Welcome to the Nilörn Q1 presentation that we just released here 2 hours ago. I will share my screen so you see the same as I do. We go through that. Just a second. There it is. Yeah. Good. Welcome again here. I will start with the financial performance and the numbers, and then after that, I will also go through a little bit what we are focusing on at the moment. As you probably have seen already in the interim report, the order income was down by 21%. That is also a reflection of the high order income we had last year in the last first half year. We have tough comparison numbers.
Also that, the way we measure the order income is when we place purchase order, then we measure the order income. As you also noticed that we are working on and have had quite a high stock level, that means that we are working on to reduce that. Even though the order income might be slower, we still have quite a lot of goods in the stock that we deliver that doesn't reflect in the order income. The order income is measured when we put in purchase order and put the goods on stock, then we measure the order as an order income. Then when we deliver the goods out, that is not an order income, that is turnover.
Also when we build up stock that affect positively the order income, and then we deliver out an invoice that affect positively the turnover numbers. Yeah. The sales also went slightly down, was a reflection of the strong comparison number we had in the first half last year. You will see that a little bit later in the graphs that I will present. Positively is that January was very slow, following the trend from the Q4. February was a little bit better and March was better. There's a positive trend. We still see that many of the outdoor brands still have a high stock level and suffer from that. What we see is a positive trend from, especially from the luxury segment, that continue to go as well.
Country that performs really well is France and Italy with the luxury segment, Spain and U.S. Even though the Spain and U.S. are relatively small number, especially U.S., it's a good positive trend. We started in U.S. a few years ago, it's a very careful start there and no dramatic at all. It's good. I see it at least that's going in a good positive direction. Bangladesh and Portugal, where we have our own major facilities production, has performed also very well. We can see that own production has increased slightly now in the total turnover. Approximately 20% of the turnover now is own produced versus if you consider Q1 last year, it was 18.5, that has increased.
The P&L will not go through that in detail. We'll just give you some explanation. In the turnover number, we have, as you saw in the previous slides, the currency effect, but we also have an effect related to the acquisition we made end of 2022 of Bally Labels in Switzerland. It's not much in the turnover. It's SEK 2.4 million, so 1% of the growth is related to Bally Labels. Why it's not more than that is because Bally Labels is a partner company, or it was a partner company to Nilörn before. A partner company means that we working very close to them, and we treat them as a subsidiary. The sales and so on was already within Nilörn numbers in Asia, and we paid out commission to them as an external company in the past.
They belong to the Nilörn Group, it's a subsidiary of Nilörn. That also affect the other external cost and personal cost here. The numbers is affected around here with the personal cost around SEK 1.5 million related to Bally Labels. As you can see, the personal cost has increased by SEK 8 million. SEK 1.5 million relates to Bally Labels and approximately SEK 2 million to the currency effect. As we have like 600 employees within the group, 43, whatever it is, are here in Sweden and remaining are outside. We're very international. As you probably know that around in Asia, a lot of employees, Hong Kong especially. The increase here is coming back to that a bit later in presentation where we have increased, but increased the number of employees as well.
That is coming to a full effect now. So Bally Labels effect and currency effect is approximately SEK 3.5 million in the personal cost. External cost has also gone up slightly here, also some currency effect of SEK 1 million. Also we're taking on cost here for more pairs, et cetera. We're more active now in the sales side, if you compare to during the pandemic. Moving on here and looking at the quarterly report or quarterly numbers. You can see the operating result is around SEK 17 million, and if you compare here to 2019, we are in line with that, slightly higher. There has been a currency effect.
Currency effect in the Q1 this year has been mainly affected by U.S. dollar, Hong Kong dollar and euro that has been much stronger versus the Swedish krona, but we also have opposite effect on the Bangladesh taka, Pakistan and the Turkish lira. As you can see here also that we see on this slide here where we have the graphs, the sales, and you can see here in the Q1 last year was very strong in sales and also Q2 and slightly lower in Q3 and Q4 was a decrease. We have here strong comparison numbers which also can be seen in the profitability here. Here versus here. Yeah. That means that the first half year here we will have quite tough comparison numbers and more easy or easy.
Well, yeah, we had a strong half, first half last year, and it will be slower last half, last year, or last half last year. Also I think to the outdoor brands and so on, I think it will take some time for them to decrease stock. I think we will see a major impact from a comeback from the outdoors brand. Not yet. But we have other clients that will perform better, like the luxury segment and so on, that will continue. Consolidated balance sheet. Just a few numbers I want to highlight. One is the inventory level that we have had a focus on this year, and we still have now. It's gone down SEK 10 million. If you compare the same quarter last year, it went up SEK 24 million.
It is on the right trend. We have more to do here. This is still a focus area for us. Cash. We have quite a lot of cash here in the group. We will now take on a dividend payout in May if the shareholders meetings admit to that, and there will be SEK 57 million payout paid out. We have still some cash in Bangladesh. We don't take out that at the moment. The intention that we will build up a factory now and instead of taking out the money and pay out a lot of tax for that, we keep the cash in Bangladesh for the factory. Equity level, strong balance sheet. That can also be seen here in equity where we have 57% or 54% almost now.
Yeah. I mention here about an average number of employees where we have a very international focus or very few in relation to in Sweden. We have increased the number. This is the average number of employees. We increased that during the period or since last year. It's mainly in the sourcing area where we have built up a strong fundamental within the group. We also increased in production, CSR compliance and IT as well. I'm coming back to that, to the efforts and what we're doing that in these areas. Here if you're looking at the net cash, that is including the effect of IFRS 16, where we move a cost for, well, treat cost for the lease we have within the group, for the...
That is mainly office in Asia and some in Europe as well. Due to that IFRS 16, we book that as a liability, interest liability cost. If you exclude this, you can see the effect here is SEK 17 million that gives a net cash cash on the bank net SEK 43 million versus SEK 65 million last year. Still quite strong net cash position. The reason why we don't repay all this cash and have no debt at all within the group is 'cause we are split in 15 different countries and we have working capital and it not all cash is easy to move around from day to day. A summary of Bally Labels, the acquisition in Switzerland.
It contributed in turnover SEK 2.4 million and in the operating profit by SEK 1.2 million. As mentioned earlier, it was a quite slow start in January, and it's improved during the quarter. It's hard to predict what happened in the coming quarter. We still see that the outdoor brands have quite big stock, but we also see positive signs in the others, other areas. I mentioned this already, the stock level, and we have seen strong development in Italy, France, U.S., and Spain, Portugal, a little bit slower in the Scandinavian market, U.K. and Germany. It's up here where we have these outdoor brands, both in Germany and Scandinavia, but also in U.K. Performance in production continue to. We do well here.
I announced last Q1 year-end report that we will expand the production both in Portugal and Bangladesh. That is still the case. It's still on the planning phase, so it's nothing affected in the cash flow. Nothing. No major decisions made yet. We're still searching for land in Bangladesh, and we have not then made any formal decisions yet, but that is still in our plans to go ahead with this. The reason why we do that is that we have seen a great demand from production moving out from Asia and from China, especially from China. China will still remain the biggest and the most important, but little volume moving out from China has a big impact in these countries. Product mix. What we can see is that packaging is increasing.
If you compare packaging Q1 2022 with packaging in percentage this quarter, it has increased from around 12%-15%, so the packaging continues to increase in relation. Labels has decreased slightly. We also decided to go for an establishment in Vietnam with the local warehouse and sourcing, et cetera. We supply already in Vietnam. We have quite many clients there, so we supply them through other partnership we have in Vietnam and through our sourcing office in Hong Kong. Now we come to the insight that we need, and that is also driven especially by the outdoor brands here. We need to be there at site. I think that is a good and important decision we made on that. Yeah.
Also announced already earlier, we continue to build a strong fundament, and if you compare to Nilörn a few years ago, we focus very much more on sustainability and CSR. We have built up a new web order system that will be launched here in the mid of this year, end of June, I think. We have a Nilörn:CONNECT. I'm coming back to that also in the presentation. Nilörn:CONNECT is where clients, as the end consumer of the garment get information on the labels about the garment, and the brand owner can the information what they want here. Packaging is an area that we are focusing on, and we're doing more and more. It's already said that that increased versus last year. Here is luxury packaging and recycled polybags.
Sourcing an area that we focus on and built up, and we are acting here. I feel we're acting very much more professional now within the sourcing area. That is also driven by the CSR. We need to consolidate our sourcing supply base, and we're doing and get control of our supply base. The team here has done a tremendous good job. Compliance is an area that we are focusing on as well. It's also driven by the client. They We are supporting them and helping them out. It's a lot of regulation coming up here in the packaging, in the material and so on the label side, and we are guiding the client on these in these areas here. That is very much client-driven. Material, also CSR-driven.
We try to help our client out, what kind of material, giving them advice and so on. IT, all these area needs information. This is also an area that we spend a lot of resources in to build up. That is important, I think, for Nilörn to take the next step and be following and be in the forefront of the development and not behind. Yeah. It's very much a change management we're doing. Of course, it's tough for the whole organization to be part of this. But I must say that they're doing a tremendous good job. I'm glad to have all these good people on board. Our vision and it still remain the same.
The slogan, adding value to brands, says very much what we are doing and focusing on. I already been into this, the structural, focusing we have at the moment within the Group in all these areas, including RFID and organization. We've working quite much on that and getting people on board, getting the drive within the organization. That also means that we have done and still do investments. We talked about the Nilörn:CONNECT, the IT, and we also talked about Bangladesh, Portugal, and so on. New offices in Vietnam here, and we are looking for other sites as well, also at the sales side. Marketing and, yeah, clients. They were all...
The aim with all this, that we should be seen or clients should feel that we are an innovative company, a transparent, creative, fast model, and they should feel that we are a reliable partner. In the past, we have been very much a design-driven company, and that's still the case. We should still be very good on design, but we should also be in the other area as CSR, et cetera. CSR, our sustainable journey, It started already in 2004, so it's been a long journey for us, but it's what I can see, it's increasing a lot last years. In 2004, we started with a Code of Conduct, Nilörn Code of Conduct. 2017, we employed our first sustainability manager.
She made our first sustainability report and put up a strategy for Nilörn, how we should act and implement all this within the group. It's actually, during these last years have been a tremendous good job on this. Last year, we implemented a preferred material index that is support for our client, what material and what impact that has on the CSR, on the environment. It help them, guiding them what materials to choose. Nilörn:CONNECT, I will come back to that. Also, for our brand or clients, where they can help our clients, their clients to present how much CO2 contribution the garment, this one have. We have taken on more and more certificates.
We have started a material group within the group, taken from new material and that we can present to the client, and giving them a choice to choose from. Karma is an internal audit system, so we can have a much better control of our supplier network, but also our internal sourcing. Sorry, internal production. Internal production, yeah. We have very good control of that compared to what we have in the past. Product description, I will not go through this in detail. You know the label is the tradition, what we are strong at, and we're coming from all the different sorts of labels from hang tags, et cetera.
Packaging is an area that is growing, very much on the, not the basic packaging, but very much on the luxury, shirt bags and gift bags, gift boxes, and also recycled poly bags. RFID, we presented that earlier. It's an area that is increasing more and more, and RFID is very essential for the logistic. Our client use that for the logistic part when to have control of their garment, where it is, and they can easily make an inventory take by just electronic scanning. Then you have the Nilörn:CONNECT, where you add this QR code on the hang tag. Or on these care labels. It can also be on a NFC chip inside here. When the end consumer...
You as an end consumer, when you buy the garment and you scan this, you can get up this in your mobile phone or in the computer where you can also. It's up to the brand owners what information they will add here and show you. So they can change this information, and so they can. This is a way for them to communicate with the end consumers. Also be used as within the CSR. Yeah. The financial targets is still the same that it's been here. We have outperformed them the last year with the revenue in excess of 7%. This quarter was slower, but the previous years has been quite good. Operating margin of around at least 10%. If you're looking for pre-pandemic, that has been around the 10%-12%.
After the pandemic here, that we outperformed the last year, was slightly lower in the Q1. Yeah. As we decided earlier that the dividend payout suggested to the annual shareholders meeting is 5 SEK this year. The goal is still that satisfy all our customers, and with our creativity, product, and services. I'm sure that if they are satisfied, we will continue to contribute. I hope we can also perform a good financial performance as well for our owners. I think I forgot to mention that in the beginning, but if any questions and so on, there is a Q&A, so you can write that, and Maria will help me out. If there are any questions, we can reply on that. Maria just also mentioned Maria is the CFO of the group.
Yep, hello, everybody. We have received some questions, so I will pick some. We have only 5 minutes left in the meeting, so probably won't have the time to reply to them all. We will do our best. We have received a question about our work within CSR purchasing, product development, materials compliance, et cetera. The question is whether we feel that we need to strengthen these functions much further or if we have reached the level that is sufficient for our current business.
Good. I think that we have reached the level. I think we have a good team both on the sourcing side and CSR and sustainability is... They will continue to just doing their job. I think we have a good team. We don't need to strengthen that further, not what I see now. I think we have the team sufficient. I think it actually can be opposite that in the long run, we will get our synergies, especially from the sourcing side, that can be even further.
An area that we will continue to develop, and we have strengthened that so already, that is within the IT, and that is both, as mentioned, within our business system to get out the information from the system but also on the client side with this web order system but also Nilörn:CONNECT system. That is still continue, but I think here we have the resources within the group that we need.
Yeah. Good. We have also received some questions about our production expansion plan and, more precise in Bangladesh and Portugal. You've already touched it to some extent. The question is, how these investments in Bangladesh and Portugal can enable us to accelerate growth?
I think, both in Bangladesh, I mean, our goal is not to be a production company, but, we've seen that, especially in Bangladesh, it's a competitive advantage. We started up in 2010 in Bangladesh as a, trading company, but in the end it turns out that being a trading company, it was difficult to find good local suppliers to keep up with the CSR demands and so on. We also faced the change the regulation in Bangladesh, so we did some import of goods and so on from Asia, from Hong Kong and so on. Due to the custom and duties and, so on in Bangladesh, we were not competitive importing, so we needed to set up our own production. We see that more and more volumes moving into Bangladesh.
To be able to co-keep up here, we need to increase because we reach the maximum of our capacity in Bangladesh. We need to continue expansion. Going back and starting with the trading is not an option because, as I mentioned, with all the taxes and so on. Portugal. It's not many production companies left in Europe. We have seen that more and more volumes also from the end, from the, our, the brand owners, our client, they're moving production closer to their to the supplier, to then to Europe because they want to have a quick supply and also CSR driven. They instead of shipping the goods around in the world, they have it more close. Then where we want to be close to our client, and there we have the factory.
Like 10, 15 years ago, Nilörn Portugal was a burden for the group. Now it's an asset. It's, we see great demand there. I think we turned Nilörn Portugal from being a burden to be a contribution to the group and to the strengthen up our competitiveness.
Yeah. Good. Unfortunately, we won't have the time now to reply to all questions. There are some more, but we can take one final question that is quite short. It is whether the acquisition of Bally Labels has resulted in any material non-recurring costs.
No, no, not at all, no. No. I think Bally Labels, it's not a dramatic acquisition. It's small and, but it's good adoption. We have been working very close to Bally Labels and Martin, who was the previous owner. His stage where he want to retire, and there was an option of him selling that to another external party or selling that to Nilörn, and we thought it was a good idea, good view to take control of our Swiss market as well. We have good, yeah. That was mainly the reason behind it.
Yeah. Good. Thank you.
Finally. Thank you. Thank you very much for everyone for listen, and, see you soon again. Thank you. Bye.