Japan PPI inflation slips to 11-mth low in July
Introduction & Market Context
ITAB Shop Concept AB (STO:ITAB) presented its Q1 2025 interim report on April 29, 2025, revealing the first financial results following its transformative merger with HMY, which was completed on February 1, 2025. The acquisition has effectively doubled ITAB’s size, expanding its geographical footprint and diversifying its customer base across Europe.
The presentation comes amid a period of retail transformation, with ITAB positioning itself to help retailers adapt to changing consumer expectations. The company’s shares closed at 24.7 SEK on the presentation day, down 2.83% or 0.7 SEK.
Executive Summary
ITAB reported strong pro forma growth in Q1 2025, with net sales reaching 3,308 MSEK, representing a 16% increase compared to Q1 2024. Adjusted EBIT grew by 12% to 209 MSEK, demonstrating the company’s ability to maintain profitability during the integration process.
As shown in the following highlights slide, the company is focusing on three key strategic priorities during this integration phase: putting people first as teams get to know each other, ensuring business continuity, and developing a clear plan for the future.
The newly combined entity now employs approximately 5,400 people, operates in more than 40 countries, and maintains 24 production facilities across 17 countries. The merger has particularly strengthened ITAB’s presence in Southern Europe, including Spain, France, and Turkey.
Quarterly Performance Highlights
The Q1 2025 results represent the first quarter that includes HMY’s contribution, though only for two months as the consolidation began on February 1, 2025. The pro forma data provides a clearer picture of the combined entity’s performance.
The following chart illustrates the transformative nature of the acquisition, showing how the combined company has achieved significant growth in both net sales and adjusted EBIT:
Breaking down the Q1 performance further, the presentation revealed that both ITAB and HMY contributed to the strong results, with particularly robust performance in certain business segments:
The grocery and fashion sectors were the primary growth drivers, both expanding by over 20% year-on-year. The grocery sector’s growth was particularly strong in the discount segment across Central and Eastern Europe, while the fashion sector benefited from investments in new concepts and refurbishments across all geographies.
Detailed Financial Analysis
The HMY acquisition has significantly altered ITAB’s geographical sales distribution, shifting exposure from Northern Europe toward Southern Europe. This diversification provides the company with a more balanced regional footprint and reduces dependency on any single market.
While sales and EBIT performance were strong, cash flow showed some pressure. Operating cash flow in Q1 2025 was 26 MSEK, down from 64 MSEK in the same period last year. The company attributed this decline to higher working capital requirements and the exclusion of January for HMY (as consolidation began February 1st). Despite this quarterly dip, the rolling 12-month cash conversion rate stands at 80%, which meets the company’s target.
Strategic Initiatives
ITAB’s value proposition centers on helping retailers adapt to evolving consumer expectations. The company focuses on delivering measurable results across four key areas: enhancing consumer brand experience, increasing sales and conversion, improving efficiencies and service, and reducing operational costs.
The company’s approach integrates lighting, interiors, and retail technology to create seamless consumer journeys and optimize retail operations. This comprehensive solution-based approach positions ITAB as a strategic partner for retailers undergoing transformation.
Forward-Looking Statements
ITAB’s strategy execution is progressing through three distinct phases: Stabilize, Build & Invest, and Expand. The company has largely completed the stabilization phase, which focused on cost and capital restructuring, and is now advancing through the building and investment phase while beginning to implement expansion initiatives.
Key integration objectives for the merged entity include ensuring business continuity, allowing teams to get to know each other, and beginning to deliver synergies. The company expects to realize synergies in procurement, cross-selling opportunities, and operational efficiencies.
As retail continues to transform in response to changing consumer expectations, ITAB is positioning itself as a partner that can help retailers adapt through insight-driven solutions. The company’s expanded scale and geographical reach following the HMY merger provide a stronger platform to execute this strategy across European markets.
The company did not provide specific guidance for the remainder of 2025, but the strong Q1 performance suggests that the integration is proceeding according to plan, with the potential for further synergy realization in coming quarters.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.