Financial Data and Key Metrics Changes - Consolidated Q4 revenue grew 4% on a reported basis and 2% on an organic constant currency basis, with full-year growth of 3% on both reported and constant currency bases [11] - Adjusted EBITDA increased by $3.1 million year over year but declined by $35.5 million for the full year [14] - Gross profit dollars grew year over year in Q4 despite a 110 basis points gross margin compression [15] Business Line Data and Key Metrics Changes - At Vista, organic constant currency revenue grew 4% for the quarter, driven by strength in promotional products, apparel, gifts, signage, packaging, and labels [12] - Revenue in the promotional products, apparel, and gifts category grew 18% for the full fiscal year, with variable gross profit in that category growing 27% [13] - Business cards declined 6% during Q4, reflecting a shift from legacy products to higher value elevated products [12][13] Market Data and Key Metrics Changes - Organic constant currency revenue growth in European markets was strong at 7% for Q4, while North America improved sequentially to 3% [12] - The total addressable market in Europe, North America, and Australia exceeds $100 billion annually, with over 60% still served by traditional suppliers [9] Company Strategy and Development Direction - The company is transitioning to product categories like packaging, promotional products, and apparel, which are expected to offset the maturation of legacy products [5][6] - Investments in manufacturing, new product introductions, and improved customer experience are aimed at capturing market opportunities [6][10] - The company aims to close the equity valuation gap through revenue and profit growth, rigorous capital allocation, and share repurchases [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the transition in product categories but remains optimistic about future growth in gross profit dollars and customer lifetime value [5][10] - Guidance for fiscal 2026 includes expected revenue growth of 5% to 6% and adjusted EBITDA of at least $450 million, factoring in startup costs and capital expenditures [19] Other Important Information - The company expects to achieve annualized savings of $14 million from cost reduction actions implemented in the latter half of fiscal 2025 [19] - Currency fluctuations had a $3.6 million benefit to adjusted EBITDA during the quarter, primarily due to the strengthening of the euro [15] Q&A Session Summary Question: FY '26 guidance implies free cash flow conversion of EBITDA at 31%. When should free cash flow conversion return to the 45% to 50% level? - Management expects the 45% to 50% conversion rate to be achievable in a normalized environment, but fiscal '26 will not reflect that due to higher CapEx and working capital fluctuations [21][26] Question: What is the go-forward revenue growth expectation for legacy and elevated products? - Management does not provide specific growth rates but anticipates continued decline in legacy products while expecting growth in elevated products [28][30] Question: Is the 2% to 3% FX adjusted growth rate expected for FY '26 the new steady state growth rate? - Management aspires to return to mid-single-digit growth rates over time, driven by execution in elevated products and high-value customers [36] Question: Has maintenance CapEx increased due to recent investments? - Maintenance CapEx has increased due to specific factors, but it is not solely a result of recent investments [39][42] Question: What is the risk that the informational product exemption ends? - There is some risk associated with the informational materials exclusion, but the company has a significant percentage of coverage under USMCA [50][52] Question: Do you think there was a pull forward in demand during Q4 due to tariffs? - Management has not seen indications of a pull forward in demand related to tariffs [54] Question: Can you explain the other income net line item and the impact of derivative contracts? - The company has an active currency hedging program that results in unrealized gains or losses, which can affect earnings but is expected to balance out over time [60][62]

Core Insights - Nilörn Group reported a decrease in order intake and net sales for the second quarter of 2025, indicating challenges in the market [6] - The company experienced a mixed performance in the first half of 2025, with an increase in order intake but a decline in net sales compared to the previous year [6] Group 1: Q2 2025 Performance - Order intake decreased by 1 percent to MSEK 205 from MSEK 208 [6] - Net sales in SEK decreased by 10 percent to MSEK 237 from MSEK 262 [6] - Operating profit amounted to MSEK 16.0, down from MSEK 25.6 [6] - Net profit for the period amounted to MSEK 10.8, a decrease from MSEK 18.7 [6] - Earnings per share decreased to SEK 0.95 from SEK 1.64 [6] Group 2: H1 2025 Performance - Order intake increased by 7 percent to MSEK 471 from MSEK 441 [6] - Net sales in SEK decreased by 2 percent to MSEK 496 from MSEK 504 [6] - Operating profit amounted to MSEK 39.0, down from MSEK 48.1 [6] - Net profit for the period amounted to MSEK 26.6, a decrease from MSEK 35.4 [6] - Earnings per share decreased to SEK 2.33 from SEK 3.11 [6]

Company Overview - Nilörn Group is a global company established in the 1970s, specializing in adding value to brands through branding and design, particularly in labels, packaging, and accessories for the fashion and clothing industry [1] - The company provides comprehensive, creative, and customized solutions in branding, design, product development, and logistics [1] - Nilörn Group operates through its own subsidiaries in multiple countries, including Sweden, Denmark, the UK, Germany, Belgium, Portugal, Hong Kong, India, Turkey, China, Bangladesh, Italy, Switzerland, Vietnam, the USA, and Pakistan [1] Upcoming Presentation - A presentation will be held via Teams on July 16 at 08:30 am CET, where the CEO will present the report [2] - Participants can register for the presentation through a provided link [2]

Financial Data and Key Metrics Changes - Consolidated net sales from continuing operations for Q1 2025 were $485 million, down 3% year over year, and essentially flat on an organic basis [24] - Adjusted EBITDA from continuing operations was $37.2 million, down 19% from $45.8 million in the prior year [24] - The net leverage ratio was 4.7 times, with about 0.8 times headroom versus the covenant level of 5.5 times [28] Business Line Data and Key Metrics Changes - In the Filtration and Advanced Materials (FAM) segment, net sales were $188 million, down more than 7% year over year, reflecting lower volumes and unfavorable currency translation [25] - The Sustainable and Adhesive Solutions (SaaS) segment saw net sales of $297 million, up almost 6% on an organic basis, with adjusted EBITDA performance of $33 million, up more than 3% year over year [26] Market Data and Key Metrics Changes - Demand patterns reflected in Q1 showed sales were flat organically year over year, with SaaS segment growth offset by softness in FAM results due to automotive and construction market challenges [16][18] - Less than 7% of annual sales are currently subject to tariff exposure, indicating a strong localized supply chain [20][22] Company Strategy and Development Direction - The company has established three near-term priorities: enhancing commercial execution, deleveraging the balance sheet, and conducting a strategic portfolio review [8][9] - A focus on cross-selling and moving existing products into adjacent applications is part of the strategy to stimulate top-line growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current demand environment remains suppressed and is not expected to return to pre-pandemic levels soon [31] - A significant sequential increase in adjusted EBITDA performance is anticipated, driven by volume increases and improved pricing relative to input costs [31] Other Important Information - The company plans to reduce capital expenditures to $40 million per year, down from $55 million in 2024, and aims to reduce inventory levels by $20 million to $30 million in 2025 [14][30] - A goodwill impairment analysis resulted in a pretax non-cash charge of $412 million due to sustained decline in share price [28] Q&A Session Summary Question: Insights on the portfolio review and cash flow generation - Management is evaluating the portfolio to maximize value and strengthen the balance sheet, with updates to be provided as progress is made [40] - A significant increase in cash flow is expected in Q2, driven by inventory reductions and improved EBITDA [42] Question: Margin contraction and dividend policy - Management identified that the FAM business has been the primary impact on margins, with expectations for improvement through cost reductions and pricing actions [49][53] - The board has discussed the dividend and plans to continue it for now, despite the focus on deleveraging [54] Question: Impact of tariffs and inflation - The company has minimal exposure to tariffs from China and is actively managing pricing to cover input costs, with expectations for favorable pricing contributions in Q2 [59][61] - Input costs are not expected to rise significantly, allowing for effective management of the price-cost spread [61] Question: Addressing weaknesses in automotive and construction segments - Management is building a robust pipeline in the optical, medical, and dental fields to offset weaknesses in automotive and construction, with expectations for growth in these areas [65]

Financial Data and Key Metrics Changes - Consolidated revenue grew 1% on a reported basis and 3% on an organic constant currency basis [11] - Adjusted EBITDA declined by $3,500,000 year over year, impacted by a $2,600,000 impairment charge and $1,100,000 in preproduction startup costs [13][14] - Gross profit would have increased modestly if not for the impairment charge and startup costs [14] Business Line Data and Key Metrics Changes - Vista experienced 3% organic constant currency growth, with key growth categories like promotional products, signage, packaging, and labels growing at double-digit rates [11][12] - Consumer products returned to 5% growth after a decline in the previous quarter [12] - The business cards and stationary product category declined 3% year over year, showing slight improvement from a 4% decline in the previous quarter [12] Market Data and Key Metrics Changes - Strong performance in Europe despite macro headwinds, while the US market faced challenges due to organic search algorithm changes [12] - The promotional products and apparel category, which represents over 20% of consolidated revenue, is most exposed to tariff impacts [21][22] Company Strategy and Development Direction - The company is focused on expanding into elevated products to serve higher lifetime value customers and increase market share [5][10] - Plans to balance capital deployment between organic growth investments, reducing leverage, and share repurchases [20] - The company aims to navigate tariff challenges by identifying alternative sourcing and implementing price increases where applicable [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering attractive growth in per share cash flow despite a noisy backdrop [4] - The company has withdrawn guidance for FY 2025 and beyond due to tariff uncertainty and potential impacts on demand [19][83] - Management believes that the current economic environment may lead to increased self-employment and demand for their products [46] Other Important Information - The company is investing in new production facilities and capabilities, particularly in the US [6][70] - The company is maintaining a high bar for growth investments while being cost-conscious in the current environment [41][74] Q&A Session Summary Question: Which customer verticals are most exposed to tariff impacts? - Management indicated that promotional products, apparel, and gifts are the most exposed, with PPAG representing over 20% of consolidated revenue [21][22] Question: What is the expected tariff expense on remaining China COGS? - The estimated tariff expense on the remaining $20,000,000 of China COGS is about $30,000,000, but pricing changes may offset some of this impact [27][29] Question: How is the company addressing potential demand drops due to tariffs? - Management stated they would reduce costs as needed and have constraints in place to manage operating expenses [40][41] Question: Can you provide an update on revenue growth in April? - Management noted that April's revenue trends were stable compared to March, complicated by holiday timing shifts [43][44] Question: What is driving the low growth at National Penn? - The low growth is attributed to reduced mail order advertising and stronger performance in e-commerce and cross fulfillment channels [45] Question: How does management view the long-term gross margin profile? - Management focuses on gross profit rather than gross margin percentages, emphasizing the importance of delivering value to customers [56][57] Question: What are the plans for capital allocation regarding share buybacks versus investments? - Management is actively considering trade-offs between share repurchases and internal investments, with a bias towards high-return growth investments [76][80]

Financial Data and Key Metrics Changes - Consolidated revenue grew 1% on a reported basis and 3% on an organic constant currency basis [12] - Adjusted EBITDA declined by $3.5 billion year over year, impacted by a $2.6 million impairment charge related to a planned sale [15][16] - Gross profit was affected by preproduction startup costs related to a new facility, but would have increased modestly if those items were excluded [16] Business Line Data and Key Metrics Changes - Vista experienced 3% organic constant currency growth, with key growth categories like promotional products, signage, packaging, and labels growing at double-digit rates [12][13] - The consumer product category returned to 5% growth after a decline in the previous quarter [13] - The business cards and stationery product category declined 3% year over year, showing slight improvement from a 4% decline in the previous quarter [14] Market Data and Key Metrics Changes - Strong growth in elevated products, which include promotional products and packaging, indicates a shift towards higher lifetime value customers [4][52] - Business performance in Europe remained strong despite macro headwinds, while the U.S. market faced challenges due to organic search algorithm changes [13] Company Strategy and Development Direction - The company is focused on expanding into elevated products to increase customer lifetime value and market share [4][10] - Plans to leverage cross-SIMPRESS fulfillment to accelerate new product introductions and reduce costs [5] - The company aims to balance capital deployment between organic growth investments, reducing leverage, and share repurchases [21][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering attractive growth in per share cash flow despite a noisy backdrop [3] - The uncertainty surrounding tariffs has led to the withdrawal of guidance for FY 2025 and beyond, with management emphasizing the need for flexibility in response to changing conditions [20][88] - Management believes that the company can navigate economic downturns effectively due to its scale advantages and diverse customer base [49] Other Important Information - The company is actively working on mitigating tariff impacts, particularly from Chinese sourced raw materials, and plans to increase prices to offset costs [19] - The new production facility in the U.S. is expected to enhance capabilities and reduce costs [6][75] Q&A Session Summary Question: Which customer verticals are most exposed to tariff impacts? - Management indicated that promotional products, apparel, and gifts are the most exposed, with promotional products representing over 20% of consolidated revenue [25][26] Question: What is the expected tariff expense on remaining China COGS? - The estimated additional cost due to tariffs on the remaining $20 million of COGS from China is approximately $29 million, but pricing changes may offset some of this impact [32][35] Question: How does management view the long-term gross margin profile? - Management focuses on gross profit rather than gross margin percentage, emphasizing the importance of delivering value to customers [62][63] Question: What is the rationale for withdrawing long-term guidance? - The withdrawal was primarily due to tariff uncertainty and its potential impact on demand, making it difficult to provide accurate forecasts [88][90] Question: How does the company balance share buybacks with internal investments? - Management regularly evaluates the trade-offs between share repurchases and capital investments, aiming for high returns on both fronts [81][86]