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.

So thanks, Andreas. And this part here is something that we like to just remind everybody about, that retail is really going through transformation. We all know that. And recent years, both in terms of COVID, inflation, and increasing consumer expectations have accelerated a lot of those trends. And it means that if retail is transforming, we have to follow and our whole industry have to follow. And I think ITEM have been leading the way here. And we started doing our own homework, of course, before we could then become more ambitious about the future. really what it comes from what we've been doing the last couple of years has been to become more consumer focused understanding what's happening with consumers understanding how the new consumer expectations are challenging retailers in new ways and of offering opportunities that the retailers have not had in the past all of this creates a need for retailers to invest in in areas that they have not invested in before it changes their spend it also means that they need to invest in new capabilities that they've not had before but all of this means that it's just accelerating if you're relevant if you meet up to the consumer expectations as a retailer you're thriving in this environment if you're not you're really struggling and it means for us as an industry and for itab as a group But we need to become much more agile. We need to be really laser focused on capital spend, profitability, making sure that we are efficient from day one. And this is a big trend shift from the way the market was before, where it was more long term. You could plan in advance the programs they they ran over several years. And now it's a short decision making, short execution time, more project based. And that's really something that has changed for the retailers they really have a dilemma that they have to invest in experiences and at the same time they have an increasing cost pressure and that leads them to being super focused on making sure that they only execute on business cases that give them a strong return on capital And that's why we have for the last couple of years been very focused on working on delivering outcome based value to our retailers. And we have changed our value proposition. We are gradually changing our way that we address the market. in order to secure that we deliver the desired consumer brand experience that the retailers want. And that is no longer enough to build fantastic, beautiful, inspiring stores. They also need to drive increased sales and conversion. and they need to deliver improved efficiency and improved service to the consumers. And at the same time, if you can do those things and reduce the operational cost for the retailer, you have a really strong value proposition. And I would say that when we are in that sweet spot and we have a couple of areas in our solution portfolio that really does this, we see no hesitation in decision making, but it takes a long time for the retailers because they need to they need to understand what the operational effect is and it's no longer procurement making all the decisions like it was in the past things are changing but this has helped us to transform and drive profitability up and this is also the ambition for us to do in the combined much larger item group is to continue to focus on driving tangible outcome for our customers that will deliver outcome also for item and our shareholders The consumer journey that we are affecting today, this is maybe a bit of a special slide. It has two sides. The left side is how we influence retailers today. And on the right side, it is how we will influence retailers in the future. So on the left side of our solutions, our interiors, our lighting, our retail technology, our services, and our solutions, we influence the consumer journey, both if it's inspiring, if it's efficient, et cetera, but we also affect the retailer's whole fleet of stores. And in the future, we need to continue to influence those aspects. So the buying experience, the consumer experience, and how efficient you can operate a fleet of stores. But the retailers, they have this cost dilemma. They need to be able to invest and at the same time take out costs. In order to do that, it will no longer be enough just to take it out from your stores. You have to also take that out from your value chain. You need to leverage data that you collect from all your channels as a brand, including the physical store, So we see an increasing need of data, technology, connectivity, and that you then share that insight across your supply chain as a retailer so you can drive efficiency also with your suppliers and through that lower your costs. It means for us that we need to invest more in Um, technology, we need to invest more in services. We need to become stronger in data and connectivity and all of these things, uh, cost money. We need to have traceability. We need to be environmental friendly and know where our goods are coming from and our ingoing material. And all of these things require a certain size. And that is a big part of the rationale why ITAB decided to grow through this acquisition of HMY. Together, we become much stronger and we'll be able to afford to live up to the expectations that retailers will have of us going forward. We've had a strategy that has really served us super well the last couple of years, the One Night Lab strategy. It has delivered on when we had to stabilize the company and simplify by restructuring our costs. We put a tick box on that. We then wanted to amplify that base by investing in new capabilities and offering new solutions and change our go-to-market model. update our inner working, so to say. That work is a small tick box on because it's still ongoing. We're still kind of driving efficiency through changing ways of working and the IT tools that we have internally. And then expand, that was the purpose of our strategy, to not just focus on restructuring and investing, but actually delivering growth and expansion and sustainable, profitable growth. That is a big tick box due to the acquisition of HMY. But it also means that we need a new strategy for the future. And we have just started up that work, and we are going to come back to you towards, I would say, either the very end of the year or the beginning of next year and communicate our new strategy once it has been developed and then later approved by our board of directors. In conjunction with that, we might update also our financial targets, but that is not decided yet. And by that, I stop talking and I hand over to questions and answers.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Carl Johann Bonnevere from DNB Carnegie. Please go ahead.

Yes, good morning, Andreas and Andreas. Difficult quarter, and I guess it doesn't become easier for us to understand given the very, very strong profitability those units, as you pointed out, had in Q2 last year. So maybe we could start there. And when you now looked at the numbers for Q2 last year, particularly on the HMY side, Andreas, do you feel they are representative, so to say, of things And do you feel comforted then also going into the second half with looking at what the HNY did on the pro forma basis last year? I always find it difficult to relate to pro forma numbers as nobody really has a commitment to them. So it would be good to get your feeling for it.

Yeah, I would say that in Q2, both for ITAB and for HNY were all time high. So that needs to be kept in the memory when you compare, when you just look at comparability between the two quarters. And I think Andreas was onto something when he presented that a rolling 12 where we're basically spot on between where ITAB were before the acquisition and where HNY were before the acquisition. So I think that we're quite spot on there. What we see, I mean, how to judge, I would say that HMY is very similar to ITAB, that the project nature of our business means that if there is a big rollout, and I know there was a huge rollout of high margin products in Q2, both for ITAB and for HMY last year, then that affects. And once that job is done, that is not recurring. But what is recurring is, of course, the customer relationships. We hardly lose any customers. But of course, these customers needs vary a lot over time. So I expect us to be able to be more stable quarter by quarter going forward. But we will continue to see these fluctuations. But our larger footprint will make us maybe fluctuate slightly less than before. the macroeconomics are playing in somewhat, but I would say it's more the comparability that is playing in. And then, of course, we knew when we acquired HNY that we had We knew the homework that we had done on the ITAP side, and we knew that we had some homework to do also in the combined group. That's why when we communicated the synergies and the intention to acquire, we also communicated that we needed two and a half to three years before we could have full realization in the P&L, and also that we would need costs to realize that we need... we needed transformation costs in order to release the synergies so i would say that we have no need to to change any of our outlook for the future based on what we promised back then when we announced the deal on the contrary we have seen that the synergies are there we we have started working on them but it takes time and it takes some time before they are visible in the pnl but we we have no um um yeah we're really optimistic about the future the integration work has gone between people i would say on a cultural and people level have gone better than expected of course there are some some some obstacles some getting to know each other that we need to do even more but all in all it's it's overwhelmingly positive um We mentioned in the report operational issues and we specifically point out France and we can say that we are disappointed by the performance of France so far this year. It has been a clear deviation from what we expected. We have been able to understand why and we have taken corrective measures. Some of them will be able to be corrected quickly, some will need some more time. But then already in our plan to drive efficiency, we knew that we had a work to do, not just in France and not just in Legacy HMY, but across the group in order to release those synergies. So sorry for the long answer, but I think that maybe gives you some flavor on where we are in the quarter. So of course, we would have if France didn't have some of the issues they had, we our comparability would have been clearly better. But we are where we are with with that and we have identified what we need to do and we're doing the work.

I very much appreciate all the color, Andrea. And I thought you mentioned, or the other Andreas mentioned, that if you look at the legacy ITAB, profitability year on year was up. Was that the LTM number or is that H1? Because it obviously can't be Q2, so I'd say in that respect.

Do you want to take that?

Yeah, I think we referred to reported numbers. So comparing the group last year to this year, there was an increase in EBIT, which we pointed out on one of the slides also.

Excellent. And then I guess that at least crystallizes the challenge, as you pointed out, Andreas, to maybe France and the legacy HNY operation. I appreciate very early in the integration and all these kind of things. But when you now then look at, as you said, the proactive measures needed to be taken, how much help do you have of the toolbox that you created for yourself in the one ITAB process? And what could we then expect being corrected short term? And what is something more for maybe for a question for 2026, 2027?

I think you guys don't need to wait until 27 before you see the effects. I mean, we are going to also report how we are performing, how much of synergies that we have identified, how much we have executed upon, and how much that have been realized in the P&L. We are going to have that type of reporting when it's too early to start that now, because we are starting up a lot of activities, so it's a bit too early. But so we're going to come back with that. And I would say that is part of the tools that we used in ITAB. We were really focused on driving, identifying where the biggest value drivers were, and then focusing on making them happen. in legacy ITAB, it was not always that we succeeded, but we were always then looking for complementing actions. And in the end, we delivered on all our promises. And it's exactly the same now with a bigger, larger ITAB, that we have identified where these synergies are. And I want to be super clear to shareholders and everybody listening to this, but also the employees. It is not just within Legacy HNY that these synergies are being found. They are found across the board, I would say. But of course, we knew that there were operational issues before we stepped into the bigger group, and we knew that we had to address them. One of the things that we did successfully in ITAB was to make sure that focus is not on top line, which is not always what the stock market wants to hear. But the focus is really on the bottom line, that profitability comes first. We should not go after new sectors or new customers or new deals. that drives turnover but doesn't materialize on the bottom line. That has been a big part of our toolbox in ITAB and we're applying the same toolbox now. It will take time because this is its behaviors that need to change, its mindsets and its insights that needs to be understood. So that's one thing. The other thing has been capital. HNY are quite strong in their capital. but we need to make sure that we leverage the combined purchasing the combined power and that the combined i would say capabilities as a group to continue to drive capital efficiency even further that is something that we're really focused on and the reason why we have a little bit negative cash flow this quarter um i would say it's uh it comes from growth it comes from inventory it comes from several things some of them are indications that things will be better some of them are indications that we that we've had growth behind us um so that so we will use all the tools and there's plenty of tools also on the hmy side that we're also applying so it's it's really um yeah learning from both companies excellent

And just on the working capital side, there is no reason to believe that we are not going to see the same kind of normal seasonal pattern where a big cash flow release comes in Q4. It's going to be geared to that this year as well, right?

I mean, that's a forecast that we are not giving. So, I mean, we know that we have a seasonality in the business, but we also know that depending on the macroeconomics, if things change, if we get a sudden burst of growth, we might need capital. So we are not... I think that there's so much uncertainty in the market that we refrain from forecasting, but we feel confident with our plan that we have for everything that we can influence in terms of integration, realizing synergies and so on. But the world around us, we just need to manage.

Yeah, and I can just add to that as well. I mean, we are in the same business with the same type of customers. I mean, there's a slight shift of exposure from Northern Europe to Southern Europe, which impacts capital efficiency to some extent. But there's no reason HNY should differ on sort of the normal pattern of our business. And then we can always say, looking back at the years I've had so far here, that certain rollout in a couple of big projects might impact what you normally see as a seasonal pattern in the shop fitting business so there's always exceptions in the project side of business thank you for the clarity and one final for me looking at joint sales initiatives I see that you in the report throughout things happening on the lightning and the tech solution side

What is your feeling, Andreas, when you now can expose your whole portfolio to a larger amount of potential clients? Are there easy sales to be had here that, as you point out, the high return on investment phenomenon, all these kind of things, that could help you, say, in the next six to 12 months coming out of those kinds of joint sales efforts?

I would say that, I mean, we are in a market that is having fierce competition and there's no lack of people that want to offer our customers their services. The good thing, though, however, then is that we very rarely lose any customers and we have strong customer relationships in all our units, I would say. And we have seen a lot of curiosity and openness from our new colleagues when it comes to especially solutions or products that they don't have within their portfolio previously. So right now we are really we're we're educating our new colleagues on on how to sell and what the benefits are from some of our solutions. And we've already seen some of the first sales happening. on both lighting and I would say gates mainly. But there are also other things that we are exploring that we can do more of going forward. So I don't think there will be any lack of of buy-in from our sales force, it will more be that we need to make sure that our customers see the benefit of testing us on new solutions because it means that they need to exchange some of their current partners. But we really have strong customer relations to leverage. That's why we have put in, I think of the synergies that we have reported, we have said that approximately €10 million will come from commercial upside. And that is the majority comes from our high margin products in ITAB that HMY don't have. But of course, there will also be sales going in the other direction, customers that HNY has, where they have not had a strong market coverage in some parts of Europe, for instance, where we do have that coverage now together, that will also help to drive commercial upside.

Excellent. Sounds encouraging. Thank you very much for all the extra granularity and all the best out there.

Thanks.

Thank you.

The next question comes from Erik Sandstedt from Kepler Chouvreau. Please go ahead.

Thanks. Erik Sandstedt here with Kepler. A few questions. You mentioned the problems in France here in the quarter, but could you share some more details on what you're referring to?

Yeah, I can be very transparent that there's been a couple of, I would say, operational issues, not to go into numbers, but some of them comes from new customer agreements that was made during the autumn based on a new calculating model where it was believed that cost had gone down, but it was wrong. So the cost had not gone down. So there has been some wrong assumptions and then some agreements have been made and we are then correcting those stepwise. And you all understand when you have somebody on the other side of an agreement, you need to do that in partnership. So that is one part of it. So it's very, I mean, it's very clearly identified. Other things have been, I mean, there have been some maybe bookkeeping technicalities, but then there has been also a couple of new customers in new sectors that has been won. And when they have the first number of projects have been executed, there has been operational and quality complications that were not good. And that means that you have to you have to take things back. You have to produce again. You have to send your installation crews again. So it drives a lot of costs, additional costs without adding any turnover, of course. So it has been those types of operational issues and that have impacted us. Then I would say also maybe one change that in France, I mean, I think we all know that last year, France was really booming the first half of the year. And then the second half of last year, France were struggling. That's also to be taken into account. I mean, and we know that France was booming before the Olympics. And then after the Olympics, there was kind of a settlement in the French economy. uh there was also some quite a lot of political turmoil in in france that have caused some of this but all in all we i mean we are the market leader in france by far so we have a very strong position we just need to get our ducks lined up and make sure that we have good teamwork and that we understand what we do um so We've also done some some there's been changes in management and there has been changes in the regional management after the merger, some before and then majority after. And we have strong, strong confidence in the team that is now working on this. I don't know, Andreas, if you want to add something to what I said.

I think a good summary, we can just also say that there's been actions taken in the last, during Q2, and that we do see an effect from some of those actions.

Yeah, already in June, we have seen some effect of that. So we believe that we will be able to improve the situation short term, but then we also have a long term work to do.

Okay, thanks for that. Then also in terms of cross-selling activities between the legacy ETAB and HNY, can you give any examples of where this has already happened?

I will not go into customers, but we have succeeded in selling lighting products to existing legacy HMY customers. So thanks to the good customer relationships, these customers have agreed to try the new products that comes from the combined group. So that's one example. There has also been HNY has had collaboration on Gates with one of our competitors. So that is, of course, changing now. So there are some sales coming there. Then HNY have not been super focused on Gates like we have. So we are now educating the teams and we are switching then the competing products to our products and step by step we are going to see an increase of that sales. Then we need to realize also that Southern Europe doesn't have the same tradition as I would say Central or Northern Europe when it comes to using gates in stores. But we have seen the same trend in Southern Europe when it comes to shrinkage or theft in stores. And that is just a big problem in Southern Europe, as it has been across, I would say, Northern Europe and in Australia and North America. And we see an increasing curiosity from retailers in these regions to explore what our solutions can do and how they can help them. But I want to remind everybody that usually those sales processes are quite long because it impacts not just the entrance and the exit of the store. It impacts the experience. Sometimes it becomes better. Sometimes some consumers think it's different. But you also need to then adjust the flow of the store and you need to do several other things. It's not just to put product in, you need to really buy into the solution. So usually the big orders comes after quite long periods of discussing and testing, piloting, and then the orders come when they feel confident that this is something that they will be able to operate within their fleet.

Thanks. Actually speaking of that, what share of your business is loss prevention? Are you ready to sort of give any details here? I think you've earlier said that retail tech is 30%, but that includes a lot of other products, of course.

Now, we have not shared the percentage of the loss prevention per se, because I mean, it is a combination of different products. So it's interiors, it's gates, it's digital capabilities, it's sometimes also checkout solutions. So it is a mix and it's very, it's different from customer to customer. So I don't think we're going to communicate a percentage of that, but we are, I'm not sure if we have communicated the retail tech percentage in this report, but that's something that we can come back and do going forward because it is something that we have. I know that you guys have enjoyed following that in the past, so we can try to come back to that also going forward.

Yeah thanks and then finally a few sort of more detailed financial questions perhaps but in terms of the amortizations of acquisition related intangible assets how much were they in the quarter?

As we have communicated earlier, we need to come back during the autumn on that. So we need to fully complete the acquisition when it comes to completion accounts, and then we need to do a purchase price allocation exercise and then come back to an exact figure.

Yeah, fair enough. And also, financial expenses were somewhat higher than I had expected at least in the quarter. Here you do mention currency effects and hyperinflationary accounting. Will those sort of latter effect materially in any way or how should we think about that number going forward?

Yeah, that's true. We are impacted by the acquisition. We're impacted by hyperinflation, as you say, and currency impact. So all in all, we are sort of seeing financial expenses and net financial items sort of according to plan and as these sort of one-off effects will settle we'll be able to calm down a bit.

Thanks. And then just finally from me, I also noted that other operating expenses in the income statement showed a larger loss here compared to the same period last year. I think it was 19 million now. Was there anything specific on that line?

No, not that I have an answer on now. No, I need to look into that. Can we look into and come back to you?

Yeah, it's fair. I just wanted, if you knew it, to sort of on top of your head, but not a big deal. Thanks a lot. Thank you.

Next question comes from Carl Johan Bonnevir from DNB Carnegie. Please go ahead.

Well, sorry, do it in the proper language, everybody understand. Just coming back on the PPA amortization question, I note in your pro forma calculation, you have done some sort of at least approximation that seeming to be 20 million related to PPA. Is that maybe your best guess at this moment, given that you haven't finalized the numbers, or how should we see that?

Yes, we haven't seen any reason to adjust what's previously communicated.

Maybe you can then refresh me on the previous communication because I haven't heard you communicate anything on that.

No, I think, I mean, you can see the difference between the performa, what we call EBITDA communication and what's reported. So we are doing an approximation so far, which you can calculate. But because to what the final number will be, we have to come back following the summary.

We're still in... Yeah, sorry, I was just like Andrea said before, that we're still in discussing the closing accounts with the seller. So there might be some small adjustments coming out of that. If there are any adjustments, they will be positive for us, I think. So there are no negative surprises that could come out of that.

And best guess on PPA at monetization would be about 80 million a year or something like that number.

Yeah, I think what we have put in is our approximation for now. And then we have that caveat or disclaimer that the work needs to be finalized before it can be, before we come with further details. But we can also look into this question and see if we can provide some more flavor. So we need to take that back and come back with some more flavor.

That's fine, that's fine. And just on integration costs, given what you now see in the operation, so to say, on opportunities on both sides, do you still think the earlier guidance for integration cost is still valid or is there bigger opportunities?

With bigger opportunities, you mean that they could be lower?

Yeah, or higher because you see bigger opportunities as well on the reality side.

I think that is too early to say. What I stick to now is that the promises we have made when it comes to the synergies is what I'm really aiming to keep or what we are aiming to keep. So, and we have no reason to change or, I mean, in either direction, these numbers, and we put in quite a healthy amount of costs as well. And I just want to remind everybody that those are the costs to realize the synergies. We also have some costs that we are adjusting for one offs that are more connected to the transaction. So transaction related costs, they are not part of that, the synergy realization that is more of an operational character, I would say.

Excellent. Thank you very much. All the best out there. Thanks.

Okay, so we don't have any more.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions.

Yes, thank you. We have one written question. And it reads, were there any larger orders in either ETAB or HNY in Q3 or Q4 of last year?

Yes, I think we communicated that. Mats, maybe you can help me to remember here when we communicated those. Maybe they were because some of that came in then in Q1 and Q2 in the, I would say, profit and loss. But I don't remember if the orders were taken We always have high, I mean, each deal that we do needs to be one, but we only communicate them when they are, I would say, 8 million euro or above in size. That's when we communicate them to the market because then we think it has a broader interest. But I don't, maybe Mats, if you're looking, if we had something that we communicated of that nature.

Yeah, we didn't present any major deals.

Maybe it was in Q1 that those presentations were made.

Yeah, we had a couple of deals that we presented in August and September. One was for a shopping shop concept and that was for 20 million euros in total. And the other one was for a financial player in in in the UK, but looking at the shop and shop concept, for instance, that was 20 million euros over four years. Yeah. And the financial service provider, that was also 22 million euros over four years. So it's not specifically for these two last quarters in 2024.

But maybe we can comment and give some more flavor to this question, because I assume that somebody is trying to understand what to expect going forward. And we don't give forecasts. But of course, the first half of 2024 for ITAB prior to the acquisition was outstanding. It was really outstanding. and and i tried to remind everybody back then that you cannot expect this going forward you you should expect this now and then but not in every quarter um that being said the start of 25 have been i would say good in in many aspects especially the deal and the integration but we have met we have been up against really really high comparable figures When we look forward into the rest of the year, if you look back to 24, those of you who were around, you remember that ITAB didn't have, we didn't repeat the strong start of the year. We had more normal finish of the year. So those are the figures that we're meeting on the ITAB side. And then, of course, now we are a combined business. So I need to remind everybody that we are We, of course, have HNY with us in all the figures now. But Performa, we are meeting figures that we have a chance, a good chance to be compared against. But of course, if you just look at ITAB standalone, the reported figures, I mean, we are already now delivering more value than before. And so even though we had that extremely strong start. So I think that's zooming out. I'm really happy what we have done. And I think that two and a half years from now, those of you that hang in there during that period, you're also going to see that we are a much stronger company when we've gone through all the things that we need to do.

Okay, thank you. We have a few more questions coming in now. Are you experiencing the same sales affecting market environment attitude in Q3 as in Q2?

I mean, we don't give forecasts about Q3. What we are communicating in our reports and we have since I would say since fourth quarter last year is that there is hesitation in the market. And that comes not from us or our performance or from our it comes from the general confusion in the finance markets and what to expect, what to plan for. And even though we are not have a very high exposure to tariffs to US. Of course, we have sales in US, but we're not that affected in a large scale. But the whole general uncertainty that people don't know what will happen with interest rates or with consumer confidence, those things makes large, many companies, not just within retail, but many are hesitant about the future. And that hesitation is affecting us just like everybody else. But I don't think ITAB is hit in any worse way than our competitors. I would say, on the contrary, we have a larger footprint now, so we are probably going to be able to be more stable. But I would say that is affecting. The market is hesitating. And I mean, one week ago, Most experts believe there would be maybe 10% tariffs, and now the European Union is facing maybe 30% tariffs. So this will affect the general economy more than anything that ITAB can influence. But everything we are doing, we feel quite confident about. yeah but we don't give forecasts for the future so sorry for that guys and the reason for that is not that we don't know what's going on or that we maybe wouldn't be able to but it is the nature of our business being very first of all seasonal but also being then very project driven and depending on how our customers make their decisions it can fluctuate a lot and we don't want to be

spend all our reporting time explaining why our forecasts are deviating positively or negatively so we believe in doing the job and delivering the results and then you guys need to value us based on that maybe a follow-up on that then assuming the markets uncertainties are eased in the near term could this lead to a backload a year i assuming orders not made in q1 q2 will be made later

I mean, if the general economic climate improves and hesitation goes away and consumer confidence returns, that's fantastic for retailers. That means that they will have confidence to invest as well. So I think that we are all it's all guess working what will happen. But if we get more stability, then that is good for everybody, I think. But those things we cannot influence. So we focus on all the things that we can influence.

Yeah. And the final question is, I mean, irrespective of the project based business that affects quarter on quarter comparison, looking specifically on ETAO standalone, would you expect that the sales mix in 2025 will reflect the one in 2024 on a full year basis?

It's also a forecast question, so I will not answer that. But what we write in the report is that so far this year, legacy ITAB have had strong performance. um i would say so that's what we have written and so i will not uh give kind of um i will not reveal what we see in our crystal ball because also for us it's a bit shady so i will not give forecasts okay thank you very much that was the last question so i'll hand over to to you andreas to conclude the meeting Thank you, Mats. So I just say a big thank you, guys. And maybe the main takeaway from the report is that compared to, I mean, Performa compared to last year, where we had exceptional results in both groups, the combined comparison is maybe not so impressive. But when you zoom out as a shareholder, there is a bit growth on ITAB. the integration work have started really well and we have we have seen now bottom up that the synergies are there and we will go for them we have started that work and and we'll continuously report back to you guys uh maybe towards the end of the year we will start that work so you can have some transparency on how our synergy realization is progressing Okay, big thank you for everyone that have listened and hope to have you with us also when we come back with the third quarter. Bye bye.