We are continuing to advance our position from a strategic perspective. Several of our customers are choosing to use a larger proportion of our all-inclusive offer, which is in line with our business concept of offering complete shop concepts. Our offer is competitive and we will continue to develop the concept in order to create more effective and more attractive shop environments for our customers.
Currency-adjusted sales increased by 33% compared to the same period last year. Sales have developed better in the UK and Central Europe, on a par in NorthEast and not as well in Scandinavia. The acquired companies in Southern Europe have not developed as well as expected, although they finished the period slightly better. The integration process is ongoing and will continue in future.
We have strengthened our market position above all in the UK and Central Europe. Several of our existing customers are choosing to utilise a larger proportion of our offer in order to achieve a more effective and more attractive shop environment.
Profit after financial items increased by 14%. The improved profit can mainly be explained by the increase in sales. The trend in steel prices has had a negative impact on profit. The exchange rate impact is marginal compared to the same period last year.
The gross margin has remained stable, which indicates that the long-term work aimed at streamlining all parts of our operation in order to improve our offer has produced results.
During the second quarter of the year, sales have developed better than last year. The unchanged earnings are primarily due to the trend in steel prices as well as costs for increased sales efforts and product development within lighting and digitisation.
Following Euroshop, the level of interest has remained strong among both national and international retail chains. During the fair, we were able to present several new and innovative products and solutions for the shops of the future. To an ever greater extent, consumers are using digital tools before, during and after their purchase in the physical shop. Increased digitisation in the physical shop is driving forward our sales and development. We will continue the development of our digital solutions for the shops of the future.
Acquisition after the end of the period
We have acquired two German lighting companies, which jointly comprise one of the leading players as regards sales of lighting systems principally to the non-food segment in the German market. The acquisition was conditional on competition approval, which was awarded on 6 July. The companies are sales companies with expertise in light planning and design. The acquisition is a stage in the intensification of our marketing activities and reinforcement of our position. The acquisition is expected to generate synergies, and we will be offering customers in Germany a combination of local lighting expertise with global sourcing of lighting products. The acquisition is in line with ITAB’s strategy and continued investment in sales of a total concept for retail trade.
We are expecting good growth in future. As in previous years, volumes are expected to be lower at the start of the year before increasing in the second half of the year. Despite the market development in southern Europe, the integration of the La Fortezza Group is proceeding according to plan. Many discussions about expanded cooperation are being carried out with existing and new customers.
We are carefully monitoring the trend in steel prices, rapid exchange rate fluctuations and the general political situation, which can change our conditions on the market.
The efficiency measures that were conducted last year, with particular focus on Belgium and Finland, are providing a good position looking to the future. We will continue our long-term work aimed at streamlining all parts of our operation, in order to improve our offer.
ITAB’s global presence is becoming even more important, as several of our customers are expanding across large parts of the world. We have commenced the construction of a new production facility in China during the period. The facility is expected to be in operation during the second half of 2018, and we will primarily be supplying our European customers’ establishments in Asia.
We will further develop our sustainability work. In recent years, we have developed a sustainability programme that supports both the business process and customer demands. The programme extends across the Group, and the companies will be working locally within each area of focus.
Our all-inclusive offer comprising many innovative solutions, alongside our working model and geographic presence, will lead to better business both for ITAB and our customers.
Ulf Rostedt, CEO ITAB Shop Concept