Humble : Interim Report Humble Group Q1_ENG_2023-05-04

INTERIM REPORT

JANUARY - MARCH 2023

INTERIM REPORT

JANUARY - MARCH 2023

INTENSE FIRST QUARTER WITH FOCUS ON OPERATIONS

Financial information

First quarter

• Net sales amounted to 1 592 MSEK (873).
• EBITDA amounted to 156 MSEK (64).
• Adjusted EBITDA amounted to 147 MSEK (113).
• EBITA amounted to 130 MSEK (47).
• Adjusted EBITA amounted to 121 MSEK (95).
• EBIT amounted to 85 MSEK (14).

• Adjusted EBIT amounted to 76 MSEK (62).
• Adjusted EBIT per share amounted to 0,25 SEK (0,25).
• Cash flow from operating activities amounted to 183 MSEK (9).
• Earnings per share before and after dilution amounted to -0,01 SEK (-0,12).

Significant events

During the first quarter

• Humble Group has completed the acquisitions of Privab Ystad, Privab Trollhättan, Privab Grossisterna AB and Napame Holding AB.

After the quarter

• Humble Group has given notice of the annual general meeting to be held on Friday May 19, 2023.
• Peter Werme, chairman of the board, has informed the nomination committee that he is not available for re- election as either board member or chairman of the board at the annual general meeting 2023.

Financial overview

	First quarter	Last Twelve	Full year
	Months
	2023	2022		Apr 2022 -	2022
MSEK		Mar 2023

Net sales	1 592	873
Gross profit	484	297
Gross margin	30%	34%
EBITDA	156	64
Adjusted EBITDA	147	113
EBITA	130	47
Adjusted EBITA	121	95
EBIT	85	14
Adjusted EBIT	76	62
Adjusted EBIT per share before dilution (SEK)	0,25	0,25
Earnings per share before and after dilution (SEK)	-0,01	-0,12
Cash flow from operating activities	183	9

5 520	4 800
1 720	1 532
31%	32%
596	504
586	551
502	419
492	466
328	257
318	304
1,07	1,07
-0,03	-0,13
429	255

See page 21 for definition and calculation of key ratios

Humble Group AB Interim Report January - March 2023	Humble Group is a leading FMCG Group
comprising 47+ entrepreneurial driven entities, with
Stockholm, 4 May 2023	focus on health and well-being in a sustainable way

| SUMMARY

INTENSE FIRST QUARTER WITH FOCUS ON OPERATIONS

Seasonally, the first quarter is the weakest for our operations. Nevertheless, we have had a good start to the year and we have begun to see the effects of our work to improve operational efficiency in the group. We have continued to have high demand for our products and have maintained strong organic growth. We reached a net turnover of SEK 1,592 million (SEK 873 million) and an adjusted EBITDA of SEK 147 million (SEK 113 million), which corresponds to a margin of 9.2 percent. Although some of the companies have had some challenges in adapting to the tough market environment with high inflation and volatility, I am pleased with several of the group-wide initiatives that we have put in place to support our entrepreneurs. We are already starting to see the results from the work to improve cash flow and we will continue to prioritize actions that contribute to strengthening our liquidity and balance sheet. All in all, I have a positive view of 2023 and the opportunities that exist by growing the group with our attractive brands, innovations, and products.

Operational focus

During the quarter, we continued with the strategically important work of defending and strengthening our gross profit margins. We still have a way to go in order to reach the historically normal levels from before the shipping and inflation crisis. At the same time, I am convinced that the work we are doing will benefit us going forward and that with the right activities we have good possibilities to reach an even higher profitability margin than what has been standard for our companies in previous years.

Our objective is to optimize the group's working capital structure in order to convert the group's profit generation and assets into cash flow more quickly. It is of course challenging to reduce the working capital with the strong growth that many of our businesses have, but in the long term we should be able to reduce our inventory levels and become more efficient in the dynamics between accounts receivable and accounts payable.

The work to realize synergies within the operating segments continues. Quality Nutrition and Future Snacking have developed well during the quarter and we see great potential in acting on exciting business opportunities within both segments. One of the initiatives within Quality Nutrition, which we call Arena Nutrition, involves gathering the segment's commercial expertise under one and the same umbrella. In this way, it will be easier to attract new customers and offer an overall solution as a full-service supplier in sports nutrition. We are already starting to see the effect of the initiative and I am convinced that it is a model that we will be able to use in other areas of the group.

Within Future Snacking, we have carried out several successful launches. Pändy is the latest example in the group, whose sugar- reduced sweets have received strong listings in Sweden and rank high in the top lists of online pharmacies. It is proof that the concepts work and are gaining wider acceptance among modern consumers.

During the quarter, we completed the acquisition of a production property in Borås, which enables La Praline Scandinavia to keep long- term production within the group. We are today the owner of 15 properties that our manufacturing units produce in. Through a possible divestment of such properties, we have the flexibility to refine the group's focus and strengthen the balance sheet going forward if we desire to.

The Sustainable Care segment has performed a stable quarter with continued growth in most of the subsidiaries. In some of the companies that offer premium products, we have noticed to some extent price sensitivity among the consumers. In general, however, we have managed to handle the challenges well through, among other things, strategic price and packaging adjustments. We continuously evaluate how we can strengthen the product offering and supplement with white-label and price fighters to create an attractive overall mix for our retailers.

For the Nordic Distribution segment, we have noted a certain margin pressure, where the transfer of increased input prices has not been executed at the desired rate. We work continuously to ensure long- term sustainable gross margins. The segment has performed very well historically and I feel confident that we will be successful in regaining the margin in the long term. We have several exciting ongoing synergy projects where we see an opportunity to consolidate sales force and centralize resources for increased efficiency.

During the quarter, we completed the previously communicated strategic acquisitions of the Privab companies and we are now fully focusing on developing the cooperation between the various units. We are also reviewing how we can further develop the group's distribution and channel strategy from a strategic perspective to become a comprehensive partner for both our internal and external brands. The goal is for us to be the preferred partner for brands to collaborate with in order to achieve successful distribution in the Nordics.

Outlook

Consolidation of the operations is proceeding according to plan. With the slower pace of acquisitions, we can dedicate additional resources to optimize value creation for all our companies. In general, we have noted a change in behaviour among some of our suppliers in recent weeks, where many of the price increases that characterized the entire 2022 are now conspicuous by their absence. To the contrary, we see potential for a reverse development in the market with reduced purchase prices. This would mean that we can maintain a stable price position with our customers and at the same time be able to strengthen profitability going forward.

The work on the list change is progressing well and we have several exciting projects at group level to further enhance our sustainability development and follow-up. The challenging market climate is of course difficult to navigate, but we continue to work intensively towards our goal of growing Humble into the FMCG group of the future.

Simon Petrén

CEO Humble Group

Stockholm, May 4, 2023.

Humble Group AB Interim Report January - March 2023

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| CONSOLIDATED DEVELOPMENT

HUMBLE GROUP'S FINANCIAL DEVELOPMENT

FIRST QUARTER

REVENUES

RESULTS

Net sales

EBITA

Net sales for the quarter amounted to 1 592 MSEK (873), an

EBITA for the quarter amounted to 130 MSEK (47), which

increase of 82 % compared to the corresponding period last year.

corresponded to a change of MSEK 83 compared with the

The change is attributable to completed business acquisitions of

corresponding period last year. The impact on EBITA from

67 %, organic growth for the wholly owned companies in both

depreciation of right-of-use assets amounted to -14 MSEK

periods of 14 % and currency impact was

(-10). EBITA was also positively impacted by revaluation of

2 %. Net sales proforma increased with 21 %, where organic

contingent considerations of total 31 MSEK (1). Adjusted EBITA

growth proforma amounted to 20 % and currency impact was

amounted to 121 MSEK (95). For more details, please refer to

1 %.

Note 5 Items affecting comparability.

EXPENSES

EBIT

Other external expenses

EBIT for the quarter amounted to 85 MSEK (14), which

Other external expenses for the quarter amounted to -208 MSEK

corresponded to a change of 508 % compared with the

(-114), which corresponded to 13 % (13) of net sales. Other

corresponding period last year. Net effect from IFRS 16 Leasing to

external expenses were positively impacted by IFRS 16 Leasing

EBIT for the quarter amounted to 1 MSEK (1).

with MSEK 15. Acquisition related costs for the quarter amounted

CASH FLOW

to -3 MSEK (-0).

Personnel expenses

Cash flow from operating activities

Cash flow from operating activities amounted to 183 MSEK (9).

Personnel expenses for the quarter amounted to -183 MSEK were

Cash flow from operations was positively impacted by net working

(-141), which corresponded to 11 % (16) of net sales. Personnel

capital release of 82 MSEK (-60). The Group has during the quarter

expenses was negatively impacted by employment-linked

continued the work with several strategic initiatives to optimize

consideration (stay-on-bonuses and lock-in penalties) of -12 MSEK

the net working capital usage going forward.

(-38). Remaining increase is mainly explained by additional

FINANCIAL POSITION

employees in the Group through the acquired subsidiaries. For

more details, please refer to Note 5 Items affecting comparability.

Financial expenses

Depreciation and amortisation

Interest expenses for the period amounted to -84 MSEK (-51). Of

the total interest expenses, -52 MSEK (-33 MSEK) is related to

Total depreciation and amortisation for the quarter amounted to -

bond financing. Interest expense related to unwinding of

71 MSEK (-50), which corresponded to a change of 42 % compared

discounting effect of contingent considerations presented at fair

with the corresponding period last year. Depreciation of right-of-

value amounted to -18 MSEK (3). Such interest expense has no

use assets amounted to -14 MSEK

cash effect in the quarterly result.

(-10) for the quarter. Amortisation of intangible assets related

from acquisitions, whereof vast majority related to customer

relations, amounted to -36 MSEK (-28).

CHANGE IN NET SALES

First quarter

whereof change attributable to

2023

2022

Organic

Currency

Acquisitions

Total

MSEK

Growth

change

Consolidated net sales

1 592

873

118

14

587

719

Change in %

14%

2%

67%

82%

Proforma net sales (all companies)

1 828

1 508

299

21

-

320

Change in %

20%

1%

-

21%

Humble Group AB Interim Report January - March 2023

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| SEGMENT INFORMATION

SEGMENT REPORT - FUTURE SNACKING

SEGMENT OVERVIEW

Future Snacking strives to offer cutting edge, healthier and sustainable food & snacking products that challenge traditional foods and snacks. Our Future Snacking companies are driven by the passion for innovative concepts and aim to contribute to a more sustainable consumer society where health and well-being is at the centre without compromising taste, quality or feel.

Humble Groups functional food and "Better-for-you" products include sugar- and calorie reduced, vegan and vitamin enriched products that benefit the consumer. Global megatrends with shifting demographics, changing lifestyles, the food industry environmental impact, politics and digitalisation drive the shift in consumer awareness and behaviours. Humble Groups mission is clear, to become the frontrunner in delivering high-quality food & snacking products that align with the future consumers demands.

SALES AND PROFITABILITY

Net sales for the Future Snacking segment amounted to 238 MSEK

1. during the quarter, a total increase of 61 % compared to the corresponding period last year. The growth among the brands in the segment was mainly driven by new product launches and innovations as well as continued international and domestic expansion of existing brands. True Gum had a strong organic growth and gained market positions through new listings at major retailers in Germany. Moreover, the brands have gained stronger distribution with retailers thanks to partnership with the Nordic Distribution segment. The production companies have continued to expand their product offering with their own brands and via additional contract manufacturing to external parties. EBITDA for the quarter amounted to 23 MSEK (10), with an EBITDA margin of 9 % (7).

For further financial information of the Group, refer to Note 4 Segment information and disclosure of revenue. Companies included in the segment can be found in Note 31 in the Annual report 2022 and in Note 8 Business combination in this interim report.

	First quarter
MSEK	2023		2022
Net sales		238		148
Raw material and consumables		-136		-77
Gross profit		102		71
Gross margin		43%		48%
EBITDA		23		10
EBITDA in relation to net sales		9%		7%
EBIT		6		-1
EBIT in relation to net sales		3%		0%
PROFIT AND LOSS AFTER FINANCIAL ITEMS		4		-3
Profit and loss after financial items in relation to net sales		2%		-2%

Humble Group AB Interim Report January - March 2023

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