ITAB Shop Concept AB (publ)

So I would like to say big welcome to everybody to the first quarter of 2025 and also the first time that we present combined figures for ITAB integrated into together with HMY. So just to remind everybody, I mean, I think most people that follow us are aware of the acquisition we made and that it became also HNY became part of ITAB as of 1st of February this year. So we have two months of HNY into the ITAB figures in the quarter, but we have decided to focus on the pro forma in order for comparability. But just to remind everybody what we are, what we've been focusing on, because when you combine two market leaders like ourselves and HNY, it's super important to keep focus on business continuity, customers and our people first, making sure that everybody understands what is going to happen, making sure that all customers are being prioritized. And then we focus on getting to know each other, understanding the strengths, the opportunities, the challenges that we have together so we truly can become better together as intended, but also to start to deliver on the synergies because this will help to make us stronger in front of our customers. It will help to deliver more value to the company. And as everybody knows, we will find these efficiencies and synergies within procurement, cross selling and general efficiency improvements. so when looking at itab group now combined with pro forma numbers for 2024 those that follow us follow us can see that sales have now doubled so we are on above 13 billion swedish in sales we have 24 manufacturing sites spread over 17 countries and we have operations in more than 40 countries with a total of around 5,400 employees. For 2024, combining the two companies, the adjusted EBIT margin was 6.9. And then adjustments are made for, of course, transaction costs, because this is truly an industry-changing transaction. So we have significant transaction costs, but also then some factory adjustments and divestments of operations both in Mexico and in Africa. China restructuring in Mexico, not divestment. And for everybody that knows us, groceries, our biggest customer group, followed by do it yourself and home improvement. Of course, fashion is very important. And then uh but we are in most um i would say all sectors of retail we are present consumer electronics is big food food to go pharmacists etc and our focus is really to go from being very product oriented like the whole industry have been traditionally into becoming truly solution oriented so focusing on what delivers value for our customers And how can we drive that value even more through our solutions, both existing solutions and the solutions that we develop together with our customers and together with our suppliers. When you look maybe a little bit closer into the segments that we are active in, you can see the size of a grocery in the performer numbers. It's a little bit more than half our sales. Home improvement, do it yourself is 11% of sales and fashion then follows from 9%. And then as you can see, the other segments that covers all other sectors is quite significant. When you look at just some highlights on the first quarter, you can see that sales grew with 16%, so a really good sales growth. Also, the adjusted EBIT grew by 12%. We have been really, really focused on getting a good start by focusing on our customers and our people, and that has helped us to have a good start also with the integration work. focus on on business continuity despite then you could say the increasing macroeconomic uncertainty with tariffs one day and maybe not tariffs the next day and I would say it's more the uncertainty in the world around us that we see as something that this creates added I would say added risk at the same time I would like to point out that we have limited exposure to effects coming from the tariffs. We have operations in most of our present geographies, so we'll be able to manage this without more than maybe marginal effect. The acquisition of HNY and the whole integration work that comes after a long process where we have a clear idea of the strategic rationale behind and also a clear plan for the future in how we can help to deliver increased value for our shareholders. But maybe what's most important is increased value, a broader portfolio, more solutions, more capability, more, I would say, experience and know-how to all of our customers. So by that I hand over to Ulrika to go through the interim reports Q1 to focus more on the figures.

Yes, good morning, everybody. As Andreas already mentioned, to illustrate the financial effects of the acquisition and give you a representative view of the development of the business, we have mainly focused this presentation highlighting the pro forma development. And you will, of course, find all details on the reported figures with HMY consolidated 1st of February in our interim report. So zooming out on the development over the recent years, you can clearly see the effect of the transformative acquisition of HMY doubling our size. In the first quarter 25, we have a performance sales growth of 16% despite the hesitant market and also given the fragile macroeconomic stability. Performance sales in the first quarter was 3.3 billion compared to 2.8 last year and adjusted EBIT excluding non-recurring costs and also amortization of acquisition related intangible assets amounted to 209 million SEK. If we look at the rolling 12 full-year performance sales, we have 13.7 billion SEK in in first quarter 25 and an adjusted EBIT of over 900 million SEK corresponding to an EBIT margin of 6.8. Summarizing the financial highlights for the quarter, we see growth across most geographies and customer sectors, especially within legacy HMY. Due to higher sales of retail technology products, we have historically higher margins and results within legacy ITAB, and we are coming from a very strong comparable result in Q1-24. driven by the favorable product mix where we last year had the highest EBIT margin in ETABS history. So in all, increased sale had a positive impact on earnings. At the same time, the merger with HMY impacted the product mix with lower share of technical solutions during the quarter, also affecting the combined margin for the new ETAP group. Performa adjusted EBIT for the combined group in Q1 of 209 million corresponds to an EBIT margin of 6.3%. Looking at our customer sectors, we can see that grocery and fashion sectors have been driving the sales growth in the first quarter with a growth over 20%. Our sector exposure in the group is now further diversified after the acquisition. And within the grocery sector, it's especially the discount segment in Central and Eastern Europe that has been driving the growth, but also fashion has invested in new concepts and refurbishments across geographies. The market is continuing to show considerable interest in the group's technical and digital solutions for loss prevention and the sales trend for customized shop fittings were also positive. We have recently signed agreement with one of Europe's largest home improvement and gardening chains for shop fitting solutions. in five new stores and also a new agreement was signed with one of the largest grocery chains in UK for the rollout of new smart gates in over 200 stores. If we look at the combined group market exposure, we can see a shift from Northern Europe to Southern Europe, where this acquisition is complementing and clearly strengthen our presence in Spain, France and Turkey. So as you can see in Northern Europe, we previously had around 30, 25, 30% within the old ETAP group and Southern Europe was around 20%. In the new combined group, we have sales in Southern Europe of above 40% and a little bit more evenly divided in the other geographies. Looking at our cash flow, this was affected. We have in the first quarter 26 million. This was affected by higher operating capital. And this is also excluding the month of January for HMY. So the cash flow is not on a pro forma basis. Rolling 12, we still have a strong cash flow of 586 million with a cash conversion of 80%. And also that is not on a pro forma basis. And by that, I hand over again to Andreas to conclude on the presentation. Thank you.

Thank you. And so all in all, we are I would say we're proud to have, I would say, a good start to the year. We've had the integration work so far have have been over expectations people are really connecting people are speaking the same language sometimes we use the same words but we mean different things sometimes we we mean the same things but we use different words so we're really in the process of getting to know each other and so far it's has been an overwhelmingly positive experience We've had just two and a half weeks ago, we had 90 senior leaders coming together in the first time to discuss how we become better together, better as a company, better as an organization in empowering our people, but also then better in our value proposition to our customers. Usually when we have these presentations, I start to talk a little bit about what we are doing and where we're going and why we believe that we are doing the right things. I will end the presentation today a little bit on that note. As we all know, retail is truly transforming and so is ITAB. this all comes from changing consumer expectations. And this has accelerated, as we all know, fueled by the democratization of technology and of information and networks of information. And expectations no longer maybe come from your retail competitor. It comes from an online experience, maybe not at all in a retail situation or in a in a situation where you are purchasing. So it's all about me, my experience, my needs, my expectations. And this poses a true challenge, especially for traditional retailers. And that's the focus for ITAB. So traditional retailers, they need to They need to invest in new channels. They need to change their priorities. They have to reduce their costs. At the same time, they have to invest in expanding and enhancing the experience and the convenience in their brand experience and keeping up with pace in the ever changing needs of the customers. This really creates a cost versus experience dilemma in how to get the best return on capital for most retailers. And this is also where our opportunity comes to really be curious, consumer oriented and understand this and focus on what drives value for our customers. And by that then help them by being more agile and more focused on their needs and less romantic about our own portfolio. and more on which solutions we need to develop together and this really comes from since a couple of years back when we have been improving step by step it really comes from focusing on the outcome that we create with our customers so what is the desired consumer brand experience how can we help to improve the physical store experience driving the footfall and driving then retention of consumers But that is not enough to create a great brand experience. You also have to drive increased sales and conversion. And no longer is that enough for many years. That was fine. But you also have to improve the efficiency of the store and the service level of the store because consumers is not just happy with having convenience on the that doesn't benefit them. It has to benefit them. And at the same time, these investments need to benefit also the retailer. And then if you also then can help to reduce the operational cost for the retailer, you have really found a sweet spot. And this is what we talk about when we say an outcome based value proposition is to focus on how we can drive these values for our customers, and then being confident in that that will also drive value for us. And this is a slide that I like to use. And for some people that see it for the first time, maybe it's a little bit busy, but it's on the left side, you have kind of where we are today and how we also influence through our proposition. We really influence a retailer's consumer journey. be it inspirational, be it the convenience. And we also influence the retail operations. How do you operate the store? How do you operate the fleet of stores? So that is ITEV's influence today. And we believe that that will continue also in the future. But it will not be enough for us to do that through our traditional solutions of interiors, lighting, retail tech. We need to do that with more and more services, more and more insights that comes from being connected, being able to use data and insights that comes from other stakeholders, other ecosystem partners, and combine that with insights that comes from our solutions and to bring that to the benefit of the retailer. Because the retailers, they have this dilemma. They need to take out cost at the same time they need to invest in experience. So it will no longer be enough just to do that in the store format or in the fleet of stores. You have to do that across the retailer's value chain. And then you need more data. And that's what we are investing in becoming more and more strong there. That is also what is driving the logic behind. ITAB and HNY joining forces because the demands of data safety, technology, connectivity, integration, those demands become increasingly tough and needed. And it becomes also difficulty if you don't have the right size to be able to invest in these areas and provide the safety and the innovation that our customers require. And just kind of reminding everybody about our strategy that we've had for a couple of years, that was really about coming from a position where we were struggling a bit. So we had to stabilize. We did our cost and capital restructuring. We have a tick box there. We really simplified what we were doing. We clarified a lot of things. Then we amplified by investing in new capabilities, new go-to-market, new services, new proposition to our customers. and then to expand the growing organically and growing through acquisitions. And I put the tick box there as well. So our strategy for the last five years have really served us really, really well. And we have, we have realized most of these things. There are still more to do in order for us to drive our maturity and to be the leader in our industry that we, that we now are. Um, but we also need to set the new direction going forward. So what about the next five years? So towards the end of this year, we expect to have a new strategy that we'll be ready to communicate. And by that, I close the presentation part and I open up for questions and answers.