FULLTEXT DEL 1 AV 1
Kvartalsrapport Q2 2023
===== SIDA 1 ===== INTERIM REPORT APRIL – JUNE 2023 ===== SIDA 2 ===== INTERIM REPORT APRIL – JUNE 2023 Humble Group AB Interim Report April – June 2023 Stockholm, July 25, 2023 STABLE DEVELOPMENT WITH A FOCUS ON INTEGRATION AND EFFICIENCY Financial information Second quarter • Net sales amounted to MSEK 1 710 (974). • EBITDA amounted to MSEK 158 (65). • Adjusted EBITDA amounted to MSEK 170 (106). • Adjusted EBITA amounted to MSEK 141 (86). • Adjusted EBIT amounted to MSEK 95 (48). • Adjusted EBIT per share amounted to SEK 0.30 (0.17). • Cash flow from operating activities amounted to MSEK 445 (14). Adjusted for tax deferrals of MSEK 260, the cash flow from operating activities was MSEK 185. • Earnings per share before and after dilution amounted to SEK 0.00 (-0.18). Six months • Net sales amounted to MSEK 3 303 (1 847). • EBITDA amounted to MSEK 313 (130). • Adjusted EBITDA amounted to MSEK 316 (219). • Adjusted EBITA amounted to MSEK 262 (182). • Adjusted EBIT amounted to MSEK 171 (111). • Adjusted EBIT per share amounted to SEK 0.55 (0.42). • Cash flow from operating activities amounted to MSEK 627 (23). Adjusted for tax deferrals of MSEK 260, the cash flow from operating activities was MSEK 367. • Earnings per share before and after dilution amounted to SEK -0.01 (-0.30). Significant events During the second quarter • The annual general meeting elected Pål Bruu and Sara Berger as new board members. Henrik Patek, Ola Cronholm and Dajana Mirborn were re-elected as board members and Dajana was elected as new Chairman of the Board. • Humble Group intends to take up new bank facilities of MSEK 1 650 to refinance existing bonds and existing credit facility. • Humble Group has carried out a direct new issue of 131.6 million shares and raised proceeds of MSEK 875. After the quarter • Humble Group enters into a letter of intent regarding the sale of real estates. Financial overview Humble Group is a leading FMCG Group comprising 47+ entrepreneurial driven entities, with focus on health and well-being in a sustainable way Last Twelve M onths Full year MSEK 2023 2022 2023 2022 J ul 2022 - J un 2023 2022 Net sales 1 710 9 74 3 303 1 847 6 256 4 800 Gross profit 501 342 986 639 1 8 79 1 532 Gross margin 29% 35% 30% 35% 30% 32% EBITDA 15 8 65 3 13 13 0 687 504 Adjusted EBITDA 170 10 6 3 16 2 19 648 551 Adjusted EBITA 14 1 86 262 18 2 546 466 Adjusted EBIT 95 48 171 111 363 304 Adjusted EBIT per share before dilution (SEK) 0,30 0 ,17 0,55 0,42 1,17 1,0 7 Earnings per share before and after dilution (SEK) 0,00 - 0 ,18 -0,01 -0,30 0 ,13 - 0 ,13 Cash flow from operating activities 445 14 627 23 686 255 See page 23 for definition and calculation of key ratios Second quarter Six months ===== SIDA 3 ===== | SUMMARY Humble Group AB Interim Report April – June 2023 2 STABLE DEVELOPMENT WITH A FOCUS ON INTEGRATION AND EFFICIENCY We end an intensive first half of the year with a stable second quarter that is in line with our targets of continued growth, increased profitability and positive cash flow with a high conversion rate. We have strengthened the group's balance sheet with a directed new issue of SEK 875 million and in connection with this secured a new capital structure based on bank loans, which will fundamentally change our opportunities to grow organically and with significantly lower interest costs. It is no news that the consumer market is tough and it is therefore gratifying that we have a good momentum with continued strong demand for Humble's products and reached an all-time high both in terms of sales and profitability in June. Most of the operating companies have now been part of Humble for a longer time and have begun to find their place in the group, with increased collaborations and synergies as a result. During the second half of the year, we will accelerate the work with our platforms Future Snacking, Quality Nutrition, Sustainable Care and Nordic Distribution. It will primarily involve some consolidation and integration around the larger platform companies, where we see that there is an opportunity to speed up the development of smaller businesses and realize synergies in the form of rationalization, efficiency and higher productivity in our manufacturing units. We are facing an exciting autumn and have our two most important quarters ahead of us. Financial result The second quarter accounted for a stable financial result with net sales amounting to SEK 1,710 million (974) and with continued organic growth of 13 percent and 15 percent pro forma. Profitability was strengthened to MSEK 170 adjusted EBITDA (106) and the positive cash flow that we have been working with since the autumn of last year has been maintained, where we, adjusted for non-recurring items from tax deferrals, generated an operational cash flow after change in working capital of MSEK 185 (14). The inventory increased slightly, but relatively we have reduced its size in relation to net sales by approximately 0.7 percentage points during the year, with further potential to improve. Our top priority is to continue to strengthen the gross margin and recover part of the loss since 2021, while streamlining the management of net working capital. It is gratifying that the second quarter is the first in over a year that we have turned to a positive development regarding proforma adjusted EBITDA, with the hope that it is the beginning of a longer recovery to previous levels of profitability. In order to improve the financial result going forward, we have started a group-wide pricing project with several identified improvement areas where we have the opportunity to calibrate our pricing model. Operational focus In addition to the financial activities, the internal work has been characterized by an operational focus towards certain consolidation and integration as well as broadening the group-wide functions within sales and purchasing. In the work to develop the segments, it is natural to consolidate certain subsidiaries around the operations where we have reached a sufficient size and identified strong teams and leadership, which will form the future building blocks of our growth platform. With a reduced pace of acquisitions, we have also integrated the M&A team under Marcus Stenkil's leadership as part of operations, which feels very good. Already in the first half of the year, we have seen the effects of being able to run group-wide initiatives more quickly and thus strengthen our competitiveness and adaptability. This is a critical function of how we grow the businesses and I firmly believe it is the key to extracting maximum value from our subsidiaries. Market The quarter started somewhat cautiously but that changed quickly and ended with a good month of May followed by an even better month of June with both sales and profitability records. We have recovered the gross margin with 0.36 percent compared to the previous quarter, adjusted for the consolidation effect of Privab. There is a long way to go towards our target of 35 percent, but we are convinced that the initiatives that have been established will get us there in a few years' time. I am often asked how Humble's products stand in an increasingly uncertain consumer market. In response to the question, I can share that the group's range of white label, private label, contract manufacturing and pricefighters in the low-price segment is standing strong and is expected to grow and develop positively even in a recession scenario. In addition, most of our premium brands are doing well, although some have suffered somewhat from customer price sensitivity. For example, brands such as True Gum and Body Science stand out positively, which had significant sales growth of 83 and 37 percent respectively during the first half year. So far, we have no indications of any dropping demand overall, but we are vigilant and follow the market closely. We work continuously to stay well prepared and ensure that Humble has a sustainable position that stands up well even in tougher times. Outlook I am very grateful for the trust we have from our major shareholders and the banks Nordea, SEB and SEK, which has enabled the new capital structure that we can now establish for the group. Together with the ongoing sale of the properties, we have taken the necessary measures to organically continue our growth journey, with a suitable financing structure which gives us the possibility to generate a healthy free cash flow going forward. The preparations for a list change are progressing well and we estimate to be ready for the review during the coming autumn. It is still a challenging market to operate in and we are far from satisfied. However, I would like to point out that the strength of Humble's companies and the persistence we see, together with a gross profit recovery, will give us the right conditions to be able to deliver more value to all our shareholders over time. Simon Petrén CEO Humble Group Stockholm, July 25, 2023. ===== SIDA 4 ===== | CONSOLIDATED DEVELOPMENT Humble Group AB Interim Report April – June 2023 3 HUMBLE GROUP’S FINANCIAL DEVELOPMENT SECOND QUARTER REVENUES Net sales Net sales for the quarter amounted to MSEK 1 710 (974), an increase of 76 % compared to the corresponding period last year. The change is attributable to completed business acquisitions of 60 %, organic growth for the wholly owned companies in both periods of 13 % and currency impact was 2 %. Net sales proforma increased with 17 %, where organic growth proforma amounted to 15 % and currency impact was 2 %. EXPENSES Other external expenses Other external expenses for the quarter amounted to MSEK -190 (-154), which corresponded to 11 % (16) of net sales. Other external expenses were positively impacted by IFRS 16 Leasing with MSEK 18. Acquisition related costs for the quarter amounted to MSEK 0 (-9). Personnel expenses Personnel expenses for the quarter amounted to MSEK -199 (-141), which corresponded to 12 % (14) of net sales. Personnel expenses were negatively impacted by consideration linked to employment (stay-on-bonus and lock-in penalties) of MSEK -12 (-10). 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 MSEK -76 (-57), which corresponded to a change of 33% compared with the corresponding period last year. Depreciation of right-of-use assets amounted to MSEK -17 (-11) for the quarter. Amortisation of intangible assets related from acquisitions, of which a vast majority related to customer relations, amounted to MSEK -37 (-30). RESULTS EBITA EBITA for the quarter amounted to MSEK 129 (45), which corresponded to a change of MSEK 84 compared with the corresponding period last year. EBITA was also positively impacted by revaluation of contingent considerations of total MSEK 10 (-9). Adjusted EBITA amounted to MSEK 141 (86). For more details, please refer to Note 5 Items affecting comparability. EBIT EBIT for the quarter amounted to MSEK 83 (8), which corresponded to a change of 938 % compared with the corresponding period last year. Net effect from IFRS 16 Leasing to EBIT for the quarter amounted to MSEK 2 (1). CASH FLOW Cash flow from operating activities Cash flow from operating activities amounted to MSEK 445 (14). Cash flow from operations was positively impacted by net working capital release of MSEK 299 (-4). The Group has during the quarter continued the work with several strategic initiatives to optimize the net working capital usage going forward. Tax deferments of total MSEK 260 was recognised as short term liabilities and had a positive impact on the cash flow for the quarter. FINANCIAL POSITION Financial expenses Interest expenses for the period amounted to MSEK -89 (-59). Interest expense related to unwinding of discounting effect of contingent considerations presented at fair value amounted to MSEK -23 (-19). Such interest expense has no cash effect in the quarterly result. For more details, please refer to Note 6 Financial expenses. CHANGE IN NET SALES MSEK 2023 2022 Organic Growth Currency Acquisitions T otal change Consolidated net sales 1 710 974 12 7 20 589 736 Change in % 13 % 2% 60% 7 6% Proforma net sales (all companies) 1 900 1 630 245 25 - 270 Change in % 15 % 2% - 17 % Second quarter whereof change attributable to ===== SIDA 5 ===== | CONSOLIDATED DEVELOPMENT Humble Group AB Interim Report April – June 2023 4 SIX MONTHS REVENUES Net sales Net sales for the first six months amounted to MSEK 3 303 (1 847), an increase of 79 % compared to the corresponding period last year. The change is attributable to completed business acquisitions of 64 %, organic growth for the wholly owned companies in both periods of 13 % and currency impact was 2 %. Net sales proforma increased with 19 %, where organic growth proforma amounted to 17 % and currency impact was 1 %. EXPENSES Other external expenses Other external expenses for the first six months amounted to MSEK -398 (-268), which corresponded to 12 % (8) of net sales. Other external expenses were positively impacted by IFRS 16 Leasing with MSEK 34. Acquisition related costs for the first six months amounted to MSEK -5 (-10). Personnel expenses Personnel expenses for the first six months amounted to MSEK - 382 (-282), which corresponded to 12 % (9) of net sales. Personnel expenses was negatively impacted by consideration linked to employment (stay-on-bonus and lock-in penalties) of MSEK -24 (- 48). 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 first six months amounted to MSEK -146 (-108), which corresponded to a change of 35 % compared with the corresponding period last year. Depreciation of right-of-use assets amounted to MSEK -31 (-21) for the first six months. Amortisation of intangible assets related from acquisitions, of which a vast majority related to customer relations, amounted to MSEK -72 (-58). RESULTS EBITA EBITA for the first six months amounted to MSEK 259 (93), which corresponded to a change of MSEK 166 compared with the corresponding period last year. EBITA was also positively impacted by revaluation of contingent considerations of total MSEK 41 (-9). Adjusted EBITA amounted to MSEK 262 (182). For more details, please refer to Note 5 Items affecting comparability. EBIT EBIT for the first six months amounted to MSEK 168 (22), which corresponded to a change of 651 % compared with the corresponding period last year. Net effect from IFRS 16 Leasing to EBIT for the period amounted to MSEK 3 (2). CASH FLOW Cash flow from operating activities Cash flow from operating activities amounted to MSEK 627 (23). Cash flow from operations was positively impacted by net working capital release of MSEK 382 (-64). The Group has during the first six months continued the work with several strategic initiatives to optimize the net working capital usage going forward. Tax deferments of total MSEK 260 was recognised as short term liabilities and had a positive impact on the cash flow for the period. FINANCIAL POSITION Financial expenses Interest expenses for the period amounted to MSEK -173 (-106). Interest expense related to unwinding of discounting effect of contingent considerations presented at fair value amounted to MSEK -36 (-15). Such interest expense has no cash effect in the result of the first six months. For more details, please refer to Note 6 Financial expenses. CHANGE IN NET SALES MSEK 2023 2022 Organic Growth Currency Acquisitions T otal change Consolidated net sales 3 303 1 847 245 34 1 17 7 1 456 Change in % 13 % 2% 64% 7 9% Proforma net sales (all companies) 3 728 3 1 38 543 47 - 590 Change in % 17 % 1% - 19 % Six months whereof change attributable to ===== SIDA 6 ===== | SEGMENT INFORMATION Humble Group AB Interim Report April – June 2023 5 SEGMENT REPORT - FUTURE SNACKING SEGMENT OVERVIEW Future Snacking is committed to offering cutting-edge, healthier, and sustainable food and snacking products that challenge conventional options. The companies within the Future Snacking segment are fueled by a passion for innovative concepts and strive to contribute to a more sustainable consumer society. They prioritize health and well-being by reducing sugar and without compromising on taste, quality or experience. Humble Group’s Future Snacking subsidiaries focus on several areas, but in particular on functional food and "Better-for-you" products. Their offerings include sugar- and calorie-reduced options, vegan alternatives, and vitamin-enriched products that provide tangible benefits to consumers. The shift in consumer awareness and behaviors, driven by global megatrends such as changing demographics, evolving lifestyles, environmental concerns within the food industry, political factors, and digitalization, serves as a catalyst for this transformative movement. Humble Group's mission is clear: to establish the Group as the frontrunner in delivering high-quality food and snacking products that align with the evolving demands of future consumers. By addressing these emerging needs and staying at the forefront of innovation, Humble Group strives to meet the preferences of health-conscious individuals and contribute to shaping a sustainable future. SEGMENT UPDATE We are pleased to report positive progress in the Future Snacking segment during this quarter. The producers within the Future Snacking segment have exceeded our initial predictions, by delivering more products than anticipated. Here are a few notable updates: Here are a few notable updates: Several of our sugar-reduced confectionary brands such as Pändy and Wellibites have seen increased listings in both the grocery- and service trade sectors. LEV focused primarily on production and securing new customers during this quarter. They also expanded their reach by opening new franchise locations of LEV Diet stores, strengthening their market presence. FCB and Tweek have joined forces in a successful collaboration and ongoing consolidation. Furthermore, the distributors in this segment are currently experiencing a modestly positive trend. Looking ahead, we expect this trend to strengthen further in the upcoming quarters, bringing even more positive outcomes for the Future Snacking segment. SALES AND PROFITABILITY Net sales for the Future Snacking segment amounted to MSEK 234 (168) during the quarter, a total increase of 39 % compared to the corresponding period last year. Adjusted EBITDA for the quarter amounted to MSEK 30 (24), with an Adjusted EBITDA margin of 13 % (14). 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 9 Business combination in this interim report. Amount in MSEK 2023 2022 2023 2022 Net sales 234 16 8 472 327 Raw material and consumables - 13 1 - 77 -267 - 16 2 Gross profit 10 3 91 205 16 5 Gross margin 44% 54% 43% 50% EBITDA 1 15 24 26 Items affecting comparability 29 9 40 17 Adjusted EBITDA 30 24 64 43 Adjusted EBITDA in relation to net sales 13 % 14 % 14 % 13 % EBIT - 14 4 -8 3 Adjusted EBIT 15 13 32 20 Adjusted EBIT in relation to net sales 6% 8% 7% 6% PROFIT AND LOSS AFTER FINANCIAL ITEM S - 19 3 - 15 0 Profit and loss after financial items in relation to net sales -8% 2% - 3% 0% Second quarter Six months ===== SIDA 7 ===== | SEGMENT INFORMATION Humble Group AB Interim Report April – June 2023 6 SEGMENT REPORT - SUSTAINABLE CARE SEGMENT OVERVIEW Sustainable Care is a comprehensive segment that encompasses a wide array of brands, distributors, and producers specializing in personal care and household products. These products span various categories, including skincare, oral care, hair care, and hygiene, among others. The companies within the segment share a common goal of meeting the increasing demand for sustainable and eco-friendly products. By prioritizing sustainability, they actively contribute to creating a healthier and environmentally conscious planet. Their commitment to offering sustainable options aligns with the growing consumer preference for environmentally friendly choices. Through their collective efforts, the Sustainable Care segment is dedicated to making a positive impact on both personal well-being and the planet as a whole. SEGMENT UPDATE The Sustainable Care segment has witnessed notable progress and achievements throughout the second quarter. Here are a few notable updates: The Humble Co. secured several significant deals with major airlines, expanding their reach and market presence. Moreover, they successfully launched their products in several premium lifestyle stores in China, tapping into a promising market. During part of Q1, Fancystage’s factory underwent necessary renovations and installed new machines, resulting in a temporary closure. However, the factory is now fully operational, enabling them to meet production demands effectively. The new factory of Naty is still not fully up and running on all products. However, the company has come back to solid profitability during the first 6 months of 2023. Solent has exhibited consistent and stable growth, demonstrating positive performance within the segment. Their continued progress signifies their ability to adapt and thrive in the market. These updates highlight the Sustainable Care segment’s dynamic nature with successful business wins, new market entries, improved production capabilities, and steady growth. The Sustainable Care segment remains focused on delivering sustainable solutions and is well positioned for future opportunities. SALES AND PROFITABILITY Net sales for the Sustainable Care segment amounted to MSEK 493 (409) during the quarter, a total increase of 21 % compared to the corresponding period last year. Adjusted EBITDA for the quarter amounted to MSEK 93 (46), with an Adjusted EBITDA margin of 13 % (15). 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 9 Business combination in this interim report. Amount in MSEK 2023 2022 2023 2022 Net sales 493 409 977 8 11 Raw material and consumables - 3 18 -254 -635 -498 Gross profit 175 15 5 342 3 13 Gross margin 35% 38% 35% 39% EBITDA 93 46 15 9 79 Items affecting comparability -29 16 -35 52 Adjusted EBITDA 64 62 12 3 13 1 Adjusted EBITDA in relation to net sales 13 % 15 % 13 % 16 % EBIT 60 17 93 21 Adjusted EBIT 31 32 58 73 Adjusted EBIT in relation to net sales 6% 8% 6% 9% PROFIT AND LOSS AFTER FINANCIAL ITEM S 58 12 90 4 Profit and loss after financial items in relation to net sales 12 % 3% 9% 0% Second quarter Six months ===== SIDA 8 ===== | SEGMENT INFORMATION Humble Group AB Interim Report April – June 2023 7 SEGMENT REPORT - QUALITY NUTRITION SEGMENT OVERVIEW Quality Nutrition comprises brands and manufacturers devoted to providing top-quality nutritional products and supplements designed to help both athletes and everyday consumers to increase performance and improve their health in daily life. Our subsidiaries within Quality Nutrition continuously improve our product portfolio based on dedicated research and development efforts to maintain a competitive and sustainable offering to our customers. The Quality Nutrition segment is poised to capitalize on the growing demand for healthier and “better-for-you” nutritional products, as well as providing a more sustainable and qualitative range of alternatives for the broader consumer market regardless of demography and age. SEGMENT UPDATE During the second quarter of 2023, we have engaged in the planning and execution of several internal projects that aligns well with our envisioned strategy for the segment. A selection of key internal projects that either have been successfully initiated or are well underway to launch include: Export of Vitargo for distribution in the Australian market through a collaboration with Body Science. Development of a new Body Science-branded product category within canned sport- and energy drinks that have received great market interest and successful listings at key retail chains in Australia. Initiated export project of a selection of Body Science’s product range to the EU. Investment in a beverage line, further expanding our manufacturing capabilities for internal and private label- customers. Details of the investment was communicated in a press release on June 2, 2023. In short, the investment will ensure internal production of canned drinks for Humble Group brands and will improve our margins within the category by owning an additional step in the value chain. Furthermore, the investment will increase our manufacturing product range, offering private label solutions for external beverage brands. The commercial entity for our Nordic manufacturing subsidiaries, Arena Nutrition, is actively conducting sales efforts to establish new customer relationships and marketing our full-service offering. The above initiatives are only a selection of initiated projects but prove the endless number of synergies and collaborative opportunities enabled through the segment. SALES AND PROFITABILITY Net sales for the Quality Nutrition segment amounted to MSEK 354 (198) during the quarter, an increase of 79 % compared to the corresponding period last year. Adjusted EBITDA for the quarter amounted to MSEK 43 (20), with an Adjusted EBITDA margin of 12 % (10). 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 9 Business combination in this interim report. Amount in MSEK 2023 2022 2023 2022 Net sales 354 19 8 699 336 Raw material and consumables -256 - 15 4 -509 -257 Gross profit 99 44 19 0 79 Gross margin 28% 22% 27% 24% EBITDA 42 5 98 22 Items affecting comparability 1 15 - 18 17 Adjusted EBITDA 43 20 79 39 Adjusted EBITDA in relation to net sales 12 % 10 % 11% 12 % EBIT 30 -1 72 11 Adjusted EBIT 31 14 54 28 Adjusted EBIT in relation to net sales 9% 7% 8% 8% PROFIT AND LOSS AFTER FINANCIAL ITEM S 28 -2 69 10 Profit and loss after financial items in relation to net sales 8% - 1% 10 % 3% Second quarter Six months ===== SIDA 9 ===== | SEGMENT INFORMATION Humble Group AB Interim Report April – June 2023 8 SEGMENT REPORT - NORDIC DISTRIBUTION SEGMENT OVERVIEW Ever since its inception, Humble Group has pursued a comprehensive strategy that encompasses the entire value chain, including distribution. Within the Nordic Distribution segment, a network of wholesalers and distributors operates across the Nordic region. These companies possess extensive knowledge of local markets and consumer preferences. By harnessing the expertise of our Nordic Distributions subsidiaries, Humble Group is able to provide a wide array of FMCG products that cater to the diverse tastes and preferences of the Nordic region. This collaborative approach ensures that Humble Group can effectively meet the demands of the local market and offer a well-rounded product portfolio to its customers. SEGMENT UPDATE The Nordic Distribution segment has experienced an eventful quarter, marked by significant progress in various internal projects. Key developments include: Ongoing efforts to evaluate and enhance logistics between Privab entities, as well as the implementation of a more efficient IT system across all Privab entities. The consolidation of GSD and Nordfood is proceeding as planned, with the expected completion date at the end of the year 2023. This integration aims to streamline operations and optimize synergies between the two entities. Sales within Nordfood have undergone a notable transformation, with a substantial portion now being channelled through GSD rather than Be:Son Gross. This strategic sales streamlining initiative has contributed to increased efficiency and improved sales processes within the segment. Overall, the Nordic Distribution segment has made significant strides during this quarter, driven by internal projects, consolidation efforts, and sales optimization measures. These initiatives are poised to yield positive outcomes and further strengthen the segment’s performance in upcoming quarters. SALES AND PROFITABILITY Net sales for the Nordic Distribution segment amounted to MSEK 629 (168) during the quarter, an increase of 274 % compared to the corresponding period last year. Adjusted EBITDA for the quarter amounted to MSEK 33 (11), with an EBITDA margin of 5 % (7), which was continuously slightly negatively affected by margin pressure due to some delay in the transferring of increased purchase prices to customers. 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 9 Business combination in this interim report. Amount in MSEK 2023 2022 2023 2022 Net sales 629 16 8 1 15 5 373 Raw material and consumables -503 - 116 -905 -291 Gross profit 12 6 52 250 82 Gross margin 20% 3 1% 22% 22% EBITDA 26 11 48 23 Items affecting comparability 7 0 11 0 Adjusted EBITDA 33 11 59 23 Adjusted EBITDA in relation to net sales 5% 7% 5% 6% EBIT 13 7 27 15 Adjusted EBIT 20 7 37 15 Adjusted EBIT in relation to net sales 3% 4% 3% 4% PROFIT AND LOSS AFTER FINANCIAL ITEM S 9 6 19 14 Profit and loss after financial items in relation to net sales 1% 4% 2% 4% Second quarter Six months ===== SIDA 10 ===== | OTHER INFORMATION Humble Group AB Interim Report April – June 2023 9 OTHER INFORMATION ABOUT HUMBLE GROUP Humble Group is a leading FMCG Group with a focus on health and well-being. The Group comprises 47 operating entities at the day of this report. Humble Group has set financial targets that the Group shall reach SEK 16 billion in net sales proforma and SEK 1.9 billion in Adjusted EBITA proforma by the end of 2025. The company has an organic growth target at minimum 15 % year over year and a NIBD / Adjusted EBITDA proforma below 2.5x. Read more about the Group and its composition on www.humblegroup.se STAFF AND NUMBER OF EMPLOYEES On Group level At the end of the reporting period, the number of employees in the Group was 1 064 (905). The number of full-time positions (FTE) corresponded to 1 043 (778) employees for the second quarter. The proportion of women in the Group for the quarter was 47 % (47). Parent company The average number of employees in the Parent Company during the second quarter was 19 (23), with 25 % (26) being women. RISKS AND UNCERTAINTIES Humble Group works continuously to identify, evaluate, and manage risks and exposures that the Group companies face. The Group's financial position and earnings are affected by various risk factors that must be considered when assessing the company and its future earnings. A description of significant risks and uncertainties can be found in the Annual Report for 2022. There has been no material change in material risks and uncertainties since the annual report was published. PARENT COMPANY During the second quarter, the parent company has carried out a directed new issue of 131.6 million shares, raising in total MSEK 875 before transaction costs. The proceeds were partially used to amortise the revolving credit facility of MSEK 450 in the parent company. No other significant events have occurred during the second quarter. BUSINESS MARKET CONDITION UPDATE Humble Group does not have any exposures towards neither Russia nor Ukraine, and as such do not note any direct effects from the ongoing war. Even though it is difficult to quantify the exact effects, Humble notices the indirect effects from the war driven by rapidly increased inflation and market interest rates with a following change in consumer consumption patterns. Humble monitor the market development closely to ensure that we position our product mix in best possible way to meet any potential changes in market or consumer behaviour. Further on, the increased market price volatility regarding raw material prices is monitored closely to enable transition of price increases to customers in all material aspects and to a protect stable operating margins. RELATED PARTY TRANSACTION No transactions with related parties have occurred during 2023 that had a significant impact. The minor transactions that have occurred relates to lease agreements of previous owners’ properties. Lease agreements between the parties are based on an arms length’s perspective and on market terms and conditions. FINANCIAL CALENDAR The interim report for the period July-September 2023 will be published on November 2, 2023. For financial reports and calendar, see more detailed information on our website www.humblegroup.se CERTIFIED ADVISOR FNCA Sweden AB Email: info@fnca.se AUDITORS BDO Mälardalen Auditor in Charge: Carl-Johan Kjellman, Authorised Public Accountant Email: carl-johan.kjellman@bdo.se ===== SIDA 11 ===== | THE SHARE Humble Group AB Interim Report April – June 2023 10 THE SHARE THE SHARE The company’s share with ticker HUMBLE has been listed on Nasdaq First North Growth Market since 12 November 2014. NUMBER OF SHARES At the end of the reporting period, the total number of shares was 440,920,844 (293,700,856), which entitles to one vote each. All shares are of the same share class. The number of outstanding warrants amounted to 7,420,000. For the period April - June 2023, the average number of shares before dilution and average number of shares after dilution amounted to 310,133,164 and 315,503,164 respectively. TRADE IN THE SHARE Second quarter The total liquidity in the share during the second quarter amounted to MSEK 339 (861). The number of transactions for the same period amounted to 39,427 (85,088). The average volume per transaction amounted to SEK 8,587 (10,117). The average volume per trading day amounted to MSEK 5.7 (14.3). LARGEST SHAREHOLDERS The ten largest shareholders per June 30, 2023, are listed below: DATA PER SHARE An overview of share development, turnover and result per share is presented below. Owner Shares Vo tes Håkan Roos (RoosGruppen AB) 46 029 975 1 0, 44% Neudi & C:o AB 45 351 248 1 0, 29% Noel Abdayem (NCPA Holding AB) 27 836 1 52 6,31 % Alta Fox Capital 26 021 235 5,90% Nordnet Pensionsförsäkring 22 881 730 5,1 9% Capital Group 22 368 627 5,07 % Creades AB 1 8 1 36 470 4 , 11% Thomas Petrén (Seved Invest AB) 1 2 570 000 2,85% DNB Asset Management AS 1 1 963 422 2 , 71% Avanza Pension 11 9 11 3 14 2,7 0% Total top 10 245 070 1 73 55,58% Other shareholders 1 95 850 671 44,42% Total number of shares 440 920 844 1 00% Full year 2023 2022 2023 2022 2022 Low price (SEK) 6 ,12 1 3, 52 6 ,11 1 3,52 9,01 High price (SEK) 8,75 20,60 11,4 5 28,85 28,85 Closing price previous period (SEK) 6,71 1 8,80 9,77 28,00 28,00 Closing price current period (SEK) 6,55 1 4,48 6,55 1 4,48 9,77 Share price development during period (%) -2% -23% -33% -48% - 67% Trading volume in the share (MSEK) 339 861 907 2 706 4 223 Number of transactions in the share 39 427 85 088 99 540 202 334 347 1 33 Average volume per trading day (MSEK) 5,7 14 ,3 7,4 22,0 16 ,7 Average volume per transaction (SEK) 8 587 10 117 9 113 1 3 374 12 16 6 Number of shareholders* 23 1 21 23 448 23 1 49 23 448 24 080 Number of shares outstanding* 440 920 844 293 700 856 440 920 844 293 700 856 301 274 580 Average number of shares before dilution 31 8 1 49 075 282 51 3 981 31 0 224 826 264 964 801 284 1 51 901 Average number of shares after dilution 323 361 382 284 881 254 31 4 496 208 266 856 983 286 81 8 625 Net sales per share** 5,37 3,45 1 0,65 6,97 17,5 1 EBITDA per share** 0,50 0,23 1,0 1 0,49 1,5 3 Adjusted EBITDA per share** 0,53 0,37 1,0 2 0,83 1,70 EBIT per share** 0,26 0,03 0,54 0,08 0,94 Adjusted EBIT per share** 0,30 0 ,17 0,55 0,42 1,0 7 Earnings per share 0,00 - 0 ,18 -0,01 -0,30 - 0 ,13 * End of period, ** SEK before dilution Second quarter Six months ===== SIDA 12 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 11 GROUP INCOME STATEMENT Last Twelve M onths Full year Amount in MSEK No te 2023 2022 2023 2022 J ul 2022 - J un 2023 2022 Net sales 1 710 974 3 303 1 847 6 256 4 800 Capitalised work on own account 21 21 41 38 88 85 Other operating income 69 15 15 0 33 376 259 Raw materials and consumables -1 209 -632 -2 31 7 -1 208 -4 377 -3 268 Other external expenses - 19 0 - 15 4 -398 -268 - 774 -644 Personnel expenses - 19 9 - 14 1 -382 -282 - 725 -625 Other operating expenses -45 - 18 -84 -30 - 15 7 - 10 3 EBITDA 15 8 65 3 13 13 0 687 504 Items affecting comparability 5 12 41 3 89 -39 47 ADJ USTED EBITDA 170 10 6 3 16 2 19 648 551 Depreciation of tangible fixed assets - 12 -9 -24 - 17 -44 -37 Depreciation of right-of-use assets - 17 - 11 -31 -21 -59 -48 EBITA 12 9 45 259 93 585 4 19 ADJ USTED EBITA 14 1 86 262 18 2 546 466 Amortization of intangible fixed assets - 10 -7 - 19 - 12 -42 -35 Amortisation of fixed assets related to acquisitions -37 -30 - 72 -58 - 14 1 - 12 8 EBIT 83 8 16 8 22 402 257 ADJ USTED EBIT 95 48 171 111 363 304 Profit from shares in associated companies -1 0 -1 -2 -4 -4 Financial income 11 0 13 2 25 14 Financial expenses 6 -89 -59 - 173 - 10 6 -332 -265 PROFIT AND LOSS AFTER FINANCIAL ITEM S 5 -52 7 -83 91 1 Income tax -5 2 - 11 4 -52 -37 PROFIT AND LOSS AFTER TAX* 0 -50 -4 - 79 40 -36 Other comprehensive income Items that may be reclassified to profit or loss: Exchange differences in translation of foreign operations 19 3 69 228 75 288 13 5 COMPREHENSIVE INCOME FOR PERIOD* 19 3 19 224 -4 327 99 Earnings per share before dilution 0,00 - 0 ,18 -0,01 -0,30 0 ,13 - 0 ,13 Earnings per share after dilution 0,00 - 0 ,18 -0,01 -0,30 0 ,13 - 0 ,13 *Profit and loss after tax and Total Comprehensive Income for the period are attributable in their entirety to the shareholdes of the parent company Second quarter Six months ===== SIDA 13 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 12 GROUP BALANCE SHEET - IN SUMMARY Full year Amount in MSEK Note 2023 2022 2022 ASSETS Fixed assets Intangible assets 6 243 5 586 5 995 Tangible fixed assets 399 349 372 Financial assets 72 54 75 Total fixed assets 6 714 5 989 6 441 Right-of-use assets 16 4 13 8 15 1 Deferred tax assets 27 53 26 Current assets Inventory 1 085 831 982 Accounts receivables 595 560 683 Other short-term receivables 205 19 3 234 Cash and cash equivalents 905 257 380 Total current assets 2 790 1 841 2 279 TOTAL ASSETS 9 695 8 021 8 897 EQUITY AND LIABILITIES Equity Share capital 97 65 66 Unregistered share capital 0 0 0 Other equity contributed 5 01 1 4 1 27 4 1 31 Retained earnings 64 -264 - 16 1 Total shareholders equity 5 171 3 928 4 036 Long-term liabilities Interest-bearing liabilities 8 1 929 1 78 0 1 9 16 Contingent considerations 10 16 5 5 12 433 Long-term lease liabilities 113 91 10 0 Deferred tax liabilities 5 15 469 502 Other long-term liabilities 43 73 79 Total long-term liabilities 2 765 2 925 3 029 Short-term liabilities Interest-bearing liabilities 8 12 4 293 621 Contingent considerations 10 443 229 347 Current lease liabilities 56 45 49 Accounts payable 6 18 402 550 Other current liabilities 5 19 19 9 265 Total short-term liabilities 1 76 0 1 16 8 1 832 TOTAL EQUITY AND LIABILITIES 9 695 8 021 8 897 June, 30 ===== SIDA 14 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 13 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – SECOND QUARTER Amount in MSEK Share capital Unregistered share capital Other equity contributed Exchange rate d ifferences Retained Earnings Total shareholders e quity Opening balance April 1 , 2022 55 0 3 347 49 - 332 3 119 Net income for period -50 -50 Other comprehensive income 69 69 Total comprehensive income 0 0 0 69 -50 19 Transaction with owners in their capacity as owners: Share issue 9 721 731 Transaction costs 9 9 Share-based benefits 50 50 Total transaction with owners in their capacity as owners 9 0 78 1 0 0 790 Ending balance J une 30, 2022 65 0 4 1 27 118 -381 3 928 Opening balance April 1 , 2023 67 0 4 1 69 2 12 -341 4 1 07 Net income for period 0 0 Other comprehensive income 19 3 19 3 Total comprehensive income 0 0 0 19 3 0 19 3 Transaction with owners in their capacity as owners: Share issue 30 846 875 Transaction costs -2 -2 Share-based benefits -2 -2 Total transaction with owners in their capacity as owners 30 0 842 0 0 8 71 Ending balance J une 30, 2023 97 0 5 01 1 405 -341 5 171 ===== SIDA 15 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – SIX MONTHS Amount in MSEK Share capital Unregistered share capital Other equity contributed Exchange rate differences Retained Earnings Total shareholders equity Opening balance J anuary 1 , 2022 54 1 3 31 5 43 -302 3 110 Net income for period - 79 - 79 Other comprehensive income 75 75 Total comprehensive income 0 0 0 75 - 79 -4 Transaction with owners in their capacity as owners: Share issue 10 -1 752 762 Transaction costs 10 10 Share-based benefits 50 50 Total transaction with owners in their capacity as owners 10 -1 8 12 0 0 822 Ending balance J une 30, 2022 65 0 4 1 27 118 -381 3 928 Opening balance J anuary 1 , 2023 66 0 4 1 31 177 -338 4 036 Net income for period -4 -4 Other comprehensive income 228 228 Total comprehensive income 0 0 0 228 -4 224 Transaction with owners in their capacity as owners: Share issue 31 879 9 10 Transaction costs 3 3 Share-based benefits -3 -3 Total transaction with owners in their capacity as owners 31 0 880 0 0 9 10 Ending balance J une 30, 2023 97 0 5 01 1 405 -341 5 171 ===== SIDA 16 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 15 GROUP CASH-FLOW STATEMENT Please note that the company received deferred tax support during the second quarter recognised as short-term liabilities. This had a positive one-time effect on the cash flow from operating activities of MSEK 260. Thus, normalised cash flow from operating activities during the second quarter amounted to MSEK 185. Last Twelve M onths Full year Amount in MSEK 2023 2022 2023 2022 J ul 2022 - J un 2023 2022 OPERATING ACTIVITIES P rofit and loss after financial items 5 -52 7 -83 92 1 Adjustement for non-cash items Depreciation and Amortisation 75 58 14 5 10 8 285 247 Other items 73 15 10 7 70 19 2 15 5 Paid tax -7 -3 - 14 -8 -39 -33 Cash flow from operating activities before change in net working capital 14 6 18 246 87 530 3 71 CHANGE IN WORKING CAPITAL Change in inventories (increase - / decrease + ) -24 -56 -35 - 13 0 -6 - 10 1 Change in short term receivables (increase - / decrease + ) 59 -5 13 9 27 18 5 74 Change in short term liabilities (increase - / decrease + ) 264 57 278 39 15 0 -88 Sum of change in working capital 299 -4 382 -64 329 - 116 Cash flow from operating activities 445 14 627 23 859 255 INVESTING ACTIVITIES Acquisition of capitalised development costs -21 -21 -41 -38 -87 -84 Acquisition of intangible assets 0 0 0 0 -6 -6 Acquisition of tangible assets - 10 - 11 -23 -21 -59 -57 Acquisition of financial assets 0 4 0 4 -4 0 Consideration paid, net of acquired cash - 173 - 5 19 -236 -641 -496 -901 Cash flow from investing activities -203 -547 -300 -696 -652 -1 048 FINANCING ACTIVITIES Share issue funds 875 530 875 530 875 530 Costs related to share and bond issues -26 - 10 -26 - 10 -28 - 12 Paid premium for share incentive program 0 0 0 0 2 2 Proceeds from bond 0 0 0 0 300 300 Paid interest -50 -36 - 10 8 - 76 - 18 6 - 15 4 New loans 41 16 8 87 299 557 769 Amortization of loans -606 - 113 - 6 10 - 2 14 -1 025 -629 Amortization of lease liability - 14 - 11 -28 -21 -59 -52 Cash flow from financing activities 220 528 19 0 508 436 753 Decrease/ Increase in cash and cash equivalents 462 -5 5 18 - 16 5 643 -41 Cash and cash equivalents at beginning of period 440 262 380 420 257 420 Exchange rate differences 3 1 7 2 5 -1 Cash and cash equivalents at end of period 905 257 905 257 905 380 Second quarter Six months ===== SIDA 17 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 16 INCOME STATEMENT - PARENT COMPANY Last Twelve M onths Full year Amount in MSEK 2023 2022 2023 2022 J ul 2022 - J un 2023 2022 Net sales 12 1 13 2 33 21 Other operating income 3 0 6 1 4 1 Total revenue 16 1 19 2 37 22 Capitalised work on own account 0 2 0 5 6 9 Other external expenses -9 -4 - 13 -7 -26 -20 Personnel expenses - 11 - 12 -21 -21 -47 -48 Other operating expenses 0 0 0 0 0 -1 EBITDA -4 - 13 - 15 -21 -29 -38 Depreciation and amortisation of fixed tangible and intangible assets 0 0 0 0 0 0 OPERATING PROFIT (EBIT) -4 - 13 - 15 -21 -30 -38 Profit from shares in subsidiaries and associated companies 0 0 0 0 0 0 Interest income 17 0 18 0 29 13 Interest expenses -81 -53 - 15 6 -83 -259 -230 PROFIT AND LOSS AFTER FINANCIAL ITEM S -69 -66 - 15 4 - 10 3 -259 -256 Received dividends from subsidiaries 13 37 13 37 28 52 Year-end appropriations 0 0 0 0 10 0 10 0 PROFIT AND LOSS BEFORE TAX -56 -29 - 14 1 -66 - 13 2 - 10 4 Current taxes 0 0 0 0 - 16 - 16 PROFIT AND LOSS AFTER TAX -56 -29 - 14 1 -66 - 14 8 - 12 0 In the parent company, there are no items that are reported as other comprehensive income, which is why total comprehensive income corresponds to the year's result. Second quarter Six months ===== SIDA 18 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 17 PARENT COMPANY BALANCE SHEET – IN SUMMARY Full year Amount in MSEK 2023 2022 2022 ASSETS Fixed assets I ntangible fixed assets 1 1 1 Tangible fixed assets 1 1 1 Financial fixed assets 6 980 6 379 6 920 Total fixed assets 6 982 6 381 6 922 Current assets Inventory 0 0 0 Accounts receivables 0 0 0 Receivables with group companies 12 5 82 287 Other short-term receivables 21 12 13 Cash and cash equivalents 403 6 1 Total current assets 549 10 0 301 TOTAL ASSETS 7 532 6 481 7 222 EQUITY AND LIABILITIES Equity Restricted equity 97 65 66 Unrestricted equity 4 61 8 3 929 3 880 Total shareholders equity 4 715 3 993 3 946 Provisions 7 0 786 Long term liabilities Interest-bearing liabilities 1 834 1 5 18 1 826 Other long-term liabilities 175 542 33 Total long-term liabilities 2 009 2 060 1 859 Short-term liabilities Interest-bearing liabilities 64 18 8 571 Accounts payable 9 6 7 Liabilities to group companies 234 0 24 Other liabilities 494 234 29 Total short-term liabilities 800 428 631 TOTAL EQUITY AND LIABILITIES 7 532 6 481 7 222 June, 30 ===== SIDA 19 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 18 NOTES AND PERFORMANCE MEASUREMENTS NOTE 1 – ACCOUNTING PRINCIPLES The consolidated financial statements have been prepared in accordance with the Swedish Annual Accounts Act, RFR 1 Supplementary Accounting Rules for Groups and International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) as adopted by the EU. The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The financial statements have been prepared according to cost method except from certain financial assets and liabilities measured at fair value through profit and loss. The accounting policies adopted are consistent with those of the Annual report for the year ended December 31, 2022. New or amended IFRS standards, effective from January 1, 2023, have no impact on the result and financial position of the Group. NOTE 2 – SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS The Group makes estimates and assumptions about the future. The estimates for accounting purposes that result from these will, by definition, rarely correspond to the actual result. The estimates and assumptions that entail a significant risk of significant adjustments in reported values for assets and liabilities in this interim report correspond to those describe in Note 3 in the Annual report 2022. No significant new assessments and estimates have been made during the reporting period that have entailed any significant changes in reported items. NOTE 3 – SUBSEQUENT EVENTS Humble Group entered into a letter of intent regarding sale of real estates. The intention is to structure the Transaction as a so-called “sale- leaseback” where Humble directly, or indirectly through subsidiaries, enters into new market lease agreements with the Interested Party. The arrangement ensures that Humble’s subsidiaries can continue to run their respective businesses in existing premises without interruption. Through the Transaction, Humble’s subsidiary also gets a long-term landlord who has good knowledge and experience in running and managing properties for commercial use. Humble has historically acquired the Properties in connection with acquisitions. The Properties have had a good value development and as a natural step in Humble’s strategy to streamline the business, the board and management make the assessment that a sale of the Properties will benefit the Company in the long term. Through the Transaction, Humble will be able to focus to a greater extent on the core business, while the Company frees up capital that can be allocated to other value-driving initiatives and projects. If the Transaction is carried out at the preliminary property values, it will imply a positive profit effect of approximately MSEK 73, which will be reported in connection with the completion of the Transaction. The Transaction would mean that Humble’s net debt, after deducting Humble’s share of deferred tax, decreases by approximately MSEK 290 and that the net debt in relation to adjusted EBITDA pro forma decreases by 0.3x. After the completion of the Transaction, Humble’s EBITA will decrease by approximately MSEK 14 and the net effect for Humble’s liquidity and after amortization of the property-related loans is expected to amount to approximately MSEK 210. No other subsequent events have occurred after the end of the reporting period. ===== SIDA 20 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 19 NOTE 4 – SEGMENT INFORMATION AND DISCLOSURE OF REVENUE The Group's chief operating decision maker is the chief executive officer (CEO), who primarily uses a measure of earnings before interest, tax, depreciation and amortisation (EBITDA) to assess the performance of the operating segments. The CEO does not follow up the segments' assets or liabilities for allocation of resources or assessment of results. For further information regarding the segments, please refer to page 5-8. The Group financials consists of below combined segments: 2023, MSEK Future Snacking Sustainable Care Quality Nutrition Nordic Distribution *Other Total Net sales Revenue from sales to external customers 4 72 977 699 1 15 5 3 303 Raw material and consumables -267 -635 -509 -905 -2 31 7 Gross profit 205 342 19 0 250 986 Gross margin, % 43% 35% 27% 22% 30% EBITDA 24 15 9 98 48 - 15 3 13 Items affecting comparability 40 -35 - 18 11 6 3 Adjusted EBITDA 64 12 3 79 59 -9 3 16 Adjusted EBITDA in relation to net sales 14 % 13 % 11% 5% 10 % EBIT -8 93 72 27 - 17 16 8 Adjusted EBIT 32 58 54 37 - 11 171 Adjusted EBIT in relation to net sales 7% 6% 8% 3% 5% PROFIT AND LOSS AFTER FINANCIAL ITEM S - 15 90 69 19 - 15 6 7 P&L after financial items in relation to net sales - 3% 9% 10 % 2% 0% * Other refers to Parent company and minor administrative entities 2022, MSEK Future Snacking Sustainable Care Quality Nutrition Nordic Distribution *Other Total Net sales Revenue from sales to external customers 327 8 11 336 373 1 847 Raw material and consumables - 16 2 -498 -257 -291 -1 208 Gross profit 16 5 3 13 79 82 639 Gross margin, % 50% 39% 24% 22% 35% EBITDA 26 79 22 23 -21 13 0 Items affecting comparability 17 52 17 0 3 89 Adjusted EBITDA 43 13 1 39 23 - 18 2 19 Adjusted EBITDA in relation to net sales 13 % 16 % 12 % 6% 12 % EBIT 3 21 11 15 -28 22 Adjusted EBIT 20 73 28 15 -25 111 Adjusted EBIT in relation to net sales 6% 9% 8% 4% 6% PROFIT AND LOSS AFTER FINANCIAL ITEM S 0 4 10 14 - 111 -83 P&L after financial items in relation to net sales 0% 0% 3% 4% -5% * Other refers to Parent company and minor administrative entities ===== SIDA 21 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 20 NOTE 5 – ITEMS AFFECTING COMPARABILITY Humble Group recognises items affecting comparability to EBITDA to visualise comparable figures that are adjusted for the items that occur in historical numbers for various reasons. Explanation of what the items affecting comparability mainly refer to are presented in Note 10 in the Annual report 2022. Humble has not adjusted for any items related to extraordinary freight costs during 2023. The main adjustment item during the period was related to revaluation of contingent considerations of MSEK -41 (9) and employee-related compensation and lock-in penalties of MSEK 24 (48). NOTE 6 – FINANCIAL EXPENSES NOTE 7 – PROFORMA FINANCIALS Humble Group is a fast-growing FMCG group with an adopted strategy to grow both organically and through acquisitions. To illustrate the Group's scope at the date of publication of this interim report, Humble present a proforma on the key financials from the income statement. The proforma financials have not been adjusted for intercompany sales. Such transactions would theoretically have occurred if the subsidiary would have been part of Humble Group for the presented periods. The purpose is to visualise how the Group's financial position and results would have looked like on June 30 2023, if the companies acquired during the year, or where acquisition agreements have been communicated, would have been consolidated with the existing part of the Group. Besides the subsidiaries where Humble Group have completed the closing of the acquisitions and where full consolidation of accounts take place, below proforma financials include during the quarter completed acquisitions of Privab Trollhättan, Privab Ystad, Privab Grossisterna and Napame Holding AB. The closing of these four acquisitions took take place during March 2023. MSEK 2023 2022 2023 2022 Acqusition related cost 0 9 5 10 Revaluation of contingent considerations - 10 9 -41 9 Employee-related compensation and lock-in penalties 12 10 24 48 Surplus value in inventory 0 0 0 3 Donat ions 0 1 0 3 Restructuring 10 11 15 17 Total adjustment items 12 41 3 89 Six monthsSecond quarter Full year MSEK 2023 2022 2023 2022 2022 Interest expense related to financing -59 -34 - 114 - 67 - 174 Unwinding of discounting effect -23 - 19 -42 - 15 -61 Interest expense on lease liabilities -2 -1 -4 -2 -6 Exchange rate losses and revaluation effects 2 -3 -1 - 12 - 17 Other interest expenses -7 -2 - 12 - 10 -7 Total interest expense -89 -59 - 173 - 10 6 -265 Second quarter Six months Last Twelve M onths MSEK Proforma 2023 Proforma 2022 Proforma 2021 Proforma Q2 2023 Net sales 1 900 1 634 1 298 7 3 14 EBITDA 15 9 14 2 113 639 Items Affecting Comparability due to IFRS 12 21 26 47 ADJ USTED EBITDA 171 16 3 13 9 686 Second quarter ===== SIDA 22 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 21 NOTE 8 – NET INTEREST-BEARING DEBT Humble Group's net interest-bearing debt as of June 30, 2023, is presented in table below. Humble Group carried out a directed share issue and raised MSEK 849 in cash net of transactional costs, of which MSEK 450 was used to amortize its revolving credit facility in June 2023. Adjusted EBITDA Proforma amounted to MSEK 686. Net Interest-bearing debt in relation to Adjusted EBITDA proforma amounts to 1,9x at the end of this reporting period. Humble Group received tax deferments of MSEK 260 during the second quarter. In accordance with IFRS Accounting principles, this has been recognized as other short term liability. The tax deferment is first due in September, 2023 with the possibility for extension for up to 2 years. NOTE 9 – BUSINESS COMBINATIONS BUSINESS COMBINATIONS 2023 Acquisitions during second quarter No new acquisition has been made during the second quarter of 2023. Please see Interim Report Q1 for the four acquisitions made in the first quarter. Full year MSEK 2023 2022 2022 Interest-bearing liabilities Bond financing debt 1 834 15 18 1 826 Liability to credit institutions 2 19 554 710 Lease liabilities 16 8 13 6 15 0 Total interest-bearing liabilities 2 221 2 209 2 686 Cash and cash equivalents -905 -257 -380 Net Interest Bearing Debt (NIBD) 1 3 16 1 952 2 306 J une 30, 2023Proforma LTM ADJ. EBITDA Leverage Multiple Earnout max cash payment 587 Net Interest Bearing Debt (NIBD) 1 3 16 686 1,9 Net Interest Bearing Debt (NIBD+ EO) 1 903 686 2,8 Net Interest Bearing Debt (NIBD-Leasing) 1 14 8 6 17 1,9 Net Interest Bearing Debt (NIBD+ EO-Leasing) 1 73 5 6 17 2,8 Proforma Properties SLB (Illustrative, not yet finalized) -290 -23 Net Interest Bearing Debt (NIBD-Leasing+ SLB) 858 594 1,4 Net Interest Bearing Debt (NIBD+ EO-Leasing+ SLB) 1 445 594 2,4 June, 30 Subsidiary Acquisition date S hares and votes Segment Vertical Country Napame Holding AB 2023-03-01 1 00%Future snacking Distribution Sweden Aktiebolaget Cool & Candy AB 2023-03-1 5 1 00%Nordic Distribution Distribution Sweden Skövde Snabbgross AB 2023-03-1 5 1 00%Nordic Distribution Distribution Sweden Privab Grossisterna AB 2023-03-1 5 1 00%Nordic Distribution Distribution Sweden ===== SIDA 23 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 22 NOTE 10 – FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE The levels in the fair value hierarchy are defined as follows: Financial instrument level 1 Quoted market prices (unadjusted) in active markets for identical assets or liabilities. Financial instrument level 2 Observable data for the asset or liability other than quoted prices included in level 1, either directly (i.e. as price quotations) or indirectly (i.e. derived from price quotations). Financial instrument level 3 When one or more of the significant inputs is not based on observable market data. The Group's financial assets measured at fair value through profit and loss consists of Other long-term securities, which are classified as level 1 in the fair value hierarchy. The Group's financial liabilities measured at fair value through profit and loss consists of Contingent consideration, which are classified as level 3 in the fair value hierarchy. There have been no transfers between fair value hierarchy levels during the reporting period. FAIR VALUE DISCLOSURE OF BOND LOANS The Group also has financial instruments in the form of two senior bond loans with a total credit line of MSEK 2 000 that are not measured at fair value in the balance sheet: - MSEK 300 was issued on January 5, 2021 (2021-2024), has a fixed interest rate of 9.50 % - MSEK 1 500 was issued on July 21, 2021 (2021-2025), has a variable interest rate (STIBOR 3m + 8.25 %) For the bond loan 2021-2025, the measurement at amortised cost corresponds in all essentials to its fair value because the interest rate is variable and as the credit risk has not changed significantly. The fair value of the bond loan 2021-2024 has been calculated by using cash flows discounted at a current interest rate. The bond loan is classified as level 3 in the fair value hierarchy as unobservable data has been used, including own credit risk. The carrying amount of the bond loan 2021-2024 for 2023 are MSEK 300 (300), whereas the fair value of the loan amount to MSEK 283 (263). CONTINGENT CONSIDERATIONS The total contingent consideration to be paid are generally conditioned by significant financial performance improvements, which usually is measured to certain pre-determined EBITDA- levels by the subsidiary to be reached. The nature of the payments is generally a subject for Humble Group to decide, with a majority to be paid in cash but can also be paid with newly issued shares. This has a potential positive impact of the Groups cash flow and long-term net debt. The mechanics behind the additional purchase prices differ between the various acquisitions and the Group's commitments also extend over a longer time horizon. The provision in the consolidated balance sheet is presented at a higher level and constitutes a valuation of management's best assessment of the expected future cash flow. This assessment is made on a subsidiary-based level and is revalued regularly. The contingent considerations are recognised at fair value and have been discounted with 11 % discount rate. The duration to maturity is presented below. INPUT USED IN RECURRING LEVEL 3 FAIR VALUE MEASUREMENTS AND VALUATION TECHNIQUES The contingent considerations in the Group have been calculated based on the nominal value of the best estimate of the expected outcome on the date of the acquisition. The estimate is based on management's assessment of the probable amount to be paid given the terms of the share transfer agreement. The fair value of the contingent considerations has been calculated based on an interest rate corresponding to the remaining term until payment at each reporting date. During 2023, MSEK -36 (-15) in interest income was recognised as finance expenses regarding expenses related to contingent considerations. Estimated payments per year Nominal value F air value 2023 15 2 15 2 2024 320 291 2025 18 2 14 9 2026 20 16 Total contingent considerations 675 608 Contingent consideration, MSEK 2023 2022 Opening balance, Jan 1 780 737 New acquisitions 32 14 0 Payments - 19 9 - 16 6 Revaluation -43 9 Interest expenses related to unwinding of discounting effect 36 15 Translation differences 2 7 Closing balance, June 30 608 741 June, 30 ===== SIDA 24 ===== | FINANCIAL INFORMATION Humble Group AB Interim Report April – June 2023 23 DEFINITIONS AND CALCULATIONS ON KEY RATIO This report includes definitions and key figures that are not clearly defined in ÅRL or International Financial Reporting Standards (IFRS) but are what the company management considers to be important measures of the business's development, whereupon they are defined below. Net Sales The operation’s main income, invoiced costs, side income and income corrections. Gross Profit Net sales less raw materials and consumables. Gross Profit is calculated as 3 303 – 2 317 = 986 MSEK. Gross Margin Gross Profit in relation to net sales. Gross Margin is calculated as 986 / 3 303 = 30 %. EBITDA Earnings before payment of interest and tax as well as operational depreciation and amortisation of tangible and intangible fixed assets and depreciation and amortisation on acquisition-related surplus values. Adjusted EBITDA Earnings before payment of interest and tax as well as depreciation of tangible and intangible fixed assets, adjusted for items that are deemed to be of a non-recurring nature and therefore not recurring for operating activities. Adjusted EBITDA margin is Adjusted EBITDA divided by total revenue. Adjusted EBITDA is calculated as 313 + 3 = 316 MSEK. EBITA Earnings before payment of interest and tax as well as amortisation of intangible fixed assets and amortisation on acquisition-related surplus values. EBITA-margin is EBITA in relation to net sales. Adjusted EBITA Earnings before payment of interest and tax as well as amortisation of intangible fixed assets and amortisation on acquisition-related surplus values, adjusted for items that are deemed to be of a non-recurring nature and therefore not recurring for operating activities. Adjusted EBITA margin is Adjusted EBITA divided by total revenue. Adjusted EBITA is calculated as 259 + 3 = 262 MSEK. EBIT Earnings before payment of interest and tax. Adjusted EBIT Earnings before payment of interest and tax adjusted for items that are deemed to be of a non-recurring nature and therefore not recurring for operating activities. Adjusted EBIT margin is Adjusted EBIT divided by total revenue. Adjusted EBIT is calculated as 168 + 3 = 171 MSEK. Net interest-bearing debt Total interest-bearing liabilities less cash and cash equivalents. Net interest-bearing debt is calculated as 2 221 – 905 = 1 316 MSEK. Organic growth in net sales Change in net sales adjusted for exchange rate effect and net sales from acquired companies during the period. Organic growth in net sales is calculated as 245 / 1 847 = 13 %. Contingent consideration Deferred purchase price payments that are contingent upon future performance of an acquired subsidiary. The consideration can be paid in both cash and shares and are presented to fair value based on management’s best estimate of the occurrence of future payments. Average number of employees (FTE) Shows the average number of employees during the period and is calculated as the number of employees multiplied by the employment rate in relation to the standard time for full-time work. FMCG FMCG is an industry term and is short for Fast Moving Consumer Good. Proforma Humble Group is a fast-growing FMCG Group with an adopted strategy to grow both organically and through acquisitions. To illustrate the Group's scope at the date of publication of this interim report, Humble present a proforma on the income statement. The purpose is to visualise how the Group's financial position and results would have looked like on June 30, 2023, if the companies acquired during the year, or where acquisition agreements have been communicated, had been consolidated with the existing part of the Group. ===== SIDA 25 ===== | THE BOARD OF DIRECTORS’ APPROVAL Humble Group AB Interim Report April – June 2023 24 BOARD OF DIRECTORS’ APPROVAL The Board of Directors and the CEO assure that the interim report gives a true and fair view of the Group's and the Parent Company's operations, position and results and describes significant risks and uncertainties that the Parent Company and the companies included in the Group face. Stockholm July 25, 2023 Dajana Mirborn Ola Cronholm Chairman of the Board Henrik Patek Pål Bruu Sara Berger Simon Petrén Chief Executive Officer This report has not been subject to review by the company's auditor. This information is such that Humble Group AB is obliged to publish in accordance with the EU regulation on market abuse. The information was submitted for publication on July 25, 2023, at 08:00 CET. ===== SIDA 26 ===== | CONTACT US Humble Group AB Interim report April – June 2023 Company Registration Number 556794-4797 Headquarters Klara Norra Kyrkogata 29 111 22 Stockholm info@humblegroup.se www.humblegroup.se +4608 613 28 88 Johan Lennartsson Chief Financial Officer johan.lennartsson@humblegroup.se Simon Petrén Chief Executive Officer simon.petren@humblegroup.se Noel Abdayem Vice President & COO Brands noel.abdayem@humblegroup.se Marcus Stenkil Head of Merger & Acquisitions marcus.stenkil@humblegroup.se Kristoffer Zinn Head of analytics kristoffer.zinn@humblegroup.se