ITAB Shop Concept AB (publ)

Now I will hand the conference over to CEO Andreas Elgaard and Acting CFO Andreas Helmersson. Please go ahead.

Thank you very much. And thanks to everybody that is tuning in live or that will listen to the recording afterwards. So today we present the interim report for the second quarter of 2025. And as usual, I will start by reminding everybody a little bit about who we are, if there are newcomers to the call. So at a glance, ITAP Group, if you look at the pro forma for 2024, we have 24 production facilities in 17 countries. We operate in more than 40 countries and we have almost five and a half thousand employees, summing up to a revenue of just above 13 billion Swedish, and with an adjusted EBIT in 2024 of 918 million, and that gave a margin of 6.9%. Our main customer groups are grocery, do-it-yourself, fashion, and then basically all aspects of retail, all sectors within retail, we have some activity, small or large. And I will come into that a little bit on the next slide. And what we offer the market is really, We work with the physical stores, so we help retailers to realize their brand value and display that to consumers in the desired way. And that is mainly through retail interiors, but also through technology, through lighting and services that we put together in solutions that helps them to achieve their outcome. ITAB today, and maybe I should just, why do we talk about Proforma? Of course, we talk about Proforma because we have made a huge acquisition where we acquired one of our largest competitors. And that deal went through the 1st of February this year. And that's why we talk about Proforma for 24. And we also talk about Proforma in our reports and so on. We are now the clear leader in Europe and we have a global reach. So we are active on all continents and even if our main footprint is in Europe and our main business activities in Europe, we also have activities across all continents and we follow our customers where they want us to go. Grocery is by far our biggest sector, with a little bit more than half of our turnover. And these numbers are the performer numbers. Do-it-yourself home improvement is the second sector with around 11% of our sales. And then fashion comes close behind do-it-yourself and home improvement. And then we have all the other sectors where consumer electronics, pharmacy, or some service stations slash petrol stations are quite important for us, also travel, retail, and so on. So we work basically with all retail sectors. So before we go into the report, if I just do some highlights of the first six months of 2025, of course 2025 has been just like the ending of 24 has been dominated by the news that we intended to acquire HNY and that then went through. So as of February 1st, we are one group, we are all under one umbrella. But it means that we have a lot of homework to do. People need to get to know each other. So we focus on our people first. We focus on our customers. So we secure business continuity. And we do that, of course, under quite uncertain macroeconomic preconditions. But it's very, very important to stay close to our customers and don't get distracted by the integration efforts. And then, of course, getting to know each other, leveraging the best from both groups is what will deliver the synergies. So we have a very clear plan for the future where the promises we made when we announced the deal of synergies in the area of 30 million euro have now been confirmed through our bottom up process when we have access to our new colleagues. So the synergies are confirmed, the amount of synergies and the plan that we have to realize that. If you look at the numbers for the first six months pro forma numbers, I want to emphasize that we had we have had sales growth mainly coming from the first quarter. We see some hesitation in the market, especially from customers that maybe have a bit more difficult balance sheet. They are a bit hesitant. They want to see where the macroeconomic winds are blowing. And that is affecting us in the second quarter, I would say. In the first quarter, we were not that affected because decisions were already made and execution is the result of that. So what we see in the second quarter is the hesitation that has been in the market since November, I would say. But we delivered an adjusted EBIT of 388 million, which is, if you look at performer numbers, when we had an all time high, both in legacy HNY and legacy ITAB, that is a decrease of 20%. If you look at ITAB alone, we are increasing the EBIT, which is good for our shareholders. And by that, I hand over to Andreas to give us the numbers from the interim report.

Thanks, Andreas, and good morning, everyone. To give, as Andreas said, to give a representative view of the development of the group, we have mainly focused on the performance development in this presentation. In the interim report also published, you will find, of course, all the details, including reported figures with HMY consolidated from the 1st of February. Zooming out on the historical performance, you can clearly see the significant impact of the recent acquisition of HMY, doubling our size and reaching now above 13 billion SEC in sales. In Q2, after a very strong start of the year from a growth perspective, we can see sales are slowing down somewhat with minus six relative performer last year. However, if we remove the currency effect, it's actually 1% minus in Q2 and plus 7% year to date. In Q2, EBIT adjusted for non-recurring cost and also amortization of acquisition related intangible assets. amounted to 179 million sec, equalling 5.5%, slightly down compared to the rolling 12 adjusted EBIT of 6% margin. Zooming in on the financial highlights for Q2, we can see that although net sales is stable, especially if excluding the currency effect just mentioned, adjusted EBIT is down 40% if comparing to performer figures. Although if we only look at the reported figures, it's up 19%. Q2 2024 was a quarter where both legacy ITIL and legacy HNY had larger rollouts across several markets, including a favorable sector and product mix. Although we do have a large share of recurring business and long-term relationships with our customers, there is a project element to our business which can hit us differently across quarters. Focus onwards is to continue executing on synergies, which are now also bottom-up identified. We are also focusing on improving cost efficiency and improving operational efficiency, especially in France. If we look at our net sales by customer groups, including currency impact of minus 5% pro forma, and obviously this is something we'd like to adjust for onwards as we come further into the integration with HNY, we can see that grocery, after a very strong start of the year in Q1, is now down 7%. Instead, for Q2, we see fashion driving sales with several larger rollouts in both Central Europe and Southern Europe. We also note that the market interest into the group's technological solutions like loss prevention and operational efficiency solutions is still high, and we continue to see growth in this area. We would also like to highlight that the acquisition of HNY has further diversified our sector exposure. If we look at the combined group's market exposure, we can see the complementing nature of the acquisition of HMY, where market exposure shifts somewhat from Northern to Southern Europe through HMY's strong presence in countries such as Spain, France, and Turkey. In Q2, net sales for Northern Europe has declined with 20%, and here the currency effect is limited. It's driven by customers delaying some of the projects we've been planning for, but also somewhat hesitant to committing to plans. And we believe that, as Andreas mentioned, that a slight uptick in the macroeconomic forecast will release some of these plans. It's also great to see the growth in UK and Ireland now, impacted by the rollout of smart gates for one of the largest grocery chains in UK. Our operating cash flow for Q2 is minus 53 million SEC and the rolling 12 development at 456 million SEC, which is not Performa. The only slide here, not Performa. It's impacted negatively in the quarter by networking capital development. And networking capital is impacted by a normal seasonality where Q2 sales goes up and Q3 outlook is normally slightly up as well. and the sales growth impacting account receivables, especially in some of our major markets. We also experienced some one-off impacts from the integration work with HNY. A rolling 12 monthly cash conversion declines to 59%, with the target being at 80%, and it's mainly driven by the network and capital development just mentioned. If we zoom out a bit from the Q2 results and return to what we've previously published about our plans with merger with HNY. We do see that during 2023, Legacy ITAB had a EBIT margin of 7% and Legacy HNY around 5%, leading to a combined margin of around 6%, which is very similar to where we are today, year to date and rolling 12 pre-synergies. And although we had a good start in a new group on realizing these synergies, they have not yet started to materialize in any significant manner. There is a strong strategic rationale for this acquisition, as well as it being financially attractive. With synergies identified at 30 million euros, increasing our net income with 90%, with only a 16% share dilution, all other equal, indicates significant earnings per share growth. And with that, I'll hand over to Andreas again.