Good morning, everybody, and welcome to the Nilörn Q2 presentation. Just for your information, we will record this presentation. I know that we have a quite tough competition as it is a lot of companies reporting today. I read somewhere that this is among the most intense days during the summer of reporting. We'll try to keep it short, so you get time for other things as well. I will start here by sharing my screen. We go through. As usual, if there are any questions and so on, we can take them later on. I will start with the financial performance, discuss and talk about that. In the end, I will also highlight some tasks that we are focusing on at the moment.
Order income was down 32% in the quarter, and the sales 14% and, excluding currency effects, 18%. The currency effect is a mixture of the different countries. You know, all that the Swedish krona has been quite weak, and we are, but we are also in countries where we have even weaker currency, like in Turkey and so on. This is a mixture of all these consolidated into the Swedish krona that makes this. I also want to highlight the order income. It sounds dramatic. Yeah, I'm not that concerned about the order income. The way we measure the order income is that once it's...
Just to give you an example, we get an order from an example of an outdoor brand, we buy that labels, we put them on stock. So far, once we buy these labels, it's counted as an order income, and once these labels goes out from our warehouse, that is then turned into a turnover. The first order income is when we are buying the labels, sales comes when we are delivering the labels out from stock. Also knowing that what we faced here during the pandemic is especially the outdoor and the sports brands had a fantastic development, they ended up and ordering too much of the end consumer stock, that's what we are seeing now, that we have quite much stock.
That also means that once they start ordering again or buying again, we have the labels on stock, so we will deliver out. Our goal is now, as I mentioned, also in Q1, is to decrease the stock level in the group. That will turn into generate sales, but not necessarily any order income in the beginning. I think it's unique for Nilörn maybe to measure in this way, but it's also important for you to understand the way we measure the order income is that when we place the order, and you can say, assume that we don't get any order income at all, as zero, we will still be able to deliver because we have all the stock, so that will still generate sales.
In order for us to come down with the stock level, we will see sales, but less order income. You can also question then, why are you sitting with such a high stock level? That is, I mean, that is a function of our client. We order goods into stock when our clients, based on their forecast, and most clients have guaranteed the stock level. As Nilörn, all the goods we have on stock, or almost all goods we have on stock, except some raw material and so on, is client unique. They are branded with the client's names and so on, and that is, most cases, guaranteed by the brand owner, the in Europe here.
We also proven that in history, that the risk in our stock level is very low, as long as the brand owner survives, because they have normally guaranteed the stock level. Just for you to have an understanding about the order income. Sales went down, and that, what we are seeing here is, as I mentioned, and also especially the outdoor, the brands and the retail, says the sports brands, it also affect our main markets, where we are strong in these segments. It's Scandinavia, and it's Germany, and it's U.K. We expect and hope that we will see some relief here during the autumn side. It's too early to say exactly how and when their stock level will be a normal level, and they will start ordering again.
We see that for, especially for some sports retail now, they're coming back. Outdoor seems to be, just looking what happens here, it's a bit more slow. We also know that we, as a group, we have many fantastic brands within as in outdoors, so I'm sure they will come back sooner or later. Also, as we mentioned in Q1, we have in our luxury segment, and the trend is our founder, so we continue developing well there, Italy, France, and also Spain, and to some extent, also US. US is quite small numbers, but it's a good development. I think we have done a good job, and we are into some really nice brands in this segment.
That is also, that also means that we are the big market like Germany, Sweden, and UK are suffering. At the same time, the small countries that we traditionally have been very small in Italy, France, Spain, are growing, which makes us as a group more balanced. The accumulated numbers, I don't know what so much to say about this. We are looking here, we are on high sales levels. If you compare with 2019, we are almost on the same level, operating profit-wise. We will see how it looks at the bottom side. We've done a cost savings program. I'm coming back to that a little bit later as well. Sales we talked about already. The gross profit and the gross margin is down in the quarter.
That is also related to the product mix, we've been selling more packaging this quarter versus same quarter last year. That reflects in this margin. I will also say that in the end of Q1, we had a very strong trend, January, February, March, going up, up. I would say that in trend here in Q2 is very volatile. It go up and down, up and down, so it's not really a trend. I would say more volatile market. External cost has gone up, in personal cost. Here we are reducing staff now.
We launched, and doing that here, we assume the cost, the cost taken here in this quarter is approximately SEK 2.3 million for redundancies, and that has mainly affected our operation in Hong Kong, Turkey, but also to some extent on the headquarter here in Europe. We have not touched sales. We think sales is the engine. We are very keen to keep our salespeople, and also in other areas that we now started to have built up a big, fantastic team in sustainability and CSR and all these compliance, et cetera. They are untouched, and we have no intention to moving them around. We want to be strong.
Operating revenue, most of this, I think it's like SEK 6 million, is from currency and operating cost here is also 100% currency related. Net financial item has gone up. Here, also related to currency. We here is, we hedge all the borrowings and fundings within the group in the different currency, except in Turkey. This is mainly, except the pure interest cost here is I think it's slightly TRY 2 million here that belongs to the currency effect in this Turkish lira. Tax, tax rate here, 27%. It's slightly higher than the Q1. That is also a matter of, as we are quite in many countries, it's also depending on what countries we're making the money.
Different tax rate, different countries, makes a different consolidated tax rate. We have as a goal in the group to have an operating profit between 10% to 12%. Here, we're down to 7%, we're hoping that now we will see the volumes coming back and also the cost savings program take into account. I think we touched upon all, most of this already, here is quarter by quarter, you can see. I would say that pandemic here, slow. The after pandemic, post-pandemic, we had a really strong, especially 2022. Now we're building up stock level and so on for the outdoor. That's what the effect we see now.
It's quite hard to predict the autumn side, but I think, and what I hear is, especially that the nice brands we have, as I know we have, so I'm sure they will come back. A graph explaining the same thing. Q1 last year, it's very strong. Q2 last year, extremely strong. Q3 and Q4, less strong, so we got more relaxed, what would we say, not that challenged comparison numbers going forward. That can be seen here also in the profitability, that the Q2 last year was extremely strong. Balance sheet, yeah, inventory level, we have now worked on that. It's decreased here if you compare to December by SEK 20 million. If you're looking at last year, the same period, we increased actually the stock level by SEK 60 million.
Here, increased by SEK 60 million, here, decreased by SEK 20 million, which is good. I mean, this is needed in the group. What is optimal stock level? We should go down further and maybe around 160. I am not sure. It's depending on the client we have, of course. Equity level, strong. A little bit about the key financial numbers. These here, number of employees is the average, and what we now done is just recently now, start to reduce. It will affect approximately 30 employees in the group, but this is counted as average. You will not see that here in the number at the moment, not end of June, at least. You hopefully will see some reduction, but it is average numbers, so it takes some time. Yeah.
Volatile market, we mentioned that it. Also, I think it's here is going very rapidly up and down. We talked about the stock of finished goods. I think hoping to see a release on this. We see positive development, luxury segment, and our distribution units, the one that we see the volumes moving out from China, Hong Kong, and with the benefit of Bangladesh, Pakistan and Portugal. This is also the reason why we are here cutting cost. Turkey is also suffering due to the high inflation. Also we see that is not a Nilörn that suffer. If you look into our suppliers, that is supplying also to our competitors and in the market, they are all screaming for more volumes. They are all suffering at the moment.
That's why I think once the consumer starts to spend again, we will see the volumes coming up. Bangladesh, we also expressed earlier that we will looking into a new factory here. That's a long project. It will not be ready until probably end of 2024. We have identified some land, or our people in Bangladesh identified some land, so that is in process now. We have not closed any deal for land, but that is in a, in the process. Portugal, we have also now done a negotiation with some land that we will we will take a next step, and then the first step here is to buy the land in Portugal, and then there will be a project of expanding the existing factory into that land.
Vietnam, we have employed a lady that will be country manager and working with them, setting up our Nilörn in Vietnam. That will be ready during autumn time here at the local warehouse and sourcing and so on. The stock level I already mentioned, we have done a cost savings program of SEK 50 million on a yearly basis. That is mainly from Hong Kong and Turkey, but that also consists of we will do more consolidated shipments to Europe, negotiate the freight prices. Also from our supply side, decrease the purchase price. We have a really strong team here in sourcing now, working very systematically with this.
By-L abel acquisition, we made at the year end, contributed by SEK 2.4 million turnover in the quarter, and a loss of SEK 300,000 in Q2, and accumulated it was SEK 4.8, SEK 0.09 million, sorry. We continue our journey to be really strong in the different, as I mentioned in also in the previous presentation here, in all these area, we see the sourcing side, we're working very much differently now than we've done in the past. More centralized, to be more partnered with our suppliers and also to be able to push. That is also part of the CSR, because we cannot work with too many suppliers. You lose control then, so you need to concentrate on that.
Compliance is also we have a department in the group now helping our client in compliance. This is also this CSR-driven because we see the demand from the different countries in Europe, like Spain now we see for plastic, Norway we see, and all different countries. This is a jungle for our client, and we said that here we see an area, so we want to be support our clients because it is on the labels that these will also be branded or information should be included in this. This is part of the package we offer to our clients, support them with this. That material, to be sustainable material, give them opportunities, and then it's also, here's also a concept we have developed, which we call Nilörn:CONNECT.
That is a solution to help our customers on the journey for this DPP or Digital Product Passport that is coming now in Europe. It's a huge demand for our client to fulfill all this, and we see this as an opportunity for Nilörn to be part of and support our client in this area. This is what we are now selling. This is part of Nilörn:CONNECT, part of, as you as an end consumer, you receive this QR code, you scan that, you get information about the example here. That is, the information you see here is up to the brand owners, what they publish or choose to publish.
This is also the Nilörn:CONNECT side, that we will launch, have a here basic solution, and then we have add-ons for our brands in the different options here. Yeah. As I mentioned, the operating margin, at least 10%, we said 10% to 12% is, that is the goal, even though we are on 7% at the moment this year. Yeah, I see time fly. It's already soon 20 past. If you have any questions that you.
We have received one question, and it is about the investments in the digital product offering. If this will change the growth and margin dynamics of the overall business?
It's, I mean, it's very, very early to say. I think this is an opportunity for us to grow further. I think there will be very, from just being a label supplier that we have been in the past, we've now taken the step to be a solution provider, to be covering much, much wider range and go much more connected to the client. I think this will be some difference between the major suppliers and small suppliers. It will be difficult for everyone to join this journey, there's a rapidly development also from the demand from all the countries, CSR as, yeah, and European Union and so on. I think we doing this right is a good opportunity for us.
Yes, I agree. That's pretty much all of the questions we've got.
Very good.
Considering, time.
It's perfect.
Yes.
Good. Thank you very much, and, thank you for listening. Have a great weekend and a great summer, and see you again after the Q3. Thank you. Bye.