<a id="bm-comp-77c5fe06-427e-4284-9234-38847400d8eb" name="bm-comp-77c5fe06-427e-4284-9234-38847400d8eb" class="BMCustomAnchor"></a><table><tr><td bm-component-id="77c5fe06-427e-4284-9234-38847400d8eb" style="vertical-align: top; width:100.000000%;"><ul><li>A soft end to '25 on earnings</li><li>We cut '26e-'27e adj. EBIT by 7-6%</li><li>Trading at ~7x EV/EBIT on our NTM estimates</li></ul></td></tr></table><a id="bm-comp-bd608b06-8575-477e-acb5-7ec871decc99" name="bm-comp-bd608b06-8575-477e-acb5-7ec871decc99" class="BMCustomAnchor"></a><table><tr><td bm-component-id="bd608b06-8575-477e-acb5-7ec871decc99" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3" style="text-align:left;">Q4: strong orders but pressured margins</h3><p>Q4 was a weak quarter on adj. EBIT, ~30% below expectations despite a 2% beat on sales and a gross margin of 47.2% vs 46.2% in Q4'24. FX had an impact on Q4 sales of SEK -27m, and we believe that FX headwinds contributed to the net-negative effect on earnings. The adj. EBIT margin amounted to 5.2%, the lowest level since Q4'23. Management alluded that the margin pressure was due to FX, negative scale on operating leverage and elevated administrative expenses. Order bookings increased by 5.5% y-o-y to SEK 251m, which was above our expectations, and was partly driven by a large order of SEK 18m that spilled over from Q3 due to a later seasonal pattern in 2025.</p><h3 class="bm-h3" style="text-align:left;">We cut estimates on FX and increased opex</h3><p>We leave our '26e-'27e organic sales estimates largely unchanged, but updated FX movements lead to sales estimate cuts of ~3% p.a. for '26e-'27e. Moreover, we cut '25e-'27e adj. EBIT by 7-6% on the back of the report. We keep our assumptions that the '26e-'27e GM will be slightly lower than in '25e, as packaging sales should return once the luxury market recovers (management expects this to happen by mid-2026). We believe that Nilörn's profitability will gradually increase as the current investments in e.g. the new Bangladesh factory start to pay off. Our estimates imply an 11% adj. EBIT margin in '28e.</p><h3 class="bm-h3" style="text-align:left;">Valuation</h3><p>Our updated estimates imply that Nilörn is trading at an NTM EV/EBIT of ~7x, which is ~17% below the five-year median for Nilörn and ~25% below peers.</p></td></tr></table>