ITAB Shop Concept AB (publ)

welcome to etab shop concept q3 report 2025 presentation during the questions and answers session participants are able to ask questions by dialing pound key 5 on their telephone keypad now i will hand the conference over to ceo andreas elgard and cfo andreas helmerson please go ahead

Thank you very much. So hello, everybody, and thank you for tuning in and listening to our interim report for the third quarter this year. So I would like to start with just highlighting that I am super proud and happy to be sitting next to Andreas Helmersson, who is now our permanent CFO. We sent this out to the market as info recently. So I just want to say congratulations and we're in safe hands here. I also want to say a big thanks to Laika that now stepped back as CFO and to take care of herself. And when she comes back, she will be a great asset for ITAB moving forward again. So let's jump into the report and as always, I will focus a little bit on general ITAB information and then Andreas will go through the numbers. I will hit some numbers as well, but that's how we usually do it. So just for those, if there are any newcomers to this, this is ITAB Group at a glance. All the numbers are pro forma for 2024. Important to know. So we have 24 production facilities spread over 17 countries from Asia to over Europe. all the way to South America and with activity, I would say, in all continents. Of course, Europe is our main market. We're quite Europe-centric, but we really have a wide footprint. We have 40 plus countries that we operate in. We are approximately 5,400 people. And together, we managed to have a turnover, our revenue above 13 billion Swedish. So that's a little bit. And of course, we help retailers to realize their consumer experience that they want to have, be it inspirational, convenient, efficient. And we do that with our solutions for the different retail sectors that we're in. So it is, of course, a lot of interiors, building physical stores, and then we add value added to that through retail technology, retail lighting, and also services and solutions that we package As I mentioned, we are really focused on Europe and we are by far the largest company in Europe and we are a leader in Europe. And we have this global reach with activity across the world when needed. We follow our customers. The grocery sector is the biggest sector for us, followed by do-it-yourself home improvements. And then comes fashion, apparel and then other. Maybe moving into next year, it will be time for us to report this slightly different because we see some movements here in our sectors and there's quite a lot in other that may be qualified to be highlighted a little bit clearer for the future. We work with the most leading retail chains in the world, not all of them, but a big chunk of the leading retail chains across the world. Just some highlights on the third quarter there from my side before I hand over to Andreas Helmersson. So we have a really strong profit development in this third quarter and we are working, focusing on delivering the synergies and we have some, we already have some synergies in the bank. Of course, we'll see the full effect more clearly during next year and into 2027. towards the end of 2027, we will have the full P&L effect of the 30 million euros of synergies that we promised our investors when we acquired HNY. um so in the third quarter we have a turnover of approximately 3.3 billion swedish um with the sales growth if we adjust for for currency the vast majority of our sales is of course in euro and so we have it's important for us to follow the the currency we have as a as as mentioned a very strong result this uh this quarter with 260 million Swedish in adjusted EBIT and that's a growth of 13%. When you do such a big deal as we are busy with HMY, when you acquire somebody the same size as yourself, it's very, very important to focus on people. So we have a very people-focused approach to the integration. We are also very focused on our customers. So to make sure that we deliver value quickly and we protect business continuity so we don't get, I would say, too introvert working on integration and forgetting about the market. So those are two of our really... really important priorities but also then that's no excuse to not deliver on on our promises for the future and we have a very clear plan for the future with these synergies and how we should release them and we can I think we said this in the last quarter and I want to repeat that we see clearly bottom up that the synergies are definitely there and we will be able to deliver them. Purchasing will be absolutely able to do and also on I would say efficiency and commercial upside. So by that I hand over to Andreas.

Thank you Andreas, thank you for the welcoming and good morning to everyone. To give a representative view of the development of the group, we have mainly focused on the performer development in this presentation. In the interim report published online, you will of course find all the details, including reported figures with HNY consolidated from 1st of February. Zooming out on our historical performance, you can clearly see the significant impact of a recent acquisition of HNY, now reaching 13.5 billion in sales and rolling 12-month growth of 2%, including negative currency effects. In Q3, currency adjusted growth is up 4%, showing a stable development. And in Q3, as Andrea said, EBIT adjusted for non-recurring costs, but also the amortization of acquisition-related intangible assets amounted to 260 million Swedish, and that amounts to 7.9% margin, which is up 13% versus last year before. Zooming in on the financial highlights for Q3, we can see that although net sales is down 2%, in fact, up 4% if excluding the currency, Adjusted EBIT is up by 13%. Q3 has been impacted positively by rollouts of technological solutions about price and cost control, which has really been a focus, prioritization of profitability before sales growth, and turnaround activities in France and Turkey, as well as early synergy effects from bringing the two organizations together, including fixed costs, but also from consolidating our spend. Focus onwards is to execute on the synergies as Andrea spoke about and majority of those synergy realisation is expected to happen in 26 and 27. As well as improving our cost efficiency even further and continue to grow our profitability in key markets such as France. If we look at our net sales by customer group, we can see that our largest sector grocery is stable, and we see strong growth in home improvement, especially in the quarter, 43% up, and that is especially driven by key clients and long-going relationships that we have in Southern Europe. Fashion had a strong Q3, but it's still behind very strong comparable figures of last year. And similar to the other segment, which is also a bit down, these are two segments where we in last year, 24, had exclusivity on a few larger international rollouts due to design and development work that we have won. And the largest sectors in other, which Andreas referred to as well, can be good to mention is currently pharma and beauty, leisure and sports, and also consumer electronics. In Q3, our net sales for Northern Europe has declined with 16%. And we have seen this also in Q2, and it's especially driven by grocery sector in Denmark and Finland. And these are markets where we had large rollouts during last year with some of our key clients. But it's also a reflection of the customers are delaying some projects and being somewhat hesitant to committing to plants. Q3 has been strongest in Central Europe and especially rest of the world driven by performance in Asia, Australia and also US, especially with our technological solutions. Our operating cash flow for Q3 is minus nine million Swedish. And rolling 12 at 287 million Swedish, which is not pro forma, is impacted negatively in the quarter by network and capital development, and especially by accounts receivables. Accounts receivables are impacted by a normal seasonality, which we normally see in Q3, but also by extraordinary strong sales in the vacation period, July in the Northern Europe and August in Southern Europe, leading to pre-production in order to handle these high volumes. We have also accepted projects with high profitability on behalf or expense of longer cash conversion. We currently don't see any overdue increasing with any significance and the normal seasonal pattern of networking capital speaks towards a stronger inflow in the next quarter. And similarly to last quarter, we'd like to remind you zooming out a bit from the Q3 result and returning to what has previously been said and communicated about our plans with the merger of HNY. During 23, legacy ETH had EBIT margin of 7%, and legacy HNY around 5%, leading to a combined margin of 6%. And this is very similar to where we are today, rolling 12 pre-synergies. And although we had a good start in our new group on realizing these synergies that we have communicated, the majority of these are expected to be realized in 26 and 27. There is a strong strategic rationale for this acquisition, as well as it being financially attractive. And with the synergies identified at 30 million euros, increasing our net income with 90%, with only a 16% share dilution, all other equal, this indicates a significant earnings per share growth. And with that, I hand over to Andreas Helgård again.