Now I will hand the conference over to CEO Andréas Elgaard and Acting CFO Andreas Helmersson. Please go ahead.
Thank you very much, and thanks to everybody that is tuning in live or that will listen to the recording afterwards. Today we present the interim report for the second quarter of 2025. As usual, I will start by reminding everybody a little bit about who we are, if there are newcomers to the call. At a glance, ITAB Group , if you look at the pro forma for 2024, we have 24 production facilities in 17 countries. We operate in more than 40 countries, and we have almost 5,500 employees, summing up to a revenue of just above SEK 13 billion, and with an adjusted EBIT in 2024 of SEK 918 million. That gave a margin of 6.9%. Our main customer groups are grocery, duty sales, fashion, and then basically all aspects of retail, all sectors within retail.
We have some activity, small or large, and I will come into that a little bit on the next slide. What we offer the market is really, we work with the physical stores. We help retailers to realize their brand value and display that to consumers in the desired way. That is mainly through retail interiors, but also through technology solutions, through lighting, and services that we put together in solutions that help them to achieve their outcome. ITAB today, and maybe I should just, why do we talk about pro forma? Of course, we talk about pro forma because we have made a huge acquisition where we acquired one of our largest competitors, and that deal went through the 1st of February this year. That is why we talk about pro forma for 2024. We also talk about pro forma in our reports and so on.
We are now the clear leader in Europe, and we have a global reach. We are active on all continents, and even if our main footprint is in Europe and our main business activity is in Europe, we also have activities across all continents. We follow our customers where they want us to go. Grocery is by far our biggest sector, with a little bit more than half of our turnover. These numbers are the pro forma numbers. Do-it-yourself home improvement is the second sector with around 11% of our sales. Fashion comes close behind do-it-yourself and home improvement. Then we have all the other sectors where consumer electronics, pharmacy, or some service stations/petrol stations are quite important for us. Also, travel, retail, and so on. We work basically with all retail sectors.
Before we go into the report, if I just do some highlights of the first six months of 2025, of course, 2025 has been, just like the ending of 2024, dominated by the news that we intended to acquire HMY, and that then went through. As of February 1, we are one group. We are all under one umbrella. It means that we have a lot of homework to do. People need to get to know each other. We focus on our people first. We focus on our customers. We secure business continuity. We do that, of course, under quite uncertain macroeconomic preconditions. It is very, very important to stay close to our customers and not get distracted by the integration effort. Getting to know each other, leveraging the best from both groups, is what will deliver the synergies.
We have a very clear plan for the future where the promises we made when we announced the deal of synergies in the area of EUR 30 million have now been confirmed through our bottom-up process when we have access to our new colleagues. The synergies are confirmed, the amount of synergies, and the plan that we have to realize that. If you look at the numbers for the first six months, pro forma numbers, I want to emphasize that. We've had sales growth, mainly coming from the first quarter. We see some hesitation in the market, especially from customers that maybe have a bit more difficult balance sheet. They are a bit hesitant. They want to see where the macroeconomic winds are blowing. That is affecting us in the second quarter, I would say.
In the first quarter, we were not that affected because decisions were already made, and execution is the result of that. What we see in the second quarter is the hesitation that has been in the market since November, I would say. We delivered an adjusted EBIT of SEK 388 million, which is, if you look at pro forma numbers, when we had an all-time high, both in legacy HMY and legacy ITAB, that is a decrease of 20%. If you look at ITAB alone, we are increasing the EBIT, which is good for our shareholders. By that, I hand over to Andreas to give us the numbers from the interim report.
Thanks, Andréas, and good morning, everyone. To give, as Andréas said, 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 also published, you will find, of course, all the details, including reported figures with HMY consolidated from the 1st of February. Zooming out on the historical performance, you can clearly see the significant impact of the recent acquisition of HMY, doubling our size and reaching now above SEK 13 billion in sales. In Q2, after a very strong start of the year from a growth perspective, we can see sales are slowing down somewhat, with - 6% relative pro forma last year. However, if we remove the currency effect, it's actually -1% in Q2 and + 7% year to date.
In Q2, EBIT adjusted for non-recurring cost and also amortization of acquisition-related intangible assets amounted to SEK 179 million, equaling 5.5%, slightly down compared to the rolling 12 adjusted EBIT of 6% margin. Zooming in on the financial highlights for Q2, we can see that although net sales is stable, especially if excluding the currency effect just mentioned, adjusted EBIT is down 40% if comparing to pro forma figures. Although, if we only look at the reported figures, it's up 19%. Q2 2024 was a quarter where both legacy ITAB and legacy HMY had larger rollouts across several markets, including a favorable sector and product mix. Although we do have a large share of recurring business and long-term relationships with our customers, there is a project element to our business which can hit us differently across quarters.
Focus onwards is to continue executing on synergies, which are now also bottom-up identified. We are also focusing on improving cost efficiency and improving operational efficiency, especially in France. If we look at our net sales by customer groups, including currency impact of -5% pro forma, and obviously, this is something we'd like to adjust for onwards as we come further into the integration with HMY, we can see that grocery, after a very strong start of the year in Q1, is now down 7%. Instead, for Q2, we see fashion driving sales with several larger rollouts in both Central Europe and Southern Europe. We also note that the market interest into the group's technology solutions, like loss prevention and operational efficiency solutions, is still high, and we continue to see growth in this area.
We would also like to highlight that the acquisition of HMY has further diversified our sector exposure. If we look at the combined group's market exposure, we can see the complementing nature of the acquisition of HMY, where market exposure shifts somewhat from Northern to Southern Europe through HMY's strong presence in countries such as Spain, France, and Turkey. In Q2, net sales for Northern Europe have declined by 20%, and here, the currency effect is limited. It's driven by customers delaying some of the projects we've been planning for, but also somewhat hesitant to commit to plans. We believe that, as Andréas mentioned, a slight uptick in the macroeconomic forecast will release some of these plans. It's also great to see the growth in UK and Ireland now, impacted by the rollout of smart gates for one of the largest grocery chains in the UK.
Our operating cash flow for Q2 is - SEK 53 million, and the rolling 12 development at SEK 456 million, which is not pro forma, the only slide here, not pro forma. It's impacted negatively in the quarter by net working capital development. Net working capital is impacted by a normal seasonality where Q2 sales go up, and Q3 outlook is normally slightly up as well. The sales growth is impacting account receivables, especially in some of our major markets. We also experience some one-off impacts from the integration work with HMY. Our rolling 12 monthly cash conversion declines to 59%, with the target being at 80%. It's mainly driven by the net working capital development just mentioned.
If we zoom out a bit from the Q2 result and return to what we have previously published about our plans with the merger with HMY, we do see that during 2023, legacy ITAB had an EBIT margin of 7% and legacy HMY around 5%, leading to a combined margin of around 6%, which is very similar to where we are today year to date and rolling 12 pre-synergies. Although we had a good start in our new group on realizing these synergies, they have not yet started to materialize in any significant manner. There is a strong strategic rationale for this acquisition, as well as it being financially attractive. With synergies identified at EUR 30 million, increasing our net income by 90%, with only a 16% share dilution, all other equal indicates significant earnings per share growth. With that, I'll hand over to Andréas again.
Thanks, Andreas.
This part here is something that we like to just remind everybody about, that retail is really going through transformation. We all know that. In recent years, both in terms of COVID, inflation, and increasing consumer expectations have accelerated a lot of those trends. It means that if retail is transforming, we have to follow, and our whole industry has to follow. I think ITAB has been leading the way here. We started doing our own homework, of course, before we could then become more ambitious about the future. Really, what it comes from, what we've been doing in the last couple of years has been to become more consumer-focused, understanding what's happening with consumers, understanding how the new consumer expectations are challenging retailers in new ways and offering opportunities that the retailers have not had in the past.
All of this creates a need for retailers to invest in areas that they have not invested in before. It changes their spend. It also means that they need to invest in new capabilities that they have not had before. All of this means that it's just accelerating. If you're relevant, if you meet up to the consumer expectations as a retailer, you are thriving in this environment. If you're not, you're really struggling. It means for us as an industry and for ITAB as a group that we need to become much more agile. We need to be really laser-focused on capital spend, profitability, making sure that we are efficient from day one. This is a big trend shift from the way the market was before, where it was more long-term. You could plan in advance. The programs, they ran over several years.
Now it's a short decision-making, short execution time, more project-based. That's really something that has changed. For the retailers, they really have a dilemma that they have to invest in experiences. At the same time, they have an increasing cost pressure. That leads them to being super focused on making sure that they only execute on business cases that give them a strong return on capital. That's why we have, for the last couple of years, been very focused on working on delivering outcome-based value to our retailers. We have changed our value proposition. We are gradually changing our way that we address the market in order to secure that we deliver the desired consumer brand experience that the retailers want. That is no longer enough to build fantastic, beautiful, inspiring stores. They also need to drive increased sales and conversion.
They need to deliver improved efficiency and improved service to the consumers. At the same time, if you can do those things and reduce the operational cost for the retailer, you have a really strong value proposition. I would say that when we are in that sweet spot, and we have a couple of our areas in our solution portfolio that really do this, we see no hesitation in decision-making. It takes a long time for the retailers because they need to understand what the operational effect is. It's no longer procurement making all the decisions like it was in the past. Things are changing. This has helped us to transform and drive profitability up.
This is also the ambition for us to do in the combined, much larger ITAB Group, to continue to focus on driving tangible outcome for our customers that will deliver outcome also for ITAB and our shareholders. The consumer journey that we are affecting today, this is maybe a bit of a special slide. It has two sides. The left side is how we influence retailers today. On the right side, it is how we will influence retailers in the future. On the left side, our solutions, our interiors, our lighting, our retail technology, our services, and our solutions, we influence the consumer journey, both if it's inspiring, if it's efficient, et cetera. We also affect the retailer's whole fleet of stores. In the future, we need to continue to influence those aspects: the buying experience, the consumer experience, and how efficient you can operate a fleet of stores.
The retailers have this cost dilemma. They need to be able to invest and at the same time take out cost. In order to do that, it will no longer be enough just to take it out from your stores. You have to also take that out from your value chain. You need to leverage data that you collect from all your channels as a brand, including the physical store. We see an increasing need of data, technology, connectivity, and that you then share that insight across your supply chain as a retailer. You can drive efficiency also with your suppliers and through that lower your costs. It means for us that we need to invest more in technology. We need to invest more in services. We need to become stronger in data and connectivity. All of these things cost money. We need to have traceability.
We need to be environmentally friendly and know where our goods are coming from and our ingoing material. All of these things require a certain size. That is a big part of the rationale why ITAB decided to grow through this acquisition of HMY. Together, we become much stronger, and we'll be able to afford to live up to the expectations that retailers will have of us going forward. We've had a strategy that has really served us super well the last couple of years, the One ITAB strategy. It has delivered on when we had to stabilize the company and simplify by restructuring our costs. We put a tick box on that. We then wanted to amplify that base by investing in new capabilities and offering new solutions and change our go-to-market model, update our inner workings, so to say.
That work is a small tick box on because it's still ongoing. We're still kind of driving efficiency through changing ways of working and the IT tools that we have internally. Then expand. That was the purpose of our strategy, to not just focus on restructuring and investing, but actually delivering growth and expansion and sustainable, profitable growth. That is a big tick box due to the acquisition of HMY. It also means that we need a new strategy for the future. We have just started up that work. We are going to come back to you towards, I would say, either the very end of the year or the beginning of next year and communicate our new strategy once it has been developed and then later approved by our board of directors. In conjunction with that, we might update also our financial targets. That is not decided yet.
By that, I stop talking, and I hand over to questions and answers.
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 Karl- Johan Bonnevier from DNB Carnegie. Please go ahead.
Yes, good morning, Andréas and Andreas. Difficult quarter, and I guess it doesn't become easier for us to understand given the very, very strong profitability both units, as you pointed out, had in Q2 last year. Maybe we could start there. When you now looked at the numbers for Q2 last year, particularly on the HMY side, Andréas, do you feel they are representative, so to say, of things? Do you feel comfortable then also going into the second half with looking at what HMY did on a pro forma basis last year? I always find it difficult to relate to pro forma numbers as nobody really has a commitment to them. It would be good to get your feeling for it.
Yeah, I would say that in Q2, both for ITAB and for HMY, we're all-time high. That needs to be kept in the memory when you just look at comparability between the two quarters. I think Andreas was on to something when he presented that our rolling 12, we're basically spot on between where ITAB were before the acquisition and where HMY were before the acquisition. I think that we're quite spot on there. What we see, I mean, how to judge, I would say that HMY is very similar to ITAB. The project nature of our business means that if there is a big rollout, and I know there was a huge rollout of high-margin products in Q2, both for ITAB and for HMY last year, then that affects. Once that job is done, that is not recurring. What is recurring is, of course, the customer relationships.
We hardly lose any customers. Of course, these customers' needs vary a lot over time. I expect us to be able to be more stable quarter- by- quarter going forward. We will continue to see these fluctuations. Our larger footprint will make us maybe fluctuate slightly less than before. The macroeconomics are playing in somewhat, but I would say it's more the comparability that is playing in. We knew when we acquired HMY that we knew the homework that we had done on the ITAB side. We knew that we had some homework to do also in the combined group. That's why when we communicated the synergies and the intention to acquire, we also communicated that we needed two and a half to three years before we could have full realization in the P&L.
Also that we would need costs to realize that we needed transformation costs in order to release the synergies. I would say that we have no need to change any of our outlook for the future based on what we promised back then when we announced the deal. On the contrary, we have seen that the synergies are there. We have started working on them, but it takes time, and it takes some time before they are visible in the P&L. We have no, yeah, we're really optimistic about the future. The integration work has gone between people, I would say, on a cultural and people level have gone better than expected. Of course, there are some obstacles, some getting to know each other that we need to do even more. All in all, it's overwhelmingly positive. We mention in the report operational issues, and we specifically point out France.
We can say that we are disappointed by the performance of France so far this year. It has been a clear deviation from what we expected. We have been able to understand why, and we have taken corrective measures. Some of them will be able to be corrected quickly. Some will need some more time. Already in our plan to drive efficiency, we knew that we had work to do, not just in France and not just in legacy HMY, but across the group in order to release those synergies. Sorry for the long answer, but I think that maybe gives you some flavor on where we are in the quarter. Of course, we would have, if France didn't have some of the issues they had, our comparability would have been clearly better.
We are where we are with that, and we have identified what we need to do, and we're doing the work.
No, I very much appreciate all the color, Andréas. I thought you mentioned or the other Andreas mentioned that if you look at the legacy ITAB, profitability year on year was up. Was that the LTM number, or is that H1, or is that because I obviously can't take Q2, so I'd say in that respect.
Do you want to take that?
Yeah, I think we referred to report the numbers. Comparing ITAB Group last year to this year, there was an increase in EBIT, which we pointed out on one of the slides also.
Excellent. I mean, then I guess that at least crystallizes the challenge, as you pointed out, Andréas, to maybe France and the legacy HMY operation. I appreciate very early in the integration and all these kind of things. When you now then look at, as you said, the proactive measures needed to be taken, how much help do you have of the toolbox that you created for yourself in the One ITAB process? What could we then, yeah, expect being corrected short term? What is something more for maybe for a question for 2026, 2027?
I think we should, you guys don't need to wait until 2027 before you see the effects. We are going to also report how we are performing, how much of synergies that we have identified, how much we have executed upon, and how much that have been realized in the P&L. We are going to have that type of reporting. It's too early to start that now because we are starting up a lot of activities, so it's a bit too early. We are going to come back with that. I would say that is part of the tools that we used in ITAB. We were really focused on driving, identifying where the biggest value drivers were, and then focusing on making them happen. In legacy ITAB, it was not always that we succeeded, but we were always then looking for complementing actions.
In the end, we delivered on all our promises. It's exactly the same now with a bigger, larger ITAB that we have identified where these synergies are. I want to be super clear to shareholders and everybody listening to this, but also to employees. It is not just within legacy HMY that these synergies are being found. They are found across the board, I would say. Of course, we knew that there were operational issues before we stepped into the bigger group, and we knew that we had to address them. One of the things that we did successfully in ITAB was to make sure that focus is not on top line, which is not always what the stock market wants to hear, but the focus is really on the bottom line, that profitability comes first.
We should not go after new sectors or new customers or new deals that drive turnover but doesn't materialize on the bottom line. That has been a big part of our toolbox in ITAB, and we are applying the same toolbox now. It will take time because it's behaviors that need to change, it's mindsets, and it's insights that need to be understood. That's one thing. The other thing has been capital. HMY are quite strong in their capital, but we need to make sure that we leverage the combined purchasing, the combined power, and the combined capabilities as a group to continue to drive capital efficiency even further. That is something that we're really focused on. The reason why we have a little bit negative cash flow this quarter, I would say it comes from growth. It comes from inventory. It comes from several things.
Some of them are indications that things will be better. Some of them are indications that we've had growth behind us. We will use all the tools, and there's plenty of tools also on the HMY side that we're also applying. It's really learning from both companies.
Excellent. Just on the working capital side, there is no reason to believe that we are not going to see the same kind of normal seasonal pattern where a big cash flow release comes in Q4. It's going to be geared to that this year as well, or?
I mean, that's a forecast that we are not giving. We know that we have a seasonality in the business, but we also know that depending on the macroeconomics, if things change, if we get a sudden burst of growth, we might need capital. We are not, I think that there's so much uncertainty in the market that we refrain from forecasting. We feel confident with our plan that we have for everything that we can influence in terms of integration, realizing synergies, and so on. The world around us, we just need to manage.
Yeah, and I can just add to that as well that this, I mean, we are in the same business with the same type of customers. There's a slight shift of exposure from Northern Europe to Southern Europe, which impacts capital efficiency to some extent.
There's no reason HMY Group should differ on sort of the normal pattern of our business. We can always say, looking back at the years I've had so far here, that a certain rollout in a couple of big projects might impact what you normally see as a seasonal pattern in the shop fitting business. There's always exceptions in the project side of the business.
Thank you for the clarity. One final for me. Looking at joint sales initiatives, I see that you in the report threw out things happening on the lighting and the technology solutions side. What is your feeling, Andréas, when you now can expose your whole portfolio to a larger amount of potential clients? Are there easy sales to be had here that, as you point out, the high return on investment, say, phenomenon, all these kind of things, that could help you, say, in the next six to 12 months coming out of those kind of joint sales efforts?
I would say that we are in a market that is having fierce competition, and there's no lack of people that want to offer our customers their services. The good thing, however, is that we very rarely lose any customers. We have strong customer relationships in all our units, I would say. We have seen a lot of curiosity and openness from our new colleagues when it comes to especially solutions or products that they don't have within their portfolio previously. Right now, we are really educating our new colleagues on how to sell and what the benefits are from some of our solutions. We've already seen some of the first sales happening on both lighting and, I would say, gates mainly. There are also other things that we are exploring that we can do more of going forward.
I don't think there will be any lack of buy-in from our sales force. It will more be that we need to make sure that our customers see the benefit of testing us on new solutions because it means that they need to exchange some of their current partners. We really have strong customer relations to leverage. That's why we have put in, I think, of the synergies that we have reported. We have said that approximately EUR 10 million will come from commercial upside. The majority comes from our high-margin products in ITAB that HMY Group don't have. Of course, there will also be sales going in the other direction, customers that HMY Group has where they have not had a strong market coverage in some parts of Europe, for instance, where we do have that coverage now together. That will also help to drive commercial upside.
Excellent. Sounds encouraging. Thank you very much for all the clear granularity, and all the best out there.
Thank you.
The next question comes from Erik Sandstedt from Kepler Cheuvreux. Please go ahead.
Thanks. Yeah, Erik Sandstedt here with Kepler. A few questions. You mentioned the problems in France here in the quarter, but could you share some more details on what you're referring to?
I can be very transparent that there's been a couple of, I would say, operational issues, not to go into numbers, but some of them come from new customer agreements that were made during the autumn based on a new calculating model where it was believed that the cost had gone down, but it was wrong. The cost had not gone down. There have been some wrong assumptions, and then some agreements have been made. We are then correcting those stepwise. You all understand when you have somebody on the other side of an agreement, you need to do that in partnership. That is one part of it. It's very clearly identified. Other things have been, there have been some maybe bookkeeping technicalities. There has been also a couple of new customers in new sectors that have been won.
When they had the first number of projects have been executed, there have been operational and quality complications that were not good. That means that you have to take things back. You have to produce again. You have to send your installation crews again. It drives a lot of cost, additional cost, without adding any turnover, of course. It has been those types of operational issues that have impacted us. I would say also maybe one change that in France, I think we all know that last year, France was really booming the first half of the year. The second half of last year, France was struggling. That's also to be taken into account. We know that France was booming before the Olympics. After the Olympics, there was kind of a settlement in the French economy.
There was also quite a lot of political turmoil in France that have caused some of this. All in all, we are the market leader in France by far. We have a very strong position. We just need to get our ducks lined up and make sure that we have good teamwork and that we understand what we do. We've also done some, there have been changes in management, and there have been changes in the regional management after the merger, some before and the majority after. We have strong confidence in the team that is now working on this. I don't know, Andreas, if you want to add something to what I said.
No, I think a good summary. We can just also say that there's been actions taken in the last, during Q2, and that we do see an effect from some of those actions or continued.
Yeah, already in June, we have seen some effect of that. We believe that we will be able to improve the situation short term, but then we also have a long-term work to do.
Okay. Thanks for that. In terms of cross-selling activities between the legacy ITAB and HMY, can you give any examples of where this has already happened?
Yeah, I will not go into customers, but we have succeeded in selling lighting products to existing legacy HMY customers. Thanks to the good customer relationships, these customers have agreed to try the new products that come from the combined group. That's one example. There has also been, HMY has had collaboration on gates with one of our competitors. That is, of course, changing now. There are some sales coming there. HMY has not been super focused on gates like we have. We are now educating the teams, and we are switching the competing products to our products. Step by step, we are going to see an increase of that sales. We need to realize also that Southern Europe doesn't have the same tradition as, I would say, Central or Northern Europe when it comes to using gates in stores.
We have seen the same trend in Southern Europe when it comes to shrinkage or theft in stores. That is just a big problem in Southern Europe, as it has been across, I would say, Northern Europe and in Australia and North America. We see an increasing curiosity from retailers in these regions to explore what our solutions can do and how they can help them. I want to remind everybody that usually those sales processes are quite long because it impacts not just the entrance and the exit of the store. It impacts the experience. Sometimes it becomes better. Sometimes some consumers think it's different. You also need to then adjust the flow of the store, and you need to do several other things. It's not just to put product in. You need to really buy into the solution.
Usually, the big orders come after quite long periods of discussing, testing, piloting, and then the orders come when they feel confident that this is something that they will be able to operate within their fleet.
Thanks. Actually, speaking of that, what the share of your business is loss prevention? Are you ready to sort of give any details here? I think you've earlier said that retail tech is 30%, but that includes a lot of other products, of course.
Now, we have not shared the percentage of loss prevention per se because, I mean, it is a combination of different products. It is interiors, it is gates, it is digital capabilities. It is sometimes also checkout solutions. It is a mix, and it is very, it is different from customer to customer. I do not think we are going to communicate a percentage of that. We are, I am not sure if we have communicated the retail tech percentage in this report, but that is something that we can come back and do going forward because it is something that we have. I know that you guys have enjoyed following that in the past. We can try to come back to that also going forward.
Thank you. Finally, a few sort of more detailed financial questions, perhaps. In terms of the amortizations of acquisition-related intangible assets, how much were they in the quarter?
As we have communicated earlier, we need to come back during the autumn on that. We need to fully complete the acquisition when it comes to completion accounts, and then we need to do a purchase price allocation exercise and then come back to an exact figure.
Yeah, fair enough. Also, financial expenses were somewhat higher than I had expected, at least in the quarter here. You do mention currency effects and hyperinflationary accounting. Were those sort of latter effects material in any way, or how should we think about that number going forward?
Yeah, that's true. We are impacted by, we were impacted by the acquisition. We're impacted by hyperinflation, as you say, and currency impact. All in all, we are sort of seeing financial expenses and net financial items in sort of according to plan. As these sort of one-off effects will settle, we'll be able to come down a bit as well.
Yeah, thanks. Finally from me, I also noted that other operating expenses in the income statement showed a larger loss here compared to the same period last year. I think it was SEK 19 million now. Was there anything specific on that line?
No, not that I have an answer on now. I need to look into that.
Can we look into it and come back?
Yeah, no, it's fair enough. I just wanted if you knew it was sort of on top of your head, but not a big deal.
Thanks a lot.
Thank you.
Next question comes from Karl-Johan Bonnevier from DNB Carnegie. Please go ahead.
[Foreign language] , sorry, do it in the proper language so everybody understands. Just coming back on the PPA amortization question. I note in your pro forma calculation, you have done some sort of at least approximation that it seemed to be SEK 20 million related to PPA. Is that maybe your best guess at this moment, given that you haven't finalized the numbers, or how should we see that?
Yes, we haven't seen any reason to adjust what's previously communicated.
Maybe you can then refresh me on the previous communication because I haven't heard you communicate anything on that.
I think you can see the difference between the pro forma, what we call EBITA communication, and what's reported. We are doing an approximation so far, which we can calculate. With regards to what the final number will be, we have to come back following the summary.
We're still in, yeah, sorry. Like Andreas said before, we're still discussing the closing accounts with the seller. There might be some small adjustments coming out of that. If there are any adjustments, they will be positive for us, I think. There are no negative surprises that could come out of that.
The best guess on PPA after amortization would be about SEK 80 million a year or something like that, don't we?
I think what we have put in is our approximation for now. We have that caveat, that or disclaimer, that the work needs to be finalized before we come with further details. We can also look into this question and see if we can provide some more flavor. We need to take that back and come back with some more flavor.
That's fine. That's fine. Just on integration costs, given what you now see in the operations, so to say, on opportunities on both sides, do you still think the earlier guidance for integration cost is still valid, or is there a bigger opportunity?
I mean, with bigger opportunities, you mean that they could be lower?
Yeah, or higher than you because you see bigger opportunities as well on, I guess, the reality side.
I think that is too early to say. What I speak to now is that the promises we have made when it comes to the synergies is what I'm really aiming to keep or what we are aiming to keep. We have no reason to change, I mean, in either direction these numbers. We put in quite a healthy amount of costs as well. I just want to remind everybody that those are the costs to realize the synergies. We also have some costs that we're adjusting for one-offs that are more connected to the transaction. Transaction-related costs, they are not part of that, the synergy realization. That is more of an operational character, I would say.
Excellent. Thank you very much. All the best out there.
Thanks.
Okay, we don't have any more.
There are no more questions at this time. I hand the conference back to the speakers for any written questions.
Yes, thank you. We have one written question, and it reads, "Were there any larger orders in either ITAB or HMY in Q3 or Q4 of last year?
Yes, I think we communicated that. Mats, maybe you can help me to remember here when we communicated those. Maybe they were because some of that came in then in Q1 and Q2 in the, I would say, profit and loss. I don't remember if the orders were taken. We always have high, I mean, each deal that we do needs to be won. We only communicate them when they are, I would say, EUR 8 million or above in size. That's when we communicate them to the market because then we think it has a broader interest. I don't, maybe Mats, if you're looking, if we had something that we communicated of that nature.
Yeah, we didn't present any major deals.
Maybe it was in Q1 that those presentations.
We had a couple of deals that we presented in August and September. One was for a shop-in-shop concept, and that was for EUR 20 million in total. The other one was for a financial player in the UK. Looking at the shop-in-shop concept, for instance, that was EUR 20 million over four years. The financial service provider was also EUR 22 million over four years. It's not specifically for these two last quarters in 2024.
Maybe we can comment and give some more flavor to this question because I assume that somebody is trying to understand what to expect going forward. We don't give forecasts. Of course, the first half of 2024 for ITAB prior to the acquisition was outstanding. It was really outstanding. I tried to remind everybody back then that you cannot expect this going forward. You should expect this now and then, but not in every quarter. That being said, the start of 2025 has been, I would say, good in many aspects, especially the deal and the integration. We have been up against really, really high comparable figures. When we look forward into the rest of the year, if you look back to 2024, those of you who were around, you remember that ITAB didn't have the, we didn't repeat the strong start of the year.
We had a more normal finish of the year. Those are the figures that we're meeting on the ITAB side. Now we are a combined business. I need to remind everybody that we, of course, have HMY Group with us in all the figures now. Pro forma, we are meeting figures that we have a chance, a good chance to be compared against. If you just look at ITAB standalone, the reported figures, I mean, we are already now delivering more value than before, even though we have that extremely strong start. I think that zooming out, I'm really happy with what we have done. I think that two and a half years from now, those of you that hang in there during that period, you're also going to see that we are a much stronger company when we've gone through all the things that we need to do.
Okay, thank you. We have a few more questions coming in now. Are you experiencing the same sales-affecting market environment attitude in Q3 as in Q2?
I mean, we don't give forecasts about Q3. What we are communicating in our reports, and we have since, I would say, since the fourth quarter last year, is that there is hesitation in the market. That comes not from us or our performance or from our, it comes from the general confusion in the finance markets and what to expect, what to plan for. Even though we have a very high exposure to tariffs to the U.S., of course, we have sales in the U.S., but we're not that affected in a large scale. The whole general uncertainty that people don't know what will happen with the interest rates or with the consumer confidence, those things make many companies, not just within retail, but many are hesitant about the future. That hesitation is affecting us just like everybody else.
I don't think ITAB is hit in any worse way than our competitors. I would say, on the contrary, we have a larger footprint now. We are probably going to be able to be more stable. I would say that is affecting, the market is hesitating. One week ago, most experts believed there would be maybe 10% tariffs. Now we get, the European Union is facing maybe 30% tariffs. This will affect the general economy more than anything that ITAB can influence. Everything we are doing, we feel quite confident about. Yeah. We don't give forecasts for the future. Sorry for that, guys. The reason for that is not that we don't know what's going on or that we maybe wouldn't be able to, but it is the nature of our business being very, first of all, seasonal, but also being then very project-driven.
Depending on how our customers make their decisions, it can fluctuate a lot. We don't want to spend all our reporting time explaining why our forecasts are deviating positively or negatively. We believe in doing the job and delivering the result. You guys need to value us based on that.
Maybe a follow-up on that. Assuming the market uncertainties are eased in the near term, could this lead to a backload a year, i.e., assuming orders not made in Q1 and Q2 will be made later?
If the general economic climate improves and hesitation goes away and consumer confidence returns, that's fantastic for retailers. That means that they will have confidence to invest as well. I think that we are all, it's all guessworking what will happen. If we get more stability, then that is good for everybody, I think. Those things we cannot influence. We focus on all the things that we can influence.
The final question is, I mean, irrespective of the project-based business that affects quarter-on-quarter comparison, looking specifically on ITAB standalone, would you expect that the sales mix in 2025 will reflect the one in 2024 on a full-year basis?
It's also a forecast question. I will not answer that. What we write in the report is that so far this year, legacy ITAB have had a strong performance, I would say. That's what we have written. I will not give kind of, I will not reveal what we see in our crystal ball because also for us, it's a bit shady. I will not give forecasts.
Okay. Thank you very much. That was the last question. I'll hand over to you, Andréas, to conclude the meeting.
Thank you, Mats. I just say a big thank you, guys. Maybe the main takeaway from the report is that compared to, I mean, pro forma compared to last year, where we had exceptional results in both groups, the combined comparison is maybe not so impressive. When you zoom out as a shareholder, there is EBIT growth on ITAB. The integration work has started really well. We have seen now bottom-up that the synergies are there, and we will go for them. We have started that work. We will continuously report back to you guys. Maybe towards the end of the year, we will start that work so you can have some transparency on how our synergy realization is progressing. Okay, big thank you for everyone that have listened. I hope to have you with us also when we come back with the third quarter. Bye-bye.