Earnings call transcript: ITAB Shop Concept Q3 2025 sees stock surge 19.54%

ITAB Shop Concept AB reported its Q3 2025 earnings, revealing revenue of SEK 3.3 billion and an adjusted EBIT of SEK 260 million, marking a 13% growth. The company’s stock soared by 19.54% following the announcement, reflecting investor optimism. The firm continues to focus on retail technology solutions and integration of recent acquisitions.

Key Takeaways

• ITAB reported a Q3 revenue of SEK 3.3 billion with a 4% currency-adjusted growth.
• Adjusted EBIT rose to SEK 260 million, a 13% increase, with an EBIT margin of 7.9%.
• The stock price increased by 19.54% post-earnings announcement.
• The company is integrating its HMY acquisition, targeting €30 million in synergies.
• ITAB is expanding its retail technology solutions across Asia, Australia, and the US.

Company Performance

ITAB Shop Concept AB demonstrated solid performance in Q3 2025, with revenue reaching SEK 3.3 billion, supported by a 4% growth in currency-adjusted terms. The company continues to expand its retail technology solutions, which have shown robust performance in key markets such as Asia, Australia, and the US. ITAB is also integrating its recent HMY acquisition, aiming for significant synergies in the coming years.

Financial Highlights

• Revenue: SEK 3.3 billion, 4% currency-adjusted growth
• Adjusted EBIT: SEK 260 million, 13% increase
• EBIT Margin: 7.9%
• Operating Cash Flow: -9 million SEK

Market Reaction

Following the earnings announcement, ITAB’s stock price surged by 19.54%, reflecting strong investor confidence. The stock’s last close value was SEK 17.9, with the current trading price reaching SEK 21.4. This movement positions the stock significantly closer to its 52-week high of SEK 27.1, signaling positive market sentiment.

Outlook & Guidance

ITAB remains focused on realizing synergies from its HMY acquisition, with the majority expected in 2026-2027. The company anticipates normalized working capital in Q4 and is working on improving tax efficiency. Leadership changes are underway, with Björn Borgman set to join as CEO on May 1st.

Executive Commentary

CEO Andréas Elgaard emphasized the company’s dual focus: "We are helping retailers with two things: the consumer journey and influencing retail operations." CFO Andreas Helmersson highlighted the company’s clear agenda: "The next two years, the agenda for ITAB is super duper clear." These statements underscore ITAB’s strategic direction and commitment to enhancing its retail technology offerings.

Risks and Challenges

• Integration Costs: The HMY acquisition involves integration costs of approximately €21 million.
• Macroeconomic Environment: The challenging macroeconomic landscape could impact future growth.
• Tax Inefficiencies: Acquisition-related non-deductible costs are affecting tax efficiency.
• Working Capital: The company expects working capital seasonality to normalize in Q4.
• Restructuring Efforts: Ongoing restructuring activities in France and Turkey may pose challenges.

Q&A

During the earnings call, analysts inquired about the macroeconomic environment and its impact on ITAB’s operations. The company acknowledged the challenging conditions but expressed confidence in its restructuring and integration efforts, highlighting expectations for normalized working capital and improved tax efficiency in the coming quarters.

Full transcript - ITAB Shop Concept AB ser. B (ITAB) Q3 2025:

Conference Moderator: Welcome to ITAB Shop Concept Q3 Report 2025 presentation. During the questions and answers session, participants are able to ask questions by dialing #KEY5 on their telephone keypad. Now, I will hand the conference over to CEO Andréas Elgaard and CFO Andreas Helmersson. Please go ahead.

Andréas Elgaard, CEO, ITAB Shop Concept AB: Thank you very much. Hello everybody, and thank you for tuning in and listening to our interim report for the third quarter this year. 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. I just want to say congratulations, and we’re in safe hands here. I also want to say a big thanks to Ulrika that now stepped back as CFO and to take care of herself. When she comes back, she will be a great asset for ITAB moving forward again. Let’s jump into the report. 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.

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. 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, and we’re quite Europe-centric, but we really have a wide footprint. We have 40+ countries that we operate in. We are approximately 5,400 people, and together we manage to have a turnover or a revenue above SEK 13 billion. 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.

It is, of course, a lot of interiors, building physical stores, and then we add value add 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 improvement, 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 maybe qualify to be highlighted a little bit clearer for the future.

We work with 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 from my side before I hand over to Andreas Helmersson. 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 of synergies that we promised our investors when we acquired HMY. In the third quarter, we have a turnover of approximately SEK 3.3 billion.

With the sales growth, if we adjust for currency, the vast majority of our sales is, of course, in euro, and it’s important for us to follow the currency. We have, as mentioned, a very strong result this quarter with SEK 260 million 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. We have a very people-focused approach to the integration. We are also very focused on our customers, to make sure that we deliver value quickly and we protect business continuity, so we don’t get, I would say, too introverted working on integration and forgetting about the market.

Those are two of our really, really important priorities, but also that’s no excuse to not deliver 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. 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. By that, I hand over to Andreas.

Andreas Helmersson, CFO, ITAB Shop Concept AB: 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 pro forma development in this presentation. In the interim report published online, you will, of course, find all the details, including reported figures with HMY consolidated from 1st of February. Zooming out on our historical performance, you can clearly see the significant impact of our recent acquisition of HMY, now reaching SEK 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. In Q3, as Andreas said, adjusted EBIT for non-recurring costs, but also the amortization of acquisition-related intangible assets, amounted to SEK 260 million, and that amounts to a 7.9% margin, which is up 13% versus last year pro forma.

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 technology 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 cost, but also from consolidating our spend. Focus onwards is to execute on the synergies, as Andreas spoke about, and the majority of those synergy realizations is expected to happen in 2026 and 2027, 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. Similar to the other segment, which is also a bit down, these are two segments where we, in last year, 2024, had exclusivity on a few larger international rollouts due to design and development work that we have won. 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 the grocery sector in Denmark and Finland. 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 commit to plans. Q3 has been strongest in Central Europe and especially the rest of the world, driven by performance in Asia, Australia, and also the U.S., especially with our technology solutions. Our operating cash flow for Q3 is -9 million SEK, and rolling 12 at 287 million SEK, which is not pro forma, is impacted negatively in the quarter by net working capital development and especially by accounts receivable.

Accounts receivable are impacted by enormous seasonality, which we normally see in Q3, but also by extraordinary strong sales in the vacation period, July in 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 overdues increasing with any significance, and the normal seasonal pattern of net working capital speaks towards a stronger inflow in the next quarter. 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 HMY. During 2023, Legacy ITAB had an EBIT margin of 7% and Legacy HMY around 5%, leading to a combined margin of 6%.

This is very similar to where we are today, rolling 12 pre-synergies. Although we had a good start in our new group on realizing these synergies that we have communicated, a majority of these are expected to be realized in 2026 and 2027. There is a strong strategic rationale for this acquisition, as well as it being financially attractive. With the synergies identified at €30 million, increasing our net income with 90%, with only a 16% share dilution, all other equal, this indicates a significant earnings per share growth. With that, I hand over to Andréas Elgaard again. Thank you, Andreas. To round this off, I just want to remind everybody that we are, of course, working in the retail space, and we build physical stores, and it is really important to remind everybody about what is going on in retail.

We are all consumers, even if we sometimes forget that, but we are all consumers, and we all see in our own daily lives, and when we look at our parents and our children, how the shopping behavior and the shopping expectations and the importance of being guided and led and seen is influencing how we behave. This is, of course, a global trend, and this poses new questions and sometimes opportunities and challenges for retailers that they have to change their, in order to stay relevant, they have to invest differently to what they did in the past. The past was really dominated by rapid expansion, doing a lot of the same in a very predictable way for us as an industry.

Since a couple of years back, and this is just continuing to accelerate, being agile, having short lead times, being able to react, being able to help and guide retail chains so they get the most, I would say, most attractive business cases delivered to their operations is what is key, and that is what we have improved the last couple of years, and that has been behind our, I would say, improvement in profitability. This is super important, and it’s still ongoing. It’s nothing that is kind of settling, but what is very reassuring for those that invest in us is that there is more work than ever. It’s just that the nature of the work is changing all the time, so we need to stay agile and on our feet.

Also reminding everybody that it is projects and programs, and they don’t always follow the way that we report our quarters. They come when they come, and that’s why sometimes a quarter can be very strong, and sometimes a quarter can be a little bit less strong, and that’s why it’s important to look at us over time. Many, many retailers are really struggling with this cost versus experience dilemma, the need to stay relevant, the need to invest, and at the same time, the need to take out costs. When we help them doing that, then we have a really strong case, and we call that our value proposition.

We started focusing on this a couple of years ago to really be outcome-based, not talk about benefits and features on products, but instead talk about what is the outcome that our solutions deliver in terms of the desired consumer brand experience, the increased sales or conversion that a solution can help to drive, sharing best practice across industry, across sector. If we do that and also improve the efficiency and the service level, and at the same time can reduce the operational cost, we are a very, very attractive supplier, and we can see that that is how we have managed to improve the last couple of years. ITAB Shop Concept AB of today is really helping retailers with two things.

One is, of course, the consumer journey and the experience that you have in a retail store, but we are also influencing retail operations, the whole efficiency across the value chain. This is something we do already today with our solutions and our products within lighting, interior solutions, and retail tech. Moving forward, we see that this will continue, but it will be more and more services and more and more about being able to leverage and deliver data and be able to act on insights from data that you get from across channels in order to help the retailer constantly be relevant in the consumer experience, but also to drive efficiency in the store and across the whole value chain and to become more data-driven. We are moving forward on this clearly, and that is helping our profitability development.

This is my last quarterly report for ITAB Shop Concept AB. When I leave in January, beginning of January, it’s after six and a half years, and I’m super proud over the teams across ITAB Shop Concept AB that, first of all, how they embraced the need for change a couple of years ago and how we believed in the strategy that we made together and how we’ve been able to execute that. Almost everything in the strategy has been executed and delivered. That is something that we’re super proud of, but it also means that the work is not done, and even if we sometimes feel that we’re great, we’re simply not good enough.

A new direction going forward is required, and that direction is, of course, hinted in the acquisition of HMY, that our idea of becoming even stronger, even more agile, and to use scale of economy to deliver more value to our customers and our shareholders, that is, of course, crucial in the new direction we’re setting right now going forward. I’m also very happy to be able to hand over ITAB into the hands of Glauco Frascaroli as Interim CEO during the period between January and May 1, when Björn Borgman will join as the new President and CEO of ITAB Group. Björn has a super relevant experience, and I think the perfect leadership for ITAB going forward. With that, I just want to say thank you for you that are listening to this presentation, and also thank you for the reports the last couple of years.

I think by that, we open up for questions and answers.

Conference Moderator: If you wish to ask a question, please dial #KEY5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #KEY6 on your telephone keypad. The next question comes from Carl-Johan Bonnevere from DNB Carnegie. Please go ahead.

Yes, good morning, Andreas and Andreas, and congratulations to a very solid Q3 report. Good to see you with, I guess, the comparisons in the first half of the year were a little strange against those pro forma numbers you have. Good to see you’re firing on more cylinders. On that note, Andreas, I heard your commentary on the underlying market and the variability and so on. Do I feel that you are slightly more positive on the underlying things, but it’s still more variations related on the customer level than maybe general market level now?

Andreas Helmersson, CFO, ITAB Shop Concept AB: I mean, it’s always tricky. As you know, you’ve been following us for some time now, but I mean, we still feel that this year is much harder to navigate than 2024. We’re super proud to be able to deliver such a strong quarter as we do this time. As you all know, the windshield in the, if you make that comparison, it’s a bit tricky to look at the windshield. It’s easier to look in the rearview mirror, but that doesn’t help us when we’re navigating forward. It does help us to focus on the things that we can control. I would say that the next two years, the agenda for ITAB is super duper clear, the internal agenda, and also, and we know that the work that we will do will add value to our customers and our shareholders.

If we start to see a more stable macroeconomic where customers can start to plan with more confidence, that is just going to affect us positively. That is maybe my answer. We don’t really see a change in the macro or the underlying climate. It’s still a tough environment.

There’s more underlying patterns still, customer by customer, if you put it like that.

Yeah, absolutely. Customers with, I would say, a strained balance sheet are being very cautious with their investments. There are always customers who have a very rock-solid financial position, and they are able to invest. I would say the common denominator for all customers is that they’re much more focused on positive outcomes and quick paybacks in the business cases. That really goes across. Those who are strong financially are maybe quicker to take decisions than those that have a strained balance sheet.

Makes full sense. Andreas, I heard your commentary also on the working capital and seeing, say, a seasonal impact by buildup and so on. With the kind of prolonged cycle you see and maybe securing them contracts with slightly longer payback patterns, should we expect a normal Q4 kind of release again, or is that sliding now into maybe 2026 release?

No, I think we are. We normally see a release of cash and an inflow of cash in the fourth quarter, and there’s no signs that this should be different this year. We expect a more normalized net working capital situation again in Q4.

Good to hear. Just a housekeeping question as well, looking at the integration costs that you highlight at the time of the acquisition and the €21 million, how much of those has been incurred by now?

The €21 million that has been communicated refers to integration costs. That is, costs referring to our work with realizing the synergies. We have also had costs related to the acquisition, which is more legal costs and so to realize the acquisition. Those are almost done now. With regards to the integration costs, we expect that to continue throughout 2026. I think that the total amount.

Do you have a feeling for how much is still left because you have already done a fair bit of it?

Yeah, a rough number I would say half of the non-recurring costs that we have communicated is the acquisition cost and half-ish is the integration cost. I think that’s a rough estimate.

Excellent. Thank you very much. Andreas, all the best out there and good luck with your new role at Arion. I look forward to following you there as well. All the best.

Thank you.

Andréas Elgaard, CEO, ITAB Shop Concept AB: Thank you. Okay, it doesn’t seem like we have more questions over the telephone conference. We have a few questions in writing, starting with the first one. What lies behind the high tax cost, and what can we expect regarding tax for Q4?

Andreas Helmersson, CFO, ITAB Shop Concept AB: I can take that one. I think what we’ve seen in 2025 is that we have costs relating to the acquisition of HMY, and some of these costs are non-deductible, which means that our tax efficiency is not as good as we would like to. We can also see that when we have losses in some markets, that also skews the tax efficiency to some extent. When you do an acquisition of this size and you increase debt in a way that we have done, obviously it’s a journey to make sure that debt is pushed down across the full group to make it tax deductible as well. I think we’re on a journey and we will see tax being more and more normalized, but it will take us a while to really optimize this for them.

Okay, second question. Accumulated one-time costs amount to SEK 116 million. When can we expect these costs to evaporate, to disappear?

I think I explained this recently as well, but I think you should be aware that the integration program will continue throughout 2026 and into 2027, and that we have taken around 5 to 7 out of those 20 until now. Maybe if I add some flavor to that. I mean, I think if I remember correctly that when we communicated the deal, we said that we need around €21 million in restructuring costs. I think that’s a very, very strong business case to get €30 million in synergies at the one-time cost of €21 million, because these are then continuous synergies that we will see moving forward. These were top-down assessments and the synergies we can validate bottom-up.

When it comes to restructuring costs, they will be communicated as we take decisions because everybody will understand that restructuring costs of this nature are connected to taking costs out, and that sometimes comes at cost. Just so everybody is aware, there’s a lot of work still ahead of us to make sure that we have the most agile and efficient company we can.

Okay, thank you. I have a question. Is it possible to quantify the respective impact of the seasonal working capital pattern versus the longer cash conversion cycle projects? What was the main driver of accounts receivable?

I think the main driver is really the ones that we have said in the report, but also here in the presentation, that they’re all contributing. We’ve taken some decisions, which we normally see. Comparing to last year, we didn’t have as strong. July is obviously in Northern Europe and August in Southern Europe. We really had to plan around that in order for people to still have vacation and to be able to handle these large rollouts for some of our key clients. It’s something that happens in this industry because that really prolongs the cycle. We need to order material previously or earlier than we normally do, and then it stays in inventory and as work in progress a bit longer than it does, and now it ends up at accounts receivable.

Zooming in on accounts payables and inventory, they are at zero, net zero from a cash flow perspective this month. Everything is driven by accounts receivable, and there’s no signs of overuse or so. We feel confident that this will be more normalized in Q4 unless we have really strong rollouts approaching for Q1, which can disturb the picture, but you never know.

Okay, thank you. HMY sales growth significantly higher in Q1 versus Q2 and Q3. What was the reason? If comparison is the answer, what comps do you face in Q4?

I would say the first part of that question referred to strong growth in Q1, right? I think it’s fair to say that Legacy HMY had a strong Q3 and Q4 last year, and that spilled over into Q1 as well, especially January. They had exclusivity on some major international rollouts, which comes and goes. It’s really what we’re after, working close to our clients, trying to be a solution provider, trying to lead with creativity and design, and that’s what they have done and won some really large exclusivity rights for international rollouts. Margins are normally higher when you have that, and we saw that spilling in into Q1. High comps from a Legacy HMY perspective, and I would say from Legacy ITAB perspective, it’s quite stable. Q4 is a bit higher comps than what we expect normally in a Q4.

Maybe if I just, I mean, from my point of view, from the CEO chair, the simplification is that during 2024, ITAB had a really strong first half year and a weaker second half year, and then HMY had the opposite. They had a weak first half in 2024 and a stronger second half. We all know, those of you that have been following us for some time, you know that you cannot always find the truth in the comparisons. There’s so much going on in this industry, but that’s maybe a good reminder for people when they compare.

Okay, do you plan to report realized synergies going forward?

Yes, it’s something definitely we’d like to do, but we are currently setting up the process for that and investigating exactly how it would and could look like. To some extent, it’s always difficult to exactly point to what is the synergy and what is business as usual. We come back to this topic starting Q4 or Q1.

Okay, thank you. Please remind us of the problems in France. What issues are you seeing, and what are the measures that you have taken?

Yeah, in the Q2 report, we kind of put the finger on France, so I apologize to maybe potentially some of our coworkers for that. There were a number of decisions that HMY made before the completion of the deal that they made during the autumn about some new customer acquisitions and some that drove quite a lot of complexity. In the second quarter, I would say many of these deliveries started and they didn’t go really well. What we have been up to, and the team in France, because it’s not me and Andreas doing this, it’s really the team out there working and performing, is that they have corrected some of the mistakes and the bad assumptions and worked with the customers to make sure that we avoided some of the quality problems that were in place and also some of the bad cost calculations and so on.

Some short-term actions were taken immediately when we saw where this was going. Those actions were taken already during Q2, and we have started to see the effect in Q3, but we expect more from France going forward. HMY is the leading brand in France, and we expect as a leading brand that you should be a leader also when it comes to profitability and stability. We have an ambitious plan for France going forward to invest in competence, invest in capability, and make sure that we are super agile also in France. That’s not a surprise because we knew that when we stepped into this deal. What we didn’t know was maybe some of the short-term problems that were caused, but the majority of those we have fixed. Of course, the long-term will require some costs to be taken in order we get the effects that we want.

Okay, that was the last question I have from the audience. I’ll hand over to you, Andreas, for some final remarks.

As I said before, I just want to say thank you to you guys that have been listening, and also if there are some ITAB employees tuning in, sometimes we also have a lot of shareholders internally. Big thanks to everybody across ITAB for the third quarter. Let’s keep up the passion to integrate and keep focused on our customers, but also deliver on the synergies. That’s what you can expect from us. I also want to say thank you to you guys that have been following us in the finance market. This is my, I think, 25th report and my last report that I delivered for ITAB. It’s always special. The first one and the last one is always a bit special. Big thanks for these years, guys. Thank you.

Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.