Humble : Interim Report Humble Group Q1_ENG_2022-05-25 – ENG

INTERIM REPORT

JANUARY - MARCH 2022

INTERIM REPORT

JANUARY - MARCH 2022

ORGANIC GROWTH AND IMPROVED PROFITABILITY

Financial information

First quarter

• Net sales amounted to 879 MSEK (88).
• EBITA amounted to 85 MSEK (0).
• Adjusted EBITDA amounted to 102 MSEK (7).
• Adjusted EBITA amounted to 93 MSEK (3).
• Adjusted EBITA per share amounted to 0.37 SEK (0.04).
• Earnings per share amounted to -0.82 SEK (-0.09).
• Cash flow from operating activities before change in net working capital amounted to 91 MSEK (-4).

Significant events since the end of the quarter

• Humble Group carries out a directed share issue of 33 million shares and raises proceeds of 528 MSEK.
• Humble completes acquisitions of MedicaNatumin AB and Go Superfoods Ltd.
• Annual general meeting was held on 5 May 2022, where the board was re-elected and Thomas Petrén resigned as board member.

Proforma first quarter

• Net sales amounted to 1,067 MSEK (194).

• EBITA amounted to 102 MSEK (19).

• Adjusted EBITDA amounted to 127 MSEK (27).

• Adjusted EBITA amounted to 115 MSEK (23).

• Adjusted EBITA per share amounted to 0.46 SEK (0.14).

Financial overview		First quarter		Last Twelve Months Full year
	Proforma	2022	2021	Proforma	Apr 2021 -	2021
Follow up on financial targets (MSEK)	2022	2022	Mar 2022

Net sales	1 067	879	88
EBITA	102	85	2
Adjusted EBITA	115	93	6
Adjusted EBITA margin	10,4%	10,2%	5,9%
Adjusted EBITA per share	0,46	0,37	0,04

4 224	2 309	1 518
431	234	151
556	341	217
12,8%	14,1%	13,5%
2,21	1,36	0,88

*The net sales proforma has been restated for previous quarters. For more information, please see page 3.

Humble Group AB Interim Report January - March 2022 Stockholm, 25 May 2022

| COMMENTS FROM THE CEO

STABILITY IN A CHALLENGING CLIMATE

Seasonally, the first quarter is the weakest period of the year for our companies. Despite this, we are breaking sales records, with an organic growth of 25 % proforma for all companies that we acquired in 2021 and 2022. Given that it has been a turbulent spring with many challenging external factors spilling over into the value chain, it's reassuring that we are starting to see the impact and benefits for our companies being part of Humble. The EBITA proforma was increased by 59 % compared with last year, and our efforts to create more favourable conditions for the companies have yielded results. In the current market situation, it is required that we continue to maintain a dynamic profile and the intensive work of growing the group and establishing ourselves as a leading player of future FMCG-products.

Focus areas

Russia's invasion of Ukraine on 24 February 2022 changed the world trading climate, and it was difficult to predict the external political developments that would take place. As the entrepreneur- driven group that we are, we have continuously adapted our business and development to the uncertain conditions that the war entails. Challenges in the form of rising raw material and energy prices as well as increased shipping costs, which were already at a high level in 2021, are areas that have been at the top of our agenda to deal with. In the group, we have secured important agreements for transport and logistics, moved production, divested certain products, and invested in larger inventories and access to raw materials, activities that will enable us to continue to grow and maintain a strong gross profit margin. The operating cash flow before changes in NWC was 91 MSEK but due to the extraordinary investments in stock and raw materials we ended up with -1 MSEK from the operating activities in total. We do not see this as a problem as the increase in net working capital is a conscious and tactical growth-investment that will benefit the Group's growth and profitability in the long term. To add, our companies have historically proven to have a high cash generation and have yielded continuous dividends to their previous owners.

Continuous work that shows results

It is gratifying to sum up a first quarter with an aggregated organic growth proforma of 25 %, as well as great performances in several of our companies which have managed to find a good balance in the changing market conditions and to identify and act on new opportunities where other more slow-moving players are demonstrably facing major challenges. Furthermore, our entrepreneurs have managed to transfer increased costs to the retailers and consumers, which is reflected in that the EBITA proforma was increased by 59 % compared to the first quarter of 2021. This is a good indicator that shows the group's value creation, where we during the last quarters have established a nice trend with a steady increase of EBITA per share, which will strengthen our capacity to organically being able to finance further acquisitions.

The investment we have made in the operational team as well as the synergy projects that were initiated in the autumn of 2021 have started to have an impact. We have several case studies on how the subsidiaries share intellectual property with each other and drive the group's growth by selling their own brands in new channels and markets. The consolidated adjusted EBITA of 93 MSEK was increased by both organic growth and strengthened margin, reaching 10.2 %. Due to seasonality this is lower than the 2021-year average but higher than the comparable margin for Q1 2021 and where we are positive on our total year margin for 2022.

During the year, we acquired 6 selected companies, all of which fits perfectly into the strategic matrix we have for the Group's segments and verticals. With our structural platform and focused acquisition strategy, we naturally improve collaborations internally and offer an improved product mix to our customers.

Despite some disturbances in the capital market, we carried out a directed share issue of SEK 528 million in April, which provided the group with cash for continued acquisitions as well as new strategic owners who share the vision for our long-term journey with Humble. Moreover, we are actively looking to improve our general financing profile and have an ongoing dialogue with the banks and debt capital market, to make sure that we streamline our capital structure and maximize our free cash flow.

Sustainable and profitable growth

Our target going forward is to maintain steady and profitable growth and continue our path towards the financial goals. The management team is well staffed to handle a significantly larger company and ready to assist and integrate new operations that becomes part of the group.

We have had a good start in the second quarter, with continued sales growth and where our subsidiaries deliver as expected, increasing compared to last year. Several raw material and purchasing contracts that were signed before the Ukraine crisis, will start to take effect in Q3 and where we estimate to have the full visibility in the profit margin from Q4 and onwards. Our type of fast-moving consumer goods generally meets a non-price-sensitive consumer and we have not yet seen any major negative implications from the inflation. All in all, it gives us a good indication that Humble will be able to stand strong, regardless of how the volatile macroclimate develops in the future.

Simon Petrén

CEO Humble Group

Stockholm, 25 May 2022

Humble Group AB Interim Report January - March 2022

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| PROFORMA DEVELOPMENT

FINANCIAL DEVELOPMENT PROFORMA

OVERVIEW OF NET SALES AND ADJUSTED EBITA PROFORMA

Net sales proforma

Net sales proforma for the first quarter amounted to a total of 1,067 MSEK, which is an increase of 214 MSEK compared with the first quarter 2021, totalling an organic growth increase of 25 %.

For the last twelve months, the net sales amounted to 4,224 MSEK, which is an increase of 888 MSEK compared with the previous quarter. The historical net sales proforma has been restated where the internal net sales within the companies have been eliminated. This is a methodology change in our way to present the proforma financials, and the purpose is to better reflect the estimated group net sales levels after the acquisition has been completed.

The wholly owned companies during the first quarter in 2021 and 2022 also had a positive sales development with 56 % organic growth compared to the same previous last year. The companies continue to show higher growth than before they became part of Humble Group and several of the companies have benefited from synergies through cross-selling and joint purchasing.

In general, Humble Group had a slightly lower acquisition rate during the first quarter, where the focus has been on consolidation and integration of functions. Despite the instable macro environment, the overall ambition is for the company to continue with the acquisition strategy implemented during 2020.

EBITDA proforma

EBITDA proforma for the first quarter amounted to 102 MSEK, an increase of 57 % compared to Q1 2021. The decrease of 33 MSEK compared to Q4 2021 is attributed to the natural seasonality in the company segments of the FMCG-market, where the fourth quarter historically the strongest and first quarter the weakest.

Adjusted EBITDA proforma amounted to 127 MSEK. Out of the adjustments of 13 MSEK, 2 MSEK are attributed to product donations with regards to the Ukraine-crisis and Humble Smile Foundation, 1 MSEK to restructuring costs and the outstanding 9 MSEK to M&A and extraordinary costs of previous acquisitions. No adjustments for freights have been made.

			True Gum was founded in 2017 in Copenhagen, Denmark, by
			a team of entrepreneurs who decided to transform the gum
			market. True Gum offers 100% plant-based gum and
			lozenges that are all sugar-free,plastic-free, vegan and use
			only natural flavours and sweeteners. True Gum is now
			sold in stores across Europe.
			True Gum
Humble Group AB Interim Report January - March 2022	3

| CONSOLIDATED DEVELOPMENT

HUMBLE GROUP'S FINANCIAL DEVELOPMENT

FIRST QUARTER

REVENUES

Net sales

Net sales for the quarter amounted to 879 MSEK (88), which corresponded to an increase of 895 % compared to the corresponding period last year. The change is mainly attributable to completed business acquisitions. The organic growth in net sales for the fully owned and consolidated companies in Q1 2021 amounted to 55 MSEK (+56 %).

EXPENSES

Other external expenses

Other external expenses for the quarter amounted to -125 MSEK (-16), which corresponded to a change of 694 % compared to the corresponding period last year. The large increase in freight costs noted previous year has remained at high levels during the quarter.

Personnel expenses

Personnel expenses for the quarter amounted to -105 MSEK (-16), which corresponded to a change of 612 % compared to the corresponding period last year. The increase is mainly explained by more employees from the acquired companies.

Depreciation and amortisation

Total depreciation for the quarter amounted to -282 MSEK (-34), which corresponded to a change of 732 % compared with the corresponding period last year. The absolute majority of the depreciation relates to surplus values from acquisitions such as goodwill which amounted to -273 MSEK for the period. See Note 1 for more information. These depreciations and amortization do not have any impact on the group's cash flow.

RESULTS

Operating income (EBIT)

Operating profit for the quarter amounted to -189 MSEK (-31), which corresponded to a change of 509 % compared with the corresponding period last year.

Geopolitical climate impact

Humble Group does not have any significant exposures towards neither Russia nor Ukraine. The increasing raw material prices has been transferred to customers in all material aspects to reflect the new market conditions and remain stable operative margins.

CASH FLOW

Cash flow from operating activities before change in NWC

Cash flow from operating activities before change in net working capital during the quarter amounted to 91 MSEK (-4). The cash flow from net working capital was negatively impacted by a large increase in inventory levels. This has been a strategic decision in order to secure and maintain proper stock levels and avoid disruptions in the supply chain. Interest related to the bond is reported in the financing activities to better reflect the cash flow from operating activities.

Humble Group AB Interim Report January - March 2022

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