ITAB Shop Concept AB (publ)

Welcome to ETAB Shop Concept Q1 Report 2026 presentation. During the Q&A session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. Interim CEO and President Glauco Froscaroli and CFO Andreas Helmerson, please go ahead.

Good morning, good morning, everyone. We are here today to present our Q1 2026. I just want to give you some information for the people that doesn't know ETAP. So I want just to tell you about our production facilities. We have around 22 production facilities in 16 countries. We are operating in more than 30 countries with around 5,300 employees. Our net sales is around 13 billion SEC with our ADK around 835 million SEC. Our BDA margin is 6.3%. We, our division are a grocery that is around 51% of our sales. Then we have fashion that is around 3% of our net sales. And then we have DIY home improvement around 10%. And then we have health and beauty 6% and then other customer groups that is around 21% where we have consumer electronics, travel details, sport and leisure, services, stations, hotels, offices and brand industries. Our solutions are retail interior, retail technology, retail lighting, retail services. We think for sure what we, our brand, our strong brand is Rethink Retail Together. So we create a retail experience that connects people with the brands they love. I want to just give you some highlights of the Q1 2026. We had the solid start of the year in the commercial market. Our Q1 net sales are around 2.9 billion SEC, that is around 7% currency adjusted. minus 7%. Adjusted EBITDA is around 164 million SEC, 192 million SEC was the previous year, excluding non-recurring items, amortization of acquisition related to immaterial assets. Net profit is 70 million SEC, is higher comparing to last year, to last quarter 2025, Q1 2025. Our cash flow operation is 214 million SEC. We improved margins with purchasing synergies and lower SG&A expenses with a strong cash flow and profitable growth in focus. Here I want to underline that I think that in one, We have done a great job because I think we have to be positive on what we have done in Wuhan because all of us know that we are facing a difficult situation in the economy worldwide due to the war in Iran. and other and other things that are not helping us a lot but i think we really are proud of what we have done we can do better for sure in the future but we are we are positive what we have done if we look to the role in 12 months net sales are 12.8 billion sec comparing to 13.2 billion SEC in 2025. Our adjusted BTA is around 800 million SEC comparing to 835 million SEC in 2025. We have our plan of 30 million EUR in synergies that we have to complete by end of 2027 and we are working and we are also positive on that. Saying this, I pass the word to Andreas Hermes, our CFO.

Thank you, Glauco. To give a representative view of the development of the group, we have, as usual, focused on the performer development in this presentation. In the interim report published, you will, of course, find all the details, including reported figures with HNY consolidated from February 2025. In the historical performance overview, we are comparing EBITDA development over time. And this is very similar to the EBIT figure that we previously showed during 2025, where we also excluded amortization of acquisition-related intangible assets, which is more an accounting term than it's not an actual cash flow or cost in a sense. So we will look more at EBITDA onwards. Adjusted EBITDA in Q1 came in at 164 million SEC relative to 204 last year. Q1 is normally a softer quarter for us due to seasonality of store operations. And this year, we also see a general slowdown across sectors. So it's not in one country or in one sector, but across many sectors. And at the same time, we have managed to sustain margins due to synergy execution and initiatives. Q1 performance sales development of minus 12, but if excluding currency effect, it's minus 7%. And this is the main sort of driver of the drop in EBITDA for the quarter. In the report, you can also see that our net profit was 70 million SEK, and this is higher than last year, coming in at 41, driven by lower adjustments of non-recurring costs, but also an improved tax rate. Net debt was also further lowered in Q1, and is now at 2.1 billion SEK, down from 2.3 end of 2025. Looking at the quarterly development over time, we can see that despite an organic sales decline of minus 7%, gross margin was actually sustained and also a beta margin if adjusting for extraordinary costs and provisions affecting comparability. And this, the impact from the sales decline is mitigated by impact of synergy execution, where we estimate to be circa one third into the program from a TNL perspective. Zooming in on the sales development, our organic growth rate currency adjusted now, we see that sales were lower across most of the sectors, reflecting a hesitant market where projects have been either put on hold or pushed into Q2 or Q3. And we don't see signals of losing market share. That doesn't happen very quickly and very often at all in this industry. But we do see a weak general market temperature. Our largest sector grocery is holding up somewhat better. This is normally what we see when uncertainty increases in the economy. Grocery is still a bit stronger and less cyclical. The US-Iran conflict is, of course, impacting the decision power of our customers in general through higher transport costs and inflation and uncertainty, general uncertainty about the outlook of and the impact in our economy. And at the same time efficiency and loss prevention solutions are really driving growth for us also in q1 and it remains a pocket of of growth and we see this strong interest especially in gynosing gates and self checkouts and not the least as a result of a participation at the euro shop where we saw a strong interest in this part of our offering and in general those product segments were of highest interest across the visitors we had at the Euroshop. From a geographic standpoint, we saw a mixed development in Q1 with strong growth in some regions, such as the Nordics, where we can also see that underlying growth in the market is very strong. While Southern Europe is down 9% here, we actually saw a mixed picture also there where Spain and France were very strong, with France being due to some local market dynamics through acquisitions, especially in the grocery market where they are rebranding stores, and also the fact that we are sort of gaining some market share due to very local production facilities, but also strong relations in this sector. So that's been great to see. And Spain has also been very strong, while Italy has been very weak. And it's not just one sector, but it's across customers and across sectors. And then Eastern Europe is down quite significantly here, 35%. But it's mainly driven by a few larger customers, where the rollouts have slowed down compared to last year. On the contrary, we see growth in Australia, driving the rest of the world market, where we continue to grow our portfolio of customers, which is great to see. And at the same time, also increasing the depth of these relations. So we're buying more products and a wider part of our portfolio, and especially in the retail tech segment. Looking at the development of EBIT A a bit closer and comparing it to the quarter one last year, we see that sales volume is impacting us negatively with circa 59 million SEK, while margin and mix is holding up despite lower volume in the factories. And SG&A is also neutral despite inflation and some extraordinary costs in this quarter. And actually, our result is in line with last year if we adjust for extraordinary cost and items affecting comparability. And we see this as a signal that our synergies are being realized and that we're on the right path towards continued execution of the synergies, which will prepare us to capitalize on the market when the growth returns. Our operating cash flow for Q1 came in at 240 million SEC and rolling 12 at 973 million. This is impacted positively by working capital development, where we have continued to see a release of account receivables and a strong focus on inventory management and payment terms generally across the group. Our net debt is also down in the quarter, now at 2.1 million SEK versus 2.3 in Q4. And this is driven by our profitability, lower non-recurring costs, and improved working capital, as we saw in the last slide. In Q1, we estimate that we are circa one third into the execution of a synergy program as previously stated. The total synergy potential remains where we have communicated 30 million euros per year with full effect in 2027. Synergies come 20 million from cost efficiency and 10 million from commercial synergies. Cost overlaps, as well as some of the larger procurement categories, has been the low-hanging fruit that we prioritized so far. And in parallel, we have assessed our manufacturing and logistics network to make sure we can capture opportunities. And we've also spent time building the foundation for commercial synergies by investing in Salesforce training, showrooms, and cross-selling plans. Of course, we're looking forward to continuing updating you on this progress and our general business performance onwards. And with that, I hand over to you, Glauco Fasca-Årlegen.

Thank you very much. Going forward, which are our main priorities today is a profitable growth by capitalizing on all the positive outcome from Euroshop in February with a focus on our solution for loss prevention and store efficiency. Measures to improve our profitability continuously assessed and implemented in all parts of the group. and mitigate the impact of higher costs due to the current situation in the Middle East, as everybody knows. Continued focus on integration in our effort to achieve the 30 million euro, as just Andreas mentioned before. Effort to reduce our tied up capital and debts and that we've done already, I think a good job. Launch of shared value and culture ways of working and strategic teams and priority for ETA Group 2026. Before to close our presentation, I just want to give you some words about... I think we have to think that ITER today is the largest group in Europe and maybe in the world with the last acquisition of HMY. And also to our very strong portfolio of products, we have really a lot of chance when we know that the customer now are exitant because the global situation but we have really a lot of opportunities and as soon as the market and I'm sure the market will start to move as uh very soon we have really thanks to our product portfolio we can really be very successful and this is my really my opinion my i'm very strong convinced that our future is good so thanks to all of you and for listening

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 Erik Sandstedt from Kepler Shoebrew. Please go ahead.

Hi there. Yeah, Erik Sandstedt from Kepler Shoebrew here. few questions, please. Firstly, in terms of organic sales, how much of this 7% decline is attributable to the legacy ETA versus HNY, roughly?

Yes, I can try to answer that. I think, I mean, it's more related to where we have our market exposure and we can see that France is quite strong. That's the market where Legislation Y is significantly stronger than Legislative. And Legislation Y also had a strong foothold in Spain and both France and Spain are very strong in Q1 this year.

Okay, that's interesting. Yeah, that's interesting. Thanks. And then I'm not sure you probably don't have a lot of market data yet. But do you think that the decline is largely sort of attributable to weak markets? Or do you think that you have lost some share in the quarter?

I can answer. I think, no, we didn't lose any shares in the market because I think the only problem is that the situation is, as I said before, the customers are hesitant. And also we have to say that when we have Euroshop, normally industrial people are waiting to place new orders, to see all the new products that we present. And I have to remember that all of you that we had more than 50 000 visitors in euro shop so the results of euro show will come in the next months uh so i don't see any we didn't lose any customer we didn't see any i we don't lose any market position this is my my feeling thanks um

And then given the geopolitical tensions here and weak markets, is it fair to assume that trading conditions deteriorated throughout the quarter and that the exit rate was quite soft? Or how should we think about the dynamics within the quarter?

I think... we have uh generally i would say when when we meet the the sales people and talk about if we talk about q2 and q3 i think it's it's too early to say yet we do see some early signals that there are some light in the tunnel but some of that is also coming as a result of the euro shop so we can we can definitely see that it's euroshop is a great way to meet existing customers but it's also a great way to enlarge the relationships we have and some of these customers they are now inviting us to really as experts in fields like loss prevention where we are part of actually invited to group management meetings and we are setting up showrooms in customer headquarters just to really to as a testimony to that we are taking the lead when it comes to store efficiency and loss prevention. So I think there are some good signals, but it's too early to say. And there's a big dark cloud on the sky as well, being the US-Iran conflict, which we are exposed to CapEx investment logic. And that means that you need to feel safe before taking large CapEx decisions that the economy will not suffer. So, although we see some positive signals, it's too early to say where it will take us.

Just to follow up on that, and this is my last question, but looking at your order backlog, just the other day you announced a fairly big order in the UK with a total value of 12 million euros, right? And could you comment on how long you have worked to secure such a deal? So what's the lead times from start of discussion to signing the deal? What I'm curious about of course is how the sort of order backlog looks right now and how much visibility you have for the remainder of the year.

It's a good question. I mean, we are not yet presenting all the backlog or normally communicating anything around it. And it's something we're looking into to see if we can start doing that in the future. But I think generally it differs a lot depending on the project. I mean, some of the framework agreements we have with customers, we have pretty good outlook for the remaining part of the year. So they have a budget normally, they communicate that budget and there's no volume commitments, but we see very stable maintenance of stores or replacing shelving. But then there are things like loss prevention and that can take anything from three months to nine months to secure because we need to go through a series of customization of product technologies and testing, they start with one store and then go into next store and then they test in 10 stores and then they evaluate the business case, right? And then we go into rollout. So it's difficult to say a guideline here, but we normally have quite good outlook for the next month and a half and decent outlook for the coming three months. But then, you know, it goes down.

Yeah, I understand. That's helpful. Perfect. Thanks. That's all I had. Thanks.

The next question comes from Karl-Johan Bonnevir from DNB Carnegie. Please go ahead.

Yes, hi, Glaco and Andreas. Sorry, my connection is quite poor, so I hope you hear me.

Yeah, we can hear you.

Excellent, excellent. Just a couple of follow-up questions from me as well. As you said, you're not really want to talk about order backlog, but if you look at your commentary about clients that are, for the moment, maybe putting orders on hold and delaying rollouts, do you feel that you have, if you compare it to a year ago or maybe at the start of the year, looking at the load that you saw ahead in the factories, how does it compare? Is it pretty stable or is it better or worse?

I mean, we see a fairly stable situation still. Seasonality-wise, Q1 is a bit softer than remaining. Then there can be certain pockets of exceptional development. I highlighted Italy as one of those now. Italy is one of those places where we have a really strong position and we don't have one or two or... We have a large customer base, and it's a slowdown across most customers. I mean, partially driven by government subsidies being a bit slower, but also market development and them being a bit closer to the Middle East and so on. I think it's too early to say where it will take us, but we do see a mixed bag of some customers really being strong, having strong financials, having, I mean, we see, and as I mentioned in the report as well, self-checkouts and some loss prevention products being very, you know, already in the order books and signaling a strong year, while some of the interior projects and some other projects, they are they're still pushing decisions you know we thought we would have it in march perhaps and then they're pushing it into q2 partially because they haven't got maybe the budgets confirmed internally and sometimes so that's different reasons depending on customers and so forth but it sounds like it's pretty much how you described it earlier that it's stable at the low level and it's not really any change to it at this stage yeah

And good to hear the France being back on slightly stronger footing. Could you elaborate what has been put in place during the second half of the year to re-establish that operation?

Yeah, I think I can answer. We have done a lot of, we launched a lot of projects to reduce the cost and to improve the production facilities and also and this brings a lot of good synergies and good results that we start to see already at the end of Q4 but And then also we start the Q1 in a very good way because we start to take the market start in a very good way. The customers are moving a lot. So the sales are improving quite a lot. But let's say that was not only the sales that are improving and increasing, but really this project that we launched last year start to give the results that we expect. So this is why today France is performing very well and we are really And we are really happy with this because we think, we thought since the beginning of the acquisition of HMY that France was a very important opportunity and upside for us. And this is something that we start to see in the reality. And this is this make us make up very positive thinking and look into the future.

No doubt it's a huge market for you these days. It's good to hear that it's back on firmer footing. I see you not talking either about the phase and maybe Turkey being such a challenge here at this stage as it was during the second half of this. There has been underlying business improvements there as well?

yeah yeah in turkey yes for sure we are changing the we are thinking about how we we launched already the plan last year to restructure the the company in turkey so we have planned to improve reduce the cost but also what i want to say that sometimes not only reducing cost is the is the the final results that you can get from but you have also to think about the market the customers so also we are improving our customer network we are back again in the turkish market when when we where we lost in the past some customers now we regain quite few customers in the market so let's say going together in parallel with the reducing cost and synergies and improving the customers network that we expect in the second part of 2026 in turkey that we will bring the company in again positive and positive results

Excellent. And I saw on here your comments about the Middle East maybe impacting you with higher costs for energy transportation and potentially increasing lead times, which is the biggest challenge of those three when you try to, say, disseminate it?

I would say it creates some uncertainty in the supply chain. It means that we need to stay closer to our suppliers and our customers. There's high expectations on us delivering in time and on quality. If one article is missing, then that creates a complexity for us, which means additional costs in the installation of a project. I think it's the overall sort of product management, making sure that things are on time. And then, of course, working heavily to mitigate cost increases, both internally, but also through our partners, both customers and suppliers. So it creates some additional efforts from us to make sure we protect our synergies and our margins in the end.

And thank you very much for the very good split down on how you see the synergy evolving in the deal. And when you look at the commercial potential in this, I guess the cost side of this is more of a firm timeline, as I understand it. But when you look at the commercial synergies, how important was Euroshop to really get the HMI side to be on top and be able to sell your light products and your technical products?

Yes, Euroshop was a fantastic opportunity for us because it was the first time that we came together with HMY in the biggest fair in the world. As I said before, we had more than 50,000 visitors. and there was unexpected these results really it was a great success and i think this is the starting point together with hmy where we saw also customers from hy very interested to our product portfolio that was not before in hmy so we are starting in many countries now to to promote these products. We are launching new showrooms in these countries with all our products. And for sure the reaction on our retail tech portfolio is very, very interesting and very positive. So really concretely, we start to have already get orders and sales. So this is the most important things to say.

Fantastic, fantastic. Well, thank you very much for all and the good management of the company Glaukow on your interim period and all the best out there in the new assignments.

Thank you very much. Thank you.

The next question comes from Anton Lund from SB1 Markets. Please go ahead.

Hey guys, thank you for taking my questions. First off, on working capital, I see that inventory was built by 170 million in the quarter. And I'm just a bit curious, I mean, comparing this to 7% organic growth decline. Can you walk us through what's behind the inventory build in the quarter? that the volumes are left on your shelves or higher raw material prices or it's a mix.

Inventory is generally not impacted that quickly from no cost increases in the supply chain. It goes a bit slower, but to some extent it's more project driven where we see we have projects that are waiting. Some projects we need to build up inventory to make sure we can really succeed with installation in time partially also driven by a euro shop because we build up some inventory to be able to really be now in q2 to have some of the the high sellers sort of in stock to be really really be able to capitalize on on short-term demand So apart from that, we see working capital as being, you know, really developing well in according to plans. And yeah, then it's normal that, I mean, Q4 is normally our lowest level in the year. And then you should expect to see a build up over the year. And of course the sales slow down in Q1 is helping that. in general but you should expect Q2 and Q3 to be a bit higher and then to go down again in Q4.

Understood, thank you. And then on CapEx it was down about 25 million year over year here in Q1. Is this sort of your budgeted run rate for this year or is there something else that we should keep in mind?

uh no it is a bit lower we also we had a positive effect from selling real estate which was one million euro in so the net is then one million lower but uh no we continue continuing with the capex levels that we that we've had historically as well and continue to invest uh

in a similar pattern so it's more seasonality when exactly these cash flows comes in so very good and then I have a question on I mean we've talked about your operational footprint and it's been mentioned again today so you as you say you divested this property in Finland And since we're talking about Turkish restructuring, are you considering any property divestments there? And if so, what kind of cash proceeds would you expect?

Yeah, I think we are, from a Synergy perspective, we have spent some time analyzing the sort of network that we have from a factory and it will continue. I think Turkey, most of this optimization, I don't think you should expect to see cash in, but it could mitigate some of the restructuring costs that we see if we in places where we have two factories, as an example, and we think we can consolidate, then we're also investing at the same time in the new factories to make sure we can fit the volumes into that. So I think we are continuing to, we see great progress in some of this, especially France, which Glauco mentioned, but we'll also continue to evaluate, I mean, to really make sure we optimize the footprint and the, the cost efficiency both in Turkey and France and a few other places where we have mutual sites.

Very good and then one final one for me. The tax rate down to 24% this quarter I believe. What do you expect to see ahead? I guess this is partially due to the better performance in France or? How do you view this ahead?

I agree. France is a bit on the low side. You can't expect us to already be at 24. I think that's more of a long-term target to reach. I think we're still in a transition year to make sure we optimize depth across the group and optimize these flows. But you should see a clear improvement versus last year. That's... That's for sure. But it will take us another year to really make sure we optimize these flows. That's the plan. So it's a bit on the low side, but you should definitely see an impact from France. You should see an impact from optimizing the debt structure across the group. And we also have lower, of course, acquisition costs this year, which is non-deductible. So it's an impact from that as well. Very good.

That's all for me. Thank you.

Thank you. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Yes, we have only received one written question, and it's in line with one of the other questions that we've already answered. But could you give some color on the development during the quarter? How did the year start off in January and February compared to March?

Yeah, I think both January, February, and March were slightly behind last year. And so you don't normally see shifts that fast in the market. So Q1 is more a result of November, December last year. And it's a result of market conditions and some customer programs, which doesn't shift too quickly from month to month.

Okay, then we've answered all the written questions, so I hand over to Andreas and Glauco to maybe some final remarks before we close the conference call.

Yeah, I just want to say that this is my last day as interim CEO. So from tomorrow, Bjorn Borgoan will be the new CEO of the ETAB group. So very welcome to Bjorn and great success. And thank you to everybody. Thank you very much.