Good morning, everybody, and welcome to Nilörngruppen 's Q2 Interim Report presentation. As usual, we will record this presentation and share it later on at our website, so I hope that is okay with everyone. Together with me today is Maria Fogelström, Nilörngruppen 's CFO. I will start sharing my screen. Nilörngruppen 's Q2 presentation, and starting up with the financial performance of the quarter, it has been a quarter with ups and downs, coming back to that a little bit in the reporting here. First of all, the order income was down 1% in the quarter to SEK 205 million, and the sales was down 10% to SEK 237 million. There is a big currency effect in the quarter, standing for SEK 24 million.
There is a big impact of the currency effect, and that is, as you probably already know by this stage, that all sales are outside Sweden. It was nothing in Swedish krona, everything else in U.S. dollars, Hong Kong dollars, or in euro, and other currencies, Turkish lira and so on. All our invoicing is done outside Sweden. It has been a quite volatile market. We have seen a steady comeback on the outdoor segments. They're going really well, but the luxury segment is suffering. For luxury segments, they're mainly in the packaging in the luxury segment, but they can also be seen in the different categories that we are selling. We've also seen that European clients are a little bit hesitant, especially the clients that are exporting to the U.S., and due to the tariffs and uncertainty in the market, some clients are more cautious.
That means that they are placing the orders later in the season to be more strict. We also see a change in ordering pattern to be more later in the season. We have had in the quarter a few clients that have gone into administration, so we've been cautious and made provision on that. All this has been affecting the operating profits. This quarter's operating profits was SEK 16 million compared to SEK 25.6 million last year, same quarter. We continue to do investments, but I'm coming back to that to show what kind of Nilörngruppen we are building and going forward and the strength that gives us in the future. Accumulated numbers, order income ups that represent was a really strong order income intake in the Q1, as you remember. Sales down 1%, and adjusted for the currency effect, the accumulated sales is up 3%.
Operating profit SEK 39 million versus SEK 48 million. The big reason it's such a big impact in the currency effect is that in the profit and loss, you calculate the currency effect with the average rate. What happened at the end of Q1 was that the Swedish krona strengthened a lot, but the impact on Q1 was low due to the way it's calculated with the average. Even though the Swedish krona strengthened at the end of Q1, the impact was low. As was mentioned in Q1, there would be a big impact in Q2, which we have seen as well. Even if there would be no turnover at all in one quarter, the whole P&L is recalculated based on the average currency effect that quarter. As I mentioned, as all turnover and so on is outside Sweden, that has a big impact when the Swedish krona strengthens.
If you look at the P&L, you can see that gross profit is still strong. The gross profit is a mixture for Nilörngruppen. First, I must say that our sourcing operation has done a good job. We set up a global sourcing team since 2020, building up that. That means we are much stronger now when we have global tenders. Instead of each local sales company going out and doing the sourcing, now we have a global tender, so much stronger than that, impacting and making sure that we have consistency in pricing and so on with the different sites. Also impacting the gross profit is the product group and the clients. If a product group like packaging and so on has lower margin, another product has higher. It's also the different product mix that affects the gross margin.
The third one that affects the gross profit, the gross margin, is own production. The more own production we have, the higher gross margin. Of course, higher investments and so on, but there should be higher margin on that one. As you know, the big two sites where we have production are Portugal and Bangladesh, and those are going really well. We can also see that personnel cost has gone up in relation to total sales, and that also depends on the own staff that goes in own production here. We increased the staff a lot in Bangladesh, but also Portugal. We're also going into new countries like Vietnam, where we now have 22 employees, relatively low production so far, but it is to come. Here is when you're moving, as we are doing now, moving volumes from one country to another.
We're moving from China, Hong Kong, into Vietnam, and other countries. That takes time also to adjust the costings because we increase in one country, and it takes time until we decrease in other countries. We also employ people now in the U.S., so I'm coming back to that also. I think we have seen a really nice trend in the U.S., and therefore it's worth investing more in that to ride on the trend there. We are now 681 staff, so increased. The number of staff has increased, but as I mentioned, the big number of increase in the number of employees is in Vietnam and in Bangladesh. Tax rate is at 24% for the quarter, and that is depending on the different countries where we make the money. We are in so many countries, and some are high tax and some are very low tax.
This is the mixture. This is booked tax, and at the year end, we will see the actual tax rate coming up. Little of the product group, 24 and 25, and as you can see here, packaging has gone down from 21% to 18%, even though packaging is an area where we spend resources now, and we think there is a good potential for Nilörngruppen to go in. As you remember, we have now an own packaging manager for the group, and we have big efforts going in here, though the packaging is going down. The reason why packaging goes down is linked to the luxury market where we have big sales in packaging. That is not that we have lost any client or anything like that, but it's just that they are overstocked.
We've been told that it will be slow this year for the luxury market, and it will come back in 2026. Gross margin, as I mentioned, has gone up, so we see quite strong gross margin, but the operating margin is not that strong. The aim is that we should be back on 10%-12%. That is the goal. We will look into that. We've done some investments, coming back to that later. The aim is to be back here at 10%-12%. Turnover-wise, slightly lower turnover as you already know about the numbers, but also here in the graph for the Q2. We can also see the trend that in the past, always Q2 and Q4 was the strongest. Now the trend is that, I mean, it's even out very much, and that is due to the change of ordering pattern.
It's the season change, and that's also the quarter comparison of the operating profit. Here we can say that, I mean, volume is important. Volume matters. If the volume goes down, the profit follows with that. We have the cost now for the different departments and so on. When the volume comes, we also see a big increase in profit and vice versa. Balance sheet is strong. We have, as you know, we have done the dividend this year was quite low, relatively low compared to what it used to be. We are now being prepared to do an investment in Bangladesh. We got now everything formalized to take over the land in Bangladesh, so that will be the next step. The investment in Bangladesh will start from now on, and the goal is to have the Bangladesh production up and running until 2026.
Also here in the equity, it has a big impact on the currency. Translation differences during the year, SEK 28 million almost. That is from, yeah, all the equity we have run in the group. When we convert that into the Swedish krona, we get less than we would get in the past due to the strong Swedish krona. This is just the translation differences. I just wanted to show you that it has a big impact on a group like Nilörngruppen, where we are in 19 countries, very international. Key financial indicators in the bottom here, you can see the number of employees. We are now 681. Year 2020, we were 500, so we increased quite a lot. That is, I would say mainly the number of employees is in Bangladesh here. We increased also in Portugal and in other countries as well, but the main is in Bangladesh.
Also mentioned like Vietnam. As a summary of what said in the report is that, as predicted in Q1, big currency impact. As we knew that in the end of Q1, that was a big Swedish krona strengthen, but that was not seen in the P&L as much at that time, but that has now come. Volatile market, luxury is down, but the outdoor is still strong. Uncertainty due to tariffs, a couple of clients in administration. We still see strong sales in the U.S. for U.S. clients, and that's why we spend even more, doing more investments now in stuff there. We see uncertainty from European clients selling into the U.S. Operating more than 7% in Q2. The goal is, as I mentioned, 10%- 12%. The 7% is below what we are targeting towards. We're done in the quarter. Cost savings in Turkey.
Turkey is a country where we still have a super high inflation, even though it's coming down, but it's still very high. There's a market that we have been suffering, and also the whole textile market in Turkey is suffering at the moment. We decided to size down in Turkey in order to save cost. The concept, and we have seen this, we're building it for the future. It's all about selling a concept. In the past, it was all about selling a label. Now it's so much more about supporting clients in CSR, in compliance, new material, and for packaging and so on. It's so much more nowadays than only selling a label. What we see is that the small players are tough in the market and the big players are gaining.
We've done investments to be in the forefront, but it's also, as you can understand, important for us to monitor the cost levels. Here is somewhere as well we've done big investments in. Bangladesh factory, as I mentioned, we now signed a contract, and that will be starting now to do all the groundwork and the architect and so on. That is really good. We reached an agreement. It would have taken a long time to go through all the agreement for the land, but now we are finally there to be signed within a week or two. Portugal factory, we're going in for the lean production. We are also expanding with more looms and moving out the warehouse to get more space in the factory. That is also going according to plan.
Expanding in the U.S., we employed initially two more people in the U.S., and now this quarter we also employed a third one. We think we find the right people also catch the momentum here. We had the momentum in the U.S. We said that we decided that this is the moment where we should expand. We know that it's not cheap. It's quite expensive in the U.S. to expand, but we think the market is huge. We have so much more to be done there. Sri Lanka, we signed up and just employed persons there to set up. It will be a very small operation in the beginning, but we need to be there to serve our clients, clients that are now going into Sri Lanka as well. The Nilörngruppen Connect, we've done quite a big investment in.
Nilörngruppen Connect, I will just show you a few slides about that, is the door opener for the client, and we're supporting clients on the DPP journey. Production is still strong, and Nilörngruppen is well equipped to handle both challenges and opportunities. For us, it's a matter of opening the throttle and also pushing the brakes at the same time, finding what we should invest in. The time is flying, but I would just mention here for you, I mentioned this in the past, but I want to make sure that you understand the Nilörngruppen Connect. We see the three different areas. One is the legal compliance, where we support the client now, where we have the challenge, and the client has a challenge, and where we can support them. The other one is circular solutions, repair, resell, recycle, to be more sustainable.
The other one, the third one, is the consumer engagement, to drive sales where they can have a loyalty program and acquire new customers through the QR codes and so on. This is an area where we have invested quite a lot in. I think we are there now. We don't need to invest that much, but it is for us a really good door opener to be getting a recent token to the client. Yeah, the financial targets, yeah, it's still the 10%-1 2% operating margin. We are aiming to come back to that. Good. I see the time is flying, Maria. How do you see, do we have any questions?
Yes, we have received two questions. I think we can take them. The first one is, could you please provide some color on the clients that have entered restructuring? Which segment are they related to, and which countries are they from?
Of course, we don't release any clients' names and so on. It's in the U.K. market, and it's also in Germany. It's brand owner and retailer.
Yes, thank you. The second question is, does the market momentum for packaging versus other product groups differ?
It differs. I think here with the beauty with the packaging is that we have the client, and we are selling very little packaging. Can we be strong here? We have the, we're talking to the client, and we can help them also with the packaging area. The momentum in general for packaging is that the reason why we suffer for packaging was lower is mainly due to the luxury segment where we have been selling quite a lot of packaging, and that has decreased now in this quarter. Not that we are lost in the clients, but it's a slowdown, and we expect that to come back again in 2026. For us, I think packaging is a nice area for us to expand in. Instead of just chasing new clients, we can also add that packaging into that.
That is good news for us, a good momentum, I would say.
Thank you. As we are running out of time, I think we'll have to leave the questions there.
Very good. Thank you all for listening. Thank you, and see you at the next quarter. Thank you. Bye.
Thank you.