Nilörngruppen designs and supplies branding solutions — woven and printed labels, hang-tags, packaging and RFID — to fashion and apparel brands, with production largely outsourced to Asia. It is asset-light and self-funded (net cash, ~34% dividend payout), and it earns genuine economic value: 14.2% adjusted ROIC on a tight capital base, EP +SEK 22M, with unusually clean accounting (no PPA, modest goodwill).
The moat is moderate — real design depth and long apparel relationships, but low switching costs and no pricing power, so margins flex with the fashion cycle and FX (Asian sourcing, EUR/USD sales). FY2025 was soft (operating margin 7.8% vs 8.8%) and Q1 2026 was −16% in SEK / flat currency-adjusted with gross margin rising to 48.4%. At PEBV ~1.0 and EV/IC ~1.8x the quality is in the model, not the entry price.
Capitalising adjusted NOPAT at WACC−g plus net cash gives a reverse-DCF base around SEK 70 — roughly the current SEK 61 price area, corroborated by PEBV 1.03. The Bangladesh capacity and growing high-margin RFID/DPP mix are the upside optionality.
Base SEK 70 on stabilising fashion demand and ~8% normalised margins; bull SEK 80 if Bangladesh and RFID lift through-cycle margins; bear SEK 56 if apparel demand and FX keep margins near the Q1 level.
The market pays today’s enterprise value for roughly -4.4% NOPAT growth over 5 years. The business earns 14% on capital against a 8% cost of capital (spread +6.2 pp); the no-growth value is SEK 68/share (111% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 80 | +7% | +31% | 30% | Bangladesh + RFID/DPP lift through-cycle margins |
| Base | SEK 70 | +1% | +14% | 45% | Demand stabilises; ~8% normalised margin |
| Bear | SEK 56 | -8% | -9% | 25% | Apparel demand + FX keep margin near Q1 level |
| Prob-weighted | SEK 70 | — | +13% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 91 | 100 | 106 | 115 | 122 | 141 |
| 7.25% | 78 | 84 | 89 | 96 | 101 | 115 |
| 8.00% (base) | 68 | 73 | 76 | 82 | 86 | 96 |
| 8.75% | 61 | 64 | 67 | 71 | 74 | 82 |
| 9.50% | 55 | 58 | 60 | 63 | 65 | 71 |
Green = fair value above the current price of SEK 61.30. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Adjusted ROIC 14.2% vs 8% WACC, EP +SEK 22M — real, if cyclical, value creation on an asset-light base.
Self-funded growth, ~34% payout, fortress balance sheet for a small-cap.
~USD 10m plant (H1 2027, ~2x current) — lower-cost capacity + capacity for growth.
Growing higher-margin RFID and Digital Product Passport share supports the gross margin and moves up the value chain.
Nilörngruppen is a well-run, cash-rich, above-WACC branding-solutions small-cap trading near its reverse-DCF value as the fashion cycle softens. The quality is in the balance sheet and the asset-light model, not the entry valuation. HOLD, medium conviction; base SEK 70.
Accumulate toward the low-50s; an upgrade needs volume/margin stabilisation plus visible RFID and Bangladesh contribution.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Net revenue (LTM) | 904 | Consolidated income statement / p.7 (FY 945.1 col, less Q1'25 258.6, plus Q1'26 217.6) 📄 p.7 | LTM top line built from the interim's side-by-side 12-month and 3-month columns; mttssn uses LTM to capture the post-FY demand softening. |
| Net revenue (FY2025 anchor) | 945 | Note 3 / p.83 📄 p.83 | FY anchor; flat YoY (944.7 -> 945.1) but +1bn currency-adjusted per CEO, so reported SEK masks underlying growth. |
| Operating profit / EBIT (LTM) | 65.9 | Consolidated income statement / p.7 (FY 73.4 less Q1'25 23.0 plus Q1'26 15.4) 📄 p.7 | Reported operating profit is mttssn's EBIT base; no items sit above it that need reclassifying out. |
| Operating profit / EBIT (FY2025) | 73.4 | Consolidated income statement / p.83 📄 p.83 | Company reports plain operating profit with no adjusted-EBIT bridge — a clean APM, so reported EBIT is taken at face value. |
| Non-recurring costs add-back (Q1 2026) | 2.3 | Period highlights & p.5 / Q1 2026 📄 p.1 | 1.8 strategic-project + 0.5 restructuring costs are genuinely non-operating one-offs; normalised out to reflect run-rate earnings power. |
| Goodwill | 11.7 | Note 10 / p.99 📄 p.99 | Single indefinite-life goodwill (Bally Labels, Switzerland); impairment-tested with 26.5 MSEK headroom, kept in IC via equity, not amortised. |
| Intangible assets (total, BS) | 54.3 | Notes 3/10/11 / p.83 (carrying value) 📄 p.83 | Goodwill 11.7 + externally-acquired (IT/PLM systems) 42.6; the IT portion amortises through opex and is left untouched. |
| PPA amortization | 0 | Note 11 / p.99 📄 p.99 | No acquisition-related PPA intangibles exist (goodwill never split into customer/brand assets), so there is nothing to reject; the 4.8 MSEK intangible amortisation is IT software, a true cost. |
| Lease liabilities | 25.2 | Balance sheet / p.9; split via net-cash disclosure p.5/p.10 📄 p.9 | Offices/warehouses only (ROU ~7% of assets); excluded from IC because leases are peripheral for an outsourced-production model. |
| Interest-bearing debt (credit institutions) | 46.4 | Balance sheet / p.9 (total IB 71.6 less lease 25.2) 📄 p.9 | Bank debt is real financing capital and is added to IC; reconciled against ex-IFRS16 net cash of 55.6 MSEK. |
| Cash and cash equivalents | 102 | Balance sheet / p.9 📄 p.9 | Only 2% of revenue treated as operating; the 84.0 MSEK excess is stripped from IC as non-operating. |
| Total equity | 362 | Balance sheet / p.9; equity bridge p.10 📄 p.9 | Latest equity is the IC anchor; NCI 1.0 MSEK retained inside IC for NOPAT consistency. |
| Accumulated OCI (translation reserve) | -39.6 | Changes in consolidated equity / p.10 ('Reserves') 📄 p.10 | Only OCI component; stripped out so IC reflects deployed operating capital, not FX translation swings. |
| Taxes (LTM) | 15.1 | Consolidated income statement / p.7 (FY 16.7 less Q1'25 5.1 plus Q1'26 3.5) 📄 p.7 | LTM effective rate 24.3% (tax/PBT) used for NOPAT, slightly above the 20.6% Swedish statutory rate due to non-deductibles and unrecognised foreign losses (Note 9, p.98). |
| Free cash flow (LTM) | 70.8 | Consolidated cash flow statement / p.11 📄 p.11 | Operating CF less all capex; strong cash conversion underpins the dividend and the self-funded Bangladesh factory. |
How the mttssn view has evolved — each prior dated note is preserved.