ITAB Shop Concept AB (publ)

Welcome to ITAB Group Q2 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, President and CEO Bjorn Borgman and CFO Andreas Helmarsson. Please go ahead.

Good morning, everyone. Thank you for joining and welcome to this Q2 call. We will color a little bit outside of the lines today since this is my first quarter. We will start with a short introduction and then my take on Q2. I will then leave for our CFO Andreas to give more context. This will clearly be the meaty part of the presentation. And then we're going to wrap up with a short summary of the first impressions and priority going forward after being with the business for the first two months. But let's get this show on the road. Introduction. Why did I get the board's confidence to lead the ITAB group? This is at least my take. I'm coming from a similar role with HL Display. I've been with that business for 11 years, the last six as CEO. The HL business is very similar to ITAB when it comes to its customer base, geographies, and also the business model running. So a lot of things for me are very similar in ITAB as they were in HL. The track record in HL was strong. We delivered the last eight years with consecutive years with profit growth. And then we've had a successful acquisition journey as well. of 12 add-on acquisitions. So I think that mirrors quite well what ITAB was looking for. Before this, I spent 12 years with a company called Rekid within the FMCD business. So delivering things to grocery retailers, primarily in Europe and North America. So in total, 23 years of grocery retail experience, which is a core business for ITAB. So I think this gives a little bit of background to why I'm here talking to you today. But let's focus on what we have in front of us. Q2, quarter of stability, probably a small step forward versus both last year and Q1. Looking at the earnings in line with last year, some strong development in Nordics, France good from a lube base last year, and also US good from a lube base in general, but a few shining stars. More challenging business in Italy, UK, and of course, the Middle East from a macro perspective. When it comes to EBITDA profitability, slight steps forward versus last year, both on EBITDA and profitability. Synergy realization from the HOI acquisition is generally on track and I'm quite confident that we will deliver on the synergies we set out to deliver. That is partly offset though by a little bit of volume decline and price adjustment delay. So clearly we had input price increases in the first half of the year and the delay between getting the price adjustment from our suppliers and reflecting with our customers we see now both in Q2 and we're going to see it partly in Q3 as well. But both from a top line perspective and a profitability perspective, this breaks a little bit the negative rolling 12 trend we have. So we are cautiously happy with that. Looking at the cash flow, this looks to be challenging, but this is really driven by the change in sales volume between Q1 and Q2 this year. On top of that, we had a fairly back-heavy Q2, which reflects exactly this cash flow difference. So looking at working capital, it's in line where we were last year. So not so much drama as it might look like on that aspect. So that's really the fly into the quarter. I'm going to leave for a CFO Andreas to try to put some more meat on the bones here. Andreas, take it away.

Thanks Bjorn. Good morning, everyone. And finally, I have to say H&Y acquisition is now fully annualized and we are only using formal numbers when going back to Q1 2025 or earlier in our historic comparisons. Zooming in on Q2, we do see stable sales and profit development, as mentioned. Adjusted a bit in Q2 at 180 million, see it relative to 175 in Q2 last year. Despite sales being down versus last year, and we experienced some cost inflation on the market, we have managed to sustain margins due to synergy execution. Net profit is significantly up from 21 million SEK last year to 61 million SEK this year, driven by lower restructuring costs, lower financial expenses and more optimized tax returns. Net debt has been lowered by 553 million SEK since last year, but is up since Q1 driven by higher sales impacting accounts receivables and working capital negatively, as mentioned by Bjorn. Looking at the quarterly development over time, sales in Q2 was stable and sales has been stable with Q1 as the exception impacting on rolling 12 figures. Although a majority of this effect and the decline in rolling 12 is related to currency and especially euro impact processing. Gross margin has improved slightly in Q2 and also a beta margin, despite the recent cost increases and lower volume into our factors. Net sales by customer group in Q2, adjusted for currency, show strength in our core segment's grocery and whole improvements. and this is a trend that is also confirmed when looking at market and retail statistics. Grocery is normally more stable and holding up better in times of market uncertainty and we do see the US-Iran conflict still causing some uncertainty in the market on cost inflation but also from an economic outlook perspective causing project commitments to be delayed. At the same time, efficiency and loss prevention solutions are driving growth in pockets for us, and we see strong interest into our offerings in both guides and gates and self-checkouts, where we see there are a pipeline of opportunities in cross-selling these solutions to legislation-wise also growing. We continue to see a mixed development in sales across our key markets. Northern Europe, with especially Nordics, sustains its strong performance from Q1. Southern Europe is now also up in Q2, which is great to see. Very strong developments from key markets such as Spain and France, despite Italy remaining negative across most customer groups, although we did see some positive signals in Q2. The French market is more due to local dynamics in the grocery market, where we've been able to capitalize on this due to local production capacity in customer relations, while Spain is more driven by recent wins in specialty retail, but also the key customers in the grocery segment are investing. UK, which is down, is a market where we're exposed to project fluctuations a bit more than other regions. And some of our key projects on this market has been pushed into Q3 and Q4. Looking at our EBITDA bridge quarter on quarter, we see the sales volume is impacting a slightly negative. that procurement synergies are mitigating recent cost increases on fry energy and select categories such as powder and SG&E synergies are pushing back labour inflation and having a positive impact on profits. Next wave or SG&E synergies are planned for execution during Q3 and Q4 later this year. We expect to see a larger impact from margin mix onwards as some of input cost inflation we have seen has not been possible to handle internally through rerouting or efficiencies and will result in price increases starting to have effect in Q2. Our operating cash flow for Q2 came in at minus 112 million while rolling 12 is positive at 914 million. This has impacted negatively in the quarter by working capital development and especially accounts receivable due to a sales increase of 272 million between Q1 and Q2. No growth in overdue. It's more similar to the seasonal pattern we normally see in this business. Although we expect working capital to be higher in Q2 and Q3 due to this seasonal pattern, we see that the strengths of our new group will help us to maintain a higher capital efficiency over time through procurement power, financial market attractiveness, and consolidation of inventory and supply chains. Net debt now at 2.4 billion, down 553 million since last year, but up from last quarter driven by working capital increase of 340 million, as just mentioned. In Q2, we estimate that we are 50% into the execution of our synergy program. The total synergy potential remains, where we have communicated 30 million euros per year on an annualized basis with full effect in 2027. Synergies come 20 million from cost efficiency and 10 million from commercial synergies. We have planned for the next waves of our SG&E and cost savings initiative to take effect during Q3 and Q4, further lowering our cost base in front of 2027. And the commercial pipeline for cost selling has also gained traction, where we see that order levels are growing in line with expectations for Q3 and Q4.