ITAB Shop Concept AB
Annual Report 2021
2 ITAB ANNUAL REPORT 2021
|
2 About ITAB
4 2021 in brief
6 CEO Andréas Elgaard on 2021
8 Value proposition
10 Strategy
12 Strategic priorities
14 Financial targets
16 Market in 2021
18 Sustainability
20 Products and Services
30 The ITAB share
FINANCIAL INFORMATION
35
Administration Report with Corporate Governance Report
42 Proposed Allocation of Profits
48 Financial Review – Five years in summary
49 Comments on Five years in summary
THE GROUP
50 Income Statement
50 Statement of Other Comprehensive Income
51 Statement of Financial Position
52 Statement of Changes in Equity
52 Statement of Cash Flows
THE PARENT COMPANY
53 Income Statement
53 Statement of Other Comprehensive Income
53 Balance Sheet
54 Statement of Changes in Equity
54 Statement of Cash Flows
56 Notes
82 Alternative Performance Measures
83 Definitions
85 Auditor’s Report
87 Auditors
88 Board of Directors
89 Group Management
ANNUAL GENERAL MEETING 2022
91 Annual General Meeting 2022
91 Financial information in 2022
This Annual Report 2021 is in all respects a translation of the Swedish
original Annual Report. In the event of any differences between this
translation and the Swedish original, the latter shall prevail.
CONTENTS
THIS IS
ITAB
ITAB IS WHAT WE CREATE TOGETHER WITH
OUR CUSTOMERS
At ITAB, we help customers turn consumer brand
experiences into physical reality with our know-how,
solutions and ecosystem of partners.
Together with our customers, we create effective solutions
that contribute to versatile and inspirational experiences.
Our offering includes solution design, customised shop
fittings, checkouts, consumer flow solutions, professional
lighting systems and digitally interactive solutions for the
physical store.
We are currently helping customers within a number of
sectors, with the principal sectors being: Grocery, Home
Improvements, Consumer Electronics, Fashion, Café &
Service Stations, and Pharmacy, Health & Beauty.
3ANNUAL REPORT 2021 ITAB
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PRODUCTION
FACILITIES
EMPLOYEESITAB’S
OPERATIONS
15 locations in
12 countries
2,930
people
24 countries
THE DESIRED CONSUMER BRAND EXPERIENCE
Translating aspirations of the retailer’s brand into a physical
store experience, driving consumer footfall and retention.
INCREASED CONVERSIONS AND SALES
Delivering a store format, department or range experience
that influences consumer buying behaviour.
IMPROVED OPERATIONAL EFFICIENCIES & SERVICE
Creating a seamless customer journey that increases
throughput and improves the stores’ efficiency and service levels.
REDUCED OPERATIONAL COST
Improving the customer journey efficiency to influence store
operating models and reduce cost.
VALUE PROPOSITION
ITAB IN FIGURES 2021
NET SALES
SEK 6,245 million
PROFIT AFTER FINANCIAL ITEMS
EXCL. NON-RECURRING ITEMS*
SEK 322 million
6.2%
OPERATING MARGIN EXCL.
NON-RECURRING ITEMS*
2,930 people
NO. OF EMPLOYEES
(average)
*In 2021, non-recurring items affected EBITDA by SEK-157 million (-202), operating profit by SEK-166 million (-205) and profit after financial items by SEK-166 million
(-208). Non-recurring items primarily comprise restructuring costs within operating activities. See page 49.
Mkr
’17 ’18 ’19 ’20
’21
0
2000
4000
6000
8000
Mkr
’17 ’18 ’19 ’20
’21
0
100
200
300
400
%
’17 ’18 ’19 ’20
’21
0
2
4
6
8
’17 ’18 ’19 ’20
’21
0
1000
2000
3000
4000
4 ITAB ANNUAL REPORT 2021
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As societies opened up following the COVID-19 pandemic, there were increasing indications in 2021 that consumers were returning
to physical stores. Our customers have also become increasingly optimistic and are once again planning to make investments for
the future, which was reflected in a favourable order intake for ITAB – despite the uncertainties the pandemic continued to create.
Higher sales and effects from the transformation in line with our One ITAB strategy are reflected in the positive earnings trend for
the year, while relatively high raw material prices and global supply disruptions had an adverse impact on earnings.
2021 IN BRIEF
2021 2020
Net sales, SEK million 6,245 5,323
Growth, % 17 -12
EBITDA, SEK million 499 376
EBITDA excl. non-recurring items*, SEK million 656 578
Operating profit, SEK million 224 112
Operating margin, % 3.6 2.1
Operating profit excl. non-recurring items*, SEK million 390 317
Operating margin excl. non-recurring items*, % 6.2 6.0
Profit after net financial items, SEK million 156 0
Profit margin, % 2.5 0.0
Profit after net financial items excl. non-recurring items*, SEK million 322 208
Profit margin excl. non-recurring items*, % 5.2 3.9
Profit after tax, SEK million 103 -22
Earnings per share**, SEK 0.50 -0.21
Cash flow from operating activities, SEK million -165 811
Interest-bearing net debt, SEK million 1,239 1,748
Interest-bearing net debt excl. leases, SEK million 609 1,092
Dividend per share***, SEK – –
Equity per share**, SEK 12.17 15.69
Return on equity per annum, % 4.0 neg.
Equity/assets ratio, % 46.2 31.3
Share of risk-bearing capital, % 46.9 32.0
Average number of employees 2,930 3,030
THE ITAB GROUP IN FIGURES
* In 2021, non-recurring items affected EBITDA by SEK-157 million (-202), operating
profit by SEK-166 million (-205) and profit after financial items by SEK-166 million (-208).
Non-recurring items primarily comprise restructuring costs within operating activities. See
page 49.
** In connection with ITAB’s recapitalisation in early 2021, the number of shares in-
creased by 115,716,762 to a total of 218,100,192 shares.
*** For information about ITAB’s dividend policy, see page 37.
2021 IN BRIEF
GUIDANCE – ‘ONE ITAB’
On 10 July 2020, ITAB issued guidance regarding an
earnings improvement and its total restructuring costs
upon the implementation of the Group’s One ITAB
strategy and transformation. Based on the conditions
prevailing at that time, the guidance indicated an
underlying annualised EBITDA improvement of SEK
270–330 million (compared with EBITDA of SEK 516
million for 2019) once the One ITAB transformation is
fully implemented, which is expected to take place in
the middle of 2022. The total restructuring costs for One
ITAB in the 2020–2022 financial years were estimated
at SEK 275–325 million. This guidance continues to
apply. The restructuring costs for One ITAB to date total
SEK320 million, of which approximately SEK 60 million
pertains to impairment losses related to restructurings.
EBITDA excl. non-recurring items
(SEK million)
Guidance EBITDA after implementation of One ITAB
1,000
800
600
400
200
0
2019 2020
2021
One ITAB fully
implemented
1)
Outcome
Guidance min.
Guidance max.
1)
Relates to annual rate once One ITAB has been implemented in
full, which is planned for the middle of 2022.
5ANNUAL REPORT 2021 ITAB
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SUMMARY PER QUARTER 2021
0
500
1000
1500
2000
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Q2/21
Q3/21
Q4/21
0
2000
4000
6000
8000
NET SALES (SEK million)
Sales per quarter
(scale on the left)
Sales, rolling 4 quarters
(scale on the right)
0
50
100
150
200
Q1/17
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
Q3/18
Q4/18
Q1/19
Q2/19
Q3/19
Q4/19
Q1/20
Q2/20
Q3/20
Q4/20
Q1/21
Q2/21
Q3/21
Q4/21
0
150
300
450
600
OPERATING PROFIT EXCL. NON-RECURRING
ITEMS (SEK million)
Operating profit excl. non-
recurring items per quarter
(scale on the left)
Operating profit excl. non-
recurring items, rolling 4 quarters
(scale on the right)
2021 IN BRIEF
The Group’s currency-adjusted sales increased by 13 percent compared
with 2020, with the acquisition of Cefla Retail Solutions contributing 9 percent
and organic growth 4 percent. The recovery that began in the second half
of 2020 in Northern Europe and Central Europe also gained momentum
in Southern Europe during the first quarter of 2021. Sales to the Grocery
customer group increased most. Operating profit increased as a result of
the higher sales and solid gross margins during the quarter, despite rising
raw material prices.
The Group’s currency-adjusted sales increased by 16 percent compared
with 2020, with the acquisition of Cefla Retail Solutions contributing 10
percent and organic growth 6 percent. The positive sales trend when soci-
eties opened up after lockdowns during the pandemic, continued in all of
the Group’s geographic markets. The increase in sales continued to have
a positive impact on operating profit during the quarter, but was offset by
supply disruptions and component shortages as well as relatively high raw
material prices.
The Group’s currency-adjusted sales increased by 34 percent during the
quarter, with organic growth contributing 21 percent and the acquisition of
Cefla Retail Solutions 13 percent. Most of the sales increase compared with
2020 occurred in Southern Europe. Operating profit was positively impacted
by the increased sales, while sharply increased raw material prices and
growing shortages of both raw materials and components adversely
impacted the gross margin during the quarter.
The Group’s currency-adjusted sales increased by 16 percent compared
with the preceding year, with organic growth accounting for 5 percent. The
markets in Eastern and Southern Europe had the strongest performance,
both through organic growth and through the acquisition of Cefla Retail
Solutions. Operating profit excluding non-recurring items was positively
impacted by the increased sales, despite continued challenges in the
business environment. As raw material prices and availability of components
and raw materials stabilised, in combination with price increases and coor-
dinated sourcing gradually strengthen the gross margin.
Q1
Q3
Q2
Q4
NET SALES
SEK 1,523 million (1,416)
OPERATING PROFIT EXCL.
NON-RECURRING ITEMS
SEK116 million (53)
CASH FLOW FROM
OPERATING ACTIVITIES
SEK 102 million (126)
NET SALES
1,464 million (1,258)
OPERATING PROFIT EXCL.
NON-RECURRING ITEMS
SEK75 million (95)
CASH FLOW FROM
OPERATING ACTIVITIES
SEK -17 million (128)
NET SALES
SEK 1,488 million (1,142)
OPERATING PROFIT EXCL.
NON-RECURRING ITEMS
SEK81 million (61)
CASH FLOW FROM
OPERATING ACTIVITIES
SEK -158 million (257)
NET SALES
SEK 1,770 million (1,507)
OPERATING PROFIT EXCL.
NON-RECURRING ITEMS
SEK118 million (108)
CASH FLOW FROM
OPERATING ACTIVITIES
SEK-92 million (300)
6 ITAB ANNUAL REPORT 2021
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COMMENTS FROM THE CEO
AN EVENTFUL YEAR WITH A STRONG
CONCLUSION
Following an eventful year that was characterised by operational challenges, it is pleasing to present a close to record-breaking
conclusion to 2021, with favourable sales and earnings trends. ITAB’s transformation work and investments for the future proceeded
according to plan during the year, and several important steps were taken to establish ITAB as the retail sector’s leading solution
provider with a focus on sustainable growth and increased profitability. I am particularly proud of how our employees succeeded
in meeting increased demand while managing supply disruptions, component and material shortages, and increased shipping,
energy and material costs as a result of the pandemic.
HEALTHY DEMAND AND A STRENGTHENED POSITION
The sales trend was strong for the full year 2021, with currency-
adjusted growth of 19 percent, of which organic growth
accounted for 8 percent and the acquisition of Cefla Retail
Solutions at the beginning of the year for 11 percent. Our
focus throughout the year has been on supporting customers
by providing them with the most complete solutions possible
despite global supply disruptions, which was reflected in the
strong organic growth for the full year.
In terms of our customer categories, Grocery and Home
Improvements reported the highest growth, and geographically,
Southern Europe made the most significant contribution to the
Group’s sales increase during the year. Of ITAB’s three solution
areas, sales in Retail Interior and Retail Technology performed
the best, while Retail Lighting reported a somewhat weaker
sales trend during the year, mainly due to the global shortage
of electrical components. At the end of 2021, we could confirm
that we had a favourable order book.
STRONGER POSITION IN THE GROCERY MARKET
The acquisition of Cefla Retail Solutions was completed in
January 2021. Cefla has a strong position in the grocery
sector in Italy and through the acquisition of their business
unit for retail solutions ITAB strengthened its market position,
primarily in interiors and checkout solutions for the European
grocery market. The acquisition was strategically important
and the integration of the operations has been successful.
Consequently, we have created opportunities to offer ITAB’s
solutions to a wider group of customers and it has entailed
clear synergies for both ITAB and our customers.
POSITIVE EARNINGS TREND DESPITE EXTERNAL CHALLENGES
The positive earnings trend is mainly the result of the
increased sales and our ongoing transformation of our
operations, including completed production relocations and
cost adaptations, more shared ways of working and more
efficient and flexible market cultivation. At the same time,
the rapid and sharp increase in the prices of raw materials,
7ANNUAL REPORT 2021 ITAB
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shipping and other input goods in the first two quarters of the
year negatively impacted earnings. During the year, we also
experienced negative earnings effects from global supply
disruptions and their impact on ITAB and the efficiency of
our production, logistics and installations, with component
and material shortages in many areas. We took continuous
measures to continue to offer our customers the market’s
best service and we saw a stabilising effect toward the end
of 2021. We continuously adjusted our prices during the year
and took other cost-saving measures to offset the negative
earnings effects in the operations. At the same time, our cash
flow for the year was negatively impacted by the increased
inventory values due to our strong sales trend, increased raw
material prices, longer lead times and higher inventory levels
than normal in the autumn with the aim of ensuring our own
delivery capacity to customers. We expect inventory levels to
gradually return to normal in the coming quarters, and our
efforts to reduce the need for working capital in the Group are
continuing. For the full year 2021,
GOOD PROGRESS IN OUR TRANSITION
In terms of earnings performance, ITAB’s shift since we began
the implementation of “One ITAB” in spring 2020 has generally
been satisfactory, especially in light of the global challenges
we have faced that were not a part of our plan. Compared with
2019, EBIT excluding non-recurring items has increased by over
60 percent to SEK 390 million for 2021.
STRENGTHENED FINANCIAL POSITION AND NEW PRINCIPAL
OWNER
In early 2021, ITAB concluded a recapitalisation of the Group
through a rights issue of SEK 768 million and an offset issue
of SEK 100 million in order to strengthen the balance sheet,
contribute to greater financial flexibility and finance the One ITAB
transformation plan. In connection with the recapitalisation, we
also gained a new, strategic principal owner – the investment
company Aeternum Capital AS, which currently owns close to
25 percent of the shares in ITAB. Aeternum Capital endeavours
to generate long-term value through Board representation and
support for its portfolio companies.
Through the recapitalisation in combination with our focus
on reducing working capital, we have lowered the Group’s
indebtedness excluding leases by more than SEK 1,300 million
at the end of 2021 compared with its peak in September 2019,
which has significantly strengthened our financial position.
This provides us with favourable conditions to grow organically
and through acquisitions and to continue to strengthen our
profitability over time.
ITAB’S FOCUS IN 2022
We are now halfway through our transition and One ITAB
strategy, with the heaviest measures behind us, which focused
on adapting our cost structure with the aim of stabilising ITAB’s
financial position. We have already begun the phase of investing
in and developing new capabilities in 2021, which will remain
the focus of our transformation work in 2022 and is expected to
be concluded in 2023. In 2022, we will see continued expansion
organically and through acquisitions, with a clear focus on
Europe, and by following our strategic customers’ global
expansion. We expect ITAB to make decisive progress toward
a position as “The retail sector’s leading solution provider”, with
the aim of increasing our share of services and solutions in
Retail Technology. In conjunction with the preparation of the
annual accounts in February 2022, the Board of Directors of
ITAB adopted new financial targets focused on sustainable
growth, increased profitability and continued capital efficiency
over time. Read more about our long-term financial targets on
the following pages and our website.
The uncertainty in our operating environment and markets
regarding, for instance, the pandemic’s further development
and the effects due to Russia’s invasion of Ukraine is
exceptional, and we are closely following the development.
Our proximity to our customers and our ability to rapidly adapt
to external changes are the key to ITAB’s success, and our goal
is to continue to strengthen our customers’ competitiveness in
the best possible way. As such, our priorities for 2022 include
safeguarding our own service level and ability to deliver to
customers by remaining proactive in our sales and purchasing
efforts, combined with additional efforts to increase efficiency
in our production and delivery capacity. As the relatively high
raw material prices and shipping costs stabilise and expanded
capacity globally are deemed to reduce the component
shortages in the coming years, we are convinced it will become
even clearer that we are continuing to improve our underlying
profitability.
At the same time, everything we do at ITAB is guided by our
focus on contributing to a sustainable future – for companies,
people and the environment. Together with our customers and
partners, we discuss sustainability issues and the development
of more circular solutions with less impact on the world around
us on a daily basis. In 2022, we will continue to follow our plan
to achieve our established sustainability targets and ambitions
over the coming years. Our sustainability efforts are presented
in a separate Sustainability Report on our website.
MY SINCERE THANKS
With our complete solutions, broad product and service
offering, strong partners and all of our passionate employees,
we at ITAB have strengthened our customers’ competitiveness
in an optimal manner, despite external challenges. I would
therefore like to extend my sincere thanks to all our employees
for their tremendous work in an eventful and challenging
2021, and to our customers and partners for their continued
confidence in us. I look forward to an exciting new year in 2022
together with you.
Jönköping, March 2022
COMMENTS FROM THE CEO
Andréas Elgaard,
President & CEO
8 ITAB ANNUAL REPORT 2021
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Changes in the retail market in recent years have been driven by new consumer behaviour. To keep up with developments and
to better understand future demand, requires in-depth knowledge of the end consumer. ITAB has conducted consumer surveys
to better assist its customers and thereby developing the right solutions for these new challenges. In listening to consumers clear
messages could be heard.
UNDERSTANDING THE CHANGES IN CONSUMER BEHAVIOUR
The world’s consumers are increasingly better informed and
online, and as a result more time conscious and demanding.
They are accustomed to having access to what they want, when
they want it, and in the way they want it. Today’s consumers have
higher expectations of brands, particularly in terms of choice,
convenience, service and added value.
In order to understand these changes, ITAB has carried out
several studies in consumer behaviours through interviews with
consumers in Asia and Europe. From these, consumer patterns
have been discerned, which have enabled the creation of a
unique working tool. This enables ITAB to better understand the
market challenges and opportunities, and to help customers
clarify the evolving needs, wants and behaviours of their target
consumer. Together with operational necessities, this drives
ITAB’s concept and solution design process.
The needs range from the more basic needs, such as
price, safety and convenience, as witnessed during the
COVID-19 pandemic, to the more aspirational, such as
experience, inspiration, group affiliation and self-esteem. By
providing deeper insight, ITAB’s specialists and their customers
can co-create different operational solutions to support the
investment in differentiating their brand experience in the store,
and ensure a quick ROI.
By understanding the consumer’s behaviour and market
challenges, ITAB will be the best partner to help customers find
the right solutions to convert their brand strategy into a physical
store/meeting place.
CONSUMER EXPECTATIONS REQUIRE RETAIL TO CHANGE
The consumer of the future demands environments that provide
convenience, choice and/or a place for socialising and fun.
Many are seeking a healthier, more sustainable lifestyle, while
others simply want a deal and find the best price. However, to
complicate matters further, their wants and needs and resultant
shopping missions can vary not only by the day of the week,
but also by the time of day. They also expect to be seamlessly
guided through an integrated and personalised experience
across both offline and online channels. A successful concept
must stand out by offering a frictionless consumer journey and
experience that meets most or all of these raised expectations.
CONSUMER EXPECTATIONS DRIVING
RETAIL DYNAMICS
STRATEGY
9ANNUAL REPORT 2021 ITAB
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CONSUMER EXPECTATIONS DRIVING
RETAIL DYNAMICS
STRATEGY
To provide the additional support that ITAB’s customers now
require, it is essential that client-facing teams have a good
understanding of consumer needs and how to satisfy them.
To do this, behavioural trends are identified in the “consumer
hierarchy of needs” to help customers translate these needs
into physical reality.
According to ITAB’s new analytical tool terminology,
convenience is taking care of consumers in a seamless way –
that is, Time well saved. Inspiration is making sure you engage
in a meaningful way – in other words, Time well spent. It is about
understanding consumers’ expectations when they are in
different moods and modes. Retailers are experimenting and
exploring new ways to stay relevant and to differentiate their
store experience from their competitors.
RETAILERS ARE ADAPTING TO NEW CONSUMER BEHAVIOUR
With consumers having more choice and greater expectations
on convenience and service, it is getting harder for retailers to
keep up with a consumer who expects their varying needs to
be met every time, 24/7. In addition, disruption has come from
new competitors, new channels (online and mobile), and new
business models. This disruption has diverted retailers’ investment
priorities to compete with online and price-led formats.
Many retailers are switching their investment priorities, from
store expansion and refurbishment to online integration,
experiential initiatives and promotions. They are testing new
shop fitting concepts, reformatting existing space to bring in
new products and services, and investing in new digital tools.
However, in most cases consumers’ raised expectations still
are not currently being met by their in-store experience. Many
offline retailers with physical store networks continue to lose sales
to online operators, while facing increasing price pressures.
They are looking to find ways to bridge this gap between
consumers’ online and offline experiences, and ideally create
a single, seamless and flexible shopping journey. However, any
investment in productivity and store experience needs a clear
and rapid ROI.
As a result, many of ITAB’s customers are seeking greater
support from suppliers with solution design expertise and
experience to resolve their “service vs cost” dilemma, so ITAB’s
role has already started to evolve.
CONSUMERS AT THE HEART OF EVOLUTION
As part of One ITAB, strategic business review in the latter part
of 2019, ITAB considered how they could help retailers afford
to invest in better service and experience when their current
operating model costs are increasing.
By learning from consumers and analysing how their
expectations and spending patterns continue to evolve, and
understanding the impact online and social media is having
on society and consumer behaviour, the physical store can be
helped to satisfy the expectations and relationship needs of
shoppers.
ITAB’s value proposition is customer-centric and focuses on
four well-defined ROI objectives:
• The desired consumer brand experience
• Increased conversions and sales
• Improved operational efficiencies and service
• Reduced operational cost
The markets for future investment were also prioritised. This work
will provide the main platform for our profitable and sustainable
growth in the coming years.
Rethink Retail. Together.
Store design and
architecture
Retail Interiors
Experience amplifiers and personalisation
Online/offline integration
Solution Design and
Integration
Retail Technology
Process, Project
management, Logistics
and Installation
Retail Lighting
Maintenance
Seamless Checkout and payments
Back-end productivity
Retail Analytics
SERVICES SOLUTIONS PRODUCTS
ITAB’S VALUE PROPOSITION STRENGTHENS EUROPEAN RETAILERS
10 ITAB ANNUAL REPORT 2021
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A STRATEGY TAILORED TO MEET A
CHANGING MARKET
Consumer and market dynamics are driving the need for continious changes in the retail market. ITAB is evolving its business under
the One ITAB strategy to further support its customers, as well as to take advantage of new opportunities.
The Group’s market and customers have been permanently
changed by the disruption caused by online and mobile
usage growth, and its impact on consumer behaviour. As a
result, we have been evolving the current ITAB business to better
support customers in this new retail landscape, and to meet
the expectations of all our key stakeholders.
The future direction of the Group was co-created with input
from our colleagues, customers and consumers from all over
the world in late 2019. As a result, our One ITAB strategy is based
on an in-depth understanding of current and future consum-
er expectations and market demand. It is built on current
strengths and future opportunities, and provides everyone in
the ITAB Group with a clear direction and understanding of our
strategic goals and desired business model.
We are now continuing to refocus our business to meet our
customers’ changing needs, building on our existing strengths
and creating new revenue streams for growth. We are updating
our offer in order to develop a more sustainable revenue model,
creating new demand and selling more of our equipment
and services to more customers. On the one hand, we are
continuing to improve our traditional product and service
offers; on the other hand, we will build on existing and new
strategic customer relationships to satisfy the growing demand
for outcome-based solutions. This combined approach will
help us to grow our service-based revenues, and to smooth out
the current demand peaks and troughs.
RETHINK RETAIL. TOGETHER.
Our mission statement is as follows: “At ITAB we help customers
turn consumer brand experience into physical reality with our
know-how, solutions and ecosystem of partners.”
Through the physical realisation of engaging, efficient and
seamless environments, we are delivering measurable results
for customers in terms of their key performance metrics – expe-
rience, sales, efficiency, service and costs. We provide them
with expert support to achieve their store profitability goals,
from new concept and solution design, through tactical perfor-
mance improvement initiatives, to more efficient store project
implementation and refurbishment programmes.
Consumers are looking for better experiences everywhere.
There are new opportunities for us to deliver value. Our
approach will not only enable us to expand the share of our
existing markets, but also allows us to cultivate various new
markets where we can add value. It is about doing what we
have been good at, but better, whilst also exploring new emerg-
ing opportunities.
1. Reposition to a Solution Provider
Our strategic vision is to develop a
solution-based business model, building
on the Group’s intrinsic knowledge base
and its success in delivering innovative
solutions. Where we have developed more
strategic relationships with customers and
address their new market challenges, we
drive greater value both for them and for
our Group. One of our strategic priorities
is to further build on this success and
expand our solution design approach
to a wider range of customers. The
customers will benefit from working within
our proven solution design process which
is both customer and consumer centric.
2. More Agile Manufacturer
We are further re-engineering our
operational structure and processes
to reflect changing demand and to
improve our production agility and
flexibility. In general, our market is no
longer characterised by long-term
roll-out programs with large volumes.
Instead, customer demand is increasingly
based on projects with smaller volumes
and shorter lead-times. Over the years
our manufacturing base has been
following more traditional demand
patterns. As a result we have now
identified a number of opportunities
to increase operational efficiency and
consistency throughout the Group.
3. Become One ITAB
In 2019, the establishment of One ITAB
highlighted issues caused by the Group’s
structure, which at the time consisted of
a large number of individual business
units based on product offer and country
of origin. There were inefficiencies in
communication, shared knowledge
and shared ways of working as well
as disparate cultures, which we are
now addressing. The strategy work also
revealed that a number of the desired
strategic components were already in
place with consultative selling activity, an
existing solutions portfolio, senior customer
relationships and training programmes.
ADAPTING TO A CHANGING MARKET – THREE CORE BUILDING BLOCKS
STRATEGY
11ANNUAL REPORT 2021 ITAB
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STRATEGY
12 ITAB ANNUAL REPORT 2021
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ITAB’S STRATEGIC
PRIORITIES
The core of the One ITAB strategy is to evolve ITAB’s business to a solution-based and more agile business model. This is built
on the Group’s intrinsic knowledge base and its success in delivering innovative solutions, and at the same time the Group’s
management, operational and cost structures are re-aligned in accordance with the strategy. To do this, we need to expand on
and strengthen our existing capabilities in relationship management, solution and service sales, knowledge sharing, shared core
processes and IT systems. We have phased our priorities to support the needs of our operations - firstly, to stabilise our financial
position then to establish new fundamental and distinguishing capabilities, after which we will enter our expansion phase.
THE VALUE OF STRATEGY LIES IN ITS DELIVERY
We have identified seven Strategic Priorities to streamline
and help drive growth and change in the Group. Specific
goals and detailed action plans have been prepared for
the Strategic Initiatives under the control and leadership of
Group Management. The changes are implemented in close
co-operation with the leaders in each of the market regions
and strategic business units to realise our plans and achieve
the goals quickly and efficiently.
To support of our strategic priorities and build up the compe-
tence required to live up to our ambitions and goals, we have
implemented a large number of initiatives over the past 18
months. We have successfully implemented several actions
to support our initial phases of the strategy, and we are now
continuing to work on further initiatives to build and expand
our operations – as well as to create shared work methods and
strengthen the participation of our employees.
STRATEGY
BEING A SOLUTION PROVIDER
This is all about how we approach problem solving for our customers,
and create measurable ROI for ITAB’s solutions. We start by
understanding our customers’ strategic goals and challenges, and
through a holistic dialogue we co-create solutions.
Progress to date includes:
• Launch of our outcome-based value proposition.
• Introduction of our solution design capabilities to support all
Group customers.
• Launch of our new website to share know-how and experiences
from results-based solutions.
• Establishment of a commercial matrix to share best practices
and develop shared working methods.
Holland & Barrett is one of the world’s leading health and wellness retailers and the largest
in Europe, providing their customers with a wide range of vitamins, minerals and health
supplements. During 2021 and the successful execution of a pilot store, ITAB was awarded
to deliver and install various shops within the Benelux region and Spain with modular store
interiors and lighting solutions.
The new concept store, situated on Tottenham Court Road, positions ‘the floor room’ by
Carpetright in a high-profile location raising consumer expectations. Through Solution Design,
ITAB co-created a brand-new retail concept by designing and developing fixtures, technology,
and lighting that contribute to the overall success of the store.
SAPORI & DINTORNI, Italy - To deliver a delicious food experience, areas filled with quality local
goods were incorporated into the concept. Tasting, catering and exploring areas enhance the
experience further. All displays, furniture and specialist equipment such as checkouts and exit
systems were carefully designed and planned to respect and match the architecture.
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EMPOWERING PEOPLE AND SHARED WAYS OF
WORKING
Through clear KPIs, shared ways of working and access to the right
information at the right time, our people will be able to make good
business decisions. Our aim is to make all ways of working parallel,
collaborative, cross-functional and transparent.
Progress to date includes:
• Development of IT roadmap and action plan to support
fundamental capabilities.
• Implementation of shared ways of working and support systems
across our sales organisation.
• Revised operating model and new organisational structure
implemented.
• Transparency of potential and key customers.
DEVELOPING AN ECOSYSTEM OF PARTNERS
Building a robust ecosystem of partners will enable us both to deliver
the complete solutions required by our customers, and to reduce our
supplier numbers to drive out complexity and improve predictability.
Progress to date includes:
• Sourcing organisation established at the Group and business
unit levels.
• Direct material expenditure categorised.
• Ongoing consolidation towards preferred suppliers.
• Developing additional partners to support our opportunities to
offer solution design.
Other related goals include:
• Establish a network of partners to create and deliver new
innovative solutions faster.
• Eliminate complexity and improve predictability.
RE-ENGINEERED COST STRUCTURE
In accordance with the One ITAB strategy, we are re-aligning the
Group’s management, operational and cost structures, ways of
working and differentiating capabilities. Our focus is to continue
ensuring profitable and sustainable growth going forward.
Progress to date includes:
• Reduced sales and administrative expenses and a
considerably stronger financial position.
• Consolidation of manufacturing and new structures to drive
synergies and economies of scale.
• New operating model and organisational structure to
facilitate a leaner and more dynamic organisation.
• Focus on core capabilities and market development in
Europe.
EXPANDING OUR MARKET POSITION
Currently, our main differentiator is our know-how, our customer
relations, and our comprehensive portfolio, which is unique in the
market. We will build on these strengths and make them a reality in all
our regions, thereby expanding our market position.
Progress to date includes:
• Focus on European retailers and providing them with global
support when relevant (within Grocery, Home Improvements
and other customer groups, such as pharmacies and fuel
stations).
• Increased conversion and cross sales to existing customers.
• Increased penetration of existing markets (prior to the opening
of new markets).
• Utilising our strengths and cross-sectoral know-how, through
increased sales and deliveries of solutions.
Other related initiatives include:
• Strengthen our capacity to sell more of our existing services in
several geographic regions.
• Expand the scope of our services to support additional
sections of the retail industry’s value chain that have an impact
on physical stores.
• Invest in Retail Technology to optimise seamless store
experiences and efficiency.
EXCELLENCE IN OPERATIONS
Excellence in operations means that we take pride in “first time
right” and “in the agreed time,” and use Lean methodologies when
we design our shared ways of working. We will continue to focus on
reducing lead times, improving quality and eliminating waste in our
operations.
Progress to date includes:
• Matrix structure established to share best practices and build
shared ways of working.
• ITAB’s Ways of Working (WoW), based on Lean principles, piloted
in two companies
• Launch of steering committee to supervise all operational
development in accordance with One ITAB.
Our goals include:
• Full implementation of ITAB’s WoW.
• “First time right” and “in the agreed time.”
• Reduce lead times and improve quality.
• Common operational KPIs.
SUSTAINABLE FUTURE
At ITAB, we collaborate and continuously innovate for a sustainable
future. We have clear goals and ambitions for our own operations
in terms of sustainable business development, efficiency in the
value chain, good working conditions and business ethics.
Progress to date includes:
• Assessment of our sustainability programme by an independent
partner, EcoVadis, contributing to our roadmap for the future.
• Development and deployment of a new Sustainable
Procurement Policy and Supplier Code of Conduct.
• Training initiatives to strengthen operations in production and
logistics, comprising nearly 6,000 hours of training.
• Development of carbon assessment services for our customers.
Our sustainability strategy is based on four main areas:
• Sustainable Business Development
• Efficiency in the Value Chain
• Good Working Conditions
• Business Ethics
STRATEGY
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FINANCIAL TARGETS
FINANCIAL TARGETS FOCUSED ON
SUSTAINABLE GROWTH & PROFITABILITY
4-8% 7-9% >80% >30%
GROWTH
Average growth in net sales
(CAGR) of 4-8 percent per
annum over a business cycle.
Growth is to be achieved by
sustainable organic growth
and strategic acquisitions.
Sales growth
CAPITAL EFFICIENCY
Average cash conversion ratio
(operational cash flow in relation
to operating profit before
depreciation and amortisation)
of at least 80 percent over
a business cycle.
Cash conversion
EARNINGS
Average EBIT margin (operating
profit in relation to net revenue) of
7-9 percent over a business cycle.
EBIT margin
DIVIDEND POLICY
As before, dividends over a longer
period should follow the result
and correspond to at least 30
percent of the company’s profit
after tax. However, dividends will
be adjusted to the company’s
investment requirements and
any share repurchase program.
Proportion of profit after tax
Based on the Group’s strategy, ITAB is today well positioned for the next step in the implementation of One ITAB. We intend to
establish ITAB as the retail market’s leading solution provider in the coming years.
ITAB builds capabilities for more efficient and sustainable sales,
purchasing and production with the ambition of increasing the
proportion of services in its customer solutions. Over the past
two years, ITAB has carried out a number of important activities
in the transformation of the business, where the share of sales to
the grocery sector has increased to approximately 60 percent
and with an increased share of sales of Retail Technology and
services, as well as improved profitability and strengthened
financial position.
In order to take the next step in the development, the Board
of Directors of ITAB Shop Concept established new financial
targets, in conjunction with the preparation of the annual
accounts in February 2022, that focus on sustainable growth
and increased profitability.
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FINANCIAL TARGETS
16 ITAB ANNUAL REPORT 2021
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ITAB’s market position and potential for growth are based on close, long-term collaborations with customers and business partners.
In 2021, consumers returned to physical stores in most markets, as societies opened up following the lockdowns due to the COVID-
19 pandemic. ITAB’s customers have also become increasingly optimistic and are once again planning to make investments for
the future, which was reflected in a favourable order intake for ITAB throughout the year.
During 2021, the Group’s sales increased by 17 percent
compared with the preceding year. Currency-adjusted sales
increased by 19 percent, with organic growth accounting for
8 percent and the acquisition of Cefla Retail Solutions contrib-
uting 11 percent.
ITAB’s customers include several of Europe’s largest retail
chains and brand owners within both the grocery and the
specialist trade sectors, including international and national
chains and brands. These customers include Albert Heijn,
Asda, Axfood, Bricoman, C&A, Carrefour, Celesio, Circle K, Clas
Ohlson, Conad, Coop, Costa, Dixon, Dollarstore, Edeka, Elon, Etos,
Eurospin, Finiper, H&M, Homebase, ICA, IKEA, John Lewis, Jumbo,
Kesko, LeClerc, Leroy Merlin, Lidl, LuLu, Majid Al Futtaim, Metro
Group, Morrisons, NorgesGruppen, Pandora, Prisma, Polestar,
Real, Rema, Rewe, Rimi, Tesco, Tiger, Uniqlo and Waitrose.
ITAB has competitors in most geographic markets and in
several product areas. These competitors include Eden,
Expedit, Fagerhult, Hermes-Metal Yudigar (HMY), Kesseböhmer
Storebest, Lival, Mago, Modern Expo, NCR, Nitton93, ROL, Ruppel,
Tegometall, Umdasch, Van Keulen Interieurbouw, Visplay, Wanzl,
Diebold Nixdorf and Fujitsu.
ITAB presents the breakdown of the Group’s sales in two
dimensions:
• Breakdown by customer group
• Breakdown by geographic area
More information about this can be found in Note 6.
A CHANGING MARKET CREATES
NEW OPPORTUNITIES
GROCERY
The Group’s largest customer
group mainly comprises
food stores. Sales to Grocery
increased by 19 percent
during 2021, with our
operations in Southern and
Eastern Europe accounting
for most of the increase.
HOME IMPROVEMENTS
The customer group refers
primarily to construction,
furniture and home
furnishings stores. The
customer group increased
by 18 percent compared
with 2020. The increase
occurred in Southern and
Eastern Europe, while sales
in the UK & Ireland and
Central Europe declined.
FASHION
This customer group includes
stores selling ready-to-wear
clothing and shoaes, etc.
Total sales to Fashion were
unchanged in 2021, with
increases in Eastern and
Southern Europe. Sales
declined in the UK & Ireland
and Northern Europe.
OTHER CUSTOMER GROUPS
Other customer groups
include consumer electronics,
sport & leisure, pharmacies,
fuel stations, offices,
brands, industry, cafés and
restaurants. Total sales to
Other Customer Groups
rose 19 percent in 2021,
primarily in Southern Europe.
MARKET BY CUSTOMER GROUP
The customers are divided up according to the sectors within which they operate. The customer groups are Grocery, Home
Improvements, Fashion and Other Customer Groups.
MARKET IN 2021
Proportion of the
Group’s sales by
customer category
59%
14% 7%
20%
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MARKET BY GEOGRAPHIC AREA
Below, the Group’s customers are divided up according to the geographical market in which they operate. These are Northern Europe,
Southern Europe, Central Europe, United Kingdom & Ireland, Eastern Europe and Rest of the World.
NORTHERN EUROPE
Northern Europe, which includes the Nordic countries, is ITAB’s largest geographic area, with 28
percent of the Group’s sales. In 2021, sales essentially remained unchanged, with increases in
the Grocery customer group, while the sales trend was adversely impacted in other customer
groups.
SOUTHERN EUROPE
Following the acquisition of Cefla Retail Solutions in early 2021, Southern Europe is now ITAB’s
second-largest geographic area, with 24 percent of the Group’s sales. Southern Europe mainly
comprises Italy, France and Spain. Including Cefla Retail Solutions, sales increased by more
than 100 percent in 2021.
CENTRAL EUROPE
Central Europe was responsible for 23 percent of the Group’s sales in 2021. This area is made up
of Germany, the Netherlands, Belgium, the Czech Republic, Hungary, Switzerland and Austria.
Sales increased by 16 percent during the year, with the Fashion and Grocery customer groups
accounting for most of the increase.
UNITED KINGDOM & IRELAND
United Kingdom & Ireland accounted for 14 percent of the Group’s sales in 2021. Sales declined
by 9 percent during the year, with Grocery showing increased sales, while other customer
groups reported decreased sales.
EASTERN EUROPE
Eastern Europe was responsible for 6 percent of the Group’s sales in 2021, with the Baltic States,
Poland and Russia reporting the highest sales. Other countries in this region include Romania,
Slovakia, Croatia and Serbia. Sales increased by 27 percent during the year, with the Fashion
and Home Improvements customer groups accounting for most of the increase.
REST OF THE WORLD
The Rest of the World geographic area comprises all countries outside of Europe. The countries
where ITAB reports the highest sales are USA, China, Argentina and Saudi Arabia. Rest of the
World was responsible for 5 percent of the Group’s sales in 2021. Total sales declined by 4
percent during the year, with sales in the Fashion and Home Improvements customer groups
showing the greatest declines.
MARKET IN 2021
Proportion of the Group’s sales by
geographic area
18 ITAB ANNUAL REPORT 2021
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CONTINUOUS DEVELOPMENT FOR A
SUSTAINABLE FUTURE
SUSTAINABILITY
Sustainability refers to development that meets today’s needs without jeopardising the ability for future generations to meet their
own needs. Hence – as a proponent of sustainable development, ITAB takes responsibility for the way in which our business reaches
its profitability goals. This responsibility spans the entire value chain – from manufacturer and supplier to consumer.
For ITAB, it is important to conduct an ongoing dialogue with its
stakeholders and thereby build a relationship that incorporates
their views, expectations and needs in the area of sustainability.
The aim is that this should contribute to sustainable value
creation.
ITAB’s most important stakeholders are:
• Customers
• Employees
• Owners
• Suppliers
• The local community
In 2021, ITAB’s sustainability programme was strengthened with
the appointment of a Sustainability Manager for the Group.
Working in close co-operation with the Group’s Sustainability
Council, the programme was also reviewed and redefined
with a set of new and revised Sustainable Goals, approved
by Group Management. In addition, for the first time the
business’ sustainability was rated by EcoVadis, an independent
partner measuring the quality of a company’s sustainability
management system through its policies, actions and results,
earning ITAB a bronze medal on the scoring criteria. The
Group’s sustainability goals and the rating by EcoVadis are
presented in more detail in ITAB’s Sustainability Report 2021 on
itabgroup.com. The focus for ITAB is now to further develop
the roadmap going forward and take decisive actions that
will allow ITAB to achieve its Sustainability Goals and lead to a
higher score in the EcoVadis’ future ratings.
In the development of our new goals an analysis of some of our
largest customers own sustainability goals was done ensuring
that ITAB’s sustainability efforts to be complimentary to their
CSR programmes. Other external and internal stakeholders
have been involved at every stage of the development and
deployment of the goals. The continued roadmap will consider
the impact that the operations have on the economy, society,
people and the environment, as well as those aspects that affect
the stakeholders’ decision-making and their expectations. The
long-term focus areas that have been identified can be found
on the next page.
REPORTING AND FOLLOWING UP
Reporting on how well ITAB’s sustainability work is proceeding
takes place in line with Global Reporting Initiatives’ (GRI)
guidelines for sustainability reporting. ITAB has developed
a number of Key Performance Indicators (KPIs) for regular
following up and reporting of the sustainability work. The KPIs
are reported quarterly by each commercial company to the
Parent Company, and are followed up in ITAB’s Sustainability
Council, in which all the Group functions are represented. The
KPIs and reporting according to GRI can be found in ITAB’s
Sustainability Report 2021.
SUSTAINABILITY RISKS
ITAB is continuing to work on reducing the risks as regards
environmental and social issues in the value chain. The
assessment of sustainability risks is an important part of the
work on the materiality analysis and forms the basis for the
sustainability programme and the priorities as regards our
sustainable goals.
ITAB has operations in some markets that are associated
with a raised sustainability risk. Issues relating to safety, working
conditions and corruption are particularly important from a risk
perspective. ITAB handles the risks through the activities in the
sustainability programme and with the implementation of ITAB’s
Code of Conduct and the new Supplier Code of Conduct and
Sustainable Procurement Policy. The actions from the EcoVadis
assessment are also increasing the robustness of ITAB’s policies
and procedures in these areas. Several of ITAB’s facilities
located in countries associated with a higher risk are also
covered by audits performed by several of ITAB’s major
international customers.
INCREASED VALUE THROUGH CIRCULAR THINKING
ITAB has a close dialogue with some of its major customers
regarding the development of circular solutions, i.e. solutions
where ITAB can deliver value to the customer by replacing
parts of a product that have been consumed, for example
replacing the CoB (Chip-on-Board) diodes on light fixtures for
more efficient ones, rather than the whole fixture. Through our
service offering we are also developing a CO
2
e assessment tool
which will allow us to identify embodied carbon in customer
stores at draft stage and design it out, making each generation
of interiors, lighting and retail technology less impactful on the
environment than the last.
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SUSTAINABILITY
FOCUS AREAS
In 2015, the UN’s member states adopted a universal agenda that incorporates the Global Sustainable Development Goals (SDGs). The
17 SDGs act as a guide for ITAB. Particular focus has been devoted to four of the SDGs, with the most significant aspects set out below
and described more in detail in ITAB’s Sustainability Report 2021. The new goals also highlight how the Group’s activities contribute to
the other SDGs.
Read more about Group’s sustainability efforts in ITAB’s Sustainability Report 2021.
Available at itabgroup.com.
ENERGY AND
MATERIAL INPUT
PRODUCTION
DISTRIBUTION USE DISPOSAL
WASTE AND
EMISSION LEAKAGE
1 . Recycling
2–3. Remanufacturing
Refurbishing
4. Reuse
5. Longer use
Intensifying use
Dematerialisation
1 . Recycle customer equipment
• Uplift all equipment, extensive sort and recycle
programme, zero waste to landfill offer
2 . Hire and leasing
• Lease equipment to customers over lifespan of
equipment
• Design for reuse, replace the part(s) that need(s) to be
updated and lease again
3 . Incentivised return
• Offer a “buy back” of equipment
• Design for reuse, replace the part(s) that need(s) to be
updated and sell again
4 . Asset management service
• Maximising product lifetime and minimising new
purchase by tracking an organisation’s assets,
planning what can be reused, repaired or redeployed
at a different site
5 . Long life
• Products designed for long life, supported by
guarantees and trusted repair services
CIRCULAR ECONOMY
GOOD WORKING CONDITIONS
• Health and safety
• Skills development and career opportunities
• Equality and diversity
• Good conditions in the supplier stage
SUSTAINABLE BUSINESS DEVELOPMENT
• Sustainable products
• Systematic internal environmental work
• Climate-smart solutions
• Energy-efficiency (products)
EFFICIENCY IN THE VALUE CHAIN
• Minimise emissions from transports
• Energy-efficiency (production)
• Review of suppliers
• Collaborations in the value chain
BUSINESS ETHICS
• Code of conduct
• Compliance with laws and ordinances
• Anti-corruption
• Value platform
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NEW SOLUTIONS
THAT GENERATE
ADDED VALUE
Through a strategic collaboration with the custo-
mer, the challenges they are faced with are
being visualised in an entirely new way. In line
with this, solutions are developed that deliver
value both for the customer and for ITAB as a
company. New opportunities are being explored,
at the same time as tried and proven methods
and solutions are coming into their own.
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Consumer behaviour and shopping cycles have never been influenced by as many different factors as today. Two years after the
pandemic began, retailers have learned to adapt to new consumer behaviours and business practices that could permanently
reshape the retail landscape and create a “new normal.”
Retailers that are well positioned for this type of change are
succeeding through a number of different factors, starting with
a strong value proposition and a clear brand image, and a
message that resonate with consumers when shopping with
them. From an experience standpoint, successful retailers
are those that have a great customer service and a model
for services, and a unique and seamless in-store and online
experience that feels both trustworthy and memorable across
all channels.
However, retailers that fail to recognise the shift in consumer
needs and to truly invest in their end-to-end experiences are at
risk of having a brand and an offering that are no longer seen
as being of value to the consumer. Consequently, recognising
this shift and valuing the consumer’s needs as well as the
importance of providing a seamless overall experience are key
to succeed in the new normal in the retail market.
IT ALL STARTS WITH THE CONSUMER
To support this challenge, ITAB’s offerings always begin with the
consumer in all contacts and activities with customers – with
new insights and future scenarios for what their consumers
want and need, by experiencing their pains and gains
through the eyes of a consumer. This helps us to understand
market dynamics and analyse key data points to support any
upcoming challenges.
We then work with our customers to co-create attractive and
exciting performance-based solutions and drive quantifiable
results and ROI in the short, medium and long term. Through
global production with local customisation, ITAB’s unique
solution offering allows for both choice and flexibility. This
ensures that customers can be first to market, while also
guaranteeing quality, cost control and “first time right.”
CO-CREATING SOLUTIONS
With a focus on designing for people, ITAB’s approach enables
the customer to co-create the solution alongside ITAB through
an iterative process. Through strong know-how and retail
industry experience, ITAB’s solution designers are able to share
and leverage ideas to help maximise the customer’s ROI.
This dynamic and flexible model makes it possible to
develop a differentiated store experience at a low cost, while
also generating multiple value points across the consumer
experience. This distinguishes ITAB from other suppliers and
creates memorable experiences that add great value for our
customers and their consumers’ changing needs.
WORKING WITH ITAB
ITAB is able to achieve this service level through an integrated
service model that addresses the entire value chain. It is
designed to improve the consumer experience, increase
efficiency, reduce costs and result in increased sales and
conversions.
In this way, ITAB is well positioned to grow and increase its
market share in a changing retail market. ITAB is essentially
able to support the customer every step of the way through
its comprehensive services, no matter what the challenge. At
the same time, the company also offers full after-care service,
helping to improve the life cycle of the product and thereby
reducing costs over time – from standard shelving to specialist
fittings, and covering all types of interactive and merchandising
aids in between, in order to strengthen the consumer
experience.
ADAPTATION TO PERPETUALLY
CHANGING CONSUMER BEHAVIOURS
PRODUCTS AND SERVICES
Reference material: McKinsey & Company
40%
36%
33%
25%
20%
Intent to
continue
70%
73%
79%
80%
80%
75%
75 percent of consumers have tried
a new shopping behaviour during
the pandemic, and most intend to
continue with it beyond the crisis.
New shopping method
Different brand
Different retailer/store/website
Private label/store brand
New digital shopping method
23ANNUAL REPORT 2021 ITAB
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PRODUCTS AND SERVICES
Ermitazas, Lithuania
Stockmann Delikatess, Latvia
Carpetright , United Kingdom
Farmacia San Giorgio, Italy
KungSängen, Sweden
Lagardère, Italy
24 ITAB ANNUAL REPORT 2021
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INVEST IN EFFICIENT CONSUMER
FLOWS WITH A RAPID ROI
ITAB develops entry and exit systems, checkouts and self-checkout solutions for both current and future retail chains, that can be
kept updated via digital platforms. Using consumer analyses and insights as a basis, efficient solutions and systems are being
created to ensure optimum flows and better experiences in the store.
In order to identify and create the right solutions that reduce
the store’s operating costs, improve throughput and contribute
to a frictionless consumer journey, it is necessary to have an
in-depth understanding of existing and future consumer
behaviours.
ITAB works in a creative process alongside its customers,
with the aim of finding the optimum solution that focuses on
reducing shoplifting and theft, guiding customers properly and
creating flows that drive sales. By analysing 100 percent of all
transactions that take place through ITAB’s solutions, service
levels and layout can be optimised.
Controlling consumer flows in an efficient and safe manner
has been, and will continue to be, an important factor in
attracting consumers to the physical store. It is extremely
important for the consumer journey to be as good as possible,
in order to contribute to a positive shopping experience. This
applies along the entire route, from an inviting entrance, via
clear signposting, to a smooth and simple transaction at the
checkout.
The physical store has really been put to the test since spring
2020. While the number of customers permitted in stores
continues to be regulated at times, it is important to maintain
a good service level. Consequently, ITAB has worked in a more
focused manner in recent years to develop new solutions that
will contribute to flows and purchases in the store being safe,
both for the consumer and for the staff.
E-COMMERCE AND PHYSICAL STORES WORKING TOGETHER
At a time when consumers have not been able to move about
freely in the normal way during the pandemic, there has been
a dramatic increase in the need for physical commerce to
work with and benefit from the increasing level of e-commerce.
New types of solutions for fast, safe and efficient delivery have
been on the agendas for most retailers. A good example of
this is Click & Collect, with alternatives ranging from basic
pick-up points to fully automated delivery robots. The use of
new solutions is increasing rapidly among consumers, and this
phenomenon is likely to remain after the pandemic.
By analysing consumer behaviours, ITAB can understand the
challenges that exist and help its customers to understand the
needs of consumers. In this way, solutions are being identified
to ensure that the consumer will continue to choose to shop
in their particular store. For example, this could be achieved
by collaborating with other e-commerce companies and
providing them with the opportunity to deliver their products
through the store’s solution.
RAPID ROI WITH EFFICIENT CHECKOUT
Efficient checkouts have always been important for retailers.
ITAB’s development of new solutions has consistently been
characterised by relieving personnel of basic work duties so
that they can focus instead on consumer care. Significant cost
savings and an increased service level can be seen both at
large retail chains and in smaller, local stores by offering various
self-service options. The use of self-checkouts also saves space
in stores, creating room for more goods and greater choices
for consumers, depending on what they want to achieve and
experience on their shopping trip.
Allowing the consumer to scan their own goods has
become standard for most retailers. ITAB has a unique range
of self-checkout solutions, ranging from very small purchases
to large weekly shopping. In 2021, we continued to see smaller
and more frequent purchases as consumer loyalty declined
and demand for higher value increased, at the same time as
consumers want more choices and stores, all of which has had
a positive effect on the range offered by ITAB in the market.
Even though the use of self-checkouts is increasing, there is
still a considerable need for traditional checkouts. ITAB has a
large range comprising various types of checkouts to meet
the needs that exist. In this respect, developments are moving
towards increasingly efficient, ergonomic and aesthetically
pleasing checkouts.
ITAB can also develop completely new solutions for its
customers, with the trend of setting up “hybrid checkouts” that
allow for both personal service and self-service continuing to
grow. This enables our customers to reduce their operating
costs, while maintaining the desired service levels.
PRODUCTS AND SERVICES
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PRODUCTS AND SERVICES
Conad, Italy
Primark, United Kingdom
Ermitazas, Lithuania
Leclerc, Spain
Co-op, United Kingdom
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SUSTAINABLE LIGHTING REINFORCING
THE CONSUMER EXPERIENCE
Energy consumption represents a large proportion of a store’s total costs. With rising energy prices and requirements for sharply
reducing CO
2
emissions and on using recyclable materials, ITAB sees great opportunities to collaborate closely with its customers
in order to add substantial value in the transition to more economic and sustainable solutions.
Energy consumption accounts for nearly 70–80 percent of the
total cost over five years for a lighting system within the retail
market. The design and efficiency of the lighting systems have
a direct impact on this. Energy efficiency is thus central to
the development of ITAB’s lighting products and systems. The
importance of light for our well-being is gaining increasing
focus in the design of physical environments and has a major
impact on purchasing decisions and the work environment
of store staff. Consumer behaviour and the well-being of
employees are thus our key focus when developing lighting
solutions.
Shops often use more than one type of lighting to create the
right atmosphere. Through its range of lighting solutions, ITAB
can be an all-inclusive supplier for retail shops and chains.
Lighting is becoming part of an complete concept in which
all the various parts interact. The Group sells and distributes
lighting products to more than 90 countries, both through its
own companies and through national distributors, in order
to provide customers with local support in respect of imports,
certification and local service/maintenance.
LEADING LED TECHNOLOGY FOR THE GLOBAL MARKET
The development of components for LED (Light-Emitting
Diodes) products is proceeding rapidly. New and improved LED
chips are continually being released in the market, above all
with improvements in relation to CRI (colour rendering index)
and efficiency. Thanks to its in-house expertise in the fields of
electronics and LED light sources, ITAB is able to guarantee an
all-inclusive offering with the potential to tailor customer orders
and unique solutions. ITAB is one of the leading suppliers of
professional lighting systems for the retail market in Europe, with
modern energy-saving light sources based on LED. ITAB offers
a broad range of proprietary light fittings supplemented with
solutions from an ecosystem of partners. Quality and design
are secured within a “centre of excellence” team operating in
both Sweden and China.
Customers are offered a combination of local lighting expertise
and global sourcing of lighting products, all with the aim of
matching the needs of each individual chain. At ITAB’s local
Solution Design offices, shop fitting concepts are co-developed
with customers as well as both in-house and external architects
and lighting designers. The lighting is adapted to the project’s
requirements for an efficient and stimulating customer journey
that reflects the customer’s brands. The product portfolio
provides a toolbox for creating the right interaction between
fittings, checkouts, lighting and the retail chain’s goods.
Volume production takes place in the Group’s own modern
production facilities where, in addition to assembling light
fittings, the production of electronics for driving mechanisms
also takes place. Final assembly is also offered locally in
markets around the world in order to manage the distribution
of variants and local preferences. This allows a combination of
efficient production and short lead times where required.
The lighting systems are third-party certified internationally,
which makes things easier for retail chains that are expanding
into other countries. In this regard, ITAB’s has, through its many
years of experience, built up a unique expertise for managing
global customers.
CONTROLLING AN EXPERIENCE THAT INVOLVES ALL THE SENSES
A successful shopping experience needs to stimulate all the
consumer’s senses. Timing is also essential – doing the right
thing at the right time to generate the right energy, feelings and
behaviour on the part of the customer.
ITAB has developed the world’s first wireless system providing
simple control of in-store experiences. The solution combines
professional lighting, sound and images in one and the
same system, called Piri. The system helps the user to create
experience zones to provide the consumer with the right
impressions and messages. All the units are wireless, making
it possible to change the experience instantly and control/
monitor it centrally. By connecting sensors to the zones, more
energy can be saved by adapting to daylight / presence.
Part of the experience could thus be financed through energy
savings.
PRODUCTS AND SERVICES
27ANNUAL REPORT 2021 ITAB
|
PRODUCTS AND SERVICES
Farmacia Della Stazione, Italy
Peter Pane, Germany
Görtz, Germany
Stockmann, Latvia
Stahlburschen The Store,, Germany
Lagardère, Italy
28 ITAB ANNUAL REPORT 2021
|
IN-STORE PLATFORMS SUPPORTED BY
DIGITAL INNOVATION
Over the past two years, retailers have been under considerable pressure to change the way they work. New technology combined
with the effects of the pandemic have resulted in rapid changes in consumer behaviour and expectations as regards the physical
store. To encourage consumers to continue visiting their stores, retailers have to find innovative ways of changing and adapting
the shopping journey through the store.
Even before the pandemic, retailers had realised that there was
a considerable need to be able to convert their stores rapidly
to meet future consumer needs, changes in behaviour and
trends. In order to meet market requirements, ITAB has worked
to develop effective and innovative solutions to improve the
shop experience, for example through consumer guidance
and self-service options based on consumer benefits. Hence,
when this need increased in conjunction with the pandemic,
there was already an established platform in place that could
be used and further developed to meet the new requirements
that arose.
ONE PLATFORM – ENDLESS OPPORTUNITIES
At a time when we are doing more and more on our mobile
phones, we are seeing the development of more apps than
ever before. It is becoming increasingly common for consumers
to scan and pay for their goods themselves directly on their
phone. In order to satisfy current and future requirements,
retailers need a uniform digital infrastructure that links together
all the steps in the consumer journey through a single platform
to ensure the best possible experience. Rather than having
a number of separate systems, each requiring individual
maintenance, this is making it possible for retailers to follow the
consumer on one and the same platform throughout the entire
consumer journey.
To guarantee quality, scalability and function, ITAB has been
working for some time internally and with strategic partners
to further develop this shared platform, which is based on
Microsoft Azure. Together, we have created the foundation for a
digital platform that supports retailers in their aim of generating
seamless experiences. Thanks to connected products and
solutions, ITAB is also being given the opportunity to gather
valuable data, providing access to statistics, monitored oper-
ations and continually updated products. This in turn reduces
costs for the store, allows operational problems to be detected
immediately and rectified remotely, and at the same time
provides a valuable overview of the consumer journey.
A SEAMLESS CONSUMER JOURNEY
From the moment the consumer arrives in the store until the
time they leave, the digital solutions make the consumer
journey smoother, faster and more enjoyable. They also make
it possible to free up store staff time, allowing them to focus on
providing consumers with an even better service.
The consumer journey begins outside the store. With the aid
of various identification technologies and interactive digital
signs in the shop window, the retailer can promote products or
offers as well as allowing the consumer to place online orders
for home delivery using their phone. The same type of solution
also enables them to provide information about the number of
people in the shop and about whether it is permitted to enter.
To avoid the formation of queues inside or outside the store,
it is also possible to create a virtual queue. This means that
the consumer can wait at home, in their car or outdoors and
monitor their place in the queue in real time. Virtual queues
can also be used in locations such as delicatessen counters,
service desks, pharmacies, fitting rooms, etc. In the same way,
the consumer scans a QR code with their phone to join the
queue, or takes a queue ticket from a ticket machine and
then carries on shopping. When it is their turn, they receive a
message on their phone and a queue number is displayed on
a digital screen.
When it is time to pay, the consumer decides whether they
want to use a staffed checkout or a self-checkout. In the case of
the latter alternative, ITAB has developed a number of solutions
that make it possible to ensure the consumer has paid before
they leave the store. This is ideally achieved using an advanced
analysis method linked to gates, which open automatically
when the consumer has paid, without even scanning a receipt.
This provides a frictionless and improved experience for the
consumer, while retaining security for the retailer. Multiple
consumers can be managed at the same time, while further
minimising the risk of theft.
All of these applications work as standalone solutions to meet
specific needs, yet they become much more powerful when
they are combined. By creating an integrated experience,
retailers can increase digital commitment, conversions and
develop the consumer experience to achieve greater loyalty.
PRODUCTS AND SERVICES
29ANNUAL REPORT 2021 ITAB
|
PRODUCTS AND SERVICES
KungSängen, Sweden
Hemköp, Sweden
Polestar, Globalt
Morrisons, United Kingdom
Carpetright, United Kingdom CEF, Italy
30 ITAB ANNUAL REPORT 2021
|
THE ITAB SHARE
ITAB Shop Concept OMX Stockholm PI
SHARE PERFORMANCE 2021SHARE PERFORMANCE OVER 10 YEARS
THE ITAB SHARE
Jan
Feb
Mar
Apr
Maj
Jun
Jul
Aug
Sep
Okt
Nov
Dec
5
10
15
20
25
5
10
15
20
25
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
0
25
50
75
ITAB’s Class B shares were registered on First North in May 2004, and ITAB’s shares have been listed in the Mid Cap segment on
Nasdaq Stockholm since 2008. In 2021, shares were traded for approximately SEK603 million and the share price (recalculated for
completed share issues) increased by 14 percent. On 31 December 2021, ITAB’s market capitalisation totalled SEK2,927 million.
MARKET LISTING
ITAB’s Class B shares were registered on First North on 28 May
2004 and have been listed in the Nasdaq Stockholm Mid Cap
segment since 2008. In conjunction with the recapitalisation of
ITAB in spring 2021 (see page 35-36), all Class A shares were
reclassified as Class B shares, after which ITAB only has one
class of share. The shares are traded under the ticker ITAB.
THE ITAB SHARE’S PERFORMANCE IN 2021
In 2021, the ITAB share price rose by 14 percent to a final price
paid of SEK 14.72 on 31 December 2021. During the same
period, the OMX Stockholm PI rose by 35 percent. The highest
and lowest prices paid for the year were SEK 19.90 (closing
price on 15 February 2021) and SEK10.50 (closing price on 28
January 2021), respectively.
ITAB’s total market capitalisation at 31 December 2021
amounted to SEK2,927 million. During the year, approximately
38.6 million ITAB shares were traded at a total value of SEK 603
million. Calculated against the average number of shares
outstanding during the year, this corresponds to a turnover
rate of 20 percent. Calculated per trading day, an average of
approximately 152,000 ITAB shares were traded per day at an
average value of approximately SEK 2.4 million.
SHARE CAPITAL
On 31 December 2021, the share capital amounted to SEK91
million. The total number shares was 218,100,192. The quotient
value is SEK 0.417 per share. All shares carry one vote each at
general meetings of shareholders, and equal entitlement to the
company’s assets, earnings and dividends.
DIVIDENDS
ITAB’s dividend policy states that dividends over a longer period
are to follow the company’s results and correspond to at least
30 percent of the company’s profit after tax. However, dividends
are to be adjusted to the company’s investment requirements
and any share repurchase program.
The Board of Directors proposes that no dividends be paid for
the 2021 financial year.
OWNERSHIP STRUCTURE
On 31 December 2021, ITAB had 5,308 shareholders. Legal
entities, including equity funds, insurance companies
and pension funds, etc. in Sweden and abroad owned
approximately 79 percent of the total number of shares. Foreign
ownership accounted for approximately 28 percent of the total
number of shares. The largest shareholders at 31 December
2021 are presented in the table on page 31.
FURTHER INFORMATION
ITAB’s website, itabgroup.com, is continuously updated with
information about price trends, changes in ownership, etc.
31ANNUAL REPORT 2021 ITAB
|
Share holding
No. of
shareholders
No. of
shareholders (%)
No. of
shares
No. of
shares (%)
1–1,000 3,339 62.90% 846,098 0.39%
1,001–5,000 1,132 21.33% 2,797,791 1.28%
5,001–10,000 339 6.39% 2,512,488 1.15%
10,001–50,000 355 6.69% 7,939,236 3.64%
50,001–100,000 61 1.15% 4,346,774 1.99%
100,001– 82 1.54% 199,657,805 91.55%
TOTAL 5,308 100.00% 218,100,192 100.00%
DISTRIBUTION OF SHARES AT 31 DECEMBER 2021
2021 2020 2019 2018 2017
Share price at year-end*, SEK 13.42 11.75 10.84 9.66 33.34
Market capitalisation at year-end*, SEK million 2,927 1,203 1,110 989 3,413
Dividend, SEK 0.00** 0.00 0.00 0.00 1.75
Payout ratio of net earnings -** – – – 56%
Average number of shares outstanding, thousand 191,396 102,383 102,383 102,383 102,383
Number of shares outstanding at year-end, thousand 218,100 102,383 102,383 102,383 102,383
Number of shareholders at year-end 5,308 4,341 4,369 4,351 4,293
Highest share price during the year*, SEK 19.90 14.69 20.52 36.66 54.12
Lowest share price during the year*, SEK 10.50 4.77 6.84 8.40 31.76
Direct yield*** -* – – – 5.25%
Earnings per share, SEK 0.50 -0.21 1.17 0.88 3.11
Equity per share, SEK 12.17 15.69 17.07 15.61 16.26
THE ITAB SHARE
* Recalculated for the new and offset issues completed in 2021, whereby the number of shares increased by 115,716,762 to a total of 218,100,192 shares.
** Pursuant to the Board of Directors’ proposed dividend for the 2021 financial year.
*** Dividend divided by the share price at year-end.
Following the reclassification of Class A shares to Class B shares in spring 2021, ITAB has only one class of share.
Name
Number of shares
Shares
(%)
Votes
(%)
Aeternum Capital AS 54,304,496 24.90% 24.90%
Pomona-gruppen AB 37,945,397 17.40% 17.40%
Petter Fägersten with companies and family 24,718,162 11.33% 11.33%
Anna Benjamin with companies and family 14,206,593 6.51% 6.51%
Svolder AB 12,172,550 5.58% 5.58%
Stig-Olof Simonsson with companies 10,392,410 4.76% 4.76%
Öhman Funds 6,002,777 2.75% 2.75%
Försäkringsaktiebolaget Avanza Pension 4,643,944 2.13% 2.13%
Kennert Persson 3,482,200 1.60% 1.60%
Third AP Fund 3,000,000 1.38% 1.38%
Total other shareholders 47,231,663 21.66% 21.66%
218,100,192 100.00% 100.00%
SHAREHOLDERS AT 31 DECEMBER 2021
THE ITAB SHARE
32 ITAB ANNUAL REPORT 2021
|
FINANCIAL
INFORMATION
2021
ITAB Shop Concept AB’s staturory Annual
Report for 2021 consists of pages 34-84.
These pages have been reviewed by the
company’s auditors in accordance with the
Auditor’s Report on pages 85-87.
33ANNUAL REPORT 2021 ITAB
|
34 ITAB ANNUAL REPORT 2021
|
FINANCIAL INFORMATION
FINANCIAL INFORMATION
CONTENTS
ADMINISTRATION REPORT WITH CORPORATE GOVERNANCE
REPORT
35
Administration Report
42
Proposed Allocation of Profits
43
Corporate Governance Report
48
Financial review – Five years in summary
49
Comments on Five years in summary
THE GROUP
50
Income Statement
50
Statement of Other Comprehensive Income
51
Statement of Financial Position
52
Statement of Changes in Equity
52
Statement of Cash Flows
PARENT COMPANY
53
Income Statement
53
Statement of Other Comprehensive Income
53
Balance Sheet
54
Statement of Changes in Equity
54
Statement of Cash Flows
NOTES
56
Note 1 General information
56
Note 2 Accounting policies
60
Note 3 Important estimates and assessments
61
Note 4 Financial risk management
62
Note 5 Corporate acquisitions and divestments
64
Note 6 Revenue from contracts with customers
65
Note 7 Purchases and sales between Parent Company and
subsidiaries
65
Note 8 Personnel and senior executives
68
Note 9 Remuneration to auditors
68
Note 10 Depreciation, amortisation and impairment losses
68
Note 11 Costs divided by type of cost
69
Note 12 Other operating income and expenses
69
Note 13 Profit from participations in Group companies
69
Note 14 Financial income and expenses
69
Note 15 Year-end appropriations
70
Note 16 Tax
71
Note 17 Earnings per share
72
Note 18 Intangible assets
73
Note 19 Property, plant and equipment
73
Note 20 Participations in Group companies & associated
companies
75
Note 21 Financial assets and liabilities
77
Note 22 Leases
77
Note 23 Inventory
77
Note 24 Prepaid expenses and accrued income
78
Note 25 Equity
78
Note 26 Allocation of profits
79
Note 27 New share issue and offset issue
79
Note 28 Overdraft facilities
79
Note 29 Provisions for pensions
80
Note 30 Other provisions
80
Note 31 Accrued expenses and prepaid income
80
Note 32 Pledged assets
80
Note 33 Contingent liabilities
81
Note 34 Transactions with related parties
81
Note 35 Events after the balance sheet date
82
Reconciliation of Alternative Performance Measures
83
Definitions
85 AUDITOR'S REPORT
87
Auditors
88
Board of Directors & Group Management
91
Annual General Meeting 2022
91
Financial information in 2022
FINANCIAL INFORMATION
Parent Company: ITAB Shop Concept AB
Corp. reg. no.: 556292-1089
Domicile: Jönköping
Address: Box 9054, SE-550 09 Jönköping , Sweden
35ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
ADMINISTRATION REPORT WITH
CORPORATE GOVERNANCE REPORT
The Board of Directors and the Chief Ex-
ecutive Officer (CEO) of ITAB Shop Con-
cept AB (publ), corp. reg. no. 556292-
1089, based in Jönköping, hereby submit
the annual accounts and consolidated
accounts for the 1 January to 31 De-
cember 2021 financial year. The subse-
quent Corporate Governance Report,
Income Statements, Balance Sheets,
Statements of Comprehensive Income,
Statements of Changes in Equity, Cash-
flow Statements and Notes are integral
components of the Annual Report and
were reviewed by the company’s au-
ditors. Pursuant to the Swedish Annual
Accounts Act, the statutory sustainability
report is included in ITAB's Sustainabil-
ity Report 2021, which is available on
itabgroup.com.
OPERATIONS
ITAB Shop Concept develops, manufactures,
sells and installs complete shop fitting concepts
for retail chain stores. The all-inclusive offering
includes design advice, custom-made concept
fittings, checkouts, customer-flow solutions, pro-
fessional lighting systems and digitally interactive
solutions for physical stores. Customers include
leading players in Europe operating in the global
market. ITAB has operating subsidiaries in Argen-
tina, Chile, China, the Czech Republic, Denmark,
Dubai, Estonia, Finland, France, Germany, Hong
Kong, India, Italy, Latvia, Lithuania, Malaysia, the
Netherlands, Norway, Poland, Russia, Spain, Swe-
den, United Kingdom and USA.
Working in close collaboration with the custom-
er, ITAB contributes its experience and expertise
to the customer’s specific needs and requests.
Business operations are founded on long-term
business relationships and delivery reliability, in
combination with streamlined production re-
sources. ITAB is today the market leader in check-
outs for retailers in Europe, and one of Europe’s
largest suppliers of shop fitting concepts and
lighting systems.
COMMENTS ON THE GROUP’S PERFORMANCE
IN 2021
The sales trend was solid in 2021. As societies and
the retail sector opened up following the wide-
spread lockdowns due to the COVID-19 pandem-
ic sales increased, both through organic growth
and the acquisition of Cefla Retail Solutions. Cus-
tomers’ faith in the future and willingness to invest
has gradually recovered, which was reflected in
a strong order intake for ITAB during the whole
year. The shortages of raw materials and certain
components as well as global logistics disrup-
tions impacted ITAB’s delivery capacity and had
a certain negative impact on net sales in autumn
2021. As the delivery disruptions and raw material
shortages eased somewhat during the year's last
quarter, sales developed positively.
In 2021, sales to the Grocery and Home Im-
provements customer sectors increased by 19
and 18 percent, respectively, while sales to the
Fashion customer sector remained essentially
unchanged. Sales to Other customer groups rose
by 19 percent during the year.
SALES AND PROFIT
The Group’s net sales rose by 17 percent to SEK
6,245 million (5,323). Currency-adjusted sales
increased by 19 percent, with organic growth
accounting for 8 percent and the acquisition of
Cefla Retail Solutions contributing 11 percent. In
terms of geographic markets, Southern Europe
doubled its sales compared with the preceding
year through both strong organic growth and the
acquisition of Cefla Retail Solutions. Sales in East-
ern and Central Europe also increased during
the year by 27 and 16 percent, respectively, while
sales in UK & Ireland decreased by approximately
9 percent and sales in Northern Europe essential-
ly remained unchanged.
The Group’s operating profit amounted to
SEK 224 million (112) and profit after financial
items to SEK 156 million (0). Profit after financial
items was impacted by non-recurring items of
SEK-166 million (-208) pertaining to restructuring
costs, mainly attributable to the transformation
efforts under the One ITAB strategy. Excluding
non-recurring items, profit after financial items
amounted to SEK 322 million (208). Excluding
non-recurring items of SEK -166 million (-205), op-
erating profit amounted to SEK 390 million (317).
EBITDA, excluding non-recurring items of SEK -157
million (-202), totalled SEK656 million (578), cor-
responding to an EBITDA margin of 10.5 percent
(10.9). Profit after tax amounted to SEK103 million
(-22)
Profit for the year was positively impacted by
increased sales and our ongoing efforts to trans-
form the operations, including completed pro-
duction relocations and cost adaptations, more
shared ways of working and more efficient and
flexible market cultivation. The integration of the
acquired Cefla Retail Solutions has been suc-
cessful and its contribution to the Group’s earn-
ings during the year was in line with our expecta-
tions. At the same time, the sharp increase in raw
material prices during the first two quarters of the
year and shortages of certain components have
had a negative impact on all of the Group’s mar-
kets. Targeted initiatives to coordinate purchas-
ing and price increases have been continuously
implemented. Earnings for the financial year were
also negatively impacted by weaker net financial
items during the first quarter of 2021, when finan-
cial expenses were affected by changed loan
terms and the settlement of interest rate swaps,
which had a negative impact of approximately
SEK 6 million on net financial items. The lower level
of indebtedness in the Group, which was partly
due to the recapitalisation of ITAB in spring 2021,
improved net financial items, and financial ex-
penses were significantly lower from the second
quarter of 2021 than in the preceding year.
Follow-up on guidance concerning One ITAB
On 10 July 2020, ITAB issued guidance regarding
an earnings improvement and its total restructur-
ing costs upon the implementation of the Group’s
One ITAB strategy and transformation. Based on
the conditions prevailing at that time, the guid-
ance indicated an underlying annualised EBITDA
improvement of SEK 270–330 million (compared
with EBITDA of SEK 516 million for 2019) once the
One ITAB transformation is fully implemented,
which is expected to take place in the middle of
2022. The total restructuring costs for One ITAB in
the 2020–2022 financial years were estimated at
SEK275–325 million. This guidance continues to
apply. The restructuring costs for One ITAB to date
total SEK320 million, of which approximately SEK
60 million refer to impairment losses in connec-
tion with restructurings.
CASH FLOW, FINANCING AND LIQUIDITY
Cash flow from operating activities amounted
to SEK-165 million (811). Cash flow was negative-
ly impacted by higher working capital, with the
value of inventories of raw materials in particular
growing during the year. The increase is mainly
due to the strong increase in sales and the focus
to satisfy customer needs despite disruptions
in the supply of raw materials and component
shortages combined with longer lead times.
Rising raw material prices during the year also
affected the inventory value together with a more
short-term need for slightly higher inventory levels
during the process of relocating production op-
erations as part of the restructuring work under
One ITAB. The build-up of the acquired compa-
ny Cefla Retail Solutions’ operations in a newly
established subsidiary and increased sales in
Southern Europe, where customer credit terms
are longer than in the rest of Europe, also had a
negative impact on working capital and cash
flow. Net debt excluding lease liabilities declined
to SEK 609 million (1,092). Net debt including
lease liabilities amounted to SEK 1,239 million
(1,748). The reduction in net debt is mainly due
to the new share issue completed during the first
quarter of 2021.
The Group’s cash and cash equivalents, includ-
ing granted unutilised credits, amounted to SEK
746 million (1,199) on the balance sheet date on
31 December 2021. The equity/assets ratio was
46 percent (31) and the share of risk-bearing cap-
ital was 47 percent (32).
36 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
Recapitalisation and rights issue in 2021
In December 2020, ITAB announced its intention
to carry out a recapitalisation of the Group in or-
der to strengthen the balance sheet, contribute
to greater financial flexibility and finance the One
ITAB transformation plan. For further information
about the reasons for the recapitalisation and
about how the net proceeds from the rights issue
were to be used, see the section “Background
and reasons” in the prospectus published by ITAB
on 15 February 2021.
The recapitalisation consisted of three main
parts: (i) the rights issue of a maximum of SEK768
million, (ii) the offset issue of a maximum of SEK
100 million, and (iii) the reclassification of all Class
A shares to Class B shares, which meant that ITAB
would only have Class B shares outstanding after
the recapitalisation.
At an Extraordinary General Meeting on 15 Jan-
uary 2021, the shareholders in ITAB Shop Concept
AB adopted an issue authorisation to facilitate
the implementation of the rights issue. This was
utilised by the Board on 9 February 2021 to adopt
the rights issue and the offset issue. The rights is-
sue was carried out by subscription rights during
the period 19 February 2021 to 8 March 2021,
where one share prior to the implemented recap-
italisation entitled the holder to subscribe for one
new Class B share in ITAB at a subscription price of
SEK 7.50 per share. The rights issue was fully sub-
scribed, which meant that ITAB raised approxi-
mately SEK 768 million before issue costs and that
the number of shares increased by 102,383,430
Class B shares to a total of 204,766,860 Class B
shares after the reclassification of Class A shares
to Class B shares (as described below). In De-
cember 2020, it was also announced that the
current principal owners, in conjunction with the
recapitalisation, would sell the majority of their
subscription rights in the rights issue to enable
the entry of the new strategic principal owner,
WQZ Investments Group Ltd. In January 2021,
a supplementary agreement was entered into
whereby all of WQZ Investments Group Ltd’s rights
and obligations related to ITAB’s recapitalisation
were taken over by the investment company
Aeternum Capital AS, which is a company relat-
ed to WQZ Investments Group Ltd. As reported in
the prospectus, Aeternum Capital AS undertook
to thereby invest approximately SEK 407 million
in the rights issue by acquiring and utilising the
majority of the subscription rights issued in con-
junction with the rights issue to the company’s
then-principal owners.
The offset issue, which was carried out in con-
junction with the rights issue, was targeted at
Pomona-gruppen AB (related to Board member
Fredrik Rapp), VIEM Invest AB (related to Board
member Anna Benjamin) and Övre Kullen AB
(related to Board member Petter Fägersten) in
order to repay the part of the shareholder loans
they had provided to ITAB in July 2020 that was
not repaid in cash with the net proceeds from the
rights issue. The subscription price of the offset
issue corresponded to the subscription price of
the rights issue, at SEK7.50 per share. The offset
issue meant that ITAB’s share capital increased
by approximately SEK 5.6 million through the issue
of 13,333,332 new Class B shares. Consequently,
after the rights issue and offset issue, the number
of shares in ITAB was 218,100,192 Class B shares
and the share capital was approximately SEK
90.9 million.
In conjunction with the recapitalisation, the
owners of Class A shares in the company, Pomo-
na-gruppen AB and Petter Fägersten together
with Övre Kullen AB, undertook to request the re-
classification of all their Class A shares to Class B
shares at a ratio of 1:1 during February 2021, in ac-
cordance with what is regulated in ITAB’s Articles
of Association. Following the reclassification and
recapitalisation, the company only had Class B
shares outstanding, whereupon each Class B
share entitles the holder to one vote at general
meetings.
On 12 March 2021, ITAB announced that the
recapitalisation had been fully completed and
that the rights issue of SEK 768 million had been
fully subscribed. ITAB’s offset issue of SEK 100
million was also fully subscribed and all Class A
shares were reclassified to the corresponding
number of Class B shares. The company’s Annual
General Meeting (AGM) in May 2021 adopted a
change to the Articles of Association, whereby
the company would only have one class of share
after the change.Following the recapitalisation,
ITAB has 218,100,192 shares outstanding. Aeter-
num Capital AS is ITAB’s largest shareholder with
nearly 25 percent of the shares.
INVESTMENTS
The Group’s net investments amounted to SEK103
million (45), of which SEK 40 million (0) is attribut-
able to corporate acquisitions and divestments
during the year. For more information about cor-
porate acquisitions and divestments, see Note 5.
DATA PER SHARE
Earnings per share totalled SEK 0.50 (-0.21). Equity
per share amounted to SEK 12.17 (15.69).
EMPLOYEES
The average number of employees for the year was
2,930 (3,030). For more information, see Note 8.
PARENT COMPANY
The Group’s Parent Company, ITAB Shop Con-
cept AB, does not conduct any operational activ-
ities. Its operations mainly comprise Group man-
agement and support functions for the Group.
The Parent Company’s net sales pertain to reve-
nue from subsidiaries and amounted to SEK 171
million (169). Profit after financial items amounted
to SEK-13 million (15), including dividends from
subsidiaries of SEK 46 million (50) and impairment
of shares and receivables from subsidiaries of SEK
-51 million (-106) in connection with the restructur-
ings in the Group. Net divestments/investments
totalled SEK0 million (-3), of which SEK0 million
(-3) is attributable to corporate acquisitions and
divestments.
ACQUISITIONS AND DIVESTMENTS
Cefla Retail Solutions
ITAB’s Italian subsidiary La Fortezza s.p.a. entered
into an agreement with Cefla soc. coop. on 8
October 2020 to acquire 81 percent of Cefla’s
business unit for retail solutions (“Cefla Retail
Solutions”). Cefla Retail Solutions primarily of-
fers interior design and checkout solutions to its
customers, which predominantly operate in the
grocery sector in southern Europe. Through the
acquisition and the collaboration with Cefla, ITAB
has strengthened its leading position in southern
Europe and created opportunities to offer ITAB’s
solutions to a wider customer base.
The acquisition was completed in January
2021, and the acquired business unit was carved
out from Cefla’s existing structure and transferred
to a newly established Italian limited liability com-
pany, Imola Retail Solution Srl, of which ITAB owns
81 percent and Cefla the remaining 19 percent.
The acquisition of Cefla Retail Solutions is consol-
idated in ITAB as of 1 January 2021. The positive
EBITDA effect on ITAB is expected to amount to at
least SEK 30 million, and the transaction will cre-
ate opportunities for further synergy effects in the
coming years. ITAB has the right to acquire Ce-
fla’s minority stake in Imola Retail Solution three
years after the completion of the transaction.
Other acquisitions
In April 2021, a subsidiary acquired the remaining
15 percent of the partly owned company La For-
tezza Sudamericana S.A. (Argentina). The pur-
chase consideration amounted to EUR 2 million.
Cash flow was impacted in an amount of SEK -19
million in 2021.
Divestments
In connection with the restructurings in the
Group, ITAB sold 100 percent of the shares in the
company Pulverlacken i Hillerstorp AB through a
subsidiary in November 2021. The purchase con-
sideration amounted to SEK 8 million. The divest-
ment impacted operating profit by SEK0 million
and cash flow during the fourth quarter by SEK8
million.
See Note 5 for information about acquisitions
and divestments in the 2021 financial year.
ENVIRONMENTAL IMPACT
Proactive environmental work is conducted with-
in the Group with the aim of reducing the Group’s
environmental impact. The Group does not
pursue any reporting activities according to the
Swedish Environmental Code in the Parent Com-
pany or any of the Swedish subsidiaries.
Sustainability report and EU Taxonomy
ITAB has prepared a separate sustainability re-
port for 2021 in accordance with Chapter 6, Sec-
tion 11 of the Swedish Annual Accounts Act. ITAB’s
2021 Sustainability Report is available on ITAB’s
website, itabgroup.com/sustainability.
As of 1 January 2022, ITAB is eligible to disclose
certain information about their operations in ac-
cordance with the EU's Taxonomy for sustainable
investments. The ITAB Group presents this infor-
mation for 2021 in the Sustainability Report on
ITAB's website (as above).
RESEARCH AND DEVELOPMENT
The Group companies carry out continuous
product development – partly in collaboration
with customers and partly in-house – to develop
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FINANCIAL INFORMATION
new products and improve existing products.
Most of the Group’s product development relates
to self-checkout and lighting products as well as
digital solutions for physical stores. In 2021, SEK2
million (1) was capitalised as development ex-
penditure and recognised as intangible assets.
Amortisation of development costs totalling
SEK19 million (21) was charged to earnings.
SHARE AND OWNERSHIP STRUCTURE
ITAB’s shares were admitted to trading on the
First North exchange in 2004. Since July 2008, the
company's shares have been listed on Nasdaq
Stockholm. Following the conversion of all previ-
ous Class A shares to Class B shares as part of the
recapitalisation and the new share issue in spring
2021, ITAB only has one class of share outstand-
ing and the total number of shares on 31 Decem-
ber 2021 was 218,100,192. All shares are equally
entitled to a share of ITAB’s assets and earnings,
and entitle their holders to one vote per share at
general meetings of shareholders. The Articles of
Association stipulate no limitations on the num-
ber of votes each shareholder may cast at a gen-
eral meeting.
The 2021 Annual General Meeting (AGM) re-
solved to authorise the Board of Directors, on one
or more occasions, and with or without deviation
from the shareholders’ preferential rights, to de-
cide on a new issue of shares up to a maximum of
10 percent of the company’s outstanding shares.
The purpose of the authorisation to decide on
a new share issue is to increase the company’s
financial flexibility and to give the company op-
portunities for corporate acquisitions.
Pursuant to Chapter 6, Section 2a of the Swed-
ish Annual Accounts Act, listed companies are
required to disclose information concerning
certain circumstances that may affect opportu-
nities to take over the company through a public
takeover bid pertaining to shares in the com-
pany. ITAB’s creditors are entitled to terminate
granted credit facilities if the company’s shares
are delisted from Nasdaq Stockholm, or in the
event of a public takeover bid if the bidder se-
cures a holding of more than 30 percent of the
number of shares in the company or controls at
least 30 percent of the votes in the company. In
other respects, the company has not entered
into any significant agreements with suppliers or
employees that would take effect or change or
cease to apply or stipulate payment of financial
compensation should the control of the compa-
ny change due to a public offer for the shares in
the company.
At 31 December 2021, Aeternum Capital AS
held 24.9 percent of the shares and votes, Pomo-
na-gruppen AB 17.4 percent of the shares and
votes, and Petter Fägersten with companies and
family 11.3 percent of the shares and votes in ITAB.
No other shareholder had any direct or indirect
holdings in the company that represented more
than one tenth of the total number of votes. At
31 December 2021, ITAB had 5,308 shareholders
(4,341).
For information about the recapitalisation in
2021 including the rights issue, offset issue and
reclassification of all Class A shares to Class B
shares, see above. Further information about
ITAB’s shares, share price development and own-
ership structure as of 31 December 2021 are pre-
sented in the section “The ITAB share” on pages
30-31.
Repurchases of own shares
The 2021 AGM resolved to authorise the Board
to make decisions on the acquisition and con-
veyance of own shares. The authorisation is in-
tended to give the Board increased leeway in its
work with the company’s capital structure and,
if deemed appropriate, to enable share-based
incentive programmes for the Group’s employ-
ees or the acquisition of businesses through
payments with the company’s shares. The Board
of Directors shall, on one or more occasions, be
able to make such decisions ahead of the 2022
AGM. For repurchased treasury shares, all rights
associated with the shares cease to apply until
the shares are reissued.
At 31 December 2021, ITAB had no repurchased
treasury shares.
GUIDELINES FOR REMUNERATION TO SENIOR
EXECUTIVES
The Board shall prepare proposals for guidelines
for remuneration to senior executives at least ev-
ery four years, or before that if there is a need for
significant adjustments, and present the propos-
al for resolution at the AGM. The guidelines shall
apply until new guidelines have been adopted
by an AGM. The guidelines shall promote the
company’s business strategy and the safeguard-
ing of the company’s long-term interests, includ-
ing its sustainability. The remuneration shall be
on market terms and may consist of the following
components: fixed cash salary, variable cash re-
muneration, pension benefits and other benefits.
The level of remuneration for individual execu-
tives must be based on factors such as position,
competence, experience and performance.
Additionally, a general meeting of shareholders
may – irrespective of these guidelines – resolve
on, among other things, share-based or share
price-based remuneration.
The guidelines for remuneration and other em-
ployment conditions for senior executives were
adopted by the 2021 AGM in accordance with
the Board’s proposal. The guidelines are present-
ed in full in Note 8 on pages 66-67.
The Board of Directors has no intention to pro-
pose any amendments to the guidelines for
remuneration of senior executives ahead of the
AGM in 2022.
Remuneration Report for 2020
ITAB’s Remuneration Report 2020 provides an
overview of how the guidelines for remuner-
ation to senior executives, as adopted by the
2020 AGM, have been applied during the year.
The Remuneration Report was adopted by the
2021 AGM and is available on ITAB’s website
itabgroup.com.
DIVIDEND POLICY AND DIVIDENDS 2021
Over a longer period, dividends should follow the
company’s result and correspond to at least 30
percent of the company’s profit after tax. Howev-
er, dividends will be adjusted to the company’s
investment requirements and any share repur-
chase program.
The Board of Directors proposes to the 2022
AGM that no dividend be paid for the 2021 finan-
cial year.
RISKS AND UNCERTAINTIES
Risk is defined as an uncertainty that an event
will occur, which could impact ITAB’s capacity
to achieve the objectives it has set. Risks are in-
herent to all operations and must be managed
efficiently. ITAB’s risk management is aimed at
avoiding, preventing and limiting risks that ad-
versely impact its operations.
ITAB performs an overall risk assessment annu-
ally, through which the company identifies and
assesses risks that are detrimental to the attain-
ment of ITAB’s goals. The identified risks are as-
sessed based on the following two criteria:
• The probability that the risk will occur
• The consequences for ITAB if the risk scenario
should occur
ITAB’s Group management identifies conceiv-
able events that could impact the company’s
operations. These events are evaluated and a
number of control activities established (risk-lim-
iting measures) with the aim of managing and
counteracting the identified risks. For each iden-
tified risk, a corresponding activity to counteract,
limit, control and manage the risk concerned is
then developed. An assessment of the efficiency
of control activities is to be performed annually.
The Group CFO is responsible for presenting the
results of the assessment to the Audit Committee
and the Board.
The risks, uncertainties and important circum-
stances that are deemed significant for the
Group’s operations and future development are
described below. The risks relate to ITAB’s opera-
tions, industry and markets, and further include
operational risks, legal risks, regulatory risks, risks
related to corporate governance and tax risks.
The financial risks are managed by the finance
policy adopted by the Board of Directors. A more
detailed account of the Group’s significant finan-
cial risks can be found in Note 4.
Risks related to ITAB’s operations, industry and
markets
ITAB is exposed to risks related to changes in the
retail market, geopolitical circumstances and
macroeconomic factors
ITAB offers shop solutions and concepts to cus-
tomers operating in the retail industry and ITAB’s
operations are therefore affected by changes
in the retail market, especially in Europe, but
also in other parts of the world, such as USA,
China and Argentina. In the last decade, the
retail market has been affected by the growth
of online shopping and its impact on consumer
preferences and behaviours. There has been a
transition in large parts of the retail market from
large, solely physical stores to smaller stores with
digital elements and interconnection with online
stores. Changing consumer preferences and
behaviours entail that ITAB’s current and future
customers require that ITAB can offer new types
of solutions and concepts, which in turn places
38 ITAB
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FINANCIAL INFORMATION
demands on, among other things, ITAB’s project
management and production. As an example,
in recent years, ITAB’s production facilities have
had to be transformed from mainly working with
large volumes and fewer orders for the roll-out
of completely new stores to having a more flex-
ible production with more, but smaller, orders
for more project-based purchases. The fact that
consumers are increasingly expecting and de-
manding that ITAB’s customers, especially larger
retail chains, take responsibility for the entire sup-
ply chain from a sustainability perspective entails
that ITAB’s customers are increasingly demand-
ing sustainable manufacturing processes, good
working conditions and sustainable choices of
materials and raw materials. It is crucial for ITAB
to be able to predict and adapt to the changing
preferences and behaviours of consumers, and
in turn customers, in a timely manner, in order to
be able to retain its current customers and attract
new customers.
The demand for ITAB’s solutions, products
and services is affected by general macroeco-
nomic factors and other factors, including re-
cession, inflation, deflation, general domestic
and international political conditions, general
weakness in retail markets and changes in con-
sumer purchasing power and preferences. Any
uncertainties regarding future economic pros-
pects that affects consumer spending habits,
including pandemics, could have an adverse
effect on consumer purchases in the retail sec-
tor, particularly in physical stores, which could
affect ITAB’s customers and in turn adversely
affect ITAB’s operations, financial position and
operating profit. For additional information on the
impact of the COVID-19 pandemic on ITAB, see
the section “ITAB is exposed to risks related to the
COVID-19-pandemic”.
Changes in the political situation, wars or
armed conflicts in the regions or countries where
ITAB operates, or political decisions affecting an
industry or country, could materially impact the
sales or associated costs of ITAB’s shop solutions,
products and services. ITAB’s net sales derive
mainly from sales to customers established in Eu-
rope, ITAB’s suppliers of metal, which is an import-
ant raw material for ITAB’s operations, are found
mainly in Italy, Sweden and the Czech Republic,
and ITAB’s production is conducted mainly in
Scandinavia and Central Europe. Examples of
such changes are political instability between
major countries, such as between USA, Russia
and China, which has resulted in an increase of
trade barriers in the form of increased tariffs in re-
cent years, and Russia's invasion of Ukraine and
the sanctions and other measures by the outside
world against Russia due to this. Other recent
political events includes the United Kingdom’s
exit from the EU (“Brexit”), which has created un-
certainty regarding the future trade policy with
the UK, as well as stringent border controls, for ex-
ample, due to COVID-19. There is a risk that wars
and armed conflicts, sanctions and political de-
cisions may prevent or limit ITAB’s opportunities to
conduct its operations and market its solutions,
products and services. Wars, political upheaval,
changes in laws due to political agendas, such
as regarding environment, taxation, local labour
hiring requirements, and other factors, such
as trade barriers, sanctions and customs duty,
could adversely affect ITAB’s profit.
ITAB is exposed to risks related to the implementa-
tion of the Group’s strategy
As described in the section “ITAB is exposed to
risks related to changes in the retail market, geo-
politicial circumstances and macroeconomic
factors”, the retail market in which ITAB operates
has changed over the past decade, among oth-
er things, through the growth of online shopping
and its impact on consumer preferences and
behaviours. It is crucial for ITAB to be able to pre-
dict and adapt to the changing preferences and
behaviour of consumers, and in turn customers,
in a timely manner, in order to be able to retain
its current customers and attract new customers.
To meet the changing market, ITAB has devel-
oped the One ITAB strategy, including a transfor-
mation plan, which focuses on changing ITAB’s
operations so that the Group can successfully
meet the changing retail market by focusing on
improving flexibility in production and delivery,
increasing internal efficiency and improve the or-
ganisational structure. Until the end of 2021, ITAB’s
non-recurring costs related to the One ITAB strate-
gy amounted to approximately SEK320 million to
date and the strategy and transformation plan is
expected to be associated with additional costs
in 2022. The successful implementation of One
ITAB and the Group’s future strategies depends,
among other things, on ITAB’s ability to predict
the developments in the retail market and meet
customer demand in the market in which it oper-
ates as well as its ability to change ITAB’s organi-
sations and processes where necessary. If ITAB is
unable to successfully implement the One ITAB
strategy or future strategies for continued profit-
able growth, this may entail that the strategy work
instead burdens the Group’s operating profit and
that ITAB fails to adequately adapt to the chang-
ing market, which in turn could have an adverse
effect on ITAB’s operations, brand, reputation
and profit as well as ITAB’s ability to maintain its
market share and competitiveness.
ITAB is exposed to competition
ITAB's markets are competitive and fragment-
ed in such a way that ITAB competes directly
with other companies that offer shop solutions
and concepts as well as with companies that
provide such products and services that ITAB
provides and develops, for example, entrance
and exit systems, checkouts and lighting, and
digital solutions for physical stores, such as digi-
tal queuing systems in physical stores. There are
several known competitors to ITAB in both existing
and new markets. In addition, there may be oth-
er competitors, products or services that aim to
meet the same needs that ITAB meets and that
are not yet known to ITAB. The fact that ITAB’s mar-
kets are fragmented and that there are a range
of different companies that directly or indirectly
compete with ITAB means that ITAB’s customers
may, without any major obstacles, turn to any
of ITAB’s competitors if ITAB’s solutions or pricing
and lead times do not meet customer expecta-
tions. There is a risk that competitors, both known
and unknown, will develop more attractive and
efficient solutions, products or services similar
to those that ITAB develops and offers. ITAB’s
competitors may also have certain competitive
advantages, such as greater financial, produc-
tion, marketing and distributions resources than
ITAB, which may give them better conditions to
withstand unfavourable economic conditions,
to compete more effectively with price and pro-
duction, and/or to react to changes in consumer
preferences and behaviours, and thus customer
demand, faster than ITAB. If any of these risks were
to materialise, they could entail that ITAB’s market
position weakens, which, depending on the ex-
tent, could have a major impact on ITAB’s future
ability to generate revenue and have a material
adverse effect on ITAB’s operating profit.
ITAB is exposed to risks related to certain major
customers
Most of ITAB’s customers in terms of sales are ma-
jor chain stores that operate in the retail trade.
Many of these operate internationally and have
stores in several countries. During 2021, the sales
to ITAB’s largest customer accounted for approx-
imately 12 percent of the Group’s total sales.
Apart from the largest customer, sales to any oth-
er individual customer did not account for more
than 6 percent of the total sales during the year.
ITAB has long-term relationships with sever-
al of its customers, often through the signing of
framework agreements. To a limited extent, ITAB
has signed customer agreements that regulate
a long-term commitment for the customer to pur-
chase shop solutions, products and/or services
from ITAB. However, most agreements are signed
for each individual shop solution, product and/
or service. ITAB is thus dependent on maintaining
good relationships with its customers.
If a major customer reduces its use of ITAB’s
solutions, products or services, terminates an
existing agreement or terminates the relationship
with ITAB in its entirety, this could adversely affect
ITAB’s operations and financial position. In addi-
tion, bankruptcy, liquidation or any other deteri-
oration of a major customer’s profit or financial
position may result in a significant loss of revenue
for ITAB and force ITAB to limit or terminate its busi-
ness relationship with the customer. All the above
events could adversely affect ITAB’s operations
and financial position.
ITAB is exposed to risks related to its production
facilities and production costs
ITAB has 15 production facilities in 12 different
countries at present. The production facilities
mainly work with wood production for interior
decor, metal production for interior decor and
checkout counters as well as electronics for light-
ing. The production facilities are mostly located
in Europe, two are located in China and one in
Argentina. In addition, ITAB has four facilities for
assembly and distribution in Europe. These fa-
cilities employ a considerable portion of ITAB’s
employees.
The production facilities are a central function
in the Group and the production facilities are in
continuous operation. The production facilities
may be subject to different types of disruptions
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FINANCIAL INFORMATION
that entail production stoppages, such as op-
erator errors, accidents, fires, theft, burglary,
machinery breakdown, unintentional release of
substances harmful to health or environment, civ-
il unrest, civil disobedience, wars and armed con-
flicts, natural disasters (including earthquakes,
flooding, lighting strikes, snowstorms or other
natural disasters or other force majeure events),
cyberattacks or IT system disruptions, terrorist at-
tacks, strikes, transportation disruptions and pan-
demics. If the aforementioned or other reasons
lead to disruptions in production or production
stoppages in the production facilities, this could
entail that the Group is unable to fulfil its obliga-
tions to the customer in a timely manner or at all.
ITAB’s production is dependent on raw mate-
rials, which exposes ITAB to risks related to price
variations and supply disruptions for such raw
materials that are needed for ITAB’s operations,
which may affect ITAB’s production costs. Raw
material prices fluctuate based on supply and
demand in the world market, which in turn is af-
fected by factors such as transport and produc-
tion chain dynamics as well as wars, regulatory,
political and country-specific factors. In 2021, the
COVID-19 pandemic led, for example, to disrup-
tions in the supply chain, longer lead times and
shortages of certain raw materials and elec-
tronic components, which in some cases result-
ed in difficulties for ITAB to live up to customers’
wishes for speedy deliveries. Even though many
of ITAB’s customer agreements contain raw ma-
terial clauses, a significant increase in the price
of, or supply disruptions of, relevant raw materials
may entail that ITAB needs to adapt its working
methods and choice of raw materials in order to
continue to have an attractive customer offering.
Within ITAB’s line of business that works with light-
ing, ITAB develops and produces its own power
supply units and LEDs (Light-Emitting Diodes),
together with optical solutions for these. ITAB
conducts quality tests and handles the certifica-
tion process for these. There is a risk that defects
in ITAB’s products will not be detected and pass
relevant quality tests and inspections. If ITAB cer-
tifies, launches or sells lighting or other products
that prove to be affected by product defects,
there is a risk that the Group may need to recall
such products, which would entail increased
costs, risk of litigation, deteriorating reputation
and reduced sales. If any of the mentioned risks
were to be realised, with the result that the Group
does not fulfil its obligations to customers, it may
lead to loss of income, an adverse effect on cus-
tomer relationships, loss of customers, costs for
breach of contract, negative publicity and an
overall adverse effect on the Group’s operating
profit and profitability.
ITAB is exposed to risks related to distribution and
logistics
ITAB operates in global markets and its customers
are mainly located in most of Europe. As ITAB’s
customer offering includes offering all-inclusive
solutions, including the idea for a shop fitting
concept, development and production of the
concept, and finally the installation of the con-
cept on-site at the customer, ITAB is highly de-
pendent on reliable and orderly processes and
logistics systems. ITAB’s processes and logistics
systems, which the company continuously re-
views within the framework of the One ITAB strat-
egy in order to improve them and to address any
shortcomings in them, including, among other
things, contact and coordination with relevant
suppliers, such as suppliers of raw materials and
transport services, and relevant production facili-
ties, product testing, packaging and installation.
The fact that ITAB offers all-inclusive solutions
globally also entails that several of the Group’s
subsidiaries are often involved in the same cus-
tomer assignment, which requires the Group to
be able to coordinate internally on production,
distribution, installation and such.
ITAB’s processes and logistics systems are de-
pendent on the employees’ knowledge and
computerised systems. If the employees current-
ly managing the systems were to leave ITAB or if
errors or disruptions were to occur in any of the
relevant systems, for example as a result of soft-
ware malfunction, natural disaster, vandalism,
sabotage, ransomware or human error, this may
affect ITAB’s ability to deliver in accordance with
what has been agreed with the customer.
ITAB uses external suppliers for the transport of
input goods to ITAB’s production facilities and the
delivery of products to customers. There is a risk
that difficulties or problems with ITAB’s suppliers
regarding their operations (for example strikes),
financial position (including liquidation or bank-
ruptcy), labour market relations as well as polit-
ical changes and natural disasters, including
fire, flooding or other events beyond the Group’s
control, could cause disruptions or interruptions
to deliveries, which in turn may affect the Group’s
ability to deliver in accordance with what has
been agreed with the customer.
If ITAB fails to coordinate its operations in any
of the above-mentioned ways and consequent-
ly fails to deliver the correct type, quantity and
quality of its solutions, products and services in a
timely manner, this may have an adverse impact
on ITAB’s reputation, financial position and profit.
ITAB is exposed to risks related to corporate acqui-
sitions and integration of new business units
ITAB has historically carried out several corporate
acquisitions such as Nordic Light, New Store Eu-
rope and La Fortezza Group. In 2021, ITAB com-
pleted its acquisition of 81 percent of Cefla soc.,
Coop’s business unit for retail solutions (Cefla
Retail Solutions) through a newly founded com-
pany. ITAB may carry out additional acquisitions
in order to expand its offering and thus support fu-
ture growth and profitability. Acquisitions expose
ITAB to several risks. For example, ITAB makes cer-
tain assumptions and takes certain positions in
connection with an acquisition, based on its due
diligence of the company to be acquired and
other information available at the time of acqui-
sition, including assumptions on future income
and operating costs. These assumptions and po-
sitions involve risks and uncertainties that could
prove to be incorrect, entailing that ITAB cannot
achieve all the expected advantages of the ac-
quisition. The risks in connection with a corporate
acquisition include, among other things, risks
linked to competitiveness (quality, performance
and market share). The expected economies of
scale and cost savings could fail to materialise,
either in part or completely, or be achieved later
than estimated. This could result in higher costs
than planned. In addition, ITAB’s acquisition of
companies could expose the Group to risks as-
sociated with the integration of the acquisitions,
including an inability to retain key personnel
from acquired companies, disruptions to ITAB’s
current operations, merger costs, organisational
expenses, unexpected costs as well as difficulties
in achieving the expected synergy effects of the
acquisitions and successfully implementing the
Group’s strategy after the acquisition.
ITAB is exposed to risks related to the COVID-19
pandemic
As a result of the COVID-19 pandemic, states,
public authorities and other organisations have,
for extensive periods since spring 2020, imposed
guidelines, recommendations, prohibitions and
taken other actions for the purpose of limiting
the spread of infection. Such actions include,
for example, recommendations and restrictions
regarding transportation and travel, closing of
workplaces, schools and other institutions, and
restrictions on the number of participants at, or
a complete ban of, public gatherings and public
events.
With some exceptions, most companies in the
Group had a clear decline in order intake in 2020.
The impact of COVID-19 on ITAB’s operations in-
cluded reduced demand and closure of certain
customers’ operations and parts of ITAB’s own
operating activities. For example, ITAB’s produc-
tion facilities in Italy, France, Russia, Argentina
and China had to be closed for some time in the
second quarter of 2020 due to the restrictions in
effect at that time. In 2020, ITAB implemented a
number of measures to address the situation
and reduce its costs. ITAB adapted its operations,
among other things, through a reduction of the
workforce and lay-offs. Despite the measures, the
economic downturn and concerns about the
pandemic had a clear adverse impact on ITAB’s
operating profit and financial position in 2020.
Through robust organic growth and the acqui-
sition of Cefla Retail Solutions, the sales trend for
ITAB was relatively strong in 2021 as societies and
the retail sector opened up following the wide-
spread lockdowns as a result of the pandemic.
Customers’ faith in the future and willingness to in-
vest has gradually recovered, which was reflect-
ed in a strong order intake for ITAB for the full year.
The extent to which the COVID-19 pandemic
will continue to affect ITAB’s operations, profit and
financial position will depend on several factors
which ITAB currently cannot identify or assess with
precision or certainty. However, as stated in the
sections “ITAB is exposed to risks related to chang-
es in the retail market, geopolitical circumstanc-
es and macroeconomic factors” and “ITAB is
exposed to risks related to the implementation of
the Group’s strategy,” ITAB is exposed to changes
in macroeconomic factors as ITAB operates in a
global market. Factors that may impact ITAB are,
among other things, the pandemic’s scope and
duration, and any worsening of negative effects
on financial, political and market conditions. A
40 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
continued adverse effect on the global econo-
my is likely to have a continued adverse effect on
ITAB’s operations, profit and financial position
ITAB is dependent on attracting and retaining
dedicated and competent personnel
ITAB’s operations and future success are largely
dependent on several key individuals who have
extensive knowledge of the shopfitting and
store equipment industry in general and of ITAB
in particular. ITAB is particularly dependent on
the knowledge, experience and commitment of
its senior management. There is fierce competi-
tion for highly qualified personnel in several of
the areas in which ITAB’s senior executives and
other key staff have specialist knowledge. For
example, ITAB’s operations are dependent on
key individuals within the Group’s development
units and ITAB’s production-intensive operations
are dependent on the knowledge that certain
key individuals within the Group possess in wood
production for interior decor, metal production
for interior decor and checkout counters as well
as electronics for lighting.
If one or more key individuals leave or reduce
their involvement in the Group, if ITAB’s costs for
retaining, training and recruiting employees
should increase or if ITAB should fail to attract and
retain qualified key individuals and other com-
petent personnel within, among other things,
production on acceptable terms, this could have
an adverse effect on ITAB’s future prospects and
profit, and lead to postponements in the develop-
ment of ITAB’s solutions, products and services.
ITAB is exposed to risks related to IT systems and
cybersecurity
ITAB’s business and operations are particularly
dependent on the reliability, function and contin-
ued development of ITAB’s IT systems regarding
data communication and enterprise systems
that the Group uses for the workflow, from order
to delivery. The Group’s daily operations are also
affected by the functions of the IT systems relat-
ing to, among other things, finance, purchasing,
warehousing and sales support. ITAB engages
several external third parties who assist in effi-
ciently managing these systems. If the IT systems
do not work as expected, ITAB could be affected
by disruptions in production and administration.
ITAB's operations may be disrupted if the Group’s
IT systems are not managed and operated as ex-
pected by ITAB or its suppliers, or due to external
factors, including cyberattacks or malicious soft-
ware. This could entail that deliveries to the cus-
tomer do not take place in a timely manner or at
all, that sales or market share are lost or that ITAB’s
reputation is damaged, which could adversely
affect ITAB’s operations and profit.
If ITAB or any of its contracted third parties is
unable to maintain or develop its IT systems, this
may affect ITAB’s ability to sell to current and
future customers, or impact ITAB’s brand and
reputation, the Group’s ability to conduct its op-
erations in an efficient manner, or to manage its
inventory and finances, and to buy, sell, produce
or deliver, or to issue invoices on their solutions,
products and services in an efficient manner as
well as maintain a cost-efficient business model
while enabling business growth.
As mentioned, ITAB is exposed to risks related
to cybersecurity threats, which could jeopardise
the confidentiality, availability and integrity of
data and other information, including personal
data, customer information and confidential
business information. It is of great importance
that ITAB’s IT providers can maintain and update
the Group’s current IT systems and that the Group
has efficient firewalls and antivirus programs.
However, ITAB could be affected by intrusion or
damaged by computer viruses and system at-
tacks (such as attacks by malicious software),
accidents, disasters or unauthorised physical or
electronic access. If ITAB’s cybersecurity proce-
dures are inadequate, this could lead to unau-
thorised access to its systems, improper use of its
data, deletion or alteration of stored information
or other interruptions in its operations.
ITAB is dependent on its good reputation
ITAB’s reputation is an important asset that, in
ITAB’s opinion, contributes to distinguishing its
solutions, products and services from those of
its competitors. The Group’s reputation also con-
tributes to ITAB’s work to retain and attract cus-
tomers, employees and suppliers in the markets
where ITAB operates. However, ITAB’s reputation
could be damaged if ITAB fails to deliver in accor-
dance with applicable agreements, if there are
incidents in the business or as a result of actions
or statements by, or about, current or former cus-
tomers, competitors, partners, suppliers, coun-
terparties in litigation, authorities or employees.
There is also a risk that negative publicity about
ITAB or its management in connection with, for
example, system errors, cyberattacks or litiga-
tion, even if it is based on a rumour or a misun-
derstanding, may have an adverse impact on
ITAB’s operations. Damage to ITAB's reputation
may be difficult and time-consuming to restore,
and it may divert the attention of executive man-
agement from the operations or make current or
potential customers reluctant to enter into agree-
ments with ITAB. This may result in a loss of oppor-
tunities for growth and income as well as affect
ITAB’s possibilities of raising financing on favour-
able terms or at all. If any above-mentioned risks
were to materialise, this could have a materially
negative effect on ITAB’s financial position.
ITAB is exposed to risks related to insufficient insur-
ance coverage
ITAB’s insurance policies include insurance cov-
erage for risks related to ITAB’s operations, such
as general liability, property, accidents, trans-
port, business travel and Board and manage-
ment liability. However, ITAB is not fully insured
against all conceivable risks and the Group may
be subject to claims in excess of or not covered by
the Group’s current insurance coverage. ITAB’s
operations are production-intensive and the
Group’s employees deal with raw materials, oth-
er materials and completed products that cor-
respond to large values in the daily operations.
The Group may, due to its global operations, the
scope of the Group’s production, which in some
cases is subject to permits and the large volumes
of raw materials and electrical components that
the Group works with, become subject to legal
or regulatory actions, supervisory authorities
or third parties, which may not be covered by
ITAB’s current insurance coverage. Furthermore,
damage caused to ITAB could, even if covered
by ITAB’s insurance coverage, result in increased
insurance premiums. Thus, if an event occurs
that causes damage in excess of or not covered
by the current level of insurance, this may entail
that ITAB cannot reimburse the cost or entail an
adverse effect on ITAB’s operations, profit and fi-
nancial position.
Legal risks
ITAB is exposed to risks related to sanctions and
anti-corruption regulations
ITAB’s global operations, in particular the geo-
graphic spread of the Group, expose ITAB to risks
attributable to sanctions and corruption.
ITAB’s marketing and sales of its shop solutions,
products and services in certain jurisdictions,
such as countries in South America and Asia,
increases exposure to corruption. The corruption
risks are particularly high in connection with pro-
curement procedures for contracts of significant
value. The Group often engages agents to assist
with sales operations in areas where the Group
does not have a local presence and/or where
the practice of the relevant market functions by
sales through agents. The risk of corruption is
further increased by the Group’s use of agents
in some of its markets, among others, in Italy and
the Middle East, as the Group may be liable for
corrupt practices by their agents and their em-
ployees. The Group has implemented a Code
of Conduct that regulates zero-tolerance of all
forms of bribes, bribery and corruption.
If the Group’s employees or agents do not com-
ply with ITAB’s Code of Conduct and if undue
benefits are offered by the Group, or on behalf of
the Group, this may be punishable for the Group
and its employees and Directors of the Board, un-
der Swedish or other applicable anti-corruption
law.
In recent years, financial sanctions have be-
come an essential risk factor for companies that
engage in international trade. It cannot be ruled
out that ITAB, due to its geographical spread and
international sales, may be included on sanc-
tion lists due to unintentional trading, directly
or indirectly through agents, with customers in
areas subject to targeted sanctions. The politi-
cal situation in parts of the world, particularly re-
garding the military conflict between Russia and
Ukraine, is at present uncertain. The application
of reinforced measures for control of exports and
sanctions, and any other measures against Rus-
sia from at number of other jurisdictions, includ-
ing the EU and USA, due to the military conflict in
Ukraine may have effect on ITAB's ability to main-
tain its operations in Russia.
Violations of applicable anti-corruption or
sanction laws may lead to fines and other crim-
inal, civil or administrative penalties and also
adversely affect ITAB’s reputation and financial
position.
41ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
ITAB is exposed to risks related to regulatory com-
pliance, and import and export
ITAB has operating subsidiaries in 24 countries in
Europe, South America, Asia and USA, produc-
tion facilities in 12 different countries in Europe,
China and Argentina, and customers primarily
in European countries, but also in the USA, China
and Argentina. The fact that ITAB conducts its op-
erations in a global environment means that it is
subject to different regulations in several different
countries and jurisdictions, and consequently
is also exposed to risks related to the implemen-
tation of new or amended laws or regulations in
these countries and jurisdictions. For example,
the Group, through some of its Swedish subsidiar-
ies, conducts operations that are exposed to li-
ability-related risks associated with pollution that
the business has historically created or creates.
Corresponding liability may exist in accordance
with rules applicable in the other jurisdictions
where ITAB conducts operations. In addition, the
Group manages personal data about, for exam-
ple, its employees, customers and suppliers, and
is therefore obliged to comply with data protec-
tion and privacy legislation in the jurisdictions in
which ITAB conducts operations, including the
General Data Protection Regulation (EU) (GDPR).
If ITAB’s compliance with laws and regulations
related to the environment or data protection or
other laws and regulations applicable to, among
other things, the Group’s production, work envi-
ronment and certification is insufficient, or is con-
sidered insufficient, ITAB may be subject to fines,
penalties and other sanctions, third party claims,
lost reputation, loss of current customers and
the risk of an adverse impact on potential new
customers’ inclination to enter into agreements
with ITAB. It is inherently difficult to predict the out-
come of legal, regulatory and other proceedings
or claims. If the outcome of any future proceed-
ing turns out to be negative for ITAB, this could
have a material adverse impact on the Group’s
financial position and operating profit.
Amendments of laws and regulations, or the
interpretation of these, concerning customs duty,
tariffs or the implementation of such actions in
markets where ITAB conducts operations, or oth-
er increased barriers to trade, could impair ITAB's
ability to export or import goods and thus lead to
higher costs than competitors in the affected rel-
evant markets, reduce ITAB’s ability to compete
successfully and adversely affect sales and reve-
nue. For example, ITAB’s operations are affected
and may be further affected by new tariffs and
other changes in US trade policy and possible
countermeasures by affected countries, such as
China and Russia and restrictions on trade due to
the military conflict between Russia and Ukraine,
and that Brexit may result in further changes in
commercial law and trade policy that could
have an adverse impact on ITAB’s operations re-
lated to the UK. ITAB’s ability to import and export
products in a timely and cost-efficient manner
may also be affected by the situation in ports or
by other difficulties affecting transport providers,
including port, freight and warehousing capac-
ity, labour market disputes and blockages of
work, political instability, difficult weather condi-
tions or safety requirements within the EU, USA,
China and other countries.
These problems may delay the import or ex-
port of products or require ITAB to find alternative
ports, warehouses or transport providers to avoid
production interruptions or delayed deliveries to
customers. Such alternatives may not be avail-
able at short notice or result in higher transport
or warehousing costs, which could have an ad-
verse impact on ITAB’s operations and financial
position.
ITAB is exposed to labour law risks
The average number of employees in the Group
in 2021 amounted to 2,930 persons in 24 countries
and the employees are covered to some extent
by collective agreements or other agreements
with labour organisations. In Sweden, the em-
ployees of all but two companies are covered by
collective agreements. There is a risk that ITAB will
not be able to maintain stable relations with the
trade unions, negotiate or renegotiate terms of
employment or pay agreements that meet the
trade unions’ expectations or demands, or will be
impacted by conflicts at the national level where
ITAB or its suppliers, distributors or other partners
may be involved in labour disputes and/or af-
fected by strikes and work stoppages before or
during a negotiation process.
ITAB may, in the future, be involved in further dis-
cussions and conflicts, resulting in strikes or other
industrial actions that could lead to operational
disruptions and delays. In addition, conflicts with
trade unions or labour organisations may arise as
a direct result of redundancy, for example, due to
efficiency measures or rationalisation within the
organisation, or discontinued production where
a process is not well managed and within the mu-
tual understanding of unions or organisations,
which could lead to ITAB’s reputation as an em-
ployer being damaged, resulting in industrial ac-
tions being taken and a worsening of ITAB’s rep-
utation and relations with labour organisations.
Legal disputes that lead to significant negative
publicity and damage the Group’s reputation
may ultimately lead to production disruptions
and increased payroll costs, and therefore have
a material adverse effect on the Group’s opera-
tions, operating profit and financial position.
ITAB is exposed to risks related to taxation
The handling of tax issues within the Group is
based on interpretations of current and relevant
taxation legislation, tax treaties and other tax
regulations, and the positions of the authorities
concerned, such as the Swedish Tax Agency.
Furthermore, the Group regularly obtains advice
from independent tax experts on these matters.
ITAB and its subsidiaries are occasionally subject
to tax audits and reviews. There is a risk that tax
audits or reviews will result in additional tax being
charged or made deductions being denied,
for example in relation to previously completed
acquisitions, reorganisations and intra-group
transactions.
In the event that ITAB’s interpretation of tax leg-
islation, tax treaties and other tax regulations, or
their applicability, is incorrect, or if one or more
authorities successfully make negative tax ad-
justments concerning a business unit within the
Group, or if applicable laws, treaties, regula-
tions or interpretations thereof or the adminis-
trative practice relating to these are changed,
including changes with retroactive effect, ITAB’s
past and present handling of tax issues may be
questioned. If tax authorities successfully present
such claims, this could lead to an increase in tax
expenses, including tax surcharges and inter-
est, and have a material adverse effect on the
Group’s operating profit.
The jurisdictions in which ITAB operates have
transfer pricing regulations which require that
transactions with related companies be made
on market terms. The management of matters re-
garding transfer pricing within the Group is based
on the OECD’s guidelines and national regula-
tions for transfer pricing as well as documented
principles for determining prices in related party
transactions. The Group regularly obtains advice
from independent experts on these matters.
Transactions between the Group’s companies,
such as distribution of products, management
services, intra-group loans and the use of intel-
lectual property, are made, in ITAB’s opinion, on
commercial terms through the application of
existing international guidelines and national
regulations. There is a risk that tax authorities in
some of the jurisdictions where ITAB operates will
form the opinion that the transfer pricing is not
made on market terms. If a tax authority success-
fully objects to such a pricing, this may result in an
increased tax expense, including tax surcharges
and interest. This could have a material adverse
impact on the Group’s net profit.
ITAB is exposed to health and safety risks
The work environment within ITAB’s operations is
instrumental to the health and safety of the em-
ployees of the Group, due to the risk of accidents
and incidents. This applies both to the physical
work environment as well as to social and psy-
chological aspects. ITAB is subject to regulations
in areas such as occupational health and safety
in the jurisdictions where ITAB conducts produc-
tion. For example, ITAB’s operations in Sweden
are regulated by, amongst others, the Swedish
Work Environment Act (1977:1160).
ITAB works actively to reduce the number of
accidents and reviews the safety procedures
of companies that report a higher number of
accidents. Furthermore, efforts are being made
at a local level to reduce the proportion of sick
leave within ITAB. Non-compliance with acts and
regulations in any of the jurisdictions in which the
Group operates may result in authorities issuing
orders for enforcement measures, imposing fees
or fines, and in some cases even imposing restric-
tions on the operations of the Group, which can
be serious and adversely affect ITAB’s financial
position.
ITAB is exposed to risks related to intellectual
property
ITAB’s operations are dependent on a number
of intellectual property rights, including but not
limited to a number of trademarks, patents, oth-
er protected information and company secrets
that are used in and for ITAB’s solutions, products
and services. ITAB may be unable to retain such
42 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
PROPOSED ALLOCATION OF PROFITS
PARENT COMPANY 2021
The following funds are at the disposal of the AGM (SEK):
Share premium reserve 1 083 388 816
Profit brought forward 695 267 740
Net profit for the year -54 043 699
TOTAL 1 724 612 857
The Board of Directors and CEO propose that these funds be distributed as follows (SEK):
Amount to be carried forward 1 724 612 857
TOTAL 1 724 612 857
The Board of Directors proposes to the 2022
AGM that no dividend be paid for the 2021
financial year.
ITAB’s dividend policy states that dividends
over a longer period should follow the
company’s result and correspond to at
least 30 percent of the company’s profit af-
ter tax. However, dividends will be adjusted
to the company’s investment requirements
and any share repurchase program.
DIVIDEND 2021
intellectual property rights, protected informa-
tion or company secrets. The Group’s intellectual
property rights could be declared invalid, cir-
cumvented or disputed. ITAB may also be unable
to successfully protect its trademark, company
name or company secrets, or achieve or main-
tain competitive advantages. When developing
some of ITAB’s solutions, products and services,
ITAB utilises its employees and consultants and
ITAB regulates the ownership of the intellectual
property created within the framework of em-
ployment and/or engagement through its em-
ployment and consulting agreements. There is a
risk that ITAB, in whole or in part, will not succeed
in protecting and/or securing the rights to inter-
nally generated intellectual property, which risks
entailing that competitors may offer similar solu-
tions, copy or make it impossible to use the intel-
lectual property or otherwise use ITAB’s solutions
or products.
The Group's use of intellectual property rights
may also constitute, or be alleged to constitute,
an infringement of third-party intellectual prop-
erty. The costs that could result from ITAB taking
or defending itself from legal action in the event
of an infringement of intellectual property rights
could be significant. If ITAB fails in this regard, ITAB
may be liable to pay royalties and/or damages,
and ITAB may also be prohibited from using the
intellectual property rights that have been prov-
en to infringe on third-party rights. If ITAB cannot
in an efficient manner protect its intellectual
property rights or if someone takes legal action
against ITAB for infringement of intellectual prop-
erty rights, this may have a material adverse ef-
fect on ITAB’s operations, financial position and
operating profit and lead to impairment losses of
the recognised intellectual property rights.
ITAB is exposed to risks related to disputes and
legal proceedings
ITAB conducts business internationally in both
mature markets, such as USA and several coun-
tries in Europe, as well as in emerging markets,
such as China and India, some of which may be
less politically stable. ITAB may be involved as a
counterparty in various jurisdictions. According-
ly, from time to time, ITAB risks being involved in
civil, work environment-related and regulatory
proceedings arising within the scope of its day-
to-day operations.
ITAB may be negatively affected by ongoing
and/or future disputes or legal proceedings re-
lating to, among other things, labour, intellectual
property, contractual or regulatory compliance
matters or other legal claims which may result in
potential obligations to pay damages and de-
fence costs.
If a claim were to be made against ITAB, re-
gardless of whether the claim leads to a material
legal responsibility being established, the claim
may lead to financial loss or negative publicity
for ITAB or significantly damage ITAB’s brand and
reputation, which could result in loss of revenue.
Furthermore, the handling of disputes and claims
is typically both costly and time-consuming and
could therefore entail that the senior executives
and Group company involved in such a dispute
cannot focus on the day-to-day operations to the
extent expected.
FUTURE OUTLOOK
The focus for ITAB over the next few years will be to
continue our work on the transformation and to
implement the restructuring in line with the One
ITAB strategy. Following the recapitalisation in
2021, the company has a considerably stronger
financial position, which will facilitate work on the
transformation.
Today, ITAB has a unique market position in
the industry. The market has been in a transfor-
mational phase for a number of years, charac-
terised by shorter foresight and reduced order
values. The new strategy, One ITAB, governs the
direction of the transformation to a modern and
cost-efficient ITAB with an even stronger position.
The COVID-19 pandemic has had a substantial
effect on society and ITAB over the past two years.
As socities and markets return to a new normal
situation,the operations are continiously adopt-
ed to new prerequisites in the spread of infection
and recommendations. The military conflict be-
tween Russia and Ukraine, and the pandemic's
further development and current market situa-
tion make the market development in the near
future difficult to assess. The transformation work
and One ITAB strategy are laying the foundation
for strengthening the position as the leading solu-
tions provider for the European retail market with
a focus on sustainable growth and increased
profitability.
SIGNIFICANT EVENTS AFTER THE END OF THE
FINANCIAL YEAR
New financial targets for ITAB
In conjunction with the preparation of the annual
accounts in February 2022, the Board of Directors
adoptd new financial targets that support the
Group’s ambition to establish ITAB as the retail
market’s leading solution provider.
The financial targets adopted by the Board are:
Growth: Average growth in net sales (CAGR) of
4-8 percent per annum over a business cycle.
Growth is to be achieved by sustainable organic
growth and strategic acquisitions.
Earnings: Average EBIT margin (operating profit
in relation to net revenue) of 7-9 percent over a
business cycle.
Capital efficiency: Average cash conversion ra-
tio (operational cash flow in relation to operating
profit before depreciation and amortisation) of at
least 80 percent over a business cycle.
Dividend policy: As before, dividends over a
longer period should follow the result and cor-
respond to at least 30 percent of the company's
profit after tax. However, dividends will be ad-
justed to the company's investment require-
ments and any share repurchase program.
Acquisition of Checkmark in Finland
On 28 February 2022, the ITAB Group acquired,
through its Finnish subsidiary ITAB Finland Holding
Oy, all shares in Oy Checkmark Ltd. Checkmark is
one of the leading suppliers of retail technology
solutions for checkouts and store guidance for
retailers in the Nordic region. Checkmark has
annual sales of approximately EUR 12 million and
has 44 employees. Closing took effect imme-
diately and the acquisition is expected to have
a marginal positive effect on ITAB’s earnings per
share during the 2022 financial year. See also
Note 35.
ITAB discontinues its operations in Russia
In the beginning of March 2022, ITAB decided to
discontinue its operations in Russia due to the in-
vasion of Ukraine. ITAB has a production facility
and sales offices in Russia with a total of approx-
imately 125 employees. The decommissioning
process began immediately with due conside-
rations towards employees, customers, and bu-
siness partners.
ITAB's sales in Russia amounted to approxima-
tely SEK 170 million in 2021, corresponding to
approximately 2.5 percent of ITAB's total annual
sales. Consequently, the decision to discontinue
the Russian operations will not have any signi-
ficant impact on the company's revenue and
profit. The decommissioning may involve some
write-downs. The decommissioning may involve
some write-downs.
No other significant events for the Group have
taken place after the end of the financial year.
FINANCIAL INFORMATION
43ANNUAL REPORT 2021
|
ITAB
CORPORATE GOVERNANCE REPORT
2021
SWEDISH CORPORATE GOVERNANCE CODE
AND ITAB CORPORATE GOVERNANCE REPORT
ITAB Shop Concept AB (publ) is a Swedish regis-
tered limited liability company, whose overall am-
bition is to create long-term value for sharehold-
ers and other stakeholders. The ITAB share is listed
on Nasdaq Stockholm in the Mid Cap segment.
ITAB applies the Swedish Corporate Gover-
nance Code (hereinafter referred to as the
“Code”). The Code is a component of self-regu-
lation within the Swedish business sector and is
based on a “comply or explain” principle. This
means that a company that applies the Code
may deviate from individual rules if it is deemed
to result in better corporate governance, but
must then explain the reasons for each deviation
reported.
This Corporate Governance Report for the 2021
financial year describes ITAB’s corporate gover-
nance, management and administration as well
as internal controls of financial reporting, and is
prepared in accordance with the Code’s recom-
mendations. The Corporate Governance Report
constitutes part of the formal annual report doc-
umentation and was reviewed by the company’s
auditors pursuant to Swedish Annual Accounts
Act.
CORPORATE GOVERNANCE, DIVISION OF RE-
SPONSIBILITIES AND ARTICLES OF ASSOCIATION
Good corporate governance involves ensuring
that companies are managed sustainably, re-
sponsibly and as efficiently as possible for the
shareholders. Trust among legislators and in soci-
ety that companies are acting responsibly is cru-
cial to the freedom of companies to realise their
strategies in order to create value. Trust among
existing and potential investors that this is taking
place is decisive for their interest in investing in the
companies. In this way, the business sector’s free-
dom to develop and its supply of venture capital
and expertise are safeguarded.
The aim of corporate governance in Swedish
listed companies is to create a clear division of
roles and responsibilities between shareholders,
the Board of Directors, Board committees and
executive management, and it is regulated by
a combination of written rules and practices. At
first instance, ITAB is to apply the Swedish Com-
panies Act and the rules that apply in the regu-
lated market in which the company’s shares are
listed for trading (Nasdaq Stockholm) as well as
best practices in the stock market. The disclosure
requirements to which ITAB is subject are found
in the Rule Book for Issuers published by Nasdaq
Stockholm, and the Code is a component of this
regulatory framework. At the same time, ITAB
shall, in the course of its operations, abide by the
provisions stipulated in the company’s Articles of
Association, which can be found in their entirety
on ITAB’s website, itabgroup.com.
Deviations from the Code
There are no deviations from the Code to report
for 2021.
ITAB’S CORPORATE GOVERNANCE STRUCTURE
The Swedish Companies Act states that there
should be three decision-making bodies in the
company: the general meeting of shareholders,
the Board of Directors and the CEO. There must
also be an inspection body – an auditor that is ap-
pointed by the AGM. The Act specifies the duties
of each body and the responsibility of the individ-
uals included in the company’s bodies.
Refer to pages 30-31 for information about the
ITAB share and ownership structure.
ANNUAL GENERAL MEETNG (AGM)
The AGM is the highest decision-making body
through which shareholders exercise their influ-
ence over the company. The body is superior in
relation to the company’s Board of Directors and
CEO. According to the Articles of Association, no-
CORPORATE GOVERNANCE
SHAREHOLDERS
GENERAL MEETING
BOARD OF DIRECTORSAUDITORS
CEO
GROUP MANAGEMENT
SUBSIDIARIES
NOMINATION COMMITTEE
REMUNERATION COMMITTEE
AUDIT COMMITTEE
GROUP STAFF UNITS
44 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
tices to attend a general meeting shall be pub-
lished by means of an announcement in Post-
och Inrikes Tidningar (Official Swedish Gazette)
and on the company’s website. Information that
a notice has been issued must be announced in
Dagens Industri. The statutory AGM passes reso-
lutions on the adoption of annual accounts and
consolidated accounts, discharge the Board of
Directors and CEO from liability, appropriation of
profits for the past year, election of the Board and,
when required, auditors, and other matters in ac-
cordance with the Swedish Companies Act and
the Articles of Association.
All shareholders registered in the sharehold-
ers’ register and who have given notice of at-
tendance may participate in the meeting and
vote according to the number of shares owned.
Shareholders who are unable to attend in per-
son may exercise their rights by proxy. The com-
pany does not apply any special arrangements
regarding the function of the general meeting
due to provisions in the Articles of Association or,
insofar as is known to the company, due to share-
holder agreements.
Extraordinary General Meeting 2021
ITAB held an Extraordinary General Meeting on
Friday, 15 January 2021. Due to precautionary
measures related to the COVID-19 pandemic,
the meeting was held without the physical at-
tendance of shareholders, proxies and external
representatives, and shareholders could only
exercise their voting rights by post prior to the
meeting, in accordance with Sections 20 and 22
of the Act on Temporary Exemptions to Facilitate
the Execution of General Meetings in Companies
and Associations (2020: 198). Slightly more than
270 million votes were cast ahead of the meeting,
corresponding to approximately 90 percent of
the total number votes in company at that time.
The general meeting resolved, among other
things, to authorise the Board to implement the
proposed offset issue and rights issue as part of
ITAB’s recapitalisation (see pages 35-36 for fur-
ther information). It also resolved that the Articles
of Association’s limit on the number of Board
members and deputies be amended to a allow
for a maximum of nine members, with no more
than nine deputies. Vegard Søraunet was elect-
ed as a new Board member.
Annual General Meeting 2021
ITAB’s AGM was held on Tuesday, 11 May 2021.
Due to precautionary measures related to the
COVID-19 pandemic, the meeting was held
without the physical attendance of sharehold-
ers, proxies and external representatives, and
shareholders could only exercise their voting
rights by post prior to the meeting, in accordance
with Sections 20 and 22 of the Act on Temporary
Exemptions to Facilitate the Execution of Gen-
eral Meetings in Companies and Associations
(2020: 198). Slightly more than 150 million votes
were cast ahead of the meeting, corresponding
to approximately 69 percent of the total number
shares and votes in the company.
The following main resolutions were passed:
• Discharge from liability for the Board of Direc-
tors, CEO and Vice President for their adminis-
tration in the 2020 financial year.
• Re-election of Board members Anna Benjamin,
Jan Frykhammar, Petter Fägersten, Eva Karls-
son, Anders Moberg, Roberto Monti, Fredrik
Rapp, Vegard Søraunet and Ruthger de Vries.
• Anders Moberg was re-elected as Chairman.
• Ulf Hedlundh (Chairman), Fredrik Rapp and Per
Rodert were elected to the Nomination Com-
mittee.
• The registered auditing company Ernst &
Young AB was elected as auditors, with autho-
rised public accountant Joakim Falck as audi-
tor in charge.
• Fees to the Board of Directors and auditors,
and the Remuneration Report 2020, as well as
updated guidelines for remuneration to senior
executives were adopted.
• Authorisation to the Board to decide on the pur-
chase and conveyance of own shares.
• Authorisation of the Board to decide on new is-
sues of shares up to a maximum of 10 percent
of the company’s outstanding shares.
ANNUAL GENERAL MEETING 2022
ITAB’s AGM will be held on Tuesday, 10 May 2022
in Jönköping, Sweden. Further information can
be found on page 91.
NOMINATION COMMITTEE
In accordance with Code, ITAB shall have a Nom-
ination Committee. The Nomination Committee
is the general meeting’s body for proposals to
the meeting’s decisions regarding appointment
issues in order to provide good conditions for the
meeting's decisions on these issues.
The 2021 AGM appointed Ulf Hedlundh, Fredrik
Rapp and Per Rodert as members of the Nomina-
tion Committee in preparation for the 2022 AGM,
with Ulf Hedlundh as Chairman. The members of
the Nomination Committee were appointed for
the period up to and including the 2022 AGM.
In the event that a member steps down from the
Nomination Committee before its work is com-
pleted, the remaining members are tasked with
appointing a new member.
Ahead of the AGM 2022, the Nomination Com-
mittee is assigned with preparing and present-
ing proposals for the Chairman of the Meeting,
Board members and the Chairman of the Board,
fees to members of the Board and committees,
and where applicable, the election of and fees to
auditors. The Nomination Committee shall in oth-
er respects fulfil its tasks in accordance with the
Code. In its assessment of the Board’s evaluation
and in its proposals, the Nomination Committee
shall pay particular attention to the requirement
for diversity and breadth in the Board and strive
for an even gender distribution in accordance
with the diversity policy according to rule 4.1 in
the Code. The Nomination Committee’s propos-
als shall be included in the notice to attend the
2022 AGM. In conjunction with the Board issuing
the notice to attend the AGM, the Nomination
Committee shall ensure that the company pub-
lishes the Nomination Committee’s proposals
and reasoned statement as well as information
about how the Nomination Committee has con-
ducted its work on ITAB’s website, itabgroup.com.
For the Nomination Committee’s work, a fee of
SEK 30,000 shall be paid to the Chairman and
SEK15,000 to each of the other members.
Ahead of the 2022 AGM, the Nomination Com-
mittee has evaluated relevant aspects of Board’s
work and, to date, has held five minuted meet-
ings with all members present, and had several
other contacts.
BOARD OF DIRECTORS
The tasks of the Board of Directors are to manage
the company’s affairs on behalf of the sharehold-
ers. According to ITAB’s Articles of Association,
the Board of Directors must comprise at least
three and at most nine Board members with no
more than nine deputies.
Board members
At the end of 2021, the Board of Directors of ITAB
Shop Concept AB consisted of nine regular
members appointed by the AGM of 11 May 2021:
Anders Moberg (Chairman), Anna Benjamin,
Jan Frykhammar, Petter Fägersten, Eva Karlsson,
Roberto Monti, Fredrik Rapp, Vegard Søraunet
and Ruthger de Vries. A presentation of these
Board members, including information about
their other assignments, is presented on page 88
as well as on ITAB’s website, itabgroup.com. The
CEO and other officers of the Group participate
in Board meetings, acting as rapporteur or in ad-
ministrative functions.
All of the Board members are independent in
relation to the company and its senior executives.
Six of the Board members are independent in re-
lation to the major shareholders. The Board there-
by fulfils the requirements for independence
pursuant to regulatory frameworks. The Articles
of Association does not contain any special con-
ditions for appointment and dismissal of Board
members or change of the Articles of Associa-
tion.
In accordance with the AGM’s resolution in
May 2021, Directors' fees totalled SEK 2,500,000,
of which SEK500,000 was paid to the Chairman
of the Board and SEK250,000 to each of the other
Board members.
Refer also to page 45 for a summary of the
Board members and their committee member-
ship(s), attendance at Board meetings, indepen-
dence and Directors' fees.
Chairman of the Board
The Chairman of the Board is tasked with ensur-
ing that the Board’s work is well organised and
efficiently conducted, and that the Board fulfils
its assignments. The Chairman shall, in partic-
ular, organise and lead the Board’s work to cre-
ate the best possible conditions for the Board’s
work. The Chairman is tasked with ensuring that
new Board members participate in requisite in-
troductions and other training that the Board’s
Chairman and Board member deem to be ap-
propriate, that the Board continuously updates
and deepens its knowledge of the company,
that Board meetings are held when required
and that satisfactory information and supporting
material for decisions is obtained for its work, that
the proposed agendas for Board meetings are
adopted in consultation with the CEO, that the
45ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
Board’s resolutions are implemented, and that
the Board’s work is evaluated annually. The Chair-
man is responsible for contacts with shareholders
regarding shareholder issues and for conveying
the views of shareholders to the Board.
Board duties
The Board of Directors has ultimate responsibility
for the company’s organisation and the admin-
istration of the company’s affairs in the interests
of the company and all shareholders, pursuant
to the laws, ordinances and agreements that
the company is subject to. The Board shall also,
based on an analysis of the business environ-
ment, pass resolutions on strategic issues.
The Board annually adopts written rules of pro-
cedures that regulate the Board’s work and its di-
vision of responsibilities, including its committees,
decision-making bodies within the Board, the
Board’s meeting plan and the Chairman’s tasks
as well as instructions for the financial reporting.
The Board has also issued instructions to the
CEO, which includes decision authority for invest-
ments, corporate acquisitions and divestments
as well as financing matters. The Board has also
adopted a number of policies for the Group’s op-
erations, such as a Code of Conduct.
The Board monitors the CEO’s work by contin-
uously following up operations during the year
and is responsible for ensuring that the organi-
sation, management and guidelines for the ad-
ministration of the company’s affairs are appro-
priately structured and that company has good
internal controls and efficient systems for the fol-
low-up and control of the company’s operations
and compliance with laws and regulations that
are applicable to the company’s operations. The
company’s auditor attends at least one of the
Board’s meetings annually. On such occasions,
the auditor’s observations concerning the com-
pany’s accounts, procedures and internal con-
trol are reported and reviewed.
The Board is also responsible for the determi-
nation, development and follow-up of the com-
pany’s goals and strategy, decisions about ac-
quisitions and divestments of businesses, major
investments, repurchases of own shares as well
as the appointment and remuneration of exec-
utive management. The Board of Directors and
CEO submit the annual accounts to the AGM.
Furthermore, the Board is responsible for pre-
paring an annual Corporate Governance Report
that shall include the Board of Directors’ actions
to follow up on internal controls related to the
financial reporting and on how reporting to the
Board has worked. The Corporate Governance
Report shall be reviewed by the company’s au-
ditor. In connection with this, the Board shall an-
nually assess and decide whether the company
should have a special review function (internal
audit). This decision shall be justified in the Cor-
porate Governance Report.
The Board conducts an annual evaluation of its
work, whereby a questionnaire is sent out to all its
Directors. The results are compiled by the Chair-
man of the Nomination Committee, who then
provides feedback to each Board member. The
Board continuously evaluates the CEO’s work.
Each Board member shall independently as-
sess the matters that are to be addressed by the
Board and request the information that the Board
member deems necessary for the Board to make
a well-informed decision. Each Board member
shall continuously acquire knowledge of the
company’s operations, organisation, markets
and similar information required for their assign-
ment.
The Board’s work
The Board’s work follows an annual plan. In addi-
tion to the statutory meeting held in connection
with the AGM, the Board normally meets seven
times a year (regular meetings). Extraordinary
meetings are convened as needed. Every meet-
ing follows an agenda that is provided together
with other underlying documentation to Board
members prior to each Board meeting. Board
resolutions are passed following a discussion led
by the Chairman. Committees appointed by the
Board are tasked with preparing matters for reso-
lutions by the Board (see below).
The agenda of the statutory Board meeting in-
cludes adoption the Board’s rules of procedures,
decisions about company signatories and the
approval of minutes. The regular meeting held
in February addresses the annual accounts,
proposals on the appropriation of profits and
the Year-End Report. In conjunction with this, the
company’s auditors submit a report to the Audit
Committee with their findings and assessments
of the conducted audit. Every regular meeting
generally includes several other fixed items for
presentation, such as a report on the current fi-
nancial outcome of the operations.
The Board held seven regular meetings, of
which one was a statutory meeting, and five ex-
traordinary Board meetings in 2021, . The atten-
dance at Board meetings and committee meet-
ings is presented in the summary below. Essential
subjects that have been discussed during the
year include:
• Long-term goals for the operations
• Strategic direction for the operations
• Business plans, financial plans and forecasts
• Investments
• Long-term financing
• Policies and guidelines
• Risk management and internal control
• Interim reports and Annual Report
• Reports from the Board’s committees
• Sustainability work
• External audit follow-up
Audit Committee
The Board of Directors has appointed an Audit
Committee that, without impacting the Board’s
responsibilities and assignments in general, is to
prepare the Board's work of quality-assuring the
company’s financial reporting, continually meet
with the company’s auditors to obtain informa-
tion about the focus and scope of the audit as
well as discuss coordination between the exter-
nal audit and the internal control and views of
the company’s risks. The Audit Committee is also
responsible for establishing guidelines regarding
which services other than audits the company
may procure from the company’s auditors, eval-
uate the audit work and notify the company’s
Nomination Committee about the results of the
evaluation as well as assist the Nomination Com-
mittee in preparing proposals for the election of
auditors and the payment of fees for the audit
work.
ITAB’s Audit Committee comprises Jan
Frykhammar (Chairman of the Committee),
Anna Benjamin, Roberto Monti and Ruthger
de Vries. All members of the committee are in-
THE BOARD OF DIRECTORS’ AND COMMITTEES’ COMPOSITION,
INDEPENDENCE, ATTENDANCE AND FEES 2021
Committee Independent in relation to
1)
Participation in
Name Assignment Remuneration Audit
Company
and executive
management
Major
share-
holders
Board
meetings
(total
number)
Remuneration
Committee
(total number)
Audit
Committee
(total
number)
Directors'
fees incl.
committee
fees (SEK)
Anders Moberg Chairman Chairman – Yes Yes 12 (12) 3 (3) - 540,000
Anna Benjamin Board member – Member Yes Yes 12 (12) - 6 (6) 280,000
Jan Frykhammar Board member – Chairman Yes Yes 12 (12) - 6 (6) 310,000
Petter Fägersten Board member – – Yes No 12 (12) - - 250,000
Eva Karlsson Board member Member – Yes Yes 12 (12) 3 (3) - 280,000
Roberto Monti Board member – Member Yes Yes 12 (12) - 6 (6) 280,000
Fredrik Rapp Board member Member – Yes No 12 (12) 3 (3) - 280,000
Vegard Søraunet
2)
Board member Member – Yes No 12 (12) 3 (3) - 280,000
Ruthger de Vries Board member – Member Yes Yes 11 (12) - 5 (6) 280,000
1)
In accordance with the definitions of the Swedish Corporate Governance Code.
2)
Elected to the Board on 15 January 2021.
46 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
dependent of the company and its executive
management as well as the company’s major
shareholders. Jan Frykhammar has financial re-
porting qualifications. The company thus fulfils
the requirements of the Swedish Companies Act.
In 2021, the Audit Committee held six minuted
meetings, and maintained ongoing contact with
the company’s auditors. The Audit Committee
also had a number of contacts with Group man-
agement. In 2021, fees for the Audit Committee’s
work comprised SEK 60,000 to the Chairman of
the Committee and SEK 30,000 to each of the
other members.
Remuneration Committee
The Remuneration Committee’s primary tasks
are preparing the Board’s decisions on issues re-
garding remuneration principles, remuneration
and other terms of employment for executive
management, monitoring and evaluating on-
going schemes and schemes concluded during
the year regarding variable remuneration to ex-
ecutive management as well as monitoring and
evaluating the application of the guidelines for
remuneration to senior executives decided by the
AGM as well as current remuneration structures
and remuneration levels in the company. ITAB’s
Remuneration Committee has also been tasked
with preparing issues regarding remuneration
and other employment terms for the presidents of
other companies in the Group.
The tasks of the Remuneration Committee
include preparing the Board’s decisions on pro-
posals for guidelines for remuneration of senior
executives, and drafting the Board of Directors’
annual remuneration report on the application
of the company’s remuneration guidelines for
approval at the AGM. The Board shall prepare
proposals for new guidelines at least every four
years, or before that if there is a need for signifi-
cant adjustments, and present the proposal for
resolution at the AGM. The guidelines shall apply
until new guidelines have been adopted by an
AGM. The current guidelines were adopted by the
2021 AGM (see Note 8). The Board does not intend
to propose any adjustments to these guidelines
prior to the 2022 AGM. The 2020 Remuneration
Report adopted by the 2021 AGM is available on
ITAB’s website, itabgroup.com.
ITAB’s Remuneration Committee comprises Eva
Karlsson, Anders Moberg (Chairman of the Com-
mittee), Fredrik Rapp and Vegard Søraunet The
CEO is co-opted at committee meetings.
In 2021, the Remuneration Committee held
three minuted meetings. During the year, fees for
the Remuneration Committee’s work comprised
SEK 40,000 to the Chairman of the Committee
and SEK30,000 to each of the other members.
CEO AND GROUP MANAGEMENT
The CEO is appointed by the Board to be respon-
sible for the company’s day-to-day management
in line with the Swedish Companies Act and with-
in the framework established by the Board. The
CEO’s decision authority with respect to invest-
ments, corporate acquisitions and divestments
as well as financing issues is subject to rules ad-
opted by the Board. In consultation with Chair-
man of the Board, the CEO prepares the requisite
information and supporting material for decisions
in advance of Board meetings, presents agenda
items and motivate proposed resolutions. The cur-
rent CEO, Andréas Elgaard, took up his position in
September 2019.
The CEO leads the work of Group management
and makes decisions in consultation with other
members of senior management. ITAB’s Group
management comprises President & CEO An-
dréas Elgaard, Chief Financial Officer Ulrika Berg-
mo Sköld, Chief Operating Officer & Senior Vice
President – SBU Lighting Jesper Blomquist, Senior
Vice President – MBU South Europe Glauco Fras-
caroli, Senior Vice President – MBU North Europe
Roy French, Senior Vice President – Group Strate-
gy & Transformation & SBU Retail Technology Nick
Hughes, General Counsel Frida Karlsson, Senior
Vice President - People & Culture Pernilla Lorent-
zon and Senior Vice President – MBU Central Eu-
rope Klaus Schmid.
A more detailed presentation of the CEO and
Group management can be found on page 89.
Remuneration of the CEO and Group manage-
ment in the 2021 financial year is presented in
Note 8 on pages 65-68.
Group staff units
Group staff units that report directly to Group
management have responsibility for business
development, finance, insurance, HR, purchas-
ing, IT, information, investor relations, legal affairs,
communications, consolidated accounts and
Group-wide administration. Projects that cover all
or the majority of the Group’s companies are con-
trolled and coordinated from here. Within each
area, handbooks and policies are drawn up that
regulate the work in the subsidiaries.
AUDITORS
To examine the company’s annual accounts,
consolidated accounts and accounting records
as well as the administration of the Board of Direc-
tors and CEO, a registered auditing company or
one or two authorised public accountants shall
be appointed by the AGM according to the Ar-
ticles of Association. The auditors report to the
shareholders at the AGM via their Auditor's Re-
port.
The election of auditors in ITAB took place at the
2021 AGM and pertained to the term up to and
including the 2022 AGM. The company’s auditor
is the registered auditing company Ernst & Young
AB, with authorised public accountant Joakim
Falck as auditor in charge. Joakim Falck has been
the auditor for ITAB since 2018. His other audit as-
signments include Nolato AB, XANO Industri AB,
Garo AB, Hexpol AB, Nefab AB, One Partner Group
AB and Gyllensvaans Möbler AB.
The company’s auditor works in accordance
with an audit plan that incorporates the views of
the Board and its Audit Committee. The auditor
then reports his/her observations to executive
management teams, Group management and
ITAB’s Board and its Audit Committee both during
the course of the audit and in conjunction with
the adoption of the annual accounts. The com-
pany’s auditor also participates at the AGM and
describes and expresses his opinion about the
audit work. The independence of the external
auditor is regulated by special instructions ad-
opted by the Board, which stipulate the areas in
which the external auditor may be engaged on
matters beyond regular audit work. Ernst & Young
continuously tests its independence in relation to
the company and submits a written affirmation to
the Board every year, stating that the auditing firm
is independent from ITAB.
In 2021, a total of SEK 2 million (3) was paid in
fees for Ernst & Young’s services in addition to the
audit assignment.
ETHICAL GUIDELINES
ITAB works to ensure that its business operations
adhere to stringent demands on integrity and
ethics. The Board has adopted a so called Code
of Conduct for Group operations, which also in-
cludes ethical guidelines. The Code of Conduct
emphasises the importance of each and every
employee, that the Group is to offer a safe and
healthy work environment, and that ITAB works
continuously to reduce its environmental impact.
It also points out that ITAB stands for straightfor-
ward, honest communication and that all em-
ployees have to respect commercial confidenti-
ality. If an issue relating to business ethics arises
at company level, there is a system in place de-
tailing how employees should report directly to
the Group and how such issues will be handled. In
accordance with the Code of Conduct, ITAB has
a zero-tolerance policy regarding all forms of brib-
ery and corruption.
ITAB regularly reviews and evaluates inter-
nal controls in all subsidiaries, which provides
reasonable assurance of an appropriate and
effective operation, reliable financial reporting
and compliance with laws and ordinances. The
internal audit also includes a follow-up of the
sustainability programme and the Code of Con-
duct. The president of each individual company
within the ITAB Group is responsible for ensuring
compliance with local regulations. All of ITAB’s
employees are covered by the Group-wide Code
of Conduct and have signed to confirm that they
are complying with the Code.
No known cases of corruption were discovered
in the Group in 2021. ITAB has also conducted
separate reviews and training regarding anti-cor-
ruption, primarily in countries where the Group is
deemed to face the greatest risks of violations of
the ethical guidelines. Since the end of 2017, there
is also a separate Group-wide supplier policy
containing fundamental business ethics require-
ments that ITAB imposes on its suppliers. In order
to ensure that ITAB is complying with GDPR, train-
ing has been conducted for employees who pro-
cess personal data as part of their work.
INTERNAL CONTROLS FOR THE FINANCIAL
REPORTING
According to the Swedish Companies Act, the
Board is responsible for internal controls aimed
at protecting the company’s assets and thereby
the investments of its owners. This responsibility in-
cludes annually assessing the financial reporting
that the Board receives and setting requirements
for its content and presentation to ensure the
quality of the reporting. This requirement entails
that financial reporting must be appropriate, ap-
47ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
plying the relevant accounting rules and other
requirements for listed companies. The following
description is limited to ITAB’s internal controls of
the financial reporting.
The internal controls should provide reason-
able assurance of an appropriate and effective
operation, reliable financial reporting and com-
pliance with laws and ordinances. The basis
for the internal control of financial reporting is
the control environment, including the organi-
sation, decision-making paths, authorisations
and responsibilities that are documented and
communicated in the governing documents
below. ITAB’s tool for internal control is based on
the COSO framework – a framework for evaluat-
ing a company’s internal controls of financial re-
porting. The framework streamlines the work with
internal controls.
The risk map has been analysed during the
year, which forms the basis for a revised internal
audit programme. In addition to the business
risks, the internal controls have focused on for-
malities, procedures and processes linked to the
updated risk map.
Financial reporting
All subsidiaries submit monthly reports concern-
ing financial outcomes, in accordance with the
Group’s internal finance manual. The reporting is
consolidated and constitutes the basis for quar-
terly reports and operational follow-ups.
This operational follow-up is carried out in ac-
cordance with an established structure where
invoicing, liquidity, profit, tied-up capital and
other key figures of importance for the Group are
collated and form the basis for analysis and mea-
sures by management and controllers at various
levels. Other important, Group-wide aspects of
the internal control include business plans and
the annual forecast process.
For communication with external parties, the
Group has an information policy intended to
ensure that all disclosure requirements are com-
plied with correctly and in full.
Control environment
The Audit Committee’s primary task is to monitor
the accounting and reporting processes and to
ensure the quality of these reports and process-
es. The responsibility for maintaining an effective
control environment, day-to-day risk manage-
ment and internal controls in terms of financial
reporting has been delegated to the CEO. Ex-
ecutives at various levels of the company are in
turn responsible within their respective areas.
Responsibilities and authorisations are defined in
instructions to the CEO, instructions concerning
attestation rights, manuals and other policies
and procedures.
The Board determines the Group’s policies re-
garding information, credit and finance. Group
management determines other instructions, and
the responsible Group functions issue guidelines
and oversee the application of the regulatory
framework. The Group’s accounting and report-
ing rules are stipulated in an accounting hand-
book that is available to all accounting staff.
Together with laws and other external regulatory
frameworks, the organisational structure and in-
ternal regulatory frameworks constitute the con-
trol environment.
Risk assessment
ITAB works continually with risk analyses as a basis
for revisions of the Group’s mapping of risks. Fi-
nancial, operational and strategic risks are chart-
ed. The Audit Committee reviews the current risk
map when necessary and at least once a year,
as well as ongoing and planned activities linked
to the respective risk, and revisions are undertak-
en if necessary.
Control activities
The purpose of control activities is to identify, pre-
vent and correct errors and deviations. Policies
and guidelines are particularly important for
accurate accounting, reporting and informa-
tion dissemination and also define which control
activities should be conducted. ITAB regularly
updates its policies and guidelines, in writing and
at meetings. Control activities include approval
procedures, reconciliation of accounts, analyti-
cal follow-up and control of IT systems.
Follow-up
Group management and controllers regularly
follow up economic and financial reporting as
well as key business events. At each Board meet-
ing, financial performance is monitored against
forecasts, and reviews are conducted of how well
investments are proceeding according to plan.
The follow-up of results is an important comple-
ment to the controls and reconciliations imple-
mented in the financial processes themselves.
The Audit Committee regularly evaluates the in-
ternal control, the Code and significant account-
ing issues.
Opinion on internal audit function
The Board has opted not to have a special func-
tion for internal audits. The assessment is based
on the Group’s size and operations as well as ex-
isting internal control processes where the work
with internal controls is conducted in an internal
audit programme that covers all subsidiaries
according to an established plan. If necessary,
external advisers are used for internal control
projects on behalf of the Audit Committee. Parts
of the internal control are regularly examined by
the auditors.
VIOLATIONS
The company has not committed any violations
of the regulatory framework of the stock market
where the company’s shares are traded nor
breached any stock market best practices.
48 ITAB
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FINANCIAL INFORMATION
FINANCIAL REVIEW – FIVE YEARS IN SUMMARY
Income statements (SEK million) 2021 2020 2019
EXCLUDING
EFFECT OF IFRS 16
2019 2018 2017
Revenue from contracts with customers 6,245 5,323 6,064 6,064 6,031 6,381
Cost of goods sold -4,565 -3,906 -4,441 -4,445 -4,423 -4,552
GROSS PROFIT
1)
1,680 1,417 1,623 1,619 1,608 1,829
Selling expenses -1,101 -1,015 -1,183 -1,187 -1,140 -1,071
Administrative expenses -338 -285 -286 -287 -294 -305
Other operating income and expenses -17 -5 103 103 56 47
OPERATING PROFIT
1)
224 112 257 248 230 500
Financial items -68 -112 -83 -68 -73 -68
PROFIT AFTER FINANCIAL ITEMS
1)
156 0 174 180 157 432
Tax on net profit for the year -53 -22 -54 -55 -60 -103
NET PROFIT FOR THE YEAR 103 -22 120 125 97 329
Attributable to:
Parent Company shareholders 95 -21 120 125 90 319
Non-controlling interests 8 -1 0 0 7 10
1)
For more information about non-recurring items, see the tables on page 49.
Balance sheets (SEK million)
Assets
Intangible assets 1,756 1,743 1,837 1,837 1,807 1,752
Property, plant and equipment 1,366 1,367 1,606 860 939 945
Other non-current receivables 146 119 130 128 109 113
NON-CURRENT ASSETS 3,268 3,229 3,573 2,825 2,855 2,810
Inventories 1,176 698 926 926 1,019 1,174
Current receivables 1,372 900 1,095 1,095 1,219 1,388
Cash and cash equivalents 208 692 302 302 271 285
CURRENT ASSETS 2,756 2,290 2,323 2,323 2,509 2,847
TOTAL ASSETS 6,024 5,519 5,896 5,148 5,364 5,657
Equity and liabilities
Equity attributable to Parent Company shareholders 2,654 1,607 1,748 1,754 1,598 1,664
Non-controlling interests 128 118 128 128 128 120
Deferred tax liabilities 45 41 48 48 54 72
Convertible debenture loan - - 165 165 162 188
Other non-current liabilities 1,143 1,283 1,989 1,356 1,550 1,399
Other current liabilities 2,054 2,470 1,818 1,697 1,872 2,214
TOTAL EQUITY AND LIABILITIES 6,024 5,519 5,896 5,148 5,364 5,657
Cash flow (SEK million)
Cash flow before change in working capital 424 417 285 160 163 343
Change in working capital -589 394 193 193 337 -153
CASH FLOW FROM OPERATING ACTIVITIES -165 811 478 353 500 190
Cash flow from investing activities -103 -45 34 34 -242 -295
CASH FLOW AFTER INVESTING ACTIVITIES -268 766 512 387 258 -105
Cash flow from financing activities -253 -343 -489 -364 -280 3
CASH FLOW FOR THE YEAR -521 423 23 23 -22 -102
Key ratios
Operating margin, % 3.6 2.1 4.2 4.1 3.8 7.8
Profit margin, % 2.5 0.0 2.9 3.0 2.6 6.8
Interest-coverage ratio, multiple 2.9 1.0 2.9 3.4 3.0 7.8
Balance sheet total, SEK million 6,024 5,519 5,896 5,148 5,364 5,657
Equity, SEK million 2,782 1,725 1,876 1,882 1,726 1,784
Risk-bearing capital, SEK million 2,827 1,766 2,089 2,095 1,942 2,044
Interest-bearing net debt, SEK million 1,239 1,748 2,509 1,755 2,104 2,13 0
Equity/assets ratio, % 46.2 31.3 31.8 36.6 32.2 31.5
Share of risk-bearing capital, % 46.9 32.0 35.4 40.7 36.2 36.1
Return on equity, % 4.0 Neg 6.9 7.2 5.4 20.5
Return on capital employed, % 5.6 2.5 5.4 6.2 5.5 12.4
Return on total capital, % 4.0 2.0 4.3 4.7 4.1 9.0
EBITDA, SEK million 499 376 532 391 372 639
EBITDA margin, % 8.0 7.1 8.8 6.4 6.2 10.0
Depreciation and amortisation, SEK million 275 264 275 143 142 139
Net investments, SEK million 103 45 -34 -34 242 295
- of which, attributable to corp. acquisitions & divestments, SEK million 40 0 -27 -27 142 101
Average number of employees 2,930 3,030 3,247 3,247 3,384 3,599
Data for 2019 has been prepared in accordance with the new standard for leases, IFRS 16. Comparative years have not been restated. For comparison, 2019 is also reported excluding the
implementation of IFRS 16. As of 2018, the Group follows new principles for revenue and financial instruments. Comparative years have not been restated, but do not have any significant
impact. For definitions, see page 83.
49ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
COMMENTS ON FIVE YEARS IN SUMMARY
SALES
Over the past five years, ITAB’s net sales have in-
creased by an average of approximately 3 percent
per year. The acquisitions of La Fortezza Group
in 2016 and Cefla Retail Solutions in 2021 contrib-
uted positively to this increase in sales, while the
COVID-19 pandemic had a negative impact on
sales in 2020 and 2021.
During the five-year period, ITAB signed numerous
long-term agreements with leading retail chains in
Europe. These have laid the foundation for ITAB’s po-
sition as the market-leading supplier of checkouts
to retailers and one of the largest suppliers of shop
fittings and lighting systems in Europe.
In 2017, sales grew by SEK 964 million, correspond-
ing to +18 percent. Currency-adjusted sales rose by
17 percent. The majority of this growth is attributable
to the acquisitions of La Fortezza in October 2016 as
well as D&L Lichtplanung and D. Lindner Lichttechh-
nische in Germany in July 2017. Sales increased in
all market areas apart from Scandinavia, where,
above all, sales of lighting were lower compared to
the previous year.
In 2018, sales decreased by SEK 350 million,
corresponding to -5 percent. Currency-adjusted
sales fell by 8 percent. The majority of the reduc-
tion in sales is attributable to the UK and Southern
Europe. Northern Europe and the Rest of the World
also decreased, while Central Europe and East-
ern Europe recorded increased sales. In terms of
customer groups, the majority of the reduction in
sales took place in Fashion. Grocery sales also fell
slightly, while sales in Home Improvements in-
creased.
In 2019, sales grew by SEK 33 million, correspond-
ing to +1 percent. Currency-adjusted sales fell by
1 percent. Sales increased slightly in Southern Eu-
rope, Eastern Europe and the UK, while Northern Eu-
rope declined. Sales to the largest customer group,
Grocery, increased, while Fashion and Home Im-
provements decreased.
In 2020, sales decreased by SEK 741 million, cor-
responding to -12 percent. Currency-adjusted sales
fell by 10 percent. A substantial part of the reduction
was caused by the strict measures taken to reduce
the spread of COVID-19, especially during the first
six months of the year. Sales recovered somewhat
during the second half of the year due to, among
other things, increased sales of various protective
products for stores. Sales decreased in all geo-
graphic markets except Central Europe. Grocery
sales increased, while sales to other customer
groups decreased.
In 2021, sales grew by SEK 922 million, corre-
sponding to +17 percent. Currency-adjusted sales
increased by 19 percent, with organic growth ac-
counting for 8 percent and the acquisition of Cef-
la Retail Solutions in January 2021 contributing 11
percent. The sales trend was favourable throughout
the entire year as societies and retailers opened up
after lockdowns due to the pandemic. Sales to the
Grocery and Home Improvements customer groups
increased, while sales in Fashion were unchanged
compared with the preceding year. The most sig-
nificant growth took place in Southern Europe and
Eastern Europe.
PROFITABILITY
During the five-year period, operating profit varied
between a minimum of SEK 112 million (2020) and
a maximum of SEK 500 million (2017). The operat-
ing margin during the period also varied between
2.1 and 7.8 percent. Profit after net financial items
amounted to between SEK 0 million (2020) and SEK
432 million (2017), and the profit margin was be-
tween 0 and 6.8 percent. Profit over the years was
impacted by non-recurring items.
In 2017, ITAB’s operating margin improved to 7.8
percent, largely due to a continued strong gross
margin and a positive net effect in respect of the
revaluation of additional purchase considerations
as well as structural costs. Profit were affected by
increased resources for product development and
efforts aimed at responding to the rapid develop-
ments in the retail sector. In addition, profit was ad-
versely affected by a number of major customers
in Scandinavia cutting back their investment pro-
grammes, principally within lighting.
The operating margin for 2018 declined to 3.8 per-
cent. Profit was adversely affected by lower sales,
mainly in United Kingdom and Southern Europe. In
addition, profit was affected by restructuring costs in
connection with the launch of a large-scale, Group-
wide efficiency programme. Final negotiations of
an additional purchase consideration as well as
property sales had a positive impact on profit.
Profit in 2019 was in line with the preceding year.
Profit was negatively impacted by restructuring
costs related to the growth and efficiency pro-
gramme launched in 2018. Impairment of assets as
well as organisational changes and staff reductions
also had an adverse impact on profit. Capital gains
on property sales and repayments of purchase
considerations for acquisitions had a positive im-
pact on earnings.
Operating profit for 2020 declined to SEK 112 mil-
lion, corresponding to an operating margin of 2.1
percent. The decrease in sales and currency effects
had a negative impact on profit, while an improved
gross margin and effects of cost-saving measures
had a positive effect. Profit was negatively affect-
ed by SEK -205 million in non-recurring items, most
of which were attributable to restructuring costs
and inventory impairment.
Profit for 2021 was positively impacted by in-
creased sales and the ongoing efforts to transform
the operations under One ITAB, including complet-
ed production relocations and cost adaptations,
more shared ways of working, and more efficient
and flexible market cultivation. At the same time, the
sharp increase in raw material prices during the first
two quarters of the year and shortages of certain
components had a negative impact on all of the
Group’s markets. Profit was negatively impacted by
non-recurring items of SEK -166 million pertaining to
restructuring costs.
The Group’s return on equity during the period av-
eraged about 7 percent.
INVESTMENTS
Between 2017 and 2021, net investments, excluding
corporate acquisitions, amounted to a maximum
of 3 percent of sales. The Group’s investments have
mainly consisted of machinery with a focus on un-
manned operations, high utilisation of resources,
sustainability and, foremost, technical develop-
ment. In 2017 and 2018, the Group invested in a
larger production facility in China with the aim of
securing sustainable and efficient production and
assembly. In 2021, corresponding investments were
made in shared production facilities in the Czech
Republic within the framework of One ITAB.
Investments attributable to corporate acquisi-
tions focused on strengthening the Group’s position
as a market-leading supplier of shop fittings to the
Group’s selected customer groups and geographic
markets, and on strengthening and supplementing
the services and product portfolio in certain areas.
FINANCIAL DEVELOPMENT
The balance sheet total was SEK 5,315 million at
year-end 2017 and SEK 6,024 million at year-end
2021. The changes in the balance sheet total
are attributable to completed corporate acqui-
sitions, investments in production facilities and
property sales. The transition to IFRS 16 Leases on
1 January 2019 increased the balance sheet total
by SEK 725 million. The expansion was achieved
through positive cash flow from operating activities,
bank financing (mainly in connection with the
acquisitions in 2016) and the recapitalisation and
completed share issues in 2021. Interest-bearing
net debt amounted to SEK 2,130 million at year-end
2017 and was reduced to SEK 1,239 million (includ-
ing lease liabilities) in 2021. The reduction in net debt
was mainly due to the new share issue and offset
issue completed during the first quarter of 2021.
The Group’s equity/assets ratio for 2017–2020
amounted to between 31 and 32 percent, but im-
proved to 46 percent after the recapitalisation
in 2021. The share of risk-bearing capital varied
between 32 and 36 percent in 2017–2020, but in-
creased to 47 percent in 2021.
Items that do not belong to regular op-
erations, known as non-recurring items 2021 2020 2019 2018 2017
Acquisition, integration and
restructuring costs -166 -156 -70 -63 -10
Inventory impairment of non-recurring
character - -52 - - -
Revaluation/settlement, additional pur-
chase considerations for acquisitions - - 42 34 45
Sale of property and restructuring work
in Belgium - - 44 15 -
-166 -208 16 -14 35
Impact of non-recurring items
on the income statement 2021 2020 2019 2018 2017
Gross profit -59 -121 -31 -37 -5
EBITDA -157 -202 16 -5 35
Operating profit -166 -205 16 -8 35
Profit after net financial items -166 -208 16 -14 35
50 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
(SEK million) Note 2021 2020
Revenue from contracts with customers 6 6,245 5,323
Cost of goods sold 8, 9, 10, 11 -4,565 -3,906
GROSS PROFIT 1,680 1,417
Selling expenses 8, 9, 10, 11 -1,101 -1,015
Administrative expenses 8, 9, 10, 11 -338 -285
Other operating income 12 40 24
Other operating expenses 12 -57 -29
OPERATING PROFIT 224 112
Financial income 14 14 5
Financial expenses 14 -82 -117
PROFIT AFTER FINANCIAL ITEMS 156 0
Tax expenses for the year 16 -53 -22
NET PROFIT FOR THE YEAR 103 -22
Net profit for the year attributable to:
Parent Company shareholders 95 -21
Non-controlling interests 8 -1
EARNINGS PER SHARE, SEK 17 0.50 -0.21
INCOME STATEMENT – GROUP
STATEMENT OF OTHER COMPREHENSIVE INCOME – GROUP
(SEK million) Note 2021 2020
NET PROFIT FOR THE YEAR 10 3 -22
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to the income statement:
Revaluation of defined-benefit pension commitments 29 -2 2
Tax relating to items not to be reclassified 16 0 0
-2 2
Items that may be reclassified to the income statement:
Translation difference when translating foreign operations 11 8 -131
Change in fair value of hedges of net investments -1 5
Change in fair value of cash flow hedges
Change in fair value of cash flow hedges transferred to net profit for the year 8 7
Tax on items that may be reclassified 16 -5 0
25 13 3 -131
TOTAL OTHER COMPREHENSIVE INCOME 131 -12 9
COMPREHENSIVE INCOME FOR THE YEAR 234 -151
Comprehensive income for the year attributable to:
Parent Company shareholders 213 -141
Non-controlling interests 21 -10
51ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
STATEMENT OF FINANCIAL POSITION – GROUP
(SEK million) Note 2021 2020
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill 1, 6 4 4 1, 5 9 9
Other intangible assets 112 14 4
6,10,18 1,75 6 1, 74 3
Property, plant and equipment
Buildings and land 1, 0 3 4 1, 0 51
Plant and machinery 212 215
Equipment, tools and installations 10 3 95
Construction in progress and advance payments
for property, plant and equipment
6,10,19,22 1,3 6 6 1,3 67
Participations in associated companies 20 11 12
Deferred tax assets 16 117 101
Financial non-current receivables 21 18 6
TOTAL NON-CURRENT ASSETS 3,268 3,229
CURRENT ASSETS
Inventory 23 1,1 76 698
Accounts receivable 21 1 ,11 8 755
Current tax assets 37 21
Derivatives 21 4 1
Other receivables 21 12 2 48
Prepaid expenses and accrued income 6,21,24 91 75
Cash and cash equivalents 21 208 692
TOTAL CURRENT ASSETS 2 ,75 6 2 ,290
TOTAL ASSETS 6,0 24 5 , 519
EQUITY AND LIABILITIES
EQUITY
Share capital 91 43
Other contributed capital 1, 0 8 9 304
Other reserves 42 -78
Profit brought forward including net profit for the year 1, 4 3 2 1 ,338
Equity attributable to Parent Company shareholders 2,6 5 4 1,6 07
Non-controlling interests 12 8 11 8
TOTAL EQUITY 25,26,27 2 ,782 1,72 5
NON-CURRENT LIABILITIES
Liabilities to credit institutions 21 570 67 0
Non-current lease liabilities 21,22 491 5 42
Derivative liabilities 21 10 27
Other non-current liabilities 21 19 6
Provisions for pensions and similar obligations 29 41 29
Provision for deferred tax liabilities 16 45 41
Other non-current provisions 30 12 9
CURRENT LIABILITIES
Liabilities to credit institutions 21 18 2 896
Current lease liabilities 21,22 13 9 114
Shareholder loans 21,34 - 14 0
Overdraft facilities 21,28 59 52
Advance payments from customers 6,21 75 49
Accounts payable 21 971 6 21
Current tax liabilities 97 43
Other liabilities 21 121 142
Accrued expenses and prepaid income 6,21,31 384 3 81
Current provisions 30 26 32
TOTAL EQUITY AND LIABILITIES 6,0 24 5 , 519
52 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
(SEK million)
Note
Share
capital
Other
contributed
capital
Other
reserves
Profit
brought
forward
Attributable
to Parent
Company
shareholders
Attributable to
non-controlling
interests
Total
equity
EQUITY 1 JANUARY 2020 43 315 44 1,3 4 6 1, 74 8 12 8 1,8 76
Net profit for the year -21 -21 -1 -22
Revaluation of defined-benefit pension commitments 2 2 2
Translation difference, foreign operations -12 2 -12 2 -9 -131
Hedging of net investment 4 4 4
Hedging of cash flow -4 -4 -4
COMPREHENSIVE INCOME FOR THE YEAR -12 2 -19 -141 -10 -151
Effect from repayment of convertible debenture loan KV5B -11 11 0 0 0
EQUITY 31 DECEMBER 2020 43 304 -78 1,3 3 8 1, 6 07
Net profit for the year 95 95 8 10 3
Revaluation of defined-benefit pension commitments -2 -2 -2
Translation difference, foreign operations 10 5 10 5 13 11 8
Hedging of net investment -1 -1 -1
Hedging of cash flow 16 16 16
COMPREHENSIVE INCOME FOR THE YEAR 12 0 93 213 21 234
Acquisition of non-controlling interests 5 1 1 -22 -21
Acquisition of partly owned companies 5 11 11
New and offset issue 27 48 78 5 833 833
EQUITY 31 DECEMBER 2021 25,26 91 1,0 8 9 42 1,4 3 2 2 ,65 4 12 8 2 ,78 2
STATEMENT OF CHANGES IN EQUITY – GROUP
STATEMENT OF CASH FLOWS – GROUP
Indirect method (SEK million) Note 2021 2020
Operating activities
OPERATING PROFIT 224 112
Adjustment for items not included in the cash flow
depreciation charged to operating profit 10,22 275 264
impairment losses of current assets 20 98
adjustment for pensions and other provisions -11 22
participations in associated companies 1 3
other items 19 5
TOTAL 528 504
Interest received 5 5
Interest paid -78 -13 0
Tax paid -31 38
CASH FLOW FROM OPERATING ACTIVITIES
BEFORE CHANGES IN WORKING CAPITAL 424 4 17
Change in working capital
Change in inventories (increase -/decrease +) -422 85
Change in operating receivables (increase -/decrease +) -394 90
Change in operating liabilities (increase +/decrease -) 227 2 19
Total change in working capital -589 394
CASH FLOW FROM OPERATING ACTIVITIES -16 5 8 11
Investing activities
Acquisition of businesses/Group companies during the year, effect on cash and
cash equivalents
5
-48
Divestment of Group companies 5,12 8 0
Investments in intangible assets 18 -6 -6
Divestment of intangible assets 12,18 1 1
Investments in property, plant and equipment 19 -85 -40
Divestment of property, plant and equipment 12,19 27 0
Cash flow from investing activities -10 3 -45
CASH FLOW AFTER INVESTING ACTIVITIES -268 76 6
Financing activities
New share issue 27 733 -
Repayment of convertible debenture loan 21 - -16 8
Repayment of loans 21 -1,1 5 6 -29 5
Repayment of lease liabilities 21 -13 4 -12 2
New loans raised 21 304 242
Cash flow from financing activities -253 -343
CASH FLOW FOR THE YEAR -5 21 423
CASH AND CASH EQUIVALENTS AT THE START OF THE YEAR 692 302
Translation differences on cash and cash equivalents 37 -33
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 208 692
53ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
INCOME STATEMENT – PARENT COMPANY
(SEK million) Note 2021 2020
Net sales 7 171 169
Cost of goods sold 7,8,9,11 -21 -20
GROSS PROFIT 150 149
Selling expenses 7,8,9,11 -47 -48
Administrative expenses 7,8,9,10,11 -56 -53
Other operating income 12 11 11
Other operating expenses 12 -7 -10
OPERATING PROFIT 51 49
Income from participations in Group companies 13 46 50
Expenses from participations in Group companies 13 -51 -106
Financial income 14 33 112
Financial expenses 14 -92 -90
PROFIT AFTER FINANCIAL ITEMS -13 15
Year-end appropriations 15 -56 -29
PROFIT BEFORE TAX -69 -14
Tax expenses for the year 16 15 -14
NET PROFIT FOR THE YEAR -54 -28
STATEMENT OF OTHER COMPREHENSIVE INCOME
(SEK million) Note 2021 2020
Net profit for the year -54 -28
Other comprehensive income - -
COMPREHENSIVE INCOME FOR THE YEAR -54 -28
(SEK million) Note 2021 2020
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Equipment, tools and installations 10,19 6 7
Financial assets
Participations in Group companies
20
2,051 2,071
Participations in associated companies 20 15 15
Non-current receivables, Group companies 21 0 16
Deferred tax assets 16 32 17
TOTAL NON-CURRENT ASSETS 2,10 4 2,126
CURRENT ASSETS
Receivables, Group companies 21 494 242
Current tax assets 3 3
Prepaid expenses and accrued income 24 5 6
Cash and bank balance 21 54 449
TOTAL CURRENT ASSETS 556 700
TOTAL ASSETS 2,660 2,826
EQUITY AND LIABILITIES
EQUITY
Restricted equity
Share capital 91 43
Statutory reserve 7 7
98 50
Non-restricted equity
Share premium reserve 1,084 299
Profit brought forward 695 723
Net profit for the year -54 -28
1,725 994
TOTAL EQUITY 25,26,27 1,823 1,044
NON-CURRENT LIABILITIES
Liabilities to credit institutions 541 626
21 541 626
CURRENT LIABILITIES
Liabilities to credit institutions 112 832
Shareholder loans 34 0 140
Overdraft facilities 28 32 25
Accounts payable 3 20
Liabilities to Group companies 105 102
Other liabilities 4 8
Accrued expenses and prepaid income 31 40 29
21 296 1,156
TOTAL EQUITY AND LIABILITIES 2,660 2,826
BALANCE SHEET – PARENT COMPANY
54 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
STATEMENT OF CASH FLOWS – PARENT COMPANY
(SEK million) Note 2021 2020
Operating activities
OPERATING PROFIT 51 49
Adjustment for items not included in the cash flow
depreciation charged to operating profit 1 1
other items 0 -3
TOTAL 52 47
Dividends received from subsidiaries 46 50
Interest received 33 50
Interest paid -57 -100
CASH FLOW FROM OPERATING ACTIVITIES
BEFORE CHANGES IN WORKING CAPITAL 75 47
Change in working capital
Change in operating receivables (increase -/decrease +) 1 3
Change in operating liabilities (increase +/decrease -) -5 16
Total change in working capital -4 19
CASH FLOW FROM OPERATING ACTIVITIES 71 66
Investing activities
Divestment of subsidiaries 0 3
Investments in property, plant and equipment 19 0 0
Cash flow from investing activities 0 3
CASH FLOW AFTER INVESTING ACTIVITIES 71 69
Financing activities
New share issue 733 -
Repayment of convertible debenture loan - -168
Repayment of loans -1,156 -282
New loans raised 308 171
Lending to Group companies -295 688
Group contributions 15 -56 -29
Dividends paid to shareholders 0 0
Cash flow from financing activities -466 380
CASH FLOW FOR THE YEAR -395 449
CASH AND CASH EQUIVALENTS AT THE START OF THE YEAR 449 0
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 54 449
RESTRICTED EQUITY NON-RESTRICTED EQUITY
(SEK million)
Note
Share
capital
Statutory
reserve
Share premium
reserve
Profit brought
forward
Net profit
for the year
Total
equity
EQUITY 1 JANUARY 2020 43 7 310 586 126 1,072
Previous year’s profit transferred 126 -126 0
Net profit for the year -28 -28
Effect from repayment of convertible
debenture loan KV5B -11 11 0
EQUITY 31 DECEMBER 2020 43 7 299 723 -28 1,044
Previous year’s profit transferred -28 28 0
Net profit for the year -54 -54
New and offset issue 27 48 785 833
EQUITY 31 DECEMBER 2021 25,26 91 7 1,084 695 -54 1,823
STATEMENT OF CHANGES IN EQUITY – PARENT COMPANY
55ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
56 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
COMPLIANCE WITH STANDARDS AND LAWS
The consolidated accounts have been prepared
in accordance with the International Financial Re-
porting Standards (IFRS) issued by the Internation-
al Accounting Standards Board (IASB). Further-
more, the Swedish Financial Reporting Board’s
recommendation RFR 1 has been applied.
The Parent Company applies the same ac-
counting policies as the Group except for the
instances described in the section “Parent Com-
pany’s accounting policies”.
BASIS FOR PREPARATION OF THE FINANCIAL
STATEMENTS
The Parent Company’s functional currency is
Swedish krona (SEK). This means that the finan-
cial statements for the Parent Company and the
Group are presented in the reporting currency
SEK, rounded off to the nearest million SEK.
Assets and liabilities are recognised at historic
cost, except certain financial assets and liabilities
that are measured at fair value.
NEW AND AMENDED STANDARDS AND INTERPRE-
TATIONS INTRODUCED 2021
The company's management’s assessments
of relevant amendments and interpretations
of existing standards that entered into force as
of 1 January 2021 have not had any significant
impact on the Group’s or the Parent Company’s
financial statements.
ISSUED NEW AND AMENDED STANDARDS AND
INTERPRETATIONS THAT HAVE NOT YET BEEN
APPLIED BY THE GROUP
A number of new standards and interpretations
will enter into force for financial years commenc-
ing on 1 January 2022 or later and have not been
applied in the preparation of this financial report.
No new standards, amended standards or IFRIC
interpretations published by the IASB are expect-
ed to have any material impact on the financial
statements of the Group or the Parent Company.
CONSOLIDATED ACCOUNTS
The consolidated accounts include the Parent
Company, ITAB Shop Concept AB, and the com-
panies in which ITAB Shop Concept AB, directly
or indirectly, has a controlling influence as of the
balance sheet date. A controlling influence is
defined as the right to a variable return and the
potential to influence the return with the aid of the
controlling influence. Subsidiaries are consolidat-
ed from the date the Group first has a controlling
influence over the company until such time as
this control ceases.
When preparing the consolidated accounts,
the financial statements for the Parent Company
and the subsidiaries are merged. The account-
ing policies for subsidiaries have been amend-
ed, where applicable, in order to guarantee
consistent application of the Group’s policies.
Intra-Group receivables, liabilities and transac-
tions, including income and expenses and unre-
alised gains or losses that arise from intra-Group
transactions, are eliminated in their entirety.
Business combinations
Business combinations are recognised in ac-
cordance with the acquisition method. The
cost comprises the fair value of assets that
have been provided as payment, issued equi-
ty instruments and liabilities that have arisen
or been taken over as of the conveyance date.
Acquisition-related costs are expensed in the
periods when they arise and the services are
received.
The time of acquisition is the time at which the
purchaser gains a controlling influence over the
acquired company. Identifiable acquired assets,
transferred liabilities and contingent liabilities in
a business combination are initially measured
at fair value at the time of acquisition. Certain
changes to the fair values may arise due to
additional information that the purchaser has
received after the time of the acquisition. Such
changes are adjusted during the measurement
period against identified surplus values. Chang-
es that arise from events occurring after the mea-
surement period are recognised in profit or loss.
The conditional additional purchase consider-
ation is classified as a liability that is a financial in-
strument and is measured at fair value, while any
consequential gain or loss is recognised in profit
or loss as other operating income or expenses.
If the consolidated cost for the acquisition
of shares, including any amounts for non-con-
trolling interests, exceeds the value recognised
for the company’s net assets in the acquisition
balance, the difference is recognised as consol-
idated goodwill. If the consolidated cost for the
shares instead is lower than the value of the com-
pany’s net assets, the difference is recognised
directly in profit or loss. For acquisitions, the entity
approach has been applied, which means that
all assets and liabilities as well as income and
expenses are included in their entirety, includ-
ing for partly owned subsidiaries, which impacts
recognised goodwill linked to the acquisition.
Goodwill that has arisen in a corporate acqui-
sition is assessed at least annually if there is an
impairment requirement. See also the section on
intangible assets below.
RECOGNITION OF ASSOCIATED COMPANIES
Associated companies are companies in which
the Group has a significant influence, but not
a controlling influence. A significant influence
means the opportunity to influence the opera-
tional and financial governance of the compa-
ny and is normally achieved when the Group’s
participation amounts to between 20 and 50
percent of the voting rights.
From the time the significant influence is
achieved, participations in associated compa-
nies are recognised in accordance with the eq-
uity method in the consolidated accounts. The
equity method means that participations in an
associated company are recognised at cost at
the time of the acquisition and thereafter adjust-
ed with the Group’s portion of the change in the
associated company’s net assets.
TRANSLATION OF FOREIGN CURRENCY
Functional currency and reporting currency
Items in the financial statements for the various
Group units are measured in the currency used
in the financial climate where each company
primarily conducts its business (functional cur-
rency). The consolidated accounts employ SEK,
which is the Parent Company’s functional curren-
cy and reporting currency.
Transactions and balance sheet items in
foreign currencies
Transactions in foreign currencies are translated
to the functional currency at the exchange rate
prevailing on the transaction date.
Exchange rate gains and losses incurred when
paying for such transactions and when convert-
ing monetary assets and liabilities in foreign cur-
rency at the closing day rate are recognised in
profit or loss. Exceptions include when monetary
assets and liabilities comprise hedging of net
investments in foreign operations, in which case
exchange rate differences are recognised in oth-
er comprehensive income. A prerequisite is that
the hedging transactions satisfy the necessary
requirements as regards hedge accounting.
Foreign Group companies
The profit and financial position of all Group
NOTE 2. ACCOUNTING POLICIES
ITAB Shop Concept AB, corporate registration
number 556292-1089, is a Swedish-registered lim-
ited liability company with its registered office in
Jönköping, Sweden. The address of the compa-
ny’s head office is Instrumentvägen 2, Jönköping,
Sweden. The Parent Company’s shares are listed
on Nasdaq Stockholm.
The consolidated accounts include the Parent
Company and its subsidiaries, jointly referred to
as the Group. These consolidated accounts were
approved for publication by the Board of Direc-
tors on 28 March 2022.
NOTE 1. GENERAL INFORMATION
NOTES / all amounts are in SEK million unless otherwise stated /
57ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
companies with a functional currency oth-
er than the reporting currency are translated
to the Group’s reporting currency as follows:
(i) assets and liabilities for each balance
sheet are translated at the closing day rate,
(ii) income and expenses for each income
statement are translated at the average
exchange rate (unless this average rate is not a
reasonable approximation of the accumulat-
ed effect of the rates prevailing on the transla-
tion date, in which case income and expens-
es are translated as of the transaction date),
(iii) all translation differences that arise are rec-
ognised in other comprehensive income.
Countries with a high inflation currency are
recognised in accordance with IAS 29. In 2021,
Argentina was defined as a country with a high
inflation currency. The effect has not been signif-
icant for the Group.
In consolidation, exchange rate differences
that arise as a consequence of the translation of
net investments in foreign operations and from
borrowings and other currency instruments
identified as hedges of such investments are rec-
ognised in other comprehensive income. Transla-
tion differences that arise when divesting foreign
operations are recognised in profit or loss as part
of the capital gain/loss.
Goodwill and other assets and liabilities that
arise when acquiring foreign operations are treat-
ed as assets and liabilities for these operations
and translated at the closing day rate.
REVENUE FROM CONTRACTS WITH CUSTOMERS
The Group recognises revenue when the commit-
ments to supply promised goods or services are
fulfilled according to identified customer con-
tracts, excluding VAT, discounts and returns and
after elimination of intra-Group sales.
The ITAB Group sells, develops, produces and
distributes shop fittings and equipment to chain-
based customers. Most of ITAB’s customers are
major chain stores that operate internationally
and have stores in several countries. As ITAB sells
customised shop fitting concepts and often sets
a price for a combined product and service, the
revenue types are not recognised separately.
Revenue recognition for sales takes place in the
period when control has passed to the custom-
ers, which normally takes place when all mate-
rial risks and rewards associated with ownership
have been transferred to the buyer. As a result,
the Group no longer has any involvement that is
associated with ownership and does not exercise
any real control. In the event of revenue from con-
cept sales including service assignments, reve-
nue recognition takes place over time based on
the degree of completion on the balance sheet
date, when the Group will probably receive eco-
nomic benefits associated with the assignment
and reliable calculations can be performed. The
degree of completion is determined on the basis
of expenditure incurred in relation to calculated
total costs. Anticipated losses are expensed im-
mediately.
OTHER OPERATING INCOME AND EXPENSES
Other operating income and expenses derive
from activities outside of the Group’s primary op-
erations, including exchange rate differences for
operating receivables and operating liabilities,
external rental income, revaluation of condition-
al additional purchase considerations and profit
from the sale and retirement of property, plant
and equipment.
RECOGNITION OF GOVERNMENT GRANTS AND
CONTRIBUTIONS
Government grants are recognised in the state-
ment of financial position as accrued income
when there is reasonable assurance that the
grant will be received and that the Group will
meet the conditions associated with the grant.
Grants are systematically accrued in net profit
for the year in the same way and over the same
periods as the costs the grants are intended to
compensate. The grants are recognised as a cost
reduction of the items to which the grants relate.
Government grants related to assets are rec-
ognised in the statement of financial position as a
reduction of the carrying amount of the asset. For
more information, see Note 11.
FINANCIAL INCOME AND EXPENSES
Financial income and expenses comprise inter-
est income from bank funds, receivables and
interest-bearing securities, interest expenses on
borrowings, dividend income, exchange rate
differences for interest-bearing loan receivables
and loan liabilities, and changes in the value of
derivative instruments.
Borrowing costs are recognised in profit for the
period to which the relevant loans are attribut-
able. Exchange rate gains and losses on inter-
est-bearing assets and liabilities are recognised
net. Dividends received are recognised as reve-
nue when the right to receive dividends has been
determined.
INCOME TAXES
Recognised income tax includes tax to be paid
or received for the year in question, adjustments
for previous years’ tax and changes in deferred
tax. Deferred tax is reported on temporary differ-
ences that exist between the taxable value and
carrying amount of assets and liabilities as well as
on tax loss carryforwards that are likely to be used
in the future. Temporary differences are not taken
into consideration for differences that arise when
goodwill is recognised the first time. Measure-
ment of deferred tax is based on how assets or
liabilities are expected to be recovered or settled.
Deferred tax is determined using tax rates and
laws that have been enacted or substantially
enacted as of the balance sheet date. Deferred
tax assets are recognised to the extent that it is
probable that future taxable profit will be avail-
able, against which the temporary differences
can be utilised. Deferred tax assets and liabil-
ities are offset when there is a legally enforce-
able right to do so and when the deferred taxes
relate to the same tax authority.
PENSIONS
The Group’s pension plans are mostly de-
fined-contribution plans. The costs for these plans
are recognised as an expense during the period
in which the employees perform the services to
which the contribution refers. The Swedish subsid-
iaries have a defined-benefit ITP plan via Alecta.
At present, Alecta cannot provide the required
information for the Group to be able to recognise
this plan in the balance sheet in accordance with
IAS 19. Pension commitments that have not been
taken over by insurance companies or secured
in some other way with an external party are rec-
ognised as provisions in the balance sheet.
INTANGIBLE ASSETS
Capitalised expenses for development work
Development expenses where the results are
used to plan or create production of new or great-
ly improved processes or products are capitalised
if it is judged that the process or product is techni-
cally and commercially viable. The expenses are
recognised as an asset in the balance sheet from
the time when the technical and commercial
feasibility of the product has been established,
the company has the resources to complete the
development process to thereafter use or sell the
intangible asset, and it is feasible that the product
will generate future economic benefits. The carry-
ing amount includes expenses for material, direct
expenses and indirect expenses that can reason-
ably and consistently be attributed to the asset.
Capitalised development expenditure is rec-
ognised at cost less accumulated amortisation
and any impairment. Amortisation is recognised
in profit or loss over the estimated useful life of
the capitalised development expenditure. Am-
ortisation commences from the time the asset is
available for use. The estimated useful life varies
between three and ten years. Estimated useful
lives are reassessed every year.
Trademarks, patents and similar rights
Trademarks, patents and similar rights are rec-
ognised at cost less accumulated amortisation.
Amortisation is carried out on a straight-line basis
over the estimated useful life of five to ten years.
Estimated useful lives are reassessed every year.
Goodwill
Goodwill represents the difference between the
cost and fair value of acquired assets, transferred
liabilities and contingent liabilities. Goodwill rep-
resents the future economic benefits that arise
from other assets acquired in a business combi-
nation that are not individually identified and rec-
ognised separately.
The factors that constitute recognised goodwill
are primarily synergy effects in production, logis-
tics, staff, know-how and effective organisation.
Goodwill is recognised as an intangible asset with
an indeterminable useful life and is tested for im-
pairment annually or when there is an indication
of possible impairment losses; see the section on
Impairment in Note 3.
A cash-generating unit (IAS 36) is defined as
the smallest identifiable group of assets that, in
continuous use, generates cash inflows that are
essentially independent of other assets or groups
of assets. No distribution of the Group’s goodwill
has been performed since all Group companies’
activities and cash inflows are highly dependent
on each other.
The recoverable value has been determined
58 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
based on the unit’s value in use, which consists of
the present value of estimated future cash flows.
Identification of projected cash flows is based in
part on an assessment of the expected rate of
growth of the business in accordance with fore-
casts prepared by company management for
the next four years. The company uses weighted
average cost of capital (WACC) to discount pro-
jected cash flows and estimate the cash-gener-
ating unit’s value in use, see also Note 18.
LEASES
ITAB is only a lessee, not a lessor. IFRS 16 estab-
lishes principles for the recognition, valuation,
presentation and disclosure of leases. Accord-
ing to IFRS 16, assets and liabilities attributable to
leases – with the exception of short-term leases
or low-value leases – are to be recognised in the
statement of financial position. This recognition is
based on the view that the lessee has a right to
use an asset for a specific period of time and at
the same time an obligation to pay for this right.
A lessee must report:
a) right-of-use assets and lease liabilities for all
leases with a term longer than 12 months, unless
the underlying asset is of a low value;
b) depreciation of right-of-use assets, separately
from interest expenses on lease liabilities in the
income statement.
At the commencement date of a lease, a les-
see determines the lease term as the non-can-
cellable period, together with periods covered by
an extension or termination option if it is reason-
ably certain that this option will be exercised. The
lease liability is measured at the present value
of the lease payments that were not paid at the
commencement date. Lease payments are dis-
counted with the rate implicit in the lease if it can
be easily determined; otherwise the lessee’s in-
cremental borrowing rate is used. The right-of-use
asset is measured on the commencement date
as the sum of the lease liability plus (i) prepaid
lease payments (less any benefits received), (ii)
initial direct expenses, and (iii) an estimate of res-
toration costs.
After the commencement date, the right-of-
use asset is measured using the cost method,
meaning that the asset is measured at cost less
accumulated depreciation and any impairment
losses, taking into account the revaluation of the
lease liability. The lease liability increases with in-
terest expenses, decreases with paid lease pay-
ments and is remeasured to reflect any re-exam-
ination or amendment of the lease.
When a contract is entered into, the Group
assesses whether the contract is, or contains,
a lease. A contract is, or contains, a lease if the
agreement assigns the right to decide over an
identified asset over a certain period of use in ex-
change for compensation.
ITAB’s lease portfolio consists mainly of real
estate, machinery and vehicles. The Group rec-
ognises right-of-use assets and lease liabilities
attributable to leases in the statement of financial
position. Depreciation of right-of-use assets and
interest on lease liabilities are recognised in prof-
it or loss. The lease payment is divided between
repayment of the lease liability and payment of
interest.
All lease payments are discounted to present
value using the rate implicit in the lease, or ITAB’s
incremental borrowing rate.
ITAB applies the practical exemptions in IFRS 16
regarding short-term leases, which are defined
as leases where the initial lease term is a maxi-
mum of 12 months after consideration of exten-
sion options, and leases where the underlying as-
set is of a low value, which in the Group includes
office equipment. ITAB does not apply IFRS 16 for
intangible assets. Non-lease components are
expensed and are not recognised as part of the
right of use or lease liability.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recognised
as assets in the balance sheet if it is probable that
future economic benefits will arise for the compa-
ny and the cost can be reliably estimated. Assets
are measured at cost less deductions for accu-
mulated depreciation according to plan and any
impairment losses. Cost includes the purchase
price and costs directly related to transporting
the asset to site and in a condition that it can be
utilised. Expenses for improving the performance
of property, plant and equipment, beyond the
initial level, increase the asset’s value and are
recognised in the balance sheet as a part of the
original investment. Expenses for repairs and
maintenance are expensed as they are incurred.
Depreciation is carried out systematically over
the assets’ expected useful life and commenc-
es after the non-current asset has been taken
into operation. The Group applies component
depreciation, which means that each part of
property, plant and equipment with a cost that
is significant in relation to the combined cost of
the asset is depreciated separately. Land is not
depreciated.
Depreciation plan
Buildings 10–40 years
Land improvement 10–20 years
Improvements to others’ property 10–20 years
Machinery and equipment 3–10 years
Depreciation plan for right-of-use assets
Buildings, production 8–15 years
Buildings, offices and warehouses 3–10 years
Machinery and equipment 3–10 years
The useful life and residual values of assets are
reviewed regularly and adjusted regularly as
needed.
FINANCIAL INSTRUMENTS
Financial instruments are every form of contract
that gives rise to a financial asset, financial liabil-
ity or equity instrument in another company. This
includes cash and cash equivalents, loan receiv-
ables, accounts receivable, accounts payable,
current and non-current borrowings and deriva-
tive instruments.
A financial asset or financial liability is rec-
ognised in the balance sheet when the compa-
ny is party to the instrument’s contractual terms
and conditions. Accounts receivable are rec-
ognised in the balance sheet when the invoice
has been sent and the company’s entitlement to
payment is unconditional. Supplier invoices are
recognised when the invoice has been received.
The financial asset is derecognised from the bal-
ance sheet when the right to receive the cash
flows from the asset expires or is transferred to a
third party by transferring all risks and benefits as-
sociated with the asset to the third party. A finan-
cial liability is derecognised from the balance
sheet when the obligation has been fulfilled, re-
voked or expired.
When settlement or disposal of financial in-
struments is expected to occur within a normal
business cycle or within 12 months after the bal-
ance sheet date, financial assets are recognised
as current assets; otherwise they are recognised
as non-current assets. Financial liabilities that fall
due or are expected to be settled within a normal
business cycle or within 12 months after the bal-
ance sheet date, and where there is no uncon-
ditional right to postpone the liability for at least
12 months, are recognised as current liabilities;
otherwise they are recognised as non-current
liabilities.
CLASSIFICATION OF FINANCIAL ASSETS AND
LIABILITIES
A financial instrument is classified on initial rec-
ognition according to the purpose for which the
instrument was acquired. The Group divides up
its financial assets and liabilities into debt instru-
ments, equity instruments and derivatives such
as hedging instruments in hedge accounting.
Debt instruments
The classification of financial assets that are debt
instruments is based on the Group’s business
model for the management of the asset and the
nature of the asset’s contractual cash flows. The
instruments are classified at: amortised cost or
fair value through profit or loss.
Financial assets measured at amortised cost are
non-derivative financial assets with payments
that are established or can be established and
that are not traded on an active market. Re-
ceivables of this type normally arise when the
Group pays cash to a counterparty or supplies
a customer with goods or services without the
intent of converting the receivable that arises.
Loan receivables, cash and cash equivalents,
and accounts receivable are recognised at
the amount that is expected to be received
after deductions for expected credit losses. All loan
receivables and accounts receivable are as-
sessed individually. The anticipated maturity of
accounts receivable is short, which is why the val-
ue is recognised at the nominal amount.
Financial assets measured at fair value through
profit or loss include financial assets available for
sale and financial assets that have been identi-
fied as being measured at fair value through prof-
it or loss. Financial instruments in this category
are initially recognised at fair value. Changes in
fair value are recognised in profit or loss.
Derivatives are classified at fair value through
profit or loss if the instrument has not been identi-
fied as a hedging instrument in hedge account-
ing or is ineffective.
59ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
Financial liabilities are classified at amortised
cost or at fair value through profit or loss.
Financial liabilities measured at amortised cost.
This category includes loans, other financial lia-
bilities, accounts payable and financial accrued
expenses and prepaid income. Financial liabil-
ities recognised at amortised cost are initially
measured at fair value including transaction
costs. After initial recognition, they are measured
at amortised cost according to the effective in-
terest method.
Financial liabilities measured at fair value
through profit or loss include financial liabilities
that have initially been attributed to the relevant
category as well as derivative liabilities if the in-
strument has not been identified as a hedging
instrument in hedge accounting or is ineffective.
Changes in the fair value of financial instruments
are recognised in profit or loss for the period in
which they arise. Additional purchase consider-
ations in connection with business combinations
are classified as financial liabilities measured at
fair value through profit or loss.
Equity instruments.
The Group classifies equity instruments at fair val-
ue through profit or loss.
Derivatives as hedging instruments in
hedge accounting
Hedging of net investments in foreign operations
and future cash flows are recognised according
to the principles for hedge accounting. When the
transaction is entered into, the relationship be-
tween the hedging instrument and the hedged
item is assessed and analysed against the
Group’s objective for risk management in respect
of hedging. An assessment of whether the hedg-
ing instruments used in hedging transactions are
effective when it comes to countering changes in
fair value or the cash flows that are attributable to
the hedged items is performed when hedging is
entered into and continually during the hedging
period.
Hedging of net investments in foreign operations.
Investments in foreign subsidiaries (net assets in-
cluding goodwill) have to a certain extent been
hedged through loans in foreign currency. The
exchange rate gain or loss in respect of borrow-
ing that is deemed to be effective hedging is rec-
ognised as a translation difference when trans-
lating foreign operations in other comprehensive
income. The ineffective portion is recognised
immediately in net financial items in the income
statement. Profit that has been recognised under
other comprehensive income is transferred to the
income statement when the foreign operation
has been divested.
In addition to loans in foreign currencies, the
Group uses currency futures to hedge net assets
in foreign currencies. The fair value of currency
hedges is recognised as a change in the fair
value of hedges of net investments in other com-
prehensive income. Any ineffectiveness is rec-
ognised immediately in net financial items in the
income statement.
Hedging of future cash flows. The derivative in-
struments used for hedging projected interest
expenses and forecast cash flow in a foreign cur-
rency are recognised in the balance sheet at fair
value. Any gain or loss is recognised as a change
in the fair value of cash flow hedges in other com-
prehensive income until the hedged flow is rec-
ognised in the income statement, at which time
the hedged instrument’s accumulated change
in value is transferred to net profit for the year to
meet the earnings effects of translated foreign
cash flows.
Impairment of financial assets.
The Group’s financial assets, apart from those
that are classified at fair value through profit or
loss, are covered by impairment for expected
credit losses. In addition to this, the impairment
covers lease receivables and contract assets
that are not measured at fair value through profit
or loss. Impairment for credit losses according to
IFRS 9 is forward-looking, and a loss allowance is
made when there is exposure to credit risk, nor-
mally on initial recognition. Expected credit loss-
es reflect an objective, probability-weighted out-
come that gives consideration to most scenarios
based on reasonable and verifiable forecasts for
the anticipated remaining term.
The financial assets are recognised in the bal-
ance sheet at amortised cost, meaning net of
gross value and loss allowance. Changes in the
loss allowance are recognised in profit or loss.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash and
bank balances as well as short-term investments
with high liquidity, with a duration of less than
three months, and which are exposed to an in-
significant risk of fluctuations in value. In the state-
ment of financial position, overdraft facilities are
recognised as borrowing among current liabili-
ties. Cash and cash equivalents are covered by
the demands for a loss allowance for expected
credit losses.
INVENTORIES
Inventories are measured at the lower of cost or
net realisable value and in accordance with first-
in, first-out (FIFO) method. This means that inven-
tories are recognised at the lower of cost accord-
ing to the FIFO method or net realisable value.
For manufactured goods and work in progress,
cost includes a reasonable portion of the indirect
costs based on a normal capacity. Deductions
are made for internal gains that arise through
sales between companies in the Group.
PROVISIONS
A provision is recognised in the balance sheet
when the company has a legal or informal
commitment that is a consequence of an event
and it is probable that an outflow of resources
will be required to settle the commitment and a
reliable estimate of the amount is possible. Pro-
visions for restructuring operations are made
when a detailed, formal plan for the measure is
in place and a well-founded expectation that
the restructuring will take place has been es-
tablished among those who will be affected.
Provisions for restructuring operations and oth-
er provisions are recognised as provisions, as
specified in Note 30.
TRANSACTIONS WITH RELATED PARTIES
Related companies are defined as those compa-
nies included in the Group as well as companies
in which related physical persons have a con-
trolling, joint controlling or significant influence.
Related physical persons are defined as current
and former Board members, senior executives
and close family members of such persons. Infor-
mation about transactions with related parties is
presented in Note 34.
OPERATING SEGMENTS
According to the definition in IFRS 8, an operating
segment is a component of a company:
(i) that engages in business activities from
which it may earn revenue and incur expens-
es (including revenue and expenses relating
to transactions with other components of the
same company), (ii) whose operating profit is
reviewed regularly by the company’s chief
operating decision-maker as a basis for deci-
sions about the allocation of resources to the
segment and to assess its performance, and
(iii) for which discrete financial information is
available.
Identification of operating segments has been
performed in four stages: identifying the compa-
ny’s chief operating decision-maker, identifying
the business activities, determining whether
discrete financial information is available for the
business activities, and determining whether this
information is reviewed regularly by the compa-
ny’s chief operating decision-maker. The defini-
tion according to IFRS 8 has thereafter been used
to define the Group’s operating segments.
The company’s chief operating decision-mak-
er is identified as the Board of Directors, see page
88.
Profit at company level, or aggregated compa-
ny level, are not used as a basis for decisions on
the allocation of resources. Various parameters
in customer projects based primarily on strategic
aspects are used as a basis instead.
The majority of the Group’s sales are made to
major global customers, which is why the ITAB
Group has a local presence in many countries.
Decisions are made at Group level, mean-
ing, for example, that pricing takes place in
relation to a particular customer. Pricing can
entail an uneven allocation of resources be-
tween different Group units in order for the
Group to win an order. The various units’ level
of revenue and profit are consequently highly
dependent on the Group’s other companies,
which is one reason why profit is not used as a
basis for decisions on the allocation of resources.
Another reason is that the supporting data
for decisions on the allocation of production
resources is not determined by the various
units’ profit, rather by the conditions that exist in
various customer projects as regards the most
effective production for the Group as a whole.
This can entail that certain units are allocated
resources for production that are not favourable
from the individual unit’s perspective, but that are
60 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
deemed to be the best decision from a Group
perspective. The corresponding argument also
applies to other parameters, such as design,
construction, marketing, installation, develop-
ment, etc.
This business model entails that a large portion
of the decisions that affect the Group’s various
companies are taken centrally. ITAB does not
have any independent financial information
regarding products or product groups since the
majority of sales take the form of concept sales,
with a combination of several products and ser-
vices.
These conditions mean that profit is not
used as a basis for decisions regarding the allo-
cation of resources to various parts of the com-
pany, and that the Group only comprises one
operating segment.
PARENT COMPANY ACCOUNTING POLICIES
The Parent Company has prepared its annual ac-
counts in accordance with the Swedish Annual
Accounts Act and the Swedish Financial Report-
ing Board’s recommendation RFR 2. The Swedish
Financial Reporting Board’s recommendations
for listed companies have also been applied. The
application of RFR 2 means that the Parent Com-
pany, in the annual report for the legal entity, ap-
plies all IFRS and statements approved by the EU
to the extent possible within the framework of the
Swedish Annual Accounts Act and the Swedish
Act on Safeguarding of Pension Commitments,
and with respect to the relationship between
accounting and taxation. The recommendation
explains which exceptions and additions to IFRS
should be applied.
The accounting policies stipulated below for
the Parent Company have been consistently
applied for all periods as presented in the Parent
Company’s financial statements.
Presentation of income statement and
balance sheet
The financial statements include an income
statement, a statement of other comprehensive
income, a balance sheet, a cash flow statement
and a statement of changes in equity. The Par-
ent Company uses the presentation formats
specified in the Swedish Annual Accounts Act,
which means for example that a different pre-
sentation of equity is applied and that provisions
are recognised under a separate heading in the
balance sheet. For the Parent Company, equity
is presented divided into non-restricted and re-
stricted equity.
Leases
In the Parent Company, IFRS 16 is not applied. In-
stead, lease payments are recognised as an ex-
pense on a straight-line basis over the lease term.
Group contributions, shareholder contributions
and dividends
Group contributions are recognised accord-
ing to RFR 2’s alternative rule, which means that
received and paid Group contributions are
recognised as year-end appropriations in the
income statement.
Shareholder contributions are recognised di-
rectly against equity for the recipient and capital-
ised in shares and participations for the provider
to the extent impairment is not required.
Dividends received are recognised as revenue
when the right to receive dividends has been de-
termined.
Taxes
In the Parent Company, untaxed reserves includ-
ing deferred tax liabilities are recognised. In the
consolidated financial statements, however, un-
taxed reserves are divided up into deferred tax
liability and equity.
Participations in subsidiaries
Participations in subsidiaries are recognised in
the Parent Company according to the acqui-
sition method. The investments’ impairment re-
quirements are tested annually or when there is
a risk that the carrying amount of the investment
is higher than the replacement cost.
Dividends from subsidiaries are recognised
as financial income. When dividends stem from
gains earned before the acquisition, the item
must be tested for impairment.
Financial instruments
As a result of the relationship between ac-
counting and taxation, the rules relating to
financial instruments are not applied accord-
ing to IFRS 9 in the Parent Company as a legal
entity. Instead, the Parent Company applies
the cost method in accordance with the
Swedish Annual Accounts Act. In the Parent Com-
pany, financial non-current assets are thus mea-
sured at cost value and financial current assets
according at the lower of cost or net realisable
value, with impairment of expected credit losses
applied according to IFRS 9 in respect of assets
that are debt instruments. For other financial as-
sets, impairment is based on market values. De-
rivatives are recognised according at the lower of
cost or net realisable value.
NOTE 3. IMPORTANT
ESTIMATES AND
ASSESSMENTS
The preparation of financial reports requires
that the company management makes assess-
ments and uses estimates and assumptions that
affect recognised amounts in the consolidated
accounts. These estimates, assessments and re-
lated assumptions are based on experience and
other factors that are deemed reasonable in the
prevailing circumstances. The actual results may
deviate from these estimates. The estimates, as-
sessments and assumptions are reassessed reg-
ularly. Changes to estimates and assessments
are recognised in the period in which the change
takes place as well as in future periods if these pe-
riods are affected.
Below are the estimates and assessments that,
in management’s opinion, are important for
recognised amounts in the financial statements
and for which there is a significant risk that future
events or new information could result in them
changing.
BUSINESS COMBINATIONS
The measurement of identifiable assets and li-
abilities in conjunction with the acquisition of
subsidiaries or operations involves items in the
acquired company’s balance sheet, as well as
items that have not been recognised in the ac-
quired company’s balance sheet such as cus-
tomer relationships, being measured at their fair
value. There are normally no publicly listed prices
for the assets and liabilities that are to be mea-
sured, whereupon various measurement tech-
niques must be applied. These measurement
techniques are based on a number of different
assumptions. For a production-intensive compa-
ny like ITAB, non-current assets, inventories and
accounts receivable are significant items in the
balance sheet that can be difficult to measure
and assess.
The measurement of identifiable assets and
liabilities is also dependent on the accounting
environment in which the acquired company/
business has operated. Assessments are made
regarding the extent of the adaptations that
are required to the Group’s accounting policies,
the frequency with which final accounts are
prepared as well as access to data that may be
required to measure identifiable assets and liabil-
ities. All balance sheet items are thereby subject
to estimates and assessments. This also means
that a preliminary measurement is performed
and subsequently adjusted. All acquisition cal-
culations are subject to final adjustment at the
latest one year after the time of the acquisition.
With due consideration to the above descrip-
tion and the practical potential to compile and
present all individual adjustments in a way that
benefits the person reading the Annual Report,
ITAB has decided, provided this is not a case of
material adjustments, not to specify separately
for each individual acquisition the reasons why
the initial reporting of the business combination is
preliminary, nor the assets and liabilities for which
the initial reporting is preliminary.
61ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
IMPAIRMENT TESTING FOR GOODWILL, OTHER
INTANGIBLE ASSETS AND OTHER NON-CURRENT
ASSETS
Important sources of uncertainty in estimates
Goodwill is not amortised, rather impairment
testing is performed annually instead. Other
intangible assets and other non-current assets
are amortised or depreciated over the period
in which company management estimates that
the asset will be used. In addition, regular assess-
ments are performed as to whether there is any
indication of a need for impairment. Impairment
testing is based on a review of the recoverable
amount. The value is estimated based on com-
pany management’s calculations of future cash
flows, which are based on internal business plans
and forecasts.
Estimates and judgements
Company management’s judgement is required
when it comes to impairment, particularly when
assessing:
– whether an event has occurred that can affect
the values of the assets,
– whether an asset’s carrying amount can be
confirmed by the discounted present value of
future cash flows, which are estimated based on
the continued use of the asset in the operations,
– that adequate assumptions are used when pre-
paring cash flow forecasts, and
– the discounting of these cash flows.
Changes to the assumptions that are made by
company management when determining any
level for impairment can affect the financial posi-
tion and operating profit.
IMPAIRMENT TESTING FOR FINANCIAL ASSETS
Important sources of uncertainty in estimates
Impairment for credit losses of financial assets
according to IFRS 9 is forward-looking, and a
loss allowance is made when there is exposure
to credit risk, normally on initial recognition. Ex-
pected credit losses reflect an objective, proba-
bility-weighted outcome that gives consideration
to most scenarios based on reasonable and
verifiable forecasts for the anticipated remaining
term.
Estimates and judgements
ITAB’s credit risk is almost exclusively attributable
to accounts receivable. The basis for expected
credit losses comprises an assessment of the
unpaid receivables. The loss allowance for ex-
pected credit losses is based on a calculation
according to the internal regulatory framework in
combination with an individual assessment. The
assessment is performed on the basis of the cir-
cumstances that could have a significant impact
in the valuation process, such as important cus-
tomers’ financial position and ability to pay that
are known on the balance sheet date.
LEASES
Important sources of uncertainty in estimates
ITAB applies IFRS 16 Leases as of 1 January 2019.
Lease liabilities attributable to long-term leases,
which previously would have been classified as
operating leases in accordance with IAS 17, are
valued at the present value of the remaining lease
payments, discounted using the incremental bor-
rowing rate. ITAB initially recognises a right-of-use
asset as a non-current asset at an amount corre-
sponding to the lease liability. The establishment
of the lease term and incremental borrowing rate
entails judgements that affect the value of the
lease liability and right-of-use asset.
Estimates and judgements
When determining the lease liability and right-of-
use asset, the most significant judgements are at-
tributable to the establishment of the lease terms.
The majority of ITAB’s leases include options to
either extend or terminate the agreement. When
the term of the lease is established, ITAB takes into
consideration all facts and circumstances that
provide a financial incentive to utilise an option
to extend or waive an option to terminate the
agreement. Examples of factors that are consid-
ered include strategic plans, restructuring pro-
grammes, the importance of the underlying as-
set to ITAB’s operations and/or costs attributable
to not extending or terminating leases.
DEFERRED TAX
Important sources of uncertainty in estimates
Deferred tax assets/liabilities are recognised for
temporary differences between the reported
amounts for assets and liabilities and the rele-
vant taxable values as well as unutilised capital-
ised loss carryforwards. Deferred tax assets are
recognised on the basis of company manage-
ment’s estimates of future taxable profit in various
tax jurisdictions.
The actual results may differ from the estimates
due to changes in business climate, ownership
and tax legislation.
Estimates and judgements
For example, company management estimates
future taxable income in order to determine the
value of deferred tax.
Estimate/Assessment Note
Business combinations
5
Impairment testing for
goodwill, other intangible assets and
other non-current assets 18, 19
Impairment testing for
financial assets 21
Leases 22
Deferred tax 16
NOTE 4. FINANCIAL RISK
MANAGEMENT
ITAB’s risk management aims to identify, control,
prevent and minimise the Group’s risk mapping.
ITAB’s financial risks are described below. For oth-
er business-related risks, see the Administration
Report on pages 35-42.
The financial risks are managed by the finance
policy adopted by the Board of Directors. Finan-
cial activities such as risk management, liquid-
ity management and borrowing are handled
centrally by the Parent Company. This allows the
Group to optimise the financial risks and make
use of economies of scale and synergy effects.
The Group’s identified financial risks are currency,
interest, credit and liquidity risks.
CURRENCY RISK
ITAB Shop Concept is exposed to currency risks
through its international business activities. These
can be divided into transaction risk, risk when
translating foreign subsidiaries’ income state-
ments and risk when translating foreign subsid-
iaries’ balance sheets.
Transaction risk
Commercial payment flows that occur in a cur-
rency other than the respective subsidiary’s local
currency entail a transaction risk. To reduce
currency exposure, efforts are made to match
the inflow and outflow in different currencies, for
example by issuing invoices in the same curren-
cy in which purchases are made. In line with the
finance policy, each individual Group company
decides whether to hedge transaction exposure,
which in that case occurs with ITAB Shop Con-
cept AB as the counterparty. External currency
exposure hedging is thereafter performed by the
Parent Company ITAB Shop Concept AB, with due
consideration for the Group’s currency exposure
within the next 12 months. According to ITAB’s fi-
nance policy, 50–75 percent of the currency risk
within the next upcoming 12 months is hedged
through forward agreements. It is also possible
to adjust prices for currency fluctuations through
clauses in a number of customer contracts.
As a result of the hedging strategy, the impact
on ITAB’s profit from a reasonable fluctuation in ex-
change rates is deemed to be small, whereupon
the currency risk analysis regarding the transac-
tion flows is not deemed to be significant. Hedg-
ing activities to reduce transaction exposure
are classified as cash flow hedges. At the end of
2021, there were cash flow hedges of projected
flows in EUR, GBP, CZK, DKK, NOK and CNH. The fair
value of the forward agreements used to hedge
forecast flows amounted to net SEK 4 million (1).
The year’s change in fair value, SEK 3 million (-1)
after tax, has been recognised in comprehen-
sive income. The realised results of the forward
agreements amounted to SEK 3 million (0) before
tax for 2021, which has been recognised as other
operating income and expenses in the income
statement.
Risks when translating the income statements
of foreign subsidiaries
The foreign subsidiaries’ income statements are
62 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
translated at the average exchange rate for the
respective period. Given the invoicing and net
profit of 2021, a 5 percent change in the SEK ex-
change rate to all currencies would affect invoic-
ing by approximately SEK 277 million (221) and net
profit by approximately SEK 10 million (5).
Risks when translating the balance sheets of
foreign subsidiaries
The foreign subsidiaries’ balance sheets are
translated at the balance sheet date rate. The
translation risks relate to exchange rate fluctua-
tions that affect the value of the net foreign assets
when translating to SEK. The value of net foreign
assets amounted to SEK 1,766 million (1,084) as of
the balance sheet date. Investments in net for-
eign assets are partly financed by raising loans in
foreign currencies, which reduces the translation
risks. To reduce the net assets in foreign currencies
and thereby reduce the currency risks, assets are
financed locally in the foreign subsidiaries, in lo-
cal currency, where this is commercially possible.
However, some financing is arranged via the Par-
ent Company ITAB Shop Concept AB. In addition
to loans in foreign currencies, the Group uses cur-
rency futures to hedge net assets in foreign curren-
cies. The fair value of the currency hedges is rec-
ognised against comprehensive income and can
be reclassified as a financial gain or loss when cur-
rency futures are ineffective. Realised results from
currency futures amounted to SEK 0 million (0)
before tax in 2021, which was recognised against
comprehensive income in the Group. Exchange
rate fluctuations in 2021 had an impact of SEK 117
million (-127) after tax on the Group’s comprehen-
sive income. At the end of 2021, the fair value of the
currency futures is estimated at SEK -1 million (0).
The value of the Group’s foreign net assets per
currency:
Currency,
SEK million 31 Dec 2021 31 Dec 2020
CZK 428 285
NOK -54 7
GBP -104 57
EUR
1)
787 99
USD, HKD, CNY 573 518
Other 136 118
1,766 1,084
1)
EUR also refers to currencies linked to EUR.
Currency hedges
At the close of the year, the Group had
hedged the following net amount via cur-
rency futures for the purpose of hedging
cash flows and net assets. The gross volumes
below are stated per currency in the local
currency (million) measured at nominal value. All
contracts have a term of less than 12 months.
Currency,
SEK million
31 Dec 2021
31 Dec 2020
SEK 374 100
NOK -85 -70
CNH 130 152
CZK 261 187
GBP -8 -9
EUR -44 -18
DKK -21 -6
Average exchange rate,
currency futures
31 Dec 2021
EUR/SEK 10.2526
EUR/CZK 26.0860
EUR/CNH 7. 4 5 0 6
GBP/SEK 11. 88 01
GBP/CNH 8.8467
NOK/SEK 1.0 034
NOK/CNH 0.7508
NOK/CZK 2.5321
DKK/SEK 1.3740
DKK/CNH 0.9990
SEK/CZK 2.5456
SEK/CNH 0.7701
INTEREST RISK
The interest risk consists of interest rate chang-
es having a negative impact on the Group’s
profit through increased borrowing costs.
In order to reduce the interest risk, inter-
est rates can be fixed via restricted loans or
through interest rate swap agreements. The
Group’s interest-bearing net debt, which refers to
borrowing as well as convertible debenture loans
less cash and cash equivalents, amounted to SEK
1,239 million (1,748) on the balance sheet date, of
which SEK 834 million (1,232) is financed with vari-
able interest. The remaining SEK 405 million (516) is
restricted through interest rate swap agreements
and has an average fixed rate period of 41 months
(49). The average interest rate for outstanding in-
terest-bearing liabilities was 2.51 percent (5.53) at
year-end. A 1 percentage point change in inter-
est would affect net profit by approximately SEK 6
million (9) annually. The change in the fair value
of interest rate swap agreements is recognised in
comprehensive income until the hedged flow is
transferred to net profit for the year. The change
in comprehensive income amounts to SEK 17 mil-
lion (-3), of which SEK 11 million (8) has been trans-
ferred to net profit for the year. Of the SEK 11 million
recognised as financial expenses in 2021, SEK 6
million pertains to hedges assessed as ineffective
after the recapitalisation in 2021.
Derivative instruments
Interest rate
swap agree-
ments
31 Dec 2021
Nominal
amount
(SEK mil-
lion)
31 Dec 2020
Nominal
amount
(SEK mil-
lion)
Duration less
than 1 year - 49
Duration 1-3
years
155
150
Duration 3-5
years
250
192
Duration 5-10
years
-
125
405 516
LIQUIDITY RISK
Liquidity risk refers to the risk that a company can-
not borrow money to fulfil its obligations. ITAB Shop
Concept strives to maintain a high level of financ-
ing readiness, for example by monitoring and
managing the Group’s combined capital financ-
ing centrally within the Parent Company. The
majority of the Group’s borrowing takes place be-
tween banks and ITAB Shop Concept AB. Subsid-
iaries in turn borrow from ITAB Shop Concept AB on
market terms. Some local borrowing from banks
in the relevant company’s local currency may
occur.
CREDIT RISK
Credit risk refers to the risk that the counterparty
in a financial transaction is unable to fulfil its obli-
gations. ITAB Shop Concept’s credit risk is almost
exclusively attributable to accounts receivable.
The Group has historically had low losses on ac-
counts receivable.
The company’s customers are primarily large,
well-established companies with sound payment
capacity distributed across several geographical
markets. The risk of losses on accounts receivable
is managed through fixed procedures for credit
restrictions, reminder procedures and penalty
interest invoicing. Credit insurance policies exist
in conjunction with sales to customers in certain
countries. The amount that best represents the
maximum exposure to credit losses, without con-
sideration for any security provisions and VAT, is
the outstanding accounts receivable on the bal-
ance sheet date of SEK 1,118 million (755).
Credit risk from balances in banks and financial
institutes is managed by the Parent Company in
accordance with the Group’s policy. The Group’s
total financial assets amount to SEK 1,482 million
(1,519). See also Note 21 Financial assets and li-
abilities.
NOTE 5. CORPORATE
ACQUISITIONS AND
DIVESTMENTS
Information on purchase consideration and
acquired/divested net assets:
Purchase consideration 2021 2020
Total purchase consideration
excluding acquisition costs:
67 0
of which, purchase con-
sideration not paid during
the year 19 -
Expenses in conjunction with acquisitions are rec-
ognised continually as expenses.
Acquisitions and divestments had a total impact
of SEK -40 million on net investments for 2021, of
which the acquisition of Imola Retail Solution
accounted for SEK -29 million, acquisitions of
non-controlling interests SEK -19 million and divest-
ments SEK +8 million.
ACQUISITIONS IN 2021
Acquisition of Cefla Retail Solutions in 2021
ITAB Shop Concept AB’s Italian subsidiary La For-
tezza s.p.a. entered into an agreement with Ce-
fla soc. coop. on 8 October 2020 to acquire 81
percent of Cefla’s business unit for retail solutions
(“Cefla Retail Solutions”). Cefla Retail Solutions
primarily offers interior design and checkout
solutions to its customers, which predominantly
operate in the grocery sector in southern Europe.
Through the acquisition and collaboration with
Cefla, ITAB has strengthened its leading position
in Southern Europe and created opportunities to
offer ITAB’s solutions to a wider customer base.
63ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
Imola Retail Solutions on the acquisition date Final fair values Preliminary fair values
Intangible assets 1 1
Property, plant and equipment 119 124
Deferred tax assets 1 1
Inventories 27 27
Accounts receivable 10 7
Non-current liabilities -71 -75
Current liabilities -31 -28
Net identifiable assets and liabilities 56 57
Non-controlling interests -11 -11
Consolidated goodwill 1 0
Purchase consideration including unpaid purchase consideration 46 46
Purchase consideration paid in January 2021 -29
Unpaid purchase consideration, paid in 2022 -11
Unpaid purchase consideration, paid in 2023 -6
-46
DIVESTMENTS IN 2021
In connection with the restructurings in the Group, ITAB sold 100 percent
of the shares in the company Pulverlacken i Hillerstorp AB through a sub-
sidiary in November 2021. The purchase consideration amounted to SEK
8 million. The divestment impacted operating profit by SEK0 million and
cash flow during the fourth quarter by SEK8 million.
Pulverlacken i Hillerstorp on the divestment date Fair value
Property, plant and equipment 4
Inventories 8
Accounts receivable 7
Deferred tax -1
Current liabilities -10
Net identifiable assets and liabilities 8
In addition, a dormant company in Portugal was wound up in 2021.
DIVESTMENTS IN 2020
During 2020, two dormant companies in Sweden were divested. A dor-
mant company in China and a dormant company in Hungary were
wound up.
ACQUISITIONS AFTER THE END OF THE FINANCIAL YEAR
On 28 February 2022, the ITAB Group acquired, through its Finnish subsid-
iary ITAB Finland Holding Oy. all shares in Oy Checkmark Ltd. Checkmark
has annual sales of approximately EUR 12 million and 44 employees. The
acquisition is consolidated in the Group as of 1 March 2022. Refter to Note
35 Events after the balance sheet date for more information about the ac-
quisition.
CONDITIONAL PURCHASE CONSIDERATION
The agreed conditional additional purchase consideration from the ac-
quisition of non-controlling interests in Pulverlacken i Hillerstorp AB in 2018
was attributable to the company’s profit in 2018-2019. The additional pur-
chase consideration was within a range of SEK 0 to 3.2 million and was
paid on an annual basis. The remaining additional purchase consider-
ation in 2019 was valued at SEK 1 million. The final payment of SEK 0.5 mil-
lion was made in 2020.
The agreed conditional additional purchase consideration from the ac-
quisition of non-controlling interests in Reklamepartner Graphics AS in 2017
was attributable to the company’s profit in 2017-2020 and capped at NOK 2
million. The amount that could be paid was in a range of NOK 0 to 2 million
and was paid on an annual basis, with the final payment of SEK 0 million
made in 2021.
The acquisition was completed in January 2021, and the business unit was
carved out from Cefla’s existing structure and transferred to a newly estab-
lished Italian limited liability company,
Imola Retail Solution Srl. ITAB owns 81 percent of Imola Retail Solution
and Cefla the remaining 19 percent. ITAB has the right to acquire Cefla’s
minority stake in the aforementioned company three years after the trans-
action date. The acquisition is consolidated from 1 January 2021. The pos-
itive EBITDA effect for ITAB in 2021 is estimated to amount to at least SEK
30 million and the transaction will create opportunities for further synergy
effects in the coming years.
The acquisition had an impact of SEK -1 million on operating profit and
SEK -29 million on cash flow in 2021.
The exchange rate for the translation of the acquisition to SEK was EUR/
SEK 10.0343.
Effect of acquisition of 81 percent of the shares in Imola Retail Solution Srl
Preliminary fair values from the acquisition of Imola were presented in the
2020 Annual Report. Final fair values of assets and liabilities acquired in
2021, purchase considerations and the impact on the Group’s cash and
cash equivalents are presented in the table below.
The entity approach is applied for the acquisition, which means that all
assets and liabilities as well as income and expenses are included in their
entirety at the time of the initial acquisition, and no further goodwill can
therefore be linked to later acquisitions of non-controlling interests.
Acquisitions of non-controlling interest in 2021
In April 2021, a subsidiary acquired the remaining 15 percent of the partly
owned company La Fortezza Sudamericana S.A. (Argentina). The pur-
chase consideration amounted to EUR 2 million. The entity approach is
applied for acquisitions, which means that all assets and liabilities as well
as income and expenses are included in their entirety at the time of the
initial acquisition, even for partly owned subsidiaries, and no further good-
will is therefore linked to this acquisition. The difference between valued
non-controlling interests prior to acquisition and the purchase consid-
eration is recognised directly in equity attributable to Parent Company
shareholders (SEK 1 million). Cash flow in the second quarter of 2021 was
impacted in an amount of SEK -19 million.
The exchange rate for the translation of the acquisition to SEK was EUR/
SEK 10.121.
64 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
The ITAB Group comprises some 40 operating companies that sell, devel-
op, produce and distribute shop fittings and equipment to chain-based
customers. The largest customer accounts for approximately 12 percent
of external sales, and none of the ITAB Group’s other customers account
for more than 6 percent of external sales. Most of ITAB’s customers are
major chain stores that operate internationally and have stores in several
countries. Several of the Group’s companies are involved in most business
deals.
Because sales largely involve different customised shop concepts,
customer sales are often conducted with resources from several
Group companies in order to fulfil the customer’s various needs in the best
possible way. Development and production of the various shop fitting con-
cept segments are carried out by different Group companies depending
on where the best conditions exist. This business model entails that a large
portion of the decisions that affect the Group’s various companies are
taken centrally.
As ITAB sells customised shop fitting concepts and often sets a price
for a combined product and service, ITAB performs no division between
product groups. These circumstances mean that the profit or loss is not
used as a basis for deciding on the allocation of resources to different
parts of the company, and that ITAB makes no allocation according to
operating segments or business segments. See more about the business
operations on pages 20-29.
CONTRACT ASSETS AND CONTRACT LIABILITIES
ITAB’s contract assets comprise goods and services that have been delivered but not yet invoiced, normally in the event of concept sales over time, where
additional performance commitments must be fulfilled. Contract liabilities comprise advance payments from customers, allocations from customer loyalty
programmes and invoicing in addition to performances not yet fulfilled in the event of concept sales over time.
Contract assets 2021 2020
Accrued income 12 16
Contract liabilities
Advance payments from customers 75 49
Accrued expenses 30 25
Prepaid income 2 1
107 75
Revenue recognised during the period, of which: 2021 2020
Revenue included in the opening balance in the
item contract liabilities 10 10
Revenue attributable to commitments wholly or
partially executed during previous periods 1 3
Sales per customer group
1)
2021 2020
Grocery 3,680 3,094
Home Improvements 866 733
Fashion 416 420
Other customer groups 1,283 1,076
6,245 5,323
REVENUE FROM CONTRACTS WITH CUSTOMERS DIVIDED BY CUSTOMER GROUP AND GEOGRAPHIC MARKET
Revenue recognition takes place when the Group satisfies a performance commitment by transferring promised goods and the customer gains control of
the asset. This normally takes place on delivery in accordance with applicable delivery terms. In the event of concept sales where a service assignment is
included, revenue recognition for the projects takes place over time. The projects are primarily short-term projects. Payment terms vary since they are adapted
according to different conditions in different geographic markets.
2)
Northern Europe consists of the Nordic countries. Southern Europe consists mainly
of Italy, France and Spain.Central Europe’s largest markets are Germany, the
Netherlands and the Czech Republic. Eastern Europe’s largest markets are the Baltic
countries, Poland and Russia. USA, China, Argentina and Saudi Arabia account for
almost half of the market in the Rest of the World.
1)
The customer groups are divided according to the industries in which the cus-
tomers operate. Other customer groups largely consist of distributors, consumer
electronics, pharmacies and health/beauty.
Sales per market
2)
2021 2020
Northern Europe 1,498 1,500
Southern Europe 1,430 819
Central Europe 1,179 1,031
UK & Ireland 1,002 1,054
Eastern Europe 655 509
Rest of the World 481 410
6,245 5,323
NOTE 6. REVENUE FROM CONTRACTS WITH CUSTOMERS
1)
The allocation basis for deciding the country for external sales is the country
where the product is delivered and/or service is performed.
EXTERNAL REVENUE
1)
Group 2021 2020
United Kingdom 967 1,020
Italy 923 434
Norway 606 584
Germany 604 582
Sweden 452 550
Finland 309 244
France 270 266
The Netherlands 242 180
Czech Republic 186 128
Russia 166 118
Spain 142 74
Denmark 127 118
Poland 122 118
Lithuania 93 71
Romania 71 23
USA 60 64
Other 905 749
6,245 5,323
PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Group 2021 2020
Sweden 298 474
China and Hong Kong 219 211
Italy 179 102
Czech Republic 171 102
Norway 107 114
United Kingdom 103 118
Finland 75 83
Germany 74 78
Lithuania 65 63
Russia 48 43
France 47 54
Other 92 69
Goodwill 1,644 1,599
3,122 3,110
BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
65ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
NOTE 7. PURCHASES AND SALES BETWEEN PARENT COMPANY AND SUBSIDIARIES
Parent Company 2021 2020
Sales of services to subsidiaries 168 169
Purchases of services from subsidiaries -7 -8
Of the Parent Company’s invoiced sales, 100 percent consisted of invoic-
ing to subsidiaries.
Purchases from subsidiaries relate primarily to IT, design, marktering and
administration services. No goods were purchased from subsidiaries.
Profit from participations in subsidiaries as well as financial income and
expenses from Group companies are presented in Notes 13 and 14, re-
spectively.
Average number of employees 2021 of which
men
of which
women
2020 of which
men
of which
women
Parent Company Sweden 18 50% 50% 16 63% 37%
Subsidiaries Argentina 76 92% 8% 93 91% 9%
Belgium - - - 5 80% 20%
Chile 1 100% - 2 100% -
Denmark 23 61% 39% 16 75% 25%
Estonia 10 80% 20% 10 80% 20%
Finland 104 83% 17% 106 83% 17%
France 62 69% 31% 103 74% 26%
United Arab Emirates 7 86% 14% 6 83% 17%
India 1 100% - 1 100% -
Italy 351 77% 23% 194 76% 24%
China and Hong Kong 436 48% 52% 537 43% 57%
Latvia 123 85% 15% 114 83% 17%
Lithuania 141 85% 15% 129 85% 15%
Malaysia 11 82% 18% 11 82% 18%
The Netherlands 65 86% 14% 82 87% 13%
Norway 163 78% 22% 167 77% 23%
Poland 9 67% 33% 9 67% 33%
Russia 124 73% 27% 124 74% 26%
Spain 10 60% 40% 11 73% 27%
United Kingdom 197 73% 27% 241 75% 25%
Sweden 339 74% 26% 432 73% 27%
Czech Republic 396 67% 33% 352 72% 28%
Germany 256 81% 19% 259 81% 19%
USA 7 29% 71% 10 40% 60%
TOTAL IN SUBSIDIARIES 2,912 72% 28% 3,014 71% 29%
GROUP TOTAL 2,930 72% 28% 3,030 71% 29%
NOTE 8. PERSONNEL AND SENIOR EXECUTIVES
Salaries, other remuneration and social security expenses 2021 2021 2020 2020
(SEK million)
Salaries and
remuneration
Social security
expenses
3)
Salaries and
remuneration
Social security
expenses
Parent Company 39.4 20.9 27.6 15.4
(of which pension costs)
1)
6.3 6.0
Subsidiaries 1,058.1 248.2 990.3 230.2
(of which pension costs) 89.9 58.6
GROUP TOTAL 1,0 97. 5 269.1 1,017.9 245.6
(of which pension costs)
2)
96.2 64.6
1) Of the Parent Company’s pension costs, SEK 1.4 million (1.4) pertains to the Board and CEO. The company’s outstanding pension commitments to these persons
amount to SEK 0 million (0).
2) Of the Group’s pension costs, SEK 5.9 million (7.2) pertains to the Board and CEO. The Group’s outstanding pension commitments to these persons amount to SEK
0 million (0).
3) The Parent Company’s social security expenses include social security contributions for benefits issued in foreign companies where ITAB Shop Concept AB has
assumed the obligation to report and pay social security contributions.
66 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
REMUNERATION TO SENIOR EXECUTIVES
Directors' fees
In accordance with the resolution at the 2021
AGM, the fee for elected Board members
amounts to a total of SEK 2,500 thousand, of which
SEK 500 thousand to the Chairman of the Board
and SEK 250 thousand to each of the other eight
Board members.
In addition, selected Board members receive a
fee for their work on the Remuneration Committee
and the Audit Committee. These fees, which are
distributed between the committee members,
total SEK 130 thousand for the Remuneration
Committee and SEK 150 thousand for the Audit
Committee. Aside these fees, ITAB paid no other
remuneration to Board members in 2021.
Guidelines for renumeration to senior executive
These guidelines include the individuals who
are part of executive management of ITAB Shop
Concept AB (publ), currently the CEO and other
members of Group management. To the extent a
Board member performs work for ITAB in addition
to the Board assignment, these guidelines shall
also apply to any remuneration (such as consul-
tant’s fees) for such work. The guidelines are for-
ward-looking, meaning that they are applicable
to remuneration agreed, and amendments to
remuneration already agreed, after adoption of
the guidelines by the 2021 AGM. These guidelines
do not apply to any remuneration decided or ap-
proved by a general meeting of shareholders.
The guidelines’ promotion of the company’s busi-
ness strategy, long-term interests and sustainability
In short, ITAB’s business strategy is the following.
ITAB shall offer complete shop fitting concepts
for retail chain stores. With its expertise, long-term
business relationships and innovative products,
ITAB will secure a market-leading position in se-
lected markets. A prerequisite for the successful
implementation of the company’s business strat-
egy and safeguarding of its long-term interests,
including its sustainability, is that the company is
able to recruit and retain management with good
competence and the capacity to achieve set
goals. To this end, it is necessary that the compa-
ny offers competitive remuneration, which these
guidelines enable.
Variable cash remuneration covered by these
guidelines shall aim at promoting the company’s
business strategy and long-term interests, includ-
ing its sustainability.
Types of remuneration, etc.
The remuneration shall be on market terms and
may consist of the following components: fixed
cash salary, variable cash remuneration, pension
benefits and other benefits. The level of remuner-
ation for individual executives shall be based on
factors such as position, competence, experi-
ence and performance. Additionaly, a general
meeting of shareholders may – and irrespective of
these guidelines – decide on, for example, share
and share price-related remuneration.
The satisfaction of criteria for awarding variable
cash remuneration shall be measured over a
period of one year. The variable cash remuner-
ation for the CEO may amount to not more than
75 percent of the fixed annual cash salary. The
variable remuneration for other members of
Group management may amount to not more
than 50 percent of the fixed annual cash salary.
For the CEO, pension benefits, including health
insurance, shall be premium-defined. Variable
cash remuneration shall not qualify for pension
benefits. The pension premiums for premium de-
fined pension shall amount to not more than 30
percent of the fixed annual cash salary.
For other executives, pension benefits, includ-
ing health insurance, shall be premium-defined
unless the individual concerned is subject to de-
fined-benefit pension under mandatory local leg-
islation or collective agreement provisions.
Variable cash remuneration shall qualify for
pension benefits to the extent required by man-
datory local legislation or collective agreement
provisions for the individual concerned. The pen-
sion premiums for premium defined pension shall
amount to not more than 30 percent of the fixed
annual cash salary.
Other benefits may include, for example, life in-
surance, medical care insurance and company
cars. Premiums and other costs due to such bene-
fits may amount to not more than 12 percent of the
fixed cash salary.
For employment governed by rules other than
Swedish rules, pension benefits and other benefits
may be duly adjusted to ensure compliance with
mandatory rules or established local practice, tak-
ing into account, to the extent possible, the overall
purpose of these guidelines.
Termination of employment
The notice period may not exceed 12 months if
notice of termination of employment is made by
the company. Fixed cash salary during the period
of notice and severance pay may together not
exceed an amount equivalent to the CEO’s fixed
cash salary for two years, and one year for other
members of executive management. The period
of notice may not to exceed six months without
any right to severance pay when termination is
made by the executive.
Criteria for awarding variable cash remuneration,
etc.
The variable cash remuneration shall be linked
to predetermined and measurable criteria which
can be financial or non-financial. They may also
Salaries and other remuneration divided
per country and between Board members/CEO
and other employees
2021
Board
and CEO
2021
Other
employees
2020
Board
and CEO
2020
Other
employees
PARENT COMPANY IN SWEDEN 11.3 28.1 8.8 18.8
(of which bonuses) 3.6 1.7
SUBSIDIARIES IN SWEDEN 7.0 145.9 8.3 179.4
SUBSIDIARIES OUTSIDE SWEDEN
Argentina 0.6 11. 4 1.4 7.4
Belgium - - - 4.8
Brazil - - - 0.7
Chile - - - 0.8
Denmark 1.8 14.5 1.9 16.4
Estonia - 2.5 - 2.3
Finland 2.1 49.3 2.5 42.9
France 2.3 27.0 2.6 28.4
United Arab Emirates 0.6 2.1 0.6 1.9
India 0.1 - 0.5 0.1
Italy 5.7 154.0 6.2 73.8
China and Hong Kong 3.7 57.6 3.9 52.4
Latvia - 22.9 0.9 20.7
Lithuania 1.3 38.2 1.1 30.2
Malaysia 0.2 1.3 0.4 1.5
The Netherlands 1.4 34.7 1.4 42.1
Norway 7.2 114.8 5.7 109.9
Poland 0.6 4.2 0.6 3.9
Russia 1.5 17.9 1.1 14.5
Spain 1.3 4.0 0.8 1.7
United Kingdom 8.1 111.4 5.2 121.1
Czech Republic 2.6 67.9 2.2 52.5
Germany 4.4 119.5 6.5 120.3
USA 0.5 4.0 1.5 5.3
SUBSIDIARIES TOTAL 53.0 1,005.1 55.3 935.0
(of which bonuses) 11.8 7.1
GROUP TOTAL 64.3 1,033.2 61.6 953.8
(of which bonuses) 15.4 8.8
67ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
be individualised, quantitative or qualitative ob-
jectives. The criteria shall be designed so as to
contribute to the company’s business strategy
and long-term interests, including its sustain-
ability, by for example being clearly linked to the
business strategy or promote the executive’s long-
term development.
The extent to which the criteria for awarding
variable cash remuneration have been satisfied
shall be evaluated/determined when the mea-
surement period has ended. The Remuneration
Committee is responsible for the evaluation so
far as it concerns variable cash remuneration to
executive management.
For financial objectives, the evaluation shall be
based on the latest financial information made
public by the company.
Salary and employment conditions for employees
In the preparation of the Board of Directors’ propos-
al for these remuneration guidelines, salary and
employment conditions for employees of the com-
pany have been taken into account by including
information on the employees’ total income, the
components of the remuneration and increase
and growth rate over time in the Remuneration
Committee’s and the Board of Directors’ basis of
decision when evaluating whether the guidelines
and the limitations set out herein are reasonable.
Consultant’s fees to Board members
If a Board member performs services for ITAB in
addition to Board work, a special fee may be paid
for this (consultant’s fee), provided that such ser-
vices contribute to the implementation of ITAB’s
business strategy and safeguard ITAB’s long-term
interests, including its sustainability. This also ap-
plies to such services that ITAB receives through a
company wholly owned by a Board member. The
annual consultant’s fee for each Board member
may never exceed the annual Directors' fee. The
consultant’s fee shall be on market terms and de-
termined in relation to the benefit of ITAB.
The decision-making process to determine,
review and implement the guidelines
The Board of Directors has established a Remunera-
tion Committee. The committee’s tasks include
preparing the Board of Directors’ decision to pro-
pose guidelines for remuneration to senior exec-
utives. The Board shall prepare proposals for new
guidelines at least every four years or before that
if there is a need for significant adjustments, and
present the proposal for resolution at the AGM.
The guidelines shall apply until new guidelines
have been adopted by the AGM. The Remuner-
ation Committee shall also monitor and evalu-
ate programmes for variable remuneration for
executive management, the application of the
guidelines for executive remuneration as well as
the current remuneration structures and remu-
neration levels in the company. The members of
the Remuneration Committee are independent
of the company and its executive management.
The CEO and other members of executive man-
agement do not participate in the Board of Di-
rectors’ processing of and resolutions regarding
remuneration-related matters in so far as they are
affected by such matters.
Derogation from the guidelines
The Board of Directors may temporarily resolve to
derogate from the guidelines, in whole or in part,
if in a specific case there is special cause for the
derogation and a derogation is necessary to
serve the company’s long-term interests, includ-
ing its sustainability, or to ensure the company’s
financial viability. As set out above, the Remuner-
ation Committee’s tasks include preparing the
Board of Directors’ resolutions in remuneration-re-
lated matters. This includes any resolutions to der-
ogate from the guidelines.
Guidelines adopted by ITAB’s AGM on 11 May
2021.
REMUNERATION COMMITTEE 2021
In 2021, the Remuneration Committee comprised
Eva Karlsson, Anders Moberg (Chairman), Fredrik
Rapp and Vegard Søraunet, with the CEO co-opt-
ed to attend committee meetings.
Remuneration and benefits to senior executives
Costs are recognised as remuneration for the period during which each person held their role.
Directors' fee
1)
/
Fixed salary
Variable
salary
Other remuneration
and benefits
2)
Total salary
and fees
Pension
costs
Total incl.
pension
3)
2021
Board of Directors
Anders Moberg 0.5 0.5 0.5
Anna Benjamin 0.3 0.3 0.3
Jan Frykhammar 0.3 0.3 0.3
Petter Fägersten 0.3 0.3 0.3
Eva Karlsson 0.3 0.3 0.3
Roberto Monti 0.3 0.3 0.3
Fredrik Rapp 0.3 0.3 0.3
Vegard Søraunet 0.3 0.3 0.3
Ruthger de Vries 0.3 0.3 0.3
TOTAL – BOARD OF DIRECTORS 2.8 2.8 2.8
Group management
CEO 4.9 3.6 0.2 8.7 1.4 10.1
Other senior executives in Group
management (10 executives)
4)
21.7 8.8 1.3 31.8 3.3 35.1
TOTAL – GROUP MANAGEMENT 26.6 12.4 1.5 40.5 4.7 45.2
2020
Board of Directors
Anders Moberg 0.5 0.5 0.5
Anna Benjamin 0.3 0.3 0.3
Jan Frykhammar
5)
0.3 0.7 1.0 1.0
Petter Fägersten 0.3 0.3 0.3
Eva Karlsson 0.3 0.3 0.3
Roberto Monti 0.3 0.3 0.3
Fredrik Rapp 0.3 0.3 0.3
Ruthger de Vries 0.3 0.3 0.3
TOTAL – BOARD OF DIRECTORS 2.5 0.7 3.2 3.2
Group management
CEO 4.6 1.7 0.2 6.5 1.4 7.9
Other senior executives in Group
management (8 executives)
4)
16.9 5.8 1.1 23.8 3.5 27.3
TOTAL – GROUP MANAGEMENT 21.5 7.5 1.3 30.3 4.9 35.2
1) Directors' fee including remuneration for committee work to Board members concerned.
2) Benefits refer to taxable benefits for cars, medical care insurances, etc.
3) Salaries and fees are recognised excluding employer’s contributions. Pension costs are recognised excluding special payroll tax.
4) As of 1 February 2020, ITAB expanded its Group management to reflect the operations by appointing roles to support ITAB’s transformation and the shared ways of working in the
organisation. At the end of 2020, Group management consisted of ten different positions held by eight people. At 31 December 2021, Group management consisted of 11 different
positions held by ten people.
5) Board member Jan Frykhammar carried out consultancy assignments for the company in 2020 concerning the recapitalisation. A total of SEK 680
thousand was paid in consultancy fees for this work and is recognised as other remuneration in this table.
68 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
GROUP GROUP PARENT COMPANY
2021 2021 2020 2020 2021 2020
Fees
to EY
Fees
to other
auditors
Fees
to EY
Fees
to other
auditors
Fees to EY
Fees to EY
Audit assignment 5 3 4 2 1 1
Audit activities other than
audit assignment
1
0
1
1
1
0
Tax consultancy 1 2 2 1 0 0
Other services 0 1 0 1 0 0
7 6 7 5 2 1
NOTE 9. REMUNERATION TO AUDITORS
Shown below are the fees for audit assignments and other assignments that are expensed during the year. Audit assignment refers to reviewing the annual
accounts and the accounting records as well as the management of the Board of Directors and the CEO. Audit activities other than the audit assignment refer
to other quality assurance services that are performed in accordance with applicable regulatory requirements. Tax consultancy includes both advice and
checking of compliance within the tax field. Other services are other assignments. The audit was mainly performed by Ernst & Young AB (EY).
NOTE 10. DEPRECIATION, AMORTISATION
AND IMPAIRMENT LOSSES
Depreciation and amortisation divided per function
Group 2021 2020
Cost of goods sold -184 -173
Selling expenses -70 -72
Administrative expenses -21 -19
-275 -264
Parent Company
Administrative expenses -1 -1
Depreciation and amortisation divided per asset type
Group 2021 2020
Capitalised development expenditure -19 -21
Patents and other
intellectual property rights -9 -11
Buildings -149 -130
Plant and machinery -52 -56
Equipment, tools and installations -46 -46
-275 -264
Of which leases -147 -128
Parent Company
Equipment -1 -1
NOTE 11. COSTS DIVIDED BY TYPE OF COST
Government grants are recognised as a cost reduction of the items to
which the grants relate when there is reasonable assurance that the grant
will be received, and that the Group will meet the conditions associated
with the grant. The grants are systematically accrued in the same way and
over the same periods as the costs the grants are intended to compensate
for. Grants received related to the COVID-19 pandemic reduced person-
nel and other costs during the year by SEK 1 million (62) and SEK 7 million
(1), respectively. In addition, extraordinary costs of approximately SEK 3
million (3) due to the COVID-19 pandemic arose.
Costs of goods sold, selling expenses and administrative
expenses divided by cost type:
Group 2021 2020
Costs for direct materials -2,831 -2,336
Personnel costs -1,528 -1,359
Depreciation and amortisation -275 -264
Other expenses -1,370 -1,247
-6,004 -5,206
Parent Company
Personnel costs -58 -40
Depreciation and amortisation -1 -1
Other expenses -65 -80
-124 -121
Gender distribution of Board members/senior executives at year-end
2021 2021 2020 2020
Group
Share of
women
Share of
men
Share of
women
Share of
men
Board members 13% 87% 10% 90%
Senior executives 20% 80% 19% 81%
Parent Company
Board members 22% 78% 25% 75%
Senior executives 33% 67% 25% 75%
Personnel costs divided by function
Group 2021 2020
Cost of goods sold -793 -697
Selling expenses -565 -517
Administrative expenses -170 -145
-1,528 -1,359
Parent Company
Cost of goods sold -10 -7
Selling expenses -21 -13
Administrative expenses -27 -20
-58 -40
69ANNUAL REPORT 2021
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FINANCIAL INFORMATION
NOTE 12. OTHER OPERATING INCOME
AND EXPENSES
Other operating income
Group 2021 2020
Operation’s exchange rate differences 23 15
Profit due to repayment of purchase con-
sideration and revaluation of additional
purchase consideration from acquisitions
of Group companies in previous years 0 1
Repayment of pension funds 5 -
Capital gain on divestment
of non-current assets 4 1
Other
1)
8 7
40 24
Parent Company
Operation’s exchange rate differences 11 8
Capital gain on divestment
of Group companies - 3
11 11
Other operating expenses
Group 2021 2020
Operation’s exchange rate differences -23 -19
Expenses from acquisitions/divestments
of companies -2 -
Capital loss on divestment of non-
current assets -10 0
Capital loss on divestment of property,
plant & equipment -14 -6
Participations in associated companies -1 -3
Other -7 -1
-57 -29
Parent Company
Operation’s exchange rate differences -7 -10
-7 -10
Group 2021 2020
Interest expenses from interest rate
derivatives -11 -8
Default interest, equity
instruments, convertible liability - -1
Other interest expenses -51 -79
Exchange rate differences 0 -5
Other financial expenses -20 -24
-82 -117
Parent Company
Interest expenses, Group companies 0 0
Interest expenses from interest rate
derivatives -11 -8
Default interest, equity
instruments, convertible liability - -1
Other interest expenses -33 -60
Exchange rate differences -31 0
Other financial expenses -17 -21
-92 -90
NOTE 14. FINANCIAL INCOME
AND EXPENSES
Group 2021 2020
Interest income 5 5
Exchange rate differences 9 0
14 5
Parent Company
Interest income, Group companies 33 50
Exchange rate differences - 62
33 112
NOTE 15. YEAR-END APPROPRIATIONS
Parent Company 2021 2020
Group contributions received 2 17
Group contributions paid -58 -46
-56 -29
Financial income
Financial expenses
NOTE 13. PROFIT FROM PARTICIPATIONS
IN GROUP COMPANIES
Parent Company 2021 2020
Income from participations in Group
companies
Dividends received 46 50
46 50
Expenses from participations in
Group companies
Impairment of current receivables in
Group companies
1)
-9 -38
Impairment of shares in subsidiaries
2)
-42 -68
-51 -106
1) Impairment of receivables for loss coverage in Group companies in 2021 refers
to La Fortezza SpA (SEK -8 million) and Radlok S.à r.l (SEK -1 million). Impairment of
receivables for loss coverage in Group companies in 2020 refers to ITAB Rus Jsc (SEK
-2 million), La Fortezza SpA (SEK -35 million) and Radlok S.à r.l (SEK -1 million).
2) Impairment of shares in subsidiaries in 2021 refers to impairment in connection
with shareholder contributions of SEK 22 million and a further SEK 20 million after
impairment testing. Impairment of shares in subsidiaries in 2020 refers to impairment
in connection with shareholder contributions of SEK 58 million and SEK 10 million in
impairment as a result of restructurings. For more information, see Note 20.
1)
The item other operating income includes rental income of SEK 2 million (2).
70 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
Group 2021 2020
Current tax expenses
Tax expenses for the period -61 -30
Adjustment of tax attributable to previous years -3 4
-64 -26
Deferred tax expenses (-)/tax income (+)
Deferred tax attributable to temporary differences 8 5
Deferred tax attributable to previous years -3 0
Deferred tax attributable to loss carryforwards 6 -1
Deferred tax as a result of changes in tax rates 0 0
11 4
TOTAL RECOGNISED TAX EXPENSE IN THE INCOME STATEMENT -53 -22
Parent Company
Current tax for the period 0 0
Deferred tax attributable to loss carryforwards 15 -14
TOTAL RECOGNISED TAX EXPENSE IN THE INCOME STATEMENT 15 -14
Difference between Swedish income tax rate and the effective tax rate
Group 2021 2021 2020 2020
Reported profit before tax 156 0
Tax at Swedish income tax rate -32 -20.6% 0 -21.4%
Tax effect of
Adjustment of previous years’ tax -6 -3.8% 4
Other tax rates for foreign Group companies -8 - 5.1% 1
Deductible temporary differences 0 0.1% -5
Loss carryforwards -16 -10.3% -13
Altered tax rates 0 -0.3% 0
Non-taxable income and non-deductible expenses 9 5.9% -9
RECOGNISED TAX EXPENSE -53 -34.1% -22 N/A
Changes in deferred tax
Group 2021 2020
Start of the year 60 59
Acquisitions/divestments -1 0
Items recognised in other comprehensive
income
0
0
Translation differences 2 -3
Recognised in net profit for the year 11 4
End of the year 72 60
The deferred tax assets and liabilities recognised
in the balance sheet are attributable to the following:
Group
Receivables
2021
Receivables
2020
Liabilities
2021
Liabilities
2020
Non-current assets 12 9 38 33
Inventories 11 10 0 0
Current receivables 0 1 - -
Provisions for pensions and similar obligations 3 2 0 0
Loss carryforwards
1)
81 73 - -
Untaxed reserves - - 2 3
Other 10 6 5 5
117 101 45 41
1) Of the deferred tax assets for loss carryforwards recognised in the balance sheet,
there are loss carryforwards of SEK 92 million for which utilisation is subject to time
restrictions. Of these loss carryforwards, SEK 3 million matures in 2022, SEK 37 million
matures in 2024, SEK 25 million matures in 2025-2026 and the remaining SEK 27 million
matures in 2028-2031.
The Group has loss carryforwards equivalent to a nominal amount of SEK 426 million
(316), which are not recognised as a deferred tax asset. This is partially an effect
of present value calculation and partially attributable to the fact that certain loss
carryforwards could not be utilised within a reasonable time. For a small proportion
of these loss carryforwards, there are restrictions as regards utilisation per year as well
as time limits.
NOTE 16. TAX
Tax items recognised
in other comprehensive income 2021 2020
Deferred tax on cash flow hedges -5 1
Deferred tax on hedging of
net investments 0 -1
Deferred tax on pension commitments 0 0
-5 0
Parent Company Receivables
2021
Receivables
2020
Loss carryforwards 32 17
32 17
71ANNUAL REPORT 2021
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FINANCIAL INFORMATION
NOTE 17. EARNINGS PER SHARE
Group 2021 2020
Net profit for the period attributable to Parent Company shareholders, SEK million 95.2 -21.2
Average number of shares outstanding 191,396,324 102,383,430
EARNINGS PER SHARE, SEK PER SHARE 0.50 -0.21
ACTUAL NUMBER OF SHARES AT YEAR-END 218,10 0,192 102,383,430
On 9 February 2021, the Board decided to implement an offset issue and a rights issue, respectively, based on the issue authorisation decided at the Extraordinary General Meeting
of ITAB Shop Concept AB (publ) on 15 January 2021. On 12 March 2021, ITAB announced that the recapitalisation had been fully completed and that the rights issue of SEK 768 million
had been fully subscribed. Through these issues, the number of shares increased by a total of 115,716,762 and amounts to 218,100,192 shares after the issues.
Year
Transaction
Change in
share capital
(SEK thousand)
Total share
capital
(SEK thousand)
Total no.
of shares
Quotient value
per share (SEK)
1987 Formation of the company 50 50 500 100
1997 New share issue 50 100 1,000 100
1998 New share issue 8,500 8,600 86,000 100
2004 Bonus issue 8,600 17,20 0 172,000 100
2004 Split 20:1 - 17,2 0 0 3,440,000 5
2004 New share issue 16,281 33,481 6,696,200 5
2006 New share issue 1,500 34,981 6,996,200 5
2007 Split 2:1 - 34,981 13,992,400 2.5
2008 New share issue 725 35,706 14,282,400 2.5
2008 Conversion 0 35,706 14,282,500 2.5
2009 Conversion 9 35,715 14,285,940 2.5
2010 Conversion 0 35,715 14,285,952 2.5
2012 Conversion 6,668 42,383 16,953,205 2.5
2014 Split 2:1 - 42,383 33,906,410 1.25
2016 Split 3:1 - 42,383 101,719,230 0.417
2016 Conversion 277 42,660 102,383,430 0.417
2021 New share issue 42,660 85,320 204,766,860 0.417
2021 Offset issue 5,556 90,876 218,100,192 0.417
SHARE CAPITAL DEVELOPMENT
72 ITAB
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FINANCIAL INFORMATION
NOTE 18. INTANGIBLE ASSETS
2021
Group
Capitalised
development
expenditure
Patents and other
intellectual property
rights Goodwill TOTAL
Accumulated cost
Start of the year 207 92 1,599 1,898
Acquisitions of subsidiaries, see Note 5 - 1 1 2
Additions 2 4 - 6
Sales and disposals -11 -3 - -14
Translation differences for the year - 1 44 45
198 95 1,644 1,937
Accumulated amortisation according to plan
Start of the year -102 -53 - -155
Sales and disposals 2 2 - 4
Amortisation according to plan for the year -19 -9 - -28
Translation differences for the year - -2 - -2
-119 -62 - -181
CARRYING AMOUNT AT THE END OF THE YEAR 79 33 1,644 1,756
2020
Group
Capitalised
development
expenditure
Patents and other
intellectual property
rights Goodwill TOTAL
Accumulated cost
Start of the year 206 88 1,669 1,963
Additions 1 5 - 6
Sales and disposals 0 -1 - -1
Reclassifications - 4 - 4
Translation differences for the year - -4 -70 -74
207 92 1,599 1,898
Accumulated amortisation according to plan
Start of the year -81 -45 - -126
Amortisation according to plan for the year -21 -11 - -32
Translation differences for the year - 3 - 3
-102 -53 - -155
CARRYING AMOUNT AT THE END OF THE YEAR 105 39 1,599 1,743
Capitalised expenses for development work pri-
marily comprise internally generated, capital-
ised costs for the development of checkouts. Oth-
er intellectual property rights primarily consist of
valued customer relationships as well as patents.
Amortisation of intangible assets excluding
goodwill is recognised in the income statement
over the estimated useful lives of the assets. Am-
ortisation commences from the date the asset is
available for use. Estimated useful lives are reas-
sessed every year. No impairment losses or rever-
sal of impairment losses have taken place.
The Group’s goodwill comprises primarily
synergy effects in terms of production, logistics,
personnel, know-how and an effective organisa-
tion.
Impairment testing for goodwill
The Group assesses goodwill for impairment an-
nually, or more often if there are any indications
of a need for impairment, in accordance with
the accounting policies described in Note 2. No
distribution of the Group’s goodwill has been
performed since all Group companies’ activities
and cash inflows are highly dependent on each
other.
The recoverable amount for the unit has been
determined based on the value in use, which
consists of the present value of the estimated pro-
jected cash flow.
The estimate of projected cash flow is based
on an assessment of expected growth in ac-
cordance with a cautious starting point in the
forecasts prepared by management for the
coming four years. The forecasts are based on
experience from previous years, but with due
consideration for future expected developments.
According to the forecast, average growth in
the organisation, after a period affected by the
COVID-19 pandemic, is anticipated to reach 2
percent (2) per year during 2023-2025. The cash
flows beyond this four-year period have been
extrapolated with the aid of an estimated rate
of growth of 2 percent (2) per year, which corre-
sponds to estimated long-term inflation.
The assumption of projected growth is the most
important assumption and is based on exter-
nal assessments of the market’s growth, past
trends and management’s assessment of mar-
ket shares. The margins in the operations are an
estimate that also has an impact on the testing.
The EBITDA margin is an important assumption
on which company management bases its as-
sessment. When assessing impairment in 2021,
a figure of 8.5 percent was used for 2023 and 9.0
percent for 2024 and onwards. Average interest
rates have been assumed at the same levels as
the outcome for 2021. The forecast cash flows
have been converted to present value using a
discount rate of 9.7 percent (11.0) before tax,
which corresponds to 8.0 percent (8.5) after tax.
The discount factor, WACC, has been deter-
mined through the Capital Asset Pricing Model
(CAPM). As a part of the discount factor, a risk-
free rate of interest corresponding to the yield on
ten-year government bonds has been used, with
an addition for the equity market’s average risk
premium. Required return is also affected by the
debt/equity ratio in an optimal capital structure.
From a historical perspective, the risk-free interest
can be deemed to be low, which has been tak-
en into consideration in the calculation. The risk
premium was lowered during 2021, which gives
a lower outcome on the discount rate before tax
compared with 2020.
The recoverable amount exceeds the carrying
amount, which means there is no need for impair-
ment.
In order to support the impairment assessment
that has been performed for goodwill within the
Group, an overall assessment has been per-
formed of the sensitivity of the variables used in
the model. If the sustainable rate of growth is set
at 0 percent or if EBITDA is lowered by 2.5 percent-
age points, there is still no indication of an impair-
ment need.
73ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
2021 Group Buildings Machinery Equipment
Construction in
progress Total
Accumulated cost excl. leases
Start of the year 645 707 314 6 1,672
Acquisitions/divestments of subsidiaries 0 27 1 0 28
Additions 2 28 37 18 85
Sales and disposals -3 -124 -41 0 -168
Reclassifications 0 7 0 -7 0
Translation differences for the year 46 38 15 0 99
690 683 326 17 1,716
Accumulated depreciation according to plan excl.
leases
Start of the year -215 -499 -240 - -954
Divestments, subsidiaries 0 4 0 - 4
Sales and disposals 0 100 35 - 135
Reclassifications 0 -1 2 - 1
Depreciation according to plan for the year -18 -51 -31 - -100
Translation differences for the year -9 -25 -10 - -44
-242 -472 -244 - -958
TOTAL 448 211 82 17 758
Right-of-use assets
1)
586 1 21 - 608
CARRYING AMOUNT AT THE END OF THE YEAR 1,034 212 103 17 1,366
2020 Group Buildings Machinery Equipment
Construction in
progress Total
Accumulated cost excl. leases
Start of the year 685 725 386 32 1,828
Additions 2 17 11 15 45
Sales and disposals 0 -12 -64 0 -76
Reclassifications 10 26 -0 -40 -4
Translation differences for the year -52 -49 -19 -1 -121
645 707 314 6 1,672
Accumulated depreciation according to plan excl.
leases
Start of the year -210 -484 -285 - -979
Sales and disposals 0 12 58 - 70
Reclassifications - -4 4 - 0
Depreciation according to plan for the year -19 -54 -31 - -104
Translation differences for the year 14 31 14 - 59
-215 -499 -240 - -954
TOTAL 430 208 74 6 718
Right-of-use assets
1)
621 7 21 - 649
CARRYING AMOUNT AT THE END OF THE YEAR 1,051 215 95 6 1,367
1)
For more information about right-of-use assets, see Note 22.
NOTE 19. PROPERTY, PLANT AND EQUIPMENT
NOTE 20. PARTICIPATIONS IN GROUP COMPANIES & ASSOCIATED COMPANIES
Parent Company 2021 2020
Opening carrying amount 2,071 2,095
Divestments
1)
- -263
Shareholder contributions to subsidiaries
2)
21 307
Impairment and revaluations for the year
3)
-41 -68
CLOSING CARRYING AMOUNT 2,051 2,071
1) During 2020, ITAB Scanflow AB and ITAB Guidance AB were sold and merged into the subsidiary ITAB Shop Products AB. The purchase consideration amounted to SEK 1 million and SEK 13 million,
respectively. The subsidiary MB Shop Design AB has been sold internally to ITAB Shop Concept Nässjö AB for SEK 106 million. As a result of the restructuring, ITAB Shop Concept Nässjö AB and ITAB
Shop Products AB were sold internally to Nordic Light Group AB. The purchase consideration amounted to SEK 134 million and SEK 9 million, respectively.
2) In 2021, shareholder contributions were paid to La Fortezza SpA (SEK 20 million) and ITAB Konsult (SEK 1 million). In 2020, shareholder contributions were paid to ITAB Shop Concept Nässjö AB (SEK
106 million) and Nordic Light Group AB (SEK 143 million) in connection with the internal sale of participations as part of a reorganisation. In addition, shareholder contribution were paid to Nordic
Light Group AB (SEK 40 million) and ITAB shop Concept A/S (SEK 18 million).
3) In 2021, shares in SIA ITAB Latvia were impaired by SEK 20 million. In addition, shares in the subsidiaries La Fortezza Spa and ITAB Konsult AB were impaired by SEK -21 million in connection with the
payment of shareholder contributions. Impairment of shares in subsidiaries in 2020 refers to ITAB Pikval AB (SEK -1 million), ITAB Pharmacy Concept AB (SEK -1 million) and ITAB Shop Concept Bel-
gium N.V. (SEK -7 million). In addition, shares in the subsidiaries ITAB Shop Concept A/S and Nordic Light Group AB were impaired by SEK -18 million and SEK -40 million, respectively, in connection
with the payment of shareholder contributions.
Parent Company
2021
Equipment
2020
Equipment
Accumulated cost
Start of the year 16 16
Additions 0 0
16 16
Accumulated depreciation according to plan
Start of the year -9 -8
Depreciation according to plan for the year -1 -1
-10 -9
CARRYING AMOUNT AT THE END OF THE YEAR 6 7
74 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
PARTICIPATIONS ARE HELD IN THE FOLLOWING GROUP
COMPANIES:
CORP. REG. NO.
DOMICILE
COUNTRY
NUMBER OF
SHARES HOLDING
2021
CARRYING
AMOUNT
2020
CARRYING
AMOUNT
ITAB Shop Concept Lithuania AB 233393310 Kaunas Lithuania 635,350 100% 20 20
ITAB Eesti OÜ 10994786 Tallinn Estonia 400 100% 0 0
ITAB Germany Gmbh HRB 61998 Cologne Germany 2 100% 17 17
ITAB Harr Gmbh HRB 29025 Malschwitz Germany - 100% - -
ITAB Lighting Germany GmbH HRB 11839 Menden Germany 5 100% - -
ITAB Holding B.V 32082085 Woudenberg The Netherlands 180 100% 36 36
ITAB Benelux B.V 61775185 Hertogenbosch The Netherlands 180 100% - -
ITAB Konsult AB 556554-1520 Jönköping Sweden 1,000 100% 0 0
ITAB Shop Products Finland OY 1569393-8 Lahti Finland 1,165 100% 11 11
ITAB Pharmacy Concept AB 556603-8245 Jönköping Sweden 40,000 100% 5 5
Sintek Industrial Property AB 556031-3362 Jönköping Sweden 9,070 100% 1 1
Radlok S.à r.l B 150987 Luxembourg Luxembourg 100 100% - -
ITAB Shop Concept AS 960912624 Oslo Norway 1,534,500 100% 55 55
ITAB Industier AS 928907619 Stadsbygd Norway 150 100% - -
ITAB Norge AS 935500419 Oslo Norway 50 100% - -
ITAB Prolight AS 911973235 Oslo Norway 30 100% - -
Reklamepartner Graphics AS 979895909 Vinterbro Norway 100 100% - -
KB Design AS 913275438 Oslo Norway 34 100% - -
ITAB Lindco AS 929240227 Oslo Norway 1,000 100% - -
ITAB Shop Concept Belgium N.V 0413.792.003 Antwerp Belgium 279,295 100% 7 7
ITAB Shop Concept CZ a.s 255 68,663 Blansko Czech Republic 2,210 100% 277 277
ITAB Shop Concept A/S 19353443 Herning Denmark 11,000 100% 0 0
ITAB Shop Products A/S 13769893 Taastrup Denmark 500 100% 22 22
ITAB Kiinteistö Oy 0719064-4 Järvenpää Finland 77,000 100% 12 12
ITAB Shop Concept Polska Sp zoo 338168 Warsaw Poland 1,250 100% 2 2
ITAB Shop Products Ltd 5822228 Hemel Hempstead England 2,500,000 100% 35 35
ITAB Holdings UK Ltd 4135080 Hemel Hempstead England 4,638,743 100% 119 119
ITAB UK Ltd 3411363 Hemel Hempstead England 1,200,000 100% - -
Nordic Light Group AB 556306-5373 Skellefteå Sweden 1,000 100% 523 523
ITAB Shop Products AB
1)
556132-4046 Jönköping Sweden 1,000 100% - -
ITAB Shop Concept Nässjö AB
1)
556474-2244 Nässjö Sweden 2,000 100% - -
Nordic Light AB 556203-5161 Skellefteå Sweden 130,000 100% - -
Nordic Light Group Development AB 556511-7800 Skellefteå Sweden 2,000 100% - -
Nordic Light Group (HK) Co Ltd 759628 Hong Kong Hong Kong 20,000 100% - -
Nordic Light (Suzhou) Investment (HK) Co Ltd. 875186 Hong Kong Hong Kong 10,000 65% - -
ITAB Shop Concept China Co Ltd 91320505MA1MEFBL86 Suzhou China - 65% - -
Nuco Lighting Technology Ltd Co 440306503426898 Shenzhen China - 100% - -
Nordic Light America Inc. 27-4627942 Columbus USA 1,500 100% - -
Nordic Light South America SpA 71,936 / 49,962 Santiago Chile 100 100% - -
Nordic Light India Private Ltd U74900KA2014FTC073090 Bangalore India 10,000 100% - -
ITAB Finland Holding Oy 2447365-4 Jyväskylä Finland 40,594 100% 43 43
ITAB Finland Oy 1882702-2 Jyväskylä Finland 28,000 100% - -
La Fortezza S.p.A. a Socio Unico FI - 462981 Scarperia Italy 20,900,000 100% 786 786
Imola Retail Solution S.r.L
1)
BO-555133 Imola Italy 81,000 81% - -
La Fortezza Alser S.a.S 438699225 Jouy-le-Moutier France 3,811,580 100% - -
La Fortezza Asia Sdn Bhd 396959-A Kuala Lumpur Malaysia 600,000 100% - -
ITAB Iberica S.L.Unipersonal B85907236 Barcelona Spain
19,000 100% - -
ITAB Rus JSC 1057747369723 Stupino Russia 2,780,000 100% - -
La Fortezza Middle East DMCC JLT5135 Dubai UAE 1 100% - -
La Fortezza Sudamericana S.A. 30-68703602-2 Buenos Aires Argentina 5,645,921 100% - -
SIA ITAB Latvia 40103175540 Riga Latvia 2,845 100% 80 100
2,051 2,071
In addition to the above companies, the Group owns shares in inactive companies. In total, the Group comprised 64 legal companies at the end of 2021.
1) In 2021, 81 percent of the shares in Imola Retail Solution was acquired and a dormant company in Portugal was wound up. In 2020, the shares in ITAB Shop Concept Nässjö AB
and ITAB Shop Products AB were sold internally to Nordic Light Group AB, while ITAB Scanflow AB and ITAB Guidance AB were sold and merged into the subsidiary ITAB Shop Products
AB and the shares in the subsidiary MB Shop Design AB were sold and merged with ITAB Shop Concept Nässjö AB. In addition, a dormant company in Sweden and a dormant com-
pany in Hungary were liquidated in 2020.
Group 2021 2020
Carrying amount at the start of the year 12 15
Share issue 3 -
Depreciation surplus value -1 -1
Share of net profit for the period -3 -2
CARRYING AMOUNT AT THE END OF THE YEAR 11 12
PARTICIPATIONS ARE HELD IN THE FOLLOWING ASSOCIATED COMPANIES:
There are no major associated companies within the ITAB Group. The most significant value is linked to OmboriGrid AB.
Parent Company Corp. Reg. No. Domicile Country
Number of
shares
Share
of capital, %
Share of
votes, %
2021
Carrying amount
OmboriGrid AB (Priv) 556841-1333
Stockholm Sweden 22,059,400 20.93% 33.40% 15
2021 2020
Assets 50 24
Equity 43 9
Net sales 5 -2
Profit before tax -17 -2
ITAB’s share of OmboriGrid AB’s assets, equity, net sales and profit before tax.
OmboriGrid AB’s transactions with other
ITAB companies 2021 2020
Sales to companies within the ITAB Group 1 1
Receivable to companies within the ITAB Group 0 0
75ANNUAL REPORT 2021
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ITAB
FINANCIAL INFORMATION
NOTE 21. FINANCIAL ASSETS AND LIABILITIES
2021 2020
Time analysis of financial assets Past due Not past due Total Past due Not past due Total
Accounts receivable, not impaired
less than 30 days old 41 991 1,032 44 659 703
31-60 days old 46 46 30 30
more than 60 days old 40 40 22 22
Accounts receivable, impaired
more than 60 days old 12 12 13 13
Deduction for reserves -12 -12 -13 -13
TOTAL ACCOUNTS RECEIVABLE 127 991 1,118 96 659 755
Other financial assets - 156 156 - 72 72
CARRYING AMOUNT, FINANCIAL
ASSETS EXCL. CASH AND CASH EQUIVALENTS 127 1,147 1,274 96 731 827
The receivable is reserved as doubtful in the case of an expected credit loss. The assessment is individual and performed on a case-by-case basis.
Change in provision for expected credit losses Group
2021
Group
2020
Opening balance 13 23
Increase in provision through the income statement 4 3
Utilised reserve due to confirmed losses on accounts receivable -3 -11
Reversed provisions -2 -1
Translation differences for the year 0 -1
CLOSING BALANCE 12 13
VALUATION HIERARCHY
The Group recognises financial instruments that
are measured at fair value in the statement of fi-
nancial position. This requires information about
valuation at fair value per level in the following fair
value hierarchy:
Level 1: Listed prices (unadjusted) on active mar-
kets for identical assets or liabilities. Financial in-
struments measured at fair value based on level
1 comprise cash and cash equivalents as well as
non-current and current interest-bearing liabili-
ties.
Level 2: Other observable input data for assets or
liabilities other than listed prices included in level
1, either direct (meaning as price quotations) or
indirect (meaning derived from price quotations).
Financial instruments measured at fair value
based on level 2 comprise derivatives that are ap-
plied in hedge accounting.
Level 3: Input data for the asset or liability that are
not based on observable market data (meaning
non-observable input data).
DERIVATIVE INSTRUMENTS
Derivative instruments comprise interest rate
swaps and currency futures, and are measured
at market value according to level 2. In other
words, for derivative instruments, the fair value is
calculated through discounted future cash flows
according to the contracts’ terms and maturity
dates, where all variables, such as discount rates
and exchange rates, are obtained from market
listings for calculations.
CONDITIONAL PURCHASE CONSIDERATIONS
The calculation of conditional purchase consid-
erations (level 3) is dependent on parameters in
the agreement in question. These parameters are
mainly linked to anticipated results. All condition-
al purchase considerations were paid in 2021.
Group 2021 2020
Maturity date
within 1 year 1,617 2,117
between 1 and 3 years 793 925
between 3 and 5 years 166 229
after 5 years 156 163
2,732 3,434
Parent Company 2021 2020
Maturity date
within 1 year 276 1,185
between 1 and 3 years 549 679
between 3 and 5 years - -
after 5 years - -
825 1,864
TIME ANALYSIS OF FINANCIAL LIABILITIES RECOGNISED AS UNDISCOUNTED CASH FLOWS INCL. ACCRUED INTEREST
INFORMATION ABOUT CARRYING AMOUNT PER CATEGORY AND FAIR VALUE PER CLASS
CHANGE IN LIABILITIES ATTRIBUTABLE TO FINANCING
ACTIVITIES IN THE GROUP’S CASH FLOW
2020 Items that do not affect the cash flow 2021
Cash
flow
Short-term portion of
long-term loans
Lease liabilities
according to
IFRS 16
Translation
difference Offset issue Fair value
Derivative receivables -1 -3 -4
Non-current liabilities to credit institutions 670 7 -112 5 570
Current liabilities to credit institutions
and overdraft facilities
948 -856
112 37
241
Convertible debenture loan and shareholder loans 140 -40 -100 0
Lease liabilities 656 -134 92 16 630
Derivative liabilities 27 -17 10
NET DEBT FROM FINANCING ACTIVITIES 2,440 -1,023 0 92 58 -100 -20 1,447
Cash and cash equivalents -208
INTEREST-BEARING NET DEBT
1)
1,239
1)
Some of the company’s bank loans are restricted with covenants, stipulated in the loan contract. One of the restrictions entails that ITAB has committed to keeping the company’s
interest-bearing net debt in relation to EBITDA within certain stipulated levels. None of the company’s covenants were broken during the year.
76 ITAB
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ANNUAL REPORT 2021
FINANCIAL INFORMATION
Group
2021
Derivatives that
are applied in
hedge
accounting
Financial liabilities
measured at fair
value through
profit or loss
Financial assets
measured at
amortised cost
Other
financial
liabilities
Total
carrying
amount
Fair
value
1)
Financial assets
Financial non-current receivables 18 18 18
Accounts receivable 1,118 1,118 1,118
Derivative receivables (level 2) 4 4 4
Other receivables 122 122 122
Accrued income, financial assets 12 12 12
Cash and cash equivalents
2)
208 208 208
TOTAL FINANCIAL ASSETS 4 1,478 1,482 1,482
Financial liabilities
Liabilities to credit institutions 752 752 752
Lease liabilities 630 630 630
Overdraft facilities 59 59 59
Derivative liability (level 2) 10 10 10
Conditional purchase consideration (level 3) 0 0
Advance payments from customers 75 75 75
Accounts payable 971 971 971
Other liabilities 139 139 139
Accrued expenses, financial liability 33 33 33
TOTAL FINANCIAL LIABILITIES 10 2,659 2,669 2,669
2020
Financial assets
Financial non-current receivables 6 6 6
Accounts receivable 755 755 755
Derivative receivables (level 2) 1 1 1
Other receivables 48 48 48
Accrued income, financial assets 17 17 17
Cash and cash equivalents
2)
692 692 692
TOTAL FINANCIAL ASSETS 1 1,518 1,519 1,519
Financial liabilities
Liabilities to credit institutions 1,566 1,566 1,566
Lease liabilities 656 656 656
Shareholder loans 140 140 140
Overdraft facilities 52 52 52
Derivative liability (level 2) 27 27 27
Conditional purchase consideration (level 3) 1 1 1
Advance payments from customers 49 49 49
Accounts payable 621 621 621
Other liabilities 147 147 147
Accrued expenses, financial liability 34 34 34
TOTAL FINANCIAL LIABILITIES 27 1 3,265 3,293 3,293
Parent Company
2021
Financial assets
Receivables with Group companies 494 494 494
Cash and cash equivalents
2)
54 54 54
TOTAL FINANCIAL ASSETS 548 548 548
Financial liabilities
Liabilities to credit institutions 653 653 653
Overdraft facilities 32 32 32
Accounts payable 3 3 3
Liabilities to Group companies 105 105 105
Other liabilities 4 4 4
Accrued expenses, financial liability 2 2 2
TOTAL FINANCIAL LIABILITIES 799 799 799
2020
Financial assets
Receivables with Group companies 258 258 258
Cash and cash equivalents
2)
449 449 449
TOTAL FINANCIAL ASSETS 707 707 707
Financial liabilities
Liabilities to credit institutions 1,458 1,458 1,458
Shareholder loans 140 140 140
Overdraft facilities 25 25 25
Accounts payable 20 20 20
Liabilities to Group companies 102 102 102
Other liabilities 8 8 8
Accrued expenses, financial liability 8 8 8
TOTAL FINANCIAL LIABILITIES 1,761 1,761 1,761
1)
For current receivables and liabilities with a lifetime of less than six months, the carrying amount is considered to reflect the fair value.
2)
Cash and cash equivalents are made up in their entirety of cash and bank balances.
INFORMATION ABOUT CARRYING AMOUNT PER CATEGORY AND FAIR VALUE PER CLASS
77ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
Leases – right-of-use assets and lease liabilities
Items concerning leases have been included in the consolidated accounts as described below:
AS OF 31 DECEMBER 2021 AS OF 31 DECEMBER 2020
Right-of-use assets Buildings Equipment Machinery Total Buildings Equipment Machinery Total
Start of the year 621 21 7 649 718 30 9 757
Additions 149 15 0 164 17 9 0 26
Disposals during the year -70 0 -4 -74 - -1 -5 -6
Translation difference 16 0 0 16 -3 -2 5 0
Depreciation during the year -130 -15 -2 -147 -111 -15 -2 -128
Carrying amount at the end of
the year 586 21 1 608 621 21 7 649
Lease liabilities 608 21 1 630 630 22 3 655
The Group’s material leases pertain to leases for buildings, mainly related to Sweden, United Kingdom, Italy and France.
Machinery pertains to Norway, Russia, Italy and Latvia.
Equipment primarily comprises cars.
The Group’s profit for the 2021 financial year was charged with costs attributable to finance leases, including depreci-
ation of SEK 147 million (128) and interest expenses of SEK 13 million (14). Total lease expenses in 2021 amounted to SEK
175 million (169). Lease expenses related to low-value and short-term leases amounted to SEK 15 million (27). There are
no significant variable payments or restrictions.
Nominal value Present value Nominal value Present value
Lease liabilities 2021 2021 2020 2020
Current portion, maturity date
within one year 140 140 127 114
Non-current portion, maturity date
between one and three years 220 208 216 189
Non-current portion, maturity date
between three and five years 152 142 194 153
Non-current portion, maturity date
over five years 156 140 156 199
Carrying amount
at end of the year 668 630 693 655
NOTE 23. INVENTORIES
Group 2021 2020
Raw materials and consumables 492 211
Products in progress 124 79
Finished products and goods for resale 553 405
Advance payments for goods 7 3
1,176 698
The year’s impairment of finished products and goods for resale charged to net profit
for the year totalled SEK 20 million (98) for the Group. In 2020, SEK 23 million pertained
to measures in connection with the restructuring and SEK 52 million to a non-recurring
inventory impairment.
NOTE 22. LEASES
ITAB’s leases are attributable to properties, machinery and vehicles. The majority of ITAB’s leases include options to either extend or terminate the agreement.
When the term of the lease is established, ITAB takes into consideration all facts and circumstances that provide a financial incentive to utilise an option to
extend or waive an option to terminate the agreement. Examples of factors that are considered include strategic plans, restructuring programmes, the impor-
tance of the underlying asset to ITAB’s operations and/or costs attributable to not extending or terminating leases.
NOTE 24. PREPAID EXPENSES
AND ACCRUED INCOME
Group 2021 2020
Prepaid rent and lease payments 13 15
Prepaid insurance premiums 3 4
Other prepaid expenses 59 38
Accrued revenue from contracts with customers 13 16
Other accrued income 3 2
91 75
Parent Company 2021 2020
Prepaid insurance premiums 1 0
Other prepaid expenses 4 6
5 6
78 ITAB
|
ANNUAL REPORT 2021
FINANCIAL INFORMATION
GROUP
Share capital
For information regarding share capital and the share capital develop-
ment, see the information for Parent Company below.
Other contributed capital
Pertains to equity contributed by the owners. This includes a portion of
share premium reserves transferred to the statutory reserve as of 31 De-
cember 2005. Provisions to the share premium reserve from 1 January
2006 are also recognised as other contributed capital.
A convertible debenture loan is a combined financial instrument that is
both a liability and equity. Convertible debenture loans are recognised
divided into financial liability and equity instrument. This is achieved by de-
ducting the fair value of the financial liability from that which was received
when the convertible was issued. The value of the equity instrument is calcu-
lated as the difference between the issue payment and the fair value of the
financial liability. The equity instrument is recognised as other contributed
capital. If conversions are not carried out, the value of the equity instrument
is transferred back to profit brought forward. In 2020, SEK 11 million was trans-
ferred between other contributed capital and profit brought forward.
Other reserves
Other reserves in equity consist of the translation reserve and hedging
reserve.
Translation reserve
Translation differences concerning foreign subsidiaries are recognised as
a separate item in equity. The translation reserve includes all exchange rate
differences arising on the translation of the financial statements of foreign
operations that have prepared their financial statements in a currency other
than the Group’s functional currency. The Parent Company and the Group
present their financial statements in SEK. The translation reserve also com-
prises exchange rate differences arising on the translation of liabilities used
as hedging instruments for net investments in a foreign operation.
On the sale or discontinuation of foreign operations, accumulated
translation differences are recognised as a portion of the profit from the
divestment. In 2021 and 2020, only dormant companies of a minor value
were divested and wound up
The accumulated translation reserve, recognised in comprehensive
income as of 2004, amounts to the following:
Translation reserve attributable to
Parent Company shareholders 2021 2020
Opening balance -57 61
Translation difference on translation of foreign
operations 105 -122
Change in fair value of hedges of net investments -1 5
Tax 0 -1
Closing balance 47 -57
Translation reserve attributable to
non-controlling interests 2021 2020
Opening balance 5 14
Translation differences for the year 13 -9
Closing balance 18 5
Hedging reserve
The hedging reserve includes the accumulated net change in the fair val-
ue of cash flow hedging instruments attributable to hedging transactions
that have not yet taken place.
2021 2020
Opening balance -21 -17
Change in fair value of cash flow hedges 13 -12
Change in fair value of cash flow
hedges transferred to net profit for the year 8 7
Tax -5 1
Closing balance -5 -21
Total other reserves attributable to
Parent Company shareholders 42 -78
Total other reserves attributable to
non-controlling interests 18 5
NOTE 25. EQUITY
Profit brought forward
Profit brought forward including net profit for the year includes profit
earned in the Parent Company and its subsidiaries. Previous provisions to
the statutory reserve, excluding transferred share premium reserves, are
included in this equity item.
PARENT COMPANY
Share capital
On 9 February 2021, the Board decided to implement an offset issue and
rights issue based on the issue authorisation decided at the Extraordinary
General Meeting of ITAB Shop Concept AB (publ) on 15 January 2021. On
12 March 2021, the recapitalisation was fully completed and the rights is-
sue of SEK 768 million was fully subscribed. In connection with the issue, all
Class A shares were reclassified as Class B shares, entailing that ITAB only
had Class B shares outstanding after the recapitalisation. Through these
issues and this reclassification, the number of shares increased by a total
of 115,716,762 and amounts to 218,100,192 shares after the issues. All shares
have equal rights to dividends and each share entitles the holder to one
vote at general meetings. The quotient value per share is SEK 0.4167. For
information on the share capital development, refer to Note 17.
Statutory reserve
The purpose of the statutory reserve has been to save a portion of net prof-
it, which is not used to cover the loss brought forward. This also includes a
portion of share premium reserves transferred to the statutory reserve as of
31 December 2005.
Share premium reserve
When shares are issued at a share premium, meaning it is necessary to
pay more than the shares’ quotient value for the shares, an amount corre-
sponding to the amount received over and above the quotient value for
the shares must be transferred to the share premium reserve. Share pre-
mium reserves prior to 31 December 2005 have been transferred to the
statutory reserve.
For information on the new share issue and offset issue in 2021, refer to
Note 27.
Profit brought forward
Profit brought forward comprises the previous year’s profit brought for-
ward, including the previous year’s profit after payment of any dividends.
Together with net profit for the year and the share premium reserve, this
constitutes total non-restricted equity, meaning the amount that is avail-
able for dividends to the shareholders.
NOTE 26. ALLOCATION OF PROFITS
Parent Company 2021 2020
The following unrestricted profit
is at the disposal of the AGM:
Share premium reserve 1,084 299
Profit brought forward 695 723
Net loss for the year -54 -28
TOTAL 1,725 994
The Board of Directors and CEO propose
that these funds be distributed as follows:
Number of shares 218,100,192 102,383,430
To be paid as dividends to
shareholders in total
- -
To be carried forward 1,725 994
TOTAL 1,725 994
79ANNUAL REPORT 2021
|
ITAB
FINANCIAL INFORMATION
NOTE 29. PROVISIONS FOR PENSIONS
Defined-benefit pension plans 2021 2020
Net costs
Interest on the year’s increase in the pres-
ent value of pension commitments
1
1
Net of pensions earned and premiums
paid during the year
-3
-4
Expected return on
plan assets
0
0
RECOGNISED PENSION COSTS, NET -2 -3
Recognised provision, 31 December
Present value of pension commitments 78 62
Fair value of plan assets -37 -33
RECOGNISED PROVISION, 31 DECEMBER 41 29
Net amount distributed
between the following countries
Norway 6 4
Sweden 2 2
Italy 29 16
France 2 3
Belgium 2 4
Other 0 0
RECOGNISED COMMITMENTS IN
THE BALANCE SHEET 41 29
2021 2020
Change in recognised provision
Opening net debt 29 40
Transfer or reclassification in connection
with restructuring 0 -4
Provision assumed in connection with
corporate acquisition 11 -
Actuarial gains and losses 2 -2
Value adjustment 1 -2
Pension costs, net -2 -3
RECOGNISED PROVISION, 31 DECEMBER 41 29
The most important assumptions used for determining pension
commitments (%)
Discount factor 0.2-1.5% 0.6-1.5%
Future salary increases 0.2-2.0% 1.0-2.0%
Future pension increases 0.7-1.8% 1.5-2.4%
Expected return 1.0% 2.4%
The following tables present an overview of the items included in the net costs for remuneration recognised in the consolidated income statement for de-
fined-benefit pension plans. Certain information concerning the outcome of capital management and amounts reported in the Group’s balance sheet for
these pension plans is also provided.
ALECTA
For salaried employees in Sweden, the ITP 2 plan’s defined-ben-
efit pension commitments for retirement and family pension are
secured through an insurance policy with Alecta. According to a
statement from the Swedish Financial Reporting Board, UFR 10 Rec-
ognition of the ITP 2 pension plan financed through insurance with
Alecta, this is a defined-benefit plan that covers several employers.
For the 2021 financial year, the company did not have access to infor-
mation in order to report its proportional share of the plan’s obligations,
plan assets and costs, which meant that it has not been possible to
report the plan as a defined-benefit plan. The ITP 2 pension plan that
is secured through insurance with Alecta is therefore reported as a
defined-contribution plan. The premium for the defined-benefit retire-
ment and family pension is calculated on an individual basis, and is de-
pendent in part on salary, previously earned pension and the anticipat-
ed remaining period of service. The fees for the year for ITP 2 insurance
policies taken out in Alecta amount to SEK 5 million (7).
The collective funding ratio comprises the market value of
Alecta’s assets as a percentage of the insurance commitments cal-
culated according to Alecta’s actuarial methods and assumptions,
which do not coincide with IAS 19. The collective funding ratio is normal-
ly allowed to vary between 125 and 155 percent. If Alecta’s collective
funding ratio is below 125 percent or above 155 percent, mea-
sures must be taken with the aim of creating the conditions to
bring the funding ratio back to the normal range. In the event
of a low funding ratio, one measure may be to raise the agreed
price for new subscriptions and to extend existing benefits. In the
event of a high funding ratio, one measure may be to introduce
premium reductions. At the end of 2021, Alecta’s surplus in the form of the
collective funding ratio was 172 percent (148).
NOTE 27. NEW SHARE ISSUE AND
OFFSET ISSUE
NOTE 28. OVERDRAFT FACILITIES
Number of
shares
Share capital,
SEK million
Share premium
reserve,
SEK million
Total,
SEK
million
New share issue 102,383,430 42 726 768
Offset issue 13,333,332 6 94 100
Issue costs -35 -35
115,716,762 48 785 833
Group 2021 2020
Granted overdraft facility 597 560
Utilised overdraft facility 59 53
Unutilised overdraft facility 538 507
Parent Company
Granted overdraft facility 511 505
Utilised overdraft facility 32 25
Unutilised overdraft facility 479 480
The companies in the ITAB Group are affiliated to the Group account system. At the
end of the year, ITAB Shop Concept AB had net assets of SEK 338 million (529) via
Group accounts. Together with the subsidiaries in the Group, the Parent Company’s
total receivables from credit institutions via Group accounts amounted to SEK 54
million (449) and liabilities to credit institutions to SEK 32 million (0), meaning that the
Parent Company has a receivable from subsidiaries totalling SEK 316 million (80), net.
On 9 February 2021, the Board decided to implement an offset issue and
rights issue based on the issue authorisation decided at the Extraordinary
General Meeting of ITAB Shop Concept AB (publ) on 15 January 2021. On
12 March 2021, ITAB announced that the recapitalisation had been fully
completed and that the rights issue of SEK 768 million had been fully sub-
scribed. Through these issues, the number of shares increased by a total of
115,716,762 and amounts to 218,100,192 shares after the issues.
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NOTE 30. OTHER PROVISIONS
Group 2021 2020
Restructuring
reserve
1)
21 27
Guarantee reserve 6 5
Other provisions 11 9
38 41
1)
The restructuring reserve refers to costs in connection with
the closure of the production units in France and Sweden.
2)
Other provisions refer primarily to a provision for agents pur-
suant to Italian law and are based on average commission
over the past five years.
3)
Acquisition of Imola and refers to a provision for agents
pursuant to Italian law.
Group 2021
Guarantee
reserve
Environ-
mental
reserve
Restruc-
turing
reserve
1)
Other
provi-
sions
2)
Total
Opening balance, 1 Jan 2021 5 0 27 9 41
Provisions during the year 1 4 1 6
Acquisition of subsidiaries
3)
1 1
Utilised provisions -1 0 -10 0 -11
Translation differences 1 0 0 1
Closing balance, 31 Dec 2021 6 - 21 11 38
Of which, current provisions - - 21 5 26
Of which, non-current provisions 6 - - 6 12
Group 2020
Guarantee
reserve
Environ-
mental
reserve
Restruc-
turing
reserve
1)
Other
provi-
sions
2)
Total
Opening balance, 1 Jan 2020 4 1 - 11 16
Provisions during the year 1 - 27 - 28
Utilised provisions - -1 - -1 -2
Translation differences 0 0 0 -1 -1
Closing balance, 31 Dec 2020 5 0 27 9 41
Of which, current provisions - 0 27 5 32
Of which, non-current provisions 5 - - 4 9
NOTE 31. ACCRUED EXPENSES AND PREPAID INCOME
Group 2021 2020
Payroll and vacation expenses 159 167
Accrued social security contributions,
incl. pension and payroll tax 55 70
Accrued expenses from contracts with
customers 30 25
Accrued sales commissions 11 14
Accrued service-related expenses 18 5
Accrued interest expenses 2 8
Other accrued expenses 102 88
Prepaid revenue from contracts with customers 2 1
Other prepaid income 5 3
384 381
Parent Company 2021 2020
Payroll and vacation expenses 14 9
Accrued social security contributions,
incl. pension and payroll tax 9 6
Accrued interest expenses 2 8
Other accrued expenses 15 6
40 29
NOTE 32. PLEDGED ASSETS
Group 2021 2020
Pledges for own liabilities
Corporate mortgages 154 152
Shares in subsidiaries 1,744 1,673
TOTAL PLEDGED ASSETS 1,898 1,825
Parent Company
Pledges for own liabilities
Shares in subsidiaries 1,353 1,353
All collateral refers to collateral for liabilities to credit institutions.
NOTE 33. CONTINGENT LIABILITIES
Group 2021 2020
Guarantee undertakings 12 22
Parent Company
Sureties for subsidiaries 399 123
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FINANCIAL INFORMATION
NOTE 34. TRANSACTIONS WITH RELATED PARTIES
The ITAB Group’s related parties refer to Group
management, the Parent Company’s Board of Di-
rectors and companies under the controlling influ-
ence of these parties. Transactions of significance
with related parties refer to transactions with a
value of more than SEK 1 million with the Group’s
aforementioned related parties. For information
regarding salaries and remuneration to senior ex-
ecutives, see Note 8.
Current liabilities as of 31 December 2020 in-
cluded short-term shareholder loans from Pomo-
na-gruppen AB (related to Board member Fredrik
Rapp), VIEM Invest AB (related to Board member
Anna Benjamin) and Övre Kullen AB (related
to Board member Petter Fägersten). The loans
amounted to a total of SEK 140 million and were
approved at an Extraordinary General Meeting of
ITAB Shop Concept AB (publ) on 22 July 2020. In
connection with the offset issue in March 2021 (re-
fer to Note 27), SEK 100 million of these loans was
converted into equity. The remaining SEK 40 mil-
lion was repaid in March 2021 and none of these
shareholder loans remained on the balance
sheet date.
Transactions between ITAB’s subsidiaries and
companies under the controlling influence of
ITAB’s Board members do take place. These trans-
actions are part of the company’s standard oper-
ations and are conducted on market conditions.
Purchases totalling SEK 1 million (1) were
made in 2021 by the ITAB companies ITAB Shop
Products AB in Jönköping, ITAB Shop Concept
Nässjö AB and ITAB Finland Oy from companies in
the XANO Group, which are under the controlling
influence of Board member Anna Benjamin and
family.
Transactions between the Parent Company ITAB
Shop Concept AB and its subsidiaries are speci-
fied in Notes 7, 13 and 14. Transactions between
ITAB companies and associated companies are
specified in Note 20.
NOTE 35. EVENTS AFTER THE BALANCE SHEET DATE
NEW FINANCIAL TARGETS FOR ITAB
In conjunction with the preparation of the annual
accounts in February 2022, the Board of Directors
adoptd new financial targets that support the
Group’s ambition to establish ITAB as the retail
market’s leading solution provider. The financial
targets adopted by the Board are:
Growth: Average growth in net sales (CAGR) of 4-8
percent per annum over a business cycle. Growth
is to be achieved by sustainable organic growth
and strategic acquisitions.
Earnings: Average EBIT margin (operating profit in
relation to net revenue) of 7-9 percent over a bu-
siness cycle.
Capital efficiency: Average cash conversion ra-
tio (operational cash flow in relation to operating
profit before depreciation and amortisation) of at
least 80 percent over a business cycle.
Dividend policy: As before, dividends over a long-
er period should follow the result and correspond
to at least 30 percent of the company's profit af-
ter tax. However, dividends will be adjusted to the
company's investment requirements and any
share repurchase program.
ACQUISITION OF CHECKMARK IN FINLAND
On 28 February 2022, the ITAB Group acquired,
through its Finnish subsidiary ITAB Finland Holding
Oy, all shares in Oy Checkmark Ltd. Checkmark is
one of the leading suppliers of retail technology
solutions for checkouts and store guidance for
retailers in the Nordic region. Checkmark has its
head office in Pieksämäki in Finland and subsidia-
ries in Sweden, Norway and Denmark. The Check-
mark group has annual sales of approximately
EUR 12 million and 44 employees. Closing took ef-
fect immediately and the acquisition is consolida-
ted in the Group as of 1 March 2022.
Effect of the acquisition of the shares in
Oy Checkmark Ltd 2022
Preliminary fair values of assets and liabilities ac-
quired, purhase considerations and impact on
the Group's cash and cash equivalents accor-
ding to preliminary acquisition analyses are pre-
sented below.
ITAB DISCONTINUES ITS OPERATIONS IN RUSSIA
In the beginning of March 2022, ITAB decided to
discontinue its operations in Russia due to the
invasion of Ukraine. ITAB has a production facility
and sales offices in Russia with a total of approx-
imately 125 employees. The decommissioning
process began immediately with due considera-
tions towards employees, customers, and busi-
ness partners.
ITAB's sales in Russia amounted to approximately
SEK 170 million in 2021, corresponding to approx-
imately 2.5 percent of ITAB's total annual sales.
Consequently, the decision to discontinue the
Russian operations will not have any significant
impact on ITAB's revenue and profit. The decom-
missioning may involve some write-downs. The
decommissioning may involve some write-downs.
No other significant events for the Group have tak-
en place after the end of the financial year.
Checkmark at the acquisition
date
Preliminary
fair values
Property, plant & equipment 2
Deferred tax assets 1
Inventories 18
Other current assets 50
Liabilities -21
Net identifiable assets and
liabilities 50
Consolidated goodwill 24
Preliminary purchase conside-
ration* 74
Less: Net cash and cash equiva-
lents in acquired companies -27
Less: Unpaid purchase consi-
deration -27
Effect on the Group's cash and
cash equivalents at the acqui-
sition date 20
*) Puchase consideration will be finally regulated during the second quar-
ter 2022 after adjustments of net cash and normalised operating capital .
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RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
Key ratios included in the Annual Report derive primarily from the disclosure requirements according to IFRS and the Swedish Annual Accounts Act. In addition,
reference is made to a number of performance measures that are not defined in IFRS regulations or directly in the income statement or balance sheet, with the aim
of illustrating the company’s profit trend, financial position and how the company has invested its capital.
These financial measures are not always calculated in the same way by all companies. The main alternative performance measures presented in the Annual
Report are EBITDA, interest-bearing net debt, share of risk-bearing capital, return on equity, return on capital employed and return on total capital. The definitions
of these alternative performance measures and other key ratios can be found on the next page.
Return on equity
This measure shows the return on the shareholders' capital invested in the ITAB
Group.
(SEK million) 2021 2020
Net profit for the year attributable to Parent
Company shareholders
95
-21
Equity attributable to Parent Company
shareholders
2,654
1,607
Average*) equity attributable to Parent
Company shareholders
2,393
1,720
RETURN ON EQUITY, % 4.0 -1.2
EBITDA
EBITDA (earnings before interest, tax, depreciation and amortisation) is consid-
ered a relevant profit measure to assess the company’s profit trend over time.
(SEK million) 2021 2020
Operating profit 224 112
Depreciation and amortisation 275 264
EBITDA 499 376
Non-recurring items
1)
-157 -202
EBITDA EXCL. NON-RECURRING ITEMS 656 578
1)
For more information about non-recurring items, see page 49.
Share of risk-bearing capital
Share of risk-bearing capital is a measure that the Group views as relevant to be
able to assess ITAB’s long-term payment capacity.
(SEK million) 2021 2020
Equity attributable to Parent Company
shareholders
2,654
1,607
Equity attributable to non-controlling
interests
128
118
Provision for deferred tax liabilities 45 41
Convertible debenture loan - -
Risk-bearing capital 2,827 1,766
Total capital 6,024 5,519
SHARE OF RISK-BEARING CAPITAL, % 46.9 32.0
Return on capital employed
This measure is used to assess the efficiency and value added from the busi-
ness.
(SEK million) 2021 2020
Profit for the year after financial items plus
financial borrowing costs 238 112
Average*) balance sheet total less non
interest-bearing liabilities 4,266 4,441
RETURN ON CAPITAL EMPLOYED, % 5.6 2.5
Interest-bearing net debt
Interest-bearing net debt is the most relevant measure to show total debt financ-
ing, and is included in the covenants that ITAB has in its loan agreements with
the company’s banks.
(SEK million) 2021 2020
Interest-bearing non-current liabilities 1,071 1,239
Interest-bearing current liabilities 380 1,202
Interest-bearing assets -4 -1
Cash and cash equivalents -208 -692
INTEREST-BEARING NET DEBT 1,239 1,748
Of which, interest-bearing lease liabilities 630 656
INTEREST-BEARING NET DEBT EXCL. LEASES
609 1,092
Return on total capital
This measure is used to assess the ability to generate profit on the Group’s assets,
regardless of financing costs.
(SEK million) 2021 2020
Profit for the year after financial items plus
financial borrowing costs 238 112
Average*) total capital 5,939 5,727
RETURN ON TOTAL CAPITAL, % 4.0 2.0
*) Average is calculated as the average of opening balance and the relevant reported quarterly data up until the closing period. In other words, 2021 is calculated as (31 December 2020 + 31
March 2021 + 30 June 2021 + 30 September 2021 + 31 December 2021) divided by five.
83ANNUAL REPORT 2021
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FINANCIAL INFORMATION
DEFINITIONS
ALTERNATIVE
PERFORMANCE MEASURE
DEFINITION
MOTIVE
SHARE OF RISK-BEARING
CAPITAL
Equity plus provisions for deferred tax liabilities as
well as convertible debenture loans in relation to
total capital.
Relevant measure for assessing ITAB’s potential to fulfil
its financial obligations.
RETURN ON EQUITY
Net profit for the year attributable to the Parent Com-
pany’s shareholders in relation to average equity
attributable to the Parent Company’s shareholders.
Relevant measure to show the return on the share-
holders' capital invested in the ITAB Group.
RETURN ON CAPITAL
EMPLOYED
Profit after financial items plus financial borrowing
costs in relation to average balance sheet total less
non interest-bearing liabilities.
Relevant measure for assessing ITAB’s efficiency and
added value from the business.
RETURN ON TOTAL CAPITAL
Profit after financial items plus financial borrowing
costs in relation to average total capital.
Relevant measure for assessing ITAB’s ability to
generate profit on the Group’s assets regardless of
financing costs.
DIRECT YIELD
Paid or proposed dividend in relation to the share
price on the balance sheet date.
Return measure for shareholders.
DISCOUNT RATE (WACC)
Weighted average cost of capital – weighted
required return for equity and borrowed capital
against the company’s future earnings.
Measures the required return on ITAB’s capital and is
used to discount future cash flows.
EBITDA
Earnings before interest, tax, depreciation
and amortisation.
A relevant profit measure to assess the company’s
profit trend over time.
EQUITY PER SHARE
Equity at the end of the period attributable to Parent
Company shareholders in relation to the number of
shares at the end of the period.
Measure to describe how much equity belongs to the
shareholders of the Parent Company.
CASH FLOW FROM OPERAT-
ING ACTIVITIES PER SHARE
Cash flow from operating activities in relation to the
average number of outstanding shares.
This measure highlights ITAB’s ability to generate cash
flow and pay its shareholders.
AVERAGE NUMBER OF
EMPLOYEES
Number of worked hours divided by normal annual
working time.
This measure shows the size of ITAB’s workforce.
EARNINGS PER SHARE
Net profit for the year attributable to Parent Compa-
ny shareholders in relation to the average number
of shares.
A valuation measure that highlights ITAB’s ability to
pay dividends to its shareholders.
INTEREST-BEARING NET DEBT
Non-current and current interest-bearing liabilities
including lease liabilities less interest-bearing assets
as well as cash and cash equivalents.
A relevant measure to show ITAB’s total loan financ-
ing. This measure is included in the covenants in
ITAB’s loan agreements with the company’s banks.
INTEREST-COVERAGE RATIO
Profit after financial items plus financial interest
expenses in relation to financial borrowing costs.
Shows ITAB’s ability to cover its financial expenses.
OPERATING MARGIN
Operating profit in relation to revenue. Relevant for assessing ITAB’s efficiency and added
value.
EQUITY/ASSETS RATIO
Equity in relation to total capital. This measure highlights financial risk.
CURRENCY-ADJUSTED SALES
Translation of the foreign subsidiaries’ income
statements are conducted at each period’s average
currency rate. For comparison of profit excluding cur-
rency effects, the companies are recalculated at the
previous year’s average currency rate for the same
period. ITAB applies the European Central Bank’s
average rates for the whole period.
Relevant to show the sales and profifit trend without
any effects from currency rates fluctuations.
PROFIT MARGIN
Profit after financial items in relation to revenue. Relevant for assessing ITAB’s efficiency and added
value.
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FINANCIAL INFORMATION
The Board of Directors and the CEO hereby verify that the consolidated accounts and the annual accounts have been prepared in accordance with the
International Financial Reporting Standards (IFRS), as adopted by the EU, and the Swedish Annual Accounts Act, and provide a true and fair view of the Group’s
and the Parent Company’s financial position and results, and that the Administration Report presents a true and fair view of the development of the Group’s
and the Parent Company’s business activities, financial position and results as well as describing significant risks and uncertainties that the Parent Company
and companies within the Group face. The annual accounts and the consolidated accounts were approved for issue by the Board of Directors on 28 March
2022. The consolidated income statement and statement of financial position as well as the Parent Company’s income statement and balance sheet will be
subject to adoption at the Annual General Meeting on 10 May 2022.
Jönköping, 28 March 2022
Anders Moberg
Chairman
Anna Benjamin
Board member
Jan Frykhammar
Board member
Petter Fägersten
Board member
Eva Karlsson
Board member
Our Auditor's Report was submitted on 30 March 2022
Ernst & Young AB
Joakim Falck
Authorised Public Accountant
Roberto Monti
Board member
Fredrik Rapp
Board member
Vegard Søraunet
Board member
Ruthger de Vries
Board member
Andréas Elgaard
CEO
85ANNUAL REPORT 2021
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FINANCIAL INFORMATION
AUDITOR’S REPORT
To the Annual General Meeting of Shareholders of ITAB Shop Concept AB (publ), corporate identity number 556292-1089
REPORT ON THE ANNUAL ACCOUNTS AND
CONSOLIDATED ACCOUNTS
Opinions
We have audited the annual accounts and conso-
lidated accounts of ITAB Shop Concept AB (publ),
except for the Corporate Governance Report
on pages 43-47 for the year 2021 The annual ac-
counts and consolidated accounts of the compa-
ny are included on pages 34-84 in this document.
In our opinion, the annual accounts have
been prepared in accordance with the Annual
Accounts Act and present fairly, in all material
respects, the financial position of the Parent
Company as of 31 December 2021 and its finan-
cial performance and cash flow for the year then
ended in accordance with the Annual Accounts
Act. The consolidated accounts have been pre-
pared in accordance with the Annual Accounts
Act and present fairly, in all material respects, the
financial position of the Group as of 31 Decem-
ber 2021 and their financial performance and
cash flow for the year then ended in accordance
with International Financial Reporting Standards
(IFRS), as adopted by the EU, and the Annual Ac-
counts Act. Our opinions do not cover the Cor-
porate Governance Report on pages 43-47. The
statutory Administration Report is consistent with
the other parts of the annual accounts and con-
solidated accounts.
We therefore recommend that the General
Meeting of Shareholders adopts the income sta-
tement and balance sheet for the Parent Com-
pany and the Group.
Our opinions in this report on the annual ac-
counts and consolidated accounts are consis-
tent with the content of the additional report that
has been submitted to the Parent Company's
Audit Committee in accordance with the Audit
Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with In-
ternational Standards on Auditing (ISA) and ge-
nerally accepted auditing standards in Sweden.
Our responsibilities under those standards are
further described in the Auditor’s Responsibilities
section. We are independent of the Parent Com-
pany and the Group in accordance with profes-
sional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in
accordance with these requirements. This inclu-
des that, based on the best of our knowledge
and belief, no prohibited services referred to in
the Audit Regulation (537/2014) Article 5.1 have
been provided to the audited company or, where
applicable, its Parent Company or its controlled
companies within the EU.
We believe that the audit evidence we have ob-
tained is sufficient and appropriate to provide a
basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters
that, in our professional judgement, were of most
significance in our audit of the annual accounts
and consolidated accounts of the current period.
These matters were addressed in the context of
our audit of, and in forming our opinion thereon,
the annual accounts and consolidated accounts
as a whole, but we do not provide a separate opi-
nion on these matters. For each matter below, our
description of how our audit addressed the mat-
ter is provided in that context.
We have fulfilled the responsibilities described
in the Auditor’s responsibilities for the audit of the
financial statements section of our report, inclu-
ding in relation to these matters. Accordingly,
our audit included the performance of proce-
dures designed to respond to our assessment of
the risks of material misstatement of the financial
statements. The results of our audit procedures, in-
cluding the procedures performed to address the
matters below, provide the basis for our audit opi-
nion on the accompanying financial statements.
Valuation of goodwill and shares
in Group companies
Description of the matter
As of 31 December 2021, the reported value
for goodwill amounts to SEK 1,644 million in the
Group’s balance sheet which corresponds to
27.3 percent of total assets. Shares in Group com-
panies are reported in the Parent Company’s
balance sheet at SEK 2,051 million, which cor-
responds to 77.1 percent of total assets. Every
year, and when there is an indication of a fall in
value, ITAB tests that the recognized value does
not exceed the calculated recoverable amount.
The recoverable amount is determined for each
cash-generating unit by means of a current value
calculation of future cash flows. Future cash flows
are based on the management’s business plans
and forecasts and include a number of assump-
tions, including regarding profit trend, growth,
investment needs and discount rate For shares in
Group companies, the recoverable amount is de-
termined as fair value or value in use, whichever
is the highest.
Altered assessments of the assumptions that
the management has made in the calculation
of the recoverable amount and the assumptions
that the company has applied are therefore
very important in the assessment of the need for
impairment. We have therefore judged that the
recognition of goodwill and shares in Group com-
panies are a key audit matter.
A description of the impairment test can be seen
in Note 18 “Intangible assets” and in Note 3 “Im-
portant estimates and assessments”.
How our audit addressed this key audit matter
In our audit, we have evaluated and tested the
company’s process for establishing impairment
tests, including by evaluating the accuracy of fo-
recasts and assumptions in previous years. With
the aid of our valuation specialists, we have as-
sessed the selected discount rate and assump-
tions regarding long-term growth. We have also
reviewed the company’s model and method for
implementing impairment tests and have evalua-
ted the company’s sensitivity analysis. We have
reviewed the additional information provided in
the Annual Report.
Other Information than the annual accounts
and consolidated accounts
This document also contains other information
than the annual accounts and consolidated ac-
counts which is found on pages 1-33. The remune-
ration report for the financial year 2021 also con-
stitutes other information. The Board of Directors
and the Chief Executive Officer (CEO) are respon-
sible for this other information.
Our opinion on the annual accounts and conso-
lidated accounts does not cover this other informa-
tion and we do not express any form of assurance
conclusion regarding this other information.
In connection with our audit of the annual ac-
counts and consolidated accounts, our respon-
sibility is to read the information identified above
and consider whether the information is materi-
ally inconsistent with the annual accounts and
consolidated accounts. In this procedure we also
take into account our knowledge otherwise obtai-
ned in the audit and assess whether the informa-
tion otherwise appears to be materially misstated.
If we, based on the work performed concerning
this information, conclude that there is a mate-
rial misstatement of this other information, we are
required to report that fact. We have nothing to
report in this regard.
Responsibilities of the Board of Directors and
the CEO
The Board of Directors and the CEO are respon-
sible for the preparation of the annual accounts
and consolidated accounts and that they give a
fair presentation in accordance with the Annual
Accounts Act and, concerning the consolidated
accounts, in accordance with IFRS as adopted by
the EU. The Board of Directors and the CEO are also
responsible for such internal control as they deter-
mine is necessary to enable the preparation of an-
nual accounts and consolidated accounts that
are free from material misstatement, whether due
to fraud or error.
In preparing the annual accounts and conso-
lidated accounts, The Board of Directors and the
CEO are responsible for the assessment of the
company’s and the group’s ability to continue as
a going concern. They disclose, as applicable,
matters related to going concern and using the
going concern basis of accounting. The going
concern basis of accounting is however not app-
lied if the Board of Directors and the CEO intend
to liquidate the company, to cease operations, or
has no realistic alternative but to do so.
Translation from the Swedish original.
86 ITAB
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FINANCIAL INFORMATION
The Board's Audit Committee shall, without preju-
dice to the Board of Director’s responsibilities and
tasks in general, among other things oversee the
company’s financial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assu-
rance about whether the annual accounts and
consolidated accounts as a whole are free from
material misstatement, whether due to fraud or
error, and to issue an Auditor’s Report that inclu-
des our opinions. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs and
generally accepted auditing standards in Swe-
den will always detect a material misstatement
when it exists. Misstatements can arise from fraud
or error and are considered material if, individu-
ally or in the aggregate, they could reasonably be
expected to influence the economic decisions of
users taken on the basis of these annual accounts
and consolidated accounts.
As part of an audit in accordance with ISAs, we
exercise professional judgement and maintain pro-
fessional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstate-
ment of the annual accounts and consolidated
accounts, whether due to fraud or error, design
and perform audit procedures responsive to
those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for
our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misre-
presentations, or the override of internal control.
• Obtain an understanding of the company’s in-
ternal control relevant to our audit in order to
design audit procedures that are appropriate
in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of
the company’s internal control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of ac-
counting estimates and related disclosures
made by the Board of Directors and the CEO.
• Conclude on the appropriateness of the Board
of Directors’ and the CEO’s use of the going
concern basis of accounting in preparing
the annual accounts and consolidated ac-
counts. We also draw a conclusion, based on
the audit evidence obtained, as to whether any
material uncertainty exists related to events or
conditions that may cast significant doubt on
the company’s and the group’s ability to con-
tinue as a going concern. If we conclude that
a material uncertainty exists, we are required
to draw attention in our Auditor’s Report to the
related disclosures in the annual accounts
and consolidated accounts or, if such disclo-
sures are inadequate, to modify our opinion
about the annual accounts and consolidated
accounts. Our conclusions are based on the
audit evidence obtained up to the date of our
Auditor’s Report. However, future events or con-
ditions may cause a company and a group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure
and content of the annual accounts and con-
solidated accounts, including the disclosures,
and whether the annual accounts and con-
solidated accounts represent the underlying
transactions and events in a manner that ac-
hieves fair presentation.
• Obtain sufficient and appropriate audit eviden-
ce regarding the financial information of the
entities or business activities within the group
to express an opinion on the consolidated ac-
counts. We are responsible for the direction, su-
pervision and performance of the group audit.
We remain solely responsible for our opinions.
We must inform the Board of Directors of, among
other matters, the planned scope and timing of
the audit. We must also inform of significant au-
dit findings during our audit, including any sig-
nificant deficiencies in internal control that we
identified.
We must also provide the Board of Directors
with a statement that we have complied with
relevant ethical requirements regarding inde-
pendence, and to communicate with them all
relationships and other matters that may reaso-
nably be thought to bear on our independence,
and where applicable, actions taken to eliminate
threats or related safeguards applied.
From the matters communicated with the
Board of Directors, we determine those matters
that were of most significance in the audit of the
annual accounts and consolidated accounts,
including the most important assessed risks for
material misstatement, and are therefore the key
audit matters. We describe these matters in the
Auditor’s Report unless law or regulation preclu-
des disclosure about the matter.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
Report on the audit of the administration and
the proposed appropriations of the company’s
profit or loss
Opinions
In addition to our audit of the annual accounts
and consolidated accounts, we have also audi-
ted the administration of the Board of Directors
and the CEO of ITAB Shop Concept AB (publ) for
the year 2021 and the proposed appropriations of
the company’s profit or loss.
We recommend to the General Meeting of
Shareholders that the profit be appropriated in
accordance with the proposal in the statutory Ad-
ministration Report and that the members of the
Board of Directors and the CEO be discharged
from liability for the financial year.
Basis for opinions
We conducted the audit in accordance with ge-
nerally accepted auditing standards in Sweden.
Our responsibilities under those standards are
further described in the Auditor’s responsibilities
section. We are independent of the Parent Com-
pany and the Group in accordance with profes-
sional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in ac-
cordance with these requirements.
We believe that the audit evidence we have ob-
tained is sufficient and appropriate to provide a
basis for our opinions.
Responsibilities of the Board of Directors and
the CEO
The Board of Directors is responsible for the pro-
posal for appropriations of the company’s profit
or loss. At the proposal of a dividend, this inclu-
des an assessment of whether the dividend is
justifiable considering the requirements which
the company's and the group’s type of opera-
tions, size and risks place on the size of the parent
company's and the group’s equity, consolidation
requirements, liquidity and position in general.
The Board of Directors is responsible for the
company’s organization and the administration
of the company’s affairs. This includes among
other things continuous assessment of the
company’s and the group’s financial situation
and ensuring that the company's organization is
designed so that the accounting, management
of assets and the company’s financial affairs
otherwise are controlled in a reassuring manner.
The CEO shall manage the ongoing administra-
tion according to the Board of Directors’ guide-
lines and instructions and among other matters
take measures that are necessary to fulfill the
company’s accounting in accordance with law
and handle the management of assets in a reas-
suring manner.
Auditor’s responsibility
Our objective concerning the audit of the admi-
nistration, and thereby our opinion about dischar-
ge from liability, is to obtain audit evidence to
assess with a reasonable degree of assurance
whether any member of the Board of Directors or
the CEO in any material respect:
• has undertaken any action or been guilty of
any omission which can give rise to liability to
the company, or
• in any other way has acted in contravention of
the Companies Act, the Annual Accounts Act
or the Articles of Association.
Our objective concerning the audit of the propo-
sed appropriations of the company’s profit or loss,
and thereby our opinion about this, is to assess with
reasonable degree of assurance whether the pro-
posal is in accordance with the Companies Act.
Reasonable assurance is a high level of assu-
rance, but is not a guarantee that an audit con-
ducted in accordance with generally accepted
auditing standards in Sweden will always detect
actions or omissions that can give rise to liability
to the company, or that the proposed appropria-
tions of the company’s profit or loss are not in ac-
cordance with the Companies Act.
As part of an audit in accordance with gene-
rally accepted auditing standards in Sweden, we
exercise professional judgement and maintain
professional skepticism throughout the audit. The
examination of the administration and the propo-
sed appropriations of the company’s profit or loss
is based primarily on the audit of the accounts.
Additional audit procedures performed are ba-
sed on our professional judgement with starting
point in risk and materiality. This means that we fo-
cus the examination on such actions, areas and
relationships that are material for the operations
and where deviations and violations would have
particular importance for the company’s situa-
tion. We examine and test decisions undertaken,
FINANCIAL INFORMATION
87ANNUAL REPORT 2021
|
ITAB
support for decisions, actions taken and other
circumstances that are relevant to our opinion
concerning discharge from liability. As a basis for
our opinion on the Board of Directors’ proposed
appropriations of the company’s profit or loss we
examined whether the proposal is in accordance
with the Companies Act.
THE AUDITOR’S EXAMINATION OF THE ESEF REPORT
Opinion
In addition to our audit of the annual accounts
and consolidated accounts, we have also exa-
mined that the Board of Directors and the CEO
have prepared the annual accounts and consoli-
dated accounts in a format that enables uniform
electronic reporting (the ESEF report) pursuant to
Chapter 16, Section 4(a) of the Swedish Securities
Market Act (2007:528) for ITAB Shop Concept AB
(publ), for the financial year 2021
Our examination and our opinion relate only to
the statutory requirements.
In our opinion, the ESEF report 59d8e9b0dd
147ab5029c16eacb9506069a1b7a04e348133f7a
a1cdc4f8f55bac has been prepared in a format
that, in all material respects, enables uniform
electronic reporting.
Basis for opinion
We have performed the examination in ac-
cordance with FAR’s recommendation RevR 18
Examination of the ESEF report. Our responsibility
under this recommendation is described in more
detail in the Auditor's responsibility section. We are
independent of ITAB Shop Concept AB (publ), in
accordance with professional ethics for accoun-
tants in Sweden and have otherwise fulfilled our
ethical responsibilities in accordance with these
requirements.
We believe that the evidence we have obtained
is sufficient and appropriate to provide a basis for
our opinion.
Responsibilities of the Board of Directors and
the CEO
The Board of Directors and the CEO are respon-
sible for the preparation of the ESEF report in ac-
cordance with Chapter 16, Section 4(a) of the
Swedish Securities Market Act (2007:528), and for
such internal control that the Board of Directors
and the CEO determine is necessary to prepare
the ESEF report without material misstatements,
whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assu-
rance whether the ESEF report is in all material re-
spects prepared in a format that meets the requi-
rements of Chapter 16, Section 4(a) of the Swedish
Securities Market Act (2007:528), based on the
procedures performed.
RevR 18 requires us to plan and execute pro-
cedures to achieve reasonable assurance that
the ESEF report is prepared in a format that meets
these requirements.
Reasonable assurance is a high level of assu-
rance, but it is not a guarantee that an engage-
ment carried out according to RevR 18 and ge-
nerally accepted auditing standards in Sweden
will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error
and are considered material if, individually or in
aggregate, they could reasonably be expected
to influence the economic decisions of users ta-
ken on the basis of the ESEF report.
The audit firm applies ISQC 1 Quality Control for
Firms that Perform Audits and Reviews of Financial
Statements, and other Assurance and Related
Services Engagements and accordingly main-
tains a comprehensive system of quality control,
including documented policies and procedures
regarding compliance with professional ethical
requirements, professional standards and legal
and regulatory requirements.
The examination involves obtaining evidence,
through various procedures, that the ESEF report
has been prepared in a format that enables uni-
form electronic reporting of the annual accounts
and consolidated accounts. The procedures se-
lected depend on the auditor’s judgement, inclu-
ding the assessment of the risks of material missta-
tement in the report, whether due to fraud or error.
In carrying out this risk assessment, and in order
to design audit procedures that are appropriate
in the circumstances, the auditor considers those
elements of internal control that are relevant to
the preparation of the ESEF report by the Board
of Directors and the CEO, but not for the purpose
of expressing an opinion on the effectiveness of
those internal controls. The examination also
includes an evaluation of the appropriateness
and reasonableness of assumptions made by the
Board of Directors and the CEO.
The procedures mainly include a technical va-
lidation of the ESEF report, i.e. if the file containing
the ESEF report meets the technical specification
set out in the Commission’s Delegated Regulation
(EU) 2019/815 and a reconciliation of the ESEF re-
port with the audited annual accounts and con-
solidated accounts.
Furthermore, the procedures also include an
assessment of whether the ESEF report has been
marked with iXBRL which enables a fair and com-
plete machine-readable version of the consolida-
ted statement of financial performance, financial
position, changes in equity and cash flow.
THE AUDITOR’S EXAMINATION OF THE CORPO-
RATE GOVERNANCE REPORT
The Board of Directors is responsible for that the
Corporate Governance Report on pages 43-47
has been prepared in accordance with the An-
nual Accounts Act.
Our examination of the Corporate Governance
Report is conducted in accordance with FAR´s
standard RevR 16 The auditor´s examination of
the corporate governance statement. This means
that our examination of the Corporate Gover-
nance Report is different and substantially less in
scope than an audit conducted in accordance
with International Standards on Auditing and ge-
nerally accepted auditing standards in Sweden.
We believe that the examination has provided us
with sufficient basis for our opinions.
A Corporate Governance Report has been pre-
pared. Disclosures in accordance with chapter 6
section 6 the second paragraph points 2-6 of the
Annual Accounts Act and chapter 7 section 31
the second paragraph the same law are consis-
tent with the other parts of the annual accounts
and consolidated accounts and are in accor-
dance with the Annual Accounts Act.
Ernst & Young AB Box 7850, SE-103 99 Stockholm,
Sweden was appointed auditors of ITAB Shop
Concept AB (publ) by the General Meeting of
Shareholders on 11 May 2021. ITAB Shop Concept
AB (publ) has been a Public Interest Entity since
28 May 2004
Jönköping, 30 March 2022
Ernst & Young AB
Joakim Falck
Authorised Public Accountant
AUDITORS
The auditors are appointed by the shareholders at the Annual General Meeting. The auditors
examine the company’s annual accounts, consolidated accounts and accounting records
as well as the administration of the Board of Directors and CEO.
The company’s auditor is the registered auditing company Ernst & Young AB, with authorised pu-
blic accountant Joakim Falck as auditor in charge. Aside his duties for ITAB Shop Concept AB, Joa-
kim Falck also has auditing assignments for e.g. Nolato AB, XANO Industrier AB, Garo AB, Hexpol AB,
Nefab AB, One Partner Group AB and Gyllensvaans Möbler AB.
JOAKIM FALCK
(born 1972)
Auditor for ITAB since 2018
Authorised Public Accountat
Member of FAR SRS, Ernst & Young AB
FINANCIAL INFORMATION
88 ITAB
|
ANNUAL REPORT 2021
EVA KARLSSON (born 1966)
Board member since 2020.
Executive Vice President & Head of Group
Operations at Dometic Group.
Other Board assignments: −
Independence: Independent in relation to the
company and its senior executives. Independent
in relation to major shareholders.
Shareholding: −
BOARD OF DIRECTORS
ANNA BENJAMIN (born 1976)
Board member since 2004.
Other Board assignments: Board member of
AGES Industri AB, Inev AB, Pegital Investment AB
and XANO Industri AB.
Independence: Independent in relation to the
company and its senior executives. Independent
in relation to major shareholders.
Shareholding: 14,206,593 shares (with family and
via companies).
PETTER FÄGERSTEN (born 1982)
Board member since 2016.
Other Board assignments: Board member
of AGES Industri AB, Inev AB, Ravingatan AB,
Skanditape AB, XANO Industri AB, Övre kullen AB
and others.
Independence: Independent in relation to the
company and its senior executives. Dependent in
relation to major shareholders.
Shareholding: 24,718,162 shares (with family and
via companies).
FREDRIK RAPP (born 1972)
Board member since 2013.
CEO of Pomona-gruppen AB.
Other Board assignments: Chairman of the Board
of Binar AB, Borgstena Group AB, Eesti Höövelliist
AS, Serica Consulting AB, XANO Industri AB and
others. Board member of Ages Industri AB, Nordic
Flow Group AB, PrimeKey Solutions AB, Segulah AB
and others.
Independence: Independent in relation to the
company and its senior executives. Dependent in
relation to major shareholders.
Shareholding: 37,945,397 shares (via Pomona-
gruppen and with family).
ANDERS MOBERG (born 1950)
Chairman of the Board since 2018 och Board
member since 2011.
Other Board assignments: Chairman of the Board
of Byggmax AB. Board member of Bergendahl
& Son AB, Boconcept A/S, Stichting INGKA
Foundation and ZetaDisplay AB.
Independence: Independent in relation to the
company and its senior executives. Independent
in relation to major shareholders.
Shareholding: 1,100,000 shares (endowment
policy).
JAN FRYKHAMMAR (born 1965)
Board member since 2019.
Other Board assignments: Chairman of the Board
of Aspia AB, Kvdbil AB and Openet Ltd. Board
member of Clavister AB, Nordic Semiconductor AS,
Telavox AB and others.
Independence: Independent in relation to the
company and its senior executives. Independent in
relation to major shareholders.
Shareholding: −
ROBERTO MONTI (born 1963)
Board member since 2020.
CEO of Arper SPA.
Other Board assignments: Board member of
AIDAF and Arper SPA.
Independence: Independent in relation to the
company and its senior executives. Independent
in relation to major shareholders.
Shareholding: −
RUTHGER DE VRIES (born 1965)
Board member since 2020.
President, Scania Industrial Operations Asia.
Other Board assignments: −
Independence: Independent in relation to the
company and its senior executives. Independent
in relation to major shareholders.
Shareholding: −
VEGARD SØRAUNET (born 1980)
Board member since 2021.
CEO and Investment Director at Aeternum
Management AS.
Other Board assignments: CEO and Chairman of
the Board of Søraunet Invest AS.
Independence: Independent in relation to the
company and its senior executives. Dependent in
relation to major shareholders.
Shareholding: 54,304,496 shares (via Aeternum
Capital).
OTHER INFORMATION: Refer to ITAB’s website, itabgroup.com, for a more detailed presentation of each
Board member, including education and work experience. Information about the number of shares refers
to shareholdings as of 28 February 2022.
FINANCIAL INFORMATION
89ANNUAL REPORT 2021
|
ITAB
GROUP MANAGEMENT
OTHER INFORMATION: Information about the number of shares refers to shareholdings as of 28 February 2022.
JESPER BLOMQUIST (born 1968)
Chief Operating Officer & Senior Vice President –
SBU Lighting
Employed by the Group: 2020
Shareholding: 82,222 shares.
ULRIKA BERGMO SKÖLD (born 1967)
Chief Financial Officer
Employed by the Group: 2020
Shareholding: 25,600 shares.
PERNILLA LORENTZON (born 1969)
Senior Vice President – People & Culture
Employed by the Group: 2015
Shareholding: −
ROY FRENCH (born 1965)
Senior Vice President – MBU North Europe
Employed by the Group: 2010
Shareholding: −
ANDRÉAS ELGAARD (born 1972)
President & CEO
Employed by the Group: 2019
Education: Master of Science, Lund Institute of
Technology.
Work experience: Senior positions within IKEA,
Ballingslöv, Sperian, Icopal and Saint-Gobain
Isover.
Shareholding: 700,000 shares.
FRIDA KARLSSON (born 1984)
General Counsel
Employed by the Group: 2021
Shareholding: −
NICK HUGHES (born 1969)
Senior Vice President – Group Strategy &
Transformation and SBU Retail Technology
Employed by the Group: 2010
Shareholding: −
GLAUCO FRASCAROLI (born 1958)
Senior Vice President – MBU South Europe
Employed by the Group: 2016
Shareholding: −
KLAUS SCHMID (born 1965)
Senior Vice President – MBU Central Europe
Employed by the Group: 2018
Shareholding: −
Annual General Meeting 2022 in ITAB Shop Concept AB
(publ) will be held on Tuesday, 10 May 2022 at 3:00 p.m.
CEST at ITAB's head office at Instrumentvägen 2, Jönkö-
ping, Sweden.
The notice to attend the Annual General Meeting is ex-
pected to be published on 6 April 2022 through a press
release and on the company’s website, and through an
advertisement in Post- och Inrikes Tidningar. An announ-
cement of the publication of the notice will be made in
Dagens Industri. The notice will contain the proposed
agenda and the proposals of the Nomination Committee
and the Board of Directors for resolutions at the Meeting.
Refer to itabgroup.com for additional information
and to download and order reports.
FINANCIAL INFORMATION
IN 2022
Interim Report 3 months 1 Jan-31 Mar
Annual General Meeting 2022
Interim Report 6 months 1 Jan-30 Jun
Interim Report 9 months 1 Jan-30 Sep
Year-End Report 1 Jan-31 Dec 2022
Annual Report 2022
Annual General Meeting 2023
10 May 2022
10 May 2022
13 July 2022
28 October 2022
8 February 2022
March/April 2023
May 2023
ANNUAL GENERAL MEETING
2022
Cover image: Coop Hagastaden Bistro. Interior concept: Studio Peter Lundbergh in collaboration with Coop & ITAB. Photographer: Stellan Herner.
ITAB Shop Concept AB (publ)
Box 9054
SE-550 09 Jönköping
Instrumentvägen 2 (Visiting address)
Tel. +46 (0)36-31 73 00
info@itab.com • ir@itab.com
www.itabgroup.com • www.itab.com