Increased demand on product differentiation within fashion creates market demand. Nilörngruppen offers a customer solution consisting of everything from design to production and helps its customers to differentiate themselves in a competitive market.

Transition from labels to RFID creates future growth potential. Market transition from labels to RFID-labels creates potential for revenue growth in an unexplored market. Nilörngruppen’s customer base of 1000+ customers give Nilörngruppen an edge.

Flexible production cost and effective logistics. A big part of production is outsourced to low-cost countries which enables Nilörngruppen to produce cheap and with flexibility. The production is located closely to its customers´ subcontractors, which enables Nilörngruppen to deliver the products 48h from an order.

Relative valuation indicates a potential upside of 12.8%. Revenue is estimated to grow with a CAGR of 4.8% between 2019-2021. Meanwhile, the operating margin is expected to gradually decrease to a terminal level of 10.5% as a result of a tougher market. Given a target multiple of 12x P/E in comparison to its peers, an upside of 12.8% is motivated.

Analysts: Ludwig Nilenstrand & Markus Hellberg