Good morning, everybody, and welcome to the year-end report for Nilörngruppen. I will here share my screen over my shortly the pre-presentation. Hope you all see that now. I will here just start to focus on the numbers and the report for the quarter and the year-end, and then I will go over and talk a little bit about the investments and what we are looking forward now to in 2023 and so on. I just pick up here. This laser point, I think that is good to have here. Yeah, as you've probably seen already, we released the report and the numbers to the stock market. A slightly weaker quarter versus we had in the previous year. 2022 has been a really strong year for us in total.
The Q4 was weaker. Not that we have lost any clients, but we see a general decline, generally for the most of the clients. It's slightly different in different countries. Order income decreased 18%, and the sales decreased by 15%, and excluding currency effects, 17%, with an operating profit of SEK 14 versus SEK 40 last year. The general decline we see is mainly in the Nordic area and in the UK. The UK market and retail markets has quite tough at the moment. With many other big retailers suffers, and that has affected us. We see a quite positive contribution, and we're looking forward to see what's happened here in 2023 with the luxury segment. We're talking about France, and we're talking about Italy.
We have made some good breakthroughs, and we really see some good numbers in these countries. These countries are both is France and Italy, and also Spain are relatively small in Nilörn, but they are growing good now. They're good numbers there. I'm looking forward to see what comes out here. As you can see, we have also now a less currency effect this quarter was compared what we have had in the past. What we've seen during the year is that many brands that performs really well is the outdoor, the workwear, the sports, and so on. These are also down in the quarter. I think talking to clients, the trend has been so strong in the beginning of 2022, and so they built up quite a lot of stock.
Now, the sales has not been as strong as they thought. They are sitting with quite some stock, and therefore they are more careful now, which we had seen in this quarter. Yeah. We accumulated numbers here. Also strong. This is the best year ever we have had in the group. We just was here announced in the press release that we increased, excluding currency effect of 10%-- Sorry, on 60%. We just sent out a new release, adjusted that to 10%. There was a miswriting here, a miscalculation from our side. We are sorry for that, but that has been adjusted and the new release has been sent out. The sales excluding currency effect accumulated is 10%. Yes, this is the best year ever.
The best year ever we have had before the pandemic was 2019, where the sales was SEK 718 million, now SEK 983 million, the operating profit was before the pandemic was in 2018, where the operating profit was SEK 85 million. Now it's up to SEK 136 million. Even though it's lower quarter, but accumulated extremely good numbers, I would say. Looking at this income statement, a few things I want to mention. Here we have a decreased gross profit of SEK 25.8 million, where most of this comes from volume. A small part comes from lower margin as well. The lower margin is, I mean, we have seen in the past year, higher energy prices, raw prices, but also product mix.
The mainly effect here comes from the lower volume. Looking at the cost side in the quarter, the personal cost has gone up. This is, as the year in full in 2022 was such a good... The bonuses both for salespeople, but we have bonuses for salespeople and for the manager around in the group, have been on a very high level versus in the past. That has also affected. What we do is not that we book everything in the Q4. We try to book that accumulated during the year. There will of course, be some adjustments, when you're doing the real calculation in the Q4.
That has also affected, as the year has been strong and, even though the Q4 was a bit weaker, that has been affected with, as we normally spread out the bonuses during the year. That has also affected the Q or numbers relatively high. There is an operating revenue and there is an operating cost here, other operating revenue, other operating cost. Most of these are currency effect. Not all operating income, but like SEK 30 million of this is currency effect. All of these operating costs are currency effect. That is when we have receivables and payables in foreign currency that we reevaluate and so on. As we are in different countries all over the world, that has a quite big impact.
Tax rate is like 23 something, going forward, I think we can expect a tax rate around 20%-23%, 24% going forward. As you know, the tax rate is very different in different countries like India, Pakistan, Bangladesh, and Europe, is, and Hong Kong. It's a mixture of all this. Depending on whether we get a profit, the tax rate will change, but I think it will be around this 23% going forward. Here is the income statement on a quarterly basis. As you can see, it's quite volatile in the different quarters.
If you compare the, this Q4 number now with the previous Q4s, we can see that here we have an operating margin of 7%. If we have to go back to 2019 where we have also around 7%. As you can also see, these years, as this year have been like 16%, 70% the previous quarter, which is extremely high if you compare to the historical number that we perform. If you look in 2020 or and back like to an old to 2010, the average operating margin for our group is around 10%-12%. What we have seen here is, I perform strong. Yeah.
Continue here with a graph where we will also see, same as you saw on the previous picture, but here more on a graph level. We see the turnover. The dark blue in 2022, very high in Q1, Q2, and Q3, and now a little bit slower here in Q4. As I said, it's not 1 client, it's not that we lost any client. It's more a general trend for most of the client. I think they're being cautious. They built up stock and so on, and the uncertainty in the market, especially here in Europe. That the volume is driving, the volume driven is also affecting then the profit here. Balance sheet. We have quite a bit up the inventory level, and that was the same trend also in Q4.
It's come down a little bit. So Q3, it come down a little bit. We have a big focus on that. I'm not afraid that, of the valuation of the stock. We have a very conservative policy, where we force also subsidiary to be conservative in the valuation. We try to get, the client, the brand owners in Europe to guarantee all the stock, where we have in the most cases, not all cases. If we don't have a guarantee, we are very cautious in the way we evaluate the stock. Yeah. Maria, our CFO, has done a good job here forcing all the subsidiaries, being, taking right answers on. Cash and equivalents, we have quite some cash in the group, and we also have quite high equity level.
The key financial indicators, we have gone through these slightly here with the growth and so on. What I want to mention is the average numbers of employees. That now is 587. That is the average number during the year. This is, yeah, average numbers. Not actually at the at the year-end, but the average number. Employees what we increased most is in production. We increased quite many in Portugal. We increased in Bangladesh. We have also increased in some central functions for the group like CSR, sourcing, IT, and so on. As I will come to that, what we are building up the group now. So that is to strengthen the group and also adjusting for the bigger volumes that we are proceeding with now.
To be a good supplier, that is the most crucial, I think. You need to be a good, reliable supplier. The board has proposed a dividend of 5 SEK per share, which is equivalent to last year or same as last year. We have some investment that we will do, also I'm coming back to that. Yeah, a little bit short summary. We acquired Bally Labels that will be consolidated from 1st of January this year. Bally Label has been a partner company to Nilörn. Partner company. What does that mean? That means that they're treating them as a subsidiary, but they have been independent or externally owned. They have used our distribution units around in Asia, and we are paying our Asian distribution units pay commission to them in Switzerland.
They've been like a subsidiary, but they've been external. Martin, the previous owner, he's become to an age that he wants to retire. We decided that the best way is we take over it together with the two of the employees, which we think is a very good solution. They know the clients, they know the company well, but they didn't have all the funding, we are part of that now. Nilörn holds 80% of this company, the two employees hold 10% each. This is not a big impact for 2023. Most of these turnover already is in our books as the way we operate is that the turnover happens in Asia, we're paying out commissions.
This commission and the profit of this company will get into the group. I mean, it's not having a big impact on the group. We already talked about that, a slow end of the year, but the best year ever. Here is the numbers that we show. Already talked about the pre-pandemic numbers. We're up to like 30% if you compare to that. Operating profit now up 136 if you compare to 85 before the pandemic. Highest stock levels we mentioned, talked about already. Some clients with finished product, which makes them more careful when ordering a new garment, which then affects our labeling. They don't need as much labeling in the Q4. Positive development, especially in Italy and France. Spain continue well as well, and the US.
What we see, which I am really happy to see, is that in the luxury segment, both that we are getting more market share in these clients now. We started with the small volumes, but we see that we have performed well. They're happy with us as a supplier, so we can take a better grip on that. I mentioned that we are looking to expand the production. We hit the roof now both in Portugal and in Bangladesh. We are looking to expand in both these countries. In Bangladesh, we are actually looking to move the whole factory and build up a new factory. The cost, it's not possible to expand the existing land there. It will take, we will see how quick it goes.
Nothing will be ready this year. It will hopefully be ready by the second half 2024, I think. We are working, and we've continued to do so, with the structural work within the group. We started here a few years ago, like two, three years ago. That is very much client-driven. We have invested in people, and we see that what we have achieved now is really something, I would say. Also, of course, our competitor is doing that. I think the team we have and we built up now, is doing a really good job. We think here we can have a competitive edge, that we are, can be proactive instead of reactive, driven by the client.
We support them with information instead of give instead of they just asking. Here, I just wrote WOS. That is our web order system. We have a system where the, our customers, can go in and see the stock and the ordering and the ordering process and so on. We are rebuilding that now to make it more modern. This has been something that has been a competitive edge for Nilörn for many, many years. Now the front end, the look and feel when you get into it feels old. That will be ready and launched in Q2 this year. Nilörn Connect, I will come back to that in a slightly later slide, what that is, means.
That is a new system that we have built, where the end consumers can read in the QR code, and so you can get a feeling of the, of the garment. I'll come back to that. Sourcing, we built up an organization, both in Asia and Europe, much more focusing and building a partnership with our suppliers, together with the purchase size. And we have now a compliance. We have a material teams, very much also CSR-driven, sustainability-driven, where the client wants to see alternative material that is more in line with a sustainable and so on. There we have a team working on that with 100% dedicated person.
This will also be in our collection that we show to our client, and we feel that is a competitive edge as well for Nilörn. Yeah. To feed all this is a lot of information they need to do a good job, so that also puts a demand on our IT. We also employ people within IT to and we're also using external partners here to get all the information that we need. I must say, I'm really proud of the employees we have in the group. They've done a fantastic job. I think we're really onto it and building something here for the future. Our vision is to be the best label and branding company worldwide, not necessarily the biggest, but the best.
We talked about the structure we're doing in all these areas. That means that. That will also affect new offices. We'll be looking here and to open up in Vietnam. We will have more sales offices in Europe. We've just Spain a few years ago and so on. U.S. The goal with all this investment, what we are doing here, I will not go through this in details, but that is to come out as an innovative company, to be transparent, creative. Our clients should feel that we are reliable and a modern company. For that, we need to be fast as well. That is our goal and to continue the nice growth we have had.
We need to invest to be able to cope with the future. That... Yeah, we are investing. We have done that, and we will adjust. The Q3 was a little bit weaker, but we will continue to build up the trust among the client. Sustainable journey is an extremely important part of our business. We have that in our sustainability report. We explain that quite well, so I think that is worth reading for everyone. We... This is in the label that we are here. We are very, by tradition, very strong and that way we have our home, you can say. We started and built up, and we've seen growth in the packaging. We will continue to do so.
We will also start to work harder in the heat transfer, an area that we are not that strong in, but we see big opportunities. We've been working with RFID. We are running that, and Martin here is running with his team a good job. We are growing in this area, and we're taking bigger part of the group's turnover in this. RFID is more logistic part for our customers to know they can do the stocktake and then know exactly how much garment they have and different items and so on, which is good for the retailers but also for the e-commerce business. They know for sure... Oops, sorry. I dropped out, I realized here. Sorry for that. I don't know what happened.
Not exactly sure where I dropped out, but I think it was on this slide. Yeah, what I said here was that the revenue growth should long-term be exceeding 7%, and that is organic growth. On top of that, we can add on with the acquisition if we.
Christian, you need to reshare the screen. The screen is not shared.
Okay. Thank you, Tobias. Thank you. There. Now I hope you can see it again. Yeah. It was on this slide it was dropped out, Tobias, wasn't it?
Maybe the previous one. Go back one and see.
It was neither the next slide.
No, this one was also not with. I think people didn't see this.
Didn't see this? Okay.
Here. Yes. Here it was.
Dropped out. Okay. Okay. Sorry for that, and thank you. Yeah. What I meant here with RFID, that is more on logistic side for our customers, the brand owners to know where they have the stock and what the accuracy in the stock level, which is important when they're selling the brands and especially for the e-commerce business. They know exactly how much goods they have. The accuracy so they don't sell goods they don't have in stock because now they know for sure that it is correct. The Nilörn Connect, this is something new we built, and we have already a few clients on board on this. With this is after sales, and that is for you as end consumers.
You can scan this QR code. We provide the labels with this QR code. You as an end consumer get up this information where you will see information about the garment. The information you get here is, it's up to the brand owners what they can add on here. We provide with a system where they can add on information. We provide the labels with the QR code. This is very much also sustainable driven, where the brand owners add on information about the garment, where it's produced, what it consists of, and sustainable information.
It can also be all sorts of information, like care instruction, how you should wash it and so on. The financial targets for the group will remain the same set by the board. There's still the 7% growth we will have, and that is all organic growth. If there will be any additional acquisitions, there will be add on on that. The long-term goal is the 7%. Also, as I said, it's happening quite a lot in the market at the moment, a lot of restructuring and so on. It is an exciting time here. We are talking to companies, but nothing that we can...
We have quite far way to go, but we at least we'll see what we can do here and be part of that. Operating margin of at least 10%. As you can see, we know that we have achieved that quite well. The goal is to have a dividend payout of 60%-90% of the net profit. Our goal is to make our customers satisfied with all our creativity, product and services, gone through that. I think that goes hand in hand. If we manage to do that well, it will also be a good investment for our investors and shareholders within the group. Thank you so far, and let's see if we have some questions. Maria?
Actually, we haven't received any questions. There is a Q&A function. If anybody has any question, feel free. We just got a question about 2023 and how optimistic our clients are and if there is any difference between different segments, for example, low cost, mid segment, luxury, and how the clients see the future in each segment. What would you say about that?
Yeah, thank you. I think, looking forward here... Yeah, it's, I think it will be a little bit slower here in Q1 . Talking to the client, they are quite optimistic anyhow for the full year. As you mentioned, Maria, especially the luxury segments seems to be very positive, I think it will be a breakthrough for Nilörn Italy this year. I think it will be slower here in the beginning, also seeing, the slow order income we had here in Q 4 that will have an impact in the beginning. I'm optimistic for the full year.
Also in some countries, as we also said, we see a big difference in different countries, like, in the U.K. retail sectors is still slow and I'm not sure, but they are more cautious in the U.K. than in other markets. That is my feeling at least. Yeah. I think that was it for today. If anyone has any questions or any comments or so, you just feel free to call me or Maria, and we will see what we can help you with. Looking forward to 2023 and coming back after Q1. Thank you very much. Thank you. Bye.