-28,766
Net profit for the period	13,177	41,228	66,636	-33,603	87,438
Period January - December 2020
Revenue
External revenue	49,628	198,555	370,050	-	618,233
Total revenue	49,628	198,555	370,050	,0	618,233
Profit
Operating profit	3,157	15,141	34,638	-2,172	50,763
Interest income				,606	,606
Interest expense				-4,304	-4,304
Taxes on the profit for the year				-13,551	-13,551
Net profit for the year	3,157	15,141	34,638	-19,421	33,514

Nordic

Other

Intra

Primary segment – Geographic area

3. IFRS 16 Leasing

IFRS 16 Leases

Report of financial position	31/Dec/21	Of which effect of IFRS 16	31 Dec 2021 not incl. effect of IFRS 16
Other non-current assets	133,320	34,743	98,577
Other current assets	20,632	-1,192	21,824
Equity	278,259	-,870	279,129
Long-term interest-bearing liabilities	46,131	19,147	26,984
Short-term interest-bearing liabilities	29,583	15,274	14,309
Total effect on equity		33,551

Report of effects on profit	Jan-Dec 2021	Of which effect of IFRS 16	Jan-Dec 2021 not incl. effect of IFRS 16
Other external cost	-61,953	16,359	-78,312
Depreciation, amortisation and impairment	-25,941	-15,133	-10,808
Net finance items	-3,343	-1,202	-2,141
Taxes	-28,766	-,2	-28,764
Total	-120,003	,22	-120,025

Key financial indicators	Jan-Dec 2021	Of which effect of IFRS 16	Jan-Dec 2021 not incl. effect of IFRS 16
Operating margin Net cash and cash equivalents (liabilities −),	15.2%	0.2%	15.0%
MSEK	40.7	-34.4	75.1
Equity ratio, %	50.0%	-3.2%	53.3%

4. Definitions of alternative key financial indicators

ESMA (The European Securities and Markets Authority) has published guidelines for alternative key financial indicators for companies with securities listed on a regulated market within EU. These guidelines shall be applied to alternative key financial indicators used starting 3 October 2016. Reference is made in the annual accounts to a number of non-IFRS performance metrics used to help investors as well as management to analyse the company's operations. These financial metrics should therefore not be seen as replacements for metrics defined according to IFRS. Since all companies do not calculate financial metrics in the same way, they are not always comparable with metrics used by other companies. These financial metrics should therefore not be seen as replacements for metrics defined according to IFRS. We describe below the various non-IFRS performance metrics used as a complement to the financial information reported in accordance with IFRS and how these metrics have been used.

Non-IFRS metrics	Definition	Justification
Average equity	Equity at the beginning of the period, plus equity at the end of the period, divided by two.	The metric is the difference between the Group's assets and liabilities, which is equivalent to consolidated equity contributed by owners and the consolidated aggregated profit. This metric is used to report the capital attributable to the Group's owners.
Average number of employees	Average number of yearly employed	This metric is used to measure the development of the Group's workforce.
Revenue growth	Net revenue at the end of the period, minus net revenue at the beginning of the period, divided by net revenue at the beginning of the period.	This metric is used to measure the development of the Group's revenue over time.
Return on equity	Period's result according to the income statement in percent of average equity.	This metric is used to analyse profitability over time, given the resources attributable to the Parent Company's owners.
Return on capital employed	Result before taxes, plus financial expenses, in percent of average capital employed.	Return on capital employed is a profitability metric used to gauge the result relative to the capital required to run the business.
Interest-bearing net cash and cash equivalents/liabilities	Interest-bearing receivables, cash and cash equivalents, reduced by interest-bearing liabilities.	The metric shows the total debt financing and is used as a complement to judge the feasibility of paying dividends, to implement strategic investments and to gauge the Group's ability to meet its financial obligations.
Operating margin	Operating result in percent of net revenue.	This metric is used to measure operative profitability.
Equity ratio	Equity in percent of balance sheet total.	This measure shows the proportion of the company's total assets financed with equity by its shareholders. A high equity ratio is an indication of financial strength.
Operating margin	Operating result in percent of net revenue.	This metric is used to measure operative profitability.

Definitions of key financial indicators not defined by IFRS

Nilörngruppen in Brief

Nilörngruppen is a global company founded in the 1970s, with expertise in adding value to trademarks through branding in the form of labels, packaging and accessories, primarily for customers in the fashion and apparel industry. Nilörngruppen offers complete, creative and customised concepts in branding, design, product development and logistic solutions. The Group conducts business via its own subsidiaries in Sweden, Denmark, Great Britain, Germany, Belgium, Portugal, Hong Kong, India, Turkey, China, Bangladesh, Italy and Pakistan. The Group has partner companies in Tunisia and Switzerland.