Humble : Interim Report Humble Group Q4_ENG_2023-02-22

YEAR END REPORT

OCTOBER - DECEMBER 2022

YEAR-END REPORT

JANUARY - DECEMBER 2022

CONTINUED STRONG GROWTH AND A GOOD START IN 2023

Financial information

This is Humble Groups first consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS). The effects of the transition on comprehensive income and equity can be found in Note 12 - Effects of first-timeadoption to IFRS.

Fourth quarter

• Net sales amounted to 1 606 MSEK (854).
• EBITDA amounted to 143 MSEK (5).
• Adjusted EBITDA amounted to 179 MSEK (148).
• EBITA amounted to 119 MSEK (-1).
• Adjusted EBITA amounted to 155 MSEK (142).
• EBIT amounted to 63 MSEK (-36).
• Adjusted EBIT amounted to 99 MSEK (107).
• Adjusted EBIT per share amounted to 0,35 SEK (-0,44).
• Cash flow from operating activities amounted to 247 MSEK (111).
• Earnings per share before and after dilution amounted to -0,19 SEK (-0,35).

Twelve months

• Net sales amounted to 4 800 MSEK (1 486).
• EBITDA amounted to 504 MSEK (-39).
• Adjusted EBITDA amounted to 551 MSEK (235).
• EBITA amounted to 419 MSEK (-64).
• Adjusted EBITA amounted to 466 MSEK (210).
• EBIT amounted to 257 MSEK (-125).
• Adjusted EBIT amounted to 304 (149).
• Adjusted EBIT per share amounted to 1,11 SEK (0,81).
• Cash flow from operating activities amounted to 255 MSEK (85).
• Earnings per share before and after dilution amounted to -0,26 SEK (-1,18).

Significant events

During the fourth quarter

• Humble Group secures a new multicurrency revolving credit facility together with SEB and Nordea of a total MSEK 650, replacing the previous credit facility with SEB of MSEK 400.
• Humble Group receives decision to grant patent for EUREBA

After the quarter

• Humble announces conditional share purchase agreements regarding Privab Ystad, Privab Trollhättan and Privab Marketing.
• Humble obtains bondholders approval in written procedure to amend terms and conditions of its senior secured bonds.
• Humble change accounting principles to IFRS and RFR2.

Financial overview

			Fourth quarter				Twelve months
	MSEK	2022	2021	2020	2022	2021	2020
	Net sales	1 606	854	15		4 800	1 486	29
	Gross profit	478	265	2		1 532	441	7
	Gross margin	30%	31%	13%		32%	30%	24%
	EBITDA	143	5	-20		504	-39	-30
	Adjusted EBITDA	179	148	-6		551	235	-14
	EBITA	119	-1	-20	419	-64	-31
	Adjusted EBITA	155	142	-7	466	210	-15
	EBIT	63	-36	-22		257	-125	-37
	Adjusted EBIT	99	107	-9		304	149	-21
	Adjusted EBIT per share	0,35	0,44	-0,07	1,11	0,81	-0,24
	Earnings per share before dilution	-0,19	-0,35	-0,20		-0,26	-1,18	-0,45
	Cash flow from operating activities	247	111	-6	255	85	-9
Humble Group AB Year-End Report January - December 2022					Humble Group is a leading FMCG Group
		comprising 40+ entrepreneurial driven entities, with
Stockholm, 22 February 2023			focus on health and well-being in a sustainable way!

| SUMMARY

CONTINUED STRONG GROWTH AND A GOOD START IN 2023

I am proud to present that Humble Group is showing organic growth of 21% in the fourth quarter. This is much higher than the growth of the underlying FMCG market and shows that the demand for our healthy and sustainable products is both strong and sustainable. Net sales amounted to SEK 1,606 million (854) and, in addition to organic growth, our acquisitions contributed to a total sales increase of 67%. Adjusted EBITA amounted to SEK 152 million (142), with a margin in line with the previous quarter despite the volatile macro climate. In addition, we have had the ambition to strengthen the balance sheet by reducing working capital. During the quarter we achieved a positive operating cash flow of SEK 247 million (111) and reduced the net debt by SEK 121 million to SEK 2,306 million (1,610). In this quarterly report, as previously communicated, we have transitioned to reporting with IFRS accounting principles. Advantages from the switch include a higher degree of transparency in the group's reporting and is a big step towards a list change to Nasdaq Stockholm's main market. We have launched a new segment reporting to provide a clearer picture of the development within the group. We have also seen a strong start of the new year with an organic growth in January of over 20% and with increased profitability, despite difficult comparative figures. My assessment is that we are well prepared for 2023.

The fourth quarter is seasonally the group's most important period, with high sales and many decisive decisions to position our products for the coming year. We end in the same spirit as previous quarters with continued high organic growth and good profitability. The underlying gross margin has been stable, despite some negative impact of shipping costs and a weak SEK (consolidation effects of Privab negatively affected the gross margin by three percentage points). As previously communicated, we expect shipping costs to stabilize at lower levels during the year. The report presents our new segments Future Snacking, Quality Nutrition, Sustainable Care and Nordic Distribution. With the new segments, it clearer how we create value between our operations and shows the attractive position we have established in short time with Humble Group, both in the Nordics and internationally. It's gratifying to see how each of the segments have had an underlying average annual revenue growth of approx. 12% and an annual EBITDA increase of 17%, on a pro forma basis, since 2015. We have also noted that the subsidiaries are growing

faster and with improved profitability once they have become part of the Humble Group.

Operational focus

During the fourth quarter, we have endured the positive effects from our focus on reducing working capital and strengthening profitability in our subsidiaries. This resulted in an operating cash flow of SEK 247 million (111), strengthened liquidity and reduced net debt by SEK 121 million. We expect high growth in 2023 as well, but we will continue to have a clear focus on strengthening cash flow and implementing strategic initiatives to reduce inventory levels and streamline the use of working capital. We are at an early stage of the group's optimization process and we are not yet satisfied. Hence, there is still additional potential to further improve profitability and the cash flow going forward.

Acquisitions

During the quarter, we have signed binding agreements in relation to three new acquisitions, which we now can integrate with the already existing Privab units in the Nordic Distribution segment. In a short time, we have gained a strong position in the Swedish FMCG market, with an efficient and dynamic distribution of both listed and unlisted products to relevant segments and stores. Through this platform we can generate growth for both our existing and new brands. There are still many exciting companies to acquire and the interest to become part of the Humble Group has never been greater. While we will maintain a slower acquisition pace than the past two years, we intend to continue to grow with selective strategic acquisitions if the right opportunities arise. A slower environment will also enable us to acquire companies at lower valuation multiples.

Outlook

I feel great optimism for 2023 given all the projects and initiatives underway within the group. The year has started strong with organic growth in January of over 20% and improved profitability in many of the subsidiaries. In addition, the organization is imbued with wonderful energy and in a positive spirit, which imply that we are well equipped for the future. The journey towards building the leading FMCG company with a focus on healthy and sustainable products continues.

Simon Petrén

CEO Humble Group

Stockholm, February 22nd, 2023.

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| CONSOLIDATED DEVELOPMENT

HUMBLE GROUP'S FINANCIAL DEVELOPMENT

This is Humble Groups first consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS). The effects of the transition on comprehensive income and equity can be found in Note 12 - Effects of first-timeadoption to IFRS.

FOURTH QUARTER

REVENUES

Net sales

Net sales for the quarter amounted to 1 606 MSEK (854), which is an increase of 88 % compared to the corresponding period last year. The change is attributable to completed business acquisitions and organic growth of 21 %. Organic growth was driven by increased sales volume, additional distribution, and minor price increases.

EXPENSES

Other external expenses

Other external expenses for the quarter amounted to -190 MSEK (-132), which corresponded to 12 % (-15 %) of total net sales. The large increase in freight costs noted during the first nine months and during 2021 has started to decline and come down to more normalised levels. Humble estimates that lower freight rates will have a positive impact on the profitability in the first half of 2023. Acquisition related costs for the quarter amounted to -10 MSEK (-33).

Personnel expenses

Personnel expenses for the quarter amounted to -196 MSEK (-170), which corresponded to 12 % (20 %) of total net sales. Personnel expenses was negatively impacted by employment-linked consideration (stay-on-bonuses and lock-in penalties) -13 MSEK (-85). Remaining increase is mainly explained by additional employees in the group through the acquired subsidiaries. For more details, please refer to Note 5 Items affecting comparability.

Depreciation and amortisation

Total depreciation and amortisation for the quarter amounted to -83 MSEK (-41), which corresponded to a change of 102 % compared with the corresponding period last year. Depreciation of right-of-use assets amounted to -14 MSEK (-9) for the quarter. Amortisation of intangible assets related from acquisitions, mainly customer relations, amounted to -46 MSEK (-25).

RESULTS

EBITA

EBITA for the quarter amounted to 119 MSEK (-1), which corresponded to a change of MSEK 120 compared with the corresponding period last year. The impact on EBITDA from IFRS 16 and leasing expenses amounted to 16 MSEK (9), which had a positive net effect on EBITA by 1 MSEK. Since the third quarter the freight transport prices from Asia have dropped significantly. However, the EBITA was still negatively impacted by high freight prices in the fourth quarter given that the new prices have yet to be fully normalised in the income statement. EBITA was also negatively impacted by items affecting comparability. For more details, please refer to Note 5 Items affecting comparability.

Earnings Before Interest and Tax (EBIT)

EBIT for the quarter amounted to 45 MSEK (-36), which corresponded to a change of 224 % compared with the corresponding period last year. Net effect from IFRS 16 Leasing to EBIT for the quarter amounted to 1,3 MSEK (0,5).

CASH FLOW

Cash flow from operating activities

Cash flow from operating activities amounted to 247 MSEK (3). Cash flow from operations was positively impacted by net working capital release of 63 MSEK (4). The group has initiated several strategic decisions in order to optimize the tie-up net working capital usage going forward.

FINANCIAL POSITION

Financial expenses

Interest expenses for the period amounted to -83 MSEK (-50). Of the total interest expenses, -52 MSEK (-33 MSEK) is related to bond financing, -20 MSEK (-15) is related to interest expense on contingent considerations, which is presented at fair value but have no cash effect until the actual consideration is being paid.

Humble Group AB Year-End Report January - December 2022

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| CONSOLIDATED DEVELOPMENT

TWELVE MONTHS

REVENUES

Net sales

Net sales for the financial year amounted to 4 800 MSEK (1 486), which is an increase of 223 % compared to the corresponding period last year. The change is attributable to business acquisitions and organic growth of 29 %. Organic growth was driven by increased international expansion, additional distribution, higher sales volumes and minor price increases.

EXPENSES

Other external expenses

Other external expenses for the period amounted to -644 MSEK (-237), which corresponded to 13 % (16 %) of net sales. The freight costs for the financial year remained at high levels which continue to have a negative impact on the Group's profitability. Management have started to see a decline in global freight rates which is estimated to contribute positive to the overall profitability during 2023. Acquisition related costs for the full year amounted to -39 MSEK (-65).

Personnel expenses

Personnel expenses for the period amounted to -625 MSEK (-323), which corresponded to 13 % (22 %) of total net sales. Personnel expenses was negatively impacted by employment-linked consideration (stay-on-bonuses and lock-in penalties) of total -72 MSEK (-159). Remaining increase is mainly explained by additional employees in the group through the acquired subsidiaries. For more details, please refer to Note 5 Items affecting comparability.

Depreciation and amortisation

Total depreciation and amortisation for the period amounted to - 247 MSEK (-85), which corresponded to a change of 191 % compared with the corresponding period last year. Most of the amortisation relates to intangible assets related to acquisitions which amounted to -128 MSEK (-46) for the period. Amortisations of intangible assets related to acquisitions do not have any negative impact on the Group's cash flow.

RESULTS

EBITA

EBITA for the period amounted to 419 MSEK (-64), which corresponded to a change of 756 % compared with the corresponding period last year. During the 2022 the freight prices has been significantly higher than 2021. Since the beginning of Q3 there has been a major drop in the prices from Asia. However, the EBITA was still negatively impacted by high freight prices in the first three quarters, starting to lower in the fourth quarter and have yet to be fully normalised in the income statement. EBITA was also negatively impacted by items affecting comparability, see Note 5 Items affecting comparability for further details.

Earnings Before Interest and Tax (EBIT)

EBIT for the period amounted to 257 MSEK (-125), which corresponded to a change of 306 % compared with the corresponding period last year. Net effect from IFRS 16 Leasing to EBIT for the period amounted to 2 MSEK (1).

CASH FLOW

Cash flow from operating activities

Cash flow from operating activities during the period amounted to 255 MSEK (85). 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.

FINANCIAL POSITION

Financial expenses

Financial expenses for the period amounted to -265 MSEK (-96), which corresponded to a change of 177 % compared with the corresponding period last year. Of the total interest expenses, -165 MSEK (-66) is related to bond financing, -61 MSEK (-8) is related to interest expense on contingent considerations, which is presented at fair value but have no cash effect until the actual consideration is being paid.

Net interest-bearing debt

Net interest-bearing debt at the end of the year amounted to 2 306 MSEK (1 610). In relation to Adjusted EBITDA proforma of 691 MSEK, this corresponds to a leverage of 3.3x.

Humble Group AB Interim Report October - December 2022

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