Adding value to brands
Nilörngruppen is an international group founded in 1977, which adds brand value through branding and design in the form of labels, packaging and accessories to customers, especially in the fashion and apparel industry. Nilörn strives to increase its competitiveness by offering services covering all design resources and a logistics system that ensures reliable and short delivery times.
Nilörngruppen originates from a design bureau that Claes-Göran Nilsson started in Borås in the early 1970s. During the 1980s, the company expanded through acquisitions of mainly Swedish and Nordic textile and label companies. In 1998, Nilörngruppen was listed on the Stockholm Stock Exchange and the company continued to grow internationally through acquisitions. During the period 2000-2008, the company suffered overall losses. In 2009, the company was delisted from the Stockholm Stock Exchange since the major shareholder, Traction, increased its ownership. At the same time, the current CEO Claes af Wetterstedt acceded. A new strategy was implemented, focusing on selling more products to the company's largest customers and investing in international expansion through a strengthened sales organization. Furthermore, most of the company's own factories were discontinued in favour of production through external suppliers in Asia, with a smaller production capacity remaining internally. Since 2009, the company has shown profit every fiscal year and after six years of changes, Nilörn was again listed in the summer of 2015.
The company is the market leader in the Nordic region and has a strong market position in parts of Europe, primarily in the UK and Germany. Nilörn’s increased sales efforts has been successful and generated both new customers and additional sales to existing customers. The UK, which been showing robust growth for several years, became the company’s largest market in 2015. Other important European markets where Nilörn currently has limited presence include the Netherlands, France, Italy and Spain.
More than labels
Although Nilörn, at first glance, only is a subcontractor that ensures that labels, packaging and accessories are delivered to customers in the fashion and apparel industry, the company does more than that. Nilörn builds long-term business relationships and establishes close cooperation with the customer’s different departments, where both management, marketing, sales, design and logistics departments are involved. Customers often request Nilörn to participate in the design process at an early stage to figure out brand concepts. A concept can contain anything from a handful to well over 100 labels, packaging and accessory suggestions. There should be a unifying theme that consistently has a context. Logos, graphics, colours, patterns and materials can be used to give a stringent impression in a way that promotes an effective message.
Internal and external manufacturing
To compete for major brand and design projects, the company realized that it is necessary to be close to customers as strategic decisions are taken at the headquarters. Labels, packaging and accessories have become increasingly important in strengthening the brand, thus become a matter for the customer's top management. Nilörns main customers, the brand owners, concentrate their resources on branding and design, brand development, marketing and sales, while subcontractors handle all production. The Customer’s production is mainly located in low-cost countries in Asia and Eastern Europe.
Since brand owners outsourced the manufacturing to subcontractors, Nilörn is required to operate close to the customers, through own companies or by a network of strategic partners. About 85-90% of all production takes place via partner companies, which result in an ability to quickly correct for demand changes. However, some own production is important to ensure delivery, quality and flexibility. In addition, production competence and cost awareness are maintained in procurements.
Logistics solutions and IT-systems on a global basis
Nilörn’s automatic ordering system provides total control through the supply chain. When a production order from the customer is sent to the manufacturer, Nilörn receives a label order at the same time from the customer's system in a fully automated process. The order is automatically handled by Nilörn and within 48 hours, everything from woven labels to price tags and barcode labels is delivered to the manufacturer.
Nilörns web solution was designed with both the customer and the producer in mind. The tool provides a complete overview of ordering, storage and distribution, enabling both the customer and the manufacturer to order labels and check delivery. The web solution, which is available in several languages, is customized for each customer's needs and serves as a tool for direct and continuous control. Real-time support is offered and the system supports both internal and external communication managed by Nilörns IT-system. Customers can also integrate this service into their own systems, allowing customers and manufacturers to order and monitor order placement as well as distribution. Nilörns web solution also offers a comprehensive set of follow-up and report-generating options.
Strong balance sheet and financial targets
Nilörns financial target is a maximum net debt/EBITDA of 2.0x over a business cycle and the company's historical average is -0.3x. Thus, the company has a balance sheet that allows for an acquisition agenda. In its former form, Nilörn was an acquisition machine and bought companies throughout Europe. The acquisition of HC Etiketter in 2017 was the company's first acquisition since 2007.
The growth target is to achieve a revenue growth higher than 7% per annum over a business cycle and an operating margin of at least 10%.