CEO's comments

CEO Ulf Rostedt comment January-June 2010

The markets are gradually becoming more active and large parts of the Group report a marked increase in requests. During the first six months of 2010 a number of larger customer agreements have been met on several of our markets.

The agreement met with one of Europe’s largest grocery chains is ITAB’s single largest agreement to date.The order value is estimated to over SEK 400 million during 2,5 years and will result in a solid ground for the coming autumn as well as the years ahead.

Additionally, larger agreements have been met with Sainsbury in England and Prisma in the Baltic States. The agreement in the Baltic States is especially important for us because this region, as for the rest, is severely affected by the present economical situation. The intention of these agreements also mean a larger overall commitment towards our customers, which is in line with our strategy, and as we see it, the development of the markets. Several of our customers are expanding their establishment programmes and the market seems more positive today compared to corresponding period last year. The customers past years’ purchasing patterns distinguished by a quiet start of the year and escalating volumes in the second half, are expected to repeat it this year too. Order volumes in the Group and the establishment programmes that are planned for this autumn is significantly better than in the past.

The volume in sales for the first sixmonths was a bit lower than expected, but still in line with expectations. Compared to corresponding period last year the sales regions NorthEast and Benelux has started off somewhat biding, UK & Ireland and Scandinavia on par with last year whilst Central Europe have had a positive development.

Through continuous potentiating of our business on several levels, there has been an increased focus on the use of existing resources and adjustments of fixed costs due to lower sales volumes and we have been able to sustain the results with a stable gross margin as a base. These activities will lead to that the potential for an improved result will be good when the sales volumes return.

The Group is well prepared for higher volumes in 2010 to existing and new customers. Our ambition is to strengthen our position even more in all our markets. Our all-inclusive offer to establish turnkey shop concepts and project management appears to be especially interesting since several customers have severely reduced their fixed expenses and now stand ready to expand.

Jönköping 9 July 2010
Ulf Rostedt