ITAB.ST — mttssn research

HOLD

Conviction: MEDIUM

A retail-store-fixtures and self-checkout solutions provider with sub-WACC returns (ROIC 6.3%, EP −SEK 124M) and a market that prices decline (negative implied growth) — cyclical, low-margin retail-capex exposure. HOLD with a bearish lean.

Adj. ROIC

6.3%

WACC 8% → spread -1.7pp

Economic Profit

SEK -124M

−SEK 124M; sub-WACC

FCF Yield

10.7%

10.7% FCF yield; deleveraging

Price / Target

SEK 16 → SEK 14

-10% base; HOLD

Revenue (LTM)

SEK 12.9B

LTM; store fixtures + checkout

EBIT Margin

4.6%

~5% EBIT — low

EV / IC

0.93×

Enterprise value / invested capital

Net Debt

SEK 2.8B

Thesis

ITAB Group supplies store fittings, checkout systems (including self-checkout) and in-store solutions to retailers. It is a low-margin (~5% EBIT), cyclical business tied to retail capital expenditure, with adjusted ROIC of 6.3% below the 8% WACC and economic profit of −SEK 124M.

The market's own implied perpetual growth is negative — it prices a decline, consistent with structural pressure on physical-retail fit-out spend. Self-checkout/automation is the offset; sub-WACC returns and retail-capex cyclicality are the cautions.

Valuation · reverse-DCF & scenarios

Reverse-DCF fair value runs ~SEK 6–10 across scenarios — below the SEK 15.5 price; the negative implied growth reflects structural retail-capex pressure. A leveraged, cyclical, low-return business.

Base SEK 14 (−10%); bull SEK 20 (self-checkout/automation demand + margin + retail-capex recovery); bear SEK 10 (retail-capex weakness persists).

Market-implied growth

≥6.0%

model ceiling — EV implies more than constant-ROIC sustains

No-growth value / share

SEK 10

65% of price; rest = priced-in growth

ROIC − WACC

-1.7 pp

ROIC 6.3% vs WACC 8.0% — positive = value creation

CAP (priced-in)

n/a

years of excess returns the price implies (fades to WACC)

At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~6.0%, limited by ROIC 6% ≈ WACC 8%) it cannot reach the current EV. No-growth value is SEK 10/share (65% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.

Scenario	24m target	Impl. g	Upside	Prob.	Driver
Bull	SEK 20	≥6%	+29%	30%	Self-checkout/automation demand + margin + recovery
Base	SEK 14	≥6%	-10%	40%	Sub-WACC; market prices decline
Bear	SEK 10	≥6%	-36%	30%	Retail-capex weakness persists
Prob-weighted	SEK 15	—	-6%	100%	Scenario-weighted expected value

Sensitivity — fair value / share at WACC × growth

WACC \ g	0%	3%	5%	8%	10%	15%
6.50%	17	17	17	17	16	14
7.25%	13	13	12	11	10	7
8.00% (base)	10	9	8	7	6	2
8.75%	8	7	6	4	3	-2
9.50%	6	5	4	2	0	-5

Green = fair value above the current price of SEK 15.54. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.

Method & data. NOPAT SEK 465, invested capital and ROIC 6.3% are observed (adjustments.json); WACC 8.0% and terminal g 2.5% are assumptions. EV→equity uses net debt SEK 2,819. The model holds ROIC constant (no fade) over the explicit horizon; the CAP figure instead fades excess returns to WACC.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Self-checkout/automation

Retail-automation (self-checkout) demand is the principal growth offset — the bull case.

2. Installed base/service

An installed base supports some recurring revenue.

3. Scale in store solutions

A leading European position in store fittings/checkout.

4. Margin/return optionality

Mix shift to solutions/automation could lift returns.

5. Cash generation

10.7% free-cash yield aids deleveraging.

Key risks

Sub-WACC returns / decline6.3% ROIC < WACC, negative EP, and the market prices decline — the dominant issue.
Retail-capex cyclicalityPhysical-retail fit-out spend is cyclical and structurally pressured.
LeverageSEK 2.8B net debt on a low-return base.
Low margins~5% EBIT leaves little buffer.
E-commerce shiftThe long-run shift to online pressures physical-store investment.

Conclusion

ITAB is a low-margin, sub-WACC retail-fixtures business the market prices for decline, with self-checkout/automation the offset. HOLD with a bearish lean, medium conviction; base target SEK 14 (−10%).

An automation-led mix shift lifting returns is the upside; structural retail-capex pressure is the risk.